Banking Insitutions and Big Businesses Regulated or...

Regulation is defined as a law, rule, or other order prescribed by authority, especially to regulate conduct. Deregulation is defined as to remove government regulatory controls from an industry, a commodity, etc. The big question is can an institution of any type able to self-regulate in an appropriate manner. Are they able to put profit to the side for the health and safety of people? Are they capable of making ethical decisions and to not adversely affect people? Does the past indicate this? And if they display good judgment should regulation be scaled back? Banking institutions and big business have done severe damage to the American economy and destroyed millions of lives, many times. Panics, depressions and recessions riddle our†¦show more content†¦Then bundling and selling off these loans that turned into toxic assets on the market. If that wasn’t enough they took out insurance on these toxic loans, which AIG backed. When banks and brokers came to collect on their hedged bets, it was almost collapse AIG. This started a chain of near bankruptcy and the act of the bail out or TRAP. Under President Franklin D Roosevelt, a man named Ferdinand Pecora, was responsible for exposing the shady dealings of big banks, tax evasion, self-dealing, and bad speculations, which resulted in the Glass-Steagall act of 1933. Pecora wrote in his book Wall Street Under Oath, â€Å"Under the surface of the governmental regulation, the same forces that produced the riotous speculative excesses of the ‘wild bull market’ of 1929 still give evidences of their existence and influence.†¦ It cannot be doubted that, given a suitable opportunity, they would spring back into pernicious activity.† I do believe he was right. Although we have had some recessions between the 1940’s and now, nothing to the magnitude of the Great Depression or the Great Recession. I personally believe it’s a little more than a coincidence that the economy crash happened just 9 years after the repeal of Glass-Steagall in 1999 under President Clinton. A handful of greedy Americans are affecting the rest of American lives and reputations. Many people including my own parents, that played by the rules,

