Jules Kroll Essay

JULES KROLL

        After receiving the Certificate on Government receipts (COUGARs), Jules Kroll plans to enter the credit rating business. This is a great and fruitful idea. Once the COUGARS is offered to a business premise, the stakeholders are assured of safety principal and also transparent profits which each enterprise strives for. This implies that the company’s Treasury securities have been stripped of their coupon payments and can be redeemed at face value. This is the right time for Jules to venture into the credit rating business because an opportunity has been offered by being given the COUGARs by the A.G. Becker Paribas firm thus they should hand in their prospectus that provides the details of the investments offered for sale to the public. Though it had become more competitive as many new entrants compete for funding.

        Corruption that was rooted in the CRAs led to the collapse of the economy in the US which caused a great shakedown in large financial institutions and the global economy too. This crisis caused the stock markets all over the world dropped thus leading to the loss incurred in the housing market too. The credit raters were optimistic of the housing mortgage boosting their credit rating business by using it in bond trading business. This however turns out to be unprofitable unlike expected by the credit raters.

        The incumbent credit raters provided inaccurately financial rates thus granting loans to home buyers with bad credit and undocumented incomes. This was due to their differences in interests as agencies were infested with greed for money instead and also financial institutions wanted to have higher credit ratings. This led to the collapse of some major financial institutions.

After the financial crisis Kroll founded the K2 Intelligence which was used to investigate theft and graft claims all over Europe. With much success in the uncovering of the secrets that had caused plundering of fortunes due to the financial crisis made K2 intelligence be known globally hence he formed the Kroll Bond Rating Agency to operate as a transparent credit rating agency. This boosted the economy since the financial rates were accurately reached at by the agency. The financial crisis therefore had a positive effect to Kroll’s opportunity as it gave him a go ahead to venture into credit rating services.

Kroll’s plan of venturing into this credit rating business can be so fruitful if they consider various aspects for the effectiveness, efficiency and competence within the credit rating market in the US. The various factors that should be put into consideration include:

1. Staffing
2. Financing
3. Regulatory requirements
4. Specialization

With the above factors put in consideration without any being under looked or ignored, Kroll’s plan will be so profitable and will also enable boosting of both the American and Global economy.

1. Staffing

Before entering into the credit ratings business, Kroll needs to identify, acquire, develop and maintain an efficient and satisfied team of employees within their organization.  This can be done through recruitment, development and appraisal of their current employees.  In the staffing process the employees that should be selected on merit basing on various aspects such as;

1. Expertise- The employees should be well versed with making decisions regarding bond ratings and also bond acquisitions. This will foster realization of greater profit margins and also boost the economy of the country and also the global economy.
2. Objective and Team Oriented- The employees should focus on meeting the core organizational goals and objectives through coordinated teamwork. Each employee should relate well and work well with the other employees to foster a working environment.
3. Willingness to assume duty- The employees should be readily willing to serve both the investors and customers to their satisfaction. This will enhance a good customer relations which breeds customer loyalty.
4. Diplomatic, tactful and diagnostic skills- The employees should be able to critically analyze to understand and define situations in the bond rating market. This is important in getting to know the areas which are more promising in terms of profits in the case of bond investing so as to advise the investors where to invest in.
5. Transparency- The employees should be transparent in the case of financial institutions rating and also analyze the credit worthiness of debtors so as to prevent a situation such as the Financial Crisis from reoccurring. This can be done through the efforts of the employees being firm and initiate transparency in accurate rating of financial institutions thus shunning manipulation by financial institutions.
6. Critical thinking- The employees should be able to easily analyze the market value of various bonds and advise accordingly on which bonds to invest in and which bonds should stop being invested in due to future losses that might be incurred. This will steer growth of the national and global economies.

1. Financing

Kroll should put in place adequate and efficient financing measures so as to ensure proper performance of the organization in the credit rating market. This financing should adequate enough to cater for the expense, assets and investments needs of the company. The company should be able to cater for expenses such as the salaries for the employees, financing research on the bond ratings, employee strengthening programs and also allowances and employee benefit packages to increase the morale of the employees. The company should be able to acquire assets that can be used to retain money to bail out the company in the case of an internal financial stagnation or crisis. Also the company can invest in various areas so as to maximize their profits so as to ensure efficient running of their programs.