In such cases, however, institutions conducting specialized or local business must understand the inherent risks, such as potential risk concentrations. Compensation As many of you know, as an economist I am particularly interested in the impact that compensation has on incentives for bank management.
It is believed these difficulties are attributable to various factors; three of which I will explain now. 3  Difficulties in Utilization of Market Data Practical hurdles are one of the factors that make it difficult for traditional theory to be fully adopted. In relation to asset prices, there often are constraints in utilizing data in practice.