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1 – 10 of over 86000Paul N. Finlay and Steven B. Tyler
Describes the means by which the performance of propertyinvestments can be measured and analysed. Reports on the results of aquestionnaire survey looking into the practice of UK…
Abstract
Describes the means by which the performance of property investments can be measured and analysed. Reports on the results of a questionnaire survey looking into the practice of UK independent property portfolio managers. Suggests that a survey of financial institutions, namely insurance companies and pension funds, would reveal more about the objectives of performance measurement.
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Miguel Calvo and Marta Beltrán
This paper aims to propose a new method to derive custom dynamic cyber risk metrics based on the well-known Goal, Question, Metric (GQM) approach. A framework that complements it…
Abstract
Purpose
This paper aims to propose a new method to derive custom dynamic cyber risk metrics based on the well-known Goal, Question, Metric (GQM) approach. A framework that complements it and makes it much easier to use has been proposed too. Both, the method and the framework, have been validated within two challenging application domains: continuous risk assessment within a smart farm and risk-based adaptive security to reconfigure a Web application firewall.
Design/methodology/approach
The authors have identified a problem and provided motivation. They have developed their theory and engineered a new method and a framework to complement it. They have demonstrated the proposed method and framework work, validating them in two real use cases.
Findings
The GQM method, often applied within the software quality field, is a good basis for proposing a method to define new tailored cyber risk metrics that meet the requirements of current application domains. A comprehensive framework that formalises possible goals and questions translated to potential measurements can greatly facilitate the use of this method.
Originality/value
The proposed method enables the application of the GQM approach to cyber risk measurement. The proposed framework allows new cyber risk metrics to be inferred by choosing between suggested goals and questions and measuring the relevant elements of probability and impact. The authors’ approach demonstrates to be generic and flexible enough to allow very different organisations with heterogeneous requirements to derive tailored metrics useful for their particular risk management processes.
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Joseph Calandro and Scott Lane
The purpose of this paper is to introduce the concept of an Enterprise Risk Scorecard.
Abstract
Purpose
The purpose of this paper is to introduce the concept of an Enterprise Risk Scorecard.
Design/methodology/approach
With the accelerating growth in global risk levels leading to an intense current demand for risk management solutions, an analysis was conducted on whether a scorecard framework could be applied to risk measurement. This analysis included a survey of Kaplan and Norton's voluminous and seminal writings on the Balanced Scorecard, in which, surprisingly, relatively little on the measurement of risk was found.
Findings
The findings suggest that a scorecard framework could be an effective risk measurement, management and communication tool. For both design and organizational reasons it is recommended that risk scorecards be separate from performance scorecards.
Research limitations/implications
Utilizing two scorecards – one for performance and a separate one for risk – could provide strategy‐focused organizations with a more comprehensive diagnostic control system. The research implications of this approach could be significant, as it essentially opens up a new field of research.
Originality/value
This is assumed to be the first formal paper on risk and a scorecard framework. Previous work on integrating risk measurement frameworks is very different from the approach proposed here.
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The theory of finance is built around return and risk concepts and a basic tenet of finance is that there is a trade off between the risk and returns of assets. As such the…
Abstract
The theory of finance is built around return and risk concepts and a basic tenet of finance is that there is a trade off between the risk and returns of assets. As such the measurement of risk goes to the very core and foundation of the theory of finance. Given that the main theories of finance have been maturing over several decades of discussion and debate, one would imagine that a concept as fundamental as the measurement of risk would be a well settled issue by now. On the contrary, the recent finance literature shows ample evidence that risk measurement and risk concepts are drawing continued scrutiny from academic researchers. This is because there are several alternative, and competing ways in which risk can be conceived of and it is not clear which of the alternative concepts is most appropriate. Each concept of risk can be measured or estimated in several ways as well. Estimation methods can be diverse in their precision. Risk measurement can be further complicated by the fact that risk is not a static feature. Risk changes over time. Whether risk changes can be modelled satisfactorily is a major challenge taken up by researchers.
Amid increased size and complexity of the banking industry, operational risk has a greater potential to occur in more harmful ways than many other sources of risk. This paper…
Abstract
Purpose
Amid increased size and complexity of the banking industry, operational risk has a greater potential to occur in more harmful ways than many other sources of risk. This paper seeks to provide a succinct overview of the current regulatory framework of operational risk under the New Basel Accord with a view to inform a critical debate about the influence of data collection, loss reporting, and model specification on the consistency of risk‐sensitive capital rules.
Design/methodology/approach
The paper's approach is to investigate the regulatory implications of varying characteristics of operational risk and different methods to identify operational risk exposure.
Findings
The findings reveal that effective operational risk measurement hinges on how the reporting of operational risk losses and the model sensitivity of quantitative methods affect the generation of consistent risk estimates.
Originality/value
The presented findings offer tractable recommendations for a more coherent and consistent regulation of operational risk.
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Antje Hargarter and Gary Van Vuuren
This paper aims to examine the problem of conduct-risk measurement for banks, using South Africa as an example of a developing market. Conduct risk is a new and complex phenomenon…
Abstract
Purpose
This paper aims to examine the problem of conduct-risk measurement for banks, using South Africa as an example of a developing market. Conduct risk is a new and complex phenomenon in global financial services and could negatively impact various stakeholders. There are concerns about new regulations and potential misconduct fines affecting profitability and sustainability for banks. While presenting a serious problem, especially in developing markets, with the added challenge of financial inclusion, conduct risk and its measurement have not been researched sufficiently. If the measurement problem could be solved, the management could be facilitated.
Design/methodology/approach
Based on a literature review, existing surveys and new interviews, a best-practice proposal for measuring conduct risk was developed. The approach was exploratory and inductive and added primary insights.
