Option Ratings After both blocks of the risk game, participants rated each option on a nine-point rating scale according to its valence, arousal and riskiness
In most cases, though, derivatives (contracted pricing) are utilised to limit riskiness
and may be combined with traditional assets to increase risk-adjusted return.
This shift reflected an increase in the riskiness
of equity and higher demand for safe assets on the part of emerging market economies because of increased official foreign reserves accumulation.
Minimum private investor participation will now range between 10% and 60% depending on the age and riskiness
of the company.
Average tier-l capital at banks went up, but so did the riskiness
of their assets, as measured by the risk-weighted assets.
The ECB will take a snapshot of loans and other assets, including holdings of government debt, from the balance sheets of 128 banks at the end of this year and scrutinise their riskiness
before it takes over as the bloc's banking supervisor late next year.
They are also the standard against which the riskiness
of stocks and bonds are measured.
The core of the planned Basel rule is a requirement that banks hold capital equivalent to at least three per cent of their assets, without any possibility to take into account the riskiness
of a lender's investments.
This can be explained by greater tolerance due to familiarity (Greenstein and Hamilton, 1997) or a more accurate assessment of client's riskiness
due to improved knowledge (Johnstone and Bedard, 2004).
Perhaps beliefs about issues such as the riskiness
of climate change or nuclear power constitute part of what it means for people to belong to specific groups.
This second distorting effect results from pushing interest rates below the natural rate and consequently reducing risk premiums so that there is a collective mis-appreciation of the riskiness
of business ventures.
The lack of standardisation in how European banks measure their riskiness
is leading to differences in perceptions of investors with respect to investibility of banks, according to a Reuters report.