The Controllership Relevance or Risk Management in non-Financial Companies: a study of risk managers` and controllers` perceptions

The purpose of this study is to analyze the Controllership relevance as support risk management in non-financial companies. Risk management is a widely discussed and disseminated subject amongst financial institutions. It is obvious that economic uncertainties and, consequently, prevention and. control must also exist in non-financial companies. To enable managers to take safe-decisions, it is essential for them to be able to count on instrumental support that provides timely and adequate information, to ensure lower levels of mistakes and risk exposure. However, discussion concerning risk management in non-financial companies is still in its early stages in Brazil. Considering this gap, this study aims at assessing how Controllership has been acting in? companies under the insight of risk and how it can contribute to risk management in non-financial companies. To achieve the proposed goal, a field research was. carried-out with non-financial companies that are located in the city Sao Paulo and listed in the Sao Paulo Stock Exchange (Bovespa). The research was carried out using questionnaires, which were sent do Risk Officers and Controllers of those companies with the purpose of evaluating their perception on the subject. The results,of the research allow us to conclude that Controllership offers support to risk management, through information that contributes to the mitigation of the risks in non-financial companies.

Impact of the Subprime Crisis in the Provision of Credit Risk of Major National Banks

Financial institutions are directly exposed to the credit risk, that is, the risk of the borrower not fulfill with their obligations, paying their debts in its stated periods established previously. The bank predict this type of risk, including them in their balance-sheets. In 2006/2007 there was the impact of a new financial crisis that spread around the world, known as the crisis of subprime. The objective of this study is to analyze if the provisions for credit risk or liquidation increased the sprouting of the crisis of subprime in ten major national banks, chosen accordant to their total assets. To answer this question, the balance-sheets of each one of these banks in the period of 2005 to 2007 were analyzed. This research is characterized, as for its objectives, as descriptive and as for the procedures as documentary research. It is also characterized as having a qualitative approach. The results show that the crisis of subprime has caused little impact in the credit risk provision of the analyzed institutions. It was noticed a slight increase in the provision indicators at the peak of the crisis in 2006. These percentages were reduced in, 2007, probably reflecting the economic stability of Brazil and the stagnation of the crisis Of subprime in that year, at least in relation to in our country.

Diagnosis of Organizational Soft Problems in a Peruvian Financial Institution by Systemic Thinking

Managing financial institutions in an underdeveloped economic context has become a real challenge nowadays. In order to reach the organization`s planned goals, they have to deal with structural, behavioral and informational problems. From the systemic point of view, this situation gets even worse when the company does not present organizational boundaries and a cohesive identification for their stakeholders. Thus, European countries have some special financial lines in order to help the development of micro credit in Latin communities in an attempt to help the local economy. However, institutions like Caixa dos Andes in Peru present management problems when dealing with this complexity. Based on this, how can the systemic eye help in the diagnosis of soft problems of a Peruvian financial company? This study aims to diagnose soft problems of a Peruvian financial company based on soft variables like identity, communication and autonomy and also intends to identify possible ways to redesign its basic framework. The (VSM--Viable System Model) method from Beer (1967), applied in this diagnostic study, was used in a practical way as a management tool for organizations` analysis and planning. By describing the VSM`s five systems, the creation of a systemic vision or a total vision is possible, showing the organization`s complexity from the inside. Some company`s soft problems like double control, inefficient use of physical and human resources, low information flows, slowness, etc. The VSM presented an organizational diagnosis indicating effective solutions that do integrate its five systems.

Microscopic origin of non-Gaussian distributions of financial returns

In this paper we study the possible microscopic origin of heavy-tailed probability density distributions for the price variation of financial instruments. We extend the standard log-normal process to include another random component in the so-called stochastic volatility models. We study these models under an assumption, akin to the Born-Oppenheimer approximation, in which the volatility has already relaxed to its equilibrium distribution and acts as a background to the evolution of the price process. In this approximation, we show that all models of stochastic volatility should exhibit a scaling relation in the time lag of zero-drift modified log-returns. We verify that the Dow-Jones Industrial Average index indeed follows this scaling. We then focus on two popular stochastic volatility models, the Heston and Hull-White models. In particular, we show that in the Hull-White model the resulting probability distribution of log-returns in this approximation corresponds to the Tsallis (t-Student) distribution. The Tsallis parameters are given in terms of the microscopic stochastic volatility model. Finally, we show that the log-returns for 30 years Dow Jones index data is well fitted by a Tsallis distribution, obtaining the relevant parameters. (c) 2007 Elsevier B.V. All rights reserved.

Financial distress, financial constraint and investment decision: Evidence from Brazil

This paper analyses the presence of financial constraint in the investment decisions of 367 Brazilian firms from 1997 to 2004, using a Bayesian econometric model with group-varying parameters. The motivation for this paper is the use of clustering techniques to group firms in a totally endogenous form. In order to classify the firms we used a hybrid clustering method, that is, hierarchical and non-hierarchical clustering techniques jointly. To estimate the parameters a Bayesian approach was considered. Prior distributions were assumed for the parameters, classifying the model in random or fixed effects. Ordinate predictive density criterion was used to select the model providing a better prediction. We tested thirty models and the better prediction considers the presence of 2 groups in the sample, assuming the fixed effect model with a Student t distribution with 20 degrees of freedom for the error. The results indicate robustness in the identification of financial constraint when the firms are classified by the clustering techniques. (C) 2010 Elsevier B.V. All rights reserved.

INSTITUTIONAL DEVELOPMENT THROUGH POLICY-MAKING A Case Study of the Brazilian Central Bank

A number of contemporary studies rightly emphasize the notion that policy outcomes result from institutional determinants. But as a growing literature on institutional development notes, these institutions are themselves impermanent. Sometimes, in crisis moments, institutions are replaced wholesale. More frequently, institutions evolve gradually over time. Using the Brazilian Central Bank as a case study, this article illustrates that the policy-making process itself can be a central driver of gradual institutional development, with institutions evolving through the accumulation of policy choices made over many years and under different policymakers in response to contemporaneous events and unforeseeable economic and political challenges.

Five-year evaluation of bloodstream yeast infections in a tertiary hospital: the predominance of non-C. albicans Candida species

This is a retrospective observational study of clinical and epidemiologic data from bloodstream yeast infections over 5 years (2004-2008) in a tertiary-care hospital. During this period, there were 52 such infections, at a rate of 2.4 per 1,000 hospital admissions. Non-C. albicans Candida species and other genera were responsible for 82% of infections, with C. tropicalis and C. parapsilosis being the most common. In 2008 no C. albicans infections occurred. Several uncommon fungal pathogens were observed, including Trichosporon asahii, Rhodotorula spp. and Candida zeylanoides. Of 16 isolates tested, 3 (19%) were resistant to fluconazole, including one C. zeylanoides (MIC 8 mu g/ml) and one C. tropicalis (MIC 16 mu g/ml) isolate, as well as intrinsically resistant C. krusei. All isolates tested were susceptible to itraconazole (n = 7) and amphotericin B (n = 8). Yeast infections were associated with severe underlying diseases, mainly hematological/solid cancers (71%), hospitalization in the ICU (41%), central venous catheters (80%), and use of antimicrobials (94%). The overall mortality rate was 50%. Our finding of a predominance of non-C. albicans Candida species infection with uncommon yeasts, and fluconazole resistance, suggests the need for continuous surveillance of fungemia and of antibiotic susceptibility trends, in order to adopt treatment strategies applicable to particular healthcare institutions.