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STRATEGICISSUESFACINGINVESTMENTBANKS

FALL2016

STEVENG.MANDIS,PHD(Professor)

E-mail:sgm2130@columbia.edu

OfficeHours:Uponrequest.E-mailforanappointment.Preferredmeansofcommunicationisviaemail.Studentscanexpectaresponsewithin12to24hours.Studentsarewelcometoemailtheprofessoratanytime.

REQUIREDCOURSEMATERIALS

1. ReadingPacket2. Recentandrelevantarticles(tobesentbyProfessor)3. Mandis,StevenG.2013.WhatHappenedtoGoldmanSachs?:AnInsider’sStoryofOrganizationalDrift

andItsUnintendedConsequences

REQUIREDPREREQUISITESANDCONNECTIONTOTHECORE

Thelearninginthiscoursewillutilize,buildon,andextendconceptscoveredinthefollowingcorecourses:

CoreCourse ConnectionwithCoreCORPORATEFINANCE 1. Risk

2. FirmValuationModelDECISIONMODELS 1. FundamentalConceptsofDecisionMakingFINANCIALACCOUNTING 1. FinancialStatementsofBanksGLOBALECONOMICENVIRONMENT

1. RoleofFinancialMarketsintheEconomy

LEADERSHIPDEVELOPMENT 1. Ethics,Decision-Making,Persuasion,andTeamsSTRATEGYFORMULATION

1. Trade-Offs,Value-Added,CompetingFirms,StrategicAnalysis,Diversification,andCross-Selling

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COURSEDESCRIPTION

Thecourseisdesignedtohelpthoseinterestinginevaluatingthefinancialindustrywhichisundergoingrapidchange(e.g.,astudentinterestedinmanagementconsultingorprofessionalservices);workinginfinancialservicesorinvestmentbanking(butwantsabroaderunderstandingofthevariousdivisionsanddepartmentsandhowtheyinterrelate);orlearninggenerallymoreaboutthefinancialsystem.

Eachclasssessionfocusesononecriticalstrategicissuefacingaglobalinvestmentbank.Ingeneral,casediscussionswillbeledbytheteacheroraguestspeaker.Theclasstopics/strategicissuesoftenvarydependingonthestudents’interestsandtopicalissues.

Topics

1stclassisanoverviewofclassandexpectations.Noworkisnecessary.Itwouldbehelpfultowatchthesevideos.Assets/Liabilities.Banking1and2.https://www.khanacademy.org/economics-finance-domain/core-finance/money-and-banking/banking-and-money/v/banking-1

AnOverviewofInvestmentBanks.Thefirsttwoclassestypicallygothroughtheorganizationandstructureofauniversalandinvestmentbank.Typically,weusethereallifeexampleofJPMorgan.Typicallywecoverwhybanksareorganizedthewaytheyare.JPMorganpresentationfromInvestorDay:https://www.jpmorganchase.com/corporate/investor-relations/document/firm_overview_investor_day_2016.pdf

DifferentBanks’Strategies,Leadership/CrisisandCross-Selling.

CorporateCulture.Whatisit?Whyisitimportant?Whatisorganizationaldrift.Whatpressuresanorganization?WewillreadsomepartsofWhatHappenedtoGoldmanSachs.TalentOrientedorProcessOriented?SeeEndofThisDocumentforClassDiscussionQuestions.

TheFinancialCrisis.Wetypicallyreadtwocasesaboutthefinancialcrisis.Whydidithappen?TheimportanceofConfidence.LeverageandRisk.InterestRateRisk.CreditRisk.

IncomeStatementsandBalanceSheets.WewillreviewIncomeStatements/PressreleasesofVariousBanks.Whatisthebiggestcost?Whataboutlegalcosts?Coststocomplywithregulations?Technologycosts?DVA.VAR.

Valuation.Howdoyouvaluebanks.Whatdoesthismeanforstrategy?

CompensationandPromotion.Wewillreadacasestudyaboutabankerupforpromotion.WewillreviewtheProxystatementsofvariousbanks.ResearchwhatyoucanforeachbankasifyouwereHR.Whatwouldyouadviseforthebonuspoolthisyear??SeeEndofThisDocumentforClassDiscussionQuestions.

RiskManagement.SeeEndofThisDocumentforClassDiscussionQuestions.

Legal/Regulatory.GlassSteagall,SarbanesOxley,GrammLeachBileytoDoddFranktoVolkerRule.SeeEndofThisDocumentforClassDiscussionQuestions.

