Case Study of Bank One
PROJECT GUIDELINES 1. DUE DATE
Monday, June 3rd
Hard copy – Room 201 C
2. CONTENT
The report is expected to be between 10 to 15 pages excluding table of content, introduction and appendix.
The content includes two parts: A. 1 Page summary of the case
Summary significantly longer than 1 page will lead to grade reduction. B. One of the following question set
Group 1, 3, 5, 7, 9 – Question set 1
Group 2, 4, 6, 8, 10 – Question set 2
QUESTION SET 1
If Banc One wanted to manage its interest rate exposure without using swaps, what could it do? Specifically, how could it move from being asset-sensitive to either neutral or mildly liability-sensitive without using swaps? What are the pros and cons of using swaps vs. these other means of adjusting the bank's interest rate sensitivity? What impact do they have on the bank's interest rate sensitivity, liquidity, accounting ratios, and capital ratios?
QUESTION SET 2
What is the structure of asset and liability of Banc One and its implication for interest rate risk? What is the role of ALCO in asset and liability management process? Discuss the dilemma that Banc One’s management faced in dealing with the bank’s falling stock price. What are the possible solutions to solve their problem presented in the Case? What is your opinion about these solutions?
3. AUTHENTICATION
Please honor the academic integrity code by ensuring the authentication of the work. Failure to do so will lead to significant reduction of your grade.
4. PEER ASSESSMENT
There will be a peer assessment for the project. Each member will fill out an assessment for yourself and other members in your group.
Your grade will be calculated = 80% project grade + 20% peer assessment + bonus (if eligible)
Please see email for direction to receive bonus on the
Monday, June 3rd
Hard copy – Room 201 C
2. CONTENT
The report is expected to be between 10 to 15 pages excluding table of content, introduction and appendix.
The content includes two parts: A. 1 Page summary of the case
Summary significantly longer than 1 page will lead to grade reduction. B. One of the following question set
Group 1, 3, 5, 7, 9 – Question set 1
Group 2, 4, 6, 8, 10 – Question set 2
QUESTION SET 1
If Banc One wanted to manage its interest rate exposure without using swaps, what could it do? Specifically, how could it move from being asset-sensitive to either neutral or mildly liability-sensitive without using swaps? What are the pros and cons of using swaps vs. these other means of adjusting the bank's interest rate sensitivity? What impact do they have on the bank's interest rate sensitivity, liquidity, accounting ratios, and capital ratios?
QUESTION SET 2
What is the structure of asset and liability of Banc One and its implication for interest rate risk? What is the role of ALCO in asset and liability management process? Discuss the dilemma that Banc One’s management faced in dealing with the bank’s falling stock price. What are the possible solutions to solve their problem presented in the Case? What is your opinion about these solutions?
3. AUTHENTICATION
Please honor the academic integrity code by ensuring the authentication of the work. Failure to do so will lead to significant reduction of your grade.
4. PEER ASSESSMENT
There will be a peer assessment for the project. Each member will fill out an assessment for yourself and other members in your group.
Your grade will be calculated = 80% project grade + 20% peer assessment + bonus (if eligible)
Please see email for direction to receive bonus on the