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112. Cyber Risk Scenarios, the Financial System, and Systemic Risk Assessment
- Author:
- Lincoln Kaffenberger and Emanuel Kopp
- Publication Date:
- 09-2019
- Content Type:
- Working Paper
- Institution:
- Carnegie Endowment for International Peace
- Abstract:
- Cyber risk has become a key issue for stakeholders in the financial system. But its properties are still not precisely characterized and well understood. To help develop a better understanding, we discuss the properties of cyber risk and categorize various cyber risk scenarios. Furthermore, we present a conceptual framework for assessing systemic cyber risk to individual countries. This involves analyzing cyber risk exposures, assessing cybersecurity and preparedness capabilities, and identifying buffers available to absorb cyber risk–induced shocks.
- Topic:
- Science and Technology, Cybersecurity, Finance, Internet, and Risk
- Political Geography:
- Global Focus
113. Creating a Euro Area Safe Asset without Mutualizing Risk (Much)
- Author:
- Alvaro Leandro and Jeromin Zettelmeyer
- Publication Date:
- 08-2019
- Content Type:
- Working Paper
- Institution:
- Peterson Institute for International Economics (PIIE)
- Abstract:
- This paper explains and evaluates three proposals to create “safe assets” for the euro area based on sovereign bonds, in which sovereign risk is limited through diversification and some form of seniority. These assets would be held by banks and other financial institutions, replacing concentrated exposures to their own sovereigns. The paper focuses on three ideas: (1) to create multitranche “sovereign bond-backed securities” (SBBS), of which the senior tranche would constitute a safe asset; (2) to create a senior, publicly owned financial intermediary that would issue a bond backed by a diversified portfolio of sovereign loans (“E-bonds”); and (3) to issue sovereign bonds in several tranches and induce banks to hold a diversified pool of senior sovereign bonds (“multitranche national bond issuance”). Public attention (including public criticism) has so far focused on the first idea; the other two have not yet been seriously debated. The authors find that none of the competing proposals entirely dominates the others. SBBS do not deserve most of the criticism to which they have been subjected. At the same time, E-bonds and multitranche national bond issuance have several interesting features—including inducing fiscal discipline—and warrant further exploration.
- Topic:
- Economics, Sovereign Wealth Funds, Banks, and Risk
- Political Geography:
- Europe and Global Focus
114. The Rise of Global Innovation by US Multinationals Poses Risks and Opportunities
- Author:
- Lee G. Branstetter, Britta Glennon, and J. Bradford Jensen
- Publication Date:
- 06-2019
- Content Type:
- Policy Brief
- Institution:
- Peterson Institute for International Economics (PIIE)
- Abstract:
- For decades, US multinational corporations (MNCs) conducted nearly all their research and development (R&D) within the United States. Their focus on R&D at home helped establish the United States as the unrivaled leader of innovation and technology advances in the world economy. Since the late 1990s, however, the amount of R&D conducted overseas by US MNCs has grown nearly fourfold and its geographic distribution has expanded from a few advanced industrial countries to many parts of the developing world, creating an innovation system that spans the globe. Like many aspects of globalization, including the offshoring of manufacturing over recent decades, the globalization of R&D raises concerns about US competitiveness and loss of technological leadership. At the same time, the spreading geographic location of innovation presents opportunities for US-based companies if the right policies are adopted to seize them. The research presented in this Policy Brief demonstrates that US innovators continue to remain involved in important ways in US MNCs' global R&D activities, and fears of a hollowing out of US capacity to innovate—based probably on previous fears about the hollowing out of US-based manufacturing—may be overstated. Indeed, the large and growing pool of highly educated scientists and engineers in the developing world could increase the rate of global productivity growth, to the advantage of US-based companies and the world in general. The authors conclude that a productive way to capitalize on the globalization of MNC R&D is not to oppose it but to combine emerging-market talent with MNC experience so that innovation can flourish to improve global living standards and fuel economic progress.
- Topic:
- International Trade and Finance, Science and Technology, Multinational Corporations, Risk, and Private Sector
- Political Geography:
- North America, Global Focus, and United States of America
115. Firm-Level Political Risk: Measurement and Effects
- Publication Date:
- 07-2019
- Content Type:
- Working Paper
- Institution:
- Institute for New Economic Thinking (INET)
- Abstract:
- We validate our measure by showing it correctly identifies calls containing extensive conversations on risks that are political in nature, that it varies intuitively over time and across sectors, and that it correlates with the firm’s actions and stock market volatility in a manner that is highly indicative of political risk. Firms exposed to political risk retrench hiring and investment and actively lobby and donate to politicians. These results continue to hold after controlling for news about the mean (as opposed to the variance) of political shocks. Interestingly, the vast majority of the variation in our measure is at the firm level rather than at the aggregate or sector level, in the sense that it is neither captured by the interaction of sector and time fixed effects, nor by heterogeneous exposure of individual firms to aggregate political risk. The dispersion of this firm-level political risk increases significantly at times with high aggregate political risk. Decomposing our measure of political risk by topic, we find that firms that devote more time to discussing risks associated with a given political topic tend to increase lobbying on that topic, but not on other topics, in the following quarter.
