Risk Management Policies Research Articles

Corporate hedging and the variance of stock returns

By means of a difference-in-differences approach on the volatility of stock returns (σ-DID), we investigate the effect that hedging has on corporate risk. Examining the relation between hedging and the idiosyncratic variance of stock returns, we show that when new commodity derivatives are introduced in the Chicago Mercantile Exchange (CME), firms with exposure to the commodities experience up to a 40% drop in the idiosyncratic variance of stock returns. The effect is persistent over time and it is associated with real effects: firms that hedge more also experience an increase in profit margins, investment, access to credit lines, and a drop in cash holdings. Our results establish a direct link between corporate risk management policies and stock return behavior.

Disaster vulnerability analysis of small towns in Brazil

Most of the global urban population lives in cities with less than one million people, whereas in Brazil, more than 45% of the population is estimated to live in cities with up to 100,000 people. As in both the global and Brazilian contexts, many of these people live in disaster-prone areas, there has been an increasing demand for research on small cities to subsidize actions contributing to disaster risk reduction. Thus, this study evaluates the vulnerability and capacities of small Brazilian municipalities to reduce risks, especially those related to landslides and floods. To this end, 234 municipalities located in the southern and southeast regions of the country were classified into two population classes, that is, cities from 20,000 to 50,000 people and those from 50,000 to 100,000 people. These municipalities are characterized by high levels of municipal human development and availability of municipal master plans. Statistical analysis of a set of quantitative and qualitative indicators revealed that the vulnerability of populations and municipal capacities is mainly related to the economic sectors, public policies, and city size. Municipal master plans and high levels of municipal human development guarantee neither better urban infrastructure nor specific risk management legislations. Although there are legal tools recommending disaster risk management policies, such tools are insufficient to reduce vulnerabilities and increase capacities in small Brazilian cities.

Analysis of Credit Risk, Intellectual Capital and Financial Performance of Listed Deposit Money Banks in Nigeria

This paper examined the effects of credit risk, intellectual capital as well as credit risk moderated by intellectual capital on financial performance of fifteen listed deposit money banks in Nigeria (DMBs) from 2007 to 2016. Data were sourced from annual reports of banks and Nigerian National Bureau of Statistics and analysed using Generalised Method of Moments (GMM). The study finds that credit risk index by loan loss ratio negatively affects financial performance of the sampled banks; while capital employed efficiency, loan loss provision moderated by intellectual capital, capital adequacy ratio, income and diversification have positive relationship with banks’ financial performance. Thus, the study recommends that banks should strengthen their credit risk management culture to ensure prompt repayment of loans. The banks should operate within the required capital adequacy ratio to serve as buffer against loan loss provisions provided by the Central Bank of Nigeria. A strong credit risk management culture should be embedded within intellectual capital structure of banks, where all persons at all levels appreciate and understand the banks’ risk management policies as well as strategies and incorporate same into decision-making and business processes.

Understanding the value of enterprise compliance technology

The increasing costs and complexities of compliance and the intensifying competition for financial professionals and compliance staff are pushing financial services firms to adopt regulatory technology. The RegTech market has expanded from 150 vendors to more than 400 within just four years as firms seek effective and efficient solutions to their compliance and regulatory needs. Firms reduce regulatory risk and increase operational efficiency by replacing manual processes, internally built systems, off-the-shelf software that has been modified for compliance needs or some combination thereof, with built-for-purpose, integrated enterprise solutions for needs such as licensing and registration, conflict of interest disclosure review and administration, oversight and risk management and supervisory policies and procedures. However, some firms have difficulty ascertaining an accurate return on investment in enterprise technology because of the challenges involved in identifying and considering all of the benefits of an integrated platform and the culture of compliance that it creates. Although returns such as cost savings and productivity gains can be measured rather easily, benefits such as fines avoided and a reputation for strong compliance are often harder to quantify. To understand the value of enterprise technology, a firm must evaluate its effectiveness and efficiency in meeting a firm’s regulatory and compliance needs and assess the impact that it makes in recruiting and retaining top talent by offering an experience that emphasises ease of use and the elimination of manual tasks. This paper offers a detailed look at quantitative and qualitative benefits that a firm should consider in evaluating the effectiveness, efficiency and experience of a builtfor-purpose enterprise compliance and licensing platform.

