scholarly journals ANALYSIS OF FINANCIAL CRISIS CONTAGION INDICATORS

2012 ◽  
Vol 8 (1) ◽  
pp. 197-206
Author(s):  
Evaldas Račickas ◽  
Asta Vasiliauskaitė
Keyword(s):  
Financial Crisis ◽  
Financial Markets ◽  
Financial Risk ◽  
High Reliability ◽  
Management Strategies ◽  
Warning System ◽  
Global Scale ◽  
Geographical Regions ◽  
Risk Management Strategies ◽  
The Impact

The financial crisis in the last decades has become a common phenomenon. However, due to the process of globalization, financial markets’ integration and their interdependency, financial crisis tend to evolve and gain not only regional but also global scale. In the context of financial market liberalization, globalization and internalization, the subsequences caused by financial risk and financial crises contagion become more visible and more severe. The financial crisis that originated in one region of the world through the rapid process of financial markets’ globalization may spread worldwide and adversely affect other geographical regions, thus causing serious problems and disruption throughout the whole global financial system in the way of destabilizing it. Although it is not easy to forecast crises with high reliability, recently a lot of scientific researches were done on the analysis of financial crisis indicators. Early warning system of forthcoming crisis that uses a lot of different economical and financial indicators can indeed be a useful tool for preparation for the coming financial crisis, for evaluating subsequences of crisis to a country’s economy and for assessing the impact of financial crisis future vulnerabilities. In the article all the financial crisis indicators which are presented in scientific literature are examined systemically and classified into four main groups. The main finding is that all the financial crisis indicators differ in their significance on financial crisis contagion. Moreover, all indicators and their observance simultaneously let both academics and politicians to evaluate the current economic situation and to determine if a country is struck by financial crisis or not. By using system of financial crisis indicators it could help to detect contagion at an earlier stage and help to prepare for the forthcoming crisis and to prevent from huge losses when the financial crisis hits. After all, the knowing of financial crisis contagion indicators system could be extremely valuable in developing appropriate financial risk management strategies.

Normative dimensions of central banking: How the guardians of financial markets affect justice

2017 ◽  
Author(s):  
Peter Dietsch
Keyword(s):  
Monetary Policy ◽  
Financial Crisis ◽  
Financial Markets ◽  
Central Banking ◽  
Democratic Legitimacy ◽  
Policy Agenda ◽  
Theory Of Justice ◽  
Introductory Section ◽  
The Impact

Monetary policy, and the response it elicits from financial markets, raises normative questions. This chapter, building on an introductory section on the objectives and instruments of monetary policy, analyzes two such questions. First, it assesses the impact of monetary policy on inequality and argues that the unconventional policies adopted in the wake of the financial crisis exacerbate inequalities in income and wealth. Depending on the theory of justice one holds, this impact is problematic. Should monetary policy be sensitive to inequalities and, if so, how? Second, the chapter argues that the leverage that financial markets have today over the monetary policy agenda undermines democratic legitimacy.

COVID -19 and Indian Financial Markets: A Review

2020 ◽  
Vol 16 (02) ◽  
pp. 1-8
Author(s):  
Kamaldeep Kaur Sarna
Keyword(s):  
Financial Markets ◽  
Financial Institutions ◽  
Financial Services ◽  
Stock Markets ◽  
Global Economy ◽  
Banking Sector ◽  
Global Financial Crisis ◽  
Negative Impact ◽  
Management Strategies ◽  
The Impact

COVID-19 is aptly stated as a Black Swan event that has stifled the global economy. As coronavirus wreaked havoc, Gross Domestic Product (GDP) contracted globally, unemployment rate soared high, and economic recovery still seems a far-fetched dream. Most importantly, the pandemic has set up turbulence in the global financial markets and resulted in heightened risk elements (market risk, credit risk, bank runs etc.) across the globe. Such uncertainty and volatility has not been witnessed since the Global Financial Crisis of 2008. The spread of COVID-19 has largely eroded investors’ confidence as the stock markets neared lifetimes lows, bad loans spiked and investment values degraded. Due to this, many turned their backs on the risk-reward trade off and carted their money towards traditionally safer investments like gold. While the banking sector remains particularly vulnerable, central banks have provided extensive loan moratoriums and interest waivers. Overall, COVID-19 resulted in a short term negative impact on the financial markets in India, though it is making a way towards V-shaped recovery. In this context, the present paper attempts to identify and evaluate the impact of the pandemic on the financial markets in India. Relying on rich literature and live illustrations, the influence of COVID-19 is studied on the stock markets, banking and financial institutions, private equities, and debt funds. The paper covers several recommendations so as to bring stability in the financial markets. The suggestions include, but are not limited to, methods to regularly monitor results, establishing a robust mechanism for risk management, strategies to reduce Non-Performing Assets, continuous assessment of stress and crisis readiness of the financial institutions etc. The paper also emphasizes on enhancing the role of technology (Artificial Intelligence and Virtual/Augmented Reality) in the financial services sector to optimize the outcomes and set the path towards recovery.

scholarly journals The impact of the financial crisis on earnings management: Empirical evidence from Italian and Spanish listed companies

