LSBM302 Corporate Risk Management

LSBM302 Corporate Risk Management

  1. Assessment 1 Details

5.1          Task

A review of Corporate Risk Failure - AIB/Allfirst (2002)

Banking failures due to weaknesses in risk management were exposed by the Global Financial Crisis in 2007-08. However, cases before this are informative as they highlight the importance of learning from business history and applying a critical perspective to continuing failures.

In 2002 John Rusnak, a "lone wolf" currency trader at Allfirst, racked up losses of almost US$700 million. It was Ireland's biggest banking scandal, and the fourth-biggest banking scandal in the world, at the time when it came to light. External advisors, law firm Wachtell, Lipton, Rosen & Katz reviewed the Allfirst treasury operation and produced a report (better known as the Ludwig report) providing advice to the boards of Allfirst and its parent, Allied Irish Banks (AIB).

You are given this report and three additional case studies on AIB/Allfirst, highlighting different perspectives: corporate governance, e-risk and financial risk.

You are required to:

  • Produce an assessment of the AIB/Allfirst failure with specific reference to its risk management
  • Draw on the evidence provided (the report and 3 case studies)
  • Ensure that you draw directly on the course and the teaching of each week to apply a corporate risk management perspective.
  • Use appropriate models, frameworks and example.
  • Use a range of academic sources for your report.
  • Use Harvard referencing throughout for your citations and the reference list.
  • Focus on analysis from the perspective of (a) Assessment of risk, (b) Risk response and (c) Risk governance and regulatory risk.

The assessment should be in the form of a report with the following structure:

  1. Introduction 

Provide an overview of:

  1. The AIB/Allfirst failure
  1. A summary of the key reasons why Allfirst failed – based on the literature.
  1. Assessment of risk
  1. Identify key risks and
  1. Classify these risks into categories - use recognised frameworks and models.
  1. Risk response 
  1. Review how AIB/Allfirst responded to its risk exposure and/or
  1. Identify any gaps and shortfalls in its approach by critically applying models and frameworks designed to measure and model different business risks
  1. Highlight any relevant aspects of Risk governance and regulatory risk
  1. Findings and conclusions
  1. Summarise the key points that explain why and how AIB/Allfirst failed from a risk management perspective
  1. Analyse, synthesise and evaluate the data to establish solutions
  1. Make recommendations to minimise the possibility of such failures happening in the future.

5.2          Submission requirements

You are required to submit this assignment by Friday/09 March 2018/3pm. You must submit your assignment by using the Turnitin gateway in the module’s Canvas site.

Please Note: The act of submitting your work electronically will be taken as an acceptance of the Declaration of Authorship (see Appendix 2).

  1. Extensions and Mitigating Circumstances

Applications for extensions and mitigating circumstances, with supporting evidence (such as medical certificates), should be made through the Student Self-service Portal (SSP).

6.1          Extensions

If a student experiences unforeseen circumstances that may prevent the student submitting an assignment at the first opportunity, it is possible to request an extension of up to two weeks. The length of extension requested will be evaluated by the Academic Administrator.

About the Book

LSBM302 Corporate Risk Management

  1. Assessment 1 Details  LSBM302 Corporate Risk Management

5.1          Task

A review of Corporate Risk Failure – AIB/Allfirst (2002)

LSBM302 Corporate Risk Management Banking failures due to weaknesses in risk management were exposed by the Global Financial Crisis in 2007-08. However, cases before this are informative as they highlight the importance of learning from business history and applying a critical perspective to continuing failures.

In 2002 John Rusnak, a “lone wolf” currency trader at Allfirst, racked up losses of almost US$700 million. It was Ireland’s biggest banking scandal, and the fourth-biggest banking scandal in the world, at the time when it came to light. External advisors, law firm Wachtell, Lipton, Rosen & Katz reviewed the Allfirst treasury operation and produced a report (better known as the Ludwig report) providing advice to the boards of Allfirst and its parent, Allied Irish Banks (AIB).

You are given this report and three additional case studies on AIB/Allfirst, highlighting different perspectives: corporate governance, e-risk and financial risk.

