...RISK MANAGEMENT CHANGES IN CONSUMER PREFERENCES AND TASTES * We are a consumer products company which operates in a highly competitive market and rely on continued demand for our products. * Significant changes in consumer preferences * Inability to anticipate changes and respond to consumer trends * Develop new products that are responsive to consumer preferences * Consumer concerns regarding health effects and ingredients. * Damage to the company’s reputation * Consumer’s willingness to purchase our products. * Launching successful new products * Product Innovation * Effectiveness of product packaging. FINANCIAL PERFORMANCE RISK * Highly competitive market * Major international beverage companies operating in multiple geographic areas * Brand recognition * Satisfy consumer preferences * Unable to compete effectively with other leading brands * Impact on revenues and profit margins ECONOMIC CONDITIONS * Slow down in the country economy’s * Changes in interest rates * Tax laws and tax rates * Commodity markets * Inflation * The effects of government initiatives to manage economic conditions * Reduced demand for our products resulting from a slowdown in the global economy * Affect critical customers * Affect in suppliers and distributors * Reduced borrowing capacity * Price risk associated with forecasted purchases of raw materials * Financial results ...
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...role in achieving sustainable development and economic and political stability in both developed and underdeveloped economies. * Financial institutions play an important role in economic and financial environment of any country. * An essential element in the health of any financial system is the soundness of its institution. * As the value of the bank’s assets decreases or the percentage of non-performing loans increases a deduction from capital is take in an equal amount to restore the balance. Thus, capital acts as a source of funds to bear risks and absorb losses, covering any imbalance caused by a fall in the value of assets. * The level of capital funds required to support the institutional structure and to provide protection against unanticipated and excessive losses is known as capital adequacy * Capital adequacy is the most crucial element within bank supervisory systems * Systemic risk or the contagion effect means failure of one bank leads to possible collapse of several other financial institutions. * A liquidator is the officer appointed when a company goes into winding-up or liquidation who has responsibility for collecting in all of the assets of the company and settling all claims against the company before putting the company into dissolution * G-10 countries include Belgium, Canada, France, Germany, Italy, Japan, The Netherlands, Sweden, Switzerland, The United Kingdom and The United States. * G-10 countries along with...
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...RISK MANAGEMENT IN BANKS The business of banking today is synonymous with active risk management than it was ever before. The success and failure of a banking institution heavily depends on the strength of the risk management system in the current environment. This is true as the very business of banking is risk-taking as an intermediary, i.e. interposing between savers (depositor) on one hand and the borrower on the other hand, thereby accepting the risks of intermediation. Risk Management: Meaning & Components A risk can be defined as an unplanned event with financial consequences resulting in loss or reduced earnings. Therefore, a risky proposition is one with potential profit or a looming loss. Risk stems from uncertainty or unpredictability of the future. In commercial and business risk generates profit or loss depending upon the way in which it is managed. Risk can be defined as the volatility of the potential outcome. Risk is the possibility of something adverse happening. Risk management is the process of assessing risk, taking steps to reduce risk to an acceptable level and maintaining that level of risk. The essential components of any risk management system are – * Risk Identification: i.e. the naming and defining of each type of risk associated with a transaction or type of product or service; * Risk Measurement: i.e. the estimation of the size, probability and timing of potential loss under various scenarios; * Risk Control: i.e....
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...Basel I The Basel Accords are some of the most influential—and misunderstood—agreements in modern international finance. Drafted in 1988 and 2004, Basel I and II have ushered in a new era of international banking cooperation. Through quantitative and technical benchmarks, both accords have helped harmonize banking supervision, regulation, and capital adequacy standards across the eleven countries of the Basel Group and many other emerging market economies. On the other hand, the very strength of both accords—their quantitative and technical focus—limits the understanding of these agreements within policy circles, causing them to be misinterpreted and misused in many of the world’s political economies. Moreover, even when the Basel accords have been applied accurately and fully, neither agreement has secured long-term stability within a country’s banking sector. Therefore, a full understanding of the rules, intentions, and shortcomings of Basel I and II is essential to assessing their impact on the international financial system. This paper aims to do just that—give a detailed, non-technical assessment of both Basel I and Basel II, and for both developed and emerging markets, show the status, intentions, criticisms, and implications of each accord. Basel I Soon after the creation of the Basel Committee, its eleven member states (known as the G-10) began to discuss a formal standard to ensure the proper capitalization...
