Bank capital for market risk: a study in incentive compatible regulation
Traditionally, government regulation in the United States follows a straightforward command approach. The government states the desired activities of the regulated firm, the allowable actions, and the prohibited actions. The firm is punished if it violates these strictures. Regulatory economists have identified many problems with this approach. First, there is the problem of asymmetry in information: Regulations cannot be enforced if they require information from the firm that the regulator cannot elicit reliably and at reasonable cost.
Assessing market and credit risk of country funds: A value-at-risk analysis
The paper presents a treatment for the measurement and disclosure of market and credit risks in the context of capital adequacy regulation. The proposed approach is in conformity with the Basle Committee's latest proposal on risk measurement, and is based on the Value-at-Risk (VaR) methodology. This approach is applied to investments in close-end country funds of emerging markets. For 13 .such funds listed in the New York Stock Exchange during the period October 1994 to December 1997, the average VaR estimate is found to be well above the capital adequacy ratio of 8% required by most regulatory authorities and to be sensitive to the emergence of increased financial turbulence.
Development of Science and Technology in the Iranian Electric Power Industry: Challenges and Future Progress
This chapter examines four key segments of the electric power industry in Iran: generation, transportation, distribution and consumption. It reviews the method, development, and evolution of electric power generation in the country. Specifically, the chapter reviews the structure of the electric industry, the main players, institutions, standards as well as laws, human resources, technology, the export and import markets, and engineering management of the industry in the country. Finally, the challenges facing the industry will be identified and policy suggestions to remedy the problems will be provided.