Abstract
In <b><i>Novel Risks: A Research and Policy Overview</i></b>, from <b><i>The Journal of Portfolio Management</i></b> Special 2021 issue on novel risks, <b>Ahmet Karagozoglu</b> of <b>Hofstra University</b> examines several novel risks of interest to financial market participants. These include environmental, social, and governance (ESG) risk; climate change risk; cybersecurity risk; and geopolitical risk. New and emerging risks are sometimes referred to as “nonfinancial risks.” Karagozoglu contends, however, that their impact needs to be measured financially and points to the parallels between these different risks in terms of measurement and disclosure challenges. Establishment of consistent disclosure policy and reporting requirements is needed, as is improvement in measuring the impact of these novel risks on asset prices, volatility, and global financial stability. These improvements would benefit investors, markets, and regulators because better information leads to improved financial stability.
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