UBS and Auction Rate Securities (A) Harvard Case Solution & Analysis

UBS, a global financial services company, to decide whether to continue to support the securities market auction rate in a growing financial crisis. These tools are guaranteed by UBS, have been sold to customers as highly liquid and safe alternative to cash. Decision UBS ┬╗becomes relevant when Citigroup, another leading underwriter ARS, decides to let their auctions fail, leaving clients with illiquid assets of uncertain value. The case examines the theoretical and practical aspects of liquidity risk, and challenges students to evaluate the benefits of implicit honor commitments to customers for the costs of the purchase of billions of dollars in illiquid assets. (B) and (C) cases, consider the implications of the decision UBS. "Hide
by Daniel B. Bergstresser, Sean Cole, Siddharth Shenai Source: Harvard Business School 23 pages. Publication Date: Mar 05, 2009. Prod. #: 209119-PDF-ENG

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