Thai hedging practices post-Asian financial crisis

This paper provides survey evidence captured from a sample of 113 respondents to a 2008 questionnaire sent to 344 companies in Thailand. The study examines Thai hedging practices following the Asian Financial Crisis of 1997. Thai companies, like their international counterparts, rely predominantly on matching and forward contracts to hedge transaction exposure. Thai companies, however, appear to be less rigorous when it comes to internal control and supervision of derivative activity. It is recommended that Thai companies improve their risk management practices by putting into place a documented hedging policy, which includes a requirement that senior staff be actively engaged in the risk management activities of the firm.

Risk management, optimal

Individuals continually confront a discrepancy between ever expanding and changing wants and the means that they have at their disposal, time, and income, to satisfy them. One of the consequences is the need to make constrained choices between alternatives that have uncertain outcomes. Risk is a different concept from uncertainty. Individual optimal risk management means reducing, eliminating, or fully bearing risk, after conducting a “cost-benefit” analysis. In practice, however, cognitive biases mean that many decisions are not economically rational, necessitating paternalistic government and judicial interventions. Systemic, or whole financial system collapse risk is, optimally managed using well-designed macroprudential regulatory tools. The source of this type of risk is the inherent dynamics of the financial system over the course of the business cycle, interacting with credit market negative externalities, often as in the case of the GFC, spawned by government regulatory failure

The challenges faced by the external audit industry in Brazil: an exploratory study

The auditing role in the contemporaneous business environment, and increasing interest in and demand for governance and transparency, has become an element even more important to the society, as a whole, in order to build solid basis to the development of businesses and generation of wealth through technical knowledge, independence, transparency, credibility, and ethics. Nevertheless, the external financial audit industry in the world and also particularly in Brazil has faced several challenges which threaten its success and evolution. In this sense, since the external audit industry in Brazil has been immersed in a deep crisis with features that are explored through this study, allow me to create an analogy over this study saying that the external financial audit industry is like a sick person with a chronic disease, but the disease has not yet been diagnosed and the person has been dealing with the isolated symptoms. This person, the external audit industry, has struggled with this disease for many years and it is getting worse. It is fundamental to highlight that the challenges faced by the external audit industry in Brazil, ultimately, have not harmed the industry only, but they also materialize themselves as chronic issues for the corporate governance and the capital markets since they harm every interested party. In my point of view, the hardest affected are the investors or shareholders whose interest the independent auditor’s work seeks to preserve. Therefore, the purpose of this study is to have a picture of the challenges faced by the external audit industry in Brazil and understand those challenges as a requirement to analyze the potential alternatives to solve them or, analogically, to diagnose this disease. The research purpose is to map and identify the challenges faced by the external audit industry in Brazil based on the understanding of professionals seasoned in the area. Those challenges are mapped and understood through a methodological approach, a questionnaire answered by auditors with experience in the Brazilian auditing market. The challenges were preliminarily listed based on over 16 years of experience of the author in the area of auditing and financial and accounting services, discussions and interviews about the topic with seasoned professionals, and analyses of pieces of news, publications and academic studies. The questionnaire was used in order to validate the challenges, observations, perspectives, and perceptions gathered through those resources. Despite of the fact that the study is highly relevant, it was not found, through my research, other analyses on this topic with a similar approach which is intended by this study. It looks like the external audit industry in Brazil has walked through these new age dealing with problems on a daily basis and the real challenges of the industry may be concealed by the economic conditions in Brazil and other explanations. As in any problematic scenario, in which a critical analysis is needed, having an accurate picture and understanding of the challenges is a crucial step to start exploring alternatives to address them.

Corporate risk management and exchange rate volatility in Latin America

Includes bibliography

ENVIRONMENTAL EXPOSURES AND LUNG CANCER RISK AMONG WOMEN IN HARRIS COUNTY, TEXAS, 1977-1980 (OCCUPATION, SMOKING, BYSTANDER)

Excessively high, accelerating lung cancer rates among women in Harris County, Texas, prompted this case-comparison study. Objectives were to compare patterns of employment, indirect exposures, and sociodemographic variables of lung cancer cases with comparison subjects (compeers) after standardizing for possible confounders, such as age and cigarette smoking. Lung cancer cases were microscopically confirmed, white, Harris County residents. Compeers, chosen from Medicare records and Texas Department of Public Safety records, were matched on gender, race, age, resident and vital status. Personal interviews were conducted with study subjects or next-of-kin. Industries and occupations were categorized as high risk, based on previous studies.^ Almost all cases (95.0%) and 60.0% of compeers smoked cigarettes. The odds ratio for lung cancer and smoking is 13.9. Stopping smoking between ages 30-50 years carries a lower risk than stopping at age 58 or more years. Women's employment in a high risk industry or occupation results in consistently elevated, smoking-adjusted odds ratios. Frequency and duration of employment demonstrate a moderate dose-response effect. A temporal association exists with employment in a high risk occupation during 1940-1949.^ No increased risk appeared with passive smoking. Husband's employment in a construction industry or a structural occupation significantly increased the smoking-adjusted odds ratios among cases and compeers (O.R. = 2.9, 2.2). Smoking-adjusted odds ratios increased significantly when women had resided with persons employed in cement (O.R. = 3.2) or insulation (O.R. = 5.5) manufacturing, or a high rise construction industry (O.R. = 2.4). A family history of lung cancer resulted in a two-fold increase in smoking-adjusted odds ratios. Vital status of compeers affected the odds ratios.^ Work-related exposures appear to increase the risk of lung cancer in women although cigarette smoking has the single highest odds ratio. Indirect exposure to certain employment also plays a significant role in lung cancer in women. Investigations of specific direct and indirect hazardous exposures in the workplace and home are needed. Cigarette smoking is as hazardous for women as for men. Smoking should be prevented and eliminated. ^

