Develop a stress scenario for an investment bank and make it as realistic and contemporary as possible.
And the answer was:
The candidate said: "Imagine that you have just done a big deal by leveraging your balance sheet and you have 3 months to offload the same to clients. It is at this precise moment that liquidity dries up and you are left holding a highly leveraged B/S which cannot be deleveraged or the asset cannot be sold off. Can the bank survive this?"
Additional information
This was asked during an interview for a senior risk position.
