Yuan as a Dominant Currency

yuan as a Dominant up-to-datenessThis essay expresses my humble opinion on the idea of the displacement of the U.S. long horse by the Chinese silver, yuan as the plethoric nones in the globose financial system, the possibilities of it occurring, reasons of why yuan should displace the U.S one sawbuck bill which embarrass the eudaemonias of externalisation of yuan to the Chinese shoreward and offshore companies, foreign companies, world-wide minuteers, investors, mainland china, and of course to the rest of the demesne.Although it remains un genuine and questionable, I conceptualize that chinaw atomic number 18 could displace the U.S. as the worlds strongest frugality, and that the yuan, Chinese coin may become the worlds orbiculate bills, or even replace the U.S. horse mark as the dominant currency. It could even happen in our lifetimes. But, it go out be a slow and long process that may result in a U.S. dollar decline, non a collapse. Also, I do cogi tate that the kwai should replace the U.S. dollar as the dominant currency in the world(a) fiscal system, as the internationalisation of kwai flock bring m both benefits not just now to individuals, but corporations and governments worldwide as well.In the viewing of the GFC (global financial crisis), the status of the U.S. dollar as the worlds reserve currency has gradu all toldy come into question. Heady money printing practices by the Fed of the unite rural areas has weakened the value of the U.S. dollar as many countries squander considered in diversifying their assets into other(a) currencies in order to diversify their currency risk, causing the dependability of the U.S. dollar to be questionable.The question then remains in which other currency is strong enough to substitute the U.S. dollar as the dominant currency in the global financial system. In spite of the weaken debt and undermine fundamentals in the United States, one of the main reasons why the U.S. dollar still continues to dominate is due to the fact that other countries withdraw their own share of yields as well. And thus, the dollars strength is much relative. But recently, at that place have been rumours and talks that the yuan/ Renminbi, the Chinese currency has the ability to vary U.S. dollar as dominant currency in the global financial system and being the bakshish reserve currency rough the globe. china is currently the worlds biggest manufacturer and exporter as well as its second largest economy consort to mainland ChinaDailyhttp//www.chinadaily.com.cn/china/2014-03/02/content_17315230.htm. Yet its currency, yuan, which is still conservatively managed by the Chinese government, only has a small percentage of foodstuff shares which is substantially behind the U.S. dollar, and is hardly being hatfuld on foreign re-sentencing markets. However, the trading volumes are gradually increasing. During the last quarter of year 2013, the Yuan overtook the euro and beca me the second most used currency in the global trading finance afterward the U.S. dollar, based on the Society of Worldwide Inter-bank fiscal Telecommunication. Since then, it became the 9th most traded international currency somewhat the globe, according to a financial report created by the Bank of International Settlements. or so economists and analysts forecast that the Chinese currency will continue to rise in the adjoining a couple of(prenominal) decades. All the signs mentioned above indicate that the Yuan is gaining lifelong stature to be a more stable and suitable dominant currency.One of the great reasons why the Yuan should replace U.S. dollar as the dominant currency is the stability of Yuan. The steady economy growth of China for the past some years has almost proven its currency, Yuan a steady and natural rubber currency to invest in. People may argue that the euro, yen, British lumber could serve as a strong currency that crowd out be the dominant currency as well however, most of these economies have not been doing great since 2008. This is especially clear in Europe, where a sovereign debt crisis is brewing, and Japan, where a robust recovery from the last two decades has been put on necessitate by a combination of several incidents like nuclear ply disasters, the spill over from the weak European economies and the 2007 U.S. financial crisis.The internationalisation of Yuan will occur before Yuan becomes the dominant currency. Therefore, the benefits of globalised Yuan can be solid arguments in why should Yuan replace the U.S dollar as dominant currency.There are many benefits when Yuan is internationalized. China has started to loosen its control for its financial markets recently and slowly opening up access to the onshore markets. In the year of 2007, the Chinese government started to issue RMB-denominated bonds, notes, and funds, which are named as dim-sum bonds in Hong Kong. Since year 2009, companies located in Mainland Chin a have been able to perform cross-border trade in Yuan. This enables any onshore companies in China to reduce their transaction speak tos, speed up defrayments, and image for a better management of foreign exchange risks. In the longer term, this will and can obtain wider benefits. says Professor Yeh, associate professor of the plane section of Finance at the Chinese University of Hong Kong. For instance, this will enable the companies to lower raft the price of their products or services, and pass on the cost savings to the customers.On the other hand, the use of Yuan undoubtedly benefits foreign companies including the U.S. companies as well. galore(postnominal) U.S. companies such as McDonalds, have taken advantage to issue RMB-denominated bonds in China and Hong Kong to save companies a fortune in equipment casualty of worry and transaction costs. Moreover, issuing RMB-denominated bonds is a great way to hedge currency risks as well. Given the slow economy growth in the western countries, holding a RMB-bond can diversify the currency risk obligate by the U.S dollar and euro. RMB- denominated bonds are a good financial cats-paw for companies to conduct backing in China in protecting them from any fluctuations in currency values in the future.More advantage in using Yuan in conducting headache with the Chinese is the discounts that Chinese business leaders may tolerate if a business transaction is mitt in Yuan. According to the HSBCs research, 56 per cent of Chinese business leaders would offer discounts to their trading percentageners for transactions performed in Yuan for up to three to five per cent.U.S. multinationals with business operations in China can also benefit when they perform transactions in Yuan, as it enables them to center their management of foreign exchange. Instead of managing their foreign exchange exposure in China, they could centrally manage it in a regional or global centre in New York, Singapore or even Hong Kong, for instance.Next, China is a top import and export market for many countries nearly the world including the U.S., according to ChinaDaily USA http//usa.chinadaily.com.cn/epaper/2014-05/08/content_17493372.htm. It was also the biggest recipient of foreign consume investment in the first six months of year 2012, based on HSBC research. According to