Importance Of Risk Management Research Articles

МЕХАНИЗМЫ УПРАВЛЕНИЯ РИСКАМИ В ХОДЕ РЕАЛИЗАЦИИ ИНВЕСТИЦИОННЫХ ПРОЕКТОВ

The article reflects the elements of risk management during the implementation of investment projects, shows the role and importance of risk management in ensuring the implementation of programs, reveals organizational and methodological aspects of risk assessment that affect individual stages of project implementation.

Perception and risk management strategies for ranchers and their determinants: a case study from Turkey

ABSTRACT: In this study, beef cattle farmers’ perceptions of risk and risk management strategies, and their determinants were analyzed using factor analysis and partial least squares regression analysis. The data set used in this study came from a survey conducted in Erzurum Province. The results demonstrated that variability in fodder price, insufficient farm income, uncertainty in government policies were perceived as the most important risks. Clean cattle shelter, off-farm income, monitoring and preventing livestock diseases were perceived as the most important risk management strategies. Results, also, demonstrated that some characteristics of farmers affected farmers’ perceptions. In this study, it was identified that the most important risk sources were economics-based. So, it was recommended that the government policy should be focused on preventing the fluctuations in input/output prices.

Determinants of livestock insurance adoption in Nepal

Livestock insurance, an important risk management tool, is becoming popular in Nepal after Crop and Livestock Insurance Directives, 2013, came into action. To widen the adaptability of the insuranc...

Study on Sustainable Development of Agricultural Insurance in Jilin Province

Agriculture is not only the largest industry in China, but also the pillar industry in China. The sustainable development of agricultural production is a major issue related to national livelihood and national development. However, the sustainable development of agricultural production needs agricultural insurance to protect farmers' income risk. The rational use of agricultural insurance is a powerful guarantee for farmers' investment in agricultural production. Agricultural insurance is a very important risk management tool in agricultural development. It is of great significance to promote the development of agricultural production and increase farmers' income.

Making Deep Learning-Based Predictions for Credit Scoring Explainable

Credit scoring has become an important risk management tool for money lending institutions. Over the years, statistical and classical machine learning models have been the most researched risk management tools in credit scoring literature, and recently the focus has turned to deep learning models. This transition is due to better performances that are shown by deep learning models in different domains. Despite deep learning models' superior performances, there is still a need for explaining how these models make their predictions. The non-transparency nature of deep learning models has created a bottleneck for their use in credit scoring. Explanations of decisions are important for lending institutions since it is a requirement for automated decisions that are generated by non-transparent models to be explained. The other issue in using deep learning models, specifically 2D Convolutional Neural Networks (CNNs), in credit scoring is the need to have the data in image format. We propose an explainable deep learning model for credit scoring which can harness the performance benefits offered by deep learning and yet comply with the legislation requirements for the automated decision-making processes. The proposed method converts tabular datasets into images and thus allowing the application of 2D CNNs in credit scoring. Each pixel of the image corresponds to a feature bin of the tabular dataset. The predictions from the 2D CNNs were explained using state-of-the-art explanation methods. Furthermore, explanations were evaluated using a sanity check methodology and also performances of the explanation methods were compared quantitatively. The proposed explainable deep learning model outperforms the other credit scoring methods on publicly available credit scoring datasets.

Application of text mining in identifying the factors of supply chain financing risk management

PurposeThis study aims to clarify the risk management practices of banks as supply chain finance (SCF) service providers.Design/methodology/approachUsing 4,014 evaluation and approval reports, this study constructed five risk management factors and examined their functions with secondary data. Two text-mining techniques (i.e. word sense induction, TF–IDF) were used to equip the classic routine of dictionary-based content analysis.FindingsThis research successfully identified four important risk management factors: relationship-based assessment, asset monitoring, cash flow monitoring and supply chain collaboration. The default-preventing effect of these factors are different and contingent on the type of financing contexts (i.e. preshipment, postshipment).Practical implicationsThe empirical evidences provide practical implications for SCF service providers to manage risk. SCF service providers are suggested to pay more attention to cash flow monitoring when providing postshipment financing services and shift the focus to relationship building and supply chain collaboration when providing preshipment financing services.Originality/valueThe study shows that a large volume of textual materials can provide adequate clues for researches as long as they are mined with suitable analytic techniques and approaches. Based on the results, SCF service providers can identify problems of their operations and directions for improvement. In addition, the risk management vocabulary from the E&A reports can be utilized by SCF service providers to digitize their loan approving process and, further, to facilitate the decision-makings.

