Economic capital

What's happening at JP Morgan Chase?

Recently, many have come forward to ask me what is going on within JP Morgan Chase's risk management division. Over the past year, a number of people have left the operational risk team, both at the corporate and business unit levels. Risk executives in…

Time for multi-period capital models

Several financial institutions use single-period models to determine their credit portfolio loss distribution, calculate their loss volatility and assign economic capital. Here, Kevin Thompson, Alistair McLeod, Panayiotis Teklos and Shobhit Gupta…

Time for multi-period capital models

Several financial institutions use single-period models to determine their credit portfolio lossdistribution, calculate their loss volatility and assign economic capital. Here, Kevin Thompson,Alistair McLeod, Panayiotis Teklos and Shobhit Gupta…

The 'benefits' of smoothing

For a specific with-profits life insurance model, this article considers the amount of economic capital that is required to back smoothing benefits for a with-profits life insurance firm

Economic capital – how much do you really need?

Economic capital is becoming the language of risk. While market, credit and operational risk have different determinants and use different methodologies, the levels of risk can all be summarised in a common dimension – the amount of economic capital…

Unexpected recovery risk

For credit portfolio managers, the priority is to properly incorporate recovery rates into existingmodels. Here, Michael Pykhtin improves upon earlier approaches, allowing recovery rates todepend on the idiosyncratic part of a borrower's asset return, in…

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