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Topic Review
Biography
Topic Review
Conceptualizing Future Generations as Stakeholders
Many investors think in terms of MSV (maximization of the shareholder value) and fail to consider other important stakeholders. Future generations will “inherit” the results of the actions of current generations. Investing money in some lucrative ideas is definitely a very important financial activity, but it must be done responsibly. The Sustainable Development Goals (SDGs) postulated by the UN; the Environmental, Social, and Governance (ESG) criteria; and the Equator Principles are some notions proposed to be considered to make investors’ actions more responsible. Future generations deserve a better, safer, and unwasted place to live in, so it is the right time to start thinking of them as major stakeholders.
998
29 Dec 2021
Topic Review
Financial Derivatives
This book, Financial Derivatives, a blessing or a curse? (DerivaQuote, 2006), introduces financial derivatives, their uses and the debates surrounding their use. It looks at whether one should fear them or embrace them by digging into literature, theory and case studies. The world seems to be divided into two camps: those who embrace financial derivatives as the ‘Holy Grail’ of the new investment area, and those who denigrate derivatives as the financial Antichrist (Edington, 1994). As the quote above suggests, there are many conflicting views and opinions on derivatives and their use. Derivatives are seen either as useful instruments or as a complete waste of time and money. Experience has indicated that derivative products have transformed the way firms view financial risk and mitigate it. It is no longer relatively simple, and risks are changing continuously with innovation. Risks are no longer nationwide but global and the internet and other fast communication channels have further complicated the issue. In the article, ‘Are Derivatives Financial "Weapons of Mass Destruction"?’ Simon (2008) explains that although derivative instruments have been used to hedge risks that were previously left open, there are still those who are sceptical about using these instruments. As the Group of Thirty (G30) (1993) note, users from “both inside and outside of the financial industry, remain uncomfortable with derivatives activity.” Moreover, the latest survey by the Bank for International Settlements (2009) suggests that there is widespread employment of derivatives with adequate risk management systems. Nevertheless, not all firms are immune to derivatives misuse. This book uses literature and case studies to determine whether it is misuse of this financial instrument, and not the derivatives instrument itself, that causes firm failure and large losses. These case studies help to pinpoint the root causes of these incidents.
981
28 Oct 2020
Topic Review
Japan’s Commercial Real Estate
Japan commercial real estate investment market has, in general, seen a number of scholarly papers in the past, they are concentrated largely on its listed real estate investment segment. There is a significant knowledge gap concerning the non-listed value-add real estate funds’ risk-adjusted performance and portfolio diversification benefits in an institutional investors’ portfolio. This is particularly true in the case of specific countries e.g. in Japan.
945
10 May 2022
Topic Review
Gamma Squeeze
In the stock market, a gamma squeeze occurs when the underlying price of a stock increases within a very short timeframe. A higher amount of money moving into call options results in greater buying activity and can push the stock price up as a result.
923
07 Nov 2022
Topic Review
Climate-Related Prudential Risks
Climate change creates financial risks to the safety and soundness of banks, insurers and the wider financial system, posing a significant threat to the stability of the financial system. Climate-related financial and sustainability risks are already starting to crystallise and have the potential to increase substantially in the future. For instance, physical risks that arise from increasing the severity and frequency of climate and weather-related events may lead to a reduction in asset values, a fall in profitability and an increase in the cost of settling underwriting losses for insurers. On the other hand, adjustment towards a carbon-neutral economy may prompt a reassessment of asset values, a fluctuation in energy prices, and a deterioration of the creditworthiness of borrowers, potentially leading to credit losses. While there is a pressing need for central banks, regulators and financial institutions to accelerate their capacity to assess and manage such financial risks that may result from climate change, academic research will be a key impetus to drive and support the ongoing efforts of the financial sector and the regulatory bodies in building capacity to address these risks.
899
15 Jul 2020
Topic Review
Cryptocurrency
Cryptocurrency is gaining popularity worldwide, with some countries already starting to regulate and accept cryptocurrency in their financial services. Malaysia’s Securities Commission (SC) announced in October 2021 that over MYR 16 billion (USD 3.85 billion) involving digital assets and cryptocurrencies were traded between August 2020 and September 2021. Since cryptocurrencies are issued by private corporations and are technically beyond the federal government’s control, criminals may use them for illegal reasons such as money laundering and terrorist funding. Consequently, it is vital to examine why investors are engaged in cryptocurrency in the first place.
879
25 Apr 2022
Topic Review
Artificial Intelligence and Firm Performance
Developments in computer science, robotics, machine learning, and data accumulation have facilitated the application of advanced technologies in businesses. Among the cutting-edge technologies, Artificial Intelligence (AI) has gained growing attention in different sectors of society, industry, and business. The unprecedented novel coronavirus (COVID-19) pandemic has brought massive uncertainty and has negatively impacted health care, economy, population mobility, and numerous industries, including tourism, aviation, manufacturing, education, and other business sectors. The halted production, supply chain disruption, and shrinking customer activity led to a decline in company revenues and negatively affected corporate performance and the world economy.
856
02 Aug 2022
Topic Review
Journal JRFM
Journal of Risk and Financial Management (ISSN 1911-8074; ISSN 1911-8066 for printed edition) is an international, peer-reviewed, open access journal on risk and financial management. JRFM was formerly edited by Prof. Dr. Raymond A.K. Cox and published by Prof. Dr. Alan Wong online in one yearly volume from 2008 until end 2012. Since October 2013, it is published monthly and online by MDPI. International Engineering and Technology Institute (IETI), Institute of Data Science and Artificial Intelligence (IDSAI), International Research Institute for Economics and Management (IRIEM) are affiliated to Journal of Risk and Financial Management (JRFM) and their members receive a discount on the article processing charges. Manuscripts are peer-reviewed and a first decision provided to authors approximately 13.9 days after submission; acceptance to publication is undertaken in 2.9 days (median values for papers published in this journal in the second half of 2020).
850
26 Sep 2021
Topic Review
Digital Finance Contributes to Promotion of Financial Sustainability
Digital finance, which is defined as the digitalization of the financial industry, has shown growing importance in recent years. It has helped promote financial inclusion, providing means to address the problem of financial depressions in developing and emerging economies. Digital finance possesses three key features including a high capacity for acquiring and processing information, instant cross-spatial information dissemination, and a low marginal cost effect.
848
12 Jul 2022
Topic Review
Association between Internal Control and Sustainability
With the integration of sustainable development into all aspects of the economy, politics, society, culture, and ecology, the effectiveness and innovation of enterprises in sustainability have become global research issues. Internal control affects the current operation and management as the main means for enterprises to maintain normal production and operation and prevent risks. Internal control has, on the one hand, positive effects on enterprise sustainability by improving the quality of financial information, derived effects, and spillover effects. However, on the other hand, internal control can be detrimental to enterprise sustainability by increasing compliance costs and legal liabilities.
815
12 Aug 2022
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