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People Value at Risk: A Key Indicator for Sound Management

Author

Listed:
  • Jose Manuel Feria-Dominguez

    (Department of Financial Economics and Accounting, Universidad Pablo de Olavide)

  • Enrique Jimenez-Rodriguez

    (Department of Financial Economics and Accounting, Universidad Pablo de Olavide)

  • Pilar Camacho-Rubio

    (Department of Financial Economics and Accounting, Universidad Pablo de Olavide)

Abstract

People are the most important asset for companies, but they are also a source of risk. People risk involves both intentional and unintentional people’s behavior that could provoke losses for firms. The main goal of this paper is twofold: to identify four different risk categories (Internal Fraud, Employment Practices and Workplace Safety, Clients, Products and Business Practices and Execution, Delivery & Process Management) that are “people-related”, and to measure the people risk exposure by applying the concept of People-Value at Risk (People-VaR) as a new key-indicator for sound management in the financial sector. Then, we also calculate the Risk Adjusted Return on Capital (RAROC) to evaluate the bank’s risk-adjusted performance, being both measures useful tools for monitoring the shareholder’s value creation

Suggested Citation

  • Jose Manuel Feria-Dominguez & Enrique Jimenez-Rodriguez & Pilar Camacho-Rubio, 2014. "People Value at Risk: A Key Indicator for Sound Management," Working Papers 14.03, Universidad Pablo de Olavide, Department of Financial Economics and Accounting (former Department of Business Administration).
    • Handle: RePEc:pab:fiecac:14.03
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    People Risk; People-Value at Risk; Risk Adjusted return on Capital (RAROC); Banking performance;
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