CiNii Books - Liabilities, liquidity, and cash management : balancing financial risks

"This book provides a very helpful and informative insight into an aspect of finance that has become quite intricate and complex but is nevertheless very fascinating."-Dr. Henry Kaufman, President, Henry Kaufman & Company, Inc. Strategies and advice on balancing financial risk for leveraged companies In today's highly leveraged economy, good liabilities management has become vitally important. Entire sectors of the economy, and some of the biggest financial and industrial companies, face dramatic overexposure problems. But adequate internal liability controls can greatly reduce risk. Featuring case studies in a number of industries and examples of both proper and improper liabilities management in major organizations, Liabilities, Liquidity, and Cash Management shows managers, accountants, investment advisors, and other professionals who deal with liabilities and overexposure how they can implement good internal controls on liability and overexposure. It provides modern tools, critical strategies, and timely advice specifically tailored to the needs of companies facing overexposure and debt risk in a volatile economy. Topics include: Loss of capitalization Derivatives Risks of globalization Sensitivity analysis, gap analysis, stress testing, and value-added solution Real-time financial reporting and virtual balance sheets Liquidity management Money markets, yield curves, and interest rates Mismatch risk profiles Credit risk Risk in the new economy

Table of Contents

PART ONE: CHALLENGES OF LIABILITIES MANAGEMENT
1 Market Bubble of Telecoms Stocks
Leveraging Makes the Global Financial Market Fragile
Credit Crunch Cripples Ambitions of Telephone Operators
Investment Banks Also Paid Dearly for Telephone Companies' Overexposure
Message from the Bubble in the Fall of 2000
Liquidity Crisis to Be Solved through Liability Management
2 Downfall of Lucent Technologies, Xerox, and Dot-Coms
Has the New Economy Been Destabilized?
Market Falls Out of Favor with Tech Stocks: Apple Computer's Blues and the Dot-Coms
Lucent Technologies' Hangover
Downfall of Xerox
Shift from Real to Virtual Economy and the Challenge of the Service Industry
Financial Staying Power and Business Turf
3 Liabilities and Derivatives Risk
Risk and Return Embedded into Derivatives Contracts
Why an Industrial Company Is Interested in Derivatives
Oil Derivatives and the Impact on the Price of Oil
Risks Taken by Intel, Microsoft, and the Financial Industry
Using Derivatives as a Tax Haven
Market Psychology: Wealth Effect and Reverse Wealth Effect
4 Reputational and Operational Risk
Distinction between Ability to Perform and Willingness to Perform
Troubles Facing Certified Public Accountants in Connection
with Reputational Risk
Corruption and Mismanagement Underpin the Failure
to Control Operational Risk
Case Study on Operational Risk and Reputational Risk
With Orange County
Fallout from Operational Risk Hits Both the Fund and the Broker
Scandals Become Part of Reputational Risk When
They Come to the Public Eye
PART TWO: MANAGING LIABILITIES
5 Assets, Liabilities, and the Balance Sheet
Aftermath of Liabilities: Nissan Mutual Life and General American
Earthquake after Liabilities Hit the Balance Sheet
Sensitivity Analysis, Value-Added Solutions, and Gap Analysis
Proper Recognition of Assets and Liabilities, and the Notion of Stress Testing
Redimensioning the Balance Sheet through Asset Disposal
Weight of Liabilities on a Company's Balance Sheet
6 Virtual Balance Sheets and Real-Time Control
Virtual Financial Statements and Their Contribution to Management
Modeling of Assets and Liabilities Must Follow Rigorous Rules
Stress Scenarios Help to Reveal the Nature of Underlying Conditions
Forward-Looking Statements and Virtual Close at Cisco
Preparing a Real-time Report on Hedging and Exposure
From Virtual Balance Sheets to Finances of Virtual Corporations
Managing the Liabilities Accounts of Virtual Companies
7 Liquidity Management and the Risk of Default
Liquid Assets and the Concept of Liquidity Analysis
