Reputation Risk: Measured

Reputation Risk: Measured

Peter Mitic

Santander UK, 2 Triton Square, Regent’s Place, London

Page: 
171-180
|
DOI: 
https://doi.org/10.2495/SAFE-V8-N1-171-180
Received: 
N/A
|
Accepted: 
N/A
|
Published: 
January 01 2018
| Citation

OPEN ACCESS

Abstract: 

Two principal results for reputation risk are established. First, reputation risk can be measured in terms of a single index, arising from a data mining process directed at the opinions in a complex multi-agent network. Second, the results of the measurement process, gathered over an extended period, can be expressed directly in monetary terms by finding a correlation between the daily changes in the index and in sales. Stressed periods are modelled by calculating value-at-risk using a ‘loss-distribution/ scenario’ approach, as for operational risk capital. The short-term effect of reputation risk events on sales and profits can be significant in absolute terms, but is small as a percentage of total sales. Negative reputation has a more significant impact than positive reputation.

Keywords: 

reputation, reputation risk, alva, sentiment analysis, correlation, Loss Distribution, Scenarios, stressed

1. Introduction
2. Reputation Measurement
3. Reputation, Sales and Profit
4. Results
5. Discussion and Summary
  References

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