A proposal for an open-source financial risk model

Jong Ho Hwang

LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library

Abstract: This paper presents a policy proposal for building a new framework for gathering, measuring and disclosing financial risk information in the global economy. The paper examines the current state of the financial risk framework, notes its advantages and disadvantages and proposes a new construct that aims to address some of the shortcomings that are currently in place. The proposed open-source financial risk model separates the dual function that internal risk models perform within financial institutions, first to attempt to optimize the risk-return profile of mostly private economic rent-seeking entities, and second to maximize safety and soundness considerations for the public which is at risk of bearing the consequences of financial actors. The goals of a robust financial risk model are examined in order to determine the design of the proposed risk framework.

Keywords: open; source; risk; financial; models; governance; public; regulation; supervision; global; institutions (search for similar items in EconPapers)
JEL-codes: D82 G2 G28 (search for similar items in EconPapers)
Pages: 18 pages
Date: 2014-01-31
New Economics Papers: this item is included in nep-rmg
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Persistent link: https://EconPapers.repec.org/RePEc:ehl:lserod:59298

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