Risk Assessment and Financial Regulation in Emerging Markets' Banking: Trends and Prospects
This book describes various approaches in modelling financial risks and compiling ratings. Focusing on emerging markets, it illustrates how risk assessment is performed and analyses the use of machine learning methods for financial risk assessment and measurement. It not only offers readers insights into the differences between emerging and developed markets, but also helps them understand the development of risk management approaches for banks. Highlighting current problems connected with the evaluation and modelling of financial risks in the banking sector of emerging markets, the book presents the methodologies applied to credit and market financial risks and integrated and payment risks, and discusses the outcomes. In addition it explores the systemic risks and innovations in banking and risk management by analyzing the features of risk measurement in emerging countries. Lastly, it demonstrates the aggregation of approaches to financial risk for emerging financial markets, comparing the experiences of various countries, including Russia, Belarus, China and Brazil.
Investors are being encouraged after the global crisis to reduce their dependence on the largest credit rating agencies for risk assessments of companies and securities. Comparing risk assessments from different sources rapidly becomes non-trivial when more than three credit rating agencies are involved. We propose a method for comparing rating scales, and hence constructing correspondence diagrams and tables, thereby treating the rating scales used by different agencies as objects of study. Scales are compared by looking at sets of ratings assigned to similar entities (hereinafter banks) with the assumption that the risk being measured by each credit rating agency is the same for a given rated entity at a given point in time. Studying international bank ratings for a five-year period shows that there are subtle differences for the largest credit rating agencies. A mechanism for constructing mappings between scales could lead to more competition with new credit rating agencies.
Emerging markets, to which Russia belongs to, represent a significant part of the world economy and have a tendency to expand their share. According to Sheth (Sheth, 2011), emerging markets have common marketing features. At the same time, each country has a number of specific marketing features that distinguish it from other countries and leave their mark on marketing activities of companies in this country. Understanding of marketing practices is important because it helps to analyze peculiarities of company's marketing activities, adjust existing theories and models of marketing and create new ones, that relevant to the reality of emerging markets. Also it allows adjusting the existing marketing activities to the market more efficiently. Thus, the purpose of this paper is to identify the specifics of marketing practices of Russian companies.
The article analyses the main changes in the US financial regulation following the Dodd-Аrank Act adoption in July 2010. The author arrives at the conclusion that the 2007 – 2009 financial crisis resulted in a shift of the dominating paradigm concerning the need for financial regulation. The article contains a number of hypotheses as to possible impact of the current reform on the US economy.
The paper explores the outcomes of Russian Federation G20 Presidency in 2013. The analysis is based on the model of balancing external conditions and national priorities for developing an agenda in informal institutions (supply-demand model). This analytical paradigm allows to reveal to what extent the Presidency has managed to ensure: 1) a high level of response to the key global governance challenges in the agenda and summit decisions; 2) a balance between national and other members’ interests in the Presidency priorities; 3) utilizing the institution’s capabilities; 4) conformity of the role chosen by the Presidency (organizer, mediator, political leader, national representative) to the combination of external and internal conditions.
Russia took over the responsibility for coordinating the G20 work from Mexico, accepting the rotating presidency of this premier forum for economic cooperation on December 1, 2012. The G20 met the fifth year of its work under conditions of a two speed recovery which by March 2013 transformed into a three speed recovery. Unsteady and sluggish growth, persisting imbalances and downside global economy risks demanded that this forum of the world largest economies concentrate the efforts on developing a set of measures aimed at boosting sustainable, inclusive and balanced growth and jobs creation around the world. These priorities constituted the core of the Russian G20 presidency concept, aimed at ensuring sustainable global growth and rebuilding of trust between the world economy different agents in accordance with the G20 mission and capability.
Consolidating efforts on its core economic and financial priorities, the G20 also launched collaboration to overcome such risks as increasing income disparities, chronic underinvestment into development of safe, secure and modern infrastructure, unforeseen consequences of regulation.
The analysis findings reveal that the Russian presidency managed to ensure a good balance of national interests and the partners’ prioritiesin the G20 agenda; utilizing the G20 capabilities to respond to the key global governance challenges. The choice of the presidency role depended on the nature of the issues and was defined by a combination of internal and external conditions. Thus, the acuteness of the problem for all summit participants determined demand for leadership in including into the economic forum agenda the debate on a peaceful resolution of the conflict in Syria. On employment and social policies the Russian presidency combining the roles of an organizer and a political leader helped upgrade the G20 dialogue to a new quality level.
A major success factor in deliberation and adoption of the comprehensive action plan on base erosion and profit shifting was the OECD capability to take responsibility for the plan development. With the OECD leadership, solid experts’ foundation, and a high level of relevance of the problem for all members, the presidency supported the process as the organizer.
On the topic of stimulating long-term investment, a priority for Russia as well as most of the G20 partners, the presidency managed to consolidate the efforts of several international institutions over a short period. On this priority, as well as on the financial regulation reform, the presidency acted as a representative of the national interests and an organizer. In developing the new development strategy the choice in favor of a combination of a mediator and an organizer proved most productive. As a result the G20 agreed a new cooperation for development outlook.
The presidency active collaboration with the international organizations and engagement with social partners was instrumental in harnessing their experts’ potential and enhancing the G20 transparency, legitimacy and effectiveness. The G20 institutions consolidation continued through development of new coordination mechanisms and strengthening accountability.
Under the Russian presidency the G20 reaffirmed its value as the premier economic cooperation forum. Emphasizing restoring strong and inclusive growth and employment while ensuring fiscal sustainability, the leaders for the first time in the history of the G20 stressed that the well-being of individual people should be at the center of the growth agenda. This consequential outcome of the five years collaboration might be a start of a new G20 agenda where inclusiveness is one of the pillars of growth.
Building long-term customer relations plays a pivotal role in contemporary management practice. Customer relationship management process in a company involves various different actors ranging from top management to line-level employees. One of the key areas of it is related to the utilization of corporate CRM system which serves as crucial information source in providing better customer insight. This article explores directions for improving the use of CRM system through analyzing the gaps between its perception by managers and sales representatives in a multinational pharmaceutical company. The field research is based on a quantitative data from online questionnaires. The sample consists of 219 representatives based in four emerging markets. These initial findings could be useful for other pharmaceutical companies in emerging markets.