US Domestic Banking Research Paper

St. John’s University

FIN3315/ Prof. Meiselas

Fall 2018

Research project

Overview

During your future career, it is likely that you will be asked to study an issue(s) and make a business decision and/or recommendation to senior executives, or lenders, or investors. People who offer good advice are remembered and tend to be promoted whereas those who cannot provide successful ideas are likely to overlooked.

I believe that you are more likely to offer a successful decision or recommendation if you conduct an objective qualitative assessment before offering your thoughts. Objective assessments should be based on effective research. This small project can help you apply this skill to impress your future employer.

This project has two objectives: 1) to enable each student to expand their knowledge of banking and financial services through research and analysis; and 2) to practice creating reasonable conclusions about banking and financial markets based on reliable data. You may select your own assignment question and topic (though I must approve it) and conduct your own research to reach a well-founded conclusion.

Select your topic by creating a question that you will answer

As you probably know, banking issues and questions have dominated the financial news during the last ten years. Many of these issues have been sweeping in nature (bank failures, too big to fail banks, adjustments in the levels of regulation).

Rather than giving you a project that you must carry out, I would like you to create specific research question that your research will answer. You should select a topic that is important to US domestic financial services (preferably banks). Often, being able to describe a problem is the first step towards resolving it. Therefore, defining a meaningful research question can be the most difficult aspect of this exercise.

Important: Before you finalize your topic and begin your work, I would like you to discuss your topic and your research question before you proceed with your research

Here are sample questions that students answered in the past (you may not use these specific questions.

· JP Morgan encountered problems in managing credit default swaps during 2012. Some observers believe that these problems revealed internal control problems that financial managers should keep in mind. Do you believe that there were internal control problems or were the losses merely a result of poor securities trading?

· Why did the US government bail-out Bear Stearns by selling it to JPM but it did not help Lehman Bros?

· Has the securities industry succeeded in transferring credit and interest rate derivatives from principal transactions to exchange-based transactions as intended in the Dodd-Frank act?

· Are financial derivatives adequately disclosed in the bank’s financial statements.

· What were the problems that led to Wells Fargo bank’s failure to detect and stop the creation of fraudulent bank accounts and credit cards?

The question that you select to answer should be thought-provoking. If you have a strong opinion about an issue but you cannot find enough research to assess it objectively, you should pick another topic. Using our library may be a good source of reliable information rather than just picking information from little-know writers.

In some cases, there may be no clear answer to the question, but I still seek your conclusion and your supporting rationale. Please be careful to avoid selecting a topic that you have a strong bias about and disregard any research that has an underlying political agenda.

Organization of your paper

As above, your research should be directed towards answering the specific question that you have chosen. Do not give me a book report or tell me a story. Your work must explain the pertinent issues surrounding your research question and create a well-founded and objective assessment of the potential answers to your research question (be sure to address both pro’s and con’s). Last, please provide your conclusions to your question.

Your report must include the following:

1. Cover sheet

2. A brief abstract (synopsis) at the beginning of your report

3. A table of contents

4. Statement of your question, including an explanation of the importance of the question.

5. A discussion of the pertinent issues, concerns, and environment surrounding the question (background and the facts) that is based on your research

6. Synopsis of expert proposals to answer to the question (if any)

7. Your research conclusion and justification.

8. Reference list

References

Unfortunately, many Americans have reached conclusions about banks and the financial industry based on fallacious and limited facts. Governmental and public concerns about the stability and morality of the banking industry during the Great Recession of 2008 led to a sea of errors, political infighting, and hyperbole. Many issues, such as the examples that I provided above, cannot be accurately assessed based on inexpert sources of research. Please avoid relying tabloid newspapers, political or biased sources, editorials, unreliable websites (just because it’s on the web doesn’t make it accurate), etc.).

Your research sources must be based on information disclosed by reliable experts in the financial industry. Please restrict your research to well-respected business newspapers or journals, analyses by expert analysts, regulators, academics, and peer-reviewed journals. You may select views from the web but be certain that the writer is an EXPERT in the subject matter (ie. look up the author’s background before buying into her views). The SJU library is an outstanding source of expert assessments of most topical issues. FYI, you have access to the SJU library on mystjohns.

