Case Questions(1) - Case Questions Questions are provided to help facilitate understanding of the case A one page(maximum 1.5 page if necessary response

Case Questions(1) - Case Questions Questions are provided...

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Case Questions Questions are provided to help facilitate understanding of the case. A one page (maximum 1.5 page, if necessary) response to each set of case questions must be posted in Blackboard prior to the class in which the case will be discussed (see Syllabus). Questions should be answered on an individual basis, without discussion with other students. Investment Banking in 2008 (B): A Brave New World 1. Why were proponents of deregulation so successful in the late 1990s? How much can weblame deregulation for the meltdown in the investment banking industry, and how could thegovernment have foreseen and/or stopped the domino effect before the crisis of 2008?2. Could any one of the investment banks have remained competitive without following theindustry trend of taking on increasing amounts of leverage to boost returns on investment? Ifso, how?3. Why was Lehman Brothers allowed to collapse while Bear Stearns was not?4. Did the compensation structure of the investment banking industry encourage bankingexecutives and employees to take on excessive risk to boost short-term profits? Why or whynot?5. How much of the industry-wide crisis stemmed from the investment banks’ financials and thecurrent economic climate as opposed to investor panic and speculation?6. Both Bear and Lehman bailed out their proprietary hedge funds. Did they have any otheroption? What would have happened had they not done so?7. Could Morgan Stanley and Goldman Sachs have survived without becoming bank holdingcompanies? What were the benefits and disadvantages of becoming bank holding companies?
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  • Fall '12
  • Stowell
  • Corporate Finance, Bear Stearns, investment bank, investment banking industry

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