Preface |
Acknowledgments |
Chapter 1 Introduction |
Organization of This Book |
Why Read This Book? |
Note |
Chapter 2 Data Governance in Financial Risk Management |
Introduction |
Governance Center of Excellence |
Data Governance Assessment |
Data Governance Maturity Model |
Best Practices in Data Governance |
Conclusion: Next Generation Techniques to Reduce Data Governance Risk |
Notes |
Chapter 3 Information Risk and Data Quality Management |
Introduction |
Organizational Risk, Business Impacts, and Data Quality |
Examples |
Data Quality Expectations |
Mapping Business Policies to Data Rules |
Data Quality Inspection, Control, and Oversight: Operational Data Governance |
Managing Information Risk via a Data Quality Scorecard |
Summary |
Notes |
Chapter 4 Total Quality Management Using Lean Six Sigma |
Introduction |
Performance Targets |
Process for Excellence |
Process Improvement |
Summary |
Chapter 5 Reducing Risk to Financial Operations through information technology and Infrastructure Risk Management |
Introduction |
The Problem |
Risk Source and Root Cause |
Risk Management |
Closing Comments |
Global IT Standards Matrix |
Links to IT Risk Associations and Agencies |
Chapter 6 An Operational Risk Management Framework for All Organizations |
Introduction |
Definition and Categorization of Operational Risk |
How Auditors and Regulators Approach Risk Management |
How Rating Agencies Evaluate Operational Risk |
An Operational Risk Framework for All Organizations |
Conclusion |
Chapter 7 Financial Risk Management in Asia |
Introduction |
Risks in Asian Supply Chains |
Risks in Asian Financial Markets |
Conclusion |
Notes |
Chapter 8 Doing Business in Latin America: Lessons Learned and Best Practices for the Protection of Foreign Investors |
Introduction |
The World Bank Indicators |
Protection of Debt Investors |
Protection of Minority Owners |
Conclusion |
Chapter 9 Mitigating Risk Exposure in Transitioning to the IFRS |
Introduction |
Revenue Recognition Risks (IAS 18) |
Derivatives (IAS 39) and Hedging Risks |
Share-Based Compensation and Pension Risks |
Non-Financial Asset Risks |
Off Balance Sheet Risks (Financial Assets) |
Tax Liability Risks |
Other Liability Risks |
Financial Liabilities and Equity Risks |
Business Combination Risks (Mergers and Acquisitions) |
Financial Services Industry Risks |
Conclusion - Suggestions to Reduce the Conversion Risks |
Notes |
Chapter 10 Quantitative Operational Risk Management Methods |
Introduction |
Operational Risk Overview |
Quantitative Methods |
Modeling Approach Operational Risk |
Operational Value at Risk |
Multi-Factor Causal Models |
Regime Switching Models |
Discriminant Analysis |
Bayesian Networks |
Process Approach to Operational Risk |
Business Process Modeling and Simulation |
Precursor Analysis in Operational Risk Management |
Agent-Based Modeling |
Six Sigma Approach to Quality & Process Control: Failure Modes and Effects Analysis |
Conclusion |
Bibliography |
Notes |
Chapter 11 Statistical Process Control Integrated with Engineering Process Control |
Introduction |
Control Schemes |
Statistical Process Control |
Engineering Process Control Systems |
Finance Example |
Conclusion |
Bibliography |
Notes |
Chapter 12 Business Process Management and Lean Six Sigma: A Next Generation Technique to Improve Financial Risk Management |
Background |
Historical Perspective |
BPM in Financial Services - Functionality to Look For |
Survey of Cross Industry Deployments of BPM Solutions |
Benefits of BPM over Traditional Process Development |
Pulte Mortgage Case Study |
Ameriprise Financial Case Study |
Lean Six Sigma's SIPOC Approach to BPM |
Conclusion |
Notes |
Chapter 13 Bayesian Networks for Root Cause Analysis |
Introduction: Risk Quantification in Finance |
Causal Knowledge Discovery |
Bayesian Networks |
Conclusion |
Bibliography |
Chapter 14 Analytics: Secrets to Deriving Business Value and Insights out of Information |
Abstract |
Introduction |
