2007 Handbooks

In this course we will look at financial institutions which fail, trying to identify common factors. We will look at empirical studies of insolvencies from different countries and for different types of financial institutions (including life and general insurers, health funds, banks, superannuation funds, hedge funds and other investment management and risk management organisations). We will consider various theories about the underlying causes of failure, looking at factors such as product design, pricing, reserving, investment, asset-liability management, liquidity management, reinsurance, accounting issues, regulatory arbitrage and corporate governance. We will also be looking at the effectiveness of regulation, both in preventing failures and dealing with the consequences of failures (eg using guarantee schemes). Students will be expected to read a number of case studies from different countries and different practice areas and be prepared to discuss them in weekly seminars. For example we will look at problems arising in Lloyds, FAI, HIH, First Executive, Confederation Life, Penn Square, Vehicle and General, Tricontinental, AMP, Westpac, West Middlesex, the Albert and European, NAB, the Equitable, Nissan Mutual Life and the Superior Bank.