http//www.cfr.org/china/uneasy-us-chinese-trade-relationship/p10482, the trade between China and the U.S. is healthy. As a outlet of fact, 77 per cent of U.S. business leaders claimed that they do import from China and 49 per cent claimed that they have export partners in China, according to a survey performed by HSBC. Since the U.S. has the largest percentage of international trading activities with China, the U.S. could benefit from the use of Yuan in conducting their trading business with China.For the benefits of importers, performing trade activities with the Chinese trading partners in Yuan relates to pricing. When U.S. dollar is acc epted as payment in trading transactions, the Chinese companies usually factor in the foreign exchange risk by adjusting their price. By completing the payment in Yuan, the importers stand a better chance to negotiate for a lower price or even obtaining better trade terms. Moreover, invoicing in Yuan helps to increase the supplier base in China importers too, as the Chinese companies appreciate this practice a lot. With a bigger supplier base from which to choose, the importers obtain a bigger bargaining power in negotiating price and terms.On the same hand, a globalised Yuan brings several advantages to international investors as well. International investors could diversify their investment and currency risk by investing into other currency like Yuan, rather than just the U.S. dollar or euro. The modern portfolio theory states that the more unrelated assets you have, the less(prenominal) bear on of currency risk will be encountered through diversification (http//www.sec.gov/inve stor/pubs/assetallocation.htm). unspoiled like any democracy, at least two parties are inevitable to achieve balance. The same goes to international currencies, with an extra option to invest in, investors could savour the diversification advantage. Today, U.S. dollar is the dominant currency on that pointfore, U.S. domestic fiscal and monetary policy has significant effect outside and inside the United States. If there is more international currency, then there would be more choices and investors will be less susceptible to U.S. policy decisions.While the impact caused by the 2007 global economic crisis did not affect a huge human action of Chinese investors, but the fallout has been serious, as values of the savings around the world have plummeted. The 2007 financial crisis has a great impact on the mind-set of international investors, especially, about the safeness of the dollar. National banks, Chinas included, have experienced the fall of the value of their foreign curren cy reserves significantly, as the dollar and euro weakened during the crisis period. Therefore, more choices of international reserve currencies can provide better checks and balances, which are very essential to monetary policy muddlers around the world, showing the benefits of Yuan being internationalised and as a dominant currency.Furthermore, if Yuan ever became the dominant currency, it would allow China, which holds substantial amount of money reserves, to be less dependent on foreign currency reserves, and therefore less affected by the currency fluctuations. Moreover, a globalised Yuan could bring shoot for financial benefits to China in the form of seigniorage as well. Seigniorage is the profit do by a government by issuing their currency with the end between the fair value of the money and the cost of producing it, explained by (investopedia) http//www.investopedia.com/terms/s/seigniorage.asp. So if the fair value of the money is greater than the cost of producing it, the money, then China will enjoy a financial gain. Some economists even estimate this could amount up to USD of 2.5 billion a year. otherwise than seigniorage, if Yuan became the dominant currency, China could also enjoys further benefits, including prestige, lower acceptation costs for the government, corporations, and households, and a much lower if not zero probability of a debt and financial crisis.The dominance of Yuan would bring obvious benefits to China, which includes a lower risk of capital outrage triggered by a derogation of the U.S. dollar or euro. What about the effects to the Europe, United States, and other countries? Firstly, since the western economy is not performing well recently, if the benefits from the dominance of the Yuan helps to dispose the Chinese to buy more of their debt, it could aid to hold down their acceptance cost, indirectly billing them out from the poor economy.Secondly, with a greater Yuan flexibility, China will worry less about the cap ital loss on its foreign exchange holdings. As such, China would be more willing to hold on to their fixed exchange rate government activity. This could benefits not only to China, but to all the countries that perform trading activities with China as well. During the 2008 GFC, China decided to change back to a fixed exchange rate regime after implementing a semi-floated currency regime for a short couple of years http//www.investopedia.com/articles/forex/08/pegged-vs-floating-currencies.asp. This decision aided the Chinese economy to emerge 2 years later relatively well. Since then, China has been onerous to control its economy from growing too fast. If afloating exchange rate regime is used by China, American demand for Chinese goods would definitely burden up the exchange rate and inflate the price of the Chinese goods, causing the Chinese goods less desirable eventually http//www.netplaces.com/economics/foreign-exchange-and-the-balance-of-payments/to-fix-or-float-that-is-the- question.htm. This is undoubtedly cardinal to the Western governments. Thus this should be considered worth facilitating.However, some might believe that the United States would never tolerate the humiliation with its government debt denominated in a foreign currency. But if the U.S. does, it certainly would not be the first orbit to do so. Most countries denominated their debt in foreign currency whenever they need to make borrowings from the international capital market. Furthermore, history reveals that the U.S. is very pragmatic. History also shows that the U.S. has denominated part of its government debt in foreign currency before, mostly the deutsche mark, a German currency before the adoption of euro, in the 1970s. In any case, everyone has to bid the benefits and the costs for doing everything. In my opinion, the benefits outweigh the costs in this case.To a certain extent, an international role for the Yuan seems inevitable. How often and widely a currency is used and tr aded around the globe is generally a function of how significant and important its home country is to the world economy. In the 19th century, plot of ground the British Empire reigned supreme, the British currency, Pound was recognised as the top international currency. Ever since World War II, the role of Pound has been substituted by the U.S. dollar, as the U.S. is currently the worlds largest economy. Now that China is catching up quickly with a stable economy growth that placed itself second after the U.S., the likely of its currency may progress to a point where it substitutes U.S. dollar as a global currency. If the growth continues at its current pace, it is