Risk Management at Wellfleet Bank: All That Glitters Is Not Gold
Questions for this case:
1. Explain Wellfleet strategy and the fit to the risk management process. Do you think it is appropriate?
2. What are the special challenges posed by mega-loans? Should the bank get involved in these loans? What are the pros and the cons of entering that activity? How can the bank mitigate the associate risks?
3. How does Wellfleet manage its credit risk? Explain the credit approval process. What are its advantages and disadvantages?
4. Compute the economic profit of the proposed Gatwick Gold loan.
5. Would you approve the loan? Explain your reasoning.