Risk Management and Value Creation in ... - Arabictrader.com

Index 315
Conflicts of interest, 77, 81, 102, 104
between (old and new)
shareholders, 75, 81
between managers and outside
investors, 97
between managers and
shareholders, 12, 81–83
between shareholders and bond
holders, 12, 81, 91, 94, 97
Consolidation, in banking industry, 18
Consumption, 11, 13, 69, 82, 195
on the job, 82
stream, 69
time pattern of, 11
Continental Illinois, 147, 157
Contract, default-free, 122
Contractual arrangements, (ex ante),
75, 90
Contribution:
incremental or marginal, 170, 179–
180, 182, 187, 189, 283
total, 135, 176, 180, 266, 290–291
to value creation, 242, 245
Control:
internal, 196
questions, 44
sample, 37–38
Coordination:
of investment and financing, 79, 95,
97, 104, 114, 125
of risks, 281
Core capability or competency, 29,
72–73, 86
Corporate
objective. See Firm objective
function
raiders, 10
Corporation(s), industrial, 1, 15, 21,
23, 73, 100, 104, 107, 130,
132, 166, 237, 239, 241
Correlation, 10, 26, 102, 131, 134,
170, 178–179, 185–186, 193,
195, 203, 208, 210, 212, 235,
254, 255, 257
asset, 181, 249, 256
between types of risk, 211, 213, 220
country default, 182
default, 181–182
matrix, 189–190, 209, 211
of joint movement in credit quality,
181
with existing bank portfolio, 136,
253, 266
Cost(s):
allocation of, 16, 241
bankruptcy, 80, 106, 111–112, 130,
139
direct, 99, 107, 110, 126
fixed, 73, 107, 113, 197, 205–207
indirect, 99, 104, 108–112, 126
marginal, 39, 46, 63, 73, 98, 126, 265
observable, 201
of (holding economic) capital, 240,
245–246, 272, 276
of borrowing, 32
of contracting, 76, 90, 123
of default (direct and indirect), 59,
68, 76–77, 98, 107, 111, 245,
247, 288
of ensuring a stable risk profile, 105
of financial distress, 79, 99, 105–
108, 111–112, 123, 125, 132–
134, 137, 141, 143, 155, 156,
219, 267–270, 274, 286
of funds, 243, 252
of investment, 251
of issuance, 79, 99, 105, 114
of risk management, 26, 78–79,
105, 113, 124, 140
of stock price reaction, 79, 91, 98
of total risk, 133–137, 238, 265–
269, 271–280, 282, 284, 289,
291
rigid, 205–206
social, 12–14, 110, 144–145
variable, 206–209
Cost base, fixed, 205–206
Cost basis, historical, 149
Cost-benefit analysis, 124, 132, 202
Counterparty, 171, 173–175, 182,
185
Covariance, of returns, 2–3, 24, 36,
62, 145, 180, 270
Covenants, 12, 76, 93–94, 97, 108