First place in the Managing Risk Category, in the 2005 European Foundation for Management Development (EFMD) Case Writing Competition

Allied Irish Banks - The Currency Derivatives Fiasco

Allied Irish Banks - The Currency Derivatives Fiasco
Case Code: FINC032
Case Length: 11 Pages
Period: 1997 - 2004
Pub Date: 2004
Teaching Note: Not Available
Price: Rs.500
Organization: Allied Irish Banks
Industry: Banking
Countries: Ireland, US
Themes: Risk Management
Allied Irish Banks - The Currency Derivatives Fiasco
Abstract Case Intro 1 Case Intro 2 Excerpts


The case discusses how John Rusnak (Rusnak), a trader at Allfirst Financial Inc. (Allfirst), the US subsidiary of Ireland's leading bank - Allied Irish Banks (AIB), lost $750 mn in foreign exchange trading operations.

It describes in detail how the fraudulent trading activities and manipulation of records by Rusnak resulted in major losses.

The case brings out the complete sequence of events and also highlights the reasons for the loss, including inadequate supervision, control system deficiency and failure to review policy and procedures.


  • Risk Management in Banks, Value at Risk (VAR) Model



Allied Irish Banks, Currency Derivatives, Corporate Disasters, Value at Risk (VAR) Model, Management Controls, Risk Management in Banks, Asset and Liability Management, Ludwig Report, Arbitrage, Currency Options, Currency Forwards

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