Debt Policy and Financial Performance of Commercial Airline Companies in Kenya

The air transportation sector is important for the development and economic progress of the country. It facilitates many segments of the economy such as tourism, manufacturing, horticulture and hotels. The airline industry contributes billions of shillings to the economy and provides employment to thousands of Kenyans. For example, in 2017 the airline industry in Kenya contributed Kshs. 300 billion to the economy. The airline sector supports 620,000 jobs directly and indirectly (International Air Transport Association (IATA), 2017).However, during the period 2013 -2019 the cumulative performance of the sector were losses of approximately Kshs. 30 billion. Researchers have attributed this poor performance to numerous factors key amongst them is the financing and financing costs. These challenges have led to the closure and/or collapse of a number of local airline companies. This research project investigated the effect of debt policy on the monetary performance of airline firms in Kenya. The main objective was achieved by using sub-objectives which were to establish the effect of debt limits, debt structuring, debt issuance, and debt risk management practices on the financial performance of commercial airline companies in Kenya. The study was anchored on the Modigliani and Miller Theory, Agency Cost Theory, and Pecking Order Theory. The descriptive research design was used to answer the research hypotheses. The target population for the study were all the forty-eight air line companies approved to operate in Kenya as at 31/12/2020 while the target respondents were the finance directors. Census sampling was used. The data was analysed using statistical packages for social sciences. The data analysis consisted of descriptive and inferential statistics. The results showed that the limits on debt had an inverse and insignificant effect statistically on the financial performance of commercial airline companies as deduced from a coefficient of -0.547 and critical level of 0.204. The study established that debt structuring had a positive and statistically insignificant effect on financial performance as suggested by the coefficient of 0.324 and significance level of 0.363. The study found that debt issuance and debt risk management policies had inverse and statistically significant effect on the financial performance of commercial airline companies in Kenya as implied by coefficients of -1.625 and -1.464 and p-values of 0.005 and 0.000 respectively. The study recommends that the management of the commercial airline firms review their debt policy so that it can be effective and yield positive effects on performance.

Sharia Life Insurance Business and Risk Management Based on Sharia Principles: Regulatory Perspective