Pricing longevity derivatives via Fourier transforms

Longevity-linked derivatives are one of the most important longevity risk management solutions for pension schemes and life annuity portfolios. In this paper, we decompose several longevity derivatives—such as geared longevity bonds and longevity-spread bonds—into portfolios involving longevity options. For instance, we show that the fair value of an index-based longevity swap can be broken down into a portfolio of long and short positions in European-style longevity caplets and floorlets, with an underlying asset equal to a population-based survivor index and strike price equal to the initial preset survivor schedule. We develop a Fourier transform approach for European-style longevity option pricing under continuous-time affine jump–diffusion models for both cohort mortality intensities and interest rates, accounting for both positive and negative jumps in mortality. The model calibration approach is described and illustrative empirical results on the valuation of longevity derivatives, using U.S. total population mortality data, are provided.

Analisis Manajemen Risiko Di Ruang Filing RSUD dr Soediran Mangun Sumarso Wonogiri Tahun 2020

Patient safety is a system that makes patient care safer, including risk assessment, identificationand management of patient risks, incident reporting and analysis, the ability to learn from incidents andtheir follow-up, and implementation of solutions to minimize risks and prevent injury caused by errors.the result of carrying out an action or not taking the action that should be taken The importance of riskmanagement in the hospital is to minimize the number of unwanted events. Based on a preliminary studyof five medical record processing at the Dr Soediran Mangun Sumarso Wonogiri Regional Hospital, thebigger risk is filing, in the medical record unit there is no standard risk management operationalprocedure and there is no report related to risk management. This type of research is descriptive with across sectional approach. The subjects are the Facility Management and Safety coordinator, head ofmedical records, and head of filing. The object of the filing room and the risk management process. Theresearch instruments were observation guidelines and interview guidelines. Data analysis was carriedout by univariate. The results show that risk management at Dr Soediran Mangun Soemarso WonogiriHospital has been carried out. Safety Facility Management is a working group to plan risk managementin each unit. The medical record unit of Dr Soediran Mangun Soemarso Wonogiri Hospital implementsrisk management with an appropriate sequence of risk management processes starting fromcommunication consultation, scope of context criteria, risk assessment, risk treatment, monitoring andreview. In the filing section of the Dr Soediran Mangun Soemarso Wonogiri Regional Hospital, there isone important stage that is overlooked in the risk management process, namely the scope, context, andcriteria stages. The conclusion of this study is that the Facility and Safety Management section hasimplemented a risk management process in the medical record unit but has not been maximallyimplemented in the filing section.

Management Accounting, Strategy Implementation and the Importance of Risk Management

Management Accounting, Strategy Implementation and the Importance of Risk Management

A latent‐factor‐driven endogenous regime‐switching non‐Gaussian model: Evidence from simulation and application

AbstractRegime‐switching models are widely used in empirical economics and finance research for their ability to identify and account for the impact of latent regimes or states on the behaviour of the interested variables. Meanwhile, empirical evidence often reveals complex non‐Gaussian characteristics in the state‐dependent dynamics. We generalize the latent‐factor‐driven endogenous regime‐switching Gaussian model of Chang, et al., Journal of Econometrics, 2017, 196, 127–143 by allowing the state‐dependent conditional distributions to be non‐Gaussian. Our setup is more general and promises substantially broader relevance and applicability to empirical studies. We provide evidence to justify our generalization by a simulation study and a real data application. Our simulation results confirm that when the state‐dependent dynamics are misspecified, the bias of model parameter estimates, the power of the likelihood ratio test against endogenous regime changes, and the quality of the extracted latent factor all deteriorate quite considerably. In addition, our application to the S&P 500 index return data reveals strong evidence in favour of our non‐Gaussian assumption, and the superiority of our model specification delivers an important risk management implication.

