Economic Capital: A Practitioner Guide

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.

Ashish Dev is executive vice president of risk management, at KeyCorp. He is group head of Enterprise Risk Management, which includes economic capital allocations, Basel II coordination, data warehousing, credit underwriting models, strategic analytics and credit portfolio management along with operational risk. As a member of all the three high-level risk committees of KeyCorp viz. ALCO, CREDCO and ORCO, he is involved in decision making in all areas of risk in the bank. Ashish has been the prime mover in establishing enterprise-wide risk-adjusted product pricing and performance measurement and in creating a new credit portfolio management function in the bank. Prior to joining KeyCorp, Ashish was head of quantitative research and analysis in Bank One. Ashish has a PhD in economics and holds the CFA professional designation.