Jani Sainio

  1. A Loan Portfolio Model Subject to Random Liabilities and Systemic Jump Risk.

    Authors: Luis H. R. Alvarez, Jani Sainio
    Subjects: Risk Management
    Abstract

    We extend the Vasi\v{c}ek loan portfolio model to a setting where liabilities
    fluctuate randomly and asset values may be subject to systemic jump risk. We
    derive the probability distribution of the percentage loss of a uniform
    portfolio and analyze its properties. We find that the impact of liability risk
    is ambiguous and depends on the correlation between the continuous aggregate
    factor and the asset-liability ratio as well as on the default intensity.

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