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 standardised and internal capital models

utilised 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, analyse how SVB’s unique business model, corporate culture, and

relationship-driven approach to the innovation economy 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 required 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 on Moodle for detailed instructions, including the Important Instructions

and FAQs document.

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