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COVER
STORY
Financial
Engineering: A Strategic Risk Management Concept - - Arindam Banerjee
Financial
engineering (FE) essentially involves the design, development
and implementation of financial instruments, processes and
strategies to solve the financial problems. In the arena of
risk management, the financial engineering has contributed
in numerous ways by the introduction of new instruments and
strategies. The important innovations among these instruments
include the financial derivatives, which are considered to
be a fine craft of FE and an important risk management tool.
This article discusses the contribution of financial engineering
in financial risk management.
© 2005 IUP. All Rights Reserved
RISK
New
Standards in Risk Retention in Insurance - - K Ramachandran
Concept
of risk is hardly taught during our schooling. The closest
we come face to face with risk is when we face admonitions
for over reaching beyond our capabilities. We grow up without
the feel and understanding of risk! Our education orients
us to functional capabilities and making a career of it. In
our professional life this has the effect of directing attention
towards operational issues to the neglect of conscious attention
to risk issues. This article confer the risk management practices
followed in insurance industry.
© 2005 IUP. All Rights Reserved
RISK
Value
at Risk: A New Tool of Risk Measurement - - Dibyendu Dutta
Value
at Risk (VaR) has become a favorite risk measurement tool
among the banks and financial institutions all over the world.
The banks are mainly using the VaR as risk metrics to describe
the probability of the market risk of a trading portfolio.
Not only banks, but securities firms, commodity dealers etc.,
are also using VaR. This article gives a meticulous discussion
on the VaR as risk metrics and its application in risk measurement
and control.
© 2005 IUP. All Rights Reserved
RISK
VaR
Application in Financial Institutions - - G Mohan Kumar
Globally,
financial concerns are placing increasing reliance on statistical
models to measure and manage financial risks, ranging from
market risks to credit risks to operational risks over the
past decade. Such models have gained credibility because they
provide a coherent framework for identifying, analyzing and
communicating these risks. This article gives a comprehensive
idea about VaR which is a technique used to estimate the probability
of portfolio losses based on the statistical analysis of historical
price trends and volatilities.
© 2005 IUP. All Rights Reserved
RISK
Credit
Default Swaps: Finally to be Listed in an Exchange - - Amandio FC da Silva
A
credit default (CD) swap gives protection to the buyer of
the swap against specific risks. In case of a buyer of the
CD swap gets credit protection while the seller of the CD
swap guarantees the creditworthiness of the product. This
derivative instrument in future can become very popular among
bankers and can be traded through exchange. This article talks
about the pros and cons of listing such an instrument in an
exchange.
© 2005 IUP. All Rights Reserved.
FOREX
The
Renminbi Exchange Rate Revaluation Unshackling the Dragon - - KL Narasimha Rao
The
remarkable export growth in China has caused huge trade surplus
with the US and other developed countries and in turn the
Chinese foreign currency reserve has increased. There has
been a continuous demand from the US to revalue the Chinese
currency. Finally, China has revalued its currency. But the
question is will it help the US to reduce the trade deficit?
This article discusses the different facets of the Renminbi
exchange revaluation and its impact on other countries.
© 2005 IUP. All Rights Reserved
FOREX
Issues
in Export of Fruits in India - - B Sashikala
Since
the inception of economic reforms, there has been a remarkable
improvement in the trade relations of India with other foreign
countries. Agricultural sector in India is one such avenue
where there is a vast export potential in the areas of fresh
fruits, vegetables and other related products. Considering
the diversity and size of this sector, the export potential
has to be tapped furthermore. This article discusses some
of the major issues associated with the export of fruits in
India.
© 2005 IUP. All Rights Reserved
SPEECH
Regulation
and Risk Management: Implementing Basel II - - V Leeladhar
© 2005 Reserve Bank of India (www.rbi.org.in). This speech
was delivered at the Platinum Jubilee celebrations of the
South Indian Bank Ltd., Thirussur, July 9, 2005.
CASE
STUDY
The
Merger of Centurion Bank with Bank of Punjab - - B Sravana Kumar
The
merger of Centurion Bank with Bank of Punjab is a new beginning
in the Indian Banking industry. Earlier, we have seen troubled
banks being merged with Public Sector Banks under the guidelines
of RBI. The merger of these two banks is an example for other
struggling banks to chalk out a strategy for their growth
rather than look for a public sector banks to take them over.
© 2005 IUP. All Rights Reserved.
BOOK
REVIEW
Financial
Derivatives: Pricing, Applications, and Mathematics - - Jamil Baz, George Chacko
Principles
in pricing of financial derivatives are very complex and intricate
to understand. Through this book, the authors have brought
in the methodical mathematics, applications and methodologies
in pricing financial derivatives in one place. The book has
four parts which deal with Preliminary Mathematics, Principles
of Financial Valuation, Interest Rate Models, and Mathematics
of Asset Pricing.
© 2004 Jamil Baz and George Chacko. All Rights Reserved. The
IUP holds the copyright for the review.
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