Analysis of case risk management of financial market and institution

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BNFNF 3305 – Risk Management of Financial Markets and Institutions

Case study (10 Points) Spring 2017-20178

Case study

Case study Requirements:

· The Due date of the assignment is on Saturday April 14th, 2018 at 4:00 PM.

· Only Soft Copy is required and submission should be through the safe assignment link on Blackboard.

· Direct Copy and Paste from the case is NOT allowed. If plagiarism was detected, your total assignment grade will be affected. Further disciplinary actions may be decided by the instructor.

From the case titled as "THE WEEKEND THAT CHANGED WALL STREET", answer the following questions:

QUESTION 1:

What were the causes of Lehman Brothers failure? (40% Points)

(You need to search the internet to answer this question.) Suggested readings:

· https://journal-of-insurance-and-financial-management.com/index.php/JIFM/article/download/36/pdf

· http://www.iiste.org/Journals/index.php/RJFA/article/viewFile/11290/11598

Definition of the Problem

· Core Problem

· Symptoms

· Other related problem

Alternative/Solutions/Options

· Develop a number of options

· Evaluate each option in relation to the core problem, feasibility (applicability), pros, cons, etc.

QUESTION 2:

Why didn’t the government interfere and bail out Lehman Brothers as it did with Bear Stearns? (20% Points)

(You need to highlight the issue of moral hazard in the banking sector)

QUESTION 3:

Examine the importance of the commercial paper market? Why did the Lehman Brothers failure have an impact on it? (20% Points)

QUESTION 4:

Discuss the role that Lehman Brothers played in the CDS (Credit Default Swap) market at the time? (20% Points)

CASE ANALYSIS WRITE-UP

AN OUTLINE

Introduction

· Basic/General Information about the company:

· Background

· Nature of the Business

· Stages of Development