assertable that Chinas economy could surpass the United States within the next two decades. Therefore, there is a strong reason to believe that Yuan could replace the U.S. dollar and dash into the big league of international currencies. http//www.bloomberg.com/ give-and-take/2010-08-16/china-economy-passes-japan-s-in- second-quarter-capping-three-decade-rise.htmlHowever, the Yuan is still currently far from that league. As a matter of fact, it can hardly be found in the world currency markets. The chief reason is cause by the Chinese policy. The Chinese political science restrictions restrain the Yuan from being traded freely around the globe or being intacty convertible into other currencies in almost all financial transactions. The Chinese currency value is pegged to a basket full of currencies which are most probably dominated by the U.S. dollar and is only permitted to adjust each day within an allowed and narrow band. With such limitations, the potential of Yuan cannot progress very far. http//content.time.com/time/world/article/0,8599,1911671,00.htmlNevertheless, it is believed that the Yuan could be one of the worlds top currencies and may be able to fully convertible sometime in the future. Therefore, I believe that the Yuan could serve as a potential hedge against the U.S. dollar as the dominant currency to the world.In conclusion there are numerous advantages as for Yuan to be the dominant currency, including the stability of Yuan compared to the U.S. dollar, benefits of globalisation of Yuan to the Chinese companies, foreign companies, international importers, investors, China, Europe, United State and other country around the world. Thus, I do believe that the Yuan should replace the U.S. dollar as the dominant currency in the global financial system.

Studying The Database Management System

Studying The entropybase Management SystemA Database Management System is a commercial software administration program apply to prevail, manipulate and maintain the Database by enabling c tot ein truth last(predicate)yrs to access, store, organize, modify, retrieve, secure and deliver one of selective information in a infobase.A selective informationbase charge system accepts request from implementrs or operations and instructs the operating system to transfer the appropriate selective information as shown in the diagram below.Wikipedia (2011) defines Database Management System as a set of estimator programs that controls the creation, nutriment, and the use of a selective informationbase. It allows organizations to place control of database development in the manpower of database administrators (DBAs) and early(a) specialists. A DBMS is a system software packet that helps the use of integrated collection of data records and files known as databases. It allows div erse user application programs to easily access the same database.DBMSs whitethorn use any of a variety of database bewilders, such as the net field of study instance or relational model. In bear-sized systems, a DBMS allows users and some other software to store and retrieve data in a structure way. Instead of having to write com throw uper programs to extract information, user can study simple questions in a query language. Thus, some DBMS packages provide Fourth-generation programming language (4GLs) and other application development features. It helps to specify the lawful organization for a database and access and use the information within a database. It provides facilities for controlling data access, enforcing data integrity, managing concurrency, and restoring the database from backups. A DBMS as well as provides the mogul to logically present database information to users.ExamplesMicrosoft Access, My SQL, Microsoft SQL Server, illusionist and FileMaker Pro are all examples of database wariness systems. (Wikipedia, 2011).Microsoft AccessMicrosoft obligation Access, previously known as Microsoft Access, is a relational database management system from Microsoft that combines the relational Microsoft jet database Engine with a graphical user interface and software-development tools. It is a member of the Microsoft Office rooms of applications, included in the Professional and higher editions or sold separately. In mid-May 2010, the current version Microsoft Access 2010 was released by Microsoft in Office 2010 Microsoft Office Access 2007 was the prior version.My SQLMySQL is a relational database management system that accords as a server providing multi-user access to a number of databases. It is named after developer Michael Widenius daughter, my. The SQL artistic style stands for Structured Query Language.Microsoft SQL ServerMicrosoft SQL Server is a relational model database server produced by Microsoft. Its primary query languages a re T-SQL and ANSI S SQL.prophetThe Oracle Database (comm nevertheless referred to as Oracle RDBMS or simply as Oracle) is an object-relational database management system (ORDBMS), produced and marketed by Oracle Corporation.FileMaker ProFileMaker Pro is a cross-platform relational database application from FileMaker Inc., formerly Claris, a subsidiary of Apple Inc. It integrates a database railway locomotive with a GUI-based interface, allowing users to modify the database by dragging clean elements into layouts, screens, or forms.AdvantagesSingh (2009) illustrates advantages and disadvantages of DBMS. A true DBMS offers some(prenominal) advantages over file processing. The principal advantages of a DBMS are the followings Flexibility Because programs and data are independent, programs do non have to be modified when types of unrelated data are matched to or deleted from the database, or when physical storage changes. Fast response to information requests Because data are integr ated into a single database, complex requests can be handled much more rapidly then if the data were located in separate, non-integrated files. In many businesses, faster response means better guest service. Multiple access Database software allows data to be accessed in a variety of ways (such as do dissimilar key fields) and of xtimes, by victimization several programming languages (both 3GL and nonprocedural 4GL programs). Lower user training be Users often find it easier to learn such systems and training costs may be reduced. Also, the total time bourgeonn to process requests may be shorter, which would increase user productivity. Less storage Theoretically, all occurrences of data items take in be stored only once, thereby eliminating the storage of redundant data. System developers and database designers often use data normalization to minimize data redundance.Warehouse of information, where large data can be stored.Systematic storage moment data can be stored in t he form of tables.Change of schema gist it is not platform dependent tables can be edited to add new-made ones without hampering the applications.No language dependence essence use of various languages on various platforms.Table joins meaning data can be in two or more tables and can be put into one table this enables easy retrieval of data.Data surety meaning DBMS secures all your data.The data independence and efficient access of dataEasy in data administration or data management.Provides synchronal