Characteristics Of The Debt Finance Essay Example Pdf - Free Essay Example

Sample details Pages: 4 Words: 1348 Downloads: 1 Date added: 2017/06/26 Category Finance Essay Type Narrative essay Did you like this example? Debt financing is financing a company by selling the bonds, notes or mortgages held by the business. Basically it is borrowing money to keep your business running. Long term debt financing is typically associated with larger assets such as buildings, equipment, land, and large machinery. The schedule for repayment for long term debt financing expands for more than a year. Short term debt financing is mostly associated with operations of the business such as inventory purchasing, payroll, and supplies. The repayment of short term debt financing happens in less than a year. With debt financing, your business does not have give up future profits or ownership in the company like with equity financing. Debt financing is more commonly known as selling bonds or debentures. Debentures are tools used by large companies to raise capital for their projects and operations. This is known as a debt offering since the company literally goes into debt to the investors until th e price of the debenture is paid back, plus interest, or until it is converted into stock. The company must record this debt in their balance sheet. If bankruptcy occurs, the debenture holders are considered creditors and must be paid back by the companys remaining assets. Debentures are a way for companies to raise capital without having to use their assets or give up ownership in their company. This leaves their assets free to do other things to generate capital for the business. Long term Long term debt financing is done, when the repayment schedule of the loan and the approximated useful life that the purchased assets have is expected to go beyond one year. These assets can be machineries, computers, shelving, land and other such things. The long term loans are usually secured initially up to 65 percent by the purchased assets and then, the remaining 35 percent by the unburdened physical assets. If both these things fail, then the services are availed of guarantors and sha reholders. Characteristics of the Long Term Loans of Debt : ÃÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¢ The principal amount is repaid over a time period that is in direct relation to the utilitarian life of assets such as buildings and land up to 30 years and computers for 3 years. ÃÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¢ The long term loan of debt carries the repayment provisions of both the principal as well as the interest in a repayment schedule that is preset. The repayment that is done before time is penalty bound, on account of the non-planning of the alternative investments regarding the same by the lenders. ÃÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¢ The percentage of the interest rate usually remains steady for the entire loan term. Every payment of the original amount reduces the balance in it and subsequently, the interest is computed on the reducing balance of the amount. The Evaluation and Approach of the Loans : The long term loan evaluation is a very sophisticated and rigorous process, than the evaluation of mortgage loans. The lenders of such loans are in fact evaluating the management teams ability, seeing the situations commercial viability and the collateral security attached for supporting the loan application, as mentioned in the financial submissions. The evaluation of the long term loans requires a plan that is in the format of a bound presentation and provides all the detailed information about the companys management or the project or individuals. The loans concerning the business requires the exact history of it, the production methods of its products, the operations of the business, its market position, the purpose of taking the loan with the intimate details, the securities given for the loan approval and the extensive projections and financial information regarding the business. Most of the people approach the field of money borrowing with some apprehension. In fact, the borrowing of money from financial institutions has not to be view ed as begging. Rather, it has to be viewed as giving an opportunity to the commercial loan institute for doing business. The money is borrowed from the people, who aid in soliciting the business of the individuals taking the loan. Loans are in fact a commodity on the shelves of the retailers. The aspirants of the loans are actually helping the lenders in doing business. Short Term CF Short Term Debt financing usually applies to money needed for the day-to-day operations of the business, such as purchasing inventory, supplies, or paying the wages of employees. Short term financing is referred to as an operating loan or short term loan because scheduled repayment takes place in less than one year. A line of credit is an example of short term debt financing. Commercial Banks and Non Performing Loans Role of Commercial Banks in Extending Loans Loans as Assets for the Commercial Banks Nonperforming Loans A nonperforming loan seems simple enough to understand in theory but is subject to various definitions. Generally speaking, a loan is nonperforming when it is not making income for the lender. According to the Financial Times, the point when a loan is classified as nonperforming by a lender and when it becomes a bad debt depends on local regulations. There is no global standard to define non-performing loans at the practical level. Variations exist in terms of the classification system, the scope, and contents. Such problem potentially adds to disorder and uncertainty in the NPL issues. For example, as described by Se-Hark Park (2003), during 1990s, there were three different methods of defining non-performing loans in Japan: the 1993 method based on banking laws; the Banks Self-Valuation in March 1996; and the Financial Revival Laws-Based Debt Disclosure in 1999. These measurements have gradually broadened the scope and scales of the risk-management method. Similar to the trend in Japan, more countries, regulators, and banks are movin g towards adopting and adapting better and more consensus practices. For example, in the U.S., federal regulated banks are required to use the five-tier non-performing loan classification system according to BIS: Pass, Special Mention, Substandard, Doubtful, and Loss. Presently, the five-tier system is the most popular risk classification method, or, in some cases, a dual system of reporting according to their domestic policy guidelines as well as the five-tier system. According to BIS, the standard loan classifications are defined as follows: (1) Passed: Solvent loans; (2) Special Mention: Loans to enterprises which may pose some collection difficulties, for instance, because of continuing business losses; (3) Substandard: Loans whose interest or principal payments are longer than three months in arrears of lending conditions are eased. The banks make 10% provision for the unsecured portion of the loans classified as substandard; (4) Doubtful: Full liquidation of outsta nding debts appears doubtful and the accounts suggest that there will be a loss, the exact amount of which cannot be determined as yet. Banks make 50% provision for doubtful loans; (5) Virtual Loss and Loss (Unrecoverable): Outstanding debts are regarded as not collectable, usually loans to firms which applied for legal resolution and protection under bankruptcy laws. Banks make 100% provision for loss loans. Non-performing loans comprise the loans in the latter three categories, and are further differentiated according to the degree of collection difficulties. In addition to the standardised system, efforts have been made to improve the classification of loans. For example, more countries are shortening the period when unpaid loans become past due, intending to put loans on lenders timetable sooner and require them to address these loans before losses start to escalate. The International Accounting Standard 39 revised in 2003 focuses on recognition and measurement of finan cial instruments and, most importantly, defines and establishes the measurement and evaluation of impaired loans. As lenders usually make little or no loss provision for impaired loans, they are at risk to be suddenly forced to reclassify such loans as a loss and take a full write-down if the borrowers go bankrupt. The initiation of this standard is to prevent lenders from being caught off-guard. In addition, many global economists, rating agencies, and organisations such as the World Bank and the Asian Development Bank have begun to evaluate the effects of NPLs on GDP growth. They reduce growth estimates to reflect the time and cost of resolving large non-performing loan issues. The Time Limit Assets (Loans) Classification Substandard Doubtful Loss Provisioning Substandard Doubtful Loss Credit Risk Management Don’t waste time! Our writers will create an original "Characteristics Of The Debt Finance Essay Example Pdf" essay for you Create order

