This document outlines various types of risks faced by treasury operations including interest rate risk, foreign exchange risk, credit risk, commodity risk, operational risk, liquidity risk, and other risks. It provides details on measuring and managing each type of risk through approaches like sensitivity analysis, scenario analysis, stress testing, value at risk and monitoring key risk indicators. An example is provided to illustrate operational risk from a large trading error at the Tokyo Stock Exchange.
In general terms, Risk could be defined as a situation which involves exposure to some danger. Therefore, the probability of the occurrence of a certain negative action which could be caused due to controllable or uncontrollable reasons could be known as risk. Copy the link given below and paste it in new browser window to get more information on Independent Risk:- http://www.transtutors.com/homework-help/finance/independent-risk.aspx
Interest rate risk management for banks under Basel II, presentation by Christine Brown, Department of Finance , The University of Melbourne, Shanghai, December 8-12, 2008
The beta coefficient is a form of measurement for volatile movement in an individual stock, as well as systematic risk in comparison to comparable stocks or the wider market.
Beta is a representation of the trajectory output of the slop calculated through regression analysis of a particular stock vs sector vs wider market. http://blugm.com
This material takes a pragmatic look at how the risks in the Treasury operations of a Bank can best be managed. It identifies the risks in the treasury function of a bank and highlights the need for an ERM approach for optimality.
In general terms, Risk could be defined as a situation which involves exposure to some danger. Therefore, the probability of the occurrence of a certain negative action which could be caused due to controllable or uncontrollable reasons could be known as risk. Copy the link given below and paste it in new browser window to get more information on Independent Risk:- http://www.transtutors.com/homework-help/finance/independent-risk.aspx
Interest rate risk management for banks under Basel II, presentation by Christine Brown, Department of Finance , The University of Melbourne, Shanghai, December 8-12, 2008
The beta coefficient is a form of measurement for volatile movement in an individual stock, as well as systematic risk in comparison to comparable stocks or the wider market.
Beta is a representation of the trajectory output of the slop calculated through regression analysis of a particular stock vs sector vs wider market. http://blugm.com
This material takes a pragmatic look at how the risks in the Treasury operations of a Bank can best be managed. It identifies the risks in the treasury function of a bank and highlights the need for an ERM approach for optimality.
Managing Credit Risk
• A major part of the business of financial institutions is making loans,
and the major risk with loans is that the borrow will not repay.
• Credit risk is the risk that a borrower will not repay a loan according
to the terms of the loan, either defaulting entirely or making late
payments of interest or principal.
• Concepts of adverse selection and moral hazard provides framework
to understand the principles that is used to minimize credit risk, yet
make successful loans.
Financial risk management is the practice of protecting economic value in a firm by using financial instruments to manage exposure to risk: operational risk, credit risk and market risk, foreign exchange risk, shape risk, volatility risk, liquidity risk, inflation risk, business risk, legal risk, reputational risk, sector risk etc. Similar to general risk management, financial risk management requires identifying its sources, measuring it, and plans to address them.
Financial risk management can be qualitative and quantitative. As a specialization of risk management, financial risk management focuses on when and how to hedge using financial instruments to manage costly exposures to risk.
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Unveiling the Secrets How Does Generative AI Work.pdfSam H
At its core, generative artificial intelligence relies on the concept of generative models, which serve as engines that churn out entirely new data resembling their training data. It is like a sculptor who has studied so many forms found in nature and then uses this knowledge to create sculptures from his imagination that have never been seen before anywhere else. If taken to cyberspace, gans work almost the same way.
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Enterprise Excellence is Inclusive Excellence.pdfKaiNexus
Enterprise excellence and inclusive excellence are closely linked, and real-world challenges have shown that both are essential to the success of any organization. To achieve enterprise excellence, organizations must focus on improving their operations and processes while creating an inclusive environment that engages everyone. In this interactive session, the facilitator will highlight commonly established business practices and how they limit our ability to engage everyone every day. More importantly, though, participants will likely gain increased awareness of what we can do differently to maximize enterprise excellence through deliberate inclusion.
