Risk Management in the Polish Financial System (eBook)

Konrad Raczkowski, PhD, is Professor of Economics and Management and Director of the Institute of Economics at the University of Social Sciences in Warsaw, Poland.   Marian Noga, PhD, is Professor of Economics, former Member of the Monetary Policy Council of Poland and former Rector of Wroclaw University of Economics, Poland.   Jarosław Klepacki, PhD, is an economist and lawyer. He is also an arbitrator at the International Court of Arbitration in Amsterdam, Netherlands.

Cover 1
Half-Title 2
Title 4
Copyright 5
Contents 6
List of Figures 9
List of Tables 11
Preface 13
1 National Systemic Risk Management 16
Introduction 16
1.1 Managerial grounds for risk and making strategic decisions 17
1.2 Economic risk versus state risk 23
1.2.1 State systemic risks 23
1.2.2 Economic risk 35
1.2.3 Tax risk from the perspective of the state and the economy 39
Conclusions 54
2 Stability of the Polish Financial System and the Risk Involved 55
Introduction 55
2.1 Macroprudential policy 62
2.1.1 The operation of a financial system and the influence it exerts on economic growth 62
2.1.2 Interaction between financial institutions 74
2.1.3 Protection of financial stability – macroprudential policy goals and tools 76
2.2 Microprudential policy 88
2.2.1 Prevention of individual bankruptcy Individual hazard analysis 88
2.2.2 Depositor protection 106
2.3 Comprehensive assessment of the financial situation in Poland 109
Conclusions 114
3 Management of Financial Stability Risk 115
Introduction 115
3.1 The structure and function of the financial safety system 116
3.2 Systemic risk institutions in the network of international capital ties 122
3.3 The principles of effective supervision of the financial market 136
3.4 Transfer of banking risk into the financial system 139
3.5 Reorganization of legal risk management processes 146
Conclusions 151
4 The Risk of Investing in Financial Instruments 153
Introduction 153
4.1 Types of financial instruments 153
4.1.1 Money market instruments 161
4.1.2 Debt instruments 163
4.1.3 Equity instruments 170
4.1.4 Derivative instruments (derivatives) 175
4.2 Investment risk involved in equity financial instruments 182
4.2.1 Market risk 185
4.2.2 Issuer risk 188
4.2.3 Liquidity risk 190
4.2.4 Risk of total value loss 191
4.3 The risk of investing in debt instruments 192
4.3.1 Inflation risk 193
4.3.2 Currency risk 195
4.3.3 Risk of price change and risk related to a given company 196
4.3.4 Default risk 197
4.3.5 Risk of early amortization 199
Conclusions 199
5 Strategic Risks of Investing in Stock Exchange 201
Introduction 201
5.1 Stock exchange investment style 201
5.2 Risk of investment strategies 206
5.2.1 Speculation 210
5.2.2 Short selling 212
5.3 Risk of other strategies 216
5.3.1 Opportunistic strategy 217
5.3.2 Buy and hold strategy 219
5.3.3 Market timing strategy 221
5.3.4 Behavioral strategy 222
5.3.5 Dollar cost averaging strategy 224
5.3.6 Current yield strategy 229
5.3.7 Ratio investment strategy 231
5.3.8 Capital preservation strategy 233
5.3.9 The Benjamin Graham strategy 234
5.3.10 Fixed structure strategy 237
5.3.11 Constant proportion strategy 240
5.3.12 The black swan strategy 242
Conclusions 247
Final remarks 249
Notes 250
References 254
Index 270