Search results

Most non-financial companies in Greece do not have an ERM function nor present one in their organizational charts. The enterprise risk management is still more theory than practice even for companies that have embraced it so far, and in general the enterprise risk management seems to be at its infancy in Greece with only some prominent and mature organizations showing the way forward. The aim of this study is to provide some reflections about risk disclosure in annual reports and accounting practices in Greece. Although companies in Greece do seem reluctant to apply ERM, during last years, non-financial information demonstrated to emerge within financial statements and annual reports, giving a broader perspective to risk.

The purpose of this research is to create an expert risk‐based piping system inspection model. The proposed system includes a risk‐based piping inspection system and a piping inspection guideline system. The research procedure consists of three parts: the risk‐based inspection model, the risk‐based piping inspection model, and the piping inspection guideline system model. In this research procedure, a field plant visit is conducted to collect the related domestic information (Taiwan) and foreign standards and regulations for creating a strategic risk‐based piping inspection and analysis system in accordance with the piping damage characteristics in the petrochemical industry. In accordance with various piping damange models and damage positions, petrochemical plants provide the optimal piping inspection planning tool for efficient piping risk prediction for enhancing plant operation safety.

The purpose of this paper is to investigate Financial Action Task Force (FATF)'s risk‐based guidance to combat money laundering and terrorist financing to determine its approach to the identification and management of low‐risk providers, products and transactions.

The paper analyses the relevant FATF recommendations and its guidance notes and reflects on key questions for regulators and financial institutions.

FATF has not defined “risk” for purposes of the risk‐based approach. The absence of a clear definition complicates the identification of low‐risk products. FATF do provide an example of a risk matrix that can be used to identify low‐risk banks, but the example is based on assumptions and generalisations that are not sustainable. In addition, it identifies certain low‐value transactions as “low risk” transactions. The paper reflects on the role of value as an indicator of risk and concludes with a number of suggestions to clarify the conceptual framework.

Low‐risk products and transactions are often overlooked because the risk‐based approach focuses attention on high‐risk matters. Low‐risk products are however crucial to the efforts to increase financial inclusion. The paper identifies gaps in the current conceptual framework and indicates ways in which they can be addressed.

Here the author proposes the Mutual Insurance Model with Incentive Compatibility (MIMIC). MIMIC is a model for deposit insurance that mimics the incentives and practices of a private sector, mutual, insurance organisation. The main features of MIMIC are: fully risk‐based premiums, payments by the Federal Deposit Insurance Corporation (FDIC) to the US Treasury Department (the Treasury) for its line of credit and ‘catastrophe insurance’, rebates to banks when the reserve ratio exceeds a risk‐based ceiling, surcharges on banks when the reserve ratio dips below a risk‐based floor, dilution fees on deposit growth to maintain reserve ratio and refunds to banks to maintain reserve ratio when their deposits shrink.

The purpose of this paper is not only seek to trace developments that have contributed to the importance of risk in regulation, but also to justify why risk has become so significant within regulatory and governmental circles.

This task will be facilitated through a consideration of theories associated with risk, and by reference to two forms of risk regulation, namely risk‐based regulation and meta regulation. As well as a consideration of the application of both in jurisdictions such as the UK, the paper adopts a comparative approach through references to the their application in jurisdictions such as Germany, Italy, and the USA, and also through a comparison between meta‐regulatory strategies and risk‐based regulation.

This paper concludes that all regulatory strategies should take into consideration the importance of management responsibilities – both on individual and corporate levels. Meta‐risk regulation has not only assumed such a prominent position in regulation through its application in Basel II, but also is preferred to risk‐based regulation – not only because of the element of ambiguity which risk‐based regulation introduces into its assessment (through a consideration of the external environment of the firm), but also because of its impact of the use of external auditors in regulation and supervision.

The practical implications of a move towards risk‐based regulatory strategies, and meta‐regulatory strategies in particular, is that courts are simply not adequately equipped to deal with the pace with which some financial instruments, such as derivatives, operate.

This paper not only introduces originality through its comparative approach and the choice of jurisdictions involved, but also through the attention it draws to the need for more innovative techniques such as meta regulation. Meta regulation can be considered to be the most evolved and collaborative form of regulation, which is best suited for such an ever‐evolving and changing regulatory environment that currently exists.

The purpose of this paper is to explain the rule‐based and risk‐based anti‐money‐laundering (AML) approach, to demonstrate the implementation problems in carrying out a risk‐based approach (RBA) to AML and finally propose in what way the RBA should be conducted in China.

This paper analyzes the practice of money‐laundering risk management in Chinese AML programs, compares the rule‐based AML approach and the risk‐based AML approach, and discusses the practical condition of carrying out the risk‐based AML approach in China.

