TheCausesofHomelessnessintheUnitedStates xSSEssayOutline11 xfinancialriskmanagement1 x
The Causes of Homelessness in the United States
Cindy Kuropas
St. Petersburg College
The Causes of Homelessness in the United States
The introduction paragraph of your essay goes here, with 4-5 sentences. It presents information about your problem, in this case, homelessness, and documents that information with a (citation). The last sentence is the thesis statement, which states the problem and the two causes.
First Cause
For the bold header, don’t write first cause, write out the first cause you will present related to your problem. This paragraph will present the first cause of your problem along with data that shows it caused the problem. Data will be documented using (citations).
Second Cause
Repeat the process from the first cause here while giving the second cause that is related to the problem you chose. Document all information with (citations).
Conclusion
The conclusion paragraph, which is 4-5 sentences, goes here.
References
Last Name, F. M. (Year). Article Title. Journal Title, Pages From – To.
Last Name, F. M. (Year). Book Title. City Name: Publisher Name
There should be at least 3 sources presented. At least two of those sources should be from the database. The 3rd source can be from the database or the Pew website. If using a different website, get it approved first by emailing me the link.
Social Sciences Essay Outline
I Introduction:
* Identify the social issue.
*Provide and cite information (APA) that proves the issue is real and what its current state is. What does the most recent data say?
*Craft a thesis statement that presents the issue and two causes that created or influenced the issue.
II Body Point:
*Discuss one cause of the issue.
*Provide research to demonstrate how the cause influenced the issue. (APA documentation)
*Document all research using APA citations.
III Body Point:
*Discuss the second cause of the issue.
* Provide research to demonstrate how the cause influenced the issue. (APA documentation)
*Document all research using APA citations.
NOTE: 3 sources must appear somewhere in sections I – III. At least two of the sources must be from the database. Only use direct quotes if the content cannot be paraphrased in your own words.
IV Conclusion:
* Review the issue and its causes in a wrap-up paragraph.
V References:
* Include your references for all research in APA style.
Running head: RISK MANAGEMENT IN FINANCIAL INSTITUTIONS
1
RISK MANAGEMENT IN FINANCIAL INSTITUTIONS 2
Risk Management in Financial Institutions
Student Name
Institutional Affiliation
Abstract
Risk management in financial institutions is studied through the utilization of gathered information on buffering of interest rate and foreign exchange prospect
.
There is a lot of proof that shows that institutions that are well capitalized tend to buffer more, controlling for risk vulnerability, across and within institutions over time. I shall look at the net worth shocks as a consequence of loan losses because of drops in house prices. Organizations that go through such shocks tend to minimize their hedging as compared to other institutions that are indistinguishable to them. The proof agrees with the theory that financial restrictions hinder both hedging and financing.
Contents
Abstract 1
Introduction
3
Objectives of the study 3
General objective: 3
Specific objectives
3
Review of existing literature
4
Variables and hypothesis development 4
Dependent variable 4
Independent variables
5
Methodology
5
Work plan and schedule
7
References ……………………………………………………………………………………………………………………………………………8
.
Introduction
There has been a lot of debate concerning risk management in financial institutions and its claimed failure especially during a financial crisis. The rudimentary formula of risk management in financial institutions is not known and its principal determining factors are not well comprehended. Risk management in this sector has been changed over the years in response to directives that transpired from the worldwide financial crisis and the penances imposed in its wake. There are trends that are ongoing that are suggestive that risk management will undergo much more change in a few years to come.
In the past, the term “risk management” for various financial institutions meant controlling the financial details of risk such as the portfolio risk of a bank. Today, a lot of these institutions are now looking at risk from a more whole, enterprise-wide perspective. The destruction that has been inflicted by other classifications of risk has achieved predominant hold of regulators’ and executives’ attention. Executives that are always thinking ahead recognize the importance of incorporating risk management into the strategic planning process; a source of competitive advantage.
Objective of the study
The aim of this research is to analyze the financial risk management strategies that financial institutions use and how it has helped the institutions to realize profit hence improving their net worth.
Specific objectives
I want to show that the net worth of financial institutions is a principal determinant of their risk management across and within institutions over time.
Review of existing literature
It has been stated that the net worth of a financial institution is the main determinant of their risk management since institutions that are well capitalized hedge more than those institutions with very low net worth. Restricted risk management leaves financial institutions more exposed to shocks and is a main cause in financial crises (Rampini, Viswanathan, & Vuillemey, 2016). There is an economically and statistically significant positive correlation between net worth and risk management across and within institutions over time. There has been a lot of debate concerning financial institutions’ risk management and its failure during the financial crisis; the general patterns of risk management in these types of institutions are not well known and the key determinants are not understood.
