SCHOOL OF BANKING AND FINANCE
FINS5530 – FINANCIAL INSTITUTION MANAGEMENT
Group Assignment – Summer 2024
INSTRUCTIONS:
• This is a group assignment. Each group should have a minimum of 4 to a maximum
of 5 members. You are expected to work collaboratively on this assignment.
• You are required to register yourself into a group via the group builder tool on
Moodle. The sooner you finalize your group, the more time you have on this
assignment.
• You are encouraged to include tables and graphs in your report. You should avoid
direct screenshots of tables and graphs from the annual report.
• You may also use the textbook or other online resources as references. All sources
must be carefully cited in a reference list.
• To write a successful report, please carefully read the marking criteria attached to
this paper.
The report must contain the following:
1. Cover page - including course name, title of the report, and for each group
member, full name, and student ID.
2. Table of contents
3. Executive summary - A summary of the key findings of your research (about a
page)
4. Introduction - Provide an overview of how the report is structured and discuss the
value of your research
5. Body – please use the following headings/themes to organise the body of the
report (you may use subheadings within each of these headings). Please use
research evidence/case study references to support your discussion of these
themes.
6. Conclusion - This is not a summary, but a discussion of key implications of the
findings/recommendations of your research/analysis.
7. References - Please use the Harvard referencing system.
8. Maximum length – 3,000 words. The cover page, table of contents, executive
summary, and bibliography are not included in the word count. You may vary the
word count by +/- 10%.
The following formatting is recommended for the report:
• Use Portrait orientation
• Use Arial font, size 11 pt
• Use 1.5 line spacing
• Use A4 paper size


Page 2

1. Introduction
Banks are subjected to a wide array of risks during their operations. Risk management
is about understanding and managing the Bank's risk environment and taking measures,
where necessary, to ensure that risks are contained to acceptable levels, while making sure
loss-absorption buffers are sufficient. In addition, the analysis of banks must also consider
the current status of a country’s financial system and overall economy.
Financial statements as well as capital and risk disclosures (or Piller 3 Disclosures) offer a
window into the operations and risk management of a bank. The financial statements for
banks can look very different from those reported by most companies while risk
disclosures are unique to this sector.

2. Purpose
This term-long project will allow you to apply theory and financial modelling techniques to a
real bank. Thus, you will need to draw on the knowledge you acquire during lectures and the
skills you practice. You will also be expected to critically analyse bank decision making.
As an expert team in banking, you and your team members are asked to identify and
analyse bank financial risk management failures by the usage of information provided by
financial statements and other public disclosures. Your team are required to read Silicon
Valley Bank (SVB)’s 2022 Annual Report and its Pillar 3 capital disclosures, conduct relevant
research, and write a detailed consulting report.
An additional learning outcome is for teams to learn to collaborate effectively, incorporate
different perspectives, produce quality work according to an agreed plan, and provide
constructive feedback to each other.

