Bad incentives or weak controls?

Author(s):

Gilad Livne

Industry:
Banking

The recent loss of £1.5 billion at UBS as a result of allegedly unauthorised trading raises the question as to the possible causes of this failure. Is this attributable to wrong pay incentives, failure of supervision and internal control, or is it a result of corporate culture?

Dr Gilad Livne, Senior Lecturer in Accounting and Finance, explains further based on his latest research.

Updated: 10/02/2017
Comments:
Views: 13,628

Insurance solvency under parameter uncertainty

Financial institutions such as insurance companies or banks are regulated according to a Value-at-Risk principle. This means that they have to hold enough capital, such that their probability of becoming insolvent over a fixed time horizon (e.g. 1 year) is very low (e.g. at most 0.5%). Calculation of the required capital according to this principle stumbles on the quite fundamental difficulty of estimating the probability of very extreme scenarios based on limited data sets.

Updated: 10/02/2017
Comments: 4
Views: 13,230

Ending compulsory annuitisation: what are the consequences?

The report highlights the consequences of the Government's proposal to end the requirement for pension scheme members to purchase annuities by the age of 75.

Updated: 10/02/2017
Comments: 7
Views: 13,148

Do accounting requirements constrict supply chain finance?

Author(s):

ManMohan Sodhi

Industry:
Any Industry


Although supply chain finance appears to offer a win-win-win proposition for buyers, suppliers and banks, buyers have been reluctant to adopt these solutions. It has been suggested that accounting requirements on supply chain finance render its adoption unattractive for buyers through reclassification of accounts payable to debt, thus increasing the debt held by the buyer on their balance sheet.

To investigate whether this is indeed the case, preliminary research was carried out through interviews with four financial organisations.

Updated: 09/12/2014
Comments: 19
Views: 13,060

Partnership under pressure

As recently as twenty years ago, partnership was the pre-eminent form of governance in most major professional sectors. But in the 1980s the incidence of partnership began to decline in areas such as accounting, management consulting, actuarial consulting, and investment banking, to the extent that most major consulting firms and almost all investment banks are now organised as privately-held or publicly-quoted corporations.

Updated: 02/11/2011
Comments:
Views: 12,959

Insurance, systemic risk and the financial crisis

Author(s):

Faisal Baluch

 et al.

In this paper we assess the impact of the financial crisis on insurance markets and the role of the insurance industry in the crisis itself.

Updated: 01/01/2015
Comments: 40
Views: 12,657

Apocalyptic demography? Putting longevity risk in perspective

Current life expectancy depends very much on demographic factors, particularly lifestyle, and varies from scheme to scheme, i.e. it is scheme specific. It is therefore very important that companies understand where their scheme sits in the population of pension schemes as far as life expectancy is concerned.

Updated: 10/02/2017
Comments:
Views: 12,480

Business Models and Technological Innovation - how they interact

The business model construct appeals to many academics, yet it lacks a widely accepted language that would allow researchers to draw on the work of others. In this piece, we explore one clear emerging view of the business model construct and examine where this view takes us in terms of understanding the relationship between business model innovation and technical innovation.

Updated: 09/02/2017
Comments:
Views: 12,441

Buttressing Supply Chains against Floods in Asia for Humanitarian Relief and Economic Recovery

Author(s):

ManMohan Sodhi

 et al.
Topic:
Operations

Flood is the most frequently occuring natural disaster worldwide, with Asia suffering the highest incidence. While humanitarian efforts and initiatives to alleviate suffering caused by floods are ongoing, we believe there is a new opportunity to coordinate "last mile" humanitarian efforts in the event of a flood, using micro-retailers. Micro-retailers are the 'last mile' nodes in traditional retail supply chains in many Asian countries, and we propose the use of social enterprise to buttress these supply chains for distribution of essential goods by coordinating with micro-retailers before and after floods. In support of this we also present a stylised model to quantify the benefits of our proposal.

Updated: 01/01/2015
Comments: 10
Views: 12,352