Op Risk Class Group Projects
- Anthony Peccia
- Nov 21
- 1 min read
Updated: Nov 30
post your questions below that you didn't get a chance to ask in class.
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Updated: Nov 30
post your questions below that you didn't get a chance to ask in class.
My question is for the Citi group. It is interesting that you went from governance -> controls -> exposures -> ressilance. One could argue if we do not do the framework in order we will not put the best controls in place since we did not properly identify the exposures first place. Do you think the order in which we evaluate ECRG matters? Could going in this order cause any problems when evaluating cases in real life? - David Hull (Not David Wang)
For group 7: Why were the losses so large even if JPM had capital?
For team 2: Given your analysis, do you think the bank’s failure should primarily be viewed as a liquidity crisis, or as a market-risk and governance failure that simply manifested as a liquidity event? And if it is the latter, which element of ECRG do you think is the most important one?
For the First Republic Bank case, One of your controls are, Restrict uninsured deposit growth at thresholds. I am unsure that this is realstic, my understanding is that a bank will never tell you that you can't deposit more money, whether uninsured or insured. They will simply ask how much more can you give us? I feel the entire problem here is simply ALM not uninsured deposit risk, while the liquidity risk was accelerated by uninsured deposits, it was entirely created and started by large losses from unmatched duration instruments. The culture became more risk seeking which when things went backwards created this problem
For Group 8: do you think there's regulatory exposure to banks if their stress testing practices are designed specifically to pass regulatory inspection, and not 100% accurately reflecting the bank's financial exposure?