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• Case | HBS Case Collection | July 2003 (Revised June 2010)

  FrontPoint Partners

  Jay O. Light

  A hedge fund platform, a new and unique kind of asset management firm, contemplates various client markets for its services.

  Keywords: Asset Management; Investment; Demand and Consumers; Market Platforms; Service Delivery; Financial Services Industry;

  Citation:

  Light, Jay O. "FrontPoint Partners." Harvard Business School Case 204-020, July 2003. (Revised June 2010.)  View Details

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• Mimeo | 2010

  An Analysis of the Impact of 'Substantially Heightened' Capital Requirements on Large Financial Institutions

  Anil Kashyap, Jeremy C. Stein and Samuel G. Hanson

  We examine the impact of "substantially heightened" capital requirements on large financial institutions, and on their customers. Our analysis yields three main conclusions. First, the frictions associated with raising new external equity finance are likely to be greater than the ongoing costs of holding equity on the balance sheet, implying that the new requirements should be phased in gradually. Second, the long-run steady-state impact on loan rates is likely to be modest, in the range of 25 to 45 basis points for a ten percentage-point increase in the capital requirement. Third, due to the unique nature of competition in financial services, even these modest effects raise significant concerns about migration of credit-creation activity to the shadow-banking sector, and the potential for increased fragility of the overall financial system that this might bring. Thus to avoid tilting the playing field in such a way as to generate a variety of damaging unintended consequences, increased regulation of the shadowbanking sector should be seen as an important complement to the reforms that are contemplated for banks and other large financial institutions.

  Keywords: Financial Institutions; Governing Rules, Regulations, and Reforms; Capital; Equity; Financing and Loans; Credit;

  Citation:

  Kashyap, Anil, Jeremy C. Stein, and Samuel G. Hanson. "An Analysis of the Impact of 'Substantially Heightened' Capital Requirements on Large Financial Institutions." 2010. Mimeo.  View Details

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• Case | HBS Case Collection | November 1999 (Revised October 2009)

  Virtualis Systems (A)

  Jay O. Light and Michael J. Roberts

  Describes a second-year MBA's attempts to make money for a fledgling Web-hosting business. As the case ends, he must both sort out the company's business model and financing needs, as well as select from an array of financing and acquisition alternatives.

  Keywords: Mergers and Acquisitions; Business Model; Business Startups; Financial Strategy; Financing and Loans; Web Services Industry;

  Citation:

  Light, Jay O., and Michael J. Roberts. "Virtualis Systems (A)." Harvard Business School Case 800-003, November 1999. (Revised October 2009.)  View Details

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