The Risk Management of Minimum Return Guarantees

Contracts paying a guaranteed minimum rate of return and a fraction of a positive excess rate, which is specified relative to a benchmark portfolio, are closely related to unit-linked life-insurance products and can be considered as alternatives to direct investment in the underlying benchmark. They contain an embedded power option, and the key issue is the tractable and realistic hedging of this option, in order to rigorously justify valuation by arbitrage arguments and prevent the guarantees from becoming uncontrollable liabilities to the issuer. We show how to determine the contract parameters conservatively and implement robust risk-management strategies.

Cut Out By The Middle Man: The Free Speech Implications Of Social Network Blocking and Banning In The EU

This article examines social network users’ legal defences against content removal under the EU and ECHR frameworks, and their implications for the effective exercise of free speech online. A review of the Terms of Use and content moderation policies of two major social network services, Facebook and Twitter, shows that end users are unlikely to have a contractual defence against content removal. Under the EU and ECHR frameworks, they may demand the observance of free speech principles in state-issued blocking orders and their implementation by intermediaries, but cannot invoke this ‘fair balance’ test against the voluntary removal decisions by the social network service. Drawing on practical examples, this article explores the threat to free speech created by this lack of accountability: Firstly, a shift from legislative regulation and formal injunctions to public-private collaborations allows state authorities to influence these ostensibly voluntary policies, thereby circumventing constitutional safeguards. Secondly, even absent state interference, the commercial incentives of social media cannot be guaranteed to coincide with democratic ideals. In light of the blurring of public and private functions in the regulation of social media expression, this article calls for the increased accountability of the social media services towards end users regarding the observance of free speech principles