Abstract: Sharia life insurance is an agreement between two parties. One is obliged to pay a contribution or premium, and the other must ensure a full guarantee of the insurers. It should undertake the protection of a contingent or uncertain loss based on the contract. This research used a descriptive qualitative approach. It seeks to explore and understand the central phenomenon to obtain in-depth data to reveal the facts on the research object. The theoretical contribution in this study can contribute to the insights about the insurance partnership of ASYKI, Inc. to increase the number of insurance participants. It is expected that people do not have doubts about sharia life insurance in a formal juridical manner related to insurance. The result of the research showed that Asuransi Shariah Keluarga Indonesia ASYKI, Inc Pasuruan Unit's performance is generally good. According to Law No.40 of 2014, its risk management is sharia-oriented. However, it does not rule out individuals who register individually. Still, ASYKI, Inc. Pasuruan Unit provides some solutions. They should register with the ASYKI partners. It opens an opportunity for the polis applicants to easily recognize and apply sharia life insurance without going through business entities or companies that act as intermediaries.الملخص: التأمين على الحياة في الشريعة هو تأمين أو اتفاق بين طرفين يلتزم فيه أحد الطرفين بدفع تراكات أو أقساط والآخر ملزم بتقديم ضمانات كاملة لدافعي الاشتراكات / الاشتراكات / الأقساط إذا حدث شيء ما الطرف الأول أو ممتلكاته وفقًا للاتفاق المبرم. النهج المستخدم في هذه الدراسة هو نهج وصفي نوعي. يسعى هذا النهج إلى استكشاف وفهم الظاهرة المركزية من أجل الحصول على بيانات متعمقة لكشف الحقائق التي حدثت في موضوع البحث. يمكن أن تساهم المساهمات النظرية في هذه الدراسة في المعرفة حول شراكة التأمين لـ PT. ASYKI في زيادة عدد المشاركين في التأمين. من الناحية العملية حتى لا يساور الناس شك حول التأمين الشرعي على الحياة ، سواء من الناحية القانونية أو الرسمية المتعلقة بالتأمين .وقد أظهرت نتائج هذه الدراسة أن PT. تعتبر وحدة ASYKI Pasuruan للتأمين الشرعي للأسرة الإندونيسية بشكل عام جيدة ووفقًا للقانون رقم 40 لعام 2014 في إدارة إدارة المخاطر على أساس مبادئ الشريعة الإسلامية ، على الرغم من أنه من الممكن للأفراد التسجيل بشكل فردي ، وهو الحل الذي تقدمه PT. يجب أن تسجل وحدة ASYKI Pasuruan بوالص التأمين الموجهة بشكل فردي إلى أحد الشركاء الذين يعملون مع PT. سيفتح ASYKI وفي المستقبل فرصًا لمسجلي السياسة الفردية بحيث يكون الجمهور أكثر حرية في التعرف على التأمين على الحياة وتطبيقه وفقًا للشريعة بسهولة دون الحاجة إلى المرور عبر كيان تجاري أو شركة تعمل كوسيط. Abstrak: Asuransi jiwa syari’ah merupakan pertanggungan atau perjanjian antara dua belah pihak yangmana pihak satu berkewajiban membayar kontribusi atau premi dan yang lainnya memiliki kewajiban memberikan jaminan sepenuhnya kepada pembayar iuran/kontribusi/premi apabila terjadi sesuatu yang menimpa pihak pertama atau barang miliknya sesuai dengan perjanjian yang sudah dibuat. Pendekatan yang digunakan dalam penelitian ini adalah pendekatan kualitatif deskriptif. Pendekatan ini berusaha mengekplorasi dan memahami gejala sentral agar mendapatkan data yang mendalam guna mengungkapkan fakta yang terjadi pada objek penelitian. Kontribusi teoritis dalam penelitian ini dapat memberikan sumbangsih ilmu pengetahuan tentang kemitraan asuransi PT. ASYKI dalam menambah jumlah peserta asuransi. Adapun secara praktis agar masyarakat tidak memiliki keraguan mengenai asuransi jiwa shariah, baik secara yuridis formal yang berhubungan dengan perasuransian. Hasil dari penelitian ini bahwa PT. Asuransi Shariah Keluarga Indonesia ASYKI Unit Pasuruan secara umum dan keseluruan sudah baik dan sesuai dengan UU No.40 Tahun 2014 dalam pengelolaan manajemen resiko sudah berdasarkan prinsip shariah, meskipun tidak menutup kemungkinan ada individu yang mendaftarkan diri secara perorangan, namun solusi yang ditawarkan dari pihak PT. ASYKI Unit Pasuruan hendaknya pendaftar poli asuransi secara individu di arahkan pada salah satu mitra yang bekerja sama dengan PT. ASYKI dan ke depannya akan membuka peluang bagi pendaftar polis secara perorangan sehingga masyarakat lebih leluasa untuk mengenal dan menerapkan asuransi jiwa shariah dengan mudah tanpa harus melalui badan usaha atau perusahaan yang menjadi perantara.

Flood risk policies in Italy: a longitudinal institutional analysis of continuity and change

ABSTRACT This paper analyses continuity and change in flood risk management policies in Italy between 1952 and 2020. By using the politicized institutional analysis and development (IAD) framework, we systematically analyse the interplay between discursive, institutional and contextual factors to explain policy continuity and change. Italian flood risk management has traditionally been state-centred and focused on flood protection infrastructure for hazard reduction. Although shock events and European Union directives have been triggers for change, the policy shift towards a risk-based approach has been hampered by strong centralism and a hostile attitude towards the differentiation of rules and practices.

