Clayton S. Rose

Professor of Management Practice

Clayton Rose joined the HBS faculty in 2007 after many years as a senior executive in financial services.  His teaching and case writing are focused on managerial and leadership responsibility and on the financial services industry.  He currently teaches Reimagining Capitalism:  Business and the Big Problems, a second year elective.  Previously he taught Managing the Financial Firm, a course he created at the onset of the financial crisis, Leadership and Corporate Accountability, The Moral Leader, and was a member of the design team and faculty for the new required FIELD course.  He is also working with a small faculty group to develop an executive education program aimed at enhancing the effectiveness of the most senior teams in large enterprises.

He was Vice Chairman at JP Morgan Chase & Co, and senior executive at J.P. Morgan & Co. (the predecessor company). He was a member of JPM’s senior leadership and headed two of the firm’s five major lines of business - Global Investment Banking and Global Equities. He was a founder and architect of the firm's equities business, and had management roles in various securities, derivative and corporate finance businesses, and worked in London. He also had responsibility for Morgan's private equity business, led Morgan's Diversity Initiative, and represented the firm during the Long Term Capital Management crisis in 1998.

He received his Ph.D. (with distinction) in sociology from the University of Pennsylvania in 2007. In addition to his doctorate, he has earned an AB and MBA from the University of Chicago, and an MA from the University of Pennsylvania. He has taught strategy at the Graduate School of Business at Columbia University and the Stern School of Business at New York University.

He is currently a director of Bank of America, XL Group plc and a trustee of the Howard Hughes Medical Institute.  He has served on a number of other boards, including Freddie Mac (after the government takeover) and chairing the board of one of the largest hedge funds during the financial crisis.

Journal Articles

  1. Race at the Top: How Companies Shape the Inclusion of African Americans on Their Boards in Response to Institutional Pressures

    Drawing on institutionalist theory, we conceptualize the racial composition of the boards of directors of large American companies as shaped in response to social and political norms. We use new longitudinal and cross-sectional data to test hypotheses about factors that shape the degree of racial inclusion on boards of directors among large public corporations, and we draw upon in-depth interviews with key participants to gain insights into the mechanisms that are likely to have generated the patterns we detect in our statistical models. We find evidence suggesting that large American corporations manage the racial composition of their elite leadership groups in response to these norms.

    Keywords: Leadership; Governing and Advisory Boards; Race Characteristics; Mathematical Methods; Government and Politics; Public Ownership; United States;

    Citation:

    Rose, Clayton S., and William T. Bielby. "Race at the Top: How Companies Shape the Inclusion of African Americans on Their Boards in Response to Institutional Pressures." Social Science Research 40, no. 3 (May 2011): 841–859. View Details

Cases and Teaching Materials

  1. Teckentrup: A Door to Managing Difference

    For Kai Teckentrup, the owner and co-CEO of the German "Mittelstand" door manufacturer Teckentrup, balancing competitive pressures, demographic realities and values were at the heart of the diversity program that he had started and championed at the company. Beyond this, attracting skilled workers to Germany was a national imperative; as the native population aged and its numbers in the workforce shrank, it would be critical to find new workers to fund and maintain the retirement and social service programs provided by the government. The company had made significant progress, and Kai was a recognized leader in German business for his attention to and success in managing diversity, but he knew there was much more to do.

    Keywords: Diversity Management; "Corporate Values," Manufacturing Industry, Competitiveness, Demographics; Change Management; Transformation; Diversity Characteristics; Ethnicity Characteristics; Gender Characteristics; Literacy Characteristics; Nationality Characteristics; Race Characteristics; Residency Characteristics; Corporate Accountability; Corporate Social Responsibility and Impact; Organizational Culture; Economic Growth; Fairness; Moral Sensibility; Values and Beliefs; Immigration; Employee Relationship Management; Civil Society or Community; Manufacturing Industry; Construction Industry; Consumer Products Industry; Europe; Germany; Russia; Turkey;

    Citation:

    Rose, Clayton, Jerome Lenhardt, and Daniela Beyersdorfer. "Teckentrup: A Door to Managing Difference." Harvard Business School Case 315-016, October 2014. View Details
  2. Following Lance Armstrong: Excellence Corrupted

    After years of vigorous denials, on January 14, 2013 Lance Armstrong admitted in a television interview with Oprah Winfrey that he "doped" in each of his record seven consecutive Tour de France victories, confirming the findings a few months earlier by the US Anti-Doping Agency that he had orchestrated "a massive team doping scheme, more extensive than any previously revealed in professional sports history." Until that moment with Oprah, Armstrong had consistently and strenuously denied using performance enhancing drugs (PEDs), blood transfusions, or other artificial enhancers to compete in the grueling, three-week race throughout France. He verbally thrashed, bullied and threatened legal action against riders, journalists, race officials, and anyone else who had suggested he had cheated.

    This case explores Armstrong's leadership of a corrupt culture, the extensive nature of the cheating scandal among elite athletes, the decisions taken by other riders to both support Armstrong and his scheme and ultimately to admit to cheating, and the costs borne by those associated with Armstrong. It allows for discussion of the responsibilities that leaders have to followers, and that followers have to themselves and to others.

    Keywords: corruption; leadership; culture; Ethics; Crime and Corruption; Leadership; Culture; Sports Industry; United States; Europe; France;

    Citation:

    Rose, Clayton, and Noah Fisher. "Following Lance Armstrong: Excellence Corrupted." Harvard Business School Case 314-015, July 2013. View Details
  3. High Wire Act: Credit Suisse and Contingent Capital

    Late in 2010, Credit Suisse CEO Brady Dougan and his team considered whether or not to issue contingent capital, which Swiss regulators would require by 2019. They faced a number of substantial issues, including: Would contingent capital actually work as conceptualized and provide sufficient loss absorption when called upon? Would it be cost effective? Would there be sufficient demand for this new instrument? What were the risks to Credit Suisse's reputation with clients and regulators if an issue did not go well? In addition, The Basel Committee, the body that recommended global bank capital adequacy standards, had decided that much existing bank "hybrid debt" would no longer count as capital for regulatory purposes, meaning that Credit Suisse and other banks would need to replace this portion of their equity accounts with some other form of capital. However, the Basel Committee had yet to decide whether contingent capital would count as capital in the new "Basel III" regulatory regime.