Information Technology and Service Evolution |
Information Analytics Technology Landscape |
Future Analytics Technologies |
Conclusion |
Notes |
Chapter 15 Embedded Predictive Analytics: Transforming Risk Management from Review Function to Competitive Advantage |
Introduction |
Execution Risk in the Financial Services Industry |
Business Processes |
Predictive Analytics: Technology-Enabled Analytic Methods |
Conclusion: Managing Risk Competitively |
Chapter 16 Reducing the Financial Risks in Litigation and Legal Discovery |
Background |
The Sedona Conference and The New Rules of Civil Procedure |
U.S. Court Rulings under the New FRCP |
U.S. Rulings Impacting Businesses Outside the United States |
Best Practices and Next Generation Techniques |
Conclusion |
Notes |
Chapter 17 The Circle of Trust |
Introduction |
Is Three Sigma Good Enough? |
Economic Value of a Sigma |
The Six Sigma Audit |
Conclusion |
Notes |
Chapter 18 Reducing Liability Risk Through Best Environmental Practices |
Introduction |
The Economy and the Environment |
Environmental Risks: Risks and Securities and Exchange Commission (SEC) |
Impact of Industrial Environmental Management on Firms Competitive Advantage |
Shift in Industrial Ecosystem toward Sustainability |
Industrial Profitability and Sustainable Development |
Pollution Trading and Firms Financial Performance |
Conclusion |
Bibliography |
Notes |
Chapter 19 Beyond Segregation of Duties: Next Generation Techniques in Evaluating User Access Control Risks |
Introduction |
User Access Controls, Not Just Segregation-of-Duties |
Risk Assessment Methodology |
The Next Generation of Segregation of Duties: User Access Controls |
Current State and Future Direction of Risk Advisory and Audit Firms |
Current State and Future Direction of ERP Software Vendors |
Conclusion |
Notes |
Chapter 20 Transaction Based Cross-Enterprise Risk Management |
Overview |
Background |
Basel II and Current USA Implementation |
Current State Enterprise Risk Management |
Financial Accounting versus Risk Accounting |
Ten Principles of Effective Enterprise Risk Management |
A Transactional Approach |
Cross-Enterprise Solution |
Predictive Risk Models |
Conventional Solutions versus Cross-Enterprise Process |
Conclusion |
Notes |
Chapter 21 Throughput Accounting |
Background |
The Five Focusing Steps |
Throughput Accounting |
Elements of Throughput Accounting |
Evaluating Financial Decisions |
Role of a Constraint |
Applying T, I, and OE to Traditional Business Measures |
Product Cost - Throughput Accounting versus Cost Accounting |
Analyzing Products Based on Throughput per Constraint Unit |
How Can a Company Increase T/CU? |
Key Decisions Areas to Apply Throughput Accounting |
Summary |
Appendix: Common Questions and Answers |
Notes |
Chapter 22 Environmental Consistency Confidence - Scientific Method in Financial Risk Management |
Introduction |
Paradigms Applied - Values, Control, Re-Engineering, and Costing |
Environmental Consistency Confidence - Statistical Head, Cultural Heart |
What Is a Key Risk Indicator (KRI)? |
Case Study - Global Commodities Firm |
Predictive Key Risk Indicators for Losses and Incidents (PKRIóLI) Issues |
Case Study - European Investment Bank |
What Is Current Practice? |
Bigger Canvases for Scientific Management |
Conclusion |
Bibliography |
Notes |
Chapter 23 Quality in the Front Office - Reducing Process Variation in Trading Firms |
Introduction |
Development Methodology for Quantitatively-Driven Projects in Finance |
Waterfall Process for Continuous Improvement (Kaizen) |
Conclusion |
Notes |
Chapter 24 The Root Cause of the Global Financial Crisis and Corporate Governance Reforms to Prevent Future Failures in Risk Management |
Introduction |
Background to the Global Financial Crisis of 2007-2008 |
Why This Crisis Deserves Close Scrutiny |
The Root Cause of the Catastrophic Failure in Financial Risk Management |
How to Prevent Future Failures in Financial Risk Management |
Conclusion |
Notes |
Index |