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Chartered Banker MBA Programme
ASB9042 International Banking
1. The due date for the assignment is the 31st March 2016.

2. The word limit for this assignment is 5,000 which does not include referencing.

3. Assignments are to be submitted through Turnitin in Blackboard, only one submission attempt is possible.

4. Students may request an extension to the stipulated due date in exceptional circumstances only and where supporting documentation can be offered. Such requests must be made to the Chartered Banker MBA office no later than 1 week prior to the due date. Requests received on or after the due date will be refused.

5. Assignments should be submitted by midnight local time in the students’ country of residence. Where an assignment is late without an agreed extension, the following rules will apply without prejudice:
a. Up to 10 days late – 10% penalty.
b. Assignment will be accepted for further 4 weeks but will be marked to a maximum of the lowest possible passing grade.
NB: Where 10% is stated, in practice this means that 10 points will be removed from any grade as each assignment is graded out of 100. An assignment graded at 50 which receives a 10% penalty will therefore have a final grade of 40.
6. This assignment contributes to 100% of the overall module grade.

7. Before submitting your assignment, please ensure that it is properly referenced, to guard against accusations of malpractice. Guidance on referencing can be found by clicking on the link below and choosing “Harvard Referencing Guide”

http://www.bangor.ac.uk/library/help/guides.php.en Additional information on avoiding allegations of malpractice can be found in the Student Handbook.

Case Study
Banking Sector Restructuring Program in Kazakhstan – BTA Bank JSC
Synopsis of the Case Study

This case focuses on the Government of Kazakhstan’s strategy to restructure a systemically
important financial institution, BTA Bank JSC, in the context of the global financial crisis in

Kazakhstan is a post-socialist transition country; upon independence, Kazakhstan restructured its economy to a market-based system with IMF assistance and experienced
double-digit growth as a result of oil and other natural resource production for much of the
early 2000s. An undiversified economy, Kazakhstan’s financial sector was heavily dependent
on foreign capital flows and a number of its largest banks experienced insolvency as a result
of the US subprime crisis, coupled with slumping oil prices.

BTA Bank JSC, a legacy of Soviet era state banks that dominated the pre-1991 Kazakhstani
financial sector that had been privatized in the mid-1990s and re-branded in 2008, was a
systemically important bank with a deteriorating financial profile at the end of December
2008. High levels of non-performing loans, high leverage ratios, and mismanagement
including fraud allegations brought BTA Bank JSC close to default and resulted in the
Government of Kazakhstan, through the government owned holding company, Samruk-
Kazyna, to recapitalized the bank. BTA Bank JSC had to be restructured

This case discusses the different approaches to bank restructuring that were adopted in the
US, Germany, Ireland, and elsewhere during the global financial crisis. In addition, the case
considers the specifics of Kazakhstan’s macroeconomic and financial profile. This case
challenges the reader to consider what restructuring approach is appropriate to the
preservation of the sovereign profile of the Government of Kazakhstan in the face of a variety of conflicts of interest among investors, investment banks, taxpayers, and international development organizations.

Aims and Objectives

• Explore approaches to bank restructuring in developed and emerging markets.
• Identify the interests of the sovereign, shareholders, investors and investment banks in a restructuring process.
• Introduce the burden-sharing approach and its corporate structure
• Understand the macroeconomic profile of a post-socialist emerging market economy
based on mineral extraction.
• Understand the issue of moral hazard in the context of bank restructuring.

Structured Assignment

To demonstrate an understanding of the various international variables affecting bank
restructuring in a changing industry, students should aim to structure their assignment (max
5,000 words) in a way as to address all of the following questions:

1. What makes an institution “too-big-to fail’?
2. Discuss the key differences between bank recapitalisation and bank restructuring.
3. Discuss the different approaches to bank restructuring. What factors should authorities take into account when choosing an approach? How would these considerations be different in an emerging market context?
4. Discuss the potential role of sovereign wealth funds (SWFs) in providing a stabilising
function during a financial crisis.
5. Present an analysis of BTA Bank JSC financial position in 2007 and 2008.
6. Discuss the Government of Kazakhstan’s intervention through its sovereign wealth
fund. Did the action achieve the Government of Kazakhstan’s aims?
7. Present an analysis of BTA Bank JSC financial position in 2009, following the sovereign bailout approach. What options were available at this stage?
8. Discuss the short term, medium term and long-term implications of the different restructuring options.
9. Identify the interest groups involved in the restructuring. What role do they play in
making the restructuring effective?
10. As the senior adviser to the Government of Kazakhstan on the BTA Bank JSC
restructuring, what would be your communication strategy and corporate structure model?