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1 – 10 of 99Traditionally, individual states have shared responsibility for regulating the US insurance industry. The Dodd–Frank Act changes this by tasking the Federal Reserve with…
Abstract
Traditionally, individual states have shared responsibility for regulating the US insurance industry. The Dodd–Frank Act changes this by tasking the Federal Reserve with regulating the systemic risks that particularly large insurance organizations might pose and assigning the regulation of swap-based substitutes for insurance and reinsurance products to the SEC and CFTC. This paper argues that prudential regulation of large insurance firms and weaknesses in federal swaps regulation could reduce the effectiveness of state-based systems in protecting policyholders and taxpayers from nonperformance in the insurance industry. Swap-based substitutes for traditional insurance and reinsurance contracts offer protection sellers a way to transfer responsibility for guarding against nonperformance into potentially less-effective hands. The CFTC and SEC lack the focus, expertise, experience, and resources to adequately manage the ways that swap transactions can affect US taxpayers’ equity position in global safety nets, while regulators at the Fed refuse to recognize that conscientiously monitoring accounting capital at financial holding companies will not adequately protect taxpayers and policyholders until and unless it is accompanied by severe penalties for managers that willfully hide their firm’s exposure to destructive tail risks.
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Jacob Kashiwagi, Kenneth Sullivan and Dean T. Kashiwagi
To describe the implementation of the Performance Information Risk Management System (PIRMS) to indefinite delivery indefinite quantity (IDIQ) general contractors in the US Army…
Abstract
Purpose
To describe the implementation of the Performance Information Risk Management System (PIRMS) to indefinite delivery indefinite quantity (IDIQ) general contractors in the US Army Medical Command (MEDCOM) 26 sites, 150 projects/year, and $250m/year maintenance and repair construction program.
Design/methodology/approach
To test the hypothesis that facility owner management, control, and decision making is a source of risk, and that the transfer of risk and control to the contractors will minimise the risk.
Findings
Include minimising construction management by 33 percent, motivated contractors to regulate their own contracts, minimised unresolved issues by 50 percent, minimised contractor generated change orders by 20 percent, and moving from doing quality control to quality assurance.
Research limitations/implications
The authors see no constraints in the implementation of PIRMS in other organisations. This paper reflects the perceptions of the Arizona State University research team, and publicly available test results, and not the views or policy of the USA Medical Command.
Originality/value
Includes the use of dominant performance/risk information from the contractor's weekly risk reports to create accurate performance and risk information on all ongoing projects, the IDIQ contractors, and on the client's/buyer's personnel. Risk information is being used to streamline a large organisation's organisational structure, minimising decision making and transactions, and transferring risk and control to the party who can minimise the technical risk.
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Asima Siddique, Muhammad Asif Khan and Zeeshan Khan
Among all of the world's continents, Asia is the most important continent and contributes 60% of world growth but facing the serving issue of high nonperforming loans (NPLs)…
Abstract
Purpose
Among all of the world's continents, Asia is the most important continent and contributes 60% of world growth but facing the serving issue of high nonperforming loans (NPLs). Therefore, the current study aims to capture the effect of credit risk management and bank-specific factors on South Asian commercial banks' financial performance (FP). The credit risk measures used in this study were NPLs and capital adequacy ratio (CAR), while cost-efficiency ratio (CER), average lending rate (ALR) and liquidity ratio (LR) were used as bank-specific factors. On the other hand, return on equity (ROE) and return on the asset (ROA) were taken as a measure of FP.
Design/methodology/approach
Secondary data were collected from 19 commercial banks (10 commercial banks from Pakistan and 9 commercial banks from India) in the country for a period of 10 years from 2009 to 2018. The generalized method of moment (GMM) is used for the coefficient estimation to overcome the effects of some endogenous variables.
Findings
The results indicated that NPLs, CER and LR have significantly negatively related to FP (ROA and ROE), while CAR and ALR have significantly positively related to the FP of the Asian commercial banks.
Practical implications
The current study result recommends that policymakers of Asian countries should create a strong financial environment by implementing that monetary policy that stimulates interest rates in this way that automatically helps to lower down the high ratio of NPLs (tied monitoring system). Liquidity position should be well maintained so that even in a high competition environment, the commercial is able to survive in that environment.
Originality/value
The present paper contributes to the prevailing literature that this is a comparison study between developed and developing countries of Asia that is a unique comparison because the study targets only one region and then on the basis of income, the results of this study are compared. Moreover, the contribution of the study is to include some accounting-based measures and market-based measures of the FP of commercial banks at a time.
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The purpose of this paper is to describe and analyze the accounting standards reforms that have moved the accounting profession away from rules‐based towards principles‐based…
Abstract
Purpose
The purpose of this paper is to describe and analyze the accounting standards reforms that have moved the accounting profession away from rules‐based towards principles‐based accounting practice and financial reporting, and to explore the implications for boards of directors of fair value estimates of the unknowable contaminating financial statements with financial misstatements.
Design/methodology/approach
The paper critically reviews the internationally accepted accounting, auditing and financial reporting standards with respect to fair value accounting and relates them to directors' fiduciary duties – the duties of care, of oversight, and of obedience.
