Economics Update (April-June 1998)

Financial Markets Conference
Explores Risk Management

Academic Papers Available

Four academic papers on risk management and hedging were presented and discussed at the Atlanta Fed's 1998 Financial Markets Conference. The papers were

  • "Why Do Firms Hedge? An Asymmetric Information Model," by Douglas Breeden and S. Viswanathan;
  • "Managerial Incentives and Risk Management Policy," by Sonku Kim and Sheridan Titman;
  • "Hedging Long-Dated Oil Futures Contracts: An Empirical Investigation," by Ehud I. Ronn and Chang N. Xuan; and
  • "Risk Measurement and Hedging," by Mitchell A. Petersen and S. Ramu Thiagarajan.
To receive a copy of these papers, contact Jess Palazzolo of the Atlanta Fed at (404) 498-8747.

R isk management, which is critical to the stability of the financial system, was discussed and debated recently by economists, regulators, and business, banking and financial industry executives at the Federal Reserve Bank of Atlanta's 1998 Financial Markets Conference in Miami.

Risk Management Issues

A variety of risk management issues were explored at the conference through presentations of academic papers, roundtable discussion sessions and remarks by several notable speakers, including Fed Chairman Alan Greenspan, Fed Governor Laurence Meyer, Howard Davies of the Securities and Investments Board in London, and Gay Evans, chair of the International Swaps and Derivatives Association.

Among the topics discussed were environmental risks, or risks stemming from changes in accounting rules or general changes in the regulatory environment in which financial institutions trade credit derivatives, and operational risks, resulting from flawed internal control systems.

For more information on the annual conference, see the Conferences section.

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