Shadow Banking A Form Of Regulatory Arbitrage - 1185 Words

Shadow banking can be seen as a form of regulatory arbitrage that provides important financial intermediation functions distinct from those preformed by banks and capital banks [Claessens et al (2012)]. Some of these functions include securitization and collateral intermediation both of which we have partially discussed. One thing that should be pointed out is that, contrary to its name; shadow banking is not completely unrelated to conventional banking. For instance, shadow-banking complements traditional banking by expanding access to credit or by supporting market liquidity, maturity transformation and risk sharing [Nico Valckx et al]. The only major difference between the two banking systems is that shadow banking is not regulated.†¦show more content†¦The shadow banks responded to this by trying to issue new securities and force selling the underlying collateral. However due to the aforementioned slump in mortgages and real estate prices, this response failed and the va lue of these repurchase agreements continued to decline whilst the haircuts continued to increase. Due to this, lenders refused to offer short-term loans whilst haircuts grew to new highs. This meant that repo lending drastically decreased and lead to the collapse of the shadow banking system. To highlight the extremity of the above scenario, Figure 2 shows the drop in the US repo market before and after the 2008 recession [Financial Times (2013)] [Figure 2]. In retrospect, due to the above events, regulators became concerned by the use of repo agreements and the simultaneous use of haircuts in these agreements. These regulators were concerned that haircuts would amplify negative market trends and in situations where asset prices were falling, the increases in haircuts in response to the loss of confidence in an asset could reduce the liquidity of market users who may then sell assets, and so reducing the price of the asset and causing the haircuts to further increase [ICMA]. They believe that this scenario contributed greatly to the current financial recession. However, there are some arguments against thisShow MoreRelatedBasel Norms2920 Words   |  12 Pagesof the Basel Accord in 1998 and how it has evolved over the course of the last 23 years. Contrary to the popular belief capital regulations have been considered the biggest underlying factor of the subprime crisis owing to securitization, the shadow banking system and the flexibili ty given to banks in risk assessment. The recent Basel III norms though aim to mitigate the already caused damage, the results are still left to be witnessed. Evolution of Basel Norms and their contribution to the SubprimeRead MoreShadow Banking29874 Words   |  120 PagesFederal Reserve Bank of New York Staff Reports Shadow Banking Zoltan Pozsar Tobias Adrian Adam Ashcraft Hayley Boesky Staff Report no. 458 July 2010 This paper presents preliminary findings and is being distributed to economists and other interested readers solely to stimulate discussion and elicit comments. The views expressed in this paper are those of the authors and are not necessarily reflective of views at the Federal Reserve Bank of New York or the Federal Reserve System. Any errorsRead MoreEvaluating Basel10414 Words   |  42 Pagesrole in the safety and soundness of individual banks and the banking system. 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Like Glass-Steagall, the legislation passed after the Great Depression, it sought to regulate the financial markets and make another economicRead MoreIntroduction: The financial sector has been hit badly by the financial crisis in 2008. The1600 Words   |  7 Pagesby forcing each financial institution to hold an adequate percentage of capital to act as a buffer against liquidity problems faced by those institutions (Benink, Wihlborg 2002). Basel 1: The Basel Committee on Banking Supervision started Basel 1 Accord in 1988 to stabilize the banking system by ensuring that banks maintains capital not less than 8% of its credit risk (Hussain, Ramzan et al. 2012) in (Hasan 2002). Where credit risk is the risk associated with the default of a borrower to pay hisRead MoreBanking, Liquidity and Bank Runs9201 Words   |  37 PagesBanking, Liquidity and Bank Runs in an In†¦nite Horizon Economy Mark Gertler and Nobuhiro Kiyotaki NYU and Princeton University May 2012 Abstract We develop a variation of the macroeconomic model of banking in Gertler and Kiyotaki (GK2011) that allows for household liquidity risks and bank runs as in Diamond and Dybvig (DD1983). As in GK, because bank net worth †¡ uctuates with aggregate production, the spread in the expected rates of return on bank credit and deposit †¡ uctuates countercyclicallyRead MoreFinancial System Between Australia and Singapore8919 Words   |  36 Pagesis known as the Monetary Authority of Singapore (MAS). Earlier in 1970, Singapore started to growth and there was increasing need of a better banking and financing environment. Hence in 1970, the MAS Act was passed by the parliament of Singapore. In 1st January 1971, MAS was formed with the MAS Act giving it the power to regulate every element in the banking aspects of Singapore. MAS then take over the task to regulate the insurance industry in April 1977 and the function of Security Industry inRead MoreEurope Economic Crisis55278 Words   |  222 Pageshistory of the European Union. Although signs of improvement have appeared recently, recovery remains uncertain and fragile. The EU’s response to the downturn has been swift and decisive. Aside from intervention to stabilise, restore and reform the banking sector, the European Economic Recovery Plan (EERP) was launched in December 2008. The objective of the EERP is to restore confidence and bolster demand through a coordinated injection of purchasing power into the economy complemented by strategicRead MoreThe Impact of Business Ethic on Organisational Performance14958 Words   |  60 Pageswhile ensuring that essential action plans are taken that ensures that the organisational systems and processes are well aligned with it ethical dispositions and ethos. Below is the ‘Obligations of Senior Financial Officers’ excerpted from the banking group’s codes of conducts: |â€Å"HSBC Group Business Principles and Values is applicable to all HSBC employees and sets out the fundamental standards to be followed by | |them in their everyday actions on behalf of the Company. In addition to the GroupRead MoreInside the Meltdown49737 Words   |  199 Pagessuccessfully. We have seen a lot of stability. People are keeping their money in banks, which is good. ... I think we ll be judged by how history judges us, whether we continue to be effective in trying to stabilize the banking sector and maintaining people s confidence in the banking system. ... You say in speeches that the FDIC and yourself saw a storm brewing over the last two years. ... When I came to the agency, we were still in a very benign economic environment, but the FDIC staff, our supervisors

