BFF5280
Final Take-Home Assessment
This is an individual assignment.
The word limit of 2000 (
±10%) words, excluding references.
Learning Objectives:
This assignment has been designed to achieve the following learning outcomes:
LO1: Reconcile theory and bank practice in the areas of interest rate risk, market risk, loan risk,
loan portfolio risk, foreign exchange risk, liquidity risk and risks associated with financial
derivatives.
LO2: Identify and evaluate various risk measurement and risk management techniques used by
financial institutions.
LO3: Develop critical skills in applying the BIS standardized and internal capital models
utilized for assessing banks’ regulatory risk.
LO4: Demonstrate the acquisition of a comprehensive understanding of the topics covered in
BFF5280.
Resources:
You will need access to the below resources to complete this take-home final assessment.
1. Course Moodle Page of BFF5280: Tab titled “Final Take-Home Assessment”
2. Relevant Lecture Notes of BFF5280.
Please, access the Section titled “Final Take-Home Assessment”. This section includes the
following resources:
1. The main case:
▪ The link to the Harvard Business Publishing, case title: “The sudden
implosion of the Silicon Valley Bank”
2. Important Instructions and Frequently Asked Questions (FAQs)
Conditions for the use of generative artificial intelligence (AI):
Generative AI tools cannot be used in this assessment task: In this assessment, you must not
use generative artificial intelligence (AI) to generate any materials or content in relation to the
assessment task.
Case Questions:
Please prepare evidence-based responses to the following questions. Your responses will be
evaluated based on how well you understand and connect the relevant underlying
theories.
Question 1 – Governance and Strategy Focus (5 Marks)
Evaluate the strategic decisions and governance practices at Silicon Valley Bank (SVB)
that contributed to its failure.
In your response, analyze how SVB’s unique business model, corporate culture, and
economic relationship-driven approach to the innovation influenced its risk profile. Discuss
the effectiveness of internal controls and board oversight, and how these factors interacted
with broader market conditions to expose the bank to systemic vulnerabilities.
Question 2 – Risk and Regulation Focus (5 Marks)
Discuss the risk management failures that led to the collapse of Silicon Valley Bank
(SVB).
Your analysis should include an examination of asset-liability mismatch, interest rate risk,
investment strategy, and the use of hold-to-maturity accounting. Reflect on the role of
regulatory supervision and oversight, and assess whether enhanced stress testing and prudential
standards might have mitigated the risks SVB faced.
Question 3 – Comparative Banking Model Focus (5 Marks)
Critically assess SVB’s business and banking model in comparison to traditional
commercial banks.
In your response, explore how SVB’s client concentration, uninsured deposit base, and
reliance on venture capital ecosystems shaped its risk exposure. Contrast this with standard
liquidity and funding models in the banking sector, and evaluate whether the maturity
transformation framework applied differently in SVB’s case.
Question 4 – Crisis Dynamics and Contagion Focus (5 Marks):
Analyse the dynamics of the SVB bank run and its broader implications for financial
stability.
Discuss how depositor behaviour, digital technology, and social media influenced the speed
and scale of withdrawals. Evaluate the role of uninsured deposits and network effects within
the venture capital community. Consider the implications for future bank run scenarios and the
adequacy of current regulatory frameworks in managing such digitally amplified crises.
Question 5 — Regulation or policy reform (5 Marks)
Question: Propose regulatory or policy reforms that could reduce the likelihood of a similar
bank failure in the future.
Question 6 – Video Presentation (5 Marks)
If you were advising Greg Becker, CEO of Silicon Valley Bank (SVB), in 2022, what key
recommendations would you have made to help prevent the bank’s eventual collapse?
Your response should focus on identifying major risks that require urgent attention and
propose actionable strategies for mitigating these risks.
Instructions:
Assume the role of a consultant delivering strategic advice to the CEO. Prepare a video
presentation (maximum 3 minutes) outlining your recommendations. You must also prepare
3–5 PowerPoint slides to support your presentation.
Note:
No written submission is required for this question. Please refer to the “Final Take-Home
Assessment” section o