Although China has made significant progress on combating money laundering, the practice of money‐laundering risk management in Chinese AML programs is still weak, and the pre‐conditions for fully implementing the RBA in China are yet to be met.

This paper highlights the practical issues preventing Chinese authorities from fully implementing a risk‐based AML approach, and proposes a “rule‐based but risk‐oriented” AML approach (a partial RBA) in the context of Chinese realities.

This paper aims to argue that the Nigerian banking industry needs to adopt a risk-based regulation as a future regulatory model in the industry. The frequent distress and failures in the industry have shown that reliance on recapitalisation and on credit rating information by the supervisors and investors to determine the health of the financial institutions is less than satisfactory. This is more so when agency ratings suffer accountability deficits.

This paper posits that while the regulation of the credit ratings is necessary for institutional accountability, it is never a substitute for oversight functions and due diligence exercise for both the supervisors and investors in the industry. This exploratory research paper is structured to cover the origin of banking regulation in Nigeria, the recapitalised efforts by the regulators, the problem with the agency ratings and why the future of Nigerian banking regulation should be risk-based.

This research paper posits that while reliance on recapitalisation strategy and agency rating publications is relevant in banks, the future of Nigerian banking regulation should be risk-based.

The Nigerian banking industry should develop effective risk-management structures in line with the international regulatory framework.

In Australia, national harmonisation of occupational health and safety (OHS) regulation was pursued through the development of model Work Health and Safety legislation. The model Work Health and Safety Regulations specify that construction works above a threshold cost of AU$250,000 are deemed to be construction projects requiring the appointment of a principal contractor with duties relating to OHS planning and coordination. The purpose of this paper is to explore the effectiveness of the monetary threshold as a suitable trigger for specific OHS planning and coordination duties.

Interviews were conducted with 46 Australian construction industry stakeholders, including union representatives, employer groups, construction firm representatives and regulators, as well as four international construction OHS experts, to explore perceptions about the effectiveness of the monetary threshold. Two construction scenarios were also modelled to test for variability in operation of the threshold by geographical location of works and design conditions.

The monetary threshold was perceived to be subject to two forms of capture problem, reflecting inadvertent capture of low risk works or failure to capture high risk works. Organisations were also reported to deliberately split contracts to avoid capture by the threshold. The cost-estimate modelling revealed inequalities and variation in the operation of the monetary threshold by geographic location and design specification.

The analysis suggests that limitations inherent in the use of a monetary threshold to trigger duties relating to OHS planning and coordination in construction works. Opportunities to use more sophisticated risk-based mechanisms are considered.

The study explores a fundamental challenge of risk-based OHS regulation, i.e., how to ensure that workers’ health and safety are adequately protected without creating an unnecessarily high regulatory burden. The research provides evidence that using a monetary value as a proxy measure for OHS risk in construction projects may be problematic.

In September 2009, G20 representatives called for introducing a minimum leverage ratio as an instrument of financial regulation. It is supposed to assure a certain degree of core capital for banks, independent of the controversial procedures used to assess risk. The paper aims to discuss these issues.

This paper discusses the interaction and tensions between the leverage ratio and risk-based capital requirements, using financial data of the Swiss systemically important bank United Bank of Switzerland.

It can be shown that the leverage ratio potentially undermines risk weighting such that banks feel encouraged to take greater risks.

The paper proposes an alternative instrument that is conceived as a base risk weight and functions as a backstop. It ensures a minimum core capital ratio, based on unweighted total exposure by ensuring a minimum ratio of risk-weighted to total assets for all banks. The proposed measure is easy to compute like the leverage ratio, and also like the latter, it is independent of risk weighting. Yet, its primary advantage is that it does not supersede risk-based capital adequacy targets, but rather supplements them.

The Basel Committee has proposed a new capital framework to respond to the deficiencies of the 1988 Capital Accord (Basel I). The 1988 Accord has been criticised for its crude assessment of risk and for creating opportunities for regulatory arbitrage. In principle, the new approach, often referred to as Basel II, is not intended to raise or lower the overall level of regulatory capital currently held by banks, but to make it more risk sensitive. The spirit of the new Accord is to encourage the use of internal systems for measuring risks and allocating capital (the Accord extends the use of internal models from market risk to credit risk). A number of issues have been raised, however, with regard to its complexity, its cost, its impact on procyclicality, the possibility that it can lead to competitive distortions if some countries do not apply it (some big emerging economies) or apply it differently to small and big institutions (the USA) and others. Banks in Europe will also be obliged to comply with the new Capital Directive, often referred to as CAD III, which is the means by which the EU will implement the new Basel Capital Accord. CAD III will apply to all credit institutions and investment firms and not only to internationally active banks, as Basel does. This paper presents a critical approach to these developments and examines their impact upon the banking industry.