    Keywords: Financial Institutions; Capital Markets; Financial Crisis; Decision Choices and Conditions; Leadership; International Finance; Financial Liquidity; Risk and Uncertainty; Competitive Strategy; Financial Services Industry; Switzerland;

    Citation:

    Rose, Clayton, and David Lane. "High Wire Act: Credit Suisse and Contingent Capital." Harvard Business School Teaching Plan 313-048, May 2013. View Details
  4. Barclays and the LIBOR Scandal

    In the summer of 2012, Barclays plc, one of the largest banks in the world, agreed to settle with authorities and acknowledged that the firm had manipulated LIBOR (London Inter-Bank Offered Rate)—a benchmark reference rate that was fundamental to the operation of international financial markets and was the basis for trillions of dollars of financial transactions. The scandal brought into question the credibility of LIBOR and raised the issue of who was responsible for the manipulation that had occurred at Barclays. The scandal cost Barclays' chairman and its controversial CEO Robert Diamond their positions and called into question the actions of the Bank of England, U.K.'s central bank. The case provides students with an opportunity to understand the details behind the scandal and the roles of multiple parties. It allows students to explore the challenges faced by leaders operating in a corrupt system, and to understand the responsibilities that financial institutions and their leaders/managers have to the financial and economic systems in which they operate. Because LIBOR is so widely used as a benchmark reference, the case study and analysis have global implications.

    Keywords: financial systems; financial services; ethics; corruption; regulation; culture; leadership; general management; Banking Industry; Financial Services Industry; United Kingdom;

    Citation:

    Rose, Clayton S., and Aldo Sesia. "Barclays and the LIBOR Scandal ." Harvard Business School Teaching Plan 313-108, April 2013. View Details
  5. Barclays and the LIBOR Scandal

    In June of 2012, Barclays plc admitted that it had manipulated LIBOR—a benchmark interest rate that was fundamental to the operation of international financial markets and that was the basis for trillions of dollars of financial transactions. Between 2005 and 2009 Barclays, one of the world's largest and most important banks, manipulated LIBOR to gain profits and/or limit losses from derivative trades. In addition, between 2007 and 2009 the firm had made dishonestly low LIBOR submission rates to dampen market speculation and negative media comments about the firm's viability during the financial crisis. In settling with U.K. and U.S. regulators the firm agreed to pay $450 million in fines. Within a few days of the settlement, Barclays' CEO, Robert Diamond, had resigned under pressure from British regulators. Diamond blamed a small number of employees for the derivative trading related LIBOR rate violations and termed their actions as "reprehensible." As for rigging LIBOR rates to limit market and media speculation of Barclays' financial viability, Diamond denied any personal wrongdoing, and argued, that if anything, Barclays was more honest in its LIBOR submissions than other banks—questioning how banks that were so troubled as to later be partly nationalized could appear to borrow at a lower rate than Barclays. This case explains why LIBOR was an essential part of the global financial market, the mechanism used to establish the rate, and what Barclays did wrong. The case allows for an examination of: i) the consequences of violating the trust of market participants, ii) cultural and leadership flaws at Barclays; iii) the challenge of effectively competing in a market where systemic, and widely understood, corruption is taking place, iv) the complicity of regulators in perpetuating a corrupt system; v) what might, or might not, be effective remedies for the systemic flaws in LIBOR.

    Keywords: financial systems; financial services; ethics; corruption; regulation; culture; leadership; general management; Banking Industry; Financial Services Industry; United Kingdom;

    Citation:

    Rose, Clayton S., and Aldo Sesia. "Barclays and the LIBOR Scandal." Harvard Business School Case 313-075, January 2013. (Revised May 2013.) View Details
  6. JP Morgan Chase & the CIO Losses

    On July 13, 2012, JP Morgan Chase & Co. announced a larger than expected loss for the quarter, $4.4 billion, from positions held in the Chief Investment Office (CIO), raising the total losses to $5.9 billion. Since the substantial risks in the CIO had first been revealed on April 5, the firm and its CEO, Jamie Dimon, had been the source of intense scrutiny by regulators, legislators, the media, shareholders, and analysts. The situation represented a rare, but significant, misstep by Dimon who had successfully steered Morgan through the financial crisis and was regarded as one of the financial industry's best leaders and risk managers. The firm also revealed that it was restating its first quarter 2012 results because of what it had learned as it investigated the CIO losses.

    Keywords: risk management; banking; governance; finance; Risk Management; Corporate Governance; Business Earnings; Accounting; Banking Industry; Financial Services Industry; United States;

    Citation:

    Rose, Clayton. "JP Morgan Chase & the CIO Losses." Harvard Business School Case 313-033, August 2012. (Revised September 2012.) View Details
  7. Aubrey McClendon's Special Incentive Compensation at Chesapeake Energy (B)

    Keywords: stockholders; Activist Investors; corruption; Conflict of Interests; Crime and Corruption; Executive Compensation; Energy Industry;

    Citation:

    Healy, Paul, Clayton S. Rose, and Penelope Rossano. "Aubrey McClendon's Special Incentive Compensation at Chesapeake Energy (B)." Harvard Business School Supplement 113-093, January 2013. View Details
  8. On Weldon's Watch: Recalls at Johnson & Johnson from 2009 to 2010 (TN)

    Teaching Note for On Weldon's Watch: Recalls at Johnson & Johnson from 2009 to 2010 HBS case 311-029.

    Keywords: Decision Choices and Conditions; Values and Beliefs; Leadership; Crisis Management; Corporate Social Responsibility and Impact; Organizational Change and Adaptation; Organizational Culture; Quality; Pharmaceutical Industry;

    Citation:

    Sucher, Sandra J., and Clayton S. Rose. "On Weldon's Watch: Recalls at Johnson & Johnson from 2009 to 2010 (TN)." Harvard Business School Teaching Note 613-064, November 2012. View Details
  9. Transatlantic Holdings, Inc. - The Belle of the Ball

    In November of 2011 Transatlantic Holdings, Inc., a global property and casualty reinsurance company, announced it had agreed to sell itself to Alleghany Corporation, ending "the most frenzied takeover battle" of 2011, which involved competitors, Warren Buffett's National Indemnity, and private equity investors. The agreement with Alleghany came after Transatlantic's failed effort at a merger of equals, and several other unsuccessful bids for the company, one that was hostile.

    Keywords: Mergers & Acquisitions; finance; strategy; insurance and reinsurance; governance; Insurance; Mergers and Acquisitions; Strategy; Valuation; Financial Services Industry; Insurance Industry; United States; Bermuda; Switzerland;

    Citation:

    Rose, Clayton S., and Aldo Sesia. "Transatlantic Holdings, Inc. - The Belle of the Ball." Harvard Business School Case 313-017, July 2012. View Details
  10. Barclays Capital and the Sale of Del Monte Foods

    This case explores the reputational and legal issues that arise as Barclays Capital attempted to manage client conflicts by following established industry practice in the face of changing legal norms. In February 2011, Judge Travis Laster granted a preliminary injunction that delayed for 20 days a shareholder vote on the sale of Del Monte Foods Co. (Del Monte) to a consortium of three private equity firms. In his opinion, Laster was critical of Del Monte's board, noting that the directors may not have properly exercised their fiduciary duties, and the private equity firms. However, he saved his most severe criticism for an organization that was not even a party to the suit: the company's financial advisor, Barclays Capital. He suggested that Barclays had placed its own interests ahead of the company's in its actions and advice.

