Growth After the 2008 Financial Crisis: Hudson Bay Bank
(10 pages of text)
In early January 2009, the newly hired head of Business, Strategy & Development, Cash Equities at Hudson Bay Bank (HBB) was analyzing how his group could increase revenues after the market meltdown of 2008. His analysis specifically focused on a business segment known as high-frequency trading, in some ways a controversial revenue stream, whereby traders take advantage of split-second price differences to earn a profit. Although U.S. firms had been using this technology for years, the Canadian landscape had only just become hospitable to the concept. This business segment could represent an attractive new source of revenue, but the financial services industry had seen dramatic changes since 2007, calling into question many of its foundational policies and procedures. Will high-frequency trading provide the innovation that HBB was seeking to grow revenues?
The case is suitable for use in courses on general management and finance. The case provides the opportunity for an in-depth discussion of the 2008 financial crisis and how it has altered the playing field for many organizations, especially in the banking and financial industries. The main teaching objectives are threefold:
- To understand the sources of the 2008 financial crisis and its impact on Canadian and U.S. banks.
- To recognize the need for new growth in banking after the financial crisis and the regulatory barriers surrounding how growth can be achieved.
- To introduce the concept of high-frequency banking as one product innovation in banking.
Finance and Insurance
Canada, Large, 2009
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