People Value at Risk: A Key Indicator for Sound Management

Jose Manuel Feria-Dominguez (), Enrique Jimenez-Rodriguez () and Pilar Camacho-Rubio ()
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Jose Manuel Feria-Dominguez: Department of Financial Economics and Accounting, Universidad Pablo de Olavide
Enrique Jimenez-Rodriguez: Department of Financial Economics and Accounting, Universidad Pablo de Olavide
Pilar Camacho-Rubio: Department of Financial Economics and Accounting, Universidad Pablo de Olavide

No 14.03, Working Papers from Universidad Pablo de Olavide, Department of Financial Economics and Accounting (former Department of Business Administration)

Abstract: People are the most important asset for companies, but they are also a source of risk. People risk involves both intentional and unintentional people’s behavior that could provoke losses for firms. The main goal of this paper is twofold: to identify four different risk categories (Internal Fraud, Employment Practices and Workplace Safety, Clients, Products and Business Practices and Execution, Delivery & Process Management) that are “people-related”, and to measure the people risk exposure by applying the concept of People-Value at Risk (People-VaR) as a new key-indicator for sound management in the financial sector. Then, we also calculate the Risk Adjusted Return on Capital (RAROC) to evaluate the bank’s risk-adjusted performance, being both measures useful tools for monitoring the shareholder’s value creation

Keywords: People Risk; People-Value at Risk; Risk Adjusted return on Capital (RAROC); Banking performance (search for similar items in EconPapers)
Pages: 29 pages
Date: 2014-05
New Economics Papers: this item is included in nep-rmg
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http://www.upo.es/serv/bib/fiecac/fiecac1403.pdf First version, 2014

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Persistent link: https://EconPapers.repec.org/RePEc:pab:fiecac:14.03

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