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Rescate y costos del riesgo financiero
[Rescue costs and financial risk]

Author

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  • Estrada, Fernando

Abstract

First externalities risk due to the size of the companies or the principle that large companies are also at risk of bankruptcy (too big to fail) are examined. The problem is illustrated by a case in which extreme risks with negative consequences for savers and investors are taken. If we accept-so conservatively that the risk exposure of a company is limited by its capital, while -ocasionales- external losses may adversely affect the general public, have placed to explain how and why the big break companies; or better understand why the big break also. In particular, considering the conditions to contain the risk foreseeable losses with positive externalities, then, what can happen with negative derivatives risk capital. Following Taleb / Tapiero, hypotheses are contrasted based on partial information of firms had losses (including external risk factors); the policy implications of this analysis are projected after evaluating two fundamental issues that continue to preoccupy the public opinion: how failures occur in markets for the case of large firms, corporations or companies, and what are the criteria for regulation and rescue available to governments, institutions and citizens to control them.

Suggested Citation

  • Estrada, Fernando, 2014. "Rescate y costos del riesgo financiero [Rescue costs and financial risk]," MPRA Paper 58848, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:58848
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    References listed on IDEAS

    as
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    6. Estrada, Fernando, 2009. "Tamaño y Riesgo en los Mercados Financieros [Size and Risk in the Finanzal Markets]," MPRA Paper 19267, University Library of Munich, Germany.
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    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Financial markets; Risk; externalities; Colombia; Interbolsa;
    All these keywords.

    JEL classification:

    • G00 - Financial Economics - - General - - - General
    • G01 - Financial Economics - - General - - - Financial Crises
    • G02 - Financial Economics - - General - - - Behavioral Finance: Underlying Principles
    • G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies; Insider Trading
    • G17 - Financial Economics - - General Financial Markets - - - Financial Forecasting and Simulation
    • G18 - Financial Economics - - General Financial Markets - - - Government Policy and Regulation
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • G33 - Financial Economics - - Corporate Finance and Governance - - - Bankruptcy; Liquidation
    • G38 - Financial Economics - - Corporate Finance and Governance - - - Government Policy and Regulation

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