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Performance Measurement in Financial Institutions in an ERM framework

Performance Measurement in Financial Institutions in an ERM framework

Author: Ashish Dev; Vandana Rao
Publisher: Risk Books
ISBN: 9781904339724
Published In: October 2006
Format: Paperback
Jurisdiction: International ? Disclaimer:
Countri(es) stated herein are used as reference only

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Focusing on internal business unit performance, this in-depth practitioner guide addresses both traditional and risk-adjusted performance measures in financial institutions, providing you with the tools to implement a ’balanced scorecard’ approach to performance measurement.

As performance measurement in financial institutions moves progressively away from traditional measures and towards the objective of shareholder value creation, finance professionals now need to understand many new drivers of performance which are unfamiliar to them. Risk professionals must also be aware of how measures of risk integrate with financial and operational drivers of the new measures of performance.

In the spirit of enterprise risk management, you will benefit from an integral treatment of the three pillars of internal performance measurement in a financial institution:

* Funds transfer pricing

* Economic capital

* Expense allocation

You will get a look at Basel II from the perspective of improved financial and operational performance. Furthermore, you will be introduced to the concept of ’balanced scorecards’, a new approach of balancing financial and non-financial drivers of performance.

This practical new title addresses segment reporting and examines the issues and pitfalls of comparing performances across units and institutions as well as factors related to performance and compensation in financial institutions, which are rarely found in this type of literature.

Focusing on internal business unit performance, this in-depth reference handbook will enable you to successfully measure and control performance. It is recommended for chief financial officers, treasurers, financial analysts, accountants, chief risk officers, risk managers, auditors and management consultants engaged in financial consulting to financial institutions.

1. Improvement of Risk-adjusted Performance through Active Credit Portfolio Management of SME Exposures: basic concepts

2. Performance Measurement when a SME bank is engaged in Active Credit Portfolio Management: Transfer Pricing of Credit

3. Modelling and Measuring Performance of Indeterminate Deposits

4. The Fundamentals of Economic Capital

5. The Fundamentals of Funds Transfer Pricing

6. Risk-adjusted Performance of Credit Products and Credit-based Relationships

7. Expense Allocation

8. From Financial Performance Measures to Balanced Scorecards

Ashish Dev is Executive Vice President, Risk Management, at KeyCorp. He is group head of Enterprise Risk Management, which includes Economic Capital Allocations, Basel II Coordination, Data Warehousing, Credit Underwriting Models, Strategic Analytics & Credit Portfolio Management, and Operational Risk. As a member of all the three high-level risk committees of KeyCorp viz. ALCO, CREDCO and ORCO, he is involved in decision-making in all areas of risk in the bank. Ashish has been the prime mover in establishing enterprise-wide risk-adjusted product pricing and performance measurement and in creating a new credit portfolio management function in the bank. Over the last four years, Ashish has been prominent in deliberations at all levels relating to Basel II formulations and Pillar 2 standards both as part of several industry groups and also directly with US regulators active in Basel II. Ashish is listed as one of the most published authors amongst cutting-edge papers in Risk magazine during the period 1994-2003. Prior to joining KeyCorp, Ashish was head of Quantitative Research and Analysis in Bank One. Ashish has a PhD in Economics and holds the CFA professional designation.

Vandana Rao is associate professor in the Business and Economics Division of Indiana University East. She teaches courses in finance, economics and statistics. She has won several teaching awards in the Indiana University system. Her research interests are diverse and range from economic demography to financial institutions. Vandana has worked as a research consultant/project director with community organisations at various levels, including the UNICEF, the Government of India and economic development agencies in the State of Indiana. Vandana has a PhD in economics.