Honduras Essay Example For Students

Honduras Essay Located in middle Central America, Honduras is a tropical country named afterthe depth of the water along the northern border of the Caribbean Sea (LexisNexis). Nicaragua to the South and Guatemala and El Salvador to the West borderHonduras. The climate in Honduras varies depending upon the region. Along thecoast the weather is hot and dry, yet, in the mountain ranges it stays cool thewhole year round. Honduras is the third poorest country in the world. There arefew corporations, universities, and land for the citizens to settle on inHonduras, causing many citizens to immigrate to other countries to find newopportunities. Due to the lack of employment, education, and land, Hondurancitizens immigrate to the United States in order to find a better life. Hondurasis a very racially diverse country. Their backgrounds, housing, and economicpatterns differ greatly than those of Americans. Ninety percent of the residenceon the island are Mestizo or Ladinos while the other ten percent are poo r groupsknown as the Garifuna and the blacks of the West Indies. The Garifuna and theblacks of the West Indies make up the problem of emigration in the states. Bythe 1980s there was economic and political crisis in all of Central Americaand the number of emigrants shot up. In Honduras, at this time, there was anational economic plan (American Immigration Cultures 395). This plan tookaway much of the land from the common folk, and Honduras economy was so bad thatthere were no jobs to offer. This sparked the spike in emigration to the UnitedStates. At this time there was also a spike in the tuition for college andconsidering that there are only a few universities in the country. Emigration tothe U.S. started subtly. Much of the emigration is connected to the UFCo and theStanford Fruit Company, which at one time monopolized all the banana trade. Culture And CustomsThe Native American and Spanish strains in Honduran cultural history isvisible in the awesome architecture. Fine Arts in Comayagua, the old capitalhas long been a custom to our southern neighbors. in northwestern Honduras is aceremonial center of the Old Empire of the Maya and one of the most importantarchaeological sites in the entire western hemisphere. Type Of GovernmentThe constitution of Honduras was formed in 1982. Under the Constitution,the people elect a president and the members of the legislature serve four-yearterms. Presidents can only serve one term. The cabinet is appointed by thepresident. The military has allot of the influence in the government ofHonduras. Military leaders are completely responsible for its national securitypolicies and they can veto any of the presidents appointments to the cabinet. Military leaders have often taken complete control of the government in the past. EducationIn this country education is free and compulsory for children betweenthe ages of 7 and 12. Although the literacy rate stands at 73% the governmentpledges to raise it. The Pan American Agricultural School, financed by theUnited Brands Company of the United States, is near the capital. LanguageSpanish is the official language and is spoken by nearly all theHonduran people. English is spoken by some people in the north, and the NativeAmericans have retained their languages. ReligionAbout 85% of the people are Roman Catholic. Protestants constitute asmall minority. Type of CurrencyThe unit of currency in Honduras is the lempira, which is divided into100 centavos. 6.91 lempiras equal $1.00 to the US as of 1993. Governmentcontrolled municipal Bank and national Agricultural development Bank providecredit for developmental projects. AgricultureAbout 16% of the total land area of Honduras is arabel, most of it onthe coastal plains. The leading cash crop are coffee and bananas and plantains. Other important crops include sugarcane and palm oil. The principle food cropsare corn, beans, and rice. Citrus fruit and pineapples also are grown. Medical InformationIn recent years public health services in Honduras have been made moreaccessible through an increase in modern health units. Also through thedevelopment of community participation in health programs. These programs haveresulted in malaria control, improved sewage, and increased medical personnel. Unfortunately, malnutrition, inadequate housing, and infant diseases are still aproblem. ClimateThe climate of Honduras is Tropical but is tempered by the higherelevations of the interior. Coastal regions are warmer and the humidity canbecome high. This all added together gives the Honduras nation an average 80degrees F. or 26.7 degrees C. Well now that you have taken the time to learn a little bit of facts ofthe Great Latin country of Honduras, I hope you will take some time to visitthis rich cultured country. I am confident that you will enjoy this awesomeexperience!History

