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FINM7407 – Financial Institutions and Markets | Assessment 2 | Semester 1, 2025
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FINM7407 – Financial Institutions and Markets
Assessment 2: Case Study Assignment (20% of Final Grade)
This document covers a real-world case study. It requires a student to understand the risks
facing financial institutions and how institutions and government as regulators mitigate these
risks. The document contains an assessment description, assignment questions to be
answered, submission link, submission format, learning objectives, marking guide, and
helpful guidelines.
Assessment Description
The purpose of this assignment is to provide a real life case study on the collapse of
Northern Rock, a banking financial institution in the United Kingdom. The assignment will
assess students’ understanding of financial institution risk evidenced by detailed research.
Assignment Questions
As a starting point, carefully read the article “Reflections on Northern Rock: The Bank Run
that Heralded the Global Financial Crisis” by Hyun Song Shin as published in the Journal of
Economic Perspectives Volume 23, Number 1 Winter 2009, on pages 101 to 119.
This article is saved under the Case Study Assignment / Assignment Instructions folders.
Please use this journal article case study as a background (together with your reading and
understanding of the lecture/textbook and other publications including academic journals) to
carefully develop your answers to the four questions listed below:
1. What was the most significant risk(s) that Northern Rock was exposed to prior to the
retail bank run in 2007? In discussing your answer, refer to the funding profile of
Northern Rock. (20 Marks)
2. The liquidity regulation changes following the implementation of Basel III were
introduced to build resilience into global banks’ balance sheets to future proof the
financial system from shocks. Explain how these regulations could have assisted
Northern Rock. (20 Marks)
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3. In 2023 United States Silicon Valley Bank (SVB) experienced a bank run from deposit
holders and collapsed. Explain the risk similarities to Northern Rock (if any) and other
types of risks specific to SVB in the lead up to the collapse. Why did the Basel III
Liquidity changes implemented not stop the collapse of SVB? (30 Marks)
4. Outline the purpose of deposit insurance and its role as a risk mitigation tool for bank
runs. Explain the role of deposit insurance in regards to Northern Rock and SVB. In
your answer discuss the deposit insurance schemes in Australia, the United States and
the United Kingdom.
(20 Marks)
The remaining 10 marks out of possible total 100 marks will be allocated to the quality of
references used, professional writing, and formatting.
The total marks are out of 100 and count towards 20% of your final grade. It is expected
assignment results will be released within 3 weeks following the due date of the assignment.
This task has been designed to be challenging, authentic and complex. Whilst students may
use AI technologies, successful completion of assessment in this course will require students
to critically engage in specific contexts and tasks for which artificial intelligence will provide
only limited support and guidance.
A failure to reference generative AI use may constitute student misconduct under the Student
Code of Conduct.
To pass this assessment, students will be required to demonstrate detailed comprehension of
their written submission independent of AI tools.
Submission link
You are required to submit your assignment in “pdf” file in Blackboard. The deadline for
submissions is Tuesday 6 May 2025 at 4:00pm AEST. Upload your file to the link named
“Case Study Submission Link”.
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Submission format
The length of your submission (including the cover page) should be from 8 to 10 pages (10
pages are the maximum) of text excluding a list of references. Figures and tables may be
placed before 1 or after the list of references. Use 1.5 line spacing, 12 font size ‘Times New
Roman’, ‘Normal’ margins, justified paragraphs and page numbering in the bottom right-hand
side. Please insert your full name (family name entered last in capital letters) and eight-digit
student number as a header on every page of your submission (see the sample header of this
document).
Your submission file must be in “pdf” format and name with your first name, last name, and
student ID (FIRST_LAST_STUDENT ID). For example, the first name of the student is Chris
and the surname of the student is Bell, his student ID is 12345678, then the submission file
should be named as: CHRIS_BELL_12345678 .
As a rule of thumb, using shorter paragraphs or sentences improves readability. Footnotes
should be kept to a minimum. An introduction and conclusion are needed in your answer to
each question. Please make sure we can clearly follow where one section ends and the other
begins, i.e. use subheadings to guide the reader. The sub-headings corresponding to the
aforementioned four questions in the write-up.
Learning objectives
This assessment achieves the below learning outcomes:
Learning outcome 2: Examine in detail the on and off balance sheet products of financial
institutions;
Learning outcome 3: Translate the balance sheet activities of financial institutions and select
the appropriate risk mitigation techniques to preserve capital or profitability; and
Learning outcome 4: Demonstrate through application how
liquidity, interest rate and credit
risks can be mitigated for financial institutions.
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Marking guide
Please refer the assignment rubric file under the case study assignment folder.
Further helpful guidelines for scoring marks on your assignment
There could be more than one answer acceptable to the examiners. However, it is your
responsibility to clearly defend your answers in a coherent manner in your written
submission. That is, providing vague comments or disjointed arguments are not
acceptable answers. Similarly, any jargon or acronym should be followed by a brief
definition or explanation when first used, e.g. shadow banking, repos, ABS or OFC.
Once again, you need to pay close attention to your arguments being coherent from
one question to the next. A better approach is to address both sides of an argument
(i.e. pros and cons), and either stop there, or if you feel strongly about taking a position,
clarify why you are doing so. Once again, as long as your arguments are presented
coherently, either approach would be acceptable for assessment purposes.
It is good practice to initially develop your answers without worrying about the
prescribed length. Once you believe you have completed your literature review (i.e.
reading what others have published), you can then work towards polishing and cutting it
down to size.
Please be aware that plagiarism, partly defined as copying and pasting someone else’s
words into your assignment without proper acknowledgement, is unacceptable at UQ.
Similarly, when you report someone else’s comments or ideas, you need to fully and
clearly acknowledge the source right next to it.
Sources you use are listed under ‘References’ that starts on a new page 2 at the end of
the main text before any figures and tables, using the Harvard Referencing Style (see
Blackboard under Assessment). It is also good practice to paraphrase other authors’
words, which would indicate your level of understanding; avoid making long direct
quotations. Nevertheless, a few short direct quotations may be used to emphasise what
you consider to be important points in your submission.
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