Aristotle Critical Lens Free Essays

â€Å"Though we love both the truth and our friends, piety requires us to honor the truth first. † Often times in life, one is caught in a sticky situation. While morals and values and normally highly regarded, complications arise when friendships are involved. We will write a custom essay sample on Aristotle Critical Lens or any similar topic only for you Order Now Relationships are an essential part of existence, the emotional connections are often the ones that shape our lives.. One if often faced with the difficult toss up between doing what is right and doing what you want. It’s a balancing out between the loyalty to your friends and maintaining your morals. I agree with this quote because piety is the quality of being religious or reverent. In order to be religious one must follow a moral code and not put worldly relationships or emotions as higher priority than the truth. An example of the struggle to find the balance is displayed in After Twenty Years by O’ Henry and Lord of the Flies by William Golding. An example of this struggle is exemplified in â€Å"After Twenty Years† by O’Henry. Two friends separated by years, miles, and jaded by their experiences since the last time they’ve met, are scheduled to reunite and rekindle the friendship they once had. The way Bob describes their friendship it was almost as if they were blood brothers, bonded together so tightly it was as if they were family. He even refers to his old pal Jimmy as the â€Å"truest and stanchest old chap in the world. † This foreshadows that he was going to remain true to his morals as opposed to honoring the friendship. His diction and use of kind words describing his friend even after twenty years of absence really exemplifies the strength of their friendship. True friends are a constant in your life and even though they may not be physically present, they will always have a special place in your heart. Another example of the foreshadowing of what’s to come is the intrigue the police officer seems to have with the man’s story. He seems much to inquisitive to just be a random stranger. You can see that he is generally interested in what has happened since his friend departed, and just the mere fact that he was present where he said he would be 20 years prior shows the true and honest man he is. And yet, when given the choice between preserving the friendship so long in the making, and doing what is right and turning his old friend in for being a criminal, he, being a police officer understands the importance of abiding by the law and chooses to turn his friend in to the authorities. While this must have been a difficult choice, this is shown because he couldn’t even break the news to him himself and needed to deflect the position onto someone else, he did what he felt was right and lived according to Aristotle’s quote. In Lord of the Flies, Ralph represents the traditional government in society. He maintains order, preserves the dignity of the union, and attempts to preserve the traditions of his forefathers. A schism occurs in this allegory within the tribe with Jack leading half and Ralph leading the others. This is symbolic of mankind and how savagery and civilization exist in unity. When savagery threatens the way of things, many fear for their own lives and safety and begin to cross over to â€Å"the dark side†. When the tribal chants and Jack’s need to kill becomes apparent, this foreshadows the savage turn in which the book will take. At the end, all the characters have either perished in the fighting or followed Jack to preserve their own lives, all except Ralph. Though he lost many followers and his high ranking â€Å"popularity† within the group, he maintains his morals and ultimately does what he believes is right regardless of the consequences. While this may a controversial issue and falls into the abstract gray area as opposed to a clear cut black and white, it cannot be denied that these two men upholded their morals and did not compromise the lessons instilled in them. What is also evident is that these men did follow a moral code which would classify as being religious, or pious. Even today the struggle between doing what you want and what you need to do is seen in court cases where one does not want to incriminate a friend, or even in your everyday life where a student might witness their fellow classmate cheating. This brings us to the question: If put into the circumstance, which will you honor first, truth or friendship? How to cite Aristotle Critical Lens, Papers

The Dynamic Business World of Today Samples for Students .

