Filter by Categories
Accounting
Banking

Risk Management




Global VaR


A type or method of value at risk (VaR) that focuses on common risk factors at a broader level amongst a number of countries (represented as a bloc) or worldwide. As a common factor model, it includes not only trade relationships but also financial linkages, typically through interest rates, stock prices and exchange rates, among others. It is particularly effective in accounting for the common factor interdependencies and global co-movements of business cycles.

For example, value at risk can be is estimated for a specific economic bloc, such as the euro area (perceived and treated as a single economy). Such a tool can consider the impact of external shocks on the economic bloc as a whole, curbing down any possible inconsistencies that could arise if the individual economies in the bloc or region were treated and modeled separately.



ABC
Risk management is a collection of tools, techniques and regimes that are used by businesses to deal with uncertainty. This involves planning and ...
Watch on Youtube
Remember to read our privacy policy before submission of your comments or any suggestions. Please keep comments relevant, respectful, and as much concise as possible. By commenting you are required to follow our community guidelines.

Comments


    Leave Your Comment

    Your email address will not be published.*