Let’s build a repeatable governance mechanism, not a one-off post-mortem.
A “Lessons Learnt” series in a bank should balance three objectives:
1. Regulatory expectation (demonstrating institutional memory, avoiding repeat mistakes).
2. Business value (turning mistakes into better decision-making frameworks).
3. Cultural change (moving from blame to structured learning).
Here’s a draft Terms of Reference (ToR) and implementation plan:
Terms of Reference: Lessons Learnt Series
Purpose
To capture, analyse, and institutionalise insights from past credit losses, ensuring that the Bank continuously strengthens its risk management, decision-making, and client engagement practices by:
establishing the causes of credit failures
capturing lessons learned (what worked well, what did not work, and what can be improved)
applying these insights to detect early warning signs and take actionable steps
sharing best practices with Relationship Managers and Credit Risk Managers
identifying gaps to improve internal credit processes.
Scope
Events covered: Credit defaults, significant restructurings, fraud cases, operational errors, regulatory breaches, and near misses. Specifically, cases for review may include:
- Non-Performing Assets (NPA) and/or Watchlist Red / Watchlist Weak cases in IBG.
- Large credit exposure of more than SGD10m.
- Fraud – Cases where company management/promoter is engaged in fraudulent activities.
- Short relationships – Cases which deteriorated into NPA within 18 months from the start of the borrowing relationship.
- Cases which bypassed the Watchlist Process (as detailed in the Watchlist Credits Identification and Review Standard) and became NPA directly.
- Cases which deteriorated rapidly through the Watchlist categories per Watchlist Credits Identification and Review Standard.
- Cases where issues of inappropriate loan origination, loan structuring or credit decisioning were identified during Watchlist Review forums or other credit forums.
- Thematic/portfolio review where necessary.
Application areas: Origination, structuring, monitoring, documentation, approval, control, and exit strategies.
Impact level: Material losses (e.g., >USD Xm or reputationally significant cases), but also patterns of recurring small losses.
Objectives
1. Extract systemic insights beyond individual blame, including what worked well, what did not work and what can be improved in the future.
2. Apply the above insights to detect early warning signs of potential distress and to take actionable steps where applicable.
3. Identify gaps and translate lessons to improve internal credit processes such as policies, frameworks, training, and monitoring tools
4. Share learnings with relevant staff, including frontline Relationship Managers, Credit Risk Managers, and Internal Auditors, at scale
5. Evidence to regulators that lessons are extracted and shared, not just documented.
Governance
Owner: Head of Credit Institute and Head of Group Special Asset Management (SAM)
Approver: Group Chief Credit Officer (or delegated committee).
Process
1. Case Selection
Quarterly identification of cases via portfolio review, audit findings, and regulatory feedback.
Criteria used may include: large credit exposure (>SGD10m), deterioration to NPA within 18 months, fraud, bypassing Watchlist Process, rapid deterioration through Watchlist categories, inappropriate loan origination/structuring/decisioning issues, or thematic/portfolio review.
2. Case analysis
Structured template to identify root cause, missed signals, flawed assumptions, and governance gaps
Gather historical information (at least 3 years prior to signs of financial distress), which may include but is not limited to:
Credit memos (including MAS Loan Grade and Watchlist Categorization Checklists).
- Standalone financial statements (annual reports, management accounts).
- Financial spreads.
- Downgrade memos.
- Watchlist write-ups.
- Meeting minutes, discussion notes, and call reports.
- Problem Asset Management / Loan Condition Sheets.
- Industry research papers, reports, etc.
Consultation with external parties such as product specialists, industry specialists, other bankers, lawyers, and accountants may also be undertaken.
3. Lesson Extraction – Boil down to 3-5 core insights per case, identifying successes, failures, missed opportunities, or unexpected outcomes.
4. Translation – Map lessons into actionable changes:
relevant credit policies and standards updates
Credit process, monitoring and structuring guidelines
Training modules & simulations
Early warning indicators
5. Dissemination
Regular “Lessons Learnt Briefs” (short, digestible) electronic direct mailers (EDM)
Posting sanitized reports on a dedicated Lessons Learnt Review website.