    Keywords: client management; Fiduciary Duty; Mergers & Acquisitions; investment banking; private equity; Ethics; Finance; Reputation; Banking Industry; United States;

    Citation:

    Coates, John, Clayton Rose, and David Lane. "Barclays Capital and the Sale of Del Monte Foods." Harvard Business School Case 313-036, July 2012. View Details
  11. El Paso's Sale to Kinder Morgan

    On October 16, 2011, El Paso agreed to sell itself to Kinder Morgan for just over $21 billion. Shareholders filed suit, arguing that the process was tainted by conflict and that a higher price could be obtained. Delaware Chancellor Leo Strine agreed with the plaintiffs on the conflicts, and in his opinion expressed serious concerns with how El Paso advisor Goldman Sachs and El Paso CEO Douglas Foshee conducted themselves in the process. The case examines these conflicts, Strine's view of their effects on the outcome, and the reason he was unable to grant the plaintiff's request, instead allowing the merger vote to proceed. The case is a companion case to "Barclays Capital and the Sale of Del Monte Foods," HBS 313-020.

    Keywords: El Paso; Kinder Morgan; Goldman Sachs; Leo Strine; conflicts of interest; corporate governance; Corporate Governance; Relationships; Lawsuits and Litigation; Energy Industry; Banking Industry; United States;

    Citation:

    Coates, John, Clayton Rose, and David Lane. "El Paso's Sale to Kinder Morgan." Harvard Business School Case 313-021, July 2012. View Details
  12. How Much? (C)

    The leader of a small business team must deal with an employee who is unwilling to reveal to him the profitability of a transaction for the firm and client.

    Keywords: leadership; ethics; culture; client responsibility; Leadership; Employees; Ethics; Communication; Knowledge Sharing; Organizational Culture;

    Citation:

    Rose, Clayton. "How Much? (C)." Harvard Business School Supplement 313-006, July 2012. View Details
  13. How Much? (A)

    The leader of a small business team must deal with an employee who is unwilling to reveal to him the profitability of a transaction for the firm and client.

    Keywords: leadership; ethics; culture; client responsibility; Leadership; Groups and Teams; Ethics; Finance; Conflict Management;

    Citation:

    Rose, Clayton. "How Much? (A)." Harvard Business School Case 313-004, July 2012. (Revised July 2012.) View Details
  14. Show Me the Money (B)

    A business unit leader faces a major decision when an employee critical to a high-profile transaction asks for a unique compensation arrangement that has implications for the culture of the business.

    Keywords: leadership; culture; compensation; Risk Management; Leadership; Decision Making; Organizational Culture; Compensation and Benefits;

    Citation:

    Rose, Clayton. "Show Me the Money (B) ." Harvard Business School Supplement 313-003, July 2012. View Details
  15. Show Me the Money (A)

    A business unit leader faces a major decision when an employee critical to a high profile transaction asks for a unique compensation arrangement that has implications for the culture of the business.

    Keywords: leadership; culture; compensation; Leadership; Cost vs Benefits; Decision Choices and Conditions; Organizational Culture; Compensation and Benefits;

    Citation:

    Rose, Clayton. "Show Me the Money (A)." Harvard Business School Case 313-002, July 2012. View Details
  16. Shut It Down?

    Meredith, the head of a major division of a financial firm, must confront an unexpected response and challenge from a senior colleague when she proposes shutting down an underperforming unit.

    Keywords: leadership; strategy; change management; collaboration; Business Units; Business Exit or Shutdown; Leadership; Strategy; Financial Services Industry;

    Citation:

    Rose, Clayton. "Shut It Down?" Harvard Business School Case 313-001, July 2012. View Details
  17. Friend Bank: The Time for Hope (Abridged)

    In 2010, Friend Bank was entering the fifth year of Hope Harris Johnson's ambitious 20-year growth plan to transform her family's one-branch community bank into an institution with a substantial presence in southeastern Alabama. Harris Johnson was pleased, so far, with the results. Strategically they had exceeded expectations in opening a second office and execution of the plan was going well. And while the financial and economic crisis that began in 2008 had affected the financial results, it also presented Friend with competitive opportunities. Nonetheless, realizing her ultimate goals for Friend would not come easily. This is a shorter version of "Friend Bank: The Time for Hope," HBS No. 310-070.

    Keywords: banking; family business; strategy and execution; Banks and Banking; Family Ownership; Financial Institutions; Strategy; Banking Industry; United States; Alabama;

    Citation:

    Rose, Clayton, and Aldo Sesia. "Friend Bank: The Time for Hope (Abridged)." Harvard Business School Case 313-010, July 2012. (Revised August 2012.) View Details
  18. MF Global: Where's the Money?

    When MF Global failed in October of 2011, it was discovered that $1.6 billion of segregated customer assets was missing. Safeguarding these assets was the firm's responsibility, and in the words of one SEC official, its "sacred obligation." What is known about the missing assets is that they were taken from the accounts of customers trading in commodity futures and used in other areas of the firm; less is known about how it happened. The case describes MF Global's operating model, certain management decisions, its regulatory oversight, and the chaos of its final days, allowing for an exploration of how so much money could have gone missing. (Note: This case may be read in conjunction with its companion, "MF Global: Changing Stripes" (HBS Case 312-105), which discusses the managerial and strategic issues leading to the firm's collapse.)

    Keywords: financial firms; customer obligations; bankruptcy; regulation; ethics; financial crisis; brokerage; Asset Management; Ethics; Governing Rules, Regulations, and Reforms; Financial Management; Crisis Management; Insolvency and Bankruptcy; Financial Services Industry;

    Citation:

    Rose, Clayton S., Pamela Chan, and Raghav Chopra. "MF Global: Where's the Money?" Harvard Business School Case 312-106, June 2012. (Revised August 2012.) View Details
  19. MF Global: Changing Stripes

    Jon Corzine became the CEO of MF Global in March of 2010. Eighteen months later, and in the wake of a massive trade in European sovereign debt, the firm filed for bankruptcy, the 8th largest in U.S. history. As the firm failed it was discovered that over $1.6 billion in segregated customer assets was missing. The case explores issues that may have contributed to MF Global's demise, including its business model and the competitive pressures it faced prior to and following Corzine's arrival, and the strategic and managerial decisions taken by Corzine to reorient the firm. In addition, the sovereign debt trade, created to boost earnings, is described in some detail.