2019 ◽  
Vol 16 (2) ◽  
pp. 121-130 ◽  
Author(s):  
Francesco De Luca ◽  
Francesco Paolone
Keyword(s):  
Financial Crisis ◽  
Financial Markets ◽  
Performance Indicators ◽  
Listed Companies ◽  
Publicly Traded ◽  
Publicly Traded Companies ◽  
Time Period ◽  
Security Offerings ◽  
The Impact ◽  
Giving Bad News

Our study adopts a reliable and widely acknowledged model to detect accounts manipulation in order to assess the impact of the financial crisis on Italian and Spanish listed companies’ propensity to manage their earnings. The analysis is conducted on 565 publicly traded companies on the Italian and Spanish financial markets during the time period 2005-2013. We find a lower propensity to manipulate earnings in both countries during the pre-crisis period (2005-2008) as suggested by a decrease in the number of high-risk manipulators until 2008 included. With the spread of the financial crisis, companies become more manipulators. We believe that the reason for this is to avoid giving bad news to markets, investors, and lenders after that the crisis may have impacted too negatively on firms’ performance indicators and financial equilibrium. Our empirical results provide various implications for further studies related to managements’ incentives concurrently with security offerings.

Global IT Risk Management Strategies

2008 ◽  
pp. 285-298 ◽  
Author(s):  
Chrisan Herrod
Keyword(s):  
Risk Management ◽  
Financial Risk ◽  
Best Practice ◽  
New Technologies ◽  
Management Strategies ◽  
Regulatory Compliance ◽  
It Risk Management ◽  
Reputational Risk ◽  
Risk Management Strategies ◽  
It Risk

This chapter describes why it is important for organizations to develop and implement an IT risk management function and use best practice risk assessment methodologies that provide a standard to measure and assess risk within organizations. Information technology risk management is a significant new function that can help companies achieve world class IT service. IT risk management includes regulatory compliance, information security, disaster recovery, and project risks. IT risk management should be part of a company’s risk management strategy on an equal footing with financial risk management and reputational risk management. As the complexity of IT infrastructures increases and as businesses continue to rely upon the Internet as the communication backbone for e-business, the associated risks increase. For these reasons, deciding upon and implementing a risk management process and a standard methodology will greatly reduce the risks associated with the introduction of new technologies that support the mission of the business.

scholarly journals Establishment of a Financial Crisis Early Warning System for Domestic Listed Companies Based on Three Decision Tree Models

2020 ◽  
Vol 2020 ◽  
pp. 1-7
Author(s):  
Gang Wang ◽  
Keming Wang ◽  
Yingying Zhou ◽  
Xiaoyan Mo ◽  
Weilin Xiao
Keyword(s):  
Financial Crisis ◽  
Decision Tree ◽  
Early Warning ◽  
Financial Management ◽  
Early Warning System ◽  
Comprehensive Evaluation ◽  
Warning System ◽  
Predictive Ability ◽  
Tree Models ◽  
The Impact

The financial crisis is a realistic problem that the general enterprise must encounter in the process of financial management. Due to the impact of the COVID-19 and the Sino-US trade war, domestic companies with unsound financial conditions are at risk of shutdowns and bankruptcies. Therefore, it is urgently needed to study the financial warning of enterprises. In this study, three decision tree models are used to establish the financial crisis early warning system. These three decision tree models include C50, CART, and random forest decision trees. In addition, the ROC curve was used for comprehensive evaluation of the accuracy analysis of the model to confirm the predictive ability of each model. This result can provide reference for domestic financial departments and provide financial management basis for the investing public.

scholarly journals A stochastic dominance approach to financial risk management strategies

2015 ◽  
Vol 187 (2) ◽  
pp. 472-485 ◽  
Author(s):  
Chia-Lin Chang ◽  
Juan-Ángel Jiménez-Martín ◽  
Esfandiar Maasoumi ◽  
Teodosio Pérez-Amaral
Keyword(s):  
Risk Management ◽  
Stochastic Dominance ◽  
Financial Risk ◽  
Management Strategies ◽  
Financial Risk Management ◽  
Risk Management Strategies

International Trade Relations and the Contagious Effects of the Asian Financial Crisis

2000 ◽  
Vol 03 (03) ◽  
pp. 367-399 ◽  
Author(s):  
Chunchi Wu
Keyword(s):  
Financial Crisis ◽  
Financial Markets ◽  
East Asian ◽  
Asian Financial Crisis ◽  
Trade Relations ◽  
Fundamental Causes ◽  
Asian Economies ◽  
Trade Relationship ◽  
The Impact ◽  
The U.S

This paper examines the trade relationship among Pacific Rim Asian economies and the U.S. with an attempt at understanding the fundamental causes for the contagious effects of the Asian financial crisis. East Asian economies trade extensively among themselves and with the U.S. This great dependence on foreign trade and investments has considerably increased the instability of the economies and financial markets in this region. It is found that the impact of the financial crisis on a domestic economy is positively correlated with its trade relationship with foreign economies. The importance of the trade relationship is manifested in the financial markets. Results show that the returns and volatility of a stock market are significantly influenced by the markets of its major trading partners. Also, foreign exchange markets often significantly interact with stock markets, especially following the Asian financial crisis. Furthermore, the Japanese and Hong Kong markets, instead of the U.S. market, had a dominating effect on East Asian financial markets during the period of the financial crisis.

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