Economic capital in the limelight
Journal of Financial Regulation and Compliance
ISSN: 1358-1988
Article publication date: 1 December 2004
Abstract
“Economic capital (EC) is in – Value at Risk (VaR) is out!” This statement by James Lam, well known to be the first Chief Risk Officer (CRO) worldwide, at the April 2004 Enterprise Risk Management (ERM) Symposium in Chicago, caused quite a reaction by the attendees. What is EC? Why are banks and insurance companies focused on calculating EC? What are the differences between EC and regulatory or rating agency capital? What are rating agencies’ views towards EC? This paper, summarising a panel on this topic, which was held at the ERM Symposium in Chicago in April of this year, attempts to answer these questions, focusing on the application of EC to life insurance companies.
Keywords
Citation
Mueller, H. and Siberón, J. (2004), "Economic capital in the limelight", Journal of Financial Regulation and Compliance, Vol. 12 No. 4, pp. 351-358. https://doi.org/10.1108/13581980410810894
Publisher
:Emerald Group Publishing Limited
Copyright © 2004, Emerald Group Publishing Limited