    Keywords: strategy; leadership; governance; bankruptcy; financial firms; financial crisis; brokerage; Asset Management; Sovereign Finance; Insolvency and Bankruptcy; Borrowing and Debt; Trade; Business Model;

    Citation:

    Rose, Clayton, Yasmin Dahya, and Jenevieve Lee. "MF Global: Changing Stripes." Harvard Business School Case 312-105, June 2012. (Revised August 2012.) View Details
  20. Aubrey McClendon's Special Incentive Compensation at Chesapeake Energy (A)

    Aubrey McClendon, founder and CEO of Chesapeake Energy, was, according to Fortune Magazine, the highest paid U.S. CEO in 2008 receiving over $100 million in total compensation. McClendon received this compensation despite a significant drop in the company's stock price and financial performance during the year. The (A) case addresses the specifics of the compensation and the rationale for the compensation from the perspective of Chesapeake's board and its compensation committee including McClendon's role in consummating several joint ventures, which the board and committee believed positioned the company for future growth in the relatively young industry of unconventional natural gas exploration and extraction. In addition, the (A) case describes the role of the compensation committee and the company's executive performance measurement factors.

    Keywords: Financial Statements; Financial Reporting; Price; Stock Options; Valuation; Joint Ventures; Business Growth and Maturation; Economic Growth; Growth and Development Strategy; Change Management; Energy Industry; United States;

    Citation:

    Healy, Paul, Clayton S. Rose, and Aldo Sesia. "Aubrey McClendon's Special Incentive Compensation at Chesapeake Energy (A)." Harvard Business School Case 110-047, January 2010. (Revised April 2013.) View Details
  21. The Tip of the Iceberg: JP Morgan Chase and Bear Stearns (A)

    "Bear Stearns & Co. burned through nearly all of its $18 billion in cash reserves during the week of March 10, 2008, and an unprecedented provision of liquidity support from the Federal Reserve on Friday, March 13 was insufficient to reverse the decline in Bear's condition. Federal Reserve Chairman Benjamin Bernanke, Treasury Secretary Henry Paulson, and New York Fed President Timothy Geithner were intent on limiting the impact of Bear's problems on the wider financial system. James ""Jamie"" Dimon, Morgan's Chairman and CEO, was in frequent contact with these regulators over the weekend of March 14–16, negotiating possible scenarios for the rescue of Bear, without which Bear would be forced to seek bankruptcy protection when markets opened on Monday. Late on Sunday afternoon, March 16, Bear's board accepted Morgan's offer to purchase Bear for $2 per share, an offer that would not have been made without significant government assistance. There was hope that the Bear rescue would help avert the far-reaching spread of damage into the larger financial world that many policymakers viewed as likely to follow the failure of a major investment bank. This case examines a seminal event in the financial and economic crisis that began in the summer of 2007 and provides background for better understanding the full scope of the crisis as it was revealed during the summer and fall of 2008. It was written to address two sets of issues. First, it provides the opportunity to understand the corporate finance issues of capital and liquidity and of firm valuation. Second, the case allows for the exploration of aspects of a firm's internal and external governance, as well as the challenges of navigating through a crisis when faced with compelling pressures from competing stakeholders."

    Keywords: Mergers and Acquisitions; Financial Crisis; Capital; Financial Liquidity; Financial Strategy; Corporate Governance; Crisis Management; Business and Stakeholder Relations; Competition; Valuation; Financial Services Industry;

    Citation:

    Rose, Clayton S., Daniel Baird Bergstresser, and David Lane. "The Tip of the Iceberg: JP Morgan Chase and Bear Stearns (A)." Harvard Business School Case 309-001, January 2009. (Revised November 2011.) View Details
  22. Perella Weinberg Partners: New Firm, Old Values

    In the five years since it opened its doors, the investment banking boutique Perella Weinberg Partners had grown into a firm that advised a roster of blue-chip clients on critical transactions and had over $8 billion of client assets under management. The three co-founders, all veterans of Wall Street, were proud of the firm they had created and were pleased with its success to date, but they also knew that it had reached a key inflection point. How much could they, or would they, want to grow? What was the best way to enhance their "relevance"? What were the costs, benefits, and impediments to growth? Another looming question was whether the firm should go public at some point.

    Keywords: Cost; Investment Banking; Growth and Development; Compensation and Benefits; Growth and Development Strategy; Market Entry and Exit; Going Public; Banking Industry;

    Citation:

    Rose, Clayton S., and Aman Malik. "Perella Weinberg Partners: New Firm, Old Values." Harvard Business School Case 312-013, September 2011. (Revised September 2011.) View Details
  23. Before the Fall: Lehman Brothers 2008

    This case examines Lehman Brothers in the months preceding its collapse. Following the announcement of a huge and unexpected second quarter loss, the CFO was removed from her post after only seven months in the job. This case explores the challenges faced by a firm leader as she attempts to manage a situation that threatens the firm's survival. In particular, the case allows for an examination of how changes in a firm's performance and position are communicated to key external stakeholders in an effort to retain their confidence, while market conditions worsen, the balance sheet deteriorates, and the firm's credibility is challenged by a short-selling hedge fund.

    Keywords: Communication Strategy; Financial Crisis; Insolvency and Bankruptcy; Financial Management; Financial Markets; Crisis Management; Trust; Financial Services Industry;

    Citation:

    Rose, Clayton S., and Anand Ahuja. "Before the Fall: Lehman Brothers 2008." Harvard Business School Case 309-093, April 2009. (Revised September 2011.) View Details
  24. What Happened at Citigroup? (B)

    The (B) case provides information on actions taken by Citigroup management in 2009-2010 in the aftermath of the financial crisis and massive government intervention to save the bank. It is a supplement to the (A) case.

    Keywords: Financial Crisis; Banks and Banking; Banking Industry; Financial Services Industry;

    Citation:

    Rose, Clayton, and Aldo Sesia. "What Happened at Citigroup? (B)." Harvard Business School Supplement 312-038, August 2011. (Revised August 2011.) View Details
  25. Before the Fall: Lehman Brothers 2008 (TN)

    Teaching Note for 309-093.

    Keywords: Resignation and Termination; Problems and Challenges; Management; Change; Performance; Rank and Position; Business and Stakeholder Relations; Investment Funds; Capital Structure; Service Industry;

    Citation:

    Rose, Clayton, and Sally Canter Ganzfried. "Before the Fall: Lehman Brothers 2008 (TN)." Harvard Business School Teaching Note 312-044, August 2011. View Details
  26. Going to the Oracle: Goldman Sachs, September 2008 (TN)

    Teaching Note for 309-069.

    Keywords: Financial Crisis; Investment; Negotiation Deal; Capital; Financial Liquidity; Decisions; Management Teams; Banks and Banking; Financing and Loans; Banking Industry; Financial Services Industry; United States;

    Citation:

    Rose, Clayton, and Sally Canter Ganzfried. "Going to the Oracle: Goldman Sachs, September 2008 (TN)." Harvard Business School Teaching Note 312-045, August 2011. View Details
  27. Post-Crisis Compensation at Credit Suisse (TN) (A), (B), and (C)

    Teaching Note for 311-005, 311-006, and 311-007.

    Keywords: Compensation and Benefits; Financial Crisis; Financial Services Industry;

    Citation:

    Rose, Clayton, and Sally Canter Ganzfried. "Post-Crisis Compensation at Credit Suisse (TN) (A), (B), and (C)." Harvard Business School Teaching Note 312-046, August 2011. View Details
  28. Friend Bank: The Time for Hope (TN)

    Teaching Note for 310-070.

