Recommended articles: Risk Management

1. Global Growth Plateaus as Economic Risks Materialize (IMF Blog).
2. What is the Correlation Between Stocks and Housing? (The Big Picture).
3. Uncertainties and risks of strategy implementation. A framework helps executives classify and understand the risk profile of a strategic initiative (LSE Business Review).
4. America’s Inflation Risks. Thanks to trade tariffs on Chinese imports, China-centric global value chains will no longer offset pressure on prices stemming from a tight US labor market. That could mean that the Federal Reserve must significantly exceed the so-called comfort zone of interest-rate normalization that financial markets are currently discounting (Project Syndicate).
5. The effects of social insurance on income losses and gains over the business cycle. Workers experience income volatility over their lifetime due to changes in both individual and macroeconomic conditions. Using panel data from the US, Germany, and Sweden, this column analyses how the probability of income losses and gains changes systematically over the business cycle. Downside risk increases in recessions, while upside chance is reduced. However, tax and transfer programmes blunt some of the largest declines in incomes in recessions (VOX).
6. The dynamics of (dis)integration in enterprise risk management. No matter how you approach integration, something will be left out and will eventually become a key challenge for ‘integrated’ designs (LSE Business Review).
7. Chart of the Week: Words Count for Central Bank Communications in Latin America and Central bank communication and the yield curve.
8. Basel standards and developing countries: A difficult relationship. In today’s world of globalised finance, regulators in developing countries have to weigh up the international ramifications of their decisions. This column presents the results of a research project which combines cross-country panel analysis and in-depth case studies of the political economy of the adoption of Basel II/III in the developing world. It finds that regulators in developing countries do not merely adopt Basel II/III because these standards provide the optimal technical solution to financial stability risks in their jurisdictions; concerns about reputation and competition are also important (VOX).
9. Finally, BIS international banking statistics at end-June 2018 and Stress testing principles.