Tuesday, June 25, 2013

Hunt: Liquid Risks

EVGENIOU Theodoros, LEDERMAN Jerome 
©2013 INSEAD Case Study

The case describes the near-collapse of a commodities market in 1979, as two investors, the Hunt brothers, tried to corner the silver market. It discusses how key players in the financial markets dealt with the potential crisis and the risks involved.

Pedagogical Objectives: To discuss market failure and liquidity risks, risk management, crisis management, financial markets, hedging via a well-known major event that happened in the late 1970s, which offers lessons that are applicable today. It thus provides a historical perspective on fundamental issues regarding markets and risk management.