Product Description

This new multi-contributor title will enable you to better analyse and evaluate economic capital in order to implement more effective risk management strategies within your business. Economic Capital is the definitive reference on this increasingly important area of finance.

Explains the fundamental elements within economic capital and provides detailed instruction on its strategic implementation.

Contains 3 distinct and accessible sections:

- Economic Capital: Concepts and Applications
- Economic Capital for Specific Risks
- Economic Capital Methodologies: Mathematical Treatment

Contains global insights from the leading experts at the forefront of economic capital research and implementation - providing you with a holistic and comprehensive multi-perspective view of all the key issues involved.

Includes a detailed assessment of the latest Basel Accord and its likely implications on your business with relation to economic capital.

Each chapter is designed to be accessible for practitioners at all levels.

Illustrates how economic capital management can maximise shareholder value.

Provides methodologies that allow you to take the cost of risk into account when planning future strategies, by clarifying which ventures create the most value.

Will enable you to better quantify the risks you face and calculate both the capital needed to cover them, should any unforeseen events occur, and the real returns being made.

Illustrates the role of economic capital in performance evaluation, and highlights where it is possible to earn more money without an initial investment.

Will help you reassess your investment strategies whilst making better operational choices in key business decisions such as pricing and capital allocation.

Product Details

• Amazon Sales Rank: #1028759 in Books
• Published on: 2004-09
• Format: Illustrated
• Original language: English
• Number of items: 1
• Binding: Hardcover
• 332 pages

Review
Economic Capital is destined to be the gold standard reference book in this arena. I highly and unreservedly recommend it. -- John Mingo, Managing Director, Mingo & Co., Formerly, Senior Advisor, Board of Governors, Federal Reserve System

The methodologies for implementing economic capital will further improve with time, making Economic Capital a standard tool for risk management. -- Hubert Mueller, Principal, Towers Perrin

About the Author
Ashish Dev is executive vice president of risk management, at KeyCorp. He is group head of Enterprise Risk Management, which includes economic capital allocations, Basel II coordination, data warehousing, credit underwriting models, strategic analytics and credit portfolio management along with operational risk. As a member of all the three high-level risk committees of KeyCorp viz. ALCO, CREDCO and ORCO, he is involved in decision making in all areas of risk in the bank. Ashish has been the prime mover in establishing enterprise-wide risk-adjusted product pricing and performance measurement and in creating a new credit portfolio management function in the bank. Prior to joining KeyCorp, Ashish was head of quantitative research and analysis in Bank One. Ashish has a PhD in economics and holds the CFA professional designation.

Customer Reviews

Great selection of articles
There are very few books around that deal with Economic Capital. This is an expensive item, however worth it. My notions on EC were limited before reading this book, but once you start reading you have the sensation that you are learning.

The first part "Concepts and applications" is well written and the sequence of articles is presented in a logical fashion.
The second part "EC for specific risks" gives you a good flavor of what people are doing (and how they are doing it) on the different risk types. The articles are good and not too technical, although I wish there were more examples.
The third part "EC Methodologies" is very technical, and recommended to experts on the matter.

Helpful resource for banking professionals struggling with Economic Capital
As another reviewer notes, this book is a collection of articles about Economic Capital. It provides a good selection of articles, enabling the reader to get a sense of what other financial institutions are doing about selected elements of economic capital calculation (e.g., AVC calculations or diversification benefit calculation.) However, since it is not a text book on economic capital there is no over-arching framework for how to manage or calculate economic capital. Instead, it will give the reader ideas about how to think about different elements without providing a higher level thesis or framework.