What is Enterprise Excellence?
Enterprise Excellence is a holistic approach that's aimed at achieving world-class performance across all aspects of the organization.
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A way to engage all in creating Inclusive Excellence. Lessons from the US military and their parallels to the story of Harry Potter. How belt systems and CI teams can destroy inclusive practices. How leadership language invites people to the party. There are three things leaders can do to engage everyone every day: maximizing psychological safety to create environments where folks learn, contribute, and challenge the status quo.
Who might benefit? Anyone and everyone leading folks from the shop floor to top floor.
Dr. William Harvey is a seasoned Operations Leader with extensive experience in chemical processing, manufacturing, and operations management. At Michelman, he currently oversees multiple sites, leading teams in strategic planning and coaching/practicing continuous improvement. William is set to start his eighth year of teaching at the University of Cincinnati where he teaches marketing, finance, and management. William holds various certifications in change management, quality, leadership, operational excellence, team building, and DiSC, among others.
Memorandum Of Association Constitution of Company.pptseri bangash
www.seribangash.com
A Memorandum of Association (MOA) is a legal document that outlines the fundamental principles and objectives upon which a company operates. It serves as the company's charter or constitution and defines the scope of its activities. Here's a detailed note on the MOA:
Contents of Memorandum of Association:
Name Clause: This clause states the name of the company, which should end with words like "Limited" or "Ltd." for a public limited company and "Private Limited" or "Pvt. Ltd." for a private limited company.
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Registered Office Clause: It specifies the location where the company's registered office is situated. This office is where all official communications and notices are sent.
Objective Clause: This clause delineates the main objectives for which the company is formed. It's important to define these objectives clearly, as the company cannot undertake activities beyond those mentioned in this clause.
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Liability Clause: It outlines the extent of liability of the company's members. In the case of companies limited by shares, the liability of members is limited to the amount unpaid on their shares. For companies limited by guarantee, members' liability is limited to the amount they undertake to contribute if the company is wound up.
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Capital Clause: This clause specifies the authorized capital of the company, i.e., the maximum amount of share capital the company is authorized to issue. It also mentions the division of this capital into shares and their respective nominal value.
Association Clause: It simply states that the subscribers wish to form a company and agree to become members of it, in accordance with the terms of the MOA.
Importance of Memorandum of Association:
Legal Requirement: The MOA is a legal requirement for the formation of a company. It must be filed with the Registrar of Companies during the incorporation process.
Constitutional Document: It serves as the company's constitutional document, defining its scope, powers, and limitations.
Protection of Members: It protects the interests of the company's members by clearly defining the objectives and limiting their liability.
External Communication: It provides clarity to external parties, such as investors, creditors, and regulatory authorities, regarding the company's objectives and powers.
https://seribangash.com/difference-public-and-private-company-law/
Binding Authority: The company and its members are bound by the provisions of the MOA. Any action taken beyond its scope may be considered ultra vires (beyond the powers) of the company and therefore void.
Amendment of MOA:
While the MOA lays down the company's fundamental principles, it is not entirely immutable. It can be amended, but only under specific circumstances and in compliance with legal procedures. Amendments typically require shareholder
Putting the SPARK into Virtual Training.pptxCynthia Clay
This 60-minute webinar, sponsored by Adobe, was delivered for the Training Mag Network. It explored the five elements of SPARK: Storytelling, Purpose, Action, Relationships, and Kudos. Knowing how to tell a well-structured story is key to building long-term memory. Stating a clear purpose that doesn't take away from the discovery learning process is critical. Ensuring that people move from theory to practical application is imperative. Creating strong social learning is the key to commitment and engagement. Validating and affirming participants' comments is the way to create a positive learning environment.
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RMD24 | Debunking the non-endemic revenue myth Marvin Vacquier Droop | First ...BBPMedia1
Marvin neemt je in deze presentatie mee in de voordelen van non-endemic advertising op retail media netwerken. Hij brengt ook de uitdagingen in beeld die de markt op dit moment heeft op het gebied van retail media voor niet-leveranciers.