Findings
Measuring concepts like conduct is a global challenge. This aside, South African banking customers are concerned about fraud and safety and administrative service hassles, rather than conduct in the regulatory sense. Best-practice measurement must account for these findings by working with a scoring for behavioural, organisational/procedural and perception indicators and with suggestions for specific surveys.
Research limitations/implications
Analysing the data measured and deciding what action should be taken if conduct risk is detected could be considered for additional research.
Practical implications
South African banks are guided in measuring a difficult and unique concept at a time of regulatory change, stakeholder pressures and limited existing knowledge.
Originality/value
The authors believe this is the first study on a critical and new challenge in banking risk measurement in a developing market.
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Marliana Abdullah, Shahida Shahimi and Abdul Ghafar Ismail
The purpose of this paper is to assess key issues in measurement and management of operational risk in Malaysian Islamic banks.
Abstract
Purpose
The purpose of this paper is to assess key issues in measurement and management of operational risk in Malaysian Islamic banks.
Design/methodology/approach
Descriptive, analytical, and comparative analyses are used to discuss the issues of operational risk in Islamic bank through the implications associated with the Islamic banks' operational risk as well as the implications on risk measurement, risk management, and capital adequacy.
Findings
Discussion on operational risk in Islamic banks is significant and becoming more complicated compared with conventional banking because of the unique contractual features and general legal environment. While basic Basel II core principles of effective banking supervision apply equally well and ideally suit the Islamic banking institutions, risk measurement, and risk management practices still need specific adaptations to Islamic banks' operational characteristics. These particularities highlight the unique characteristics of Islamic banks and raise serious concerns regarding the applicability of the Basel II methodology for Islamic banks.
Research limitations/implications
This study has important implications for the understanding of operational risk, particularly the specific issues of the Islamic banks' operational risk that arise from the different nature of the financing and investment activities of the banks. With regard to measuring operational risk capital charge, the banks have to choose the right and effective method to ensure the operational risk capital charge will be more in line with the banks' actual risk profile and thus will provide the adequate capital and an improved buffer once the losses are announced.
Originality/value
The paper will fill the gap to the existing literature of operational risk in banking institutions especially Islamic banks, by showing the needs of specific adaption of operational risk measurement and risk management practices due to the nature of Islamic banks.
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– The purpose of this paper is to provide proactive supply chain performance method considering risk which can be used during the supplier selection/assessment process.
Abstract
Purpose
The purpose of this paper is to provide proactive supply chain performance method considering risk which can be used during the supplier selection/assessment process.
Design/methodology/approach
In this paper, the effort is to present a model for evaluating the supply-related risk, which is based on the analytic hierarchy process (AHP) method and the Dempster-Shafer theory (DST). The proactive risk management methods used in this research is: seeking risk sources and identifying the variables to be used in the model, preprocessing the variables data to get the directions of the variables and the risk bounds, assigning variables weights via AHP method and finally evaluating the supply risk via DST method and determine the final risk degree.
Findings
The paper contributes to research in risk assessment in the specific field of supplier performance measurement. In this paper, a hybrid model using AHP and DST for risk assessment of supplier based on performance measurement is presented. An empirical analysis is conducted to illustrate the use of the model for the risk assessment in supply chain.
Research limitations/implications
This methodology can be adopted by supply chain managers to evaluate the level of risk associated with current suppliers, and to assist them in making outsourcing decisions.
Originality/value
The proposed method makes a contribution by including risk as a performance measure in supply chain. The generated proactive supply risk assessment process uses a hybrid model of AHP and DST providing a novel approach for performance measurement which will be valuable both to academics and practitioners in this field.
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Ruth M.W. Yeung and Wallace M.S. Yee
Adapting from the extant literature, this paper aims to present an empirical framework of risk measurement in the context of food safety risk in overseas destinations.
Abstract
Purpose
Adapting from the extant literature, this paper aims to present an empirical framework of risk measurement in the context of food safety risk in overseas destinations.
Design/methodology/approach
Data were collected from 715 respondents visiting Macau in October 2008 by using intercept method. Principal component analysis followed by confirmatory factor analysis were utilised for data analysis.
Findings
The research yielded 12 factors, of which five factors, namely Dread, Framing effect, Controllable, Regulation and Past experience measure risk characteristics; two factors, namely Uncertainty and Consequence measure tourist risk perception, and five factors, namely Travel information, Safety assurance, Destination reputation, Marketing activities and Precaution measure risk reduction, especially related to food safety risk in international destinations.
Practical implications
The tourist industry should understand more specifically what tourists want to know so as to devise appropriate communication management strategies at the international destination.
Originality/value
The risk measurement framework provides an insight for the development of an instrument to assess the social and economic impact on tourist perception of international travel risk.
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The growth in derivative activities, and the change in the way financial firms conduct these activities, has led to the development of practices within firms to manage risk. These…
Abstract
The growth in derivative activities, and the change in the way financial firms conduct these activities, has led to the development of practices within firms to manage risk. These practices relate to both the organisational context in which risk management takes place, and the measurement of market risk. Proposals and recommendations have been made in a number of reports in an attempt to encourage firms to adopt best practice, as identified by the Group of Thirty, through public disclosure requirements and rides for determining the amount of regulatory capital to support trading and derivatives activities. The adoption of best practice, together with the benefits of increased transparency and more appropriate methods for determining capital requirements, is seen to lead to a reduction in systemic risk. This paper examines the main proposals and recommendations made in the reports. In particular, the use of market risk measurement models, developed for internal risk management purposes, for public disclosures of market risk and for calculating regulatory capital is critically examined.