The Evolution of Financial Risk Management
Cantürk Kayahana,*, Tolga Muratb
aAfyon Kocatepe University, Department of Business Administration, Turkey
bAfyon Kocatepe University, Department of Business Administration PhD Student, Turkey
|A B S T R A C T||A R T I C L E I N F O|
|Purpose: This paper aims to track the history of financial risk management and how this progress affected the evolution of financial risk management. In the first part of this paper, we will look at how risk is defined, the concept of risk management, and the transaction from risk philosophy to the risk culture. The second part examines the evolution of risk management and different models used in financial risk measurements, such as variance, covariance, standard deviation, and value at risk models. In the third part, the Bretton Woods system, its effects on the global financial system, and after the Bretton Woods system is studied. In the final cut, we conclude and present our recommendations for future studies.
Methodology: This theoretical research will focus on the historical evolution of financial risk management and the financial tools used while measuring risk. The finance field has evolved with crises, technological developments, and globalization. While the finance field has been growing, how financial risks are defined, managed, and measured has also changed. In addition to these changes, the finance field was introduced with a new area called “blockchain” and new investment instruments called cryptocurrencies.
Practical Implications: This theoretical research investigates the evolution of financial risk management from a historical perspective and argues that the current financial risk management tools are insufficient to project today’s risks fully.
|Keywords: Financial risk, financial risk management, financial risk management tools
Cite Article (APA): Kayahan, C and Murat, T.(2022). The Evolution of Financial Risk Management. The Journal of Corporate Governance, Insurance, and Risk Management (JCGIRM).2022, Volume 9, Series 1, Pages 155-168.