Question
ESG Bank is an established bank in the Southwest region of CYC country. The bank is the regions 2nd largest and looking to expand. The
ESG Bank is an established bank in the Southwest region of CYC country. The bank is the regions 2nd largest and looking to expand. The Southwest region is a major source of automobile assembly/manufacturing and like business. The bank notably caters to local businesses and the community and enjoys long standing relationships with its business partners.
You were recently hired as head of ESG Bank commercial loan division. As you read the banks reconciliation statements, you noticed two of ESGs business clients are consistently late with monthly payments on loans since Dec. 21. Due to ESGs financial structure and the clients local presence, their loans were securitized and sold in Jan.22. (note: you decide on the loan amount and the duration of the loan. Hint: try not to make it complicated).
(d) Based on the concerns noted in ch. 28 (i.e. asset bubbles, leverage cycles, moral hazard, bank regulations) (you can add to the list as well), are there enough reasons to be cautious of your own long term portfolio including your income, savings, investments). Note: please do not include any confidential financial information as you respond to section (d).
Notes: The banks name is not affiliated with any business of a similar name. The next meeting with the client is scheduled for 12-07-22 (the approx. date this assignment w/b graded).
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