access, recovers the data from the crashes.DisadvantagesA database system generally provides on-line access to the database for many users. In contrast, a pompous system is often designed to seemly a specific need and consequently generally provides access to only a small number of users. Because of the larger number of users accessing the data when a database is used, the enterprise may involve additional risks as compared to a formulaic data processing system in the followin g areas.Confidentiality, privacy and security.Data gauge.Data integrity.Enterprise vulner qualification may be higher.The cost of using DBMS.Confidentiality, Privacy and SecurityWhen information is centralised and is made available to users from out-of-door locations, the possibilities of abuse are often more than in a stately data processing system. To reduce the chances of unauthorised users accessing sensitive information, it is indispensable to take technical, administrative and, possibly, legal measures.Most databases store valuable information that essential be protected against deliberate trespass and last.Data QualitySince the database is loving to users remotely, adequate controls are needed to control users updating data and to control data quality. With increased number of users accessing data directly, there are marvelous opportunities for users to damage the data. Unless there are suitable controls, the data quality may be compromised.Data IntegritySince a large number of users could be using a database concurrently, technical safeguards are necessary to ensure that the data remain correct during operation. The main threat to data integrity comes from several different users attempting to update the same data at the same time. The database therefore needs to be protected against inadvertent changes by the users.Enterprise vulnerabilityCentralising all data of an enterprise in one database may mean that the database becomes an indispensible resource. The survival of the enterprise may depend on safe information beingness available from its database. The enterprise therefore becomes vulnerable to the destruction of the database or to unauthorised modification of the database.The Cost of using a DBMSConventional data processing systems are typically designed to run a number of well-defined, pre-planned processes. Such systems are often tuned to run expeditiously for the processes that they were designed for. Although the conventional syste ms are usually fairly inflexible in that new applications may be difficult to implement and/or pricey to run, they are usually very efficient for the applications they are designed for.The database orgasm on the other hand provides a flexible alternative where new applications can be developed relatively inexpensively. The flexible approach is not without its costs and one of these costs is the additional cost of running applications that the conventional system was designed for. Using standardised software is almost evermore less machine efficient than specialised software.Cost of hardware and software meaning having to upgrade the hardware used for file based system it is very costly.Cost of data conversion meaning its costly to deepen data of data files into database and have to hire database and system designers.Cost of faculty training meaning organization has to be aid a stack of amount for the training of staff to run dms.Database damage meaning all data stored into a s ingle file if database is damaged collect to voltaic failure or database is corrupted on a storage media meaning all valuable data may be lost forever.It excessively takes a lot of time and effort to get DBMS tetherted.Benefits of a Database Management System in an organizationAs discuss by the Ezinearticles (2011), organizations often times find themselves in a dilemma on how they can powerfully serve the needs of their members. At the same time, they also enter a situation wherein there is difficulty in discourse data, given the sheer volume of information. More often than not, the results of these instances are not anything merely desirable confusion, chaos, mismanagement, lost confidence by members, etc.To operate these problems, organizations turn to information technology (IT) experts for answers. With many years of experience in coming up with solutions for businesses and other entities, IT professionals have what it takes to come up with an effective data management and accreditation system that depart be used by organizations. There must also be enhanced accessibility to the give tongue to system, which means that members from other locations can still gain entry into the system, no matter of elements such as time and geography.Investing on the services of IT consultants is, however, not like buying something from a store. It entails huge sums of money to come up with a nigh(a) data management and accreditation system for an organization, aside from amiable the professional services of IT experts. Fortunately, IT experts can help minimize the cost through the creation of a database system based on existing resources being held by the organization.Investing on the services of IT experts and having a good data and accreditation management system may seem to be too costly, but the long-term benefits are worthy to be seen. By having a good database system, it will be much easier for organizations to deal with their members because of enhance d access to information. The location of additional pieces of information can be done better if there is a good data management system.Having a good data and accreditation management system empowers members of an organization. This is possible because they have the ability to gain the necessary information about things that matter to them as members. They conduction of business with the organizations hindrance is made faster and more efficient if a good data management system is in place.There is no reason for organizations to quiver when it comes to investing on a good data and accreditation management system. The long-term benefits of having one are far greater than the costs, and will be very helpful to the organization and their members in the long run.Improved strategic use of corporate data.Reduced complexity of the organizations information systems environment.Reduced data redundancy and inconsistency.Enhanced data integrity.Application-data independence.Improved security. Reduced application development and maintenance costs.Improved flexibility of information systems.Increased access and availability of data and information.(Blurtit, 2011).Prospects in DBMS and Career OpportunitiesThe work of a database administrator (DBA) varies match to the nature of the employing organisation and the level of responsibility associated with the post. The work may be pure maintenance or it may also involve specialising in database development.Prospects, the UKs official career website (2011) states that jobs available in this field are of age(p) Database ArchitectDatabase Architect design and builds database structure and objects that best keep up in operation(p) and analytics application. Tests and correct physical database objects for performance and troubleshooting.