    Keywords: Banks and Banking; Planning; Transformation; Business Offices; Financial Crisis; Economic Slowdown and Stagnation; Goals and Objectives; Competitive Strategy; Opportunities; Banking Industry; Alabama;

    Citation:

    Rose, Clayton, and Sally Canter Ganzfried. "Friend Bank: The Time for Hope (TN)." Harvard Business School Teaching Note 312-049, August 2011. View Details
  29. Lessons Learned? Brooksley Born & the OTC Derivatives Market (TN) (A) and (B)

    Teaching Note for 311-044 and 311-070.

    Keywords: Governing Rules, Regulations, and Reforms; Trade; Financial Crisis; Markets;

    Citation:

    Rose, Clayton, and Sally Canter Ganzfried. "Lessons Learned? Brooksley Born & the OTC Derivatives Market (TN) (A) and (B)." Harvard Business School Teaching Note 312-051, August 2011. View Details
  30. High Wire Act: Credit Suisse and Contingent Capital (A)

    Late in 2010, Credit Suisse CEO Brady Dougan and his team closed in on the decision of whether or not to issue contingent capital, which Swiss regulators would require by 2019. There were a number of substantial issues facing Dougan and his team, including whether contingent capital would provide sufficient loss absorption when called upon, would there be sufficient demand for this new instrument, would it be cost effective capital, and what were the risks to Credit Suisse's reputation with clients and regulators if an issue did not go well? In addition, The Basel Committee, the body that recommended global bank capital standards, had decided that much of the existing bank "hybrid debt" would no longer count as capital for regulatory purposes, meaning banks would need to replace this portion of their equity accounts with some other form of capital. However, Basel had yet to decide whether contingent capital would be allowable in the new "Basel III" regulatory regime.

    Keywords: Financial Institutions; Capital Markets; Financial Crisis; Decision Choices and Conditions; Leadership; International Finance; Financial Liquidity; Risk and Uncertainty; Competitive Strategy; Financial Services Industry; Switzerland;

    Citation:

    Rose, Clayton S., and Aldo Sesia. "High Wire Act: Credit Suisse and Contingent Capital (A)." Harvard Business School Case 312-007, August 2011. (Revised October 2012.) View Details
  31. High Wire Act: Credit Suisse and Contingent Capital (B)

    The B case describes the process and terms of the very successful offerings of contingent capital in February 2011, as well as The Basel Committee's preliminary decision not to allow contingent capital to count as Tier 1 equity.

    Keywords: Cost vs Benefits; Decisions; Financial Crisis; Finance; Capital; Financial Instruments; Leadership;

    Citation:

    Rose, Clayton S., and Aldo Sesia. "High Wire Act: Credit Suisse and Contingent Capital (B)." Harvard Business School Supplement 312-008, August 2011. View Details
  32. What Happened at Citigroup? (A)

    What went wrong at Citigroup? In 1998, the Travelers Group and Citicorp merged to create Citigroup Inc., considered the first true global "financial supermarket" and a business model to be envied, feared, and emulated. By year-end 2006 the firm had a market capitalization of $274 billion, with $1.9 trillion in assets and $24.6 billion in earnings. But, ten years after the merger, it ended in tears. In July 2009, the firm was effectively nationalized, with billions of dollars in bailout money converted into a 34% ownership stake for the U.S. government. Citigroup was worth less than $16 billion, having lost more than $250 billion in value from its peak. This case examines Citi's business model, the challenges it faced, its leadership, and key decisions to better understand what contributed to the failure of one of the most powerful financial firms in the world.

    Keywords: Mergers and Acquisitions; Business Model; Decision Choices and Conditions; Globalized Firms and Management; Leadership; Risk Management; Failure; Financial Services Industry;

    Citation:

    Rose, Clayton S., and Aldo Sesia. "What Happened at Citigroup? (A)." Harvard Business School Case 310-004, July 2009. (Revised August 2011.) View Details
  33. Note on Capital in the U.S. Financial Industry

    This note was created to supplement classroom discussion in the EC course "Managing the Financial Firm" and provides background for exploring issues general managers in financial firms face in considering appropriate capital levels.

    Keywords: Capital; Financial Institutions; Management; Financial Services Industry; United States;

    Citation:

    Rose, Clayton S., Scott Waggoner, and Sally Canter Ganzfried. "Note on Capital in the U.S. Financial Industry." Harvard Business School Technical Note 310-005, July 2009. (Revised July 2011.) View Details
  34. ISS A/S (A)

    Provides the opportunity to examine the nature and extent of a company's responsibilities to its bondholders, and to develop an enhanced understanding of the challenges in managing contractual obligations, and circumstances under which business leaders might agree to terms outside the contract. Here, the context is a "going private" transaction in Europe, where the financing plan called for the addition to the company's balance sheet of a significant amount of new debt and a reshaping of the capital structure. While leveraged buyouts had been used in Europe for several years, this was likely the first LBO done with a company that had publicly traded investment grade debt outstanding. The increased debt from the deal would increase the risk to the company and to the existing bonds, and the bonds' prices would fall significantly as a result. Focuses on how the private equity buyers might consider the reaction of bondholders to the structure of the acquisition, and on their possible response. Students need to evaluate the transaction and its effect on the bonds, understand the principles governing contractual duties (and how they differ from fiduciary obligations), and account for a business and social culture outside the United States.

    Keywords: Risk and Uncertainty; Bonds; Contracts; Private Equity; Leveraged Buyouts; Privatization; Business and Stakeholder Relations; Borrowing and Debt; Cross-Cultural and Cross-Border Issues; Europe;

    Citation:

    Rose, Clayton S. "ISS A/S (A)." Harvard Business School Case 308-054, November 2007. (Revised June 2011.) View Details
  35. Going to the Oracle: Goldman Sachs, September 2008

    On September 23, 2008, in the midst of an historic crisis in the U.S. financial markets, Warren Buffet's Berkshire Hathaway invested $5 billion in Goldman Sachs. Goldman CEO, Lloyd Blankfein, said: "We are pleased that given our longstanding relationship, Warren Buffett, arguably the world's most admired and successful investor, has decided to make such a significant investment in Goldman Sachs." He added that the deal "will further bolster our strong capitalization and liquidity position," calling Buffett's decision "a strong validation of our client franchise and future prospects." For his part, Buffett called Goldman "an exceptional institution" with "…an unrivaled global franchise, a proven and deep management team, and the intellectual and financial capital to continue its track record of outperformance." This case provides an opportunity to evaluate Goldman's decision to raise capital, the cost to the firm of Buffett's investment, and the decision by Warren Buffett to make the investment, all in the context of a profound market crisis that may have altered the usual metrics for such decisions.

