Crisis risk management (fs) | Business & Finance homework help

Paradox of “Safe” Assets:Explain why the very assets that regulators have deemed safe for capital requirement calculations for banks have been the source of recent financial crises. Please provide two specific examples and explain them in some detail.

 

Curse of Zombies:Explain the different risk-return tradeoff (from same class of assets) faced by under-capitalized versus well-capitalized banking sectors, focusing on their incentives from the standpoint of bank shareholders. In turn, explain why leaving banking sectors under-capitalized after a crisis leads to delayed recoveries, providing one specific example of such an outcome in recent crises and the asset-choices made by the corresponding under-capitalized banking sector(s).

 

Market versus Book: Provide three rationales why equity market-based measures of leverage and volatility of a financial firm help predict its distress better than measures based on book (or accounting) and regulatory values.

 

Pie in the Sky: The European Central Bank completed its Asset Quality Review of over 100 large banks of the Eurozone this year. The stress test that was part of this exercise revealed capital shortfall for about 25 banks, totaling to about Euro 25 billion. Market data-based calculations reveal many more banks having capital shortfall totaling to an amount which is 5-10 times as large. Please explain this “discrepancy” in light of your answer to the previous question.

 

Stressful? Or Not Really! Regulatory stress tests predict a phase of 5-6 quarters of recovery following an initial 2-3 quarters of severe stress for the financial sectors being stress-tested. What bias does this lead to as far as regulatory assessments of financial sector health is concerned, focusing on the errors of omission in assuming the recovery phase? Explain one possible way of “fixing” these errors.

 

Living Will or Funeral Plan: Explain the tradeoff in subjecting distressed financial firms to “orderly liquidation” versus allowing them to be reorganized as “bridge banks”, the two options feasible under the Dodd Frank Act.

Calculate the price of your order

550 words
We'll send you the first draft for approval by September 11, 2018 at 10:52 AM
Total price:
$26
The price is based on these factors:
Academic level
Number of pages
Urgency
Basic features
  • Free title page and bibliography
  • Unlimited revisions
  • Plagiarism-free guarantee
  • Money-back guarantee
  • 24/7 support
On-demand options
  • Writer’s samples
  • Part-by-part delivery
  • Overnight delivery
  • Copies of used sources
  • Expert Proofreading
Paper format
  • 275 words per page
  • 12 pt Arial/Times New Roman
  • Double line spacing
  • Any citation style (APA, MLA, Chicago/Turabian, Harvard)

Our guarantees

Delivering a high-quality product at a reasonable price is not enough anymore.
That’s why we have developed 5 beneficial guarantees that will make your experience with our service enjoyable, easy, and safe.

Money-back guarantee

You have to be 100% sure of the quality of your product to give a money-back guarantee. This describes us perfectly. Make sure that this guarantee is totally transparent.

Read more

Zero-plagiarism guarantee

Each paper is composed from scratch, according to your instructions. It is then checked by our plagiarism-detection software. There is no gap where plagiarism could squeeze in.

Read more

Free-revision policy

Thanks to our free revisions, there is no way for you to be unsatisfied. We will work on your paper until you are completely happy with the result.

Read more

Privacy policy

Your email is safe, as we store it according to international data protection rules. Your bank details are secure, as we use only reliable payment systems.

Read more

Fair-cooperation guarantee

By sending us your money, you buy the service we provide. Check out our terms and conditions if you prefer business talks to be laid out in official language.

Read more