Risk Management in Volatile Financial Markets

Author(s): by Franco Bruni, Donald E. Fair, and Richard O’Brien

Date published: Nov 1995

edited by Franco Bruni, Donald E. Fair, and Richard O'Brien, Financial and Monetary Policy Studies 32
Kluwer Academic Publishers, Dordrecht, Boston, London, 1996
ISBN 0-7923-4053-1

The rapidly changing structure of fianancial markets is leading to a radical shift in the way in which private sector financial institutions and firms, and public regulators, are coping with risk. With markets displaying a high degree of innovation and volatility, the responsibility for risk management is being placed increasingly on private sector operators. Following assessments of the extent of market volatility and risk in financial markets, this volume presents examples of how private institutions are developing new risk management techniques and case studies from specific markets including securities markets and retail banking. In addition, senior central bankers discuss their changing attitude to risk and regulation and the implications for exchange rate and monetary policies. The papers are written by authors from many countries covering a wide range of country experiences: by players in leading banks and companies; by public officials; and by academics, providing three differing perspectives on the financial markets of the 1990s. The four main sections address central bank perspectives, volatility and risk, institutional issues and practices, and the policy implications. The volume includes the 1995 Prix de Marjolin essay and concludes with the 1995 Marjolin Lecture, given at the 19th SUERF Colloquium in Thun, from which the papers are selected. The contributions will be of considerable interest to those in banks, securities houses, company treasuries, central banks and regulatory bodies as well as to academics.