Credit Risk Aspects and Mitigation Strategies in SMEs Lending

In most developing countries, financial institutions apply credit risk management as safeguard assets of the credit portfolio, deposit and improve loan recovery. In this regard, this research outlines the importance of risk management within financial institutions and focuses on credit risk. This paper is based on literature review to identify all relevant risks associated with credit transactions. As a result, it focuses on credit mitigation paths to provide strategies to minimize or eliminate these credit risks. Keywords: Credit Risk, Mitigation Strategies, Loans, Financial Institutions, SMEs. DOI: 10.7176/EJBM/12-23-02 Publication date: August 31 st 2020

RISIKO PEMBIAYAAN MURABAHAH PADA BANK SYARIAH

Islamic banking practices have gained significant attention in the global financial industry. One of the most commonly used financing modes in Islamic banking is Murabahah. This study aims to analyze the risks associated with Murabahah financing in Islamic banks. The research delves into the various risk factors that Islamic banks face when engaging in Murabahah transactions and the strategies employed to mitigate these risks. The findings shed light on the importance of risk management in Islamic banking and its implications for the industry's growth and stability.

EDUKASI MANAJEMEN RISIKO SEBAGAI PENGEMBANGAN KOPERASI DI KABUPATEN BATANG

<p>The cooperative law has emphasized that cooperatives need to develop themselves more and be built to be strong and independent based on cooperative principles so that they can play a role as pillars of the national economy. Prioritizing the principle of kinship on the basis of social and economic principles needs attention by the cooperative manager. In line with this, good risk management can be carried out to minimize losses that may occur from the business being run. Based on this the Batang Regency Industry, Trade, Cooperatives and SMEs Office carries out the Bintek Development, Supervision and Recognition of Cooperative Achievement activities to be able to improve the performance of cooperatives in Batang Regency. The participants of the activity are the management of cooperatives and offices related to the method of presentation and discussion of questions and answers. The results of the activity show that the enthusiasm of cooperative managers in participating in these activities is very high, in theory they already know the importance of risk management so that the problem that arises is the implementation at the policy level of each cooperative.</p><p>Keywords: <em>Risk Management, Coaching, Supervision, Performance, Cooperatives</em></p>

The Development of Shariah Risk Management Model (SRM-i) for the Use of Shariah Compliance Organizations

The Bank Negara Malaysia introduced Shariah Governance Framework (SGF) in 2011, does not state the needs to have proper risk management. The personal observation as a Shariah Manager and at the same time as the Shariah auditor, the experience has taken me to the other side of the world. Throughout the journey, I found that risk management has been dependent and assigned to the conventional risk management team as well as to the risk coordinator. Concludes that no qualified Shariah risk officer has been given to do so because according to what has been depicted from IFSA or SGF, Shariah risk is something that was co-existing along with the conventional risk. There is not acceptable because Shariah risk has its unique criteria and terminologies despite the use of normal risk appetites. This issue has become an Area of Concern (AOC) in the recent audit finding in a few organizations. There is no proper Shariah risk management in place and deemed the important Shariah Risk Management model (SRM-i) to rectify the non-compliance recorded. Keywords: Shariah risk, Shariah risk model, SRM-i, rectification plan eISSN: 2398-4287 © 2020. The Authors. Published for AMER ABRA cE-Bs by e-International Publishing House, Ltd., UK. This is an open access article under the CC BYNC-ND license (http://creativecommons.org/licenses/by-nc-nd/4.0/). Peer–review under responsibility of AMER (Association of Malaysian Environment-Behaviour Researchers), ABRA (Association of Behavioural Researchers on Asians) and cE-Bs (Centre for Environment-Behaviour Studies), Faculty of Architecture, Planning & Surveying, Universiti Teknologi MARA, Malaysia.DOI: https://doi.org/10.21834/ebpj.v5iSI1.2301

Empirically assessing and modeling spillover effects from operational risk events in the insurance industry

The aim of this paper is to propose the first mathematical model for spillover effects caused by operational losses and to calibrate it based on an extensive empirical study of spillover effects and their influencing factors in the US and European banking and insurance industry. Our event study shows significant spillover effects due to operational losses, whereby a higher number of firms faces contagion effects than competitive effects. A regression analysis further reveals that spillover effects are rather information-based than pure, as event and firm characteristics have a significant impact, specifically external fraud, the return on equity of the announcing firm and the similarity between the announcing and the non-announcing firm in terms of size. Based on the empirical findings, we fit a distribution and model spillover effects and underlying operational losses to assess respective risk measures by means of a simulation analysis. The results show that spillover risk can be considerable for non-announcing firms as well as from a portfolio view, which has important risk management implications.

