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  • February 1994 (Revised July 2008)
  • Case
  • HBS Case Collection

Banc One Corporation: Asset and Liability Management

By: Benjamin C. Esty, Peter Tufano and Jon Headley
  • Format:Print
  • | Pages:29
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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.)
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About The Authors

Benjamin C. Esty

Finance
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Peter Tufano

General Management
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  • When Climate Collaboration Is Treated as an Antitrust Violation By: Matteo Gasparini, Knut Haanaes and Peter Tufano
  • Bespoken Spirits: Disrupting Distilling By: Benjamin C. Esty and Daniel Fisher
  • Crises and Collective Purpose: Distraction or Liberation? By: P. Tufano
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