Topic
Metallgesellschaft Corp
Instructions
Each case study represents a well-known, real world example of a breakdown
in a risk management process. For each case study, the objective of the
exercise is to:
1. Provide a description of the situation prior to the crisis
2. Do a forensic analysis. Describe what went wrong (in general as well as from a risk management perspective)
3. Access information from any sources, much analysis can be found on the internet, many references in “risk analytics” research papers
4. Address these specific questions related to the risk management process:
a. What caused the crisis?
b. What bet was being taken?
c. What risks were not known or not appropriately measured?
d. What were the lessons learned?
Answer preview
Metallgesellschaft, commonly known as MG, is a German corporation primarily owned by Deutsche Bank AG, Allianz among others. MG was initially a metal firm and has dramatically evolved in the few years that have past to become a significant provider of services to do with risk management. The companies of many affiliates in the energy group including refining and Inc. (MGRM) that controls refining and selling of petroleum commodities in the United States. The energy group was publicly revealed in 1993 as the one responsible for losses of about $1.5 billion.
Word count: 1206