Spread of financial crises from the perspective of risk management by financial institutions

Only abstract. Paper copies of master’s theses are listed in the Helka database (http://www.helsinki.fi/helka). Electronic copies of master’s theses are either available as open access or only on thesis terminals in the Helsinki University Library.Vain tiivistelmä. Sidottujen gradujen saatavuuden voit tarkistaa Helka-tietokannasta (http://www.helsinki.fi/helka). Digitaaliset gradut voivat olla luettavissa avoimesti verkossa tai rajoitetusti kirjaston opinnäytekioskeilla.Endast sammandrag. Inbundna avhandlingar kan sökas i Helka-databasen (http://www.helsinki.fi/helka). Elektroniska kopior av avhandlingar finns antingen öppet på nätet eller endast tillgängliga i bibliotekets avhandlingsterminaler.This study examines how propagation mechanisms for financial crises may emerge as an externality of financial institutions’ management of their assets and liabilities. Inherent to these activities is the incentive to control for the associated risks. It follows that institutions are exposed to one another’s economic fundamentals through various capital markets. Consequently, risk control activities may contribute to the formation of contagious channels. Through these, the effects of a local crisis can spill over to other regions. This implicit externality to some of the measures of risk management thereby necessitates a reassessment of their appeal. Among the constitutive principles of asset management is diversification of investment portfolios. Financial institutions limit their exposure to any particular risky prospect by holding multiple positions simultaneously. As long as the correlation between these is imperfect, the variability of portfolio returns is reduced. The average return to asset holdings remains the same. On the other hand, diversification increases inter-institutional connections in capital markets. A local crisis, by reducing returns to one position, may induce a risk-averse investor to liquidate other positions in her portfolio. Financial institutions of unrelated characteristics may thereby become exposed to one another through the medium of common third party investors. Financial institutions also undertake measures of liquidity management. The need for these stems from a maturity mismatch between their assets and liabilities. For instance, an unexpected local liquidity shock may necessitate a costly liquidation of some long positions. In particular, such risks are faced by commercial banks with many liabilities of uncertain maturity. Therefore, they typically pool the risk by participating in interbank loans markets. Banks with surplus liquidity provide credit for those unable to meet their short term liabilities. However, each interbank loan embodies a credit risk. A bank that becomes insolvent may default on its debt. The balance sheets of exposed creditors consequently deteriorate. This makes them more vulnerable to a crisis. The analysis is characterized by the theory of global games. In a framework of imperfect information, crises are viewed as a result of coordination failure among economic agents. Contagion emerges as an endogenous property of the framework, highlighting the externalities of the described risk management activities. Also, the likelihood of each outcome to agents’ coordination game is unique. The effect of contagion to the probability of a crisis can therefore be isolated from other factors. Given the contribution of portfolio diversification and interbank loans to emergence of contagion, this makes their reassessment possible. The most central sources in this investigation are Dasgupta (2004) and Goldstein and Pauzner (2004)

Avoimen lähdekoodin projektinhallintajärjestelmät

Opinnäytetyön tarkoituksena oli tutkia avoimen lähdekoodin projektinhallintajärjestelmiä sekä vertailla niitä. Tavoitteena oli löytää sopiva järjestelmä toimeksiantajan omaan käyttötarpeeseen. Järjestelmä tuli toteuttaa PHP- ja MySQL-ympäristössä. Opinnäytetyössä perehdyttiin yleisesti avoimeen lähdekoodiin sekä tärkeimpiin avoimen lähdekoodin lisensseihin. Lisäksi selvitettiin, mitkä ovat projektinhallintajärjestelmien tärkeimpiä ominaisuuksia, käytettävyyden periaatteita ja web-sovellusten kriittisimpia tietoturvariskejä. Opinäytetyössä vertailtiin ja arvioitiin kolmea eri avoimen lähdekoodin projektinhallintajärjestelmää, jotka olivat Collabtive, ProjectPier sekä Open Atrium. Vertailussa jokainen järjestelmä ja sen ominaisuudet käytiin yksitellen läpi. Järjestelmissä vertailtiin yleisiä ja projektinhallinnallisia ominaisuuksia sekä käytettävyyttä. Vertailutulosten perusteella valittiin Molentum Marketingille parhaiten soveltuva projektinhallintatyökalu. Vertailun parhaan tuloksen sai Collabtive, joka oli vertailtavista järjestelmistä ehjin kokonaisuus, vaikka sen arviointipistemäärä jäikin tyydyttävälle tasolle.The aim of this Bachelor’s Thesis was to study Open Source project management tools and compare different tools. The main goal was to find an appropriate project management tool for Molentum Marketing’s use. The chosen project management tool had to be based on PHP and use MySQL database. This Bachelor’s Thesis deals with Open Source and its most important licenses. Furthermore, the most important features of project management tools, principles of usability and the most critical security risks of web applications were examined. The three project management tools that were compared were Collabtive, ProjectPier and Open Atrium. In the comparison every project management tool and its features were examined one by one. The general and project management features as well as usability were compared. On account of the comparison and its results the most appropriate project management tool for Molentum Marketing was chosen. The winner of the comparison was Collabtive, which was the most complete unity, even though its evaluation score was only satisfactory