3. Background
Silicon Valley Bank was the 16th largest bank the US and the biggest to fail since the
2008 financial meltdown.
During the week of March 6, 2023, Silicon Valley Bank, Santa Clara, CA, experienced a
severe bank run. On the morning of March 10, 2023, the California Department of
Financial Protection and Innovation seized SVB and placed it under the receivership of
the Federal Deposit Insurance Corporation (FDIC).
The collapse of SVB unfolded rapidly. On March 8, 2023, SVB announced a loss of $1.8
billion after having to sell securities with a total value of $21 billion. The bank also
planned to issue an additional $2.25 billion in shares to offset the losses. The situation
worsened as Moody's downgraded SVB's rating, and some major venture capital funds
like the Founders Fund recommended their portfolio companies withdraw funds from
SVB. On March 9, 2023, SVB customers rushed to withdraw funds, estimating
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approximately $42 billion was withdrawn in a single day, and SVB's stock plummeted by
60%.
People queue up outside the headquarters of the Silicon Valley Bank (SVB) in Santa
Clara, California, the United States, March 13, 2023. (Photo by Li Jianguo). Source:
Xinhua.
The FDIC on March 13, 2023, disclosed that it transferred all deposits -- both insured
and uninsured -- and substantially all assets of the former Silicon Valley Bank of Santa
Clara, California, to a newly created, full-service FDIC-operated "bridge bank" in an
action designed to protect all depositors of Silicon Valley Bank.
About the parent holding company: SVB Financial Group is a financial services
company focusing on the innovation economy, offering financial products and services
to clients across the United States and in key international markets. Prior to March 10,
2023, SVB Financial Group owned and operated Silicon Valley Bank, a state-chartered
bank. On March 17, 2023, SVB Financial Group sought Chapter 11 bankruptcy
protection (Bankr. S.D.N.Y. Case No. 23-10367).
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4. Consulting assignment
Your team’s job is to deliver a consulting report on how well risks including credit risk,
interest rate risk, market risk, liquidity risk, and capital adequacy were managed in the
lead-up to the Bank’s failure. Your manager is interested in how both managerial and
regulatory failures led to the demise of the institution and has requested that you and your
teammates to address the following questions in the consulting report:
A. By reference to the main financial risks faced by the SVB, discuss whether a user
(e.g. an investor or depositor) analysing the November 2022 Basel 3 Disclosures
of the SVB had sufficient information to foresee the failure of the bank in Q1
2023. Ensure that your discussion refers to gaps in the information provided by
SVB management in the annual financial statements (accounting information)
and Pillar 3 disclosures (regulatory information). [5 marks]
B. If you were an executive in the SVB at the time, which information would you
include in the Pillar 3 disclosures to ensure that users such as investors and bank
depositors had sufficient data to inform their decision making? While you can
refer to your conclusions in A above, justify your remarks by citing specific
metrics and how much and/or in which direction the published
figures/commentary would indicatively have changed according to your
recommendations. Ensure that any arguments based on your own workings (e.g.,
restating a ratio) are supported by clear descriptions of such calculations. [5
marks]
C. In the conduct of their supervision of banks, what were the main failures of bank
regulators that contributed to the failure of the SVB? Critically assess the
adequacy of the Basel Risk-Weighted-Assets Framework as reflected in the
financial statements and Pillar 3 Disclosures to stop the SVB failure. Ensure that
your answer highlights the interconnectedness of bank risks and how that added
complexity to their management and supervision and ultimately led to the failure
of the SVB. What are your recommendations to avoid such outcomes in future?
[5 marks]
D. From your own research, identify and discuss at least two failures of the the SVB
risk management framework that contributed to the Bank’s failure. [5 marks]
E. From your own research, identify and discuss how the SVB’s strategy of specialising in
the tech start-up business segment may have contributed to the failure of the Bank.
Briefly discuss how society’s adoption of recent technological innovations may have
contributed to the intensity of the bank run experienced by the SVB [5 marks]


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5. Timeline

Students will form consulting teams to combine their perspectives and skill sets to work on
a detailed and critical analysis of several risk aspects of this bank.

Assessment Tasks Due date (11:59 PM) Weight Deliverable
Group Self Registration Friday of Week 1 n/a Self-Registration via the Group
Builder tool on Moodle
Team Resume
and Contract
Friday of Week 1 n/a Recommended mutual
agreement on a group
contract
Final submission Wednesday 31
January 2024,
11.59pm
25% Final team consulting report
submission
Team Evaluation Friday of Week 5 5% Team evaluation survey


6. Submission Guide:

• The assignment should be submitted electronically on Moodle.
• The submission should be done by one member from your team.
• A penalty of 5% grade deduction will apply for each day of late submission after the due
date.

7. Team evaluation:
You will each provide a confidential evaluation of each of your fellow group members by
completing a team evaluation survey via the Group Assignment Submission Link on Moodle
individually. Self and peer evaluation increase your ability to critically evaluate and reflect
on your own learning and skills development. By honestly reflecting on your own
performance, as well as the performance of each member of the group, you may find that
you will be able to discover strategies that will help you work more effectively in your next
group work task.

A 5% penalty will apply for not completing the survey. Please make sure your response in
the survey is a fair reflection of each group member's contribution. If you give a too high or
too low rating, you will provide an explanation of your reasons for doing so. The team
evaluation scores can affect your final grade in this assessment.
Below is the list of questions included in the team evaluation survey:
• For each person, indicate the extent to which you agree with the statement, using
a scale of 1-5 (1=strongly disagree; 2=disagree; 3=neutral; 4=agree; 5=strongly
agree):
• Attends group meetings regularly and arrives on time.
• Contributes meaningfully to group discussions.
• Prepares work in a quality manner.
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• Demonstrates a cooperative and supportive attitude.
• Rate each team member's overall contribution to the Group Assignment.
• Justify your rating of contribution. Were the behaviours of any of your team
members particularly valuable or detrimental to the team? Please justify the rating
for any team member that you deemed to have not performed or contributed
equally to your Group Assignment.