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...Edited by Foxit Reader Copyright(C) by Foxit Software Company,2005-2007 For Evaluation Only. Fisher College of Business Working Paper Series Charles A. Dice Center for Research in Financial Economics Risk Management Failures: What Are They and When Do They Happen? René M. Stulz, Department of Finance, The Ohio State University, NBER, and ECGI Dice Center WP 2008-18 Fisher College of Business WP 2008-03-017 October 2008 This paper can be downloaded without charge from: http://www.ssrn.com/abstract=1278073 An index to the working paper in the Fisher College of Business Working Paper Series is located at: http://www.ssrn.com/link/Fisher-College-of-Business.html fisher.osu.edu Risk management failures: What are they and when do they happen? René Stulz* October 2008 Abstract A large loss is not evidence of a risk management failure because a large loss can happen even if risk management is flawless. I provide a typology of risk management failures and show how various types of risk management failures occur. Because of the limitations of past data in assessing the probability and the implications of a financial crisis, I conclude that financial institutions should use scenarios for credible financial crisis threats even if they perceive the probability of such events to be extremely small. * Reese Chair of Banking and Monetary Economics, Fisher College of Business, Ohio State University, NBER, and ECGI. I am grateful for assistance from Jérôme...
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...The essential goal behind the decision making policies of a bank is to capitalize on the wealth of the bank’s shareholders. At times, there are some managers in the banks that make decisions that are in their own best interest as to oppose to the shareholders interest. For instance, decisions that affect the growth of the bank may be proposed to raise employees salaries, where as larger banks have the tendency to provide more employee compensation. Also, “the compensation to a bank’s loan officers may be linked to loan volume, which encourages a loan department to extend loans without concern about any risk.” (Madura, 2008) “As these examples suggest, banks can incur agency costs, or costs resulting from managers increasing their own wealth as to oppose to the shareholders wealth.” (Madura, 2008) For banks to prevent these types of agency problems, a few banks give stock as compensation to managers. With those types of managers they normally will make sure to maximize the shareholders wealth because they are also shareholders. If any of the decisions made by the manager are conflicting with the goal of maximizing the shareholders wealth, the share price will not be able to attain its highest. The board of directors are either appointed or elected to act as, representatives of the stockholders to institute corporate management related policies and to make decisions on major company matters. Some duties include the hiring and firing of executives, dividend policies, options policies...
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...| | | | | | | | Factors Influencing on Financial Decision A Case of a company operating in Bangladesh Company Name: GPH ispat ltd. Submitted To Mr. Saleh Mohammed Mashehdul Islam Asst. Professor, SOB, AUST. Submitted By Roll # 12-52-02-012 Mahmud Hassan Principle of Finance (MBA 603) Section # B Ahsanullah University of Science and Technology Date of Submission : 3rd Jan, 2013 Chapter-1 Company Information GPH Ispat Limited is one of the leading integrated steel manufacturing companies in Bangladesh engaged in manufacturing of M. S. Billet & M. S. Rod. The Company was incorporated in Bangladesh on 17 May 2006 as a Private company limited by shares under the Companies Act 1994. The principal activities of the Company are manufacturing and trading of iron products and steel materials of all kinds or other metallic or allied materials and marketing thereof. The commercial production of the factory commenced on 21 August 2008. The company subsequently converted into a Public limited Company. Nature of Business The Company is engaged in the manufacturing process of producing...
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...Description Enterprise Risk Management (ERM) is an approach to making strategic and business decisions after considering major risks and opportunities. Originally focused simply on managing the losses and downside, ERM now is also used to help companies decide between alternative business lines and strategic growth options. Companies are using the tool to take a more valuefocused (rather than loss-focused) approach to risk management amid increasing volatility and uncertainty. ERM considers everything from credit risk to operational and supply chain risk. ERM examines decisions through a risk lens, identifying creative approaches to succeed in a world of uncertainty. To build an Enterprise Risk Management system, all parts of the organization contribute vital perspectives: • Senior executives determine the level of risk a company is willing to take. They express their risk appetite in concrete terms such as earnings volatility and potential losses of capital, equity or assets; • The risk organization, in cooperation with line managers, continuously examines the potential impact of various risks (e.g., strategic, business, financial and operational risks) on the organization. They decide whether to avoid the exposure completely, effectively mitigate it (for example, through a transfer to another party) or use the company risk insight and risk management capabilities as an opportunity to generate extra profit from the exposure; • Line managers embed risk management principles into...