Strategy.Wouldyouratherrunatechnologydriven,processdriven,talentdriven,industry/productdriven,orglobalbank?Howwouldyoudifferentiate?

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Thefocusesareonlearningandlearningpracticalinformationandtoolstohelpastudent’scareer.

COURSEOBJECTIVES

Studentswilllearnhowtodesignandimplementacoherentstrategytoaddressacriticalstrategicissuefacinganinvestmentbankthroughlectures,discussions,andcaseanalyses.

Studentswilllearnhowtomoreeffectivelycontributetotheirfirmsandunderstandcomplexchallengesfacingseniormanagement.

ASSIGNMENTS

Studentsareexpectedtoreadthecasesandmaterialsandbepreparedtopresentordiscusskeythemes.Typically,thisisoneortwocasesperclassandoneortwoshortarticles.Studentsaregroupedtogetherinteamstorepresent“theirbank”whichcouldbeGoldmanSachs,MorganStanley,Citigroup,JPMorgan,WellsFargo,BofA,Lazard,Evercore,PJT,etc.

MIDTERMMEMO(25%):Studentsareexpectedtoturninatwo-to-threepagememotoafictionalCEOaboutastrategictopic.Asuccessfulmemotypicallyanswersthefollowingquestions:Whatistheissue/challengeandbackground(whataretheregulatory,organizational,competitive,ortechnologicalissuescausingtheproblem/issue?);whyshouldtheCEOcare/whyisthetopicimportant?;whatisyourrecommendedcourseofaction?;costs?;resourcesrequired?;timing?(andpotentialconsequences?);howwillyoujudgesuccess?/whatmetrics?Thepapershouldprovideideasfromreadingsanddiscussionsaswellasdata/evidencetosupportone’sanswer/opinion.Ifyoucan’tfinddata,figureouthowyoucouldballparkthedata,andthenuseit.Sincemostexecutivesprefermemostobeshortandtothepoint,theshortmemoforcesthestudenttofocusonthequestion,theanswerandthereasonswhythestudenthastheanswer/opinion.ThisisTypeBAssignment.Youcandiscussthememosandreceiveoutsidehelp,butyoumustsubmityourownworkandconclusionsandthegradeisindividual.

MIDTERMQUESTIONS/MIDTERMEXAM(25%):Studentswillberequiredtogenerateatotalof10questionsandanswersaboutthecoursecontentcovereduptoacertainpointinthecourse,basedontheirreadingsandnotes.Agoodbalancewouldbeatleasttwoquestionspereachclass’materials.Thesequestionsarequestionsthestudentfeelscould/wouldbeappropriateforamidtermexam.Thequestionitselfshouldhighlighttheunderstandingofakeyconceptoftheclassandshouldbeessentiallyleadingtoaveryobviousanswer.Theanswersshouldbeveryobviousandshort,oneortwowords.Forexample,thequestionsshouldnotbe“DefineXYZ?”Averythoughtfuldefinitionthatincludesthecontextofwhytheconcept/wordisimportantandwasraisedordiscussedinclassshouldbeinthequestion,andthentheanswershouldbetheword/two-threewordconcept.Thereshouldnotbeanytrueorfalseormultiple-choicequestions.Questions(andtheiranswers)willbesubmittedtotheprofessorinaMSWorddocumentwithaheaderofthestudent’snameandthepagenumber.ThesequestionswillbeusedaspartoftheMidtermGroupExamdescribedbelow.Thisisanindividualassignment.

Thequestionsrequirethestudenttothinkofthe10thingshe/shefoundinteresting/mostimportantintheclassfromreadingsanddiscussion.Inordertosucceed,thestudentmustdrawoutwhatisimportantandbalancethemfromthevariouslearningmethodsincludingreadingsanddiscussion.Thisallowstheprofessortoseewhatisresonatingwithstudentsandisitmatchingthelearningobjectives.True/Falseormultiple-choicequestionsareNOTacceptable.

SomesamplequestionsandhowIevaluatethem:1.Q.Whatisthefoundationoftheentirefinancialsystem?

