Dsc Communication Corporation Case Solution And Analysis, HBR Case Study Solution & Analysis of Harvard Case Studies

Dsc Communication Corporation Case Solution

Loss Due To Fraud: Another risk facing banks today is cases of fraud and theft. Some high-profile cases have made the news over the years, such as that of Enron, which saw thousands of investors lose money. Although no one was successfully conned, the damage caused by these incidents and the lack of punishments for those guilty has led to a bad reputation. While there is currently legislation in place to deal with these crimes, it is unknown how successful it will be in the face of challenging competition from the lenders.

Deflation: Not only deflation is a threat to the economy but it is also something that can affect the customer loan market. This is because any increase in the overall price level (which can occur due to inflation) leads to a decrease in the purchasing power of the currency of that country. As a result, any consumer loan product which requires the payment of more money to obtain the same level of goods becomes difficult to pay for, causing a loss in the bank's income. As well, it makes the purchasing power of the country’s currency go down, leading to an increase in the orders for the raw materials which are used to make that product, which also decreases the bank's income.

Can we structure the loan in a way that we can mitigate those risks?

Banks are always under some kind of difficulties, the problems have been going on for years and the stakeholders are no longer willing to raise more money into their banks to security them out. They are now in the position of waiting for the stock price.

There is a new loan administration concept that has been getting more popularity and it is called working risk control. This is a form of management where the banks use real estate evaluations to resolve the property's f.v. They then use this information in the process of loan sources and commercial contracts. If it turns out that the future value of the property is lower than the current value, they prevent it. If it turns out that the current market value of the property is higher than the future value, then they issue a loan.

The result is duplicated. First, the banks must sell the loans for less than they paid and regain some of their loss through early closing fees and interest charges. Second, they can create a better set of terms and conditions for the borrower. This way, the banks do not have to worry about future changes to interest rates, which could cause serious changes in the way they write the loan. In essence, the banks can get a better return on the loan in the form of a restructuring deal from the borrower and less loss for the bank.

This is how restructuring takes. Banks purchase the original dues at a discount and then give the borrower a new loan with a new term and interest rate. They also issue an Orca, which is attached to the loan. This ensures that the banks take as little loss as possible in the transaction.

A restructuring deal is not ideal for all borrowers. First, the interest rates are usually fixed and do not fluctuate based on the market. Secondly, since the Orca is there to remind the banks that the loan has been restructured, borrowers may not negotiate with the banks to get better terms and conditions. Borrowers should expect to pay more when they sell their loans since the banks pay much less for the original debt. If the borrowers still insist on getting better terms and conditions, then they might not be able to find better deals with other creditors or banks.

However, there are cases where restructuring offers good value to borrowers. In some cases, banks use this tactic when they want to recover some of the money they invested in the failed business. In these cases, the banks get to keep an important portion of the financing, without having too much loss. The risk in this kind of situation is relatively decreased and the banks do not have to pass on the complete loss. Banks can structure a loan in a way that reduces the risks involved.............................

This is just a sample partial case solution. Please place the order on the website to order your own originally done case solution.