Publications
Publications
- February 1994 (Revised July 2008)
- HBS Case Collection
Banc One Corporation: Asset and Liability Management
By: Benjamin C. Esty, Peter Tufano and Jon Headley
Abstract
Banc One's share price has been falling recently due to analyst and investor concern over the bank's heavy use of interest rate derivatives. Dick Lodge, chief investment officer in charge of the bank's investment and derivative portfolio, must recommend to the CEO a course of action to allay investors' fears and communicate to the market the reasons for Banc One's use of derivatives. The bank uses interest rate swaps to manage the sensitivity of its earnings to changes in interest rates and as attractive investment alternatives to conventional securities.
Keywords
Credit Derivatives and Swaps; Financial Management; Interest Rates; Investment Portfolio; Governance Controls; Risk Management; Banking Industry
Citation
Esty, Benjamin C., Peter Tufano, and Jon Headley. "Banc One Corporation: Asset and Liability Management." Harvard Business School Case 294-079, February 1994. (Revised July 2008.)