Sustainability and Risk: A Mini-Review

In today's era, managing risk has become one of the most challenging tasks for the firms, and hence they focus mainly on risk as well as sustainability in order to avoid risk. This paper focuses on these two aspects of risk as well as sustainability, particularly in financial management. For this purpose; methodology based on secondary data has been adopted in which 25 articles have been selected 20 from Scopus and five from SSRN. The findings of the paper revealed the importance of risk management as well as sustainability for organizations. The results have not found aligned as in many of the articles, the context of risk as well as sustainability has not been discussed altogether. However, these two topics are being considered by both researchers as well as organizations and news methods are being developed in order to avoid risks as well as to have sustainability.

Volatility impulse response analysis for DCC‐GARCH models: The role of volatility transmission mechanisms

AbstractThis study introduces volatility impulse response functions (VIRF) for dynamic conditional correlation–generalized autoregressive conditional heteroskedasticity (DCC‐GARCH) models. In addition, the implications with respect to network analysis—using the connectedness approach of Diebold and Y lmaz (Journal of Econometrics, 2014, 182(1), 119–134)—is discussed. The main advantages of this framework are (i) that the time‐varying dynamics do not underlie a rolling‐window approach and (ii) that it allows us to test whether the propagation mechanism is time varying or not. An empirical analysis on the volatility transmission mechanism across foreign exchange rate returns is illustrated. The results indicate that the Swiss franc and the euro are net transmitters of shocks, whereas the British pound and the Japanese yen are net volatility receivers of shocks. Finally, the findings suggest a high degree of comovement across European currencies, which has important portfolio and risk management implications.

Efficient Simulation Designs for Valuation of Large Variable Annuity Portfolios

The valuation of large variable annuity portfolios is an important enterprise risk management task but is computationally challenging due to the need for simulation. Existing methods in the literature only use simple experimental designs with significant room for improvement. This article identifies three major components in an efficient valuation framework. In addition, we propose optimal experimental designs and provides analytical insights for each component. Our numerical results show that our proposal achieves significantly higher accuracy than state-of-the-art alternatives without requiring any additional computational resource.

The risk function of the goodness-of-fit tests for tail models

This paper contributes to answering a question that is of crucial importance in risk management and extreme value theory: How to select the threshold above which one assumes that the tail of a distribution follows a generalized Pareto distribution. This question has gained increasing attention, particularly in finance institutions, as the recent regulative norms require the assessment of risk at high quantiles. Recent methods answer this question by multiple uses of the standard goodness-of-fit tests. These tests are based on a particular choice of symmetric weighting of the mean square error between the empirical and the fitted tail distributions. Assuming an asymmetric weighting, which rates high quantiles more than small ones, we propose new goodness-of-fit tests and automated threshold selection procedures. We consider a parameterized family of asymmetric weight functions and calculate the corresponding mean square error as a loss function. We then explicitly determine the risk function as the finite sample expected value of the loss function. Finally, the risk function can be used to discuss the question of which symmetric or asymmetric weight function and, thus, which goodness-of-fit test should be used in a new method for determining the threshold value.

Features of Risk Management and Organization of Internal Audit at Industrial Enterprises

This article is aimed at studying the problem of risk management at industrial corporations. It examines the nature of risk and its impact on the way the modern corporations operate. The main types of risks are analyzed on the example of their classification, developed and applied by the leading German insurance company Allianz. It among them are 10 main types of risks, including risks associated with IT systems in enterprises (in particular, cyber-crimes, failures of IT systems, leakage and loss of data), production and supply chain risks, risks of changes in legislation and regulatory policy (in particular, duties, trade wars, sanctions, protectionism), force majeure and natural disasters, changes in markets (increased competition, new competitors, fluctuations, stagnation and fall of markets), fires and explosions, climate changes, reputational risks, risks of new technologies and macroeconomic factors such as monetary policy, government austerity programs, inflation, changes in resource prices, etc. The examples of occurrence of such risks in real enterprises are given. The role and the importance of risk management at industrial corporations is determined. The model of three "lines of defense" in risk management of industrial enterprises is described, where the "first line" includes operational management and internal control mechanisms, the "second line" – the services of enterprises, responsible for management and control of risks on the ground, in particular, financial control, security service, services of quality control, compliance with standards and others, and the "third line" is internal audit. The practical aspects of its application are defined. The role and function of internal audit in risk management of companies is determined. The differences in scope and goals of internal audit as compared to other corporate compliance and governance functions are highlighted.