- Topic:
- Economics, Economy, Business, and Risk
- Political Geography:
- United States
116. The Global Exchange (Fall 2019)
- Author:
- Christy Clark, Monica Gattinger, Wilfrid Greaves, P. Whitney Lackenbauer, Geoffrey Cann, Matthew Foss, Kelly Ogle, Jean-Sebastien Rioux, Wenran Jiang, Robert Seeley, Dennis McConaghy, and Ron Wallace
- Publication Date:
- 09-2019
- Content Type:
- Journal Article
- Journal:
- The Global Exchange
- Institution:
- Canadian Global Affairs Institute (CGAI)
- Abstract:
- The demand for Liquefied Natural Gas (LNG) continues to grow and Canada’s unconventional reserves remain amongst the very best in the world. With political will and an appetite to embrace gas the way Premier Lougheed once championed oil, we can still put the wealth of Western Canadian gas to work for the good of all Canadians. The papers that follow will be essential pieces for policy makers as they map out the path to Canada’s next great economic transformation.
- Topic:
- Foreign Policy, Climate Change, Energy Policy, Environment, Oil, Gas, Risk, and Trade
- Political Geography:
- China, Canada, Australia, and North America
117. Whither US-China Trade War? Impacts on global trade, technology and finance, and strategies to mitigate risks
- Author:
- Lia Valls Pereira, Tatiana Rosito, and Gabriel de Barros Torres
- Publication Date:
- 06-2019
- Content Type:
- Special Report
- Institution:
- Brazilian Center for International Relations (CEBRI)
- Abstract:
- For its twelthth meeting, CEBRI's China Analysis Group organized discussions on the economic and geopolitical causes and consequences of trade frictions between China and the United States, considering its impact on different actors and on the multilateral trading system at large. Despite the original focus on trade imbalances, participants noted that the bilateral rivalry’s underlying drivers relate to competition for leadership in high-tech sectors and, fundamentally, to the conciliation of practices associated with different development models. Notwithstanding the uncertainty surrounding the next steps in the dispute, there was a consensus among participants that a complete decoupling between both economies is virtually unfeasible in the short-term and not likely in the long-term. The speakers at the event were Marcos Troyjo, Jin Canrong, Kellie Meiman and Niu Haibin and comments were made by Lia Valls and Tatiana Prazeres. The event was coordinated by CEBRI Senior Fellow Tatiana Rosito.
- Topic:
- Science and Technology, Bilateral Relations, Finance, Trade Wars, Risk, and Trade
- Political Geography:
- China, Asia, North America, and United States of America
118. Editing Biosecurity: Needs and Strategies for Governing Genome Editing
- Author:
- Gregory Falco, Martin Eling, Virginia Miller, Lawrence A. Gordon, Shaun Shuxun Wang, Joan T. Schmit, Russell Thomas, Mauro Elvedi, Thomas Maillart, Emy Donavan, Simon Dejung, Matthias Weber, Eric Durand, Franklin Nutter, Uzi Scheffer, Gil Arazi, Gilbert Ohana, and Herbert Lin
- Publication Date:
- 01-2019
- Content Type:
- Working Paper
- Institution:
- Center for International Security and Cooperation (CISAC), Stanford University
- Abstract:
- Cyber risk as a research topic has attracted considerable academic, industry and government attention over the past 15 years. Unfortunately, research progress has been modest and has not been sufficient to answer the “call to action” in many prestigious committee and agency reports. To date, industry and academic research on cyber risk in all its complexity has been piecemeal and uncoordinated – which is typical of emergent, pre-paradigmatic fields. Further complicating matters is the multidisciplinary characteristics of cyber risk. In order to significantly advance the pace of research progress, a group of scholars, industry practitioners and policymakers from around the world present a research agenda for cyber risk and cyber insurance, which accounts for the variety of fields relevant to the problem space. We propose a cyber risk unified concept model that identifies where certain disciplines of study can add value. The concept model can also be used to identify collaboration opportunities across the major research questions. In this agenda, we unpack the major research questions into manageable projects and tactical questions that need to be addressed.
- Topic:
- Security, Infrastructure, Governance, Cybersecurity, Risk, and Digitalization
- Political Geography:
- Global Focus
119. Disaster Management: Can ASEAN Be a Global Leader?
- Author:
- Tavida Kamolvej
- Publication Date:
- 05-2019
- Content Type:
- Commentary and Analysis
- Institution:
- Centre for Non-Traditional Security Studies, S. Rajaratnam School of International Studies
- Abstract:
- Notwithstanding the growing frequency of natural disasters worldwide, it is difficult to strengthen disaster risk governance in ASEAN and globally. Several factors stand in the way. However, a recent pilot study in Thailand suggests that a regional disaster risk platform is within reach that could transform ASEAN into a global disaster management leader.
- Topic:
- Natural Disasters, Risk, ASEAN, and Disaster Management
- Political Geography:
- Thailand and Southeast Asia
120. Managing Disasters 4.0: Need For New Thinking
- Author:
- Angelo Paolo L. Trias
- Publication Date:
- 08-2019
- Content Type:
- Commentary and Analysis
- Institution:
- Centre for Non-Traditional Security Studies, S. Rajaratnam School of International Studies
- Abstract:
- The UN Global Assessment Report (GAR) is a comprehensive review and analysis of worldwide progress on disaster risk management (DRM). This year’s edition challenges us to move beyond prevailing norms in DRM to consider the complex nature of systemic risk. What does this shift mean and how will it shape DRM policy, research, and practice?
- Topic:
- Development, Migration, United Nations, Risk, Sustainability, and Disaster Management
- Political Geography:
- Global Focus