Economic Capital: A Practitioner Guide

asked by macfan on October 31, 2006 11:17 AM

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.

Buy this book

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Reviews

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.

reviewed by jdog on November 10, 2006 10:54 PM

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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.

reviewed by speaker on November 25, 2006 12:50 AM

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add a new book!