    Keywords: Decision Choices and Conditions; Financial Crisis; Capital Structure; Financial Liquidity; Financial Markets; Investment; Performance Capacity; Financial Services Industry; United States;

    Citation:

    Rose, Clayton S., and David Lane. "Going to the Oracle: Goldman Sachs, September 2008." Harvard Business School Case 309-069, May 2009. (Revised June 2011.) View Details
  36. Note on Lobbying and the Dodd-Frank Financial Reforms

    The note provides background on the Dodd-Frank Wall Street Reform and Consumer Protection Act, brief background on lobbying, and aspects of the lobbying effort by the financial industry and JP Morgan Chase with regard to Dodd-Frank. It is intended as a companion to "The Tip of the Iceberg: JP Morgan Chase and Bear Stearns (A)," HBS No. 309-001, to facilitate class discussion, and as such provides only an overview of specific aspects of the issues discussed.

    Keywords: Government and Politics; Governing Rules, Regulations, and Reforms;

    Citation:

    Rose, Clayton S., and Aldo Sesia. "Note on Lobbying and the Dodd-Frank Financial Reforms." Harvard Business School Technical Note 311-094, March 2011. (Revised June 2011.) View Details
  37. Exit Strategy (A)

    Jeff Brown wondered whether now was the right time to call his boss, and friend, Bernard Tubiana. Brown was a rising star at Deloitte Consulting and three weeks into an important project for Aflac. He was about to receive an offer from Aflac's major competitor, Colonial Life, to become its Chief Marketing Officer.

    Keywords: Decisions; Ethics; Employees; Resignation and Termination; Service Industry;

    Citation:

    Rose, Clayton S., and Justine Kelly Lelchuk. "Exit Strategy (A)." Harvard Business School Case 311-075, January 2011. View Details
  38. ISS A/S (D): Goldman's 2011 Business Standards Report

    The (D) case describes aspects of the Jan 2011 report by the Goldman Sach's Business Standards Committee on how the firm might strengthen its practices with respect to clients and other stakeholders.

    Keywords: Acquisition; Financial Crisis; Corporate Governance; Management; Business and Stakeholder Relations; Core Relationships;

    Citation:

    Rose, Clayton S. "ISS A/S (D): Goldman's 2011 Business Standards Report." Harvard Business School Supplement 311-090, January 2011. View Details
  39. Post-Crisis Compensation at Credit Suisse (A)

    On October 20, 2009, Brady Dougan, the CEO of Credit Suisse Group, announced a new compensation plan for the bank. The announcement had followed quickly on the heels of the G-20 meeting the prior month where, in the wake of the financial crisis, the major governments had laid out a set of guidelines for compensation in the financial industry. Credit Suisse Group was the first firm to adopt the G-20 guidelines and did so a year ahead of the suggested timetable. While responsive to the concerns of regulators and politicians, Credit Suisse's program was more than a knee-jerk reaction; the new compensation plan had been the result of a "10-year journey" to reshape the culture of the firm. After a significant investment of senior leadership time to explain the new program to employees, a significant new challenge arose. On December 9, the U.K. government announced it would impose a one-time 50% tax on bankers' bonuses greater than £25,000. Dougan and the executive team had to decide how best to fund this tax. Was it fair or appropriate to have the shareholders shoulder the burden of the tax? Similarly, was it fair to ask the U.K. employees to suffer relative to their peers in other countries?

    Keywords: Financial Crisis; Globalized Firms and Management; Governing Rules, Regulations, and Reforms; Taxation; Compensation and Benefits; Organizational Culture; Business and Shareholder Relations; Banking Industry; Financial Services Industry; Switzerland; United Kingdom;

    Citation:

    Rose, Clayton S., and Aldo Sesia. "Post-Crisis Compensation at Credit Suisse (A)." Harvard Business School Case 311-005, July 2010. (Revised December 2010.) View Details
  40. J.P. Morgan Private Bank: Risk Management during the Financial Crisis 2008-2009

    Mary Erdoes, the CEO of JP Morgan's asset management business, and three colleagues provide insights into risk management issues faced by the firm's private bank during the financial crisis in 2008–2009. The case provides perspective on the philosophy with which they approach risk management, issues of greatest concern, tools and processes used in practice, the benefits and limitations of quantitative models and balance between the use of models and exercising judgment, and lessons learned from the crisis about risk management.

    Keywords: Judgments; Financial Crisis; Globalized Firms and Management; Management Analysis, Tools, and Techniques; Risk Management; Mathematical Methods; Banking Industry; United States;

    Citation:

    Mikes, Anette, Clayton S. Rose, and Aldo Sesia. "J.P. Morgan Private Bank: Risk Management during the Financial Crisis 2008-2009." Harvard Business School Case 311-003, September 2010. (Revised November 2010.) View Details
  41. Investment Technology Group

    Investment Technology Group (ITG) CEO Robert Gasser wondered if the financial crisis had permanently affected the firm's business model. A leader in trade analytics and execution for institutional equity investors, ITG had grown since its establishment in 1987 in step with the dramatic rise in equity trading volumes. During 2009, however, investors curbed their equities trading, depressing ITG's heavily commission-based revenues, and earnings plunged by 63%, resulting in ITG's first unprofitable quarter since 1988. Gasser was convinced that ITG's challenges were not simply a function of shrinking trading volumes; 2009's downturn revealed limits of client willingness to pay for the value ITG delivered, and the infrastructure ITG had constructed to support clients with customized software tools and technical support had grown well beyond sustainable levels. With his management team, Gasser had developed a two-part response to the challenge: a reduction in staff and a focus on clients that most valued what ITG offered. While significant cost savings goals would be realized in part through employee layoffs, he wondered about ITG's ability to deal with these changes. Adjusting its customer portfolio meant that ITG would be pulling back products from some clients while reaching out to others in new ways, and he was unsure how clients would respond.

    Keywords: Customer Relationship Management; Financial Crisis; Investment; Resignation and Termination; Crisis Management; Product Positioning; Organizational Change and Adaptation; Financial Services Industry; Information Technology Industry; New York (city, NY);

    Citation:

    Rose, Clayton S., and David Lane. "Investment Technology Group." Harvard Business School Case 310-064, May 2010. (Revised November 2010.) View Details
  42. Lessons Learned? Brooksley Born & the OTC Derivatives Market (A)

    On May 7, 1998, the U.S. Commodity Futures Trading Commission, chaired by Brooksley Born, issued a "Concept Release" inviting public comment on the relevance and appropriateness of existing regulation of the over-the-counter (OTC) derivatives market, a market with a notional value of $29 trillion dollars. The CFTC Concept Release, often a precursor to regulatory proposals, sought analysis of "the benefits and burdens of any potential regulatory modifications in light of current market realities." The Release was not welcomed by other regulators or by the Clinton administration. Just hours after it was published, U.S. Treasury Secretary Robert Rubin, Federal Reserve Board Chairman Alan Greenspan, and Securities and Exchange Commission Chairman Arthur Levitt announced their "grave concerns" about it in an unusual joint press release that minced no words. This case explores the battle between Born, on the one hand, and a large number of policymakers, regulators, legislators, and industry representatives, on the other, over whether and how greater regulatory oversight should be applied to the OTC derivative market. Born was defeated in her efforts; OTC derivatives played a central role in the 2008–09 financial crisis.