Over The Past Years Most Individuals Have Become Acutely Aware That Th

Over the past years most individuals have become acutely aware that the intensity of human and economic development enjoyed over the 20th century cannot be sustained. Material consumption and ever increasing populations are already stressing the earth's ecosystems. How much more the earth can take remains a very heated issue. Here a look at the facts sheds some very dark light. In 1950, there were 2.5 billion people, while today there are 5.8 billion. There may well be 10 billion people on earth before the middle of the next century. Even more significant, on an ecological level, is the rise in per capita energy and material consumption which, in the last 40 years, has soared faster than the human population. "An irresistible economy seems to be on a collision course with an immovable ecosphere." Based on these facts alone, there is grave reason for concern. Taken further, it is even more frightening to note that, while man has affected the environment throughout his stay on earth, the impact has been most intense in the relatively short industrial era. Since the industrial revolution, and over the past century in particular, man's ecological footprint on the earth has quickly grown from that of a child to one of a giant. True, this period is heralded as an economic success story, which it certainly has been. However, many argue that it seems increasingly likely that the path to man's success will soon slope downward to his demise. The climate is changing, and so must we. This paper will look at the coin of climate change, where on the one side the human impact on the earth will be shown, and on the other, the impact of earth on man. Such a study is inevitably somewhat polemical, as it is still open to debate what the precise effects of man have and will be on climate change, and also what climate change will mean to man. It will also be quite general in analysis, as a paper of this scope can allow no more. What will be made clear, nevertheless, is that the relationship between man and earth is clearly changing. More specifically, man is outgrowing the earth. If the relationship is to continue?indeed prosper?then a new balance needs to be found. The issue of climate change holds one important key to this balance. Man and the Environment Thomas Malthus is well remembered for his position as a doomsayer. When looking at the rates of population growth in Victorian England, he saw unchecked growth as leading to a rapid decline in the living standards of man. He blamed this decline on three main factors: the overproduction of offspring; the inability of natural resources to sustain rising human population; and the irresponsibility of the lower classes to prevent their overpopulation. Very generally, Malthus suggested that this trend could be controlled only if the family size of the lower classes was regulated so that poor families would not produce more children than they could support. He predicted that the demand for food would inevitably become far greater than the available supply of it. This prediction was rooted in the thought that population, when unchecked, increased geometrically; i.e., 2,4,8,16,32... while food products, or as he called it ?subsistence', only grew at an arithmetic rate; i.e, 1,2,3,4,5,...... H e provided only a basic economic reason for this however, and generally attributed famine, poverty and other catastrophic occurrences to divine intervention (he was a very religious man, a clergyman, in fact). He believed that such natural outcomes were essentially God's way of preventing man from being lazy. The point here is not to provide an evaluation of Malthus, and one might well argue that he was wrong in many of his predictions; but rather to highlight the posit that man has long been living beyond his means. Sooner or later, this will have its consequences. As a species, our success has certainly been impressive, but it has come by turning a blind-eye to our surroundings. "A prime reason for our success is our flexibility as a switcher predator and scavenger. We are consummately adaptable, able to switch form one resource base?grasslands, forests or estuaries?to another, as each is exploited to its maximum tolerance or use up.