8. Supporting materials:

1. SVB financial statements (Form 10-k) 2022 [supplied]
2. SVB Pillar 3 Disclosures November 2022 [supplied]
3. Federal Reserve Bank Board of Governors SVB Review Report [supplied]
4. Bretton Woods Committee SVB Blog Article [supplied]
Supplementary information links:
• SVB Basel III disclosures: https://ir.svb.com/financials/Regulatory-
Disclosures/default.aspx
• SVB annual reports: https://ir.svb.com/financials/annual-reports-and-
proxies/default.aspx
• GARP SVB systemic review report : https://www.garp.org/risk-
intelligence/market/fall-svb-systemic-032423












C
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C
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0
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9
8
G
Detailed Marking Criteria
Criteria
Poor
<50% (Fail)
Below
Average
50% - 64%
(Pass)
Average
65% - 74% (Credit)
Above Average
75% - 84% (Distinction)
Exceptional
≥ 85% (HD)
Demonstrates
knowledge and
understanding
of bank risks and
risk management
(30%)
Show little
understanding and
reasoning.
Does not
demonstrate
understanding of
bank risks and
risk
management.
Show some thinking
and reasoning but most
ideas are based on
general knowhow.
Main points lack
detailed development
and understanding of
bank risks
and risk management.
Content indicates
thinking and reasoning
with understanding of
bank risks and risk
management. Main
points are present with
some detail and
development.
Content indicates
articulated thinking
and good
understanding of bank
risks and risk
management.
Main points well
developed with quality
supporting details.
Content indicates clear,
logical and insightful
understanding of bank
risks and risk
management. Main points
well developed with high
qualitive and
quantitative support.
Critical analysis
of issues
applying
theory and
academic
concepts (30%)
Limited or no
application of
theory or
constructive
analysis.
No evidence of
critical thinking
and research.
Some application of
theory or data but
mainly descriptive.
Ideas are vague with
little evidence of critical
thinking and research.
Theory and analysis of
data was clearly
connected to the
application of the
bank with original
thought on a few ideas.
Some research and
critical thinking are
present.
Develops ideas with clear
link to theory with
sufficient and firm
evidence and original
thinking. Critical thinking
is weaved into points.
Develops ideas with
clear link to theory with
synthesis of ideas, in-
depth analysis and
evidences of original
thought and support for
the topic.
Reveals high degree of
critical
thinking.
Page 2
Recommends
solution based
on evidence
and theory
(20%)
No or
inappropriate
recommendation
s are made.
There are some
recommendations (too
many or too few), may
not be clearly linked to
relevant evidence
and theoretical
concepts.
There are relevant
market
recommendations, with
partial links to theoretical
concepts plus evidence
through support.
The recommendations
are relevant to
analysis and well
supported with
appropriate links to
theoretical concepts
showing evidence
through relevant
support.
The recommendations
are strongly linked to
evidence and highly
appropriate links to
theoretical concepts
showing evidence
through relevant
support.
Evidence of
Teamwork,
organization and
structure (20%)
No evidence of
teamwork
demonstrated.
Unclear,
uncoordinated, or
centred written
style, formats, and
tones.
Serious errors.
Fails to follow
most or all format
and assignment
requirements.
Team demonstrates
limited cohesion in
writing. Somewhat
unclear,
uncoordinated, or
centred written style,
formats, and tones.
Many ideas are
difficult to follow;
Includes irrelevant
material or go off
track.
Fails to follow most
format and
assignment
requirements.
Team demonstrates some
cohesion in writing.
Each paragraph has a
mainly clear focus.
Some points remain
misplaced and stray
from the topic.
Transitions evident but
not used throughout
essay.
Meets most format and
assignment requirements
with some assembly
errors.
Team demonstrates good
cohesion in writing.
Writing is coherent and
logically organized with
transitions used
between ideas and
paragraphs to create
coherence. Overall
unity of ideas is
present.
Meets format and
assignment
requirements. Report is
neat and correctly
assembled.
Team demonstrates
excellent cohesion in
writing.
Assists comprehension
and insight with seamless
integration of sections.
Writing shows high
degree of attention to
logic and reasoning of
points. Unity clearly
leads the reader to the
conclusion and stirs
thought regarding the
topic.
Meets all format and
assignment
requirements and
evidence attention to
detail. Report is neat
and correctly
assembled with
professional look.