Ans 7 : The lessons learned by the Allied Irish Bank are

 Proprietary trading is a high-risk activity. They must not have hired the employees

without specialized knowledge and expertise regarding the business, unfortunately J.

Rusnak didn’t have any of them.

 They shouldn’t have given the control under a single person

 They should have set up a clear reporting line

 There must have been adequate supervision of the employees

Ans 8 : Improvement that might prevent a future disaster of the type that bankrupted the firm.

1) The architecture of Allfirst’s trading activity was faulty. They had one

lone trader trying to implement a hedge fund. They should have

more than one manager.

2) The relationship between parent company and overseas subunits should be strong. It

should be clear that who is accountable to whom, and the reporting lines within Allfirst

and between Allfirst and AIB were blurred.

3) Strong back-office control is important. Back-office staff must be empowered to take the

right action if they have concerns about trading activity.

4) The risk management team should be more active in finding problems rather than

believing with what is being presented to them