Research Report on the House Permanent Select Committee on I essays

Research Report on the House Permanent Select Committee on I essays Research report on the House Permanent Select Committee on Intelligence On the 14th of July 1977, more than a year after the Senate had already formed its select intelligence ruling body, the House of Representatives instituted its very own Permanent Select Committee on Intelligence. This put an end to years of limited congressional oversight and paved the way for jurisdiction, an improved influence, and an overall expansion of resources. With the establishment of this committee came exclusive control (in concurrence with the Senates Select Intelligence Community) over sanctions and legislation affecting the CIA, along with the Director of Central Intelligence and a fusing of jurisdiction over the remainder of the intelligence community. This was simply the beginning of the HPSCI and it would find itself undertaking many modifications in the years that lay ahead. My intention in this report is to discuss all of the required aspects that you have specified to as much of a degree as seems sufficient. The institutional purpose of this bureaucracy , the means by which its members are selected, the responsibility of and from where this committee derives its power, and to what extent its influence carries out with regards to foreign policy will all be covered. Past crises and the steps this committee has taken in putting a peaceful end to seemingly ceaseless violence will also be presented. Finally, the scenario that has been given in class will be discussed and possibilities of action by the HPSCI will be evaluated. The HPSCI has basically three functions. The first of which is budget oversight, or in other words power of the purse. This capability gives the committee its power to authorize funds for the entire intelligence community (Smist 242). This particular branch of the HPSCI is essentially an outreach of the House Appropriations Committee, meaning its tasks and practices are qu...

1.Define international business imperative and highlight the impact…

1.Define international business imperative and highlight the impact It means doing business activities or trade with one or more than different countries outside the country boundary or geographical area. It means commercial private transaction and government organization in term of sales investment and logistics. International business lead different parties for their own motives either for profit or any political reason to under take all business activities including import and export crossing borders in goods, services and economical resources Which consists capital, skills and social political reasons. International trade has a vital role to seek for materials and parts also for international opportunities for the demand of several thing and economic resources which consists of capital, skills, people to give responsibilities for the production of physical goods. Now a days international economy business has some other importance like to enhance to political relationship with other countries like EEC. Although the world wide market has explained greatly to some extent which made the possible with other countries of the world due to the globalize economy of the world. Business transaction like finance, banking, insurance, these are the main keys sectors for varies countries where international has liked with other countries to trade on permanent basis. Forty years ago international trade was very difficult between the countries by the reasons of political, communication, and social and cultural restrictions. Creation of European Economic Community (EEC) it tried to open trade barrier between the twenty three countries who participate actively in economy growth of the EEC and free trade among the members of EU. United Kingdome as the member of the EU has developed business with several countries like China, India, Sri lanka only few shortlist to WU where there is no barrier in the members. UK imports and exports the goods and services from other countries which are not the members of the EEC. International organization is ve ry important for the local economy. We have multinational enterprises where the customers have a lot of varieties of their own choice. Competition on various channel of production have modern approach to meet the requirements in more than one country. We have a number of foreign businesses throughout the countries such as, McDonald, Kentuky, and Nado. We have a range of foreign fast food business in different sectors. International business is impartial and has give the consumers more choice to get access of multiple goods. On the other hand some counties have limited international business because of government restriction to protect the home country’s market to protect job of the citizen. Sometimes home business is disappeared due to the arrival of foreign investors. Thus protection of local business is important to secure jobs an investment political measures are essential to enhance the production of the local industry. 2. Explain what strategic Alliances. Meaning of stra tegic Alliance. Discuss the potential benefits of strategic Alliances. Advantages and disadvantages. A strategic alliance is acquiring to or more parties into a relationship to meet a business need. It might be with in the local market or at international level. Distribute different resources. The partners get both support and collaboration. This organization is proved to be beneficial.

