• Journal of the Korean Society of Safety
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• v.15 no.1
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• pp.161-166
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• 2000

Regulators often specify default values that are considered acceptable for use in risk analyses as input to regulatory decisions. Because both performing and validating a detailed risk analysis of a complex system are costly and time-consuming undertakings, the use of default values can greatly facilitate the process of performing a risk analysis in the first place as well as the process of reviewing and verifying the risk analysis. It may also ensure more uniform in quality of risk analyses. However, different regulatory agencies differ in their approaches to the use of default values, and the implications of these differences are not yet widely understood. Moreover, large heterogeneity among licensees makes it difficult to set suitable defaults. This paper focuses on the effect of default values on estimates of risk. Some insights on the effects of different levels of conservatism in setting defaults will be provided. The results can help decision makers evaluate the levels of safety likely to result from their regulatory policies.

• Nuclear Engineering and Technology
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• v.50 no.7
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• pp.1099-1105
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• 2018

How to choose defaults in risk-informed regulations depends on the conservatism implicated in regulatory defaults. Without a universal agreement on the approaches dealing with the conservatism of defaults, however, the desirability of conservatism in regulatory risk analyses has long been controversial. The opponent views it as needlessly costly and irrational, and the proponent as a form of protection against possible omissions or underestimation of risks. Moreover, the inherent ambiguity of risk makes it difficult to set suitable defaults in terms of risk. This paper, the extension of the previous work [1], focuses on the effects of different levels of conservatism implicated in regulatory defaults on the estimates of risk. According to the postulated behaviors of regulated parties and the diversity of interests of regulators, in particular, various measures for evaluating the effect of conservatism in defaults are developed and their properties are explored. In addition, a simple decision model for setting regulatory defaults is formulated, based on the understanding of the effect of conservatism implicated in them. It can help decision makers evaluate the levels of safety likely to result from their regulatory policies.

• The Journal of Asian Finance, Economics and Business
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• v.8 no.1
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• pp.665-673
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• 2021

Default has become an extreme concern in the current world due to the financial crisis. The previous prediction of companies' bankruptcy exhibits evidence of decision assistance for financial and regulatory bodies. Notwithstanding numerous advanced approaches, this area of study is not outmoded and requires additional research. The purpose of this research is to find the best classifier to detect a company's default risk and bankruptcy. This study used secondary data from the Pakistan Stock Exchange (PSX) and it is time-series data to examine the impact on the determinants. This research examined several different classifiers as per their competence to properly categorize default and non-default Pakistani companies listed on the PSX. Additionally, PSX has remained consistent for some years in terms of growth and has provided benefits to its stockholders. This paper utilizes machine learning techniques to predict financial distress in companies listed on the PSX. Our results indicate that most multi-stage mixture of classifiers provided noteworthy developments over the individual classifiers. This means that firms will have to work on the financial variables such as liquidity and profitability to not fall into the category of liquidation. Moreover, Adaptive Boosting (Adaboost) provides a significant boost in the performance of each classifier.

• The Journal of Asian Finance, Economics and Business
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• v.7 no.12
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• pp.211-222
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• 2020

This study examines simultaneous relationships between regulatory capital, risk, and cost-inefficiency for a sample of 30 commercial banks in Bangladesh from 2006 to 2018. To conduct the analysis, we used the Generalized Methods of Moments (GMM) in an unbalanced panel data framework. The empirical results show that there is a negative and significant relationship between capital regulation and credit, and overall risk. It is also evident from the results that the capital adequacy ratio is positively and significantly related to default risk and liquidity risk. Therefore, higher capitalized banks take an effort to prevent more credit risk and promote financial stability by reducing liquidity risk. Results also report that banks have been characterized as inefficient, less capitalized, and high risk. On the other hand, efficient banks are more stable but have a high level of liquidity risk. Besides, from the size of the bank, large banks are defined as having lower regulatory capital, are more risk seekers but stable with higher cost-efficiency. Notably, higher capitalized banks are more profitable and cost-efficient by reducing risk. Finally, this study also provides some insightful policy suggestions to the stakeholders.

