Risk Management and Financial Institutions

Risk Management and Financial Institutions, Fifth Edition explains all aspects of financial risk and financial institution regulation, helping you better understand the financial markets—and their potential dangers. Inside, you’ll learn the different types of risk, how and where they appear in different types of institutions, and how the regulatory structure of each institution affects risk management practices. Comprehensive ancillary materials include software, practice questions, and all necessary teaching supplements, facilitating more complete understanding and providing an ultimate learning resource. All financial professionals need to understand and quantify the risks associated with their decisions. This book provides a complete guide to risk management with the most up to date information.

Book contents:

  1. Introduction

  2. Banks

  3. Insurance Companies and Pension Plans

  4. Mutual Funds, ETFs, and Hedge Funds

  5. Trading in Financial Markets

  6. The Credit Crisis of 2007–2008

  7. Valuation and Scenario Analysis: The Risk-Neutral and Real Worlds

  8. How Traders Manage Their Risks

  9. Interest Rate Risk

  10. Volatility

  11. Correlations and Copulas

  12. Value at Risk and Expected Shortfall

  13. Historical Simulation and Extreme Value Theory

  14. Model-Building Approach

  15. Basel I, Basel II, and Solvency II

  16. Basel II.5, Basel III, and Other Post-Crisis Changes

  17. Regulation of the OTC Derivatives Market

  18. Fundamental Review of the Trading Book

  19. Estimating Default Probabilities

  20. CVA and DVA

  21. Credit Value at Risk

  22. Scenario Analysis and Stress Testing

  23. Operational Risk

  24. Liquidity Risk

  25. Model Risk Management

  26. Economic Capital and RAROC

  27. Enterprise Risk Management

  28. Financial Innovation

  29. Risk Management Mistakes to Avoid

  30. Appendices