[Solved] Discussion Post

Assignment Prompt & Instructions

Using the file attached for information and reference, answer the questions below: – 1) How did JP Morgan find itself in this position? Develop a timeline of events from 2011 to the summer of 2012. – 2) Consider standard market risk management practices for financial institutions, such as VAR: – a. Why was the risk management not sufficient to prevent such an extraordinary loss? – b. Which risk metric do you consider most appropriate? Should liquidity of an asset be considered as well? – c. Consider risk-weighted assets: should they include net exposure or gross exposure? Should derivatives of all types be regarded as the same type of RWA? – 3) Is it appropriate to employ derivatives in a cash management function? – 4) How did the bank, its shareholders and the regulators react to the situation? Were these reactions appropriate? – 5) Consider the organizational structure and processes at JP Morgan in early 2011: – a. How active should/can risk management be in terms of enforcing limits or breaches? – b. Would it help to change the organizational structure of JP Morgan? – c. If you were to redesign the risk management policy, what would be your top three changes? – 6) Describe the lessons you would take away and the steps you would take to prevent a similar occurrence in your company. \ Week7.JPMorganandtheLondonWhale__xid-63557774_1-locked.pdf](https://www.sweetstudy.com/files/week7-jpmorganandthelondonwhale-xid-63557774-1-locked-pdf "Week7.JPMorganandtheLondonWhale__xid-63557774_1-locked.pdf")