scholarly journals Knowledge is power – conceptualizing collaborative financial risk assessment

2019 ◽  
Vol 20 (3) ◽  
pp. 226-248 ◽  
Author(s):  
Thomas Michael Brunner-Kirchmair ◽  
Melanie Wiener
Keyword(s):  
Risk Assessment ◽  
Risk Management ◽  
Financial Risk ◽  
Risk Identification ◽  
Modern World ◽  
Risk Governance ◽  
Financial Risks ◽  
Financial Risk Management ◽  
Content Type ◽  
New Findings

Purpose Inspired by new findings on and perceptions of risk governance, such as the necessity of taking a broader perspective in coping with risks in companies and working together in interactive groups with various stakeholders to deal with complex risks in the modern world, the purpose of this paper is looking for new ways to deal with financial risks. Current methods dealing with those risks are confronted with the problems of being primarily based on past data and experience, neglecting the need for objectivity, focusing on the short-term future and disregarding the interconnectedness of different financial risk categories. Design/methodology/approach A literature review of risk governance, financial risk management and open foresight was executed to conceptualize solutions to the mentioned-above problems. Findings Collaborative financial risk assessment (CFRA) is a promising approach in financial risk governance with respect to overcoming said problems. It is a method of risk identification and assessment, which combines aspects of “open foresight” and the financial risk management and governance literature. CFRA is characterized as bringing together members of different companies in trying to detect weak signals and trends to gain knowledge about the future, which helps companies to reduce financial risks and increase the chance of gaining economic value. By overcoming organizational boundaries, individual companies may gain the knowledge they would probably not have without CFRA and achieve a competitive advantage. Research limitations/implications A conceptual paper like the one at hand wants empirical proof. Therefore, the authors developed a research agenda in the form of five propositions for further research. Originality/value This paper discusses the existing problems of financial risk identification and assessment methods. It contributes to the existing literature by proposing CFRA as a solution to those problems and adding a new perspective to financial risk governance.

scholarly journals Toolset for financial risk strategic assessment in corporations based on stochastic modeling

2020 ◽  
Vol 9 (28) ◽  
pp. 451-464
Author(s):  
Viktoriya Manuylenko ◽  
Denis Ryzin ◽  
Natalia Gryzunova ◽  
Olga Bigday ◽  
Olga Mandrytsa
Keyword(s):  
Risk Assessment ◽  
Risk Management ◽  
Financial Risk ◽  
Assessment Model ◽  
Financial Risks ◽  
Financial Leverage ◽  
Financial Risk Management ◽  
Environment Factors ◽  
Target Values ◽  
The Impact

The study substantiates the need to develop and test a model for assessment of strategic financial risk level in corporations. It implies modeling for two indicators: relative (financial leverage) and absolute (external capital of indicators). The model should also take into account influence of emergent environment factors and most stakeholder groups’ interests when building scenarios for their behaviors in the financial markets –Implementation of the model allows establishing financial risk target values considering deviation calculations between the indicators’ modeled and actual values simultaneously determining both tactical and strategic guidelines for Financial Risk Management Policy in corporations, which should involve stakeholders into financial risk-taking process. The model implementation also should be the basis for development and improvement of risk-based forecasting tools, business planning and stress testing. The toolkit for assessing level of current and strategic financial risks in corporations based on simulation modeling was developed and implemented with attraction of general scientific and special methods. Direct results of the study are as follows: in theoretical block of the research – essentially, main attributes of financial risks classification for corporations are identified; they are recognized by time as retrospective, current and strategic financial risks, and correct classification of the latter allows their identification, evaluation and regulation; in practical block of the research – evaluation of financial risk in corporations reveals that the risk apart from other internal factors is highly affected by the level of financial leverage, where its high value increases financial risk; still, corporations do not take into account the influence of environmental factors on its level; the role of tax risk as a part of financial risk is not significant, still it is unfortunate that the Russian legislation system allows double taxation on income tax in the form of dividends, and dividend policy of Russian corporations is unstable; in methodological block of the research –financial risk assessment model for corporations was developed and tested on a platform of a special new software product that determines the target level of financial risk; the model differs from standard approaches to financial risk assessment as it carries strategic forecasting nature and takes into account the impact of emergent environment factors; thus it promotes new areas in strategic financial risk management.