Contemporary Issues in Accounting and Finance Essay - 1

Contemporary Issues in Accounting and Finance - Essay Example They consider all this to create an enabling environment that favors their objectives (Jaiswal, 2013). The Standards of the Auditors Ready Ratios (2013) asserts that in the 21st century the European Union came up with an outline of how the auditors should conduct themselves. The outline consisted of the law that stated and guaranteed matters concerning the freedom of the assessors of the law (Kumar & Sharma, 2006, p.134). This was similar to the laws that govern the accountants. It is said that the accountants were given their laws that govern their operations. They were given by the internal profession of the accountants (Knapp, 2010, p.204). In order to promote the equality in the people and all the other professions the European Union issued a framework that was to govern the legal analyst (auditors) and ensure that they were in line with their operation, expectations and their rights. Even though, this did not concur with some stipulations from the international federation of acc ountants. This is because the accountants were entitled to some fundamental freedom and rights that ought not to be compromised. And each accountant had an obligation of independence and doing the right thing. The directives the European Union gave, differed with the directives the international ethics for accountancy (Buijink et al., 1996, p.66). According to Sharma (2012, p.14), the differences were seen and they did expect the law auditors to operate within their stipulations. In giving their outline, the union for accountants had in mind the idea of public interest. They were interested in the good of the people. But in essence the European Union found the laws quite strict for the auditors to withstand (Puttick et al., 2008, p.56). So it was a two way drive. If the law analyst happens to execute their duties within the provisions of the international accountants, the result will be a stronger system in the operation. This is because there were quite stricter provisions. And if they do there duties in the boundaries of the stipulations of the European Union, they will be bound to some freedom (Basu, 2010, p.134). Discussion According to Greene (2005, p.11), a debate about the freedom of the person when conducting and assessing the legal issues forms the basis of the story. It is from this that the general theme of the work is, â€Å"the obligation of auditing†. This discussion is majorly rotating about this question. The title about the auditor being independent comes out from the following discussion (Morris et al., 2009, p.309). Some of the good principals are now in place and should be in mind of the any auditor or accounting profession. Whenever the auditing is to happen, the outstanding statute is the objective of the auditor. In order to show the public, the people moderating and using the audit opinions in particular, the auditor is supposed to be independent. Before entering an agreement with the client; the auditor should ensure a peaceful environment and his independence (Volosin, 2008, p.14). According to Gupta (2004, .1247), the European Union argues that, by defining the key audit partner, it does not

English as a Second Language to the Learners Essay - 1

English as a Second Language to the Learners - Essay Example Two specific programs on ESL are arranged at schools namely ‘ESL targeted support program’, and ‘ESL new arrivals program’ through three phases and students at the end of the third phase are expected to ‘have extended their English language and literacy skills’ (NSW Department of Education and Training, 2004, p. 10). The program uses three modes -Direct, Collaborative, and Resource. The article helps one to use ESL scales in the assessment of the programs and undertaking necessary remedial measures. Further, the article helps the students and schools in the enrolment process of ESL programs. To sum up, this article is a pole star for students, teachers, and schools in Australia and New South Wales in ESL programs. Dr. Tina Sharpe (2004) elaborates on the specialties of ESL teachers and the article establishes a number of distinctions between a mainstream teacher and an ESL teacher. According to her, ESL teachers differ from other teachers in many ways as they have ‘the knowledge about the process of acquiring a second language’ (Sharpe, 2004, p.1). ESL teachers are aware of the learning environment of the students and they implement the target language with its cultural significance. ESL teachers provide opportunities to use language for a variety of purposes and work. Only a specialist teacher can employ the expertise regarding the process of acquiring a new language. An ESL teacher is different from a mainstream teacher, in the decisions about the topic content, resources, sequence of activities, modification of learning activities, identification of assessment opportunities and finally in evaluation and planning. To conclude, this article helps one to realize the significance o f specialized ESL teachers in transacting the language. Cummins (1996) deals with the language proficiency both in communicative skills and in an academic situation. Two misconceptions handicap students who seek to study ESL- first, the fear of incapability for logical thinking and second, the conversational skills are interpreted as overall proficiency.