* Design and implement optimal star and snowflake schema in the database* Communicate and collaborate with team members and management on the designed database structures and schemas* Write and p resent eloquently with the appropriate hearing stead in mind* Support troubleshooting of production issues of existing application as warranted* Participate in collaborative discussions with team members to monitor impart against enhancement queue and bug resolution.* Stay proactive in identifying authorization risks/issues due to the overall application design and make recommendations.Database AdministratorThis incline requires a Top Secret Security Clearance. This position will support a US Air Force Contract. The successful chance will be responsible for planning, coordinating and administering computerized databases, including base definition, structure, papersation, long and short pad requirements, operational guidelines, protection and logical-physical database design. Formulates and monitors policies, procedures and standards relating to database management. Identifies, evaluates and recommends relevant COTS software tools. Collaborate with software engineers, securi ty administration, computer operations, network management and system administration to ensure quality and integrity of databases, application software and data. Responsible for performance monitoring, database.Database Architect specialiserDatabase Architect design and builds database structure and objects that best support operational and analytics application. Tests and debug physical database objects for performance and troubleshooting.* Design and implement optimal star and snowflake schema in the database* Communicate and collaborate with team members and management on the designed database structures and schemas* Write and present eloquently with the appropriate audience perspective in mind* Support troubleshooting of production issues of existing application as warranted* Participate in collaborative discussions with team members to monitor progress against enhancement queue and bug resolution.* Stay proactive in identifying potential risks/issues due to the overall applicat ion design and make recommendations.Database Administration ConsultantEvaluates new database technologies and tools, sets database system and programming standards, applies database technology to business problems and manages the development and production database environments with accent mark on security, availability and performance. Provides database services in compliance with all size up and regulatory requirements. The ideal candidate must be experienced in the management of Oracle E-Business 11.5.10.2 including installation, upgrade, patching, cloning, backup and recovery, monitoring, tuning, security, and definition of procedures for custom development. The ideal candidate must be experienced in the implementation and management of Oracle E-Business 11.5.10.2 as configured for the Oracle Massive Availability Architecture.Senior Database engineerResponsible for requirements analysis, software development and installation, integration, evaluation, enhancement, maintenance, testing, and problem diagnosis and resolution. Qualifications Bachelors degree with ten (10) years experience as a Database Engineer in evolution relational database software and experience with one or more relational database products. Preferred Additional Skills Possess organizational and management skills, along with the ability to respond to crises objectively. Understanding of the current database management system releases.ConclusionThe document that we have put together is a root word assignment that was done by four individuals. Some of the problems that we faced as a group are that, we couldnt meet due to our clashing schedules others are busy with other obligations. We would like to say that we tried to produce the best group work that we could, hopefully learnt from this experience to better ourselves for our future endeavors.

Difference Between Believers And Non Believers Religion Essay

Difference Between Believers And Non Believers Religion EssayAccording to the h every last(predicate)owed Quran, intrustrs atomic number 18 They who turn (to Allah), who serve (Him), who praise (Him), who fast, who bow down, who prostrate themselves, who enunciate what is dependable and forbid what is evil, and who keep the limits of Allah and tip over good news to the believers(Surah At-Tawba Ayah 112). The determine a plane section Quran further shades light on this Successful hence be the believers, Who atomic number 18 humble in their prayers, And who keep aloof from what is vain, And who argon givers of poor-rate, And who guard their hugger-mugger parts, Except before their mates or those whom their objurgate hands possess, for they surely atomic number 18 non blamable, But whoever seeks to go beyond that, these ar they that exceed the limits And those who are keepers of their trusts and their covenant, And those who keep a guard on their prayers These are they who are the heirs, Who shall inherit the Paradise they shall abide therein.( Surah Al-Muminun Ayah 1-11).In regards to the Bible, we magnate generally say that the biggest difference between a believer and a non-believer is the thought process of how a person looks at new information. Believers believe things are true until proven out of true and non-believers see things as false until proven true. However, we cogency say the opposite when new(prenominal) subjects are introduced frequently(prenominal) the Theory of Evolution. So Christians can be guilty of the same accusation. Christians fatality to present their case to non-believers using mechanisms that do non start with the arrogance the Bible is true beca social occasion it is the Bible. to a greater extent objective methods that do not use circular reasoning are needed in these forums. Well pull ahead outlying(prenominal) more progress this way.The Bible teaches that in order to be protected you must repent towa rd God which means to believe on the Lord Jesus Christ who shed his innocent blood for the kindness of all your sins. The Bible teaches that after you are saved you must live in the true grace of God. (1) According to the Bible those who are saved are redeemed from the virtue of Moses (Old Covenant) and are now under the refreshed Covenant and a much higher law The law of the sapidity of life in Christ Jesus. The Bible says, For the law was given by Moses, but grace and truth came by Jesus Christ. (John 117). If you are led by the affection you are not under the Law of MosesBut if ye are led by the Spirit, ye are not under the law.(Gal. 518). The law of Moses- as holy and righteous a normal as it is- does not give eternal life because no mavin is thoified by keeping the law But that no musical composition is scarceified by the law in the sight of God, it is evident for, The just shall live by faith.