Tarantino Anthony, Cernauskas Deborah. Risk Management in Finance. Six Sigma and other Next-Generation Techniques

Wiley, 2009. — 360 p. — ISBN 978-0-470-41346-3."The recent global economic crisis has brought home the need for realistic operational risk management as an important element of an organization's survival strategy in turbulent times. In Risk Management in Finance Dr. Tarantino and his coauthors provide an operational risk framework for the twenty-first-century organization by culling the state-of-the-arts knowledge on next-generation techniques in financial risk management to forestall major risk management failures. This book represents a landmark contribution in attempting to create a corporate world that is able to cope with major crisis. The book should be on the must read list for all those interested in reforming corporate governance."
—Dr. Anwar Shah, Lead Economist and Program Leader, Governance, World Bank Institute.About the ContributorsOrganization of This Book.
Why Read This Book?
Note.Data Governance in Financial Risk ManagementData Governance Center of Excellence.
Data Governance Assessment.
Data Governance Maturity Model.
Best Practices in Data Governance.
Conclusion: next-Generation Techniques to Reduce Data.
Governance Risk.
Notes.Information Risk and Data Quality ManagementOrganizational Risk, Business impacts, and Data Quality.
Examples.
Data Quality Expectations.
Mapping Business Policies to Data Rules.
Data Quality inspection, Control, and Oversight: Operational.
Data Governance.
Managing information Risk via a Data Quality Scorecard.Notes.Total Quality Management using Lean Six SigmaPerformance Targets.
Process for Excellence.
Process improvement.Reducing Risk to Financial Operations through Information Technology And Infrastructure Risk ManagementThe Problem.
Risk Source and Root Cause.
Risk Management.
Closing Comments.
Global IT standards Matrix.
Links to IT risk Associations and Agencies.An Operational Risk Management Framework for All Organizations.Definition and Categorization of Operational Risk.
How Auditors and Regulators Approach Risk Management.
How Rating Agencies Evaluate Operational Risk.
An Operational Risk Framework for All Organizations.Financial Risk Management in AsiaRisks in Asian Supply Chains.
Risks in Asian Financial Markets.Notes.Doing Business in Latin America: Lessons Learned and Best Practices.
For the Protection of Foreign investors.The World Bank Indicators.
Protection of Debt Investors.
Protection of Minority Owners.Mitigating Risk Exposure in Transitioning to the IFRsRevenue Recognition Risks (IAS 18).
Derivatives (IAS 39) and Hedging Risks.
Share-Based Compensation and Pension Risks.
Nonfinancial Asset Risks.
Off-Balance-Sheet Risks (Financial Assets).
Tax Liability Risks.
Other Liability Risks.
Financial Liabilities and Equity Risks.
Business Combination Risks (Mergers and Acquisitions).
Financial Services Industry Risks.
Conclusion: Suggestions to Reduce the Conversion Risks.
Notes.Quantitative Operational Risk Management MethodsOperational Risk Overview.
Quantitative Methods.
Modeling Approach Operational Risk.
Operational Value at Risk.
Multifactor Causal Models.
Regime Switching Models.
Discriminant Analysis.
Bayesian networks.
Process Approach to Operational Risk.
Business Process Modeling and Simulation.
Precursor Analysis in Operational Risk Management.
Agent-Based Modeling.
Six Sigma Approach to Quality and Process Control: Failure.
Modes and Effects Analysis.Notes.Statistical Process Control Integrated with Engineering Process Control.Control Schemes.
Statistical Process Control.
Engineering Process Control Systems.
Finance Example.Notes.Business Process Management and Lean Six Sigma
A next-Generation Technique to Improve Financial Risk Management.
Background.
Historical Perspective.
BPM in Financial Services—Functionality to Look For.
Survey of Cross Industry Deployments of Bpm Solutions.
Benefits of BPM over Traditional Process Development.
Pulte Mortgage Case Study.
Ameriprise Financial Case Study.
Lean Six Sigma’s Sipoc approach to Bpm.Notes.Bayesian Networks for Root Cause Analysis
Introduction: Risk Quantification In Finance.
Causal knowledge Discovery.
Bayesian Networks.Analytics: Secrets to Deriving Business Value and Insights
Out of Information.
Abstract.Information Technology and Service Evolution.
Information Analytics Technology Landscape.
Future Analytics Technologies.Notes.Embedded Predictive Analytics: Transforming Risk Management from Review Function to Competitive AdvantageExecution Risk in the Financial Services Industry.
Business Processes.
Predictive Analytics: Technology-Enabled Analytic Methods.
Conclusion: Managing Risk Competitively.Reducing the Financial Risks in Litigation and Legal Discovery
Background.
The Sedona Conference and the New Rules of Civil Procedure.
U.S. Court Rulings under the New FRCP.
U.S. Rulings Impacting Businesses Outside the united States.
Best Practices and Next-Generation Techniques.Notes.Throughput Accounting
Background.
The Five Focusing Steps.
Throughput Accounting.
Elements of Throughput Accounting.
Evaluating Financial Decisions.
Role of a Constraint.
Applying T, I, and OE to Traditional Business Measures.
Product Cost—Throughput Accounting versus Cost Accounting.
Analyzing Products Based on Throughput per Constraint unit.
How Can a Company Increase T/CU?
Key Decisions Areas to Apply Throughput Accounting.Appendix: Common Questions and Answers.
Notes.Environmental Consistency Confidence: Scientific Method in Financial Risk Management.Paradigms Applied—Values, Control, Reengineering, and Costing.
Environmental Consistency Confidence—Statistical Head, Cultural Heart.
What Is a Key Risk Indicator (KRI)?
Case Study: Global Commodities Firm.
Predictive key Risk Indicators for Losses and Incidents (PKRI LI) Issues.
Case Study: European Investment Bank.
What Is Current Practice?
Bigger Canvases for Scientific Management.Notes.Quality in the Front Office: Reducing Process Variation
In Trading Firms.Development Methodology for Quantitatively Driven Projects in Finance.
Waterfall Process for Continuous Improvement (Kaizen).Notes.The Root Cause of the Global Financial Crisis and Corporate Board
Reforms to Prevent Future Failures in Risk Management.Background to the Global Financial Crisis of 2007–.
Why This Crisis Deserves Close Scrutiny.
The Root Cause of Catastrophic Failure in Financial Risk Management.
How to Prevent Future Failures in Financial Risk Management.Notes.