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  • Banc One Corporation

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    Gaurav Gulati
    513 vizualizări1 pagină
    Banc One Corporation could move from being asset-sensitive to neutral or mildly liability-sensitive without using swaps by changing the mix of assets and liabilities on its balance sheet, such as increasing its fixed-rate lending and deposits. Using swaps has accounting and capital ratio implications compared to other methods, and affects the bank's interest rate sensitivity and liquidity. AIRS and basis swaps are types of derivatives that Banc One uses to hedge against interest rate and other risks, but its extensive derivatives portfolio may be negatively impacting its stock price by worrying analysts and investors.

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    Banc One

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    Banc One Corporation could move from being asset-sensitive to neutral or mildly liability-sensitive without using swaps by changing the mix of assets and liabilities on its balance sheet, such as increasing its fixed-rate lending and deposits. Using swaps has accounting and capital ratio implications compared to other methods, and affects the bank's interest rate sensitivity and liquidity. AIRS and basis swaps are types of derivatives that Banc One uses to hedge against interest rate and other risks, but its extensive derivatives portfolio may be negatively impacting its stock price by worrying analysts and investors.

    Drepturi de autor:

    © All Rights Reserved
    Descărcați ca DOCX, PDF, TXT sau citiți online pe Scribd
    Indicator pentru conținut neadecvat
    513 vizualizări1 pagină

    Banc One Corporation

    Încărcat de

    Gaurav Gulati
    Banc One Corporation could move from being asset-sensitive to neutral or mildly liability-sensitive without using swaps by changing the mix of assets and liabilities on its balance sheet, such as increasing its fixed-rate lending and deposits. Using swaps has accounting and capital ratio implications compared to other methods, and affects the bank's interest rate sensitivity and liquidity. AIRS and basis swaps are types of derivatives that Banc One uses to hedge against interest rate and other risks, but its extensive derivatives portfolio may be negatively impacting its stock price by worrying analysts and investors.

    Drepturi de autor:

    © All Rights Reserved
    Descărcați ca DOCX, PDF, TXT sau citiți online pe Scribd
    Indicator pentru conținut neadecvat
    din 1

    Banc One Corporation: Asset and Liability Management

    1. If Banc One wanted to manage its interest rate exposure without using swaps, what could
    it do? Specifically, how could it move from asset-sensitive to either neutral or mildly
    liability-sensitive without using swaps?
    2. What are the pros and cons of using swaps vs. these other means of adjusting the banks
    interest rate sensitivity? What impact do they have on banks interest rate sensitivity,
    liquidity, accounting ratios, capital ratios? Make sure you work through the appendix of
    the case.
    3. What are AIRS? How do they work? Why is Banc One using them so extensively?
    4. What are basis swaps? Why has Banc One recently significantly increased its basis swap
    position?
    5. How might its derivatives portfolio be damaging the banks stock price? What are exactly
    analysts and investors worried about?
    6. What should McCoy do?

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