• The Korean Journal of Applied Statistics
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• v.24 no.2
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• pp.253-268
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• 2011

In this paper, we estimate systematic risk from credit migration (or transition) matrices under "Asymptotic Single Risk Factor" model. We analyzed transition matrices issued by KR(Korea Ratings) and concluded that systematic risk implied on credit migration somewhat coincide with the real economic cycle. Especially, we found that systematic risk implied on credit migration is better than that implied on the default rate. We also emphasize how to conduct a stress test using systematic risk extracted from transition migration. We argue that the proposed method in this paper is better than the usual method that is only considered for the conditional probability of default(PD). We found that the expected loss critically increased when we explicitly consider the change of credit quality in a given portfolio, compared to the method considering only PD.

• Journal of the Korea Academia-Industrial cooperation Society
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• v.15 no.6
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• pp.3564-3570
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• 2014

This study assessed the validity of establishing and implementing a financial supervisory policy considering that Mutual finance's increase in deposits received raises the rate of loans in the process that the recent financial supervisory authorities applied various regulatory measures to mutual financial organizations. As a result of the analysis with a least squares regression model for the correlation between the rate of increase in the deposits received by Nonghyup Mutual Finance and the default rate of loans through the complete enumeration on the 1,161 the regional Nonghyup branches nationwide from 2005 to 2011, showed that there was no (+) correlation between them the financial supervisory authorities premised but a (-) relation. As Nonghyup is a mutual financial organization with the phenomenon that the application plan of increased deposits received is becoming diversified, the increase in deposits received helps reduce the procurement interest rate of funds, which provides a chance to apply the low interest of loans again, so they have positive effects on the overall loans. Financial Supervisory authorities should re-establish a direction of policy understanding the characteristics of Nonghyup's fund use and the detailed correlation between the rate of increase in deposits received and the default rate.

• THE INTERNATIONAL COMMERCE & LAW REVIEW
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• v.36
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• pp.47-84
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• 2007

The Uniform Customs and Practice for Documentary Credits ("UCP") may be treated as a useful laboratory for studying the scope and limitations of self regulation. This is due to its almost universal success on a global stage which provides it a perspective rarely available for self regulatory provisions and due to extensive experience of judicial review of it. In this sense, it is worthwhile to examine in brief the latest iteration of the UCP, Publication No. 600 ("UCP600"). This article describes and analyze some of core provisions of the UCP600 from the perspective of their adequacy as an exercise in self regulation. It is attempted first in view of several categories of private rulemaking; definitional rulemaking, default rules, procedural rules, and remedies. After that, it is examined second in view of sound rulemaking which is related to the relative role of law and practice. It points out rich and varied insights into the possibilities and problems associated with private rulemaking in connection with commercial transactions.

• Korean Journal of Food Science and Technology
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• v.37 no.3
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• pp.492-497
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• 2005

In establishing legal limits of pesticide residues, various default values are employed to compensate for unavoidable variability in data. Because permissible errors in residue analysis reach ${\pm}30-40%$ RSD, maximum residue limits (MRLs) follow geometric progression. According to 5-yr period JMPR reports, variability factor (ratio of highest to median values) in field residue trials was 3.8-fold in 486 crop-pesticide combinations and round-up effort from highest residue to MRL was 1.5-fold, whereas regulatory margin (ratio of MRL to highest residue) used in Korea was 4.8-fold in 822 crop-pesticide combinations; Korean MRLs will be set at higher levels as compared with Codex limits if these margins are employed. Validation studies to compare and harmonize Korean and Codex MRLs of pesticide residues on food crops should be undertaken.

