Business Commons^™

Credit Risk Dynamics In Response To Changes In The Federal Funds Target: The Implication For Firm Short-Term Debt, Kwamie Dunbar, Abu S. Amin

WCBT Faculty Publications

The recent credit crisis has raised a number of interesting questions regarding the role of the Federal Reserve Bank and the effectiveness of its expected and unexpected interventions in financial markets, especiallyduring the crisis, given its mandate. This paper reviews and evaluates the impact of expected and unexpected changes in the federal funds rate target on credit risk premia. The paper's main innovation is the use of an ACH-VAR (autoregressive conditional hazard VAR) model to generate the Fed's expected and unexpected monetary policy shocks which are then used to determine the effects of a Federal Reserve policy change on counterparty …

Integrating A New Business Into The Financial Planning Process, Barbara M. Tarasovich

WCBT Faculty Publications

A new Controller in this case was recently hired by Unilever, a global 200 consumer products organization, to integrate a newly acquired business into Unilever’s financial planning process. The newly acquired organization was a publically held company and had its own existing financial processes and procedures. Financial planning and reporting are major company activities and finance and accounting professionals are expected to “get it right.” The purpose of this case study is to get students to think about the difficulties and challenges of revamping existing financial processes and procedures and alert them to areas where other financial professionals have encountered …

Forecasting And Stress-Testing The Risk-Based Capital Requirements For Revolving Retail Exposures, Kwamie Dunbar

WCBT Working Papers

This paper presents a tractable and empirically sound technique for generating stressed probabilities of default (PDs) which are then used to derive loss rates for the provisioning of a bank’s risk-based capital. This work is in response to the recent regulatory findings attributed to the Supervisory Capital Assessment Program (SCAP) stress tests of 2009 which revealed weaknesses in the existing regulatory and economic capital approaches. The SCAP projected losses of approximately $82.4 Billion in banks’ credit card portfolios for 2010, highlighting the need for better forecasting and stress testing of revolving retail exposures.

This study proposes a timely model that …

Persistence And Survival In Entrepreneurship: The Case Of The Wave Energy Conversion Corporation Of America, Giles Jackson, Randy Boxx

New England Journal of Entrepreneurship

Many entrepreneurial firms risk falling into a cash flow “Valley of Death”—the stage of a young firm’s life when seed funding is running dry but the firm has yet to secure sufficient additional funding to carry it through to product commercialization.This is particularly true in the nascent cleantech sector, where investments are often complex and capital intensive. Drawing on an in-depth interview with seasoned entrepreneur Brian Cunningham, CEO of the Wave Energy Conversion Corporation of America, this article explores the role of persistence in entrepreneurship, distinguishing between “calculated” and “blind” persistence.

The Sarbanes Oxley Act's Contribution To Curtailing Corporate Bribery, Karen Cascini, Alan Delfavero, Mario Mililli

WCBT Faculty Publications

In the wake of corporate scandals occurring in the early 2000s, a need for stricter regulation was deemed necessary by the investors of U.S. public companies. In 2002, the Sarbanes-Oxley Act (SoX) was created. Accordingly, under the rules of SoX, U.S. corporations were faced with increased oversight and also needed to substantially improve their internal controls. As companies began to scrutinize their internal affairs more closely, some businesses detected other forms of criminal activity occurring internally, such as bribery. Those companies and individuals found to have committed bribery have violated the Foreign Corrupt Practices Act of 1977 (FCPA). Throughout this …