A holistic review of research studies on financial risk management in public–private partnership projects

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Isaac Akomea-Frimpong ◽  
Xiaohua Jin ◽  
Robert Osei-Kyei
Keyword(s):  
Risk Management ◽  
Financial Risk ◽  
Real Option ◽  
Net Present Value ◽  
Developing Economies ◽  
Project Managers ◽  
Financial Risks ◽  
Systematic Analysis ◽  
Financial Risk Management ◽  
Content Type

PurposeGlobally, the management of financial risks has gained much attention in the public–private partnerships (PPP) market in recent years. Existing studies rank financial risks among the topmost risk factors that determine the success or failure of a PPP project. As essential for managing financial risks, a systematic review of previous studies on financial risk management of PPP from 1995 to 2019 (inclusive of both years) has been presented in this paper.Design/methodology/approachThe paper undertakes a systematic analysis of 49 relevant and available studies on financial risk management of PPP projects.FindingsFrom the results, high-interest charges, increased construction costs and increased market risks are some of the key financial risks hampering the success of PPP projects. Techniques used to assess financial risks include Monte Carlo Simulation (MCS) and Net Present Value (NPV). Financial risks control adopted by project managers include minimum revenue guarantee and real option pricing. Extremely limited studies on financial risk management in PPP projects in developing economies was revealed.Practical implicationsProject managers in developing financial risk management models may use the outcome of this paper to improve the financial success of PPP projects. Holistically, researchers will be guided to investigate and heighten the pertinent issues on financial risk management of PPP projects in academia.Originality/valueThe results provide a rare guide to project managers in controlling financial risks of PPP projects which is an unexplored topic. It is also the first paper to highlight the issues of financial risk management in PPP projects research.

scholarly journals Anti-Corruption Tools of Financial Risk Management in Public Administration

2021 ◽  
Vol 4 (4) ◽  
pp. 269-277
Author(s):  
Volodymyr Kopanchuk ◽  
Oleh Kravchuk ◽  
Vadym Torichnyi ◽  
Anastasiia Metil ◽  
Oleksii Kurtsev ◽  
...  
Keyword(s):  
Risk Assessment ◽  
Risk Management ◽  
Public Administration ◽  
Financial Risk ◽  
Balance Sheet ◽  
Financial Risks ◽  
Negative Consequences ◽  
Risk Minimization ◽  
Management Tools ◽  
Financial Risk Management

Every country is concerned with the problem of corruption. Selfish misuse of public office undermines the people's confidence in government and institutions, makes public policies less effective and fair, and misuses taxpayer funds that could be used to build schools, roads and hospitals. Financial risk management in public administration is based on risk assessments and finding tools to help influence them. To develop practical tools for financial risk management, the authors studied the economic practises that determine the features of financial risk assessment. They identified the elements that can motivate financial risks, including three stages of identification and analysis of risks, analyzed the main stages and indicators of assessing an organization's financial condition based on the balance sheet, produced a risk assessment algorithm and risk minimization methods in managing financial activities, and conducted a comparative analysis of financial risk assessment methods. Based on the Professional Integrity Framework proposed by the Organization for Economic Cooperation and Development, the authors developed basic measures to mitigate the potential negative consequences and proposed seven financial risk management tools for public administration. The proposed anti-corruption tools will help significantly reduce financial risks in public administration and corruption in general.

FINANCIAL RISK MANAGEMENT IN ENTREPRENEURIAL ACTIVITY: CONCEPT, SYSTEM AND PRINCIPLE OF BUILDING

2020 ◽  
Vol 2 (4) ◽  
pp. 62-67
Author(s):  
M. M. KHAYTANOVA ◽  
Keyword(s):  
Risk Management ◽  
Financial Risk ◽  
Entrepreneurial Activity ◽  
Financial Risks ◽  
Study Methods ◽  
Financial Risk Management ◽  
Concept System

The article reveals: theoretical justifications of the concept of “financial risk” in relation to the sphere of entrepreneurship; methods for its identification and processing. Financial risk management is the activity of identification, assessment, control and monitoring of risks. In the course of the study, methods for managing financial risks in entrepreneurial activity and their classification were identified.

