Inspired by among the couple of banks that effectively endured the 2007-2009 credit crisis, the case demonstrates risk management in the realm of corporate lending. Leader Alastair Dawes needs to determine if the risk governance process is sufficient to discover mega-risks, according to insights around the risk assessment and sanctioning of the $1 billion credit proposal. Students are asked to evaluate and evaluate the risks within the proposal, made by the bank's sales organization with respect to a sizable gold-mining company, and to reach a choice (whether Well fleet should accept it or otherwise). Simultaneously, students will become familiar with that grey-area risk choices and, particularly, risk-modified performance measurement can rarely be automated. Risk governance requires professionals to strike an account balance between risk modeling and qualitative business judgment-an all natural (instead of silo-based) look at risks.
Economic Loss (EL) ($)
Risk Adjsuted Revenue
1- Given its strategy, what kind of risks does Wellfleet face?
2- Given the Wellfleet’s new focus on large corporate deals and its need to recruit relationship managers from investment banks, what are the challenges for the risks culture of the organization, and its style of the risk management in particular?
3- What is your decision regarding the proposal at hand?
4- Calculate the expected loss, Economic Revenue and Economic Profit for the proposal?
5- Analyze the risk management process at Wellfleet. What suggestions might you make to the CEO about the improving the process?