The Risk Management Process Business Strategy and Tactics

by Culp, Christopher L.

• ISBN13: 9780471405542
• ISBN10: 047140554X
• Edition: 1st
• Format: Hardcover
• Copyright: 2001-04-06
• Publisher: Wiley

Summary

Integrates essential risk management practices with practical corporate business strategies Focusing on educating readers on how to integrate risk management with corporate business strategy-not just on hedging practices-The Risk Management Process is the first financial risk management book that combines a detailed, big picture discussion of firm-wide risk management with a comprehensive discussion of derivatives-based hedging strategies and tactics. An essential component of any corporate business strategy today, risk management has become a mainstream business process at the highest level of the world's largest financial institutions, corporations, and investment management groups. Addressing the need for a well-balanced book on the subject, respected leader and teacher on the subject Christopher Culp has produced a well-balanced, comprehensive reference text for a broad audience of financial institutions and agents, nonfinancial corporations, and institutional investors.

Author Biography

CHRISTOPHER L. CULP is Managing Director at CP Risk Management LLC in Chicago and is also Adjunct Associate Professor of Finance at the University of Chicago. A former president of Risk Management Consulting Services, Inc. and senior examiner in the Supervision and Regulation Department of the Federal Reserve Bank of Chicago, Dr. Culp is a managing editor of Derivatives Quarterly and Senior Fellow in Financial Regulation with the Competitive Enterprise Institute in Washington, DC. Dr. Culp holds a PhD in finance from the Graduate School of Business of the University of Chicago and a BA in economics from Johns Hopkins University.

Table of Contents

Introduction	ix
PART ONE Risk Management and Corporate Finance	1	(206)
The Nature of Risk	3	(28)
Risk Aversion, Insurance, and Hedging	31	(29)
The Irrelevance of Corporate Financing and Risk Management Decisions	60	(34)
Increasing Expected Cash Flows or Reducing the Cost of Capital by Managing Risk	94	(18)
Reducing Conflicts between Security Holders and Managers by Managing Risk	112	(17)
Reducing Conflicts among Security Holders by Managing Risk	129	(23)
Controlling and Exploiting Informational Asymmetries by Managing Risk	152	(36)
Value versus Cash Flow versus Earnings Risk Management	188	(14)
Total versus Selective Risk Management	202	(5)
PART TWO Risk Management and Business Strategy	207	(248)
Risk Culture and Risk Management Business Models	209	(17)
Integrating People, Technology, and Processes through Enterprise-Wide Risk Management	226	(22)
Identifying Market Risk Exposures and Defining Risk Tolerances	248	(12)
Spot, Forward, and Forward-Like Exposures	260	(21)
Identifying Option, Option-Like, and Real Option Exposures	281	(40)
Measuring and Monitoring Market Risk	321	(51)
Identifying, Measuring, and Monitoring Credit Risk	372	(46)
Identifying, Measuring, and Monitoring Liquidity Risk	418	(14)
Identifying, Measuring, and Monitoring Operational Risk	432	(8)
Identifying and Managing Legal Risk	440	(15)
PART THREE The Tactics of Risk Control	455	(114)
Ex Ante Capital Allocation	457	(17)
Ex Post Performance Measurement and Compensation	474	(11)
Internal Controls	485	(15)
Tactical Risk Control with Derivatives	500	(30)
Tactical Risk Control through Actual and Synthetic Asset Divestitures	530	(12)
Strategic Risk Control with Structured Liabilities	542	(6)
Insurance and ART	548	(21)
Notes	569	(15)
Bibliography	584	(13)
Index	597