Aggregation of risks and allocation of capital

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By Joshua Corrigan, Jethro De Decker , Lotte van Delft , Takanori Hoshino, Henny Verheugen | 01 September 2009
Risk assessment and risk management are critical to survival in today’s business climate, and the accurate calculation of economic capital is more important now than ever before. An effective economic capital management framework also plays a crucial role in product pricing, capital allocation and project financing, performance management, and financial reporting. This white paper examines various techniques for the aggregation and allocation of capital.