American Journal of Economics and Business Administration

Risk Management and Accounting in Financial Institutions

Description

In an increasingly global competitive context characterised by a number of changes and financial innovations, the identification, measurement and management of risks associated with financial instruments and business areas constitute, in a situation of asymmetric information, the strategic issue for financial intermediaries. Furthermore, they are the key to positive results and consequently profits or - in contrast - they lead to negative results and losses.

Risk management is a dynamic activity that needs to take shape in accordance with market scenarios and related risk events and it is entirely carried out with close and constant scrutiny of the financial intermediary business.

In the financial literature, two different approaches to this theme can be found. One refers to the organisational description of the risk management function, while the other one is related to the processes, which the latter sets in motion. Actually, organisation and processes are two sides of the same coin, as it is only through their correct co-penetration that the best results can be achieved.

It is therefore indispensable to set in place an adequate risk management function that can manage complex factors through processes able to transform risks into profit opportunities.

Risk management plays a role of primary importance in the creation of value in financial intermediaries. In order to understand the logic connecting the production of value to risk management, it is necessary to consider the reason that prompts an intermediary to deal with risk management and to acquire profound insight with regard to the targets pursued. The latter are contained in the following categories:

1. adoption of the most appropriate strategy for risk management;
2. reduction of the variability of economic outcomes;
3. capacity for a suitable response to stakeholders' expectations.

This special issue aims at developing a wider and deeper awareness of the complexity of risk management issues in the context of financial intermediaries and evolution of their business.

Possible research questions may concern (but they are not limited to):

1. Credit risk, market risk and liquidity risk associated with activity of financial institutions
2. Risk management and control systems in financial intermediaries
3. Financial management in banks, insurance companies, and investment funds
4. Strategic management and organization in banks and insurance companies
5. Hedging
6. New risks in financial markets
7. Insurance as a method of risk management
8. Reinsurance and Hybrid and Securitized Risk-Transfer Solutions
9. The evolution of the balance sheet of banks and insurance companies related to international accounting standards

The special issue welcomes contributions from a wide range of theoretical and methodological perspectives. Both conceptual and empirical contributions are encouraged.

Guest Editors

Important Dates