Case | HBS Case Collection | October 1994

Bankers Trust: Global Investment Bank

by Andre F. Perold and Kuljot Singh

Abstract

In October 1992, Eugene Shanks, president of Bankers Trust New York Corp., and Brian Walsh, head of the Global Investment Bank (GIB) business unit, are considering a proposal for a large and complex financing involving the North Sea Oil Co. (NSOC). The financing structure involves the use of derivatives, exposing Bankers Trust New York Corp. to substantial oil price risk and credit risk. Its size of $700 million and lengthy duration makes managing and laying off these risks in the financial markets a matter of prime concern. The proposed deal has been brought together by GIB, which was formed recently by merging Bankers Trust's capital markets and corporate finance functions. If successful, this deal will be an important barometer of the value that can be created by combining these traditionally separate functions.

Keywords: Risk and Uncertainty; Credit Derivatives and Swaps; Risk Management; Value Creation; Business History; Capital Markets; Financing and Loans; Financial Markets; Corporate Finance; Banking Industry; Energy Industry;

Citation:

Perold, Andre F., and Kuljot Singh. "Bankers Trust: Global Investment Bank." Harvard Business School Case 295-010, October 1994.