    Keywords: Financial Crisis; Credit Derivatives and Swaps; Governing Rules, Regulations, and Reforms; Policy; Business and Government Relations; Financial Services Industry; Public Administration Industry; District of Columbia;

    Citation:

    Rose, Clayton S., and David Lane. "Lessons Learned? Brooksley Born & the OTC Derivatives Market (A)." Harvard Business School Case 311-044, November 2010. View Details
  43. Lessons Learned? Brooksley Born & the OTC Derivatives Market (B)

    This (B) case provides the 2009 reflections of former SEC Chairman Arthur Levitt on CFTC Chairman Brooksley Born's 1998 efforts to consider regulating the OTC derivative market. It also provides a summary of the aspects of the 2010 Dodd-Frank Act that regulate these derivatives.

    Keywords: Financial Crisis; Credit Derivatives and Swaps; Governing Rules, Regulations, and Reforms; Policy; Government Legislation; Business and Government Relations; Financial Services Industry; Public Administration Industry; District of Columbia;

    Citation:

    Rose, Clayton S., and David Lane. "Lessons Learned? Brooksley Born & the OTC Derivatives Market (B)." Harvard Business School Supplement 311-070, November 2010. View Details
  44. On Weldon's Watch: Recalls at Johnson & Johnson from 2009 to 2010

    In October of 2010, Johnson & Johnson (J&J) was unable to extricate itself from a year long recall crisis that had subjected the firm to criticism from Congress and regulators, resulted in the resignation of one of the firm's most senior officers, and cost hundreds of millions of dollars from lost sales of J&J brands. This case examines the series of recalls and the strategic and cultural changes at the company that may have led to the recalls. It allows for an exploration of the reality of the iconic J&J "Credo"—its long standing set of corporate values.

    Keywords: Decision Choices and Conditions; Values and Beliefs; Leadership; Crisis Management; Corporate Social Responsibility and Impact; Organizational Change and Adaptation; Organizational Culture; Quality; Pharmaceutical Industry;

    Citation:

    Rose, Clayton S., Sandra J. Sucher, Rachel Gordon, and Matthew Preble. "On Weldon's Watch: Recalls at Johnson & Johnson from 2009 to 2010." Harvard Business School Case 311-029, October 2010. View Details
  45. Note on the Banking Industry

    This note provides an overview of the structure and function of the banking industry, with a primary focus on the U.S. It was designed to support the HBS MBA course "Managing the Financial Firm."

    Keywords: Banks and Banking; Business or Company Management; Industry Structures; Banking Industry; United States;

    Citation:

    Rose, Clayton S., and Scott Waggoner. "Note on the Banking Industry." Harvard Business School Technical Note 311-011, July 2010. View Details
  46. Note on the Asset Management Industry

    This note provides an overview of the structure and function of the asset management industry, with a primary focus on the U.S. It was designed to support the HBS MBA course "Managing the Financial Firm."

    Keywords: Asset Management; Business or Company Management; Industry Structures; Financial Services Industry; United States;

    Citation:

    Rose, Clayton S., and Scott Waggoner. "Note on the Asset Management Industry." Harvard Business School Technical Note 311-013, July 2010. View Details
  47. Note on the Insurance Industry

    This note provides an overview of the structure and function of the Insurance industry, with a primary focus on the U.S. It was designed to support the HBS MBA course "Managing the Financial Firm."

    Keywords: Insurance; Business or Company Management; Industry Structures; Insurance Industry; United States;

    Citation:

    Rose, Clayton S., and Scott Waggoner. "Note on the Insurance Industry." Harvard Business School Technical Note 311-012, July 2010. View Details
  48. Post-Crisis Compensation at Credit Suisse (B)

    The (B) case describes how Credit Suisse management allocated the cost of the 25% U.K. banker's tax among shareholders, U.K. managing directors, and the other employees globally.

    Keywords: Financial Crisis; Cost; Governing Rules, Regulations, and Reforms; Taxation; Compensation and Benefits; Banking Industry; Financial Services Industry; Switzerland; United Kingdom;

    Citation:

    Rose, Clayton S., and Aldo Sesia. "Post-Crisis Compensation at Credit Suisse (B)." Harvard Business School Supplement 311-006, July 2010. View Details
  49. Post-Crisis Compensation at Credit Suisse (C)

    The (C) case describes the results of Credit Suisse's PIP I program, the value of PAF, shareholders' vote on the new compensation plan supported by management, and the impact of the company's approach to the U.K. banker's tax.

    Keywords: Voting; Taxation; Compensation and Benefits; Business and Shareholder Relations; Banking Industry; Financial Services Industry; Switzerland; United Kingdom;

    Citation:

    Rose, Clayton S., and Aldo Sesia. "Post-Crisis Compensation at Credit Suisse (C)." Harvard Business School Supplement 311-007, July 2010. View Details
  50. Friend Bank: The Time for Hope

    In 2010, Friend Bank was entering the fifth year of Hope Harris Johnson's ambitious 20-year growth plan to transform her family's one branch community bank into an institution with a substantial presence in southeastern Alabama. Harris Johnson was pleased, so far, with the results. Strategically they had exceeded expectations in opening a second office and execution of the plan was going well. And while the financial and economic crisis that began in 2008 had affected the financial results, it also presented Friend with competitive opportunities. Nonetheless, realizing her ultimate goals for Friend would not come easily.

    Keywords: Family Business; Financial Crisis; Banks and Banking; Growth and Development Strategy; Risk Management; Family Ownership; Competitive Advantage; Banking Industry; Alabama;

    Citation:

    Rose, Clayton S., and Aldo Sesia. "Friend Bank: The Time for Hope." Harvard Business School Case 310-070, May 2010. (Revised September 2013.) View Details
  51. Merger of Equals: The Integration of Mellon Financial and The Bank of New York (TN) (A) (B) & (C)

    Teaching Note for [210016], [210025], and [210028].

    Keywords: Banking Industry; New York (state, US);

    Citation:

    Taliaferro, Ryan D., and Clayton S. Rose. "Merger of Equals: The Integration of Mellon Financial and The Bank of New York (TN) (A) (B) & (C)." Harvard Business School Teaching Note 210-060, February 2010. View Details
  52. Merger of Equals: The Integration of Mellon Financial and The Bank of New York (A)

    Less than a month after the close of the merger between The Bank of New York and Mellon Financial, managers at the two firms realized that plans for combining their asset servicing businesses—and realizing the $180 million of annual cost savings that they had promised Wall Street—were fraught with risk. Senior executives must evaluate the seriousness of the risks and identify alternative ways of integrating the two firms, while safeguarding the technologies that process and clear a substantial fraction of the world's financial transactions.

