Sending the Herd Off the Cliff Edge: The Disturbing Interaction Between Herding and Market‐Sensitive Risk Management Practices

By A. Persaud. 2000

190 citations recorded by the source corpus.

Subfields: Economics and Econometrics, Sociology and Political Science

View Paper: https://www.semanticscholar.org/paper/3e8675fcb9bcc45a1133f6121bf8290a49197d71

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Citations in the corpus

The effects of a “black swan” event (COVID-19) on herding behavior in cryptocurrency markets (2021, unknown): “Early studies by Morris and Shin (1999), Persaud (2000), and Shiller (1990), to name but a few, find that herding and institutional risk management strategies may amplify volatility in financial markets.”
The impact of risk regulation on price dynamics (2004, background): “Blum (1999), Basak and Shapiro (2001), Dańıelsson (2002), Dańıelsson and Zigrand (2001), Morris and Shin (1999), Crockett (2000), and Persaud (2000) are some recent comments that express unease about the current practice.”
A cross-country analysis of herd behavior in Europe (2014, background): “Scholars stress that herd behavior by market participants aggravates market volatility and leads to market instability (see Shiller, 1990; Eichengreen et al., 1998; Folkerts-Landau and Garber, 1999; Furman and Stiglitz, 1998; Morris and Shin, 1999; and Persaud, 2000) 2 .”
The New Political Economy of the Macroprudential Ideational Shift (2013, unknown): “This in turn meant that many banks tended to hit their VaR determined risk limits simultaneously and therefore had to sell the same assets at the same time resulting in financial herding and plummeting asset prices further accentuating procyclicality (Persaud 2000).”
Distinctions, affiliations, and professional knowledge in financial reform expert groups (2014, background): “The crisis event generated the demand for the expert groups from various authorities, and those selected to chair the groups were drawn from established leaders in the area of financial governance, as well as those with policy ideas clearly worked out prior to the 2007 crisis (Persaud 2000).”
Capital Market Liberalization and Development (2008, background): “Market-sensitive risk management practices (Persaud 2000), evaluation of investment funds (and managers’ bonuses) by short-term criteria, benchmarking against indices, bank regulations requiring less capital for purposes of capital adequacy standards for short-term debt,12 the behavior of credit-rat”
Capital-Account and Counter-Cyclical Prudential Regulations in Developing Countries (2003, background): “Whereas this second type of risk can be reduced by adequate regulation aimed at improving microeconomic risk management, the first cannot, and indeed, in the face of systematic risks, the use of common risk management techniques can actually result in greater macroeconomic volatility (Persaud 2000).”
Herd Behavior in Financial Markets (2000, background): “First, the actions (and the 1See, for example, Morris and Shin (1999), Persaud (2000) and Shiller (1990) for an analysis of how the interaction of herding and institutional risk management strategies may amplify volatility; Eichengreen and others (1998) for the role hedge funds may have played in…”