Financial institutions play a major role in the transmission of monetary policy and in the macro economy. It is important that we comprehend these institutions’ exposure to interest rate shocks and the scope in which they do not or do hedge. These vulnerabilities are, therefore, necessary for monetary and macro-prudential policy (Rampini, Viswanathan, & Vuillemey, 2016). Financial mediators are the biggest derivatives users which are calculated in terms of gross notional vulnerabilities, and interest rate derivatives comprise the majority of such vulnerabilities. Interest rate derivatives represent two thirds of the notional value of all derivatives used for hedging, which further surpass other derivatives’ positions. Risk management theory has been used which states that organizations and financial institutions subject to financial limitations are successfully risk averse (Froot, Scharfstein, & Stein, 1993), which would give them motivation to hedge.
Rampini and Viswanathan (2010, 2013) argue that the thinking brought about by the theory indicates that when financing and risk management are governed by financial restrictions, promises to the hedging and financiers parties need to be guaranteed. Financing and risk management both need net worth and, therefore, risk management has an opportunity cost that is higher for the more restricted institutions. Institutions that are financially constrained ought to assign their restricted net worth to risk management and lending. Hedging is an opportunity cost in terms of forsworn lending. Financial institutions that are more financially restricted (institutions with a low net worth) tend to hedge less and the cost of forswearing lending or cutting credit lines is higher at the periphery for these types of institutions.
Dependent Variable
The overall performance of these financial institutions in terms of their net worth is the dependent variable.
Independent variables
The variables are cash instrument, derivation instrument, exchange-trade derivatives and over the counter (OTC) derivatives. These variables have been used in the field to study the financial state of Zambian financial institution and capacity of these institutions to handle risks when providing services to their clients. They are measured using a scale that measures the statistics of the performance values on a quantified level. Cash instrument are measures of value that are determined directly by the markets. These measures of value include safeties that are readily convenient and loans and deposits that both the lender and the borrower agree to transfer. Derivative instruments are measures which derive the value of financial institutions from one or more fundamental features such as index, asset or interest rate.
Exchange-traded derivative are standardized contracts like contract options and futures that are performed on an organized futures exchange. They necessitate payment of an opening deposit or boundary established over a clearing house. Over the counter (OTC) derivatives are financial instruments traded off an exchange and are dealt between different parties’ without considering going through a discussion (EduPristine, 2019). Products like exotic option, swaps forward rates agreements are nearly continuously traded in this way.
Methodology
The objective of the research conducted is to learning more about the risk involved in financial institutions. Further on the study is to get to understand how many of these institutions surpass and overcome the financial problems they have and grow to where they are now. What methods they put in place to overcome this challenge. Also, further on the research is to understand the relationship posed by these institutions with it surrounding for a better financial growth.
The participants of the study would consist of employees, members of staff from Zambian financial institutions. A sampling method would conveniently be applied. Questionnaires as a form of a research tool can be used to collect information and the method to be used to distribute the research tool is via email and postal address. The anticipated sample size is one hundred and fifty staff members of any institutions.
Work plan and schedule
Work Plan and Schedule
Goal 1: Determine the current trends in risk management.
Key Action Steps
Timeline
Expected Outcome
Data Source and Evaluation Methodology
Person/Area Responsible
Comments
Visit local financial institutions.
1 month
Get willing participants for my study.
Scholarly articles and journals.
Myself
N/A
Goal 2: Determine how an institution’s net worth influences its risk management strategies.
Key Action Steps
Timeline
Expected Outcome
Data Source and Evaluation Methodology
Person/Area Responsible
Comments
Study the history of financial institutions’ net worth over the last 7 years.
3 months
Learn more about the history of risk management with regards to the institution’s net worth.
Scholarly articles and journals. Company websites.
Myself
N/A
References
EduPristine. (2019). Financial Instruments – Types and Jobs – EduPristine. [online] Available at: https://www.edupristine.com/blog/financial-instruments [Accessed 7 Apr. 2019].
Smallbusiness.chron.com. (2019). What Is Financial Risk Management?. [online] Available at: https://smallbusiness.chron.com/financial-risk-management-43326.html [Accessed 7 Apr. 2019].
Cimaglobal.com. (2019). [online] Available at: http://www.cimaglobal.com/Documents/ImportedDocuments/cid_tg_fin_risk_mgmt_may08 / [Accessed 7 Apr. 2019].
World Bank. (2019). Financial Risk Management. [online] Available at: http://treasury.worldbank.org/en/about/unit/treasury/ibrd-financial-products/financial-risk-management [Accessed 7 Apr. 2019].
Rampini, A. A., Viswanathan, S., & Vuillemey, G. (2016). Risk Management in Financial Institutions. [online] Available at:
http://jhfinance.web.unc.edu/files/2016/11/2017JH_Rampini-Viswanathan-Vuillemey-2016
[Accessed 7 Apr. 2019]
Rampini, A. A. and S. Viswanathan (2010). Collateral, risk management, and the distri-bution of debt capacity.Journal of Finance 65, 2293–2322.
Rampini, A. A. and S. Viswanathan (2013). Collateral and capital structure.Journal ofFinancial Economics 109, 466–492.
Froot, K. A., D. S. Scharfstein, and J. C. Stein (1993). Risk management: Coordinatingcorporate investment and financing policies.Journal of Finance 48, 1629–1658