Urban flood resilience, a multi-level institutional analysis of planning practices in the Metropolitan City of Naples

Due to increasing flood risks, urban planners and water managers are called to enhance urban flood resilience. The implementation of resilience measures requires coordination across levels of government. This study aims to unravel the complexity of implementing spatial strategies to enhance urban flood resilience in the Metropolitan City of Naples. The research is informed by the politicized Institutional Analysis and Development framework, which relates contextual variables, discourses, and institutions (formal\\informal rules-in-use) to policy outcomes. This framework is used to explain the outcomes of decision-making in multiple nested action arenas on urban flood risk management policies. It is shown that closed decision-making processes that do not involve lower levels of government, limited monitoring and enforcement, and illegal practices lead to poor coordination across levels of government. This lack of coordination explains why floodplain occupancy continues, thus hampering the shift towards a risk-based approach in flood risk management.

Gender as moderator of the influence of tourists’ risk perception on destination image and visit intentions

El género como moderador en la influencia de la percepción de riesgo de los turistas en la imagen de destino y las intenciones de visitaPropósitoEste artículo analiza la influencia del género en las relaciones teóricas y empíricas entre las percepciones de riesgo de los turistas y la imagen del destino y las intenciones de visitar.Diseño/metodología/enfoqueSe ha llevado a cabo un estudio empírico a turistas potenciales en Alemania y Reino Unido que consideran viajar a España, Egipto, Marruecos, Brasil, Colombia e Indonesia en un futuro próximo. Los datos se analizaron utilizando un Modelado de Ecuaciones Estructurales con Análisis Multigrupo.ResultadosLos resultados muestran que el género actúa como variable moderadora en las relaciones teóricas entre la percepción del riesgo, la imagen del destino y las intenciones de comportamiento. La percepción del riesgo es mayor para las mujeres que para los hombres y depende del tipo de riesgo y de las características del destino. Las mujeres están más dispuestas que los hombres no visitar un destino cuando aumenta la percepción del riesgo. Sin embargo, la influencia de la percepción del riesgo en la imagen del destino es mayor para los hombres que para las mujeres. Por tanto, los resultados demuestran que existen importantes diferencias de género en las relaciones teóricas entre las percepciones de riesgo, la imagen del destino y las intenciones de visitar.OriginalidadEste estudio proporciona nuevas evidencias sobre las diferencias de género en las percepciones de riesgo en turismo y su impacto en la imagen del destino y las intenciones de visitar, demostrando que cuando aumenta el riesgo en un destino turístico, las mujeres estarán más dispuestas que los hombres a cambiar de destino. Los resultados son útiles para el diseño de políticas de promoción y gestión de riesgos en destinos desde la perspectiva de género, considerando las diferencias de género en los comportamientos de viaje y las decisiones de consumo.Palabras clave:Comportamiento, Destino, Género, Perspectiva de género, Imagen, RiesgoTipo de papelTrabajo de investigación

Effect of Risk Mitigation on Profitability of Insurance Industries in Nigeria

Risk management plays a critical part in every organization‘s profit maximization through risk cost minimization for wise protection, which cannot be overstated. Risk mitigation (rmt), risk monitoring (rmn), risk management environment, procedure, and policies (epp), and risk measurement (rme) in relation to the profitability of the insurance industry in Nigeria were randomly selected from a wellstructured 5-point Likert scale questionnaire ranging rom ‘5 strongly agree‘ to ‘4 agree‘, ‘3 undecided‘ to ‘1 strongly disagree‘. Using the StataSE 14 statistical software, one hundred and twenty (120) questionnaires were recovered from respondents, accounting for 83 percent of the total questionnaires sent using the multiple regression statistical methodology. Risk reduction and risk monitoring have a considerable impact on the profitability of insurance companies in Nigeria, according to the findings. As a result, it concluded that risk mitigation and monitoring are important factors in determining industry profitability, and those insurance regulators should work to ensure that risk identification, assessment, measurement, and control mechanisms are implemented in accordance with best global practices in order to avoid financial crises and improve insurance performance.

