Impediments to Communication in Financial Institutions: Implications for the Risk Management Organization

Dirk Höring, Helmut Gründl and Sebastian Schlütter ()
Additional contact information
Dirk Höring: International Center for Insurance Regulation
Sebastian Schlütter: University of Applied Sciences Mainz

The Geneva Papers on Risk and Insurance Theory, 2016, vol. 41, issue 2, 193-224

Abstract: Abstract This article investigates the question of how risk management should be embedded in a financial firm’s hierarchy. We answer this question by combining capital market theory with game-theoretic thinking. We develop a theory for the integration of risk management into an organization, based on private information and differences in preferences. Our model compares the payoffs from uninformed decision-making, solo decision-making, joint voting decision-making, and coordinated decision-making when information about a project’s expected return and risk is dispersed in the organization. Our findings have a number of implications for the organization of risk management.

Keywords: risk management; organization structure; financial institutions (search for similar items in EconPapers)
Date: 2016
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://link.springer.com/10.1057/s10713-016-0015-y Abstract (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:kap:geneva:v:41:y:2016:i:2:d:10.1057_s10713-016-0015-y

Ordering information: This journal article can be ordered from
http://www.springer.com/journal/10713

DOI: 10.1057/s10713-016-0015-y

Access Statistics for this article

The Geneva Papers on Risk and Insurance Theory is currently edited by Michael Hoy and Nicolas Treich

More articles in The Geneva Papers on Risk and Insurance Theory from Springer, International Association for the Study of Insurance Economics (The Geneva Association) Contact information at EDIRC.
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().