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Please use this identifier to cite or link to this item:
http://hdl.handle.net/2451/14378
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| Title: | FINANCIAL RISK AND FINANCIAL RISK MANAGEMENT TECHNOLOGY (RMT): ISSUES
AND ADVANCES |
| Authors: | Bansal, Arun
Kauffman, Robert J.
Mark, Robert M.
Peters, Edward |
| Issue Date: | Sep-1991 |
| Publisher: | Stern School of Business, New York University |
| Series/Report no.: | IS-91-23 |
| Abstract: | Methods for sound risk management are of increasing interest among Wall
Street investment banking and brokerage firms in the aftermath of the
October 1987 crash of the stock market. We present an overview of the
basic definitions and issues related to risk, and the management of
financial risk and financial risk management technology (RMT) for
information systems (IS) technology professionals. We discuss of the
content of risk management technology, including the models, the
software and hardware, and the market data required to track risk. We
also discuss the identification of risky events, alternative approaches
to the measurement of risk, and how investment firms go about
formulating strategies to control financial risk. We next show how
changes in the information technologies supporting these tasks have led
to improvements in the control of risk and in the design of products
which involve financial risk. Advances in five areas that are of
interest are: communications software, object-oriented programming, the
use of parallel processors and supercomputers, and the application of
artificial intelligence and neural nets. Although these new information
technologies create significant opportunities to improve global and
departmental risk management, a basic question that must be addressed
involves the costs associated with their implementation. Thus, a third
contribution of this paper is to analyze the extent to which the
implementation of these technologies will affect firm costs. To this
end, we evaluate the components of the cost function for risk
management, and consider some ways that the new technologies can be
applied to reduce overall costs. |
| URI: | http://hdl.handle.net/2451/14378 |
| Appears in Collections: | IOMS: Information Systems Working Papers
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