• Proceedings of the KSEEG Conference
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• 2002.06a
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• pp.81-100
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• 2002

While most of regulatory communities in abroad recognize ' 'natural attenuation " to include degradation, dispersion, dilution, sorption (including precipitation and transformation), and volatilization as governing Processes, regulators prefer "degradation" because this mechanism destroys the contaminant of concern. Unfortunately, true degradation only applies to organic contaminants and short- lived radionuclides, and leaves most metals and long-lived radionuclides. The natural attenuation Processes may reduce the potential risk Posed by site contaminants in three ways: (i)contaminants could be converted to a less toxic form througy destructive processes such as biodegradation or abiotic transformations; (ii) potential exposure levels may be reduced by lowering concentrations (dilution and dispersion); and (iii) contaminant mobility and bioavailability may be reduced by sorption to geomedia. In this review, authors will focus will focul on "sorption" among the natural attenuation processes of hazardous inorganic contaminants including radionuclides. Note though that sorption and transformation processes of inorganic contaminants in the natural setting could be influenced by biotic activities but our discussion would limit only to geochemical reactions involved in the natural attenuation. All of the geochemical reactions have been studied in-depth by numerous researchers for many years to understand "retardation" process of contaminants in the geomedia. The most common approach for estimating retardation is the determination of distrubution coefficiendts ($K_{d}$) of contaminants using parametric or mechanistic models. As typocally used in fate and contaminant transport calculations such as predictive models of the natural attenuation, the $K_{d}$ is defined as the ratio of the contaminant concentration in the surrounding aqueous solution when the system is at equilibrium. Unfortunately, generic or default $K_{d}$ values can result in significant error when used to predict contaminant migration rate and to select a site remediation alternative. Thus, to input the best $K_{d}$ value in the contaminant transport model, it is essential that important geochemical processes affecting the transport should be identified and understood. Precipitation/dissolution and adsorption/desorption are considered the most important geochemical processes affecting the interaction of inorganic and radionuclide contaminants with geomedia at the near and far field, respectively. Most of contaminants to be discussed in this presentation are relatively immobile, i.e., have very high $K_{d}$ values under natural geochemical environments. Unfortunately, the obvious containment in a source area may not be good enough to qualify as monitored natural attenuation site unless owner demonstrate the efficacy if institutional controls that were put in place to protect potential receptors. In this view, natural attenuation as a remedial alternative for some of sites contaminated by hazardous-inorganic components is regulatory and public acceptance issues rather than scientific issue.

• Asian Journal of Atmospheric Environment
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• v.12 no.1
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• pp.1-16
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• 2018

Ground-level ozone ($O_3$) can be a menace for vegetation, especially in Asia where $O_3$ levels have been dramatically increased over the past decades. To ensure food security and maintain forest ecosystem services, such as nutrient cycling, carbon sequestration and functional diversity of soil biota, in the over-populated Asia, environmental standards are needed. To set proper standards, dose-response relationships should be established from which critical levels are derived. The predictor of the response in the dose-response relationship is an $O_3$ metric that indicates the dose level to which the plant has been exposed. This study aimed to review the relevant scientific literature and summarize the $O_3$ metrics used worldwide to provide insights for Asia. A variety of $O_3$ metrics have been used, for which we discuss their strengths and weaknesses. The most widely used metrics are based only on $O_3$ levels. Such metrics have been adopted by several regulatory agencies in the global. However, they are biologically irrelevant because they ignore the plant physiological capacity. Adopting AOT40 ($O_3$ mixing ratios Accumulated Over the Threshold of $40nmol\;mol^{-1}$) as the default index for setting critical levels in Asia would be a poor policy with severe consequences at national and Pan-Asian level. Asian studies should focus on flux-based $O_3$ metrics to provide relevant bases for developing proper standards. However, given the technical requirements in calculating flux-based $O_3$ metrics, which can be an important limitation in developing countries, no-threshold cumulative exposure indices like AOT0 should always accompany flux-based indices.