Reference no: EM132502200 , Length: word count:1600

BLO3405 Law Of Financial Institutions And Securities Assignment - Australia-Asia Business College, Victoria University, Australia

Part A - Problem-based, case study question. Word range: 800-1,000 words.

Henry is the wealthy CEO of the leading Australian bank, CashKings Pty Ltd. He reserves the final say on all business initiatives and has a ruthless policy regarding expenditure and generating profits. "I'm not your boss, the shareholders are, now go and make them money" is one of his famous catchphrases. He has a keen eye for a good corporate opportunity, producing tens of millions of dollars each year in aggregate profit.

One day he is approached by an executive from his analysis division regarding an alarming increase in default rates on a specific loan product targeting first home buyers. "Sir, the rates we offer as part of our honeymoon package have seemed to entice a great deal of the market to borrow from us, however it appears one in two homes are being foreclosed."

Henry, agitated that he had been interrupted with this bad news, puts his arm around the executive's shoulder and says, "So what? We give them an opportunity to read the fine print. We're a bank, not a charity. What do they want me to do, go down there and pay off their loan for them? The product is to stay as is and I don't want to hear another word about it. Are we managing to salvage every single cent?"

The executive replies: "Yes sir, the housing market is stable so we are able to recover 100% of the loan value, but ..." "Good," replies Henry. "That will be all." CashKings has been approached by the banking board to sign the Banking Code of Practice. "Why on earth would I sign something that isn't legally binding", replies Henry. "Get out of my office and don't come back!"

After multiple reports warning Henry against pursuing his hardline business model he is in your office, demanding to know the importance of what he describes as "business ethics". He is an impatient man and does not care about the feelings of his customers. He is only interested to know whether this will affect his bottom-line profit margins. And Henry also thinks that industry codes (such as the Banking Code of Practice) are "nonsense".

Advise Henry.

Part B - Short essay question. Word range: 400-600 words.

Access online and read the following article, and then answer the question below. Note: In the event that you are unable to access the online version, the article is also reproduced below.

'Kenneth Hayne's banking royal commission reported a year ago, but are customers any better off? by Daniel Ziffer, ABC News Australia, 4 February 2020

With reference to any of the findings made by the Banking Royal Commission of Inquiry, discuss as to whether and why, you agree, or disagree, with any of the views expressed in the above article.

Attachment:- LAW OF FINANCIAL INSTITUTIONS AND SECURITIES Assignment File.rar