scholarly journals PARAMETRIZATION OF THE MECHANISM OF FINANCIAL RISK MANAGEMENT IN THE DIGITAL SECURITIES CIRCULATION

2019 ◽  
pp. 77-83
Author(s):  
Oleksandr Volodmyrovych Lutskevych ◽  
Keyword(s):  
Risk Management ◽  
Social Life ◽  
Financial Risk ◽  
State Regulation ◽  
Securities Market ◽  
Financial Risks ◽  
Negative Consequences ◽  
Management Mechanism ◽  
Financial Risk Management ◽  
The Impact

Urgency of the research. Digital technologies are transforming all spheres of social life, and the financial sphere is no exception. In general, such trends cannot but leave an imprint on approaches to managing the financial risk of digital securities. Target setting. Currently, scientific and methodological support for the formation of a mechanism for managing the financial risks of digital securities is in the early stages of development, while the quality of state regulation and supervision of participants in digital securities directly depends on the effectiveness of the current mechanism for managing such risks. Actual scientific researches and issues analysis. Theoretical and applied aspects of the securities market, features of the impact of financial innovations and financial risk management in the field of securities circulation, are researched by V. Bodrov [1], O. M. Kovaleva [2], I. V. Krasnova [3], N. V. Tkachenko [4], Yu. B. Kolupaeva [5] and others. Uninvestigated parts of general matters defining. The methodology of formation the mechanism for managing the financial risks of digital securities needs more precise research. The research objective. Deepening the scientific understanding of the term "financial risk management mechanism for the circulation of digital securities" will ensure to outline ways of increasing the efficiency of this financial instrument usage. The statement of basic materials. This article analyzes the essence of the term "financial risk management mechanism". The construction of the mechanism has been adapted to the specifics of digital securities risk management. Conclusions. The essence of the mechanism of financial risks management of digital securities circulation is improved due to application of a set of methods for identification, quantitative and qualitative analysis, measures to prevent realization and / or reduction of negative consequences of financial risks of digital securities circulation, ways of control over some events.

scholarly journals Dataset Modelling of the Financial Risk Management of Social Entrepreneurship in Emerging Economies

Risks ◽  
2021 ◽  
Vol 9 (12) ◽  
pp. 211
Author(s):  
Elena G. Popkova ◽  
Bruno S. Sergi
Keyword(s):  
Sustainable Development ◽  
Risk Management ◽  
Emerging Economies ◽  
Social Entrepreneurship ◽  
Financial Risk ◽  
Financial Risks ◽  
Financial Risk Management ◽  
Substantial Progress ◽  
The Stability ◽  
Commercial Entrepreneurship

The relevance of this study lies in the fact that financial risk is a serious obstacle to the development of social entrepreneurship, preventing the implementation of potential support for sustainable development goals in business. The purpose of this article is to clarify specific aspects of financing factors and financial risk related to social entrepreneurship in developing countries (in comparison with the standard financial risk related to commercial entrepreneurship) in order to analyze the influence of the financing factors of social entrepreneurship on sustainable development, as well as to determine the potential for the development of social entrepreneurship through financial risk management. To achieve this goal, this article uses the methodology of econometrics—dataset modelling of financial risk management in social entrepreneurship to achieve sustainable development in emerging economies. On the basis of the results of this study, firstly, it is substantiated that the financial risks entailed by social entrepreneurship differ from the standard financial risk present in commercial entrepreneurship. Specific factors of the financing of sustainable development in emerging economies are determined and, on the basis of this, financial risks specific to social entrepreneurship in emerging economies are identified as follows: (1) reduced stimulus to use financial resources in long-term investments, which disrupts the stability and decreases inclusion; (2) joint public–private investments and decreased investment in R&D; and (3) expanded investment in the skills required for jobs and “markets of tomorrow”. Secondly, a contradictory influence of financing factors on sustainable development is demonstrated. Thirdly, a large potential for the development of social entrepreneurship by means of financial risk management (maximum reduction) was identified. With the minimization of financial risk, social entrepreneurship would demonstrate substantial progress, with an increase of 99.61% (more than 50%) from 45.18 points to 90.18 points. A novel contribution of this paper to the extant literature consists of the specification of the essence and specifics of social entrepreneurship in emerging economies through the identification of financial risks and the provision of recommendations for their management.

