Corporation and Risk transmission: Difference between pages

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imported>Doug Williamson
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Corporations are "artificial persons, who may maintain a perpetual succession, and enjoy a kind of legal immortality....", “are such as are created and devised by human laws for the purposes of society and government.” <ref>William Blackstone, Commentaries, Vol. 1, Chapter XVIII and Chapter 1, 1755/56, available for example at http://oll.libertyfund.org/title/2140</ref>
''Risk - systemic risk.''


In general, a corporation is a legal entity with separate existence from those making it up. It may be constituted by one person ("corporation sole") or by a group of people ("corporation aggregate"). Today, most corporations have perpetual succession irrespective of a person or persons ceasing involvement (including by death) though corporations may have a limited life specified in their instrument of creation. By way of contrast, an unincorporated club or a simple partnership, for example, have no separate legal existence apart from that of their members or partners.
Risk transmission is the spread of risk from one sector to another, or within a sector.


Corporations may exist in common law or under a State's constitution or be established by Charter issued under Royal prerogative or by decree or equivalent, under a statute for the purpose or by registration under powers given by statute.


In some jurisdictions some corporations sole are seen as corporations aggregate, looking at successive holders of the office over time as a group. In common law monarchies, the Crown is normally treated as a corporation sole. A single person may hold several offices as corporation sole. For example, Elizabeth Alexandra Mary Windsor is Elizabeth II, Queen of the United Kingdom, constitutes the Crown in Great Britain and Northern Ireland and, as a separate corporation, constitutes HM The Queen in Right of New South Wales.
:<span style="color:#4B0082">'''''Credit risk transmission during crisis events'''''</span>


Frequently, but not always, corporations are established for the purposes of undertaking particular activities. Examples of activities would be conduct of a State, municipality (e.g. Mayor of London, England) or other local or regional government activities, ecclesiastical activities (e.g. (Roman Catholic) Archbishop of Baltimore, USA) or a business (e.g. The Hershey Company, a US corporation that makes and sells chocolate and other foods).  
:"... we model a high-dimensional network of European CDS [Credit Default Swap] spreads to assess the transmission of credit risk to the non-financial corporate sector.  


In UK and most Commonwealth English, a corporation formed for the purposes of carrying a business is commonly known as a "company". In US English "corporation" is usually used for this meaning and "company" can take the wider meaning. US firms may, however, refer to themselves using the word "company". An example of this is the Wm. Wrigley Jr. Company, the chewing gum manufacturer merged into Mars Incorporated (another US food manufacturer) in 2008.  
:Our findings suggest a sectoral clustering in the CDS network, where financial institutions are located in the center and non-financial as well as sovereign CDS are grouped around the financial center.  


For more discussion of business corporations (companies) see [[Company]].
:The network has a geographical component reflected in differences in the magnitude and direction of real-sector risk transmission across European countries.  


:While risk transmission to the non-financial sector increases during crisis events, risk transmission within the non-financial sector remains largely unchanged."


==See also==
:''Analyzing credit risk transmission to the non-financial sector in Europe: a network approach - European Systemic Risk Board - Working Paper 78, July 2018.''
* [[Articles of incorporation]]
* [[Company]]
* [[Multinational corporation/company]]




==References==
==See also==
 
*[[Contagion]]
<references/>
*[[Credit default swap]]
*[[Credit risk]]
*[[European Systemic Risk Board]]
*[[Sovereign]]
*[[Systemic risk]]


[[Category:The_business_context]]
[[Category:The_business_context]]
[[Category:Compliance_and_audit]]
[[Category:Identify_and_assess_risks]]
[[Category:Manage_risks]]
[[Category:Risk_frameworks]]
[[Category:Risk_reporting]]
[[Category:Financial_products_and_markets]]

Revision as of 02:37, 16 November 2021

Risk - systemic risk.

Risk transmission is the spread of risk from one sector to another, or within a sector.


Credit risk transmission during crisis events
"... we model a high-dimensional network of European CDS [Credit Default Swap] spreads to assess the transmission of credit risk to the non-financial corporate sector.
Our findings suggest a sectoral clustering in the CDS network, where financial institutions are located in the center and non-financial as well as sovereign CDS are grouped around the financial center.
The network has a geographical component reflected in differences in the magnitude and direction of real-sector risk transmission across European countries.
While risk transmission to the non-financial sector increases during crisis events, risk transmission within the non-financial sector remains largely unchanged."
Analyzing credit risk transmission to the non-financial sector in Europe: a network approach - European Systemic Risk Board - Working Paper 78, July 2018.


See also

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