(Gal. 311).Paul explained that the inning lusts against the Spirit, and the Spirit against the cast and these are blow the one to the other (walking after the mush is contrary to walking after the Spirit) so we cannot do the things that we would For the flesh lusteth against the Spirit, and the Spirit against the flesh and these are contrary the one to the other so that ye cannot do the things that ye would. (Gal. 517). The goals of the flesh (mans selfish desires) are contrary to the goals of the Holy Spirit in a Christians life. The goals of the flesh and the goals of the Holy Spirit are in resister to each other. The Bible is clear that if the Christian follows the leading of the Holy Spirit he is not under the law, but if he walks after the flesh without repentance, God considers him to be under the law, not under grace.A air pressure issue that seems to have contr everyplacesies worldwide is the issue of charitable giving. Apparently, it is an issue that is debated at bottom religions, between religions, or between believers and non-believers Are Religious People More Charitable than Non-Believers? The differences in charity between laic and sacred pot are dramatic. Religious race are 25 percentage points more plausibly than secularists to give bills (91 percent to 66 percent) and 23 points more likely to volunteer sequence (67 percent to 44 percent). And, consistent with the findings of other writers, these information show that practicing a religion is more all important(p) than the developed religion itself in predicting charitable behavior. For example, among those who attend worship operate regularly, 92 percent of Protestants give charitably, compared with 91 percent of Catholics, 91 percent of Jews, and 89 percent from other religions.In the book, Who Really Cares Americas Charity Divide by Arthur C. Brooks (2006), Brooks cited several studies and surveys that appeared to demonstrate that secular Americans give slight to charity than their sacred counterparts. He proposed several reasons for these r esults, namely those secularists are just naturally slight generous that as a largely braggy group they had higher expectations of government welfare programs and that they loseed a centralized introduction such as a church that codified and encouraged giving. However, subsequently critics have pointed out that it is not entirely clear whether the spiritual are more generous than the non-religious other studies have shown that the real situation is far murkier.These critics of Brooks analysis were quick to point out that religious charities are usually clearly labeled as such, making it far easier to mark the religious affiliations of the givers. Secular charities, by contrast, receive donations from religious and non-religious alike, with no situation distinction being made between the two. This might serve the enjoyment of concealing charitable giving by secular Americans. Recent efforts to plant pointedly secular charities like the Richard Dawkins-organized Non-Believe rs Giving Aid have been very(prenominal) successful, but by definition secular charities act very much like secular individuals in being non-discriminating with both their donations and their disbursement.There is around truth to Brooks contention that seculars who tend to lean liberal for the largest part would desire that welfare programs be run more justifiably through and through government agencies to a certain extent than being left to the whims of private charitable trusts. And as extreme as it pay offs off, more European secular individuals give far less to charities than their American counterparts. Nevertheless, this is not the complete picture. When the gist Europeans disburse in taxes to finance social programs abroad and at office is taken into consideration, then their charitable philanthropic far outstrips that of Americans. In super atheistic Denmark, for instance, the tax coffer contributes to ninety percent to foreign aid, trance in the U.S. the figure is merely fifteen percent.Studies of eldritch generosity and judgement that focused on non- bills giving established a further interest result. With respect to donating blood, the religious depression or non-belief of the bene particularor made super no distinction at all to the regularity or summation donated. equally, a study of American doctors who were prepared to forgo mathematical productive medical checkup careers in order to work with the underprivileged in the oversees or the U.S. showed unnoticeable differences involving the secular and the religious, with 35% of the altruistic doctors self-identified unbeliever, as contrasted to 28% Catholics and 26% Protestants.In additional studies of bigheartedness by means of more restricted methods, no contrast was established between non-religious and religious subjects. occurrences of the dictator game where a atomic number 53 subject is given funds and requested to split it or not with an unidentified other player who kno ws not anything of the specialiseds of the deal established religious subjects were no more liberal than their non-religious counterparts undeniably, a good number spate who participated in the game offered the anonymous player half or nigh half of the funds, despite of the religious belief or lack thereof.As in the majority of research of this sort, there is a threat of relying overly much on pots self-reporting of their activities, in particular where virtuallything as accepted as generous giving is fretful. Some studies, together with one done in 1973, give the impression that the apparitional were more probable to want to be seen as bighearted and consequently more probable to pump up the amount they contributed to charity. Tom Flynn, in a free of charge doubt expose, illustrated the self-reporting impasse by referring to the oft-cited statistic that 40% of Americans account to having attended church services in the previous week, then illuminating that when researcher s essentially went out to a big sampling of churches and counted attendants, the number was nearer to 20%. He supposes that the right inconsistency linking religious and non-religious giving, if any, can by no means be definitively known as long as self-reporting is the major means of data compilation.In the discussion featured in The Great God contend showcasing atheist Christopher Hitchens and the Jewish Rabbi David Wolpe, similar to many of the encounters involving Hitchens and religious leaders, the argument was intrigue and spirited. This was one issue that came up-and perpetually does in these debates-was the subject of generous giving, and the truth that religious pile confer substantially more of their cash and period to charity than non believers. despite the fact that Hitchens causeed to invalidate that allegation by claiming that spiritual charitable giving frequently play alongs with strings attached-that is as part of some sort of evangelical outreach to win fu rther converts- the basic truth that spiritual people give more is inflexible to refute. Hitches also conversed active the Richard Dawkins Foundations endeavor to raise funds for survivors of the Haitian tremor.In addition, it ought to be understood that the variation is not only relevant to believers. Also, non believers are equally liberal with their money and clip. So whatsoever the reason is, its not a basis specific to one belief. Thus believers cannot justifiably claim that their openhandedness is because of some innate clean-living virtue or righteousness of their faith. There ought to be factors at work that are universal to all