Each statement of fact in your paper must be cited to your reference list. In the real world, few managers want your cites but you should know where you got the information if your facts are challenged. If you are challenged, you want the best references possible to back you up. You may use any of the common citing methods (though I prefer American Psychology Association method) to cite information and facts in your report. Please do not provide your opinions, conclusions, or uncited statements in sections 5 and 6 of the report (as above). Your conclusions in section 7 or your reported MUST be derived from the facts that you described in sections 5 and 6.

We want to provide a fair hearing of the issues before reaching a conclusion. Please consider the pro and con view of the answers to your question. Please don’t cite my PowerPoint slides. Keep in mind that the quality of your research will be based on the depth of research that you conduct. If you select only a few research articles, there is a good chance that your conclusion could be biased and, potentially, erroneous or ineffectual.

Please prepare the report in your words. Don’t fill the report with lengthy quotes or extensive para-phrasing language from your research. Charts, diagrams which simplify data, trends, or thoughts are welcome.

Your conclusion

Be certain that your conclusions are clearly supported by strong facts in your research. If cannot fully describe the problem and its implications on banking, intensify your research. If your research does not offer solution, proposals, or recommendations, you should broaden your research. Be sure to select the views of the most accomplished experts in the field. Don’t just pick any writer that appears in your internet search. Do your best to be objective when reaching your conclusions. Don’t fall in love with one research article or one person’s views. In the real world, difficult questions usually have more than one useful point of view.

Keep in mind that this project is an intended to be a skill shaping exercise thinking. I want to read your logic, your conclusions, and your recommendations rather than just rehashing the views and conclusions of others. I believe that difficult questions are likely to require a suitable investment in research and thought. Simple answers are often reflective of superficial research or simplistic assessment.

Formatting your report

Your report should be double-spaced using 11pt Arial or Courier font. Please use MS Word and run the spelling/ grammar, and word count apps before you submit your work to me. If you refer to a fact, you must cite the author. Any comment or fact that you wrap in quotation marks must include the author’s name and a cite. Cites and references should be prepared in APA format. If you cite something from the Web, your reference list must contain the entire hyperlink of the information. You should include no less than 8 references in your reference list.

Your report should be no less than 7 pages (does not include cover sheet, table of contents, charts, and reference list). Your report may not exceed 10 pages.

Grading, plagiarism, and due dates

Your grade on the project will be based on:

1) the relevance and significance of your research question to banking in the US;

2) the depth of your research and your choice of references;

3) your command of the subject matter;

4) the objectivity and clarity of your logic that you used to reach your conclusion;

5) the clarity of your conclusions and recommendations;

6) the organization of your research, including spelling and grammar.

I will provide lower grades if your paper contains:

· Facts or commentary that lack sufficient cites or bases

· Failure to provide a meaningful research question and/or failing to get my approval of your research question before you begin your work.

· Failing to select a topic that is within my parameters (US banking only)

· Excessive use of quotes (I want your thoughts not someone else’s commentary)

· Illogical or poorly supported data or conclusions

· Superficial conclusions.

· Poor organization of your paper (it should be interesting and clear)

· Spelling or grammar errors

Papers that contain plagiarized information, or research that has been clipped and/or copied into your report, or charts, graphs, and facts that have been drawn from others without a cite are a violation of the St. John’s Honor Code and can be submitted to the SJU academic honor code committees for resolution. Keep in mind that plagiarism includes submitting old work of your class, another student, the web, etc.

This assignment is worth 6 final grade points. You may complete your paper whenever you wish, subject to the following:

· You must discuss your topic with me before you begin your work. Please don’t wait until the last minute.

· Your report must be submitted to me no later than Friday, November 30. I will deduct 2 points from your grade for each DAY that your report is late. No email submissions are allowed without my specific permission.

· If you submit your paper by Friday, November 16, I will add 2 points to your grade for early submission.

· If you fail to submit a paper, I will remove all 6 points plus 3 points from your participation grade.

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