Case Studies

A risk management case study aims to identify, analyze, and evaluate real-world scenarios where banks faced financial, credit, market, or operational risks, deriving lessons to strengthen risk frameworks and regulatory compliance.

Tail risk refers to rare but severe loss events beyond normal VaR estimates.

Barings Bank collapsed due to unauthorized speculative trading by a single rogue trader, Nick Leeson, exposing critical failures in internal controls, segregation of duties, and oversight — a classic operational risk event under Basel framework.

Wrong-way risk occurs when exposure increases as counterparty credit quality deteriorates.

The IL&FS crisis highlighted concentration risk and inadequate due diligence in lending to shadow banking entities, underlining the need for robust counterparty risk assessment and group-level exposure limits.

Banks shifted assets off-balance-sheet to reduce regulatory capital requirements artificially.

Evergreening refers to the practice of extending new credit to a borrower to enable repayment of existing dues, thus artificially preventing NPA classification and masking the true asset quality of the bank's portfolio.

Banks lend more in booms and tighten credit in downturns, amplifying economic cycles.