You are required to:

  • Produce an assessment of the AIB/Allfirst failure with specific reference to its risk management
  • Draw on the evidence provided (the report and 3 case studies)
  • Ensure that you draw directly on the course and the teaching of each week to apply a corporate risk management perspective.
  • Use appropriate models, frameworks and example.
  • Use a range of academic sources for your report.
  • Use Harvard referencing throughout for your citations and the reference list.
  • Focus on analysis from the perspective of (a) Assessment of risk, (b) Risk response and (c) Risk governance and regulatory risk.

The assessment should be in the form of a report with the following structure:

  1. Introduction 

Provide an overview of:

  1. The AIB/Allfirst failure
  1. A summary of the key reasons why Allfirst failed – based on the literature.
  1. Assessment of risk
  1. Identify key risks and
  1. Classify these risks into categories – use recognised frameworks and models.
  1. Risk response 
  1. Review how AIB/Allfirst responded to its risk exposure and/or
  1. Identify any gaps and shortfalls in its approach by critically applying models and frameworks designed to measure and model different business risks
  1. Highlight any relevant aspects of Risk governance and regulatory risk
  1. Findings and conclusions
  1. Summarise the key points that explain why and how AIB/Allfirst failed from a risk management perspective
  1. Analyse, synthesise and evaluate the data to establish solutions
  1. Make recommendations to minimise the possibility of such failures happening in the future.

5.2          Submission requirements

You are required to submit this assignment by Friday/09 March 2018/3pm. You must submit your assignment by using the Turnitin gateway in the module’s Canvas site.

Please Note: The act of submitting your work electronically will be taken as an acceptance of the Declaration of Authorship (see Appendix 2).

  1. Extensions and Mitigating Circumstances

Applications for extensions and mitigating circumstances, with supporting evidence (such as medical certificates), should be made through the Student Self-service Portal (SSP).

6.1          Extensions

If a student experiences unforeseen circumstances that may prevent the student submitting an assignment at the first opportunity, it is possible to request an extension of up to two weeks. The length of extension requested will be evaluated by the Academic Administrator.

The granting of an extension will depend upon the nature of the difficulty the student is experiencing, whether the difficulty could and should have been anticipated, and the extent to which the circumstances were outside of the student’s control. For example, health difficulties would usually provide legitimate grounds for an extension; last minute computer issues or clashing deadlines would not. If an extension of up to two weeks is not sufficient the student should make a claim for mitigating circumstances.

LSBM302 Corporate Risk Management

NB: No extensions can be granted for TCAs and examinations.

6.2          Mitigating circumstances

If a student is unable to sit an exam or submit an assignment, the student may be able to claim mitigating circumstances, which, if accepted, would allow the student to complete the assessment for the first time at a later date, and receive an uncapped mark for it. The exam would be taken at the next sitting or the assignment would be submitted at the next submission opportunity, following the acceptance of the student’s mitigating circumstances. A claim for mitigating circumstances must be submitted before the original date for submitting the assignment or sitting the exam.

Mitigating circumstances are defined as a serious or acute problem, or an event beyond a student’s control or ability to foresee, which has prevented completion of assignment/s or attendance at examination/s. If a student is experiencing unforeseen or unexpected events – such as serious illness or severe disruption to their personal life – that may affect the student’s ability to take assignment/s or sit examination/s, the student should meet with their Module Leader, Course Leader or a Student Success Advisor to discuss the available options.

The University of Northampton’s Mitigating Circumstances Policy and Procedure document can be accessed through our Quality and Enhancement Manual:

  1. Word limits

All written assignments include clear guidance on the maximum amount that should be written in order to address the requirements of the assessment task (a ‘word limit’).

If the submission exceeds the word limit by more than 10%, the submission will only be marked up to and including the additional 10%. Anything over this will not be included in the final grade for the item of assessment.

Abstracts, reference lists, and footnotes are excluded from any word limit requirements.

Where a submission is notably under the word limit, the full submission will be marked on the extent to which the requirements of the assessment task have been met. Generally speaking, submissions under the word limit fall short of the requirements of the assessment task.

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