Prof Ronald Anderson OLD M2.10

This course is compulsory on the MSc in Risk and Finance. This course is not available as an outside option.

This course is designed to expose students to the breadth of risk management thinking and approaches across different areas. Section A. Risk and Regulation: Introduction and Overview: Sets out the problem of risk management and regulation. It formulates a general conceptual framework that can be used in devising solutions to risk either as a management problem or as a regulatory problem, or both. Section B. Financial Risk Analysis: Examines issues in financial risk including risk and regulation in the insurance markets; tools of financial risk management, including diversification, hedging and capital provisions; risk measurement for financial instruments (market risk, value at risk); credit risk, ratings and credit derivatives; operational and business risk; regulation and systemic risk. Section C. Financial Market Regulation: Discusses notions of risk in a legal setting and the role and enforcement of legal rules in financial regulation; understanding regulatory strategies and linkages between regulation and risk management; the application of regulatory and risk management tools. Section D. Organisations and Manufactured Risk: Health and Safety Risk and Regulation: Provides an understanding of: the management of risk to health and human safety; a systems based approach to variety among risk regulation regimes; how and why regulation regimes fail; and issues relating to reform of risk regulation regimes. Section E: Strategy, Control and Risk in Organisations: Provides a strategic management perspective on risk analysis and management, including an examination of strategic visioning. Also considers: issues of enforced self-regulation as a method of risk management with reference to occupational health and safety regulation; risk management and decision making in organisations; enterprise-wide risk management and auditing. Section F: Risk Analysis and the Psychology of Risk Bearing: Explores the meaning of risk as perceived by different agents; methods of dealing with risky situations; decision analysis in risky situations; complex risk and its management; problem structuring methods and how they can provide decision support.

20 hours of lectures and 18 hours of seminars in the MT. 20 hours of lectures and 22 hours of seminars in the LT.

A substantial (10,000 word essay) is an integral part of the course and represents 50% of the assessment. As part of the multi-disciplinary approach taken in the programme, students are actively encouraged to select topics that involve several of the relevant core competencies in an integrated way. Analyses of complex cases are suitable for this. However, conceptual and theoretical works are also welcome.

J. Hull, Risk Management and Financial Institutions. 2nd Edition.; S Dawson, Analysing Organisations (Macmillan, 1996); S French, Readings in Decision Analysis (Chapman and Hall, 1989); C Hood & D K Jones, Accident and Design (UCL Press, 1996); Jorion Value At Risk to 3rd Edition 2007 (McGraw Hill); M.Power. Organized Uncertainty: Designing a World of Risk Management (Oxford University Press, 2007); M.Fenton-O'Creevy, N.Nicholson, E.Soane and P. Willman, Traders: Risks, Decsions, and Management in Financial Markets (Oxford University Press, 2005); B A Turner & N F Pidgeon, Man-made Disasters (Butterworth-Heinemann, 1997). The Economics of Climate Change: The Stern Review (Cambridge University Press, 2007.

Exam (50%, duration: 2 hours) in the main exam period.
Essay (50%, 10000 words) in September.