The Government as Venture Capitalist

It's a nonprofit, venture capital fund for the poor, a few oxymorons in one sentence.

A number of risk factors were identified, including failure, the loss of capital or closure and the risk of being taken over by foreign firms.

Capital importing countries should minimize internal risks and instability connected with capital flows.

Venture capital funds could be one mechanism to attract private funds for project financing.

The chief will be responsible for risk control of the Fund's investments as a whole in terms of portfolio risk, operational risk and compliance risk, and will plan and perform the oversight of performance measurement, investment risk analysis and operational risk analysis, including risk arising from sub adviser and service provider relationships.

These risks are especially high at the dawn of a new innovation age. Achieving the socially desirable level of innovative effort then requires either foolhardy entrepreneurs who are willing to take high risks or a sufficient supply of risk capital.

The risks arising from the volatility of capital, which were currently assumed, for the most part, by recipient countries, must be more widely shared, especially by investors.

National investment insurance programmes exist in most developed countries to provide coverage for expropriation, war and repatriation risks.

Who will provide capital for the venture?

When investors make less risky loans, they require a lower risk premium , thereby reducing the cost of borrowing to the borrower.

Underlying Risk Factors

This volume of assets allows the Fund to expand its investment frontier and requires it to build up a risk control mechanism, to control comprehensively not only investment risk but also operational risk and technology risk.

Mortgage banks kept some claims on their books, but sold most of them to investment banks as mortgage backed securities. The investment banks blended these securities into asset backed securities and collateralized debt obligations (CDOs) and sold them on to financial institutions throughout the world.

Fundline includes portfolio investment funds, private equity funds and companies, venture capital funds, mutual funds and other equity vehicles.

The Contradictions of China s Communist Capitalism

The fund's objectives, typically, are those of (a) maximizing risk adjusted returns, (b) security of capital and (c) liquidity, and their respective attitudes to risk.

In order to reduce disaster risks, countries and communities must first identify risk factors, decide what level of risk is acceptable, and then take steps to reduce risks or transfer them away from affected areas.

3. Trade finance and risk management

Finally, mutual funds are at risk as well, because their supposedly safe investments may sour and the insurance that backs them now appears shaky. The sub prime contamination of money market funds would prove disastrous, with consequences far beyond what we have seen up to now.

The risks to which the lenders are exposed in project finance are considerably higher than in traditionally secured transactions, even more so in the case of infrastructure projects where the security value of the physical assets involved (e.g. a road, bridge or tunnel) would rarely cover the total financial cost of the project, given the lack of a market where such assets could be easily realized.

The biggest are not always the legal ones on which the World Bank and development agencies have focused rather, they are the business risks of a company that fails or a polity that implodes. If business conditions are auspicious and there is a strong consensus in favor of liberal capitalism as the polity s core economic principle, financial markets can develop and reluctantly absorb risks stemming from the legal system s defects.

Moreover, in a risk off environment, when investors are risk averse or when equities and other risky assets are subject to market and or credit uncertainty, it may be better to hold negative yielding bonds than riskier and more volatile assets.

The more broadly diversified our financial portfolios, the more people there are who share in the inevitable risks and the less an individual is affected by any given risk. The theoretical ideal occurs when financial contracts spread the risks all over the world, so that billions of willing investors each own a tiny share, and no one is over exposed.

Do you need to find entrepreneurs, or venture capitalists, or what do you need to take what you've got and get it to scale?

Shortcomings in information mean that businesses themselves have limited data on opportunities and risks.

16. As a result, no standardized policy in risk retention and management had been developed across the Organization.

The connection between financial risk and asset price swings emerges from the use of a new approach Imperfect Knowledge Economics (IKE) to understanding risk and fluctuations in asset markets. This approach implies that more can be done to reduce systemic risk, beyond reforming how risk is measured and capital buffers determined.

Investing in preparedness and risk reduction

(e) Create a risk and compliance section for better risk control of investments and operations

Once we're gone, there's no more risk.

Such capital subsidies would assure prospective investors that Governments were prepared to bear a portion of the risk.

It seemed to me that, yes, our modern sophisticated financial systems had created enormous macroeconomic risks. But it also seemed to me that a world short of risk bearing capacity needed virtually anything that induced people to commit their money to long term risky investments.

Clearly, the insured risks were a small part of the total risk. Moreover, much of that risk, even if insured, continues to be borne in Japan, rather than being spread effectively to foreign investors, so Japan is still alone in bearing the costs.

David S. Rose on pitching to VCs

Failure to invest in disaster risk reduction and preparedness and in post disaster recovery and rehabilitation as integral components of sustainable development efforts puts already vulnerable countries at even greater risk.

BRUSSELS A financial crisis erupts when a large volume of assets in the financial system suddenly appears to be risky and investors want to get rid of their holdings. These assets become toxic not simply risky, but carrying a risk that cannot be quantified.

The participation of foreign investors in these markets means that the risks of sudden reversals of foreign capital inflows is not eliminated.

Since all risks of financial loss are therefore assumed by the Organization and the participants, OIOS maintains its observation that the health insurance programme is essentially run on a self insured basis.

Equally, risk managers should have the authority to override senior management if necessary in order to cut excessive exposures.

Financing through the banking system also involves similar risks.

Among fiscal measures, the reduction of taxes and the granting of tax breaks in selected areas such as venture capital financing were of particular importance.

Borrowing in domestic currency avoids the risks associated with currency mismatches and pro cyclical foreign capital flows.

This would reduce transaction costs and trading risks.

A banking union for the euro area should be catalytic in encouraging deeper integration of the banking sector. But risk sharing is also about deepening capital markets, especially for equity, which is why we also need to advance quickly with a capital markets union.