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Subprime Tsunami on Indian Shores: Crisis Hits ICICI Case Solution & Answer

The bankruptcy of Lehman Brothers, a major investment bank on Wall Street, has sent shock waves in the financial markets, global liquidity dried and investor confidence reached a historically low level. Banks with exposure to complex financial instruments in highly indebted environments were considered especially vulnerable. ICICI Bank – the largest bank in the private sector in India with maximum international exposure among Indian banks – was affected by rumors about its exposure to Lehman assets. Credit fears led depositors to withdraw large sums of money and the value of bank stocks began to erode. ICICI management responded to the crisis by launching a campaign of intense public relations: the bank has published information on their exposure and defended his position through media appearances of its executives and statements issued by the rating agencies, regulators and the Government of India. The bank said its strong balance sheet, limited exposure to risky assets, adequate funding, and a coefficient healthy cash. Claimed discomfort and rumor market intermediaries as the reason for the crisis and denied any threat to their solvency. The public relations effort had barely finished when a new episode of stock collapse and withdrawal of customers began. The case offers students the opportunity to evaluate the efforts of crisis communication in the era of new media and its relationship to corporate reputation. The student, in the role of a public relations consultant must determine why the efforts failed. What more could be done to restore confidence?
by
Chetan Juneja,
Gita Bajaj
Source: Ivey Publishing
21 pages.
Release Date: June 6, 2012. Prod #: W12428-PDF-ENG
Subprime Tsunami in Indian Shores: Crisis Hits case ICICI Solution

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