Wednesday, April 24, 2019

Financial Regulation & Supervision. Andrews Bank case study Essay

Financial Regulation & Supervision. Andrews Bank case study - Essay lawsuitAdam is a newly hired commercial loan officer in training at the Andrew and Andrews Bank. later clearing several assign summary exams, he joined the bank with zeal and flak towards credit analysis. Several of his seniors noniced him for his intelligence and smartness. Soon Adam was promoted to be a financial psychoanalyst and was assigned to his superior, Jon Smith who was a commercial loan officer. As part of his job, Adam was required to exculpate credit analysis to check credit worthiness for all new customers that Jon brought into the bank. In one such case, where Roberts and Roberts had requested for a five million pound loan, Adam was extremely confused by the itinerary Jon had handled the situation. Adam noted that the company, a retail store chain, was very highly leveraged with most of the exposure beingness handled by his bank. In most of the cases, Roberts and Roberts had to a lower place taken in operation(p) leases which were not part of the long term loans like some other leases. As an accounting regulation, finance leases are classified as long term loans while operating leases only come under contingencies and commitments and in the notes. As a result, Roberts and Roberts was playing with accounting rules and noting its operating leases under notes. Subsequently, when Adam analyzed the credit worthiness of the company, he found that the company was dangerously over leveraged and because was not a safe investment or customer for the bank. Adam included this element into his analysis in the memorandum which he then forwarded to Jon so that she would include that in the credit file. However, Jon decided not to include that in her credit file and the file was later approved by the credit committal with the operating lease issue never coming up in the credit committee meeting. After this scenario, Adam overheard a conversation between Jon and other colleagues. Ap parently, Jon had a psycheal mortgage loan finish approved by the Sheffield Building Society. It was also found that the President of Roberts and Roberts was also chairing the board of the society. Adam also found that extremely favorable rates were offered to Jon on the personal mortgage. Adam was thoroughly confused because of the florescence scenario and this case now portrays several ethical concerns. Following this is an outline of the ethical concerns that are raised by this case along with the action steps that Adam should take in order to fix the situation. Moreover, sealed recommendations for the organization are also put up in order to avoid such situations in the future. Ethical Concerns Highlighted in the Case Various ethical concerns have been highlighted in the case based on the scenario outlined above. The first issue that has come up is that Jon has been given the sole responsibility to present the credit file to his superiors and the credit committee which lead s to issues such as dependency on only one person who can be easily

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