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...ICAP in 10 www.icap.com ICAP is the world’s leading interdealer broker and provider of post trade risk and information services. Business review Governance Contents ICAP in 10 Business review Group Chief Executive Officer’s review Global Executive Management Group Business review Key performance indicators Risk and control environment Corporate responsibility Governance Directors’ profiles Chairman’s statement Directors’ report Corporate governance statement Directors’ statement of responsibilities Remuneration report Independent auditors’ report 2 Financial statements Consolidated income statement Consolidated statement of comprehensive income Consolidated and Company balance sheet Consolidated statement of changes in equity Company statement of changes in equity Consolidated and Company statement of cash flow Basis of preparation Index to the notes to the financial statements Notes to the financial statements Information for shareholders Information for shareholders Definitions 68 70 71 72 16 18 20 30 32 36 Financial statements 73 74 75 78 79 42 44 46 46 54 56 65 136 137 Information for shareholders 2 ICAP in 10 The following pages provide a 10 point overview of our business, strategy, performance and governance. 1 Financial summary 2 Our segments 3 Our diversified business 4 What we do 5 How we create value 6 Opportunities and risks 7 Our strategy 8 Measuring our progress 9 Culture and people 10 Governance ICAP plc / Annual Report...
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...well increase the consequence of IT risks. IT has become more and more central to business over the past decade but many enterprise organizations have not yet modify their processes for making key decisions related to IT and IT risks. Literature The research tailored to analysis IT risk management approach and the business impact. Including the integration of enterprise risks management in the organization. This is totally different from traditional risk management. The integrations refer to modifying the IT-operations approach, adjusting its capital structure and focus on engaging the right financial instruments. There are key areas enterprise risk management integration will address. The first is that, it integrates and coordinates all the various risks type across the entire organization. Thereby, risk management cannot be managed in silo rather all the risk that occurred in the entire ICT environment must be managed and approach in an enterprise way. Second, using enterprise risk management makes it possible for users to easily identify any potential incident that may affect the organization. Moreover, this makes decision taken to curb such risks in parallel with the organization objective. IT risk management commence with risk assessment. These depend on the problem and object to be addressed. Differences of IT risks assessment methods are also analysed. Research Questions How can business executive understand the IT risks in their organization? How can IT...
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...financial services. In what can be described as B2C domain for banking industry, Internet Banking offers different online services like balance enquiry, requests for cheque books, recording stop-payment instructions, balance transfer instructions, account opening and other forms of traditional banking services. Mostly, these are traditional services offered through Internet as a new delivery channel. Banks are also offering payment services on behalf of their customers who shop in different e-shops, emalls etc. Further, different banks have different levels of such services offered. Regulations and guidelines issued by some countries include the following. 1. Requirement to notify about web site content 2. Prior authorization based on risk assessment made by external auditors 3. On-site examination of third party service providers 4. Off-site policing the perimeters to look for infringement. 5. Prohibition on hyper links to non bank business sites 6. Specification of the architecture Broadly, the levels of banking services offered through INTERNET can be categorized in to three types: (i) The Basic Level Service is the banks’ websites which disseminateinformation on different products and services offered to customers and members of public in general. It may receive and reply to customers’ queries through e-mail, (ii) In the next level are Simple Transactional Websites which allow customers to submit their instructions, applications for different services, queries...
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...AFIN328 Financial Risk Management Department of Applied Finance and Actuarial Studies Faculty of Business and Economics Unit Guide D2 Day; Offered in Session 2, North Ryde 2012 Table of Content Table of Content General Information Convenor and teaching staff Credit Points Prerequisites Corequisites Co-badged status Unit Description 2 3 3 3 3 3 3 3 Learning Outcomes Graduate Capabilities Problem Solving and Research Capability Creative and Innovative Effective Communication Commitment to Continuous Learning Discipline Specific Knowledge and Skills Critical, Analytical and Integrative Thinking Engaged and Ethical Local and Global citizens Capable of Professional and Personal Judgement and Initiative 4 5 5 5 6 6 7 7 8 8 Assessment Tasks Class Test 1 Class Test 2 Group assignment Final Examination 10 10 10 10 11 Unit Schedule Delivery and Resources Policies and Procedures Academic Honesty Grades Grading Appeals and Final Examination Script Viewing Special Consideration Policy Student Support Student Enquiry Service Equity Support IT Help 12 13 14 14 14 14 14 15 15 15 15 Research and Practice 16 Page 2 of 16 General Information Convenor and teaching staff Unit Convenor: Alan Rai Email: alan.rai@mq.edu.au Phone: 9850 1169 Office: E4A 228 Consultation Hours: 1-3pm Monday Lecturer: James McCulloch Email: james.mcculloch@mq.edu.au Consultation Hours: Consultation during tutorials or via email Credit Points 3 Prerequisites ACCG252...