Liquidity and Capital Resources: The View from Lucent Technologies
Who Is Responsible for Liquidity Management?
Unrealistic Assumptions Characterizing a Famous Model
Liquidity Ratios and Activity Ratios in the Service of Management
Computation of Leverage and Default Including Derivatives Exposure
Contingency Planning for Liquidity Management
8 Market Liquidity and the Control of Risk
Different Types of Market Liquidity and Money Supply
Liquidity Risk, Volatility, and Financial Statistics.Marking to Market and Marking to Model
Liquidity Premium and the Control of Excess Liquidity
Maturity Ladder for Liquidity Management
The Role of Valuation Rules on an Institution's Liquidity Positions
PART THREE: CASH MANAGEMENT
9 Cash, Cash Flow, and the Cash Budget
Basic Notions in Cash Management and the Cash Crunch
Cash Flow Studies and the Cash Budget
Flexible Budgeting and the Elaboration of Alternative Budgets
Benefits to Be Gained through Adequacy of Cash Figures
Cash Flow, Operating Cash Flow, and Free Cash Flow
Earnings, Cash Flow, and Price-to-Earnings Growth
Applying the Method of Intrinsic Value
10 Cash on Hand, Other Assets, and Outstanding Liabilities
Handling Cash Flows and Analyzing the Liquidity of Assets
Art of Estimating Cash Flows from Liabilities
Changes in Loans Policies and Their Aftermath
Draining Cash Resources: The Case of Bank One
Establishing Internal Control and Performance Standards
11 Money Markets, Yield Curves, and Money Rates
Money Market Instruments and Yield Volatility
Spillover Effects in the Transnational Economy
Major Factors Contributing to Global "Capital and Brains" Flows
Yield Structure and Yield Curves
Nominal Versus Real Interest Rates
Challenges Arising from the Use of Electronic Money
12 Mismatched Risk Profiles and Control by the
Office of Thrift Supervision
Interest-Rate Risk Measurement and Office of Thrift Supervision Guidelines
Practical Example on the Role of Basis Points in Exposure
Sensitivity to Market Risk and Post-Shock Portfolio Value
Levels of Interest-Rate Risk and Quality of Risk Management
Sensitivity Measures and Limits on Dealing with Complex Securities
Tuning Examination Frequency to the Quality of an Institution.PART FOUR: CREDIT RISK, MARKET RISK, LEVERAGE, AND THE REGULATORS
13 Credit Risk, Daewoo, and Technology Companies
Critical Factors in the Evaluation of Credit Risk
Bankruptcy of Daewoo
Cash Flows as Proxies of Expected and Unexpected Credit Risks
Developing and Implementing Prudential Limits
Taking Account of Management Quality in Establishing Credit Limits
Using Six Sigma to Study Deteriorating Credit Risk
Impact of the Internet on Credit Control
14 Marking to Market and Marking to Model the Loans Book
Can the Loans Portfolio Be Marked to Market?
Using the Yield Curve as a Gateway to Sophisticated Solutions
Mismatch in Capital Requirements between
Commercial Banks and Investment Banks
Creative Accounting Damages the Process of Securitization
Securitization of Corporate Loans through Credit Derivatives
15 Changes in Credit Risk and Market Risk Policies
Art of Credit Risk and Market Risk Integration
Is It Wise to Have Distinct Credit Risk and Market Risk Organizations?
Calculating Capital Requirements for Credit Risk and Market Risk
Concentration of Credit Risk, Precommitment, and Eigenmodels
Improving Capital Adequacy and Assessing Hedge Effectiveness
16 Summary: Management Blunders, Runaway Liabilities, and Technical Miscalculations Leading to Panics
Mounting Risk of Turning Assets into Runaway Liabilities
There Is No Way to Prognosticate the Aftermath of
Leveraging the Liabilities Side of the Balance Sheet
Throwing Money at the Problem Makes a Bad Situation Worse
Is Financial Contagion Spreading on a Global Scale?
Learning from Past Experience in Turning the Tide
How Has the New Economy Redefined the Nature and Framework of Risk?
The Destruction of the New Economy by Going Short in a Massive Way
Index

by "Nielsen BookData"

Liabilities, liquidity, and cash management : balancing financial risks

Author(s)

Bibliographic Information

Available at 8 libraries

Search this Book/Journal

Note

Description and Table of Contents

Details

Export