Third Day of IIMA Confluence 2008 Dedicated to Current Financial Crisis

Third Day of IIMA Confluence 2008 Dedicated to Current Financial Crisis

Another major event on campus was the first round of ‘Nestle Munching Forward’, the strategic business plan contest. A total of 15 teams from B-schools across India were shortlisted to present their ideas before the esteemed panel of judges. On campus as jury

were Mr. Puneet Dua, Business HR & Sourcing Manager for Nestle South Asia Region, Mr. Nikhil Chand, Marketing Manager - Chocolates, Nestle, Ms. Rasika Fernandes, Strategic Planning Director, JWT, Mr. Rajat Kumar Jain, Brand Manager for Nestle Munch and Ms. Rishika Kohli, Communications Manager, Nestle. "It will be the quality and relevance of idea along with the presentation skills that will help the teams to qualify for the next round," said Mr. Dua. Six teams qualified for the grand finale of the event scheduled for the concluding day of the summit.

The morning of the third day at Confluence 2008 also witnessed over 50 teams from across India competing in the preliminary round of ‘The Soothsayer', a Simulation Modelling Contest, which tested participants on their knowledge and understanding of macro-economic concepts. Six teams would battle it out in the finals where they would develop a model. The model would be evaluated based on the breadth and depth of analysis and the reasoning involved. The finals are scheduled for tomorrow.

Panel Discussion

The panel discussion titled "The Financial Crisis: Have We Reached the Bottom Yet?" was chaired by Prof. T. T. Ram Mohan of IIM Ahmedabad. The esteemed panel included Lord Meghnad Desai, Professor Emeritus, London School of Economics (LSE), Mr. Aluri Rao, Head, Morgan Stanley Private Equity India, Mrs. Shikha Sharma, MD & CEO, ICICI Prudential and Prof. Jayanth Varma, IIM Ahmedabad.

Kicking-off the discussion, Lord Desai opined that the crisis wasn’t over yet and suggested that we still haven’t fully understood the extent to which financial institutions have been exposed to the crisis. He stated that there is a 'crisis of confidence' which is preventing banks from lending to each other and said that we need to fix this situation before worrying about the mountain of bad debt. He envisioned the current crisis continuing for another 24 to 30 months and felt that it could be sorted out by 2011.

Prof. Varma, while agreeing with Lord Desai, felt that the liquidity crisis could be effectively dealt with by countries like India and South Korea which have sufficient reserves to tide over the situation. He felt the situation was being exacerbated by the 'derivative deals gone bad' largely due to the mark to market losses in crude and metal derivatives. Another cause of concern, according to him, was the impending crash in the real estate market in India, and he declared that the current crisis was worse than the Asian crisis of 1998.

On a more positive note, Mr. Aluri Rao felt that the recognition of the problem and the willingness to solve it by all corporate and countries was a welcome sign and stated that. "... now there are no laggards in the process." He felt that there was a need to restore investor confidence, which was crucial for the recovery phase to begin. He stressed that pragmatism rather than ideology was the need of the hour. He said that a V-shaped recovery in the equity markets is not possible without a significant improvement in the housing market in the US and expressed confidence that an improvement would occur by 2010.

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* Contributed by -
Ravi Shankar,
IIMA Confluence 2008,
Indian Institute of Management, Ahmedabad.

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