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This book introduces empirical methods for analyzing energy markets. Even beginners in econometrics and mathematical finance must be able to learn how to utilize these methodologies and how to interpret the analysis results. This book provides some example analyses of the North American, European, and Asian energy markets. The reader will experience some theories and practices of energy trading and risk management. This book reveals the characteristics of energy markets using quantitative analyses. Examples include unit root, cointegration, long-term equilibrium, stochastic arbitrage simulation, multivariate generalized autoregressive conditional heteroscedasticity (GARCH) models, exponential GARCH (EGARCH) models, optimal hedge ratio, copula, value-at-risk (VaR), expected shortfall, vector autoregressive (VAR) models, vector moving average (VMA) models, connectedness, and frequency decomposition. This book is suitable for people interested in the empirical study of energy markets and energy trade.

Central bank risk management has pervasive impact on financial markets. Bonds issued by controversial firms such as Shell and Ryanair are currently accepted as sufficiently safe collateral by many central banks, while in the past years EU Member States struggled to keep, and sometimes lost, that coveted status. Within their mandates, central banks often have considerable discretion over which assets get the benefit of eligibility in their operations and which risks they are willing to take. How central banks deal with financial risk is increasingly scrutinized for its impact on financial stability, environmental sustainability and public finances. How do central bankers identify, monitor and mitigate financial risk? What ideas and norms govern decision-making, in particular when interests clash? How are internal disagreements resolved? Focusing on the European Central Bank, the dissertation answers these questions by studying how central banks deal with the politics of risk management. Building on a wealth of documents from central bank archives and background interviews, the dissertation traces the evolution of ECB risk management through three periods: (i) The European Monetary Institute (1994-98), where after initially heated discussion, collateral expert taskforces fail to agree one collateral framework for the ECB and each central bank makes its own rules. (ii) In the mid-2000s, the ECB resolves its earlier disagreements by introducing sophisticated risk-modelling techniques into the heart of the collateral framework, resulting in a strict minimum credit rating requirement (iii) From 2007 onwards the ECB confronts consecutive crises but decision-making remains shaped by pre-crisis risk management practices.

Repairs and maintenance of energy assets can be carried out in a variety of ways, which are usually based on indicators of reliability and efficiency. Due to the transition to a digital energy paradigm and implementation of intelligent diagnostic tools for technical condition of the equipment, it is advisable to carry out asset management with additional tools to consider operational and economic risks, as well as to predict the integrated efficiency of energy objects. This paper presents an overview of progressive strategies for energy asset management currently used in global practice. The analysis of approaches to asset management developed by one of the largest Russian generating and grid utilities is carried out. The authors developed several methodological recommendations for the identification of priority objects for technical maintenance and repair, ranked based on the type of equipment, risk of failure, predictiveness of defects, the undersupply of energy in emergency situations, types and cost of remediation and reputation losses of the energy business. Proposals for energy companies to implement a risk-based assets management strategy in units operating energy facilities are formulated. © 2020 WIT Press. ; The work was supported by Act 211 of Government of the Russian Federation, contract No. 02.A03.21.0006.

Under the conditions of macroeconomic instability and the difficulty of forecasting trends in the market development, a competitive recovery of the electric power business is possible only by attracting large capital investment. Mergers and acquisitions deals that make it possible to concentrate assets and to amalgamate the industry business are done through the leveraged buy-out (LBO) scheme. However, LBO deals are associated not only with the investor's risks, but also with the risks of the acquirers and vendors. The article presents the authors' model of risks formalization of LBO deals. It allows for consolidating the blocks of key project and financial indicators, parameters of a specific risk, and macroeconomic and sectoral factors. The developed model yields an indicative assessment of the degree of risk of LBO deals taking into account the industry specifics. A mechanism for determining the position of the creditor in the framework of LBO is proposed as a practical application of this model. The results of the study can be used by the management of energy companies, investors and analysts in making financial decisions. © 2018 WIT Press. ; The work was supported by act 211 of the government of the Russian federation, contract no 02.a03.21.0006.