New issue of Risk Governance and Control: Financial Markets & Institutions journal

The recent (Volume 8, issue 2) issue of Risk Governance and Control: Financial Markets & Institutions journal deals with the topics of microinsurance and sustainable performance, risk management, monitoring & analysis, audit fees and pricing strategy, competitive forces & transparency as well as range based models. More details on each paper are provided below, follow the link to read/ download the papers.

Everton Dockery, Miltiadis Efentakis and Mamdouh Abdulaziz Saleh Al-Faryan study the performance of range-based models over varying market conditions and compare their performance against a set of alterative risk measurement models, including the more widely used techniques in practice for measuring the Value-at-Risk (VaR) of seven financial market indices. In particular, we focus on model accuracy in estimated VaRs over quiet and volatile moments utilizing loss functions and likelihood ratio tests for coverage probability.

Last Mazambani and Emmanuel Mutambara study the sustainable performance in microinsurance offering in low-income markets. Sustainable performance requires a balanced integration of supply and demand factors in the offering of the service. Microinsurance is still supply driven thereby creating a lopsided mismatch between demand and supply that leads to oversupply and low uptake. On the basis of extant literature, the paper aims to propose and discuss factors critical to demand and supply of microinsurance. A conceptual framework for sustainable microinsurance is presented with individual metrics that can be addressed as managerial tools for driving and controlling sustained superior performance.

Bashir Muhammad, Sher Khan and Yunhong Xu examine how risk management practices can be influenced by factors, including understanding risk management, risk assessment & analysis, risk identification, risk monitoring and credit risk analysis in commercial banks of Pakistan. The collected data satisfied the reliability requirement and regression and correlation analyses were adopted. The results suggest that understanding risk and risk management (URM), risk assessment and analysis (RAA), risk identification (RI), risk monitoring (RM) and credit risk analysis (CRA) have a positive significant impact on risk management practices (RMP).

Christos Lemonakis, Panagiotis Ballas, Vassiliki Balla and Alexandros Garefalakis investigate audit fees and pricing strategy. The innovativeness of the current research lies at the fact that it is the first time that a research focuses on “Restatements of Internal Control Reports” (RICR) and “Firm’s Earnings” (FE) as significant determinants of “Audit Fees” (AF) paid to external auditors, providing materially useful evidence about the behavioral profile of audit firms concerning their pricing strategy. Employing a dataset that captures the period before and during the global financial crisis of 2007-2008, we use RICR as control variable to assess not only the effectiveness of internal controls, but also the performance of the selected financial institutions and to what extent do the above influence the pricing strategy adopted by audit firms. In methodological terms, we apply Multiple Regression Analysis to a data set that consists of 2.878 observations, which stem from 300 US financial institutions and are recorded for a period of seven years that range from 2004 to 2010. The selection of the specific period facilitates comparisons between the period before and during global financial crisis. These findings are then contrasted with the results that cover the whole 2004-2010 period.

Muhammad Surajo Sanusi explores the operational activities of the London Stock Exchange in the 21st century to provide an overview of its operational transparency and competitiveness; the competition among its market participants and how it competes with other developed stock exchanges around the world. Evidence was found that suggests the manifestation of both competitive and uncompetitive practices in the London Stock Exchange. The presence of the key elements that enhance the competitiveness of the market, such as continued technology transformation, strategies that promote globalisation and regulatory flexibilities was observed. Simultaneously, signs of non-competitiveness such as high membership and annual fees, transaction costs and stamp duties were also observed.

The Journal of Risk Governance and Control: Financial Markets & Institutions is published quarterly. Currently, we announce a call for papers for the next issue of the journal. I order to find instructions on how to submit a manuscript please see the instructions for authors section or contact Polina Bahmetenko, the managing editor of the journal directly at