Profile of the Speaker: Dr. Sankaranarayanan is currently Professor and Dean, College of Business, Nitte Meenakshi Institute of Technology, Yelahanka, Bangalore. He began his business career in India working for the industrial houses of Tatas (Mumbai) and Murugappa Group (Chennai) after his academic degrees from IIT, Madras and IIM, Ahmedabad. He completed his Ph.D. in Business Administration from the Katz Graduate School of Business, University of Pittsburgh, and began his academic career as faculty, University of Kansas, Later he worked with University of Pittsburgh, and the State University of New York, Albany. His academic career in USA spans over 14 years.

Session: Dr. Sankaranarayanan spoke on "Sub-Prime Loans Crisis in US and its impact on the Indian economy." The session started with an explanation on mortgages and servicing of loans to less credit worthy customers. The discussion highlighted the processes involved in granting a loan, calculating down payment, fixing rate of interest, and refinancing of loans.

The workshop brought to light the factors that led to the creation of Sub-Prime loans, Collateralized Debt Obligations (CDO), and Securitization. Some important articles from New York Times dating from 1999 to 2006, citing possible crisis emanating from sub prime lending were discussed. It was observed that Securitization has proliferated into the markets to an extent where it had become difficult to identify the original lender of the loan. This led to loans being written-off, thereby causing losses worth billions of dollars. The focus has shifted from collection of loans from original defaulters to writing-off of the investments in form of CDOs and other collateralized debts. The speaker highlighted the possible repercussions of sub-prime lending in the Indian economy.

Several numerical examples were discussed to understand the creation and issuance of loans. The calculation of Equated Monthly Installments (EMI), effective rate of interest, loan refinancing and evaluation of different choices was also dealt through the examples.

It was followed by a panel discussion on the sub-prime lending, in the light of 7 parameters for identifying crisis – growth, complexity, absence of safety buffers, cognitive bias, incompetent leadership, trigger mechanism, and the role of leadership.