Finance 748                                                                                                     Fall, 2002

Managing Financial Service Organizations                                                         Dr. K. Rhoda

 

 

Seminar Research Project

 

Return to Assignments and Projects

 

Over the past few years many financial institutions have experienced difficulties.  Causes of these difficulties range from outright fraud to bad decisions to just plain bad luck.  It is often not easy to determine who is at "fault" but in most if not all cases, someone has been hurt.  To more fully understand the issues involved in managing financial institutions, we shall look at examples of failed or failing firms to perhaps get some insight into the nature of the responsibilities of their managers and/or their regulators.

 

To accomplish this, each team will be assigned a financial firm to research.  This research should be a fairly thorough examination of the institutions' problems--the history, causes, effects and outcomes (if available).  Specifically, each team should focus on the following questions:

 

 

1. What happened to the firm?  What events led up to the failure?

2. Who or what group was responsible for the mess?  What was that person's or group's motivation do you think?

3. Why did the failure occur?  Was it mistakes, wrongdoing, or what?

4. What were the effects of the failure on

- owners

- customers

- employees

- society

 How severe were these effects?  Were they fair?

5. Could the failure have been prevented?  If so, how and by whom?

 

Each team should gather information on its firm (business periodicals in the Library are probably the best source) and then discuss internally the questions listed above.  On the last two nights of class we will gather the groups together in a seminar to discuss each team's conclusions.  Each group will be asked to present a brief 5-10 minute report on its answers to the questions.  Following each report, the floor will be opened to everyone for a discussion of the issues raised.

 

The assigned financial institutions are:

 

                        Team 1             First National Bank of Keystone

                        Team 2             Superior Bank of Chicago

                        Team 3             Old Southwest Life Insurance Co.

                        Team 4             HIH Insurance Limited

                        Team 5             Sunpoint Securities, Inc.