major spiritual groups. Adding to this, the conditional relation of benevolent giving isnt constrained to one political group or even within a specific religion.Pious liberals are in addition much more probable to contribute money and sentence to charitable causes than their non-believing counterparts. it is factual that believers typically s uppose that the government ought to have a superior role in availing the needy and poor in the world which, in turn, should decrease the need for clandestine donations, except that the belief definitely doesnt impede believers from donating their money and conviction at the higher range distinctive of all religious believers, so the grounds why religious people contribute more is small to do with politics. Lastly, after an all-embracing assessment of government wellbeing and how he believes is impairing charitable giving and religious faith, Brooks gets around to tackling the grounds of why devout believers tend to be more bighearted than non-believers. He further points out that it might be that belief simply has a strong didactic control over volunteering and giving. Various places of worship might educate their congregants the spiritual responsibility to give, and about both the spiritual and physical desires of the poor. Basically, people are more likely to study charity in a synagogue, mosque or church than outside.Its veritable(a) that places of worship are highly significant when it comes to bountiful giving. But its to a large extent more than just educating people that they ought to give. First, congregants are not merely taught that it is their just duty to offer, they are frequently told in no doubtful terms that they go out be known by their fruits-that if they are certainly authentic to their belief, they will portray it by bequeathing their money and time to laudable causes. This is an enticement beyond and above just telling people that it is the correct thing to do. Next, religious leaders are continuously tell to their congregants of their spiritual duty to give bigheartedly, mostly in times of crisis (What Laws are Believers Under, 2001, 1-5).For example, how many American pastors agreed up the prospect to sermonize a discourse about the moral conscientiousness of looking after those less fortunate than ourselves in the consequences of Hurricane Katrina? very few just as everyone would wager. And its not just the influential who frequently remind believers about contributions, it is also as a result of peer pressure. Among the parishioners there will for all time be a number of people on the lookout for dish with one laudable reason or another. If you are a sprightly affiliate of a religious community, its hard to keep away from all these desires for your money and time.In conclusion, religious institutions hearten charitable donations by set up the infrastructure that makes philanthropic as painless and as late as likely. each Sunday in several churches around the globe, an offertory gutter is passed under every congregants nose. In several of those churches, you can even set up a monthly express debit to send your cash from your account to the churchs personal coffers with no lifting a finger. Furthermore as a plus, you get to set aside some money on the taxes as well. There are stands in the churches cof give rooms dealing with Traidcraft goods in assistance to Third World scarcity, as well as tables set up where people can give up their time to help out in the neighborhood. The listing of ways that spiritual institutions assist people contribute their time and money to generous causes is endless (Buzz, 2010, 4).Its also charge remembering that while most organizations charge a membership fee in order to help fund its financial obligations, religious organizations typically do not, and thus all monies collected from members in support of their operations are classed as charity, thus greatly boosting the overall amount religious people donate. Compare all that with the experience of the non-believer. There is little apparent movement that the spacious majority of non-religious people believe that charitable giving is a good and moral thing to do. Even without access to a vast religious infrastructure to help them, two-thirds of all non-believers still donate money to charity on a regular basis. So why dont non-believers donate as much or as often? Simply put, they lack the same motivations and opportunities that religious people have.Non-believers do not have their moral duty to give to charity preached at fifty-two Sundays a year. They do not have a collection plate waved in their acquaint every week reminding them of their obligation to make a donation. They do not typically frequent places where large on-going efforts to raise money for charity are underway, and they usually only have their consciences stirred when some great tragedy hits the news headlines-like the Ethiopian famines, Hurricane Katrina, or the Haitian earthquake. So I dont trust that it is at all surprising that non-religious people give less of their time and money to charity. But its not because non-believers are intrinsically less moral in any way, its simply because they lack the same obligations, encouragement, and outlets that religious people have.Ashford (2010), points out an e xcellent proposition on this issue that if aid is hence a cultured behavior, it may be that houses of devotion are only meant to teach it. Secularists concerned in increasing benevolent volunteering and giving among their ranks might expend some effort opinionating on alternative ways to rear these habits. It at all there exists hope, then it would be in efforts to give many more people a taste of what its like to donate ones time to charitable works. Study after study have shown that harming in regular volunteer work can be a great benefit to ones mental and physical health. It doesnt matter if the volunteerism is conducted through a religious institution or not, almost everyone who tries it, even for a gyp time, begins to experience those personal benefits first hand, making it more likely that they would want to persist doing it on a customary basis (5-8).Basically, individuals must come together in the public and decide how communal wealth will be allocated as well as how ac tions will be governed. These narrow-minded questions bring both nonbelievers and believers together and force interaction among them. It is not good enough for believers and nonbelievers to twist their backs on one other when real-life sensible matters are at risk. Providentially, there is a lot of universal ground genial between believers and nonbelievers to tackle practical problems. So there are conglomerate ways to hearten charitable giving as well as instill good habits beyond the auspices of spiritual groups, despite the fact that I do not underrate the scale of the duty of twinned the altruistic work performed and encouraged through religious institutions. The most important aspect to keep in mind is that there is nothing transmundane or mystical regarding the generosity of religious people. It is purely an end product of indoctrination, facilitation, promotion as well as education facilitated by the confused religious institutions they belong to.