    Keywords: Mergers and Acquisitions; Asset Management; Financial Institutions; Risk Management; Integration; Information Technology; Financial Services Industry;

    Citation:

    Taliaferro, Ryan D., Clayton S. Rose, and David Lane. "Merger of Equals: The Integration of Mellon Financial and The Bank of New York (A)." Harvard Business School Case 210-016, October 2009. (Revised February 2010.) View Details
  53. Merger of Equals: The Integration of Mellon Financial and The Bank of New York (B)

    [Continuation of "A" case.] Less than a month after the close of the merger between The Bank of New York and Mellon Financial, managers at the two firms realized that plans for combining their asset servicing businesses – and realizing the $180 million of annual cost savings that they had promised Wall Street – were fraught with risk. Senior executives must evaluate the seriousness of the risks and identify alternative ways of integrating the two firms, while safeguarding the technologies that process and clear a substantial fraction of the world's financial transactions. [Continues with “C” case.]

    Keywords: Mergers and Acquisitions; Integration; Banks and Banking; Banking Industry;

    Citation:

    Taliaferro, Ryan D., Clayton S. Rose, and David Lane. "Merger of Equals: The Integration of Mellon Financial and The Bank of New York (B)." Harvard Business School Supplement 210-025, October 2009. (Revised February 2010.) View Details
  54. Merger of Equals: The Integration of Mellon Financial and The Bank of New York (C)

    [Continuation of "A" and "B" cases.] Less than a month after the close of the merger between The Bank of New York and Mellon Financial, managers at the two firms realized that plans for combining their asset servicing businesses – and realizing the $180 million of annual cost savings that they had promised Wall Street – were fraught with risk. Senior executives must evaluate the seriousness of the risks and identify alternative ways of integrating the two firms, while safeguarding the technologies that process and clear a substantial fraction of the world's financial transactions.

    Keywords: Mergers and Acquisitions; Horizontal Integration; Financial Institutions; Business Processes; Risk Management; Strategy; Market Transactions; Assets; System; Saving; Banking Industry; New York (state, US);

    Citation:

    Taliaferro, Ryan D., Clayton S. Rose, and David Lane. "Merger of Equals: The Integration of Mellon Financial and The Bank of New York (C)." Harvard Business School Supplement 210-028, October 2009. View Details
  55. The Tip of the Iceberg: JPMorgan Chase and Bear Stearns (TN) (A), (B1), and (B2)

    Teaching Note for [309001], [309070], and [309091].

    Keywords: Banks and Banking; Banking Industry;

    Citation:

    Rose, Clayton S., Daniel Baird Bergstresser, and David Lane. "The Tip of the Iceberg: JPMorgan Chase and Bear Stearns (TN) (A), (B1), and (B2)." Harvard Business School Teaching Note 309-072, January 2009. (Revised March 2009.) View Details
  56. The Tip of the Iceberg: JP Morgan Chase and Bear Stearns (B2)

    Bear Stearns & Co burned through nearly all of its $18 billion in cash reserves during the week of March 10, 2008, and an unprecedented provision of liquidity support from the Federal Reserve on Friday March 13 was insufficient to reverse the decline in Bear's condition. Federal Reserve Chairman Benjamin Bernanke, Treasury Secretary Henry Paulson and New York Fed President Timothy Geithner were intent on limiting the impact of Bear's problems on the wider financial system. James "Jamie" Dimon, Morgan's Chairman and CEO, was in frequent contact with these regulators over the weekend of March 14-16, negotiating possible scenarios for the rescue of Bear, without which would force it to seek bankruptcy protection when markets opened on Monday. Late on Sunday afternoon, March 16, Bear's board accepted Morgan's offer to purchase Bear for $2 per share, an offer that would not have been made without significant government assistance. There was hope that the Bear rescue would help avert the far-reaching spread of damage into the larger financial world that many policymakers viewed as likely to follow the failure of a major investment bank. This case examines a seminal event in the financial and economic crisis that began in the summer of 2007, and provides background for better understanding the full scope of the crisis as it was revealed during the summer and fall of 2008. It was written to address two sets of issues. First, it provides the opportunity to understand the corporate finance issues of capital and liquidity, and of firm valuation. Second, the case allows for the exploration of aspects of a firm's internal and external governance, as well as the challenges of navigating through a crisis when faced with compelling pressures from competing stakeholders.

    Keywords: Economic Slowdown and Stagnation; Capital; Insolvency and Bankruptcy; Financial Liquidity; Banks and Banking; Governance; Crisis Management; Goals and Objectives; System; Valuation; New York (state, US);

    Citation:

    Rose, Clayton S., Daniel Baird Bergstresser, and David Lane. "The Tip of the Iceberg: JP Morgan Chase and Bear Stearns (B2)." Harvard Business School Supplement 309-091, January 2009. View Details
  57. The Tip of the Iceberg: JP Morgan Chase and Bear Stearns (B1)

    Bear Stearns & Co burned through nearly all of its $18 billion in cash reserves during the week of March 10, 2008, and an unprecedented provision of liquidity support from the Federal Reserve on Friday March 13 was insufficient to reverse the decline in Bear's condition. Federal Reserve Chairman Benjamin Bernanke, Treasury Secretary Henry Paulson and New York Fed President Timothy Geithner were intent on limiting the impact of Bear's problems on the wider financial system. James "Jamie" Dimon, Morgan's Chairman and CEO, was in frequent contact with these regulators over the weekend of March 14-16, negotiating possible scenarios for the rescue of Bear, without which would force it to seek bankruptcy protection when markets opened on Monday. Late on Sunday afternoon, March 16, Bear's board accepted Morgan's offer to purchase Bear for $2 per share, an offer that would not have been made without significant government assistance. There was hope that the Bear rescue would help avert the far-reaching spread of damage into the larger financial world that many policymakers viewed as likely to follow the failure of a major investment bank. This case examines a seminal event in the financial and economic crisis that began in the summer of 2007, and provides background for better understanding the full scope of the crisis as it was revealed during the summer and fall of 2008. It was written to address two sets of issues. First, it provides the opportunity to understand the corporate finance issues of capital and liquidity, and of firm valuation. Second, the case allows for the exploration of aspects of a firm's internal and external governance, as well as the challenges of navigating through a crisis when faced with compelling pressures from competing stakeholders.

    Keywords: Economic Slowdown and Stagnation; Capital; Financial Liquidity; Banks and Banking; Governance; Crisis Management; Failure; Business and Stakeholder Relations; Balance and Stability; Valuation; New York (state, US);

    Citation:

    Rose, Clayton S., Daniel Baird Bergstresser, and David Lane. "The Tip of the Iceberg: JP Morgan Chase and Bear Stearns (B1)." Harvard Business School Supplement 309-070, January 2009. View Details

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