Freshwater is an inimitable natural source with fascinating qualities. Worldwide availability of clean water is deficient as its demand has increased three folds since 1950s mainly in countries of African, Middle Eastern and South Asian regions (Gleick, 2003). Amongst major water consuming segments, agriculture ranks at the top, sharing for nearly 85% of worldwide utilization (Jury and Vaux, 2007). Several millions people are likely to face challenge of severe water scarcity associated with global warming in future. Around 92% total land in Pakistan constitutes arid or semi arid areas where the availability of water is naturally insufficient. Pakistan has not been blessed with ample water resources to meet the irrigation requirements of agricultural lands (Tahir et al., 2011). About 27% of the total geographic area is under cultivation in Pakistan. In Punjab, total area under crop production is 57% of total cultivated area (Rehman et al., 2013). Vegetables are annually grown on an area of 253,800 hectares in Pakistan (Perveen et al., 2010). There are several contributing factors leading to water shortage in Pakistan including poor distribution systems of irrigation, salty ground water, rapid population growth and frequent drought conditions. This situation has lead to the application of untreated city waste water for irrigating agricultural lands which has now become a common and prevalent practice in Pakistan (Khalil and Kakar, 2011) especially in peri-urban areas and in many other developing countries of the world (Ensink et al., 2004a; Sharma et al., 2007; Nagajyothi et al., 2009; Nath et al., 2009).
Languages are considered God-gifted and human being is far superior in linguistic skills as compared to other creatures. Language is associated with the civilization and demise of a language leads to death of that civilization. The words and phrases of a language are the outcome of specific epistemological environment of a civilization and cannot be used in the same mining in any other language.
During the times of financial crisis, losses tend to spread across financial institutions, threatening the overall stability of the financial system. The spreading of financial distress to various financial institutions gives birth to systemic risk. The intermediary role of the financial system is damaged, with adverse consequences for the supply of credit to the real economy. Therefore, the management of systemic risk becomes an important goal for the whole society. However, financial institutions do not contribute equally to the generation of systemic risk. Therefore, the main aim of this thesis is to assess separately how financial sectors and individual financial institutions inject systemic risk into the respective financial systems of Pakistan and BRICS during times of distress. During the last couple of decades, concentrations and control of global markets have been changed on a massive scale. Countries now are more focusing on regional and economic co-operations to achieve higher value-added production, to face regional challenges, and to cater to the monopolistic power of developed countries firms. BRICS is one of such economic cooperation. The establishment of China Pakistan Economic Corridor (CPEC) and increasing collaboration with Russia make Pakistan a potential candidate to enter this alliance. The more regional cooperation between these member countries calls for a major investigation about the spillover effect of systemically important financial sectors and institutions of BRICS and Pakistan. It is equally important to investigate the determinants of systemic risk in an economy. Delta Conditional Value at Risk (∆CoVaR) is one of the pioneer measures of assessing the systemic risk of financial institutions proposed by Brunnermeier (2016). It is based on another important financial risk measure named as Value at Risk (VaR). The panel regressions analysis is used to inspect the important determinants of the systemic risk within an economy. The results reveal that the banking sector is the highest contributor of systemic risk. The second high contributor to systemic risk is the insurance sector. The financial services sector contributes least in the generation of systemic risk of BRICS and Pakistan. Furthermore, the study also ranks top most systemically important financial institutions as well. The financial characteristics employed in the study include the size of the financial institution, the loan ratio, the leverage ratio, the tier1 ratio, and other financial characteristics. However, the findings reveal that the size of the financial institutions, the tier1 ratio, the market to book value ratio, and the operating profit margin ratio are significantly related to the systemic risk. Further, empirical analysis is carried out on 334 financial institutions of Pakistan and BRICS for the time period starting from January 2000 till December 2015. The data related to the closing prices and financial statements are taken from the Thomson Reuters Financial DataStream. The state variables data are obtained from World Development Indicators (WDI). The results have direct implications for the regulators and policymakers. Regulations that attempts to diminish the systemic risk in the financial system may take into account both systemic risk and individual risk faced by financial institutions and sectors. Furthermore, the regulatory framework might consider significant determinants while devising new strategies for financial institutions. This investigation may help to identify the most vulnerable financial institutions as well as financial characteristics helpful in reducing the systemic risk within an economy.