Integrating Risk Management and Capital Management

Prakash Shimpi
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Prakash Shimpi: London School of Economics and Political Sciences

Chapter 5 in Financial Intermediation in the 21st Century, 2001, pp 33-57 from Palgrave Macmillan

Abstract: Abstract Capital management and risk management are two sides of the same coin but conventional finance theory treats them separately. Capital management focuses on delivering the optimal balance sheet (composed of equity and debt) that minimises the cost of capital. It is the domain of the chief financial officer (CFO). Currently the term risk management refers to the roles of the risk manager and treasurer, working separately in the insurance and capital markets to manage the firm’s operational and financial risks.

Keywords: Capital Structure; Insurance Premium; Equity Capital; Insurance Model; Capital Resource (search for similar items in EconPapers)
Date: 2001
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Persistent link: https://EconPapers.repec.org/RePEc:pal:palchp:978-0-230-29412-7_5

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DOI: 10.1057/9780230294127_5

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