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A.Confidence.Myevaluation:Thisisfine/great.Wediscussedthisinclass.Itisanimportantconcept.Onewordanswerthatisobvious.B+/A-Anotherway:Q.WhatisthefoundationoftheentirefinancialsystemthatGSalsotriedtoaddresswhenittookmoneyfromBuffetandalsowhenPaulsontriedtoaddressthecrisiswithhisBazooka?A.ConfidenceThisisverygood/excellent.Broughtinsomeotherconcepts/ideasraisedinclassandreadings.A-/A2.Q.WhatkindoftradingwastheprimetargetoftheVolkerRule?A.Proprietarytrading.Myevaluation:Thisisfine/great.Wediscussthisinclass.ITisanimportantconcept.Onewordanswerthatisobvious,B+/A-Anotherway:Qitwasbelievedthatafunctioningcommercialbankingsystemisessentialtothestabilityofthefinancialsystemanditwasunsafeforbankstoengageinhigh-riskspeculationwhichcreatedunacceptablelevelsofsystemicrisk.ThereforeThisRule,whichisapartofDoddFrank,specificallyprohibitsabankorinstitutionthatownsabankfromengaginginproprietarytrading(excepttreasuriesandmunicipalbonds),andfromowningorinvestinginahedgefundorprivateequityfundabove3%ofTierOneCapital.ThisrulewhichhasbeencomparedandcontrastedtoGlassSteagallisalsoadifficultRuletointerpretbecausewhatisproprietaryornotissubjecttosomelevelofsubjectivityandsomehavearguedisareasonwhysometopproprietarytradersfromlargebanksleft?A.VolkerRuleMyevaluation:Thisisexcellent.ItshowsanexcellentunderstandingoftheVolkerRule,whyitwascreatedandconsequences.Grade:AMidtermGroupExam:Studentswillbebrokenintosmallgroups.Eachgroupwillelectacaptaintotaketheircollective10questionseachandsynthesizethegroupquestionbankintoagrouplistofthetop10questions.Thelistshouldincludethebestquestionsthegrouphasposedintheaggregateandremoveanyduplicates.Thegrouplistshouldhaveaheaderwitheveryteammembers’nameandthegroupname/numberonthetopofeverypage.Thegroupquestionsshouldlistthenameofthepersoncontributingthequestion,aswellasthequestionandtheanswer.FortheMidtermGroupExam,thegroupswillaskeachotherthequestionsinagameshowstyle,whereteamswillearnpointsforthecorrectanswers.Theteamisgradedbasedonthequalityoftheirgroupquestionsselectedandifthequestionscoveredtheessentialconceptsandtheircorrectanswersdiscussedinclassinthelive,oral,andopen-bookexamasagroup.Makesureeachquestionforthegroupreallyhighlightsakeyimportantconceptandshowsanunderstandingoftheconcept/ideabeyondsomethingbasicandhasaeasilyidentifiableonewordanswer.

Thepurposeoftheclassistolearn.Learningcollectivelyandinafun,engaging,competitive,andcollaborativewayensuresthatallstudentsareexposedtokeyquestionsandanswerswithinthecontentareathatmatchthecourse’slearningobjectives.Thepurposeofthisassignmentistoensureeveryoneislearningthemostimportantmaterialbeforemovingontothesecondhalfoftheclass.

FinalQuestionsandExam(25%):SimilartotheMidtermQuestionsassignment,studentswillberequiredtogenerateatotalof15questionsandanswersabouttheentirecoursecontent,basedontheirreadingsandnotes.Five(5)willbefromthefirsthalfoftheclass.Youcanusefivefromyourprevioustenorusenewonesbasedonthemidterm.Thesequestionsarequestionsthestudentfeelscould/wouldbeappropriateforafinalexam.ThequestionswillbesubmittedtotheprofessorinaMSWorddocumentwithaheaderofthestudent’snameandthepagenumber.Thisisanindividualassignment.StudentshavetheoptionofparticipatingintheFinalExamonthelastdayofclass,orsubmittingtheFinalPaper/Presentation.TheformatoftheFinalExamissimilartotheMidtermGroupExaminthatgroupswillaskeachotherthequestionsinagameshowstyle,andteamswillearnpointsforthecorrectanswers.Theteamisgradedbasedontheirperformanceintheliveexamasagroup.

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IfastudentwillmissthefinalorpreferstowriteapaperversusparticipateintheQ&Aandexam,thenthestudentcanre-writeorwriteanewstrategicissuepaperORwriteareviewofachapterinWhatHappenedtoGoldmanSachs.

Participation(25%):Studentswillberequiredtoattendclass,contributetoclassdiscussion,participateinthegroupactivitiesandsharerelevantresourceswitheachotherpertainingtosportsmanagement.Contributingtoclassdiscussionsmeansenhancingthequalityoftheclassexperienceforyourselfandothers.Itinvolvesmakingrelevant,usefulcomments,orposingpertinentquestions,inclearandsuccinctlanguage.Tomakesurewehaveinterestingclassdiscussion,oftenstudentswillberequiredtoanswerquestionsandsendthemtotheprofessorinadvanceofclass.Somesamplequestionsareattheendofthedocument.Theresponsescanbebulletpointsandaregradedasoneofthreegrades:good,okornotgood/didnotturnin.

