Model-Based Mitigation of Availability Risks

The assessment and mitigation of risks related to the availability of the IT infrastructure is becoming increasingly important in modern organizations. Unfortunately, present standards for Risk Assessment and Mitigation show limitations when evaluating and mitigating availability risks. This is due to the fact that they do not fully consider the dependencies between the constituents of an IT infrastructure that are paramount in large enterprises. These dependencies make the technical problem of assessing availability issues very challenging. In this paper we define a method and a tool for carrying out a Risk Mitigation activity which allows to assess the global impact of a set of risks and to choose the best set of countermeasures to cope with them. To this end, the presence of a tool is necessary due to the high complexity of the assessment problem. Our approach can be integrated in present Risk Management methodologies (e.g. COBIT) to provide a more precise Risk Mitigation activity. We substantiate the viability of this approach by showing that most of the input required by the tool is available as part of a standard business continuity plan, and/or by performing a common tool-assisted Risk Management

Interdependent security experiments

This paper analyzes the behavior of subjects in interdependent security experiments which exhibit strategic complementarity. In these experiments, subjects decide whether to pay to mitigate the risk of a loss, but the exact risk depends on the actions of other subjects. Two ranked equilibria exist, and the efficient equilibrium is for all agents to pay for the mitigation. Subjects in the interdependent security experiments rarely coordinate on the efficient equilibrium. Coordination is slightly more common in similar coordination games without the risk mitigation decision. The experiments also compare the effectiveness of two policies at inducing higher levels of mitigation.experiments, coordination game, risk mitigation, interdependent security

Earthquake vulnerability reduction program in Colombia : a probabilistic cost-benefit analysis

Cost-benefit analysis is a standard tool for determining the efficiency of planned projects. But one of the major difficulties in risk mitigation investments is that benefits are by nature uncertain. In this context, the standard approach relying on the average value of benefits may provide an incomplete picture of the efficiency of the risk mitigation project under consideration. This paper presents a probabilistic cost-benefit analysis relying on a catastrophe risk model. It produces risk metrics such as the exceedance probability curve of the benefit-cost ratio, thus providing the decisionmaker with a more complete risk analysis of the net benefits of the project. This is illustrated with the earthquake vulnerability reduction project in Colombia.Insurance&Risk Mitigation,Investment and Investment Climate,Banks&Banking Reform,Natural Disasters,Non Bank Financial Institutions

An integrated approach for evaluating the effectiveness of landslide risk reduction in unplanned communities in the Caribbean

Despite the recognition of the need for mitigation approaches to landslide risk in developing countries, the delivery of ‘on-the-ground’ measures is rarely undertaken. With respect to other ‘natural’ hazards it is widely reported that mitigation can pay. However, the lack of such an evidence-base in relation to landslides in developing countries hinders advocacy amongst decision makers for expenditure on ex-ante measures. This research addresses these limitations directly by developing and applying an integrated risk assessment and cost-benefit analysis of physical landslide mitigation measures implemented in an unplanned community in the Eastern Caribbean. In order to quantify the level of landslide risk reduction achieved, landslide hazard and vulnerability were modelled (before and after the intervention) and project costs, direct and indirect benefits were monetised. It is shown that the probability of landslide occurrence has been substantially reduced by implementing surface-water drainage measures, and that the benefits of the project outweigh the costs by a ratio of 2.7 to 1. This paper adds to the evidence base that ‘mitigation pays’ with respect to landslide risk in the most vulnerable communities – thus strengthening the argument for ex-ante measures. This integrated project evaluation methodology should be suitable for adoption as part of the community-based landslide mitigation project cycle, and it is hoped that this resource, and the results of this study, will stimulate further such programmes.Landslide modelling, Risk assessment, Cost Benefit Analysis, Developing countries, Community

Mission design considerations for nuclear risk mitigation

Strategies for the mitigation of the nuclear risk associated with two specific mission operations are discussed. These operations are the safe return of nuclear thermal propulsion reactors to earth orbit and the disposal of lunar/Mars spacecraft reactors

The incentive-compatible design of deposit insurance and bank failure resolution : concepts and country studies

Deposit insurance schemes and bank failure resolution systems are asked to fulfill conflicting public policy objectives: on the one hand, they are supposed to protect small depositors and prevent contagion risks from bank runs; on the other hand, they are supposed to minimize aggressive risk taking by banks. Beck discusses the incentive-compatible design and interaction of both components of the financial safety net and describes and compares three countries with different safety net arrangements-Brazil, Germany, and Russia.Banks&Banking Reform,Insurance&Risk Mitigation,Financial Intermediation,Financial Crisis Management&Restructuring,Payment Systems&Infrastructure,Financial Intermediation,Financial Crisis Management&Restructuring,Insurance&Risk Mitigation,Insurance Law,Banks&Banking Reform

Program-Related Investments: Social Investments

Outlines the rationale behind Casey's program-related investment to stimulate private investment in charter school facilities in Indianapolis. Describes the decision-making process and the issues considered, including fund management and risk mitigation

The Complementary Roles of Mitigation and Insurance in Managing Catastrophic Risks

This paper examines the impact that specific risk mitigation measures (RMMs) could have on reducing losses from hurricanes and earthquakes as well as improving the solvency position of insurers who provide coverage against these hazards. We first explore why relatively few individuals adopt cost-effective RMMs by reporting on the results of empirical studies and controlled laboratory studies. We then investigate the impact that an RMM has on both the expected losses and those from a worst case scenario in two model cities---Oakland (an earthquake-prone area) and Miami/Dade County (a hurricane-prone area) which were constructed respectively with the assistance of two modeling firms—Risk Management Solutions and Applied Insurance Research. The paper then explores three programs for forging a meaningful public-private sector partnership: well-enforced building codes, insurance premium reductions linked with long-term loans, and lower deductibles on insurance policies tied to mitigation. We conclude by briefly examining four issues for future research on linking mitigation with insurance: regulatory issues facing insurers, uncertainty issues in estimating risks, tradeoffs between reinsurance and mitigation and the impact of mitigation on capital market instruments.