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...| Deakin UniversityAssignment Attachment SheetFaculty of Business and Law | Date received | This form must be completed, signed and attached to each assignment you submit within the Faculty of Business and Law. If submitting online, this form must be completed and submitted with your assignment. Last NamePlease use block letters, and enter your name as it appears on your Deakin student card | First Name | Student ID | Li | Ke | 900335188 | Unit code | Unit name | Campus | Lecturer/Tutor/Unit Coordinator | MAF754 | Enterprise Risk Management | | Lecturer: David SewellPeter | | | | Tutor: | Assignment number / title | Due date | Assignment 2: A research paper of enterprise risk management for Sinomaster(SMT) group | 25 May 2012 | If this assignment has been completed by a group or team:1. Each student in the group must complete and sign a separate form;2. The assignment will be returned to the student in the group nominated below.*This assignment was completed in a group or team: No (circle or delete as necessary)The assignment should be returned to the student named on this form: No (circle or delete as necessary) | Plagiarism and Collusion Plagiarism occurs when a student passes off as the student’s own work, or copies without acknowledgement as to its authorship, the work of another person. Collusion occurs when a student obtains the agreement of another person for a fraudulent purpose with...
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...MEANINGS OF BOT, BOOT, BOO, BLT BOT (BUILD, OPERATE TRANSFER) BOT finds extensive application in the infrastructure projects and in public private partnership. In the BOT framework a third party, for example the public administration, delegates to a private sector entity to design and build infrastructure and to operate and maintain these facilities for a certain period. During this period the private party has the responsibly to raise the finance for the project and is entitled to retain all revenues generated by the project and is the owner of the regarded facility. The facility will be then transferred to the public administration at the end of the concession agreement, without any remuneration of the private entity involved. Some or even all of the following different parties could be involved in any BOT project: • The host government: Normally, the government is the initiator of the infrastructure project and decides if the BOT model is appropriate to meet its needs. In addition, the political and economic circumstances are main factors for this decision. The government provides normally support for the project in some form. (provision of the land/ changed laws) • The concessionaire: The project sponsors who act as concessionaire create a special purpose entity which is capitalised through their financial contributions. • Lending banks: Most BOT project are funded to a big extent by commercial debt. The bank will be expected to finance the project on “non-recourse”...
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...Operational Decision-Making: Integrating New Concepts into the Paradigm Ronald John Lofaro, Ph.D Captain Kevin M. Smith United Air Lines The views and opinions expressed herein are solely those of the authors and, are not to be seen as the policies, positions or beliefs of any public, private or governmental organization. ABSTRACT Over the past 8 years, the authors have been developing a training-oriented paradigm for operational decision-making in the cockpit. While our emphasis has been on the civil aviation side, both the paradigm, and any training developed from it, can be easily adapted for the business or general aviation venues. The paradigm began to form during an aeronautical decision-making workshop in 1992 (Lofaro, Adams and Adams; 1992) and, has been developed around an expanding set of interrelated concepts. The set expansion resulted from the authors continuing to wrestle with what were the processes and the critical components for real-time operational decisionmaking, as well as the relationships among decisionmaking, CRM and SA. The first component was the "rising risk continuum" (Lofaro and Smith, 1993), as embedded in event sets for LOFT. Later, the concepts/components of "critical mission impact areas" and the "critical mission factors" (Lofaro and Smith, 1998) that composed these areas were added. In the paradigm, the "pilot as risk manager" (Smith and Hastie, 1992; Lofaro and Smith, 1998; 1999) was the both the overlay and glue for the components. Here...
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