Youcanmissoneclassanditwillnotimpactyourgrade–aslongasyouemailtheprofessorinadvance.Ifyoumissasecondclass,andyoudonotgetapprovalinadvance(whichinnotnormallyunreasonablywithheld),thenitwillimpactyourgrade.

InordertoavoidambiguitythatmayleadtounintentionalviolationsoftheHonorCode,thedescriptiontypesforassignmentshavebeenstandardized.Theyarespecifiedinthetablebelow.

Type Designation Discussion of concepts

Preparation of submission Grade

A Group/group Permitted with

designated group*

By the group Same grade for each member of the group

B

Group/individual Permitted Individual

(No sharing of any portion of the submission)

Individual

C Individual/individual None of any kind Individual Individual D (An optional category to be defined in detail by the individual faculty member)

*The designated group can either be an assigned study group or a self-selected one.

METHODOFEVALUATION

Thefocusesareonlearningandlearningpracticalinformationandtoolstohelpastudent’scareer.

Thereisnocurve.

Participation 25%Questions/Mid-Term 25%Memo 25%Questions/FinalExam 25%

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CLASSROOMNORMSANDEXPECTATIONS

Classattendanceisapartofparticipation.Ifyoucan’tmakeclassorwillbelateorneedtoleaveearly,justemailme.Itypicallygiveastudentonefreepassonaclassandonefreepassonbeinglateorleavingearly.Iamparticularlysensitivetopromptnessandattendancewhenwehaveguestspeakers.

Youcaneatanddrinkinclass,aslongasitisdiscreteanddoesnotdisrupttheclassoryourneighbors.Sopleasebepolite,thoughtful,andrespectful.Askthepeoplearoundyouifyouaredisturbingthemornot.

Laptopsandcheckingdevicesformessagesarepermittedaslongasitisdiscreteanddoesnotdisrupttheclassoryourneighbors.Sopleasebepolite,thoughtful,andrespectful.IfIhavetospeaktoyouaboutabusingthisprivilege,thenitwillhurtyourparticipationgrade.

Pleaserespectthecontributionsandtimeofothersintheclass.

Pleasebringyournamecardandplaceitfrontofyou.

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JPMorgan4QPresentation

First,mapoutwhatarethebusinessunits(whatdotheydo)andwhataretherevenuesofeach.Whatisthebiggestbusiness?Youmayneedtorefertothishttps://www.jpmorganchase.com/content/dam/jpmorganchase/en/investor/includes/document/4Q2015_Earnings_Presentation.pdf

WhichgrouphashighestROE?Highestoverheadratio?

JPMorganInvestorDayPresentation

https://www.jpmorganchase.com/corporate/investor-relations/document/firm_overview_investor_day_2016.pdf

Page8–whatarethebusinesses?

Onpage1JPMhighlights4keyratios.Whatarethey?Whatdotheymean?Whyaretheyimportant?

Onpage3.JPMgivesEPSYoYgrowth.WhatwasY0Yrevenuegrowth?Whatcausedearningsgrowth?WhichbankhasthehighestROE(Surprise!)?

Page5–whatisbeinghighlightedandwhy?

Page15–NCOs–whatisit?Whyimportant?

Page19–WhatisCCARstress?GSIBsurcharge?HowdoesJPMgettotheminimumlevel?

Page20ISJPMcapitalgoingupordownovertime?

Page21–WhatisROE?WhichareahasthehighestROE?

Page24–Whytalkaboutrisingrates?

Page27–Howisincomegrowing?Whatisdrivingit?

Page33–HowdoesJPMfinanceitself?Whatislargestfundingsource?

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QuestionsonCorporateCulture/WhatHappenedtoGoldmanSachs?Whatwastheacademicquestionposedinthebook?Chapter1Whatwasthehypothesis?Chapter1Whatwastheconclusion?Chapter1WhatwouldGS’responsebe?Chapter1Whatevidencewastherethattherewasahigherthanlegalline?pg50WhatwerethecharacteristicsofthepeopleGShired?51Whatistheproblemofnostalgia?Whatweretheadvantagesofpartnershipstructurepg70,71Whatwasthepowerofthepartnershipprize?pg75Whatisasocialnetworkoftrust?81Whatisproductivedissonance83Whatisfinancialinterdependence?89Whatisdrift?-pg93-116Whatarethesigns-skimchapter5andpick2or3thatinterestyouWhatweretheconsequencesofgoingpublic-skimchapter6andpick2or3173-180,whichexampledoyoulikeandwhy?From267-269,which2or3changesdoyouthinkweremostinterestingGiveonepieceofdata/evidencetheculturechanged?EgManagementCommitteenumbersatIPOandnow?