Question: 1.Discuss how Manageers can Make Effective Decisions in today world ? 2.What is Organisational Culture and how does it Influence Employee Behavier in an Organisation ? 3.Will Planning Become More or less Important to Managers in the Future ? Answer: 1. In the dynamic business world of today, there are a host of variables that need to be considered in order to make prudent decisions especially because so much data is available relatively easily. However, since decision maker has bounded rationality and can consider only limited aspects, it is worthwhile that for every decision, rather than taking all the parameters into consideration, it makes sense to limit the purview only to a limited variables which tend to have the highest impact. This helps in maintaining equilibrium between the prudence of decision and the time frame within which it needs to be made (Burton and Thakur, 2004). Also, it is vital for the managers to embrace technology in decision making as various kind of software such as decision support systems are available which tend to present data in formats which aid decision management. Further, such systems ensure that all the relevant data is automatically available in the format that the decision maker intends to have and thus decision making becomes simplified as only interpretation is left to some extent to the decision maker. Even in this case, computing tools are available which consider all the inputs and provide model decisions for the assistance of the decision maker (Folino, 2005). Besides, considering the complexity of the decision making particularly in problems that involve way too many aspects which are vital, it makes sense to take decisions with the help of a team as vital inputs can be provided by the team members in relation to the particular aspects. Further, this option also provides expert advice of the team members on certain aspects where the decision maker may have only limited knowledge and exposure. Also, team members may offer such pragmatic solution which in isolation may not be possible and thus overall decision accuracy is improved (Heller, 2008). 2. Just like people who tend to have a culture, organizations also have a culture which is known as organizational culture. This primarily refers to the set of shared values and beliefs that the organization stands for which normally are reflected through the policies of the company and the behavior of the people belonging to the organization. Organization culture is a key element which tends to define the manner in which the business activities are performed and also the conduct of the firm towards the various stakeholders including the employees (Fox, 2007). Organizational culture tends to have a significant influence on the behavior of employees. For instance, in a bureaucratic organization the focus is on processes rather than meeting the needs and expectations of the consumers. As a result, employees tend to follow order from seniors and procedures even though these may do little to provide quality service to the consumer. The case would be very different in a service based private entity where literally the consumer is the king and the employees would go out their way to assist the customers and provide them the requisite assistance. This essentially flows from the organizational culture and value system (Bratton, 2015). Similarly, the level of formality coupled with the dress code for the organization is also driven by the culture. For instance, in traditional businesses with traditional outlook, formal conduct in interactions and dressing is emphasized on (Fox, 2007). However, this is not the case in an organization where the culture is more western and casual. In such an environment, casual behavior is the norm which is reflected in every aspect and tends to facilitate creativity in work with high degree of customer focus. Besides, the relationship between supervisor and employee is impacted by the organizational culture which defines the utility of employees for the organization (Bratton, 2015). 3. Planning would certainly be more important in the future as the project complexity is on the rise and thus it required adept planning in order to execute the project within given deadlines and cost constraints. However, the nature of planning in the future would undergo a change as the underlying environment in which the businesses operate are increasingly becoming more dynamic and hence a high degree of flexibility is required. Thus, planning for contingency and having alternate plans in wake of expected and unexpected changes would assume very high importance especially in case of longer projects (Warner, 2010). Further, technology would also emerge as a key enabler in this process as inputs from various packages would need to be considered while considering the dynamic planning process. Besides, technology allows the planners to simulate the various possible scenarios going ahead and to model separate plans to deal with the situations. Thus, planning is bound to become more critical so that the project managers can take requisite measures to deal with a particular contingency (Heller, 2008). Besides, the static planning would have to be done for shorter intervals and beyond those scenario planning would be required which would provide prior information to the managers and the associated team of what the scenario could be going ahead in the future and through technology this can be analyzed and understood even before the decision has been implemented. Thus, the reliance on scenario based planning would be vital for the future success for the managers as the traditional form of planning is fa st losing relevance as decisions need to be taken keeping in mind that need to be altered along with course in line with potential changes in internal and external variables (Burton and Thakur, 2004). References Bratton, J. (2015) Introduction to work and Organisational Behaviour.3rd edn. New York:Palgrave Macmillan. Burton, G. and Thakur, M. (2004) Management Today: Principles and Practice. 6th edn. New York: Tata McGraw Hill Education. Folino, F.D. (2005) Making Effective Decision.3rd edn. New Jersey: Gemini Books. Fox, W. (2007) Managing Organisational Behaviour. 2nd edn. Claremont: Juta and Company Ltd. Heller, R. (2008) DK Essential Managers: Making Decision.7th edn. London: DK Publishing. Warner, J. (2010) Time Management Effectiveness Profile Facilitators Guide. 4thedn.Amherst: Human Resource Development