Risk Management at Wellfleet Bank: Abridged

Posted: 2 Aug 2009

Date Written: July 27, 2009

Abstract

Inspired by one of the few banks that successfully weathered the 2007-2009 credit crisis, the case illustrates risk management in the world of corporate lending. Chief executive Alastair Dowes has to decide if the risk governance process is adequate to uncover mega-risks, based on reflections on the risk assessment and sanctioning of a $1 bn credit proposals. Students will be invited to assess and review the risks in the proposal, and to arrive at a decision (whether Wellfleet should accept it or not). At the same time, students will learn that gray-area risk decisions and, in particular, risk-adjusted performance measurement can rarely be automated. Risk governance requires executives to strike a balance between risk modeling and qualitative business judgment - a holistic (rather than silo-based) view of risks.

JEL Classification: A20, M40

Suggested Citation

Mikes, Anette, Risk Management at Wellfleet Bank: Abridged (July 27, 2009). HBS Case No. 110011, Available at SSRN: https://ssrn.com/abstract=1441911

Anette Mikes (Contact Author)

Harvard Business School ( email )

Soldiers Field
Boston, MA 02163
United States

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