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CompensationandPromotion

1. Wouldyoupromotehim?YesorNoandwhy?2. Ifyouarenotgoingtopromotehim,whatwould/couldyoudo?3. Ifhewasyourfriend,whatwouldbeyourcareeradviceafterthevariouspossibilities?4. Doyou/didyouhaveabosslikehisboss?5. Washedoomedtofail?

WhatarethesalariesandbonusesoftheCEO,CFO,#2/Presidentanda4thperson?

Aretheysimilar?

Dotheyindicateanythingaboutculture/priorities?

Whatmakesupcompensation?Whatwentintothedecision?

Howmuchiscashversusstickversusother?Whatisthevestingofthestock?

Whatistheaveragecompperpersonatyourassignedfirm?

http://www.ibankinginsider.com/on-the-job/investment-banking-salary-total-pay/

http://www.forbes.com/sites/kenrapoza/2013/03/13/how-much-do-wall-streeters-really-earn/#d5d59117f08a

http://www.mergersandinquisitions.com/boutiques-vs-bulge-brackets/

http://news.efinancialcareers.com/us-en/152549/working-for-mckinsey-bain-and-boston-consulting-vs-goldman-jpm-and-morgan-stanley/

http://www.ft.com/cms/s/0/d99d271c-5545-11e5-8642-453585f2cfcd.html#axzz4Dm0088GA

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Regulation

SarbanesOxley

JUL29,2012@01:56PM3

Sarbanes-Oxley10YearsLater:BoardsAreStilltheProblemhttp://www.forbes.com/sites/frederickallen/2012/07/29/sarbanes-oxley-10-years-later-boards-are-still-the-problem/

WhatisSarbanesOxley?

Whywasitimplemented?

Whatarethespecificchanges?

Whatistheauthorsuggestingaschanges?Doyouagree?

RepealofGlassSteagall

November11,20153:52pm

Wewerewrongaboutuniversalbanking

JohnReed

http://www.ft.com/cms/s/0/255fafee-8872-11e5-90de-f44762bf9896.html#axzz3rHpSOgws

ABigBanker’sBelatedChangeofHeart

ByJEFFMADRICKJULY29,2012

http://www.nytimes.com/2012/07/30/opinion/a-big-bankers-belated-apology.html?_r=0

WhatisG-S?

What2thingswerewrongaccordingtoReed?

DoyouthinkG-Sshouldberepealed?Why?

Dodd-Frank

TheDodd-Frankact

Toobignottofail

Flawsintheconfused,bloatedlawpassedintheaftermathofAmerica’sfinancialcrisisbecomeevermoreapparent

Feb18th2012|NEWYORK

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http://www.economist.com/node/21547784

HouseVotestoRepealDodd-FrankProvision

ByERICLIPTONdatepublishedOCTOBER30,20137:03PMhttp://dealbook.nytimes.com/2013/10/30/house-passes-bill-on-derivatives/

HowmanypageswastheBankingAct?Dodd-Frank?

Whataretheproblemswithit?

Whatarethecosts?

HowinvolvedwasCitigroupindraftingaHousebilltorepealaD-Fprovision?

VOLKERRULE

Q&A:TheVolckerRule

BySCOTTPATTERSON

June13,20122:40p.m.ET

http://www.wsj.com/articles/SB10001424052702303822204577464661833507038

VolckerRuleCostsTalliedasU.S.RegulatorsPressDeadline

JesseHamiltonandCheyenneHopkins

September30,2013—

http://www.bloomberg.com/news/articles/2013-09-30/volcker-rule-costs-tallied-as-u-s-regulators-press-deadline

VolckerRuleWillCostBanksUpto$4.3Billion,OCCSays

JesseHamilton

March21,2014

http://www.bloomberg.com/news/articles/2014-03-20/volcker-rule-will-cost-banks-up-to-4-3-billion-occ-says

WhatistheVolkerRule?

Whyisitcontroversial?

Whatisthecost?

