Suchergebnisse

The paper provides the simulation of quantitative market risks assessment metrics Value-at-Risk and Expected Shortfall for a portfolio of eurobonds of Russian oil and gas companies, and for eurobonds of each particular company. As a result of the modeling, we noted an overall significant market risks` impact on the value of the analyzed securities and made a conclusion that it is impossible to completely neutralize the influence of market risks. In this regard, the author proposes and justifies the administrative and structural solutions and recommendations, the introduction of which will enable the eurobonds issuing companies to enhance investors` loyalty to their issues and thereby reduce their cost, i.e. mitigate the required investors` return (Value-at-Risk in this case acts as a risk-premium).

Purpose
– Financial intermediaries have contributed to the growing complexity of transactions and to an emerging relational network within markets. This article considers the Eurobond market as an organization in which members adopt rationalities along with diversified and evolving courses of action. The purpose of this paper is to mobilize both historical analysis and organizational theories to show what history can bring to organizational theories using a specific financial market as a case study.


Design/methodology/approach
– The author used a methodology based on historical events and on a long-run analysis of practices. Professional sources, academic research and databases allow the author to follow an abductive approach. Observations set out of this double perspective are confronted with the conceptual frames of organizational theories.


Findings
– During the creation and organization stage, the Eurobond market adopts the pattern of a market organization. Then, it takes the pattern of a firm organization as defined by Coase and Alchian and Demsetz or it is a hybrid pattern as Williamson corpus is concerned. In its last stage of evolution, it reveals as a firm organization for all economic models of organizations.


Originality/value
– The confrontation of an historical methodology with the economic model of organization leads to the conclusion that the Eurobond market cannot be apprehended as an organization market anymore since it has become a firm organization. Traditional regulation of financial markets does not apply since a firm pattern cannot be controlled as a market one.

This is the transcript of an oral history seminar in which those involved in the early years of the market during the late 1960s described and analysed their experiences. The session began with a short historical overview.

Most current Eurobond proposals imply substantial cross-subsidisation since some countries partially pay the risk premia for others, thus creating moral hazard and disincentives for fiscal discipline. We suggest, instead, to use standard technologies of financial intermediation like pooling and collateralizing risks. The proposed Eurobond system decreases the costs for all participating nations which is Pareto improving. Since collateral requirements are calculated on individual risk, we eliminate cross-subsidisation. It is essential for the model that a significant fraction of governmental bonds is still issued individually since the model utilizes the risk perception abilities and disciplinating functions of the private capital market. We also discuss institutional issues of possible implementations.