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The UK monetary and financial system: An introduction
394
BOOK
REVIEWS
J. Gilbody THE UK MONETARY AND FINANCIAL SYSTEM: AN INTRODUCTION Routledge (London, 1988). 294 pp. Al2.95 (pbk); L35.00 (hbk) This text is a welcome addition to the range of books currently available on the UK financial system. The contents are divided into four main sections: Introduction; an overview of the monetary and financial systems; institutions and markets; and monetary policy. The introduction provides an interesting examination of the nature of a monetary economy, along with a useful appendix classifying financial claims. Section two deals with the well-trodden area of credit creation, money circulation and the role of financial intermediaries and markets. Section three will probably be of most use to banking and finance students. Here, the author provides a thoughtful and accurate analysis of the various financial institutions and markets that are important in the UK system. In particular, the chapters on retail and wholesale banking are clearly presented and are also a most enjoyable read. The chapter on investing institutions also provides a systematic analysis of pension fund, insurance company and investment firms’ activities. Overall, I would highly recommend this text for students undertaking fn-styear undergraduate studies in banking and finance, especially if they wish to understand the institutional details of the UK financial system. This book would also provide a useful support for introductory monetary ecanomics and professional banking courses. PHILIP
MOLYNEUX UCN W Bangor
V. L. Grose MANAGING
RISK:
SYSTEMATIC Loss PREVENTION
Prentice Hall (Englewood
FOR EXECUTIVES
Cliffs, NJ, 1987). 404 pp. A42.75 (hbk)
Risk measurement is a familiar component of capital investment appraisal, but readers anticipating that this subject will be developed in this book will be disappointed. There is only an oblique reference to capital budgeting and the term beta never occurs. The sub-title ‘Systematic Loss Prevention for Executives’ is a more appropriate description. V. L. Grose, a physicist by background, was a member of the American Transportation Safety Board and offers a book concerned with risk in a broad industrial context. Particular emphasis is placed upon the identifying of risks, their comparative importance and minimising the effect upon the organisation. The author dismisses attempts to use mathematical models to quantify risk suggesting that although models exist such as Weibull, Log Normal and Gaussian, they are only crude representations of reality. The ‘Hazard Totem Pole’ is presented as a method of classifying risk which is quantitative without the use of numbers. As a comment upon this apparent contradiction, Grose acknowledges that differentiating one risk from another is a subjective matter in any case. The Hazard Totem Pole is an ingenious pictorial graphing of risks (on a ranking determined by a group of Managers from the organisation), in terms of the
BOOK
REVIEWS
J. Gilbody THE UK MONETARY AND FINANCIAL SYSTEM: AN INTRODUCTION Routledge (London, 1988). 294 pp. Al2.95 (pbk); L35.00 (hbk) This text is a welcome addition to the range of books currently available on the UK financial system. The contents are divided into four main sections: Introduction; an overview of the monetary and financial systems; institutions and markets; and monetary policy. The introduction provides an interesting examination of the nature of a monetary economy, along with a useful appendix classifying financial claims. Section two deals with the well-trodden area of credit creation, money circulation and the role of financial intermediaries and markets. Section three will probably be of most use to banking and finance students. Here, the author provides a thoughtful and accurate analysis of the various financial institutions and markets that are important in the UK system. In particular, the chapters on retail and wholesale banking are clearly presented and are also a most enjoyable read. The chapter on investing institutions also provides a systematic analysis of pension fund, insurance company and investment firms’ activities. Overall, I would highly recommend this text for students undertaking fn-styear undergraduate studies in banking and finance, especially if they wish to understand the institutional details of the UK financial system. This book would also provide a useful support for introductory monetary ecanomics and professional banking courses. PHILIP
MOLYNEUX UCN W Bangor
V. L. Grose MANAGING
RISK:
SYSTEMATIC Loss PREVENTION
Prentice Hall (Englewood
FOR EXECUTIVES
Cliffs, NJ, 1987). 404 pp. A42.75 (hbk)
Risk measurement is a familiar component of capital investment appraisal, but readers anticipating that this subject will be developed in this book will be disappointed. There is only an oblique reference to capital budgeting and the term beta never occurs. The sub-title ‘Systematic Loss Prevention for Executives’ is a more appropriate description. V. L. Grose, a physicist by background, was a member of the American Transportation Safety Board and offers a book concerned with risk in a broad industrial context. Particular emphasis is placed upon the identifying of risks, their comparative importance and minimising the effect upon the organisation. The author dismisses attempts to use mathematical models to quantify risk suggesting that although models exist such as Weibull, Log Normal and Gaussian, they are only crude representations of reality. The ‘Hazard Totem Pole’ is presented as a method of classifying risk which is quantitative without the use of numbers. As a comment upon this apparent contradiction, Grose acknowledges that differentiating one risk from another is a subjective matter in any case. The Hazard Totem Pole is an ingenious pictorial graphing of risks (on a ranking determined by a group of Managers from the organisation), in terms of the