Risk averse and Single legal account pooling: Difference between pages

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imported>Doug Williamson
(Add second definition.)
 
imported>Doug Williamson
(Linked to The Treasurers Handbook - Legal implications of cash pooling structures)
 
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1.  
A cash management technique based around a single legal master account structure in the name of the parent or group financing company where the other participant accounts act as memo accounts of that legal account.


Strictly, to be 'risk averse' means to prefer a lower level of risk, for any given level of expected return or expected cost.
This cash management technique is widely used in Northern Europe (Nordic and Baltic countries).
 
Therefore, for example, risk averse investors will always require a higher expected rate of return to compensate for any higher levels of risk which they accept.
 
The assumption that market participants are rational and risk averse is one of the underpinnings of the efficient market hypothesis.
 
 
2.
 
The term 'risk averse' is also used more loosely, to refer to a low risk appetite.


Also known as Balance netting.




== See also ==
== See also ==
*[[Adverse]]
* [[Cash management]]
*[[Conservative]]
* [[CertICM]]
*[[Efficient market hypothesis]]
* [[Pooling]]
*[[Guide to risk management]]
* [[Legal implications of cash pooling structures]]
*[[Prudence]]
*[[Rational]]
*[[Risk]]
*[[Risk appetite]]
 
[[Category:Corporate_finance]]
[[Category:Risk_frameworks]]

Revision as of 11:11, 1 December 2014

A cash management technique based around a single legal master account structure in the name of the parent or group financing company where the other participant accounts act as memo accounts of that legal account.

This cash management technique is widely used in Northern Europe (Nordic and Baltic countries).

Also known as Balance netting.


See also

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