How does country risk matter for foreign direct investment?

In this paper, we aim to identify the political and financial risk components that matter most for the activities of multinational corporations. Our paper is the first paper to comprehensively examine the impact of various components of not only political risk but also financial risk on inward FDI, from both long-run and short-run perspectives. Using a sample of 93 countries (including 60 developing countries) for the period 1985-2007, we find that among the political risk components, government stability, socioeconomic conditions, investment profile, internal conflict, external conflict, corruption, religious tensions, democratic accountability, and ethnic tensions have a close association with FDI flows. In particular, socioeconomic conditions, investment profile, and external conflict appear to be the most influential components of political risk in attracting foreign investment. Among the financial risk components, only exchange rate stability yields statistically significant positive coefficients when estimated only for developing countries. In contrast, current account as a percentage of exports of goods and services, foreign debt as a percentage of GDP, net international liquidity as the number of months of import cover, and current account as a percentage of GDP yield negative coefficients in some specifications. Thus, multinationals do not seem to consider seriously the financial risk of the host country.

Risk Allocation in Toll Highway Concessions in Spain: Lessons from Economic Recession

Spain has a long tradition of encouraging toll highways by granting concessions to private companies. Concessions in Spain have been characterized by a willingness to transfer considerable risk to the private sector. Traffic demand, acquisition of the right-of-way, and financial risk have often been allocated to the private sector. From 1996 to 2011, 16 toll highway concessions, covering a total distance of 835 km, were awarded by the central government of Spain with this approach. Some of those highways started their operations just before the economic recession began. The recession had negative consequences for Spain's economy. The gross domestic product per capita plummeted, and the unemployment rate increased from 9% to 20% of the working population in just 2 years. The recession also had severe consequences for the economic performance of toll highway concessions. Traffic levels declined at a much greater rate than did the gross domestic product. In addition, the conditions imposed by the financial markets on borrowers became much stricter because of the liquidity crisis. This study analyzes the impact that the economic recession ultimately had on the performance of toll highway concessions in Spain and the actions that the government adopted to avoid the bankruptcy of the concessionaires. It was found that the economic recession helped identify some deficiencies in how risk had been allocated in Spain. The measures that both Spain and the European Union are adopting so as to improve risk allocation are discussed.

Information technology outsourcing in financial services

Regulatory pressures and strong competitiveness, as well as the need to control costs and remain up to date with information technologies have turned outsourcing into a basic tool at the disposal of financial entities. Our paper has as its aim to show the peculiarities of information technology outsourcing in the financial services industry, additionally suggesting a decision framework which can help firms minimise risks.

1992 census of financial, insurance, and real estate industries.

[v. 1] Geographic area series (FC92-A-1) -- [v. 2] Nonemployer statistics series (FC92-N-1) -- [v. 3] Subject series: Establishment and firm size (FC92-S-1) -- [v. 4] Sources of revenue (FC92-S-2) -- [v. 5] Miscellaneous subjects (FC92-S-3).

Effects of information technology on financial services systems.

Mode of access: Internet.

1992 census of financial, insurance, and real estate industries : nonemployer statistics series : summary /

"FC92-N-1."

1992 census of financial, insurance, and real estate industries.

"FC92-S-1."

1992 census of financial, insurance, and real estate industries.

"FC92-A-1."

Financial Services Regulatory Relief Act of 2006 : report (to accompany S. 2856).

"May 18, 2006."

Management motivation for using financial derivatives in Australia

This study takes a direct approach to determine management motivation for the use of financial derivatives. We survey a sample of Australian firms on attitudes to derivative use and financial risk management. Management views are sought on the importance of a series of theoretical reasons for using derivatives. Generally, we find that managers are focused on the broad reduction of risk and volatility of cash flows and earnings in using derivatives. Specific issues such as reducing bankruptcy costs, debt levels and taxation are not considered as important. A further interesting result from this research is that even though firms may use derivatives they may not necessarily hedge all of their annual exposures across different financial risks. This helps explain the inconsistency of results in many empirical studies on the determinants of derivative use.