Developing case studies for the Credit Curriculum.
RM/CRM workshops / forums.
E-learning modules.
6. Tracking – Monitor whether changes are adopted and effective (via audit, portfolio review, regulator feedback), forming a feedback loop to continuously improve credit processes.
Frequency
Quarterly case identification
TOR to be reviewed on a biennial basis to ensure its continued relevance and effectiveness.
Outputs
Case study pack (for training & reference).
“Do/Don’t” quick cards for bankers.
Playbooks for structuring/monitoring common risk scenarios.
Confidentiality & Culture
Ensure lessons focus on decisions, systems, and processes—not personal blame.
Protect confidentiality of clients and staff.
Implementation Plan
Phase 1 – Set-Up (0–3 months)
Secure GCCO buy-in.
Develop templates for case capture & analysis.
Pilot 2–3 past cases for demonstration value.
Phase 2 – Rollout (3–12 months)
Publish first Lessons Learnt Brief.
Embed new lessons learnt insights into RM/CRM training
Build searchable internal database and establish a Lessons Learnt Review website for knowledge sharing.
Phase 3 – Institutionalisation (12+ months)
Integrate into credit approval workflow (e.g., checklist referencing lessons) where applicable.
Incorporate into performance reviews (measuring risk culture).
Cross-bank sharing (regional/global if relevant).
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🔍 A critical point: this should not become a compliance-box exercise. The real leverage comes from turning cases into forward-looking structuring guidance and deal design principles, otherwise, staff will read once and forget.
“Lessons Learnt Case Note” Template
The 2-page unit of learning that bankers could digest and regulators could audit. That would make this more concrete.
Here’s a 2-page “Lessons Learnt Case Note” template you can institutionalise. It’s designed to be short, structured, and practical, something a busy banker, approver, or regulator can grasp in 5 minutes.
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📄 Lessons Learnt Case Note Template
Case ID: [Unique identifier]
Date of Case Note: [DD/MM/YYYY]
Prepared by: [Unit/Team]
Reviewed by: [Risk Committee/Approver]
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1. Case Summary (≤150 words)
Client profile (sector, geography, size)
Type of transaction (loan, facility, trade finance, derivative, etc.)
Outcome (default, restructuring, fraud, loss amount, near miss, reputational impact)
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2. Timeline of Events (visual if possible)
Date Key Event Observations
[DD/MM] Approval granted [e.g., covenant weakness identified but not tightened]
[DD/MM] Monitoring event [e.g., early warning ignored]
[DD/MM] Default/restructuring [e.g., borrower cash flow dried up]
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3. Root Cause Analysis
Breakdown by category (tick & explain):
Business decision gap (e.g., aggressive assumptions, client pushback accepted)
Risk structuring flaw (e.g., security unenforceable, weak covenants)
Monitoring failure (missed warning signs, late action)
Governance/control gap (approval override, policy not followed)
External shock (macro, regulatory, market)
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4. Key Lessons (3–5 points only, clear and actionable)
[Lesson 1: State as principle, not story, e.g. “Do not rely on projected cash inflows without independent verification.”]
[Lesson 2: …]
[Lesson 3: …]
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5. What Could Have Been Done Differently
Structuring alternatives (e.g., require escrow of receivables, add performance guarantees)
Monitoring approaches (e.g., trigger-based covenants, independent auditor checks)
Approval discipline (e.g., escalate exceptions rather than waive informally)
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6. Actionable Outcomes (for institutionalisation)
Policy/Process Update: [Specify rule or guideline change]
Training Update: [Add to banker/approver curriculum]
Portfolio Monitoring: [Add EWI or portfolio flag]
Tools/Templates: [New checklist, playbook reference]
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7. Quick Reference “Do / Don’t” Card
Do:
Verify borrower’s largest customer payments independently.
Escalate early when covenants are breached, even if client promises recovery.
Don’t:
Accept equity cure clauses without assessing shareholder liquidity.
Rely solely on management projections in cyclical sectors.
