Assignment
Course: Financial Risk Analytics
Assignment Title: Case-Based Analysis of Financial Risk Failures:
Learning from the Past
Assignment Objective:
To help students apply financial risk concepts to real-world failures by critically analyzing
different financial scams or collapses, identifying risk categories, evaluating how risk was
(mis)managed, and suggesting preventive frameworks.
Instructions (Common to All Groups):
Form groups (4–6 students per group).
Each group will be assigned one case (from the list below).
Perform a detailed risk analysis of the assigned case.
Prepare a written report with:
- Background of the case
- Timeline of events
- Key stakeholders
- Nature and type of financial risk involved
- Lapses in risk governance or control
- Financial/legal consequences
- Your group’s recommendations: How could the risk have been prevented?
Create a presentation (10–12 slides) and present it in class (15 mins per group).
Group-wise Assignment Breakdown:
Group 1: SVB Collapse (Silicon Valley Bank, 2023)
Theme: Interest Rate Risk & Liquidity Mismatch
Key Questions: -
1. Why did SVB’s bond portfolio collapse?
2. How did rapid interest rate hikes by the Fed affect SVB?
3. Was asset-liability management (ALM) ignored?
4. Was the customer concentration risk underestimated?
Group 2: Satyam Scandal (India, 2008–09)
Theme: Corporate Governance Failure & Fraud Risk
Key Questions: -
1. How did the fraud remain undetected for years?
2. Role of auditors, board, and regulators
3. Whistleblower issues and ethical lapses
4. What internal controls failed?
Group 3: Punjab and Maharashtra Co-operative Bank (PMC Bank, 2019)
Theme: Credit Risk Concentration & Internal Collusion
Key Questions: -
1. Why was over 70% of the loan book concentrated to a single borrower (HDIL)?
2. How did internal collusion bypass RBI regulations?
3. Failures in due diligence and reporting
Group 4: IL&FS Crisis (India, 2018)
Theme: Systemic Risk from Infrastructure Lending
Key Questions: -
1. How did unviable infra projects accumulate into bad assets?
2. What role did shadow banking and NBFC structure play?
3. Was the AAA rating justified?
Suggested Sources:
RBI Reports
SEBI Enforcement Orders
News archives (Economic Times, Business Standard)
Academic journals (Google Scholar, SSRN)
Financial Statements and Annual Reports
