Risks

Using a panel dataset of 385 European bank-year observations covering the 2012 to 2022 period, this study aimed to investigate the impact of derivatives on bank value and performance. We used bank-level panel data and conducted several multivariate statistical analyses, i.e., ordinary least squares (OLS), random-effects, and feasible generalized least squares (FGLS) regressions, to examine the ways in which using derivatives for different purposes influences bank value and performance. The regression results indicated a positive and significant association between hedging derivatives and bank performance, while trading derivatives had a negative effect on bank performance and value. Furthermore, the findings suggest that using such derivatives for hedging does not enhance value. Regarding the practical implications of this study and banking sector soundness, financial market regulators and policymakers should be cautious of the potential negative consequences of extensive trading derivative use. In particular, maintaining an acceptable level in this regard is essential to ensuring that the costs of engaging in derivative markets do not surpass their benefits. Hedging through derivatives may not translate into higher bank value, thus managers should justify to investors how such hedging derivatives enhance shareholder wealth. Additional research could focus on whether using derivatives in the banking industry offers any palpable advantage in the intermediate to long term; whether their use by non-financial organizations has different implications that than of financial firms; and the extent to which such financial instruments are useful for enhancing bank value.

In deregulated electricity markets, Generation Companies (GENCOs) are exposed to substantial financial risk due to volatile and uncertain electricity prices. Traditional generation asset valuation approaches, which rely primarily on expected profit, fail to adequately capture downside risk under market uncertainty. This study proposes an integrated risk-aware framework for generation asset valuation by embedding Value-at-Risk (VaR) into a Price-Based Unit Commitment (PBUC) model. VaR is employed to quantify potential profit losses at different confidence levels, enabling GENCOs to explicitly assess downside exposure associated with electricity price fluctuations. Spot price uncertainty is modeled using the Delta-Normal approach based on historical PJM market data. The resulting nonlinear mixed-integer optimization problem is solved using an Improved Immune Algorithm (IIA) enhanced with the Taguchi Method to improve convergence stability and solution diversity. Case studies on the IEEE 15-unit system demonstrate that the proposed IIA consistently outperforms conventional evolutionary algorithms in terms of profitability, robustness, and convergence reliability. The VaR analysis further reveals pronounced left-tail risk in profit distributions, particularly during peak-load periods, highlighting the importance of risk-adjusted commitment strategies. The proposed framework provides a practical decision-support tool for GENCOs to balance profitability and downside risk in competitive electricity markets.

As global climate and sustainable challenges gain more attention, green finance has emerged as a significant focus of worldwide financial reform, with green bonds serving as a key indicator. Retail investors, as an important part of the financial market, have a significant impact on the development of green finance through their investment willingness. This study aims to explore the influencing factors and mechanisms on the investment willingness of China retail investors towards green bonds. Based on empirical analysis of data from 2219 valid respondents in China, carried out using the SEM method, the results suggest that perceived usefulness (PU), investment literacy (IL), and information transparency (IT) all positively influence retail investors’ willingness to invest in green bonds. Additionally, PU, IL, and IT contribute to fostering an open attitude toward change (OATC) among retail investors, which, in turn, significantly promotes their investment willingness. This study also identifies the mediation effect of OATC. The findings provide both theoretical and practical insights to promote the development of green finance, enhance market activity, and support policy frameworks.