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8. Dissemination & Tracking
Circulated to: [Frontline bankers, approvers, Risk, Audit]
Embedded in: [Credit training, policy manual, deal checklist]
Tracking: [Who ensures compliance and follow-up]
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👉 The format deliberately forces brevity and clarity:
Page 1 = Story + Analysis.
Page 2 = Lessons + Actions + Quick Reference.
Case Study Template
This shifts from “institutional memory” (case note) into “institutional teaching” (case study). A case study for training has a different rhythm: it must immerse bankers in the decision-making context, surface dilemmas, and walk them through consequences, not just report the outcome.
Here’s a Case Study Template (3-hour session) designed for bankers:
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Case Study Template – 3-Hour Training
1. Case Title & Theme
Engaging title (e.g., “The Bitter Taste of Sweet Deals: Lessons from an F&B Importer Default”)
Theme (credit structuring, monitoring failures, sector risks, governance, etc.)
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2. Learning Objectives (framed as capabilities, not knowledge)
By the end of the case, participants should be able to:
Identify weak assumptions in financial projections.
Apply structuring tools to mitigate sector-specific risks.
Design monitoring benchmarks that trigger timely action.
Translate a failure into forward-looking portfolio discipline.
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3. Background Narrative (Context Setting) (~15 min read)
Client description (industry, size, ownership, history).
Sector backdrop (macro, competitive, regulatory, supply chain).
Bank’s relationship history.
Why the deal was attractive / pressure to book business.
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4. The Deal (Decision Point)
Facility structure (amount, tenor, pricing, covenants, security).
Financials snapshot (balance sheet, P&L, cash flow).
Bank’s risk assessment (what was said in credit memo / approval pack).
Red flags (embedded in narrative, not highlighted).
Decision Question: “If you were the deal team / credit approver, what would you do?”
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5. Discussion Exercise 1 – Before the Fall (~45 min)
Participants work in groups:
Spot risk drivers.
Stress-test projections.
Redesign deal structure (security, covenants, pricing, triggers).
Deliverable: 3 key structuring changes.
Group presentations (5 min each).
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6. The Unfolding Events (Part 2 Narrative) (~15 min)
Timeline of deterioration (delayed shipments, margin squeeze, customer loss, covenant breaches).
Bank’s responses (monitoring, waivers, restructuring attempts).
The default / restructuring outcome.
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7. Discussion Exercise 2 – During the Crisis (~45 min)
Groups debate:
What early warning signs were missed?
What monitoring should have been in place?
What interventions could have preserved value?
Deliverable: Recommended monitoring framework + escalation playbook.
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8. Resolution & Outcomes (~15 min)
Final restructuring / recovery outcome.
Actual losses (P&L impact, reputation, regulatory scrutiny).
Client and relationship fallout.
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9. Discussion Exercise 3 – Aftermath (~30 min)
Groups propose:
Policy/process changes.
Sector-specific guidance.
Quick-reference “Do/Don’t” list.
Compare to actual bank’s post-mortem actions.
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10. Facilitator’s Wrap-Up (Synthesis) (~15 min)
Extract 3–5 enduring lessons.
Link to frameworks (structuring toolkit, monitoring benchmarks, sector playbooks).
Highlight how the case feeds into institutional knowledge.
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11. Materials Provided
Case note (2-pager, pre-read or handout).
Simplified financials pack (balance sheet, P&L, cash flow, projections).
Timeline chart (for Part 2 narrative).
Worksheets for group discussions.
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12. Assessment / Reflection
Quiz / short reflection (individual) to lock in recall.
Feedback form on what participants will apply in their next deal.
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Time Structure (3 hours total):
15m Intro + objectives
15m Background narrative
45m Exercise 1 (Before the Fall)
15m Unfolding events
45m Exercise 2 (During Crisis)
15m Resolution narrative
30m Exercise 3 (Aftermath)
15m Wrap-up & reflection
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Design principle: keep participants inside the deal team’s shoes, not as external commentators. That way they feel the tension of commercial vs. risk trade-offs.
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Would you like me to draft a filled-in sample case study pack (say, a mid-sized commodity trader collapse in Asia) to demonstrate how narrative + exercises + financials actually flow in practice? That could become your first “flagship” training case.
