Department of Accounting and Finance
Module Code(s): AC6105
Module Name(s): Managing Financial Institutions
Year: 2023-2024 (Jan. to Apr. 2024)
Continuous Assessment
Individual Report on a Real-World Risk Management Failure
Since 1990s, both financial and non -financial sectors has witnessed several risk management failures leading up to serious consequences and even corporate failures. As a case report, students are expected to discuss one incidence of risk management failure either for a financial or non -financial firm that you find interesting and had a significant impact on the market and stakeholders (equity holders / debtholders / regulators / depositors etc.). Overall, the incidence of risk management failure discussed / reported should have far-reaching consequences and a direct impact on the financial markets and market participants.
In the individual report, students must discuss the causes/circumstances that led to the incident, followed by the losses the firm and the stakeholder in the firm had to incur because of the risk management failure. Finally, you need to conclude with your understanding of the incident’s effect, and how (if possible) it could have been averted if checks and balances were implemented in time.
The report should not exceed 2000 words (+/ -10%). Report should at least include:
. Background of the firm
. Incidence of the risk management failure
. Outcome of the failure and its impact on different stakeholders in the firm
. Self-reflection / Personal take on the case discussed
Basic Guidelines: Irrespective of the topic that you choose, report should be supported with relevant graphs, financial data, examples, and references. It should not be more than 2,000 words (+/-10%), including all the contents i.e., text, figures / tables, references, footnotes, appendix, etc.
Submission Deadline: 9th April, 2023. 5pm. Refer to book of modules for penalties for late submission.
Mode of Submission: CANVAS (via Turnitin)
Plagiarism: Please note that UCC’s policy on plagiarism applies. Refer to the UCC plagiarism policyi and to the guidelines previously distributed on the acceptable Turnitin similarity scores.
Suggestions: Students can prepare their report on some notable risk management failures overtime:
. Big Losses by Financial Institutions
o Allied Irish Bank ($700 million) o Long Term Capital Management ($4 billion)
o Amaranth (6 billion) o Midland Bank ($500 million)
o Barings ($1 billion) o National Westminster Bank ($130 million)
o Enron’s counterparties (billions) o Société Générale ($7 billion)
o Kidder Peabody ($350 million) o UBS ($2.3 billion)
. Big Losses by Non -Financial Corporations
o Allied Lyons ($150 million)
o Gibsons Greetings ($20 million)
o Hammersmith and Fulham ($600 million)
o Metallgesellschaft ($1.8 billion)
o Orange County ($2 billion)
o Procter and Gamble ($90 million)
o Shell ($1 billion)
o Sumitomo ($2 billion)
o WeWork (>$2 billion)
o Theranos (>$9 billion)