WHAT DRIVES RETURN OF SUKUK IN THE LONG AND SHORT TERMS?

This study aims to determine the effect of liquidity, inflation, and interest rates on the return of State Retail Sukuk (SUKRI) both in the short term and in the long term. Sampling in this study used a purposive sampling method by considering that the maturity of the series is the most recent and can be obtained in the secondary market and the data sources obtained from the monthly statistical reports of the Indonesia Stock Exchange (idx.go.id), the official website of Bank Indonesia (bi.go.id), as well as through a special request to The Indonesia Capital Market Institute (TICMI). Analysis of the data used in this study is a time series, namely research that is measured over a certain period of time. The period data used was in March 2017 on the grounds that the 009 Retail Sukuk as the object of this study were published in that month and ended in March 2020. The method used in this study is ARDL-ECM after going through the stationarity test and cointegration test. The results show that in the long term only the BI rate variable has a significant positive effect on Sukuk Returns, while in the short term only the Liquidity variable has a significant effect on Sukuk Returns. On the other hand, the inflation variable is known to have no significant effect on the Sukuk Returns in the long and short term. This research can be a reference for investors to make decisions in choosing SUKRI as their investment portfolio, as well as a consideration for the government in regulating risk management policies and determining the results offered to SUKRI which will be issued for subsequent series.

Behavioral models in insurance risk management

Behavioral characteristics attributed to consumers of insurance services are a relevant factor for analyzing the current situation in the insurance market and developing effective strategies for insurers’ actions. In turn, considering these characteristics allows the insurer to be more successful in the highly competitive field, achieving mutual satisfaction in interacting with the customer. This study is aimed to develop cognitive models of the situation (frame) “Insurance”, taking into account the specifics of the Russian insurance market and systemic factors affecting participants’ behavior in the market. In this regard, the study involves systemizing risks at various levels of the economic system, generalizing factors for the motivation of insurance consumers, developing descriptive and economic-mathematical models for the behavior of economic entities in risky situations.The results obtained represent a behavioral model of interactions among insurance market entities, which determines opportunities for efficient and mutually beneficial coordination of their activities. The developed model includes the following elements: structured individual and institutional frames “Insurance”; a professional index of interest in insurance presented in the form of a mathematical model; methodology for governing the relationships among insurance participants in the digital environment.The recommendations enable predictions of the situation in the insurance market and allow most accurately defining the consumer needs in the conditions of market changes.

Social Influences on Flood Preparedness and Mitigation Measures Adopted by People Living with Flood Risk

This paper aims to analyse evidence, based on one of the largest and most representative samples of households previously flooded or living with flood risk to date, of social patterns in a range of flood resilience traits relating to preparedness prior to a flood (e.g., property adaptations, contents insurance, etc.) and mitigations enacted during and immediately following a flood (e.g., receiving a warning, evacuation into temporary accommodation, etc.). The data were collected from a 2006 survey of 1223 households from a variety of locations across Scotland between one and twelve years after major local floods. Our analysis identifies remarkably few social differences in flood preparedness and mitigation measures, although some aspects of demography, housing and length of residence in an area, as well as personal flood history, are important. In light of this finding, we argue that social differences in vulnerability and resilience to flooding arise from deep-seated socio-economic and socio-spatial inequalities that affect exposure to flood risk and ability to recover from flood impacts. The engrained, but well-meaning, assumption in flood risk management that impoverished households and communities are lacking or deficient in flood preparedness or mitigation knowledge and capabilities is somewhat pejorative and misses fundamental, yet sometimes invisible, social stratifications play out in subtle but powerful ways to affect households’ and communities’ ability to avoid and recover from floods. We argue that general poverty and inequality alleviation measures, such as tax and welfare policy and urban and community regeneration schemes, are likely to be as, if not more, important in alleviating social inequalities in the long-term impacts of floods than social targeting of flood risk management policy.