Financial Risk Management

2016 ◽  
pp. 301-311
Author(s):  
Mirela-Madalina Stoian ◽  
Rares-Gabriel Stoian
Keyword(s):  
Risk Management ◽  
Credit Risk ◽  
Financial Markets ◽  
Financial Risk ◽  
Liquidity Risk ◽  
Financial Risks ◽  
Basic Principles ◽  
Financial Risk Management ◽  
Management Framework ◽  
Risk Management Framework

The present paper intends to serve as an introduction into the financial risk management universe. It starts with the basic assumption that performance of an organization is inseparable from the risks it is facing. Any organization should have in place the necessary tools to identify, assess and constantly measure the risks it is exposed to. The paper focuses in defining the basic principles in creating a viable risk management framework that keeps track of three major categories of identified financial risks: market risk, credit risk and liquidity risk. Emphasis is put on the models to measure these types of risks but also on the tools an organization can use in order to reduce them. The second part of the paper is dedicated to recent events that shaped and shocked financial markets and illustrate the consequences faced by organizations when risks are not properly assessed and the risk management models in place are based on dangerously unrealistic notions.

THE METHODOLOGICAL VALUE OF THE CLASSIFICATION IN THE COMPANY FINANCIAL RISK MANAGEMENT SYSTEM

2020 ◽  
Author(s):  
A.A. Fathulin ◽  
N. A. Fathulina ◽  
S. N. Basova
Keyword(s):  
Risk Management ◽  
Management System ◽  
Financial Risk ◽  
Methodological Approach ◽  
Financial Risks ◽  
Risk And Uncertainty ◽  
Financial Risk Management ◽  
Risk Management System

The complexity of understanding the nature of risks, as well as the diversity of their types and manifestations, including financial risks, requires the use of a methodological approach to their classification. Classification of financial risks is of particular importance in the company's activities in order to effectively manage them. The article analyzes the concepts of "risk" and "uncertainty", and provides risk classifications for various reasons. It is concluded that it is possible to control and manage risks through comprehensive accounting and, accordingly, prevention of various types of threats and uncertainties in the company's activities.

scholarly journals Editorial for Special Issue “Finance, Financial Risk Management and their Applications”

2018 ◽  
Vol 6 (4) ◽  
pp. 83
Author(s):  
Keyword(s):  
Risk Management ◽  
Financial Risk ◽  
Financial Risks ◽  
Special Issue ◽  
Financial Risk Management

We are pleased to announce the Special Issue on the Finance, Financial Risk Management and their Applications in the International Journal of Financial Studies. This Special Issue collects papers pertaining to several lines of research related to finance and financial risks. This Guest Editor’s note synthesizes the contributing authors’ propositions and findings regarding these developments and hopes that new areas can be opened for future researches.

scholarly journals Financial Risk Assessment Using Enterprise Risk Management Concept

2020 ◽  
Vol 1 (1) ◽  
pp. 1-14
Author(s):  
Anastasia Filiana Ismawati
Keyword(s):  
Risk Assessment ◽  
Risk Management ◽  
Financial Management ◽  
Financial Risk ◽  
Enterprise Risk Management ◽  
Financial Risks ◽  
Enterprise Risk ◽  
Management Concept ◽  
Risk Contribution ◽  
Management Report

Risk management by using risk mapping can help X Hospital located in Yogyakarta in financial management towards operating as an objective company. Enterprise Risk Management (ERM) helps organizations manage all the risks precisely and in a more integrated way. This research focuses on the risk assessment in X hospital that has not applied ERM, to analyse its financial risks. From this test, X Hospital is expected to manage its risks by using the ERM methods more, in order than the sustainability of the business can be maintained over a longer period, and thus, being able to compete with the competitors. Based on the results of risk the assessment, out of the 15 risks identified. There are top three risks that cannot be acceptable. They are: financial management report risk, contribution risk and multiple jobs risk of X Hospital. The three risks need to get response and allocations of good funds and attention from the management.

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