Retail media wordt gezien als het nieuwe advertising-medium en ook mediabureaus richten massaal retail media-afdelingen op. Merken die niet in de betreffende winkel liggen staan ook nog niet in de rij om op de retail media netwerken te adverteren. Marvin belicht de uitdagingen die er zijn om echt aansluiting te vinden op die markt van non-endemic advertising.
Implicitly or explicitly all competing businesses employ a strategy to select a mix
of marketing resources. Formulating such competitive strategies fundamentally
involves recognizing relationships between elements of the marketing mix (e.g.,
price and product quality), as well as assessing competitive and market conditions
(i.e., industry structure in the language of economics).
Attending a job Interview for B1 and B2 Englsih learnersErika906060
It is a sample of an interview for a business english class for pre-intermediate and intermediate english students with emphasis on the speking ability.
Tata Group Dials Taiwan for Its Chipmaking Ambition in Gujarat’s DholeraAvirahi City Dholera
The Tata Group, a titan of Indian industry, is making waves with its advanced talks with Taiwanese chipmakers Powerchip Semiconductor Manufacturing Corporation (PSMC) and UMC Group. The goal? Establishing a cutting-edge semiconductor fabrication unit (fab) in Dholera, Gujarat. This isn’t just any project; it’s a potential game changer for India’s chipmaking aspirations and a boon for investors seeking promising residential projects in dholera sir.
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4. • Absolute interest rate risk
– It arises from exposure to a directional (up or
down) change in interest rates
5. Yield Curve Risk
• Arises from changes in the relationship
between ST and LT interest rates
• Usual shape of yield curve is upward sloping
• Steepening or flattening or becoming
downward sloping changes the relationship
• The change in shape changes the interest rate
differential b/w ST and LT maturities
• It impacts borrowing and lending decisions
and therefore profitability
7. Forex – Transaction Risk
• Arises from transactions reported in the
income statement of a company
• Result of purchases/payments in Forex
• Inventories, royalties, license fees, etc
• Sales in forex
8. Forex – Translation Risk
• It arises when assets, liabilities or profits are
translated from the operating currency into a
reporting currency
• For example the reporting currency of a
parent company
9. Translation Risk - Example
US $ in UK Pound UK Pound
millions Sterling@ Sterling @
1.60 in 1.50 in
millions millions
Gross 1,000 625 667
Assets
Liabilities 250 156 167
Net 750 469 500
Assets
Net 150 97 103
Profit
10. Credit Risk
• Default risk
• Counter party risk
• Sovereign or country risk
• Concentration risk
• Legal risk
– Arises from a possibility that a counter party is not
legally permitted to enter into transactions such
as derivatives transactions
12. Operational Risk
• Human Errors and Frauds
• Processes and procedural risk
– Eg. Use of inadequate controls
– Sarbanes-Oxley act in USA
• Technology and systems risk
– Weakness in technology and systems provide
opportunities for errors, failures, lost data and
fraud
13. Liquidity Risk
• The ability of a firm to maintain adequate
liquidity through Wrk. Cap. Mgt.
• Firm’s capacity to meet its ST obligations
• Ability to buy securities
• Ability to sell securities
• Ability to close out contracts; trading/hedging
• The less liquid a market, the more costly and
difficult to undertake transactions in the mkt.