Psychological assistance at disaster in Bulgaria - contemporary policies for health risk management

Abstract Issue Health risk management (HRM) in Bulgaria is provided to citizens in emergencies, disasters, accidents and catastrophes (E&DAC). According to the legislation in the country, this is a part of the mandatory package of medical provision for the injured population (MPIP) and concerns any acute life-threatening condition (LTC). In the dynamically changing environment of E&DAC, a special form of health consequences among survivors are related to mental health (MeH). Description of the problem In practice, any serious E&DAC has a direct or indirect psychological impact. It can manifest itself acutely or remotely over time, puts the victims in temporary or permanent disability and is followed by serious social effects. A strategy has been proposed for inclusion in the obligatory package of MPIP in case of significant E&DAC and primary psychological assistance (PPA) for every citizen who has survived. Results In the country, PPАs to citizens for decades is an on-demand service provided mainly by the private sector. Within the BRC, a group has been formed to provide PPA with a modest resource capacity. The emotional citizens culture in the country is far from active demand for PPA in general and severely limited in resources and the MeH is not a priority. This system of public health care, based on withdrawal from the MeH, also exposes to increased risk of psycho-somatic and distress-provoked physical illnesses (PSDPPhI). Lessons Carrying out timely PPA for those in need changes the range of adverse mental effects, reducing them. Provides a better adaptive response to reduced risk of PTSD and PSDPPhI. A volume of preventive measures organized in stages over time gives a greater chance to a larger number of victims. Key messages The health of the nation is a complex program for controlling both the acute health problems at E&DAC and the protection of MeH. To provide modern sustainable policies for the implication of PPA in everyone who has seriously experienced E&DAC is resulted in good health practices.

COMPLIANCE RISK MANAGEMENT IMPLEMENTATION IN DIRECTORATE GENERAL OF TAXATION REPUBLIC OF INDONESIA

The vast amount of taxpayer and the limited resources in Indonesian Tax Authority (DJP) to monitor the taxpayer, require DJP to plan tax audit optimally. This study aim to analyze the effectifity of Compliance Risk Management (CRM) policy in DJP. This study is using qualitative approach through interview with 7 peoples who have roles in implementing tax policy in Indonesia. This study founds the importance of CRM policy, in which the tax authority cannot apply the same treatment to all taxpayers, so it needs to decide which taxpayer needs to be investigated with rational justification based on risk level. Tax authority needs to focus on implementing CRM as an important source of information in decision making process.

Dynamic correlation of market connectivity, risk spillover and abnormal volatility in stock price

The connectivity of stock markets reflects the information efficiency of capital markets and contributes to interior risk contagion and spillover effects. We compare Shanghai Stock Exchange A-shares (SSE A-shares) during tranquil periods, with high leverage periods associated with the 2015 subprime mortgage crisis. We use Pearson correlations of returns, the maximum strongly connected subgraph, and 3σ principle to iteratively determine the threshold value for building a dynamic correlation network of SSE A-shares. Analyses are carried out based on the networking structure, intra-sector connectivity, and node status, identifying several contributions. First, compared with tranquil periods, the SSE A-shares network experiences a more significant small-world and connective effect during the subprime mortgage crisis and the high leverage period in 2015. Second, the finance, energy and utilities sectors have a stronger intra-industry connectivity than other sectors. Third, HUB nodes drive the growth of the SSE A-shares market during bull periods, while stocks have a think-tail degree distribution in bear periods and show distinct characteristics in terms of market value and finance. Granger linear and non-linear causality networks are also considered for the comparison purpose. Studies on the evolution of inter-cycle connectivity in the SSE A-share market may help investors improve portfolios and develop more robust risk management policies.

