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Risks
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Risk Management for Capital Markets
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Risk Management for Capital Markets

A special issue of Risks (ISSN 2227-9091).

Deadline for manuscript submissions: 30 November 2025 | Viewed by 2272

Special Issue Editors

Prof. Dr. Yung Ming Shiu

E-Mail Website
Guest Editor
Department of Risk Management and Insurance, National Chengchi University, Taipei, Taiwan
Interests: reinsurance; risk management in financial institutions; capital markets and risk-taking; CSR and sustainable finance
Dr. Ching-Yuan Hsiao

E-Mail Website
Guest Editor Assistant
Department of Risk Management and Insurance, Tamkang University, Taipei, Taiwan
Interests: reinsurance; risk management in financial institutions; internal capital markets

Special Issue Information

Dear Colleagues,

The journal Risks is delighted to announce a new Special Issue entitled “Risk Management for Capital Markets”. This Special Issue aims to explore the contemporary theories and practices associated with risk management for capital markets.

Risk management involves the practices of identifying, addressing, and monitoring the risks associated with investment and business operations decisions. Sound risk management practices are relevant to practitioners’ cost of capital, financial performance, and solvency in capital markets; in addition, the collective risk management practices executed by all capital market practitioners can further affect the stability of the financial systems. In order to implement risk management decisions, in addition to existing instruments such as financial derivatives and reinsurance, alternative risk transfer (ART) solutions, which involve the securitization of risk, are gaining popularity. We therefore invite researchers and practitioners to contribute insights and findings on risk management practices for capital markets to this Special Issue.

This Special Issue seeks high-quality, original research articles that address the issues associated with risk management practices for capital markets. Topics of interest include, but are not limited to, the following:

  • Alternative risk transfer (ART, examples include catastrophic bond, sidecar, insurance option, index-based insurance)
  • Enterprise risk management (ERM) and risk governance;
  • ESG and climate risk management;
  • Financial derivatives and reinsurance;
  • Financial risk management;
  • Insurance operations – actuarial analysis, investment, and financial management;
  • Regulations of financial institutions;
  • Risk transmissions and financial stability.

Prof. Dr. Yung Ming Shiu
Guest Editors

Dr. Ching-Yuan Hsiao
Guest Editor Assistant

Manuscript Submission Information

Manuscripts should be submitted online at www.mdpi.com by registering and logging in to this website. Once you are registered, click here to go to the submission form. Manuscripts can be submitted until the deadline. All submissions that pass pre-check are peer-reviewed. Accepted papers will be published continuously in the journal (as soon as accepted) and will be listed together on the special issue website. Research articles, review articles as well as short communications are invited. For planned papers, a title and short abstract (about 100 words) can be sent to the Editorial Office for announcement on this website.

Submitted manuscripts should not have been published previously, nor be under consideration for publication elsewhere (except conference proceedings papers). All manuscripts are thoroughly refereed through a single-blind peer-review process. A guide for authors and other relevant information for submission of manuscripts is available on the Instructions for Authors page. Risks is an international peer-reviewed open access monthly journal published by MDPI.

Please visit the Instructions for Authors page before submitting a manuscript. The Article Processing Charge (APC) for publication in this open access journal is 1800 CHF (Swiss Francs). Submitted papers should be well formatted and use good English. Authors may use MDPI's English editing service prior to publication or during author revisions.

Keywords

  • alternative risk transfer
  • capital markets
  • ESG and climate risk
  • financial stability
  • insurance
  • reinsurance
  • risk management associated rules and regulations
  • risk management

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Further information on MDPI's Special Issue policies can be found here.

Published Papers (2 papers)

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Research

27 pages, 3247 KiB  
Article
A Different Risk–Return Relationship
by Aydin Selim Oksoy, Matthew R. Farrell and Shaomin Li
Risks 2025, 13(2), 22; https://doi.org/10.3390/risks13020022 - 27 Jan 2025
Viewed by 812
Abstract
We challenge the widely accepted premise that the valuation of an early-stage firm is simply the capital invested (USD) divided by the equity received (%). Instead, we argue that this calculation determines the break-even point for the investor; for example, investing USD 1.0 [...] Read more.
We challenge the widely accepted premise that the valuation of an early-stage firm is simply the capital invested (USD) divided by the equity received (%). Instead, we argue that this calculation determines the break-even point for the investor; for example, investing USD 1.0 in exchange for a 10% equity sets a firm-level free cash flow target of USD 10.0, resulting in a 0% return for the investor. The design of our study is that of a descriptive analysis of the phenomenon, based on three assumptions: that angel investing is a two-issue negotiation, that negotiation positions are communicated sequentially from capital to equity, and that the capital is fixed to a strategic trajectory. We note that when pausing the negotiation once a strategic trajectory (and thus capital) has been defined, utilizing the break-even point as the main reference point provides a structure that can serve as a guiding barometer for negotiators, as they evaluate their options across the full range of equity greater than 0% and less than 100%. We draw attention to the diminishing benefit of the marginal equity percentage point [diminishing at a rate of (−1/x2)] for the investor to break even on their investment. This relationship tracks to the equation [value = 1/equity], which presents the full option set for any offer, once the capital is determined. Our study provides the practitioner with the subtle benefit of situational awareness and the scholar with a logical foundation for future research. Full article
(This article belongs to the Special Issue Risk Management for Capital Markets)
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14 pages, 650 KiB  
Article
The Effect of Risk Management on Direct and Indirect Capital Structure Deviations
by Xiaoyi Li and Yung-Ming Shiu
Risks 2024, 12(12), 186; https://doi.org/10.3390/risks12120186 - 25 Nov 2024
Cited by 1 | Viewed by 802
Abstract
This study explores the effect of risk management on capital structure deviations. Specifically, we innovatively classify capital structure deviations into direct and indirect deviations, with our classification being based on deviations resulting mainly from changes in either actual or target leverage. Thus, if [...] Read more.
This study explores the effect of risk management on capital structure deviations. Specifically, we innovatively classify capital structure deviations into direct and indirect deviations, with our classification being based on deviations resulting mainly from changes in either actual or target leverage. Thus, if the variation in the actual leverage exceeds the variation in the target leverage, this deviation is considered direct. Conversely, if the target leverage varies more than the actual leverage, it is considered an indirect deviation. Our results reveal that risk management can help reduce these deviations, which mainly result from changes in actual leverage. We further demonstrate that insurers with direct deviations adjust their capital structure approximately 29.2% faster than insurers with indirect deviations. Full article
(This article belongs to the Special Issue Risk Management for Capital Markets)
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