BASEL

BaselIIIQ&A

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TheGuardian

http://www.theguardian.com/business/2010/sep/13/basel-iii-q-and-a

WhatareBASEL1,2and3norms?Whatarethebasicdifferencesbetweenthesenorms?

https://www.quora.com/What-are-BASEL-1-2-and-3-norms-What-are-the-basic-differences-between-these-norms

BaselIIIandEuropeanbanking-McKinsey&Company

https://www.mckinsey.com/.../26_Basel_III_and_...

McKinsey&Company

Nov1,2010-BaselIIIwillhavesignificantimpactontheEuropeanbankingsector.....paper,wereviewthechallengesofimplementation,especiallythe...

WhatisBasel?Whatisitsrole?

Whatareproblemswitht?

Whatdid3trytoovercome?

Whatistheimpact?

Whatarebanks’response?

SURCHARGE

Twenty-EightBanksQualifyforBasel’sToo-Big-to-FailSurcharge

JimBrunsden

July19,2011—11:29AMEDT

UpdatedonJuly19,2011—7:00PM

http://www.bloomberg.com/news/articles/2011-07-19/basel-says-28-systemic-banks-would-qualify-for-capital-surcharge

HowDoTheLargestU.S.BanksFareInTermsOfBaselIIICompliance?

http://www.forbes.com/sites/greatspeculations/2014/09/11/how-do-the-largest-u-s-banks-fare-in-terms-of-basel-iii-compliance/

What’sthesurcharge?Onwhatandwhy?

WhatareCoCos?Aretheyallowedtobeincluded?

TOOBIGTOFAIL

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AndrewGHaldane17January2013

http://www.voxeu.org/article/have-we-solved-too-big-fail

FedApproves'TooBigToFail'Surcharges

ByDunstanPrialPublishedJuly20,201

http://www.foxbusiness.com/economy-policy/2015/07/20/fed-to-approve-too-big-to-fail-surcharges/

Brainard:FedShouldConsiderIncludingCapitalSurchargeinStressTestsOfficialsareweighingstrictercapitalstandardforbiggestU.S.banks

ByVICTORIAMCGRANEAndRYANTRACY

UpdatedJuly9,201512:21p.m.EThttp://www.wsj.com/articles/feds-brainard-u-s-at-pivotal-moment-in-effort-to-end-too-big-to-fail-1436450428

Havewesolvedtoobigtofail?

WhatdoesHaldinethink?What’stheproblem?

Willsurchargesbeinstresstests?Shouldtheybe?

STRESSTESTS

Stresstests:Banksneed$75billion

Resultsoflong-awaitedbankstresstestsrevealthat10outof19bankstestedneedtoraisenewcapital.BankofAmericamustraise$33.9billion.

ByDavidEllis,CNNMoney.comstaffwriter

LastUpdated:May8,2009:

http://money.cnn.com/2009/05/07/news/companies/stress_test_announcement/index.htm?postversion=2009050717

U.S.BanksPassStressTests,SomeWithanAsterisk

ByPETEREAVISMARCH11,2015

http://www.nytimes.com/2015/03/12/business/dealbook/us-banks-pass-stress-tests-but-not-without-some-checkmarks.html

Whatarestresstests?

Whyhavestresstests?

Howdidthestresstestsgoin2009?

Howabout2015?

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CULTURE

SPEECH

EndingTooBigtoFail

11/07/2013

November7,2013

WilliamC.Dudley,PresidentandChiefExecutiveOfficer

http://www.newyorkfed.org/newsevents/speeches/2013/dud131107.html

WhatItWillTaketoChangetheCultureofWallStreet

StevenG.MandisOCTOBER24,2014

https://hbr.org/2014/10/what-it-will-take-to-change-the-culture-of-wall-street

Culture,NotLeverage,MadeWallStreetRiskier

StevenG.MandisOCTOBER11,2013

https://hbr.org/2013/10/culture-not-leverage-made-wall-street-riskier

HowimportantisCulture?

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RiskManagementThereisaHBSValueatRiskcasestudyintheCaseBook.Readpages201-204oftheGSBook.andthesearticles:GSVaRReachesRecordhttp://www.bloomberg.com/apps/news?pid=newsarchive&sid=anh9S6AJxcbYMSFICCtradershttp://news.efinancialcareers.com/us-en/205719/why-morgan-stanleys-ficc-traders-look-more-talented-than-jpms-and-goldman-sachss/Thequestionsare:WhatisVaR?WhatisthetypicalreportingofVaR?Whatistheproblemwithjustrelyingonit?HowbigofdeclineinVaR?