ANALISIS KEBIJAKAN COMPLIANCE RISK MANAGEMENT BERBASIS MACHINE LEARNING PADA DIREKTORAT JENDERAL PAJAK

Implementation of tax self-assessment system gives full trust to taxpayers to calculate, pay, and report their tax themselves. To get the optimum result, the implementation of this system is determined by the level of compliance of the taxpayers. It is affected by internal and external factors such as technology, resources, legislation where the tax authority operating, organization’s aim and strategy, and public general tax conformity. This study aim to analyze taxpayer conformity level with machine based Compliance Risk Management (CRM) policy. This study is using qualitative approach through interview with people who have roles in implementing tax policy in Indonesia. This study founds the importance of machine learning based CRM policy, in which the tax authority cannot apply the same treatment to all taxpayers, so it needs to decide which taxpayer needs to be investigated with rational justification based on risk level. Tax authority needs to focus on implementing big data analytics with machine learning algorithm as an important source of information in decision making process, and helps predict taxpayers with potential fraud, so it can be used to reduce task risk before it happens.

English

Climate Compatible Development (CCD) is an emerging development approach which seeks to minimize the threat posed by climate change while maximize the opportunities for development. In view of the adverse impact of climate change on the general development of the country, Ethiopia, a number of polices which constitute climate change mitigation and adaptation strategies have been adopted and established. Among such polices, Ethiopian water resources and disaster risk management policy is expected to have direct and indirect role in addressing climate change mitigation and adaptation. Rainwater harvesting, water shed management, use of water efficiently, small scale irrigation and water resource protection, strengthening drought and flood early warning system are adaptation strategies for water resource policy, and water harvesting and improved energy efficiency are low carbon footprint strategies/mitigation strategies. Disaster risk management policy also comprises climate change and variability related disaster risk reduction strategies; enhancing early warning information system, and safety net program as the climate change mitigation and adaptation strategies, which are the major component of CCD. These policies also have its own limitation in relation to the system base and institutional gap in implementing CCD. In fact, these barriers can be eased by updating and/or adjustment of the policies under the framework of climate compatible development; mainstreaming climate change issues into water resource and disaster risk management policy; strengthening sector-wise linkage and synergy to avoid overlap; as well as monitoring the climate change mitigation and adaptation strategies among sectors. Key words: Climate change, low-carbon footprint, adaptation, mainstreaming, Ethiopia

ENTERPRISE RISK MANAGEMENT ON FIRM VALUE : EMPIRICAL STUDY ON MANUFACTURING SECTOR COMPANIES LISTED ON THE INDONESIA STOCK EXCHANGE

Enterprise risk management (ERM) is being adopted by many firms globally and the value relevance of enterprise risk management is scarce. The purpose of this study was to determine the impact of enterprise risk management on firm value for companies on the Indonesia Stock Exchange. This study is conducted using a sample of manufacturing companies listed on the Indonesia Stock Exchange from 2012 to 2020. The findings indicate a significant correlation between enterprise risk management and firm value, indicating that enterprise risk management significantly contributes to firm value. These findings may be used to develop and shape enterprise risk management policy frameworks for firms and countries. The study provides new insights, from an Indonesian emerging market context on the value effects of enterprise risk management. Nonetheless, this study found that companies with larger and international samples may improve future studies. Keywords: Corporate Risk, Enterprise risk management, Firm Value.

Modeling Non-Maturing Demand Deposits: A Proposed Methodology to Determining the Idiosyncratic Confidence Level Used for Separating Stable Deposit Volumes From Volatile Deposit Volumes

This paper aims to develop a methodology for the estimation of the idiosyncratic confidence level inherent within the process of determining the threshold of separation between volatile and stable deposit volumes. The idiosyncratic confidence level must be reflective of the institution’s specific risk preferences and liquidity risk management policies as anchored into the Principle 9 of the European Banking Authority and Basel Committee for Banking Supervision recommendations. We illustrate the proposed methodology by including liquidity constraints from the Basel III regulatory recommendations introduced in 2013. Furthermore, we point to other ancillary applications of such procedures in the financial risk management practice.