Findings
The search for relevance in financial accounting raises daunting challenges for boards of directors tasked with fairly presenting the financial condition of a reporting business entity.
Research limitations/implications
The accounting profession has long been epistemologically conservative, judging reliability to be more important than relevance in the compiling of financial statements. With the fair value reforms, relevance has achieved ascendency over reliability. This necessitates an increase in the need for more research in the epistemology and ethics of accounting.
Practical implications
Boards of directors need to be well‐informed about, and fully engaged with, the assessment of the level of risk of material misstatement associated with the fair value accounting estimates, and with the adequacy of the related mandatory explanatory disclosures.
Originality/value
This paper's originality is grounded in its exploration of the epistemology of accounting in the light of the adoption of fair value conventions in the internationally accepted accounting, auditing and financial reporting standards and its drawing out of the implications this has for corporate governance.
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The purpose of this chapter is to outline new methodological developments in business valuation, with particular attention to how those developments are being used in litigation…
Abstract
The purpose of this chapter is to outline new methodological developments in business valuation, with particular attention to how those developments are being used in litigation involving lost profits and the value of operating businesses. In addition to methodological developments, the chapter also includes a discussion of recent legal developments, particularly selected cases that affect the use and standards for business valuation techniques within litigation settings. Finally, the chapter includes a mathematical appendix.
The extant literature provides very little insight into the way in which public purchasing departments are contributing to competitive acquisition processes for consulting…
Abstract
The extant literature provides very little insight into the way in which public purchasing departments are contributing to competitive acquisition processes for consulting services. This research attempts to address this shortcoming by describing the way that public purchasing departments have been able to contribute to these decisions throughout the various stages of the acquisition process. Study informants included 1782 public purchasers from federal, state, provincial, and local government agencies throughout the United States and Canada. While the purchasing department is involved in these important purchase decisions, it would seem that their respective agencies might benefit from increased involvement and consequently the value that can result.
Aicha Aguezzoul and Pierre Ladet
The impact of transportation on the supplier selection has received very scant attention in the literature. This is a great limitation because splitting orders across multiple…
Abstract
Purpose
The impact of transportation on the supplier selection has received very scant attention in the literature. This is a great limitation because splitting orders across multiple suppliers will lead to smaller transportation quantities which will likely imply larger transportation cost. Moreover, transportation and inventory elements are highly interrelated and contribute most to the total logistics costs. This paper seeks to present a nonlinear multiobjective programming approach of selecting suppliers and allocating the order quantity among them, taking into account transportation.
Design/methodology/approach
The model considers the total product cost and the lead‐time as the criteria to minimize simultaneously.
Findings
The total cost is the sum of transportation, inventory and ordering costs. The constraints related to suppliers and buyer are also considered in the model. The model is solved several times, evaluating various scenarios. Each scenario depends on the shipment type used between the suppliers and the buyer.
Originality/value
This paper fills a gap in the literature by comprehensively examining the role of transportation in determining the optimal number of suppliers and the portion of the order to allocate to each one.
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John E. Tyworth and Alex Ruiz‐Torres
Current studies indicate that buyers can improve lead‐time performance and reduce total inventory‐system costs by splitting orders between two suppliers. These studies, however…
Abstract
Current studies indicate that buyers can improve lead‐time performance and reduce total inventory‐system costs by splitting orders between two suppliers. These studies, however, treat transportation only implicitly as an element of the cost of placing an order. This is an important limitation, because shipping costs increase disproportionately as the size of shipment decreases and typically comprise a sizeable portion of total logistics cost. Investigates the role of transportation in the decision to procure from either one or two suppliers. A state‐of‐the art model was first modified to treat transportation costs explicitly and then used to conduct 54 experiments to measure the gains or losses in total logistics costs under a variety of representative conditions.
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The purpose of this paper is to develop an explicitly macroprudential supervisory framework designed to identify threats to financial stability use existing mechanisms to reduce…
Abstract
Purpose
The purpose of this paper is to develop an explicitly macroprudential supervisory framework designed to identify threats to financial stability use existing mechanisms to reduce the risk of these threats and to provide information to the authorities to more efficiently mitigate any instability that does arise.
Design/methodology/approach
This paper begins with an analysis of the limitations of microprudential regulation. It then develops a macroprudential surveillance framework focused on those financial markets that have the potential to undermine financial stability. It concludes with a discussion of how the surveillance results may be used to enhance financial stability.
Findings
The current supervisory focus on microprudential supervision of systemically important institutions is insufficient; an explicitly macroprudential focus is required.
Research limitations/implications
Although this paper’s conceptual framework is applicable to all advanced financial systems the discussion of specific regulatory structures focuses on the USA.
Practical implications
An explicit supervisory focus on the threats posed by major financial markets is feasible and desirable.
Social implications
The probability of a financial crisis and the economic damage caused by a crisis can be significantly reduced by redirecting some regulatory efforts toward in-depth analysis of major financial markets.
Originality/value
The paper emphasizes that macroprudential supervision must include both quantitative and detailed analysis of the qualitative aspects of key markets.
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