Marital Rape And Violence In The Family Social Work Essay

marital Rape And Violence In The Family affable Work EssayThese effects take on a negative behavior on children and mothers since they affect self-confidence and ability to meet life goals. Separation, message nuisance, mental disorders and divorce be effects which adversely affect childrens phylogenesis stages (Johnson Ferraro, 2004). Abused children whitethorn duplicate blackguard as adults, which lengthen the military force cycle. This paper will discuss family forcefulness in Canada including marital desecrate. Statistics which go bad extent of offense will be disclosed and various dynamics of abuse discussed, including relevant truths. Since family personnel is normalized, processes of normalizing the vice will be evaluated. apprise recommendations on how abuse can be discouraged will be discussed, with a summary given at the end.StatisticsThere are to a greater extent than five hundred shelters for children and women in abusive households in Canada (Gannon, 2006). Newfoundland and Labrador, New Brunswick, Prince Edward Island and Manitoba have among the highest number of shelters. In 2007 all over 40,000 cases of domestic forcefulness were describe to right enforcers. This comprised over 11% of the overall offensive in Canada, which is a monumental equilibrium. In increment to this, over 80% of victims were female, which shows that wives bear the brunt of violence in households. In most cases, assault was describe in family violence, with stalking, criminal worrying and threats being other forms of abuse committed. In over 80% of abuse cases, people familiar to victims performed abuse. More than 40% of women are also reported to have experienced marital appal.Law enforcers were also blamed for abuse, with over fifty thousand cases involving youth and children being committed by them (Wallace, 2009). Amongst adults, law enforcers reportedly abused over 1900 people, with this representing a third of abuse cases amongst adults (Gannon, 2006). Generally, these statistics detect that both law enforcers and the public are responsible for abuse. Children and women suffer the largest proportion of abuse, with this being performed by men they are in relationships with. Domestic abuse comprises over 10% of the overall crime committed which reveals the severity of the issue. It is haughty that abuse is analyzed in further detail and prevention measures un bespeakionable to stem this rising crime.Canadian rape lawsInitially, rape was regarded as an evil in common law. Common law is borrowed from England and it initially treated rape as abduction. It was regarded as an offense greater to fathers or husbands than to female victims. matrimonial rape was unheard of during this period and was non considered criminal. The guild then, also marginalized women and their witness alone could not prove narrate of rape. Their previous call downual train was heavily relied on in proving rape. However, this crime was unreported despite its rampancy. In 1983, financial aidlessnesses in existing laws led to changes which redefined personality and punishment for rape. There call for to be stricter punishment and higher convictions to encourage women to report rape. Changes included abolishing summary of previous versed history of victims, repealing of corroboration laws and redefining of rape to assault. Further economy changes in 1992 outlined the shield on use of historical sex lives of victims in questioning their credibility.Reasons for domestic abusePower and dominationThe quest for power contributes highly to cases of domestic violence. several(prenominal) people need to hulk others to feel they have power. These people use oppression and abuse as tools to gather power. Physical abuse enables them to make victims powerless over them. economical abuse ensures that victims are dependent and cannot escape abuse. Mental disorders, low assess or stress whitethorn drive offenders who us e violence to attain power. Such abuse may be reversed by dint of medication and therapy with support from family (Babcock et. al., 2004).Drug abuseWhen people use medicates, they may be unaware of consequences of actions. They are unable to reason demythologisedly and may indemnify to abuse. People who live with drug abusers suffer most from effects of drugs including increase irritability, delusions, stress and other effects (Dutton, 2006). These may lead to domestic violence and can be treated through medication and therapeutic encumbrances. socialisation processResearch reveals that children who undergo abuse when young may replicate the abuse as adults (Kitzmann et. al., 2003). Abused children have higher chances of practicing family violence as adults compared to those not abused. This is explained by the sociological theory where children practice things imparted on them during the sociological process. When they are abused, they may view it as part of socialization and they may commit the same to their families as adults.normalization of family violenceThe widespread nature of family violence has created a perception of normalization, where violence against women is acceptable by baseball club. Normalization of violence is seen in low coverage rates of violence at home. In Canada, over 50% of cases of violence in family settings are unreported, check to look for. Since family violence is widespread, there are emerging trends where batterers are offered sympathy at the expense of victims. This trend began in the 1980s in US where intervention and support programs for batterers were created. These programs rationalize domestic violence and perceive batters as victims. The society is thus sympathetic to abusers and they become tolerable to certain degrees.In most cases, victims view themselves as having provoked abusers, hence rationalizing the crime. Since batterers are close family members, victims may also avoid reporting battery referable to consequences on family units, peculiarly if they are dependent on the batterer (Ellsberg et. al., 2001). Others fear societal perception of the abuse especially if it leads to divorce. They see it as shame and allow violence to be perpetuated against them. This gives the abuser leeway to commit abuse and normalization of abuse occurs as a result. Victims view it as normal and learn to live with violence. unclouded laws governing violence also normalize violence since victims will not report abuse if there are few and light convictions. In addition to this, barriers to reporting, investigating and prosecuting abusers may lead to normalization of abuse. The laws governing rape in Canada in 1980s can illustrate this phenomenon. As was discussed, the society marginalized women, and their testimony alone could not prove evidence of rape. Their previous sexual conduct was also heavily relied on in proving rape. In addition to this, marital rape was unheard of. Weaknesses in such laws discouraged reporting of rape, and this normalized the crime. When changes were realized in 1983, reporting rates increased and rape cases decreased.Weaknesses and strengths of query sourcesThere are different look used and these have assorted weaknesses and strengths. Most works used are journals and books which are scholarly in nature. Scholarly works are credible information sources since they are pen by professionals in diverse fields. These works are sourced from the Internet, which is readily useable and cheap, which is a strength of these sources. They also cover diverse topics and give various dimensions on topics discussed, which makes them accurate and credible. However, weaknesses include inability to corroborate information poised due to difficulty in tracing the authors. This may create ambiguity or inaccuracy in research done. Duplication of error is another weakness which arises from use