Risk Management and Financial Institutions is the definitive blueprint for understanding the complex machinery of modern financial systems. In an era defined by economic volatility, algorithmic trading, and interconnected global markets, this text serves as both a masterclass for academics and a tactical manual for industry professionals. It strips away the illusion of predictability from the financial world, replacing it with rigorous, quantitative frameworks designed to measure, mitigate, and master uncertainty. At its core the book explores the delicate balance between risk and reward. Financial institutions do not exist to avoid risk; they exist to manage it. The book provides an exhaustive breakdown of the primary perils that can destabilize a firm or trigger systemic failure. Through meticulous mathematical modeling and real-world clarity, the text bridges the gap between theoretical risk and operational reality. What makes this text exceptionally powerful is its deep historical grounding. The book details the evolution of international regulatory frameworks, specifically the progression from Basel I to Basel III and Basel IV. It illustrates how these regulations are not arbitrary administrative hurdles, but vital guardrails engineered to prevent systemic contagion. By analyzing past failures—from the collapse of Lehman Brothers to rogue trading scandals—the text teaches readers that risk management is fundamentally a human discipline prone to psychological biases and structural blind spots. Risk Management and Financial Institutions is more than a text; it is an intellectual anchor. It enforces the reality that risk cannot be eliminated, only transferred or transformed.
Isaac Evans is a distinguished researcher, risk strategist, and financial economist whose career spans over two decades at the intersection of quantitative finance and institutional risk management. With an academic foundation built at the world’s leading institutions, Evans holds a Ph.D. in Financial Econometrics from the London School of Economics and an M.S. in Computational Finance from Carnegie Mellon University. His early research into systemic risk propagation during market crises laid the groundwork for modern predictive modeling frameworks used by central banks and global regulatory bodies today. Before transitioning into academia and strategic advisory, Evans spent over twelve years on Wall Street and in the City of London. He served as the Managing Director of Global Risk Strategy at a Tier-1 investment bank, where he spearheaded the restructuring of the firm’s capital adequacy frameworks through both the aftermath of the 2008 financial crisis and the implementation of Basel III/IV regulations. Later, as a Senior Consultant to the International Monetary Fund (IMF), he advised developing economies on stress-testing their banking sectors against macroeconomic shocks and geopolitical disruptions. Currently, Evans occupies a prestigious chair as a Professor of Risk Management and Financial Regulation, while concurrently serving on the board of directors for several multinational financial entities. He has authored more than forty peer-reviewed papers in top-tier journals, including the Journal of Finance and the Journal of Financial and Quantitative Analysis, focusing on liquidity risk, machine learning applications in credit scoring, and the systemic threats posed by decentralized finance.
| Preface Chapter 1. Introduction to Risk Management Risk Management Protects Organizational Value Counterparty Credit Risk Arises from Derivatives Economic Capital Measures Risk Absorption Capacity Chapter 2. Types of Financial Risks Financial Risk Defined as Uncertainty of Returns Interest Rate Risk Affects Fixed Income Positions Counterparty Credit Risk in Derivatives Model Risk from Flawed Analytics Concentration Risk in Portfolios Chapter 3. Role of Financial Institutions Foundational Role of Financial Institutions in the Economy Mutual Funds and Investment Companies Private Equity and Venture Capital Firms Bank Runs and Deposit Insurance Protection Resolution and Recovery Planning Chapter 4. Market Risk Measurement Value at Risk as a Standard Measure Historical Simulation Methodology Backtesting and Model Validation Correlation and Diversification Effects Trading Book versus Banking Book Classification Hedging and Risk Mitigation Market Risk Culture and Behavior Chapter 5. Credit Risk Assessment Five Cs of Credit Analysis Framework Probability of Default Estimation Techniques Stress Testing and Scenario Analysis in Credit Risk Counterparty Credit Risk in Derivatives and Securities Financing Credit Risk Reporting and Management Information Chapter 6. Liquidity Risk Management Nature and Sources of Liquidity Risk Net Stable Funding Ratio Liquidity Risk Limits and Monitoring Liquidity Risk and Collateral Management Liquidity Risk and Credit Ratings Chapter 7. Operational Risk Frameworks Operational Risk Frameworks Identify, Assess, and Mitigate Non-Financial Risks Risk Appetite Defines the Level of Operational Risk the Organization Accepts Risk and Control Self-Assessments Engage Business Units in Risk Identification Internal Loss Data Collection Builds Organizational Memory of Operational Risk Governance and Oversight Structures Ensure Accountability Third-Party Risk Management Addresses Risks from Outsourced Activities Operational Risk Reporting Communicates Information to Stakeholders Operational Risk and Financial Crime Compliance Operational Risk Data and Technology Infrastructure Operational Risk and Change Management Operational Risk and Internal Fraud |
|
$280.00