14. Other Risks
• Basis risk
• Reputation risk
• Equity price risk
• Systemic risk
– Failure of a major financial institution could
trigger a domino effect
– Can also arise from technological failure or a
major disaster
15. Risk Measurement
• Two approaches for risk management
– Day to day or Tactical standpoint
– High level or Strategic view
• It is necessary to have the capability to
monitor risk from both stand points
• Risk management requires both quantitative
and qualitative analysis
• However it cannot be reduced to a simple
– Checklist, a mechanical process or a number
16. Risk Measurement
• Risk assessment is a two part process
– Assessment of likely gain or loss from changes in
market rates or prices
– Assessment of probability of the changes
17. Sensitivity
• Calculate net exposure taking into account
various positions of the organization
• Example
– Exposure to foreign currency
– Track all assets, liabilities, expenses and revenues
in a foreign currency
– Study fluctuations when exchange rate changes
– GAP Analysis
18. Scenario Analysis
• Also called “ What – If – Aanlysis
• Its assesses potential loss by analyzing the
value of an instrument or a portfolio under
different scenarios
• One factor scenarios such as interest rates
• Multifactor scenarios such as changes in
interest rates as well as changes in foreign
exchange rates
19. Scenario Analysis
• Assess performance of a portfolio of bonds
• Portfolio performance might be assessed
under differing differing yield curves
– Parallel shift with rising interest rates
– Parallel shift with declining interest rates
– Steepening of the yield curve
– Flattening of the yield curve
– Scenario with an inversion to part or all of the
yield curve
20. Stress Testing
• Assessment of how exposure might perform
under more extreme conditions
• It may involve changing one or more variables
using major historical price changes
• If test shows unmanageable potential losses
• Strategies can be formulated to deal with
them
• Proper preparation is the key
21. Value at Risk
• The most commonly used measure of market
risk
• It is a systematic methodology to estimate the
potential financial loss for a given period of
time
• It is based on statistical estimates of
probability at a pre-determined confidence
interval
22. Value at Risk
• An estimate of the probability of a loss being
greater than or less than a particular $
amount as a result of market fluctuations
• It is commonly used for portfolios of assets or
for exposures
23. Credit Risk Measurement
• Assessment of probability of counter party
defaulting on its financial obligation
• Exposure at counter party default
• Loss given counter party default which
considers recovery of amounts that reduces
the loss otherwise resulting from default
• Counter party ratings (credit ratings)
24. Credit Risk Measurement
• Notional Exposure
– Notional or contractual or nominal amounts
outstanding sometimes cited as amounts at risk
– In certain derivatives transactions, less than
notional amount may be at risk
– Full contractual amount is potentially at risk
during settlement
• Aggregate Exposure
25. Replacement Cost
• The cost to replicate a transaction at current
market prices
• Assuming no settlement failures if the
derivatives counterparty defaulted on its
obligations
26. Operational Risk – Defined by BIS 2003
• Internal Fraud
• External Fraud
• Employment Practices
• Workplace Safety
• Clients
• Products
• Business Practices
• Damage to Physical Assets
• Business Disruption & System Failures
27. Operational Risk Measurement
• It results from an organization’s exposure to
people, processes and systems
• Such risk management attempts to reduce
probability of loss resulting from frauds or
errors
• Operational risk databases are being used to
measure and manage operational risk
28. Operational Risk
• Potential for operational risk include
– Number of deviations from policy or stated
procedures
– Comments and notes from internal or external
audits
– Levels of staff turnover
– Volatility of earnings
– Unusual complaints from customers and vendors
– Volume of derivatives trade
29.
30. Operational Risk – Example TSE 2005
• During the initial public offering of J-Com on
December 8, 2005, an employee at
Mizuho Securities Co., Ltd. mistakenly typed
an order to sell 610,000 shares at 1 yen,
instead of an order to sell 1 share at 610,000
yen.
• Mizuho failed to catch the error; the Tokyo
Stock Exchange initially blocked attempts to
cancel the order, resulting in a net loss of 347
million US dollars to be shared between the
exchange and Mizuho.
31. Operational Risk – Example TSE 2005
• Both companies are now trying to deal with
their troubles: lack of error checking, lack of
safeguards, lack of reliability, lack of
transparency, lack of testing, loss of
confidence, and loss of profits.
• On 11 December, the TSE acknowledged that
its system was at fault in the Mizuho trade. On
21 December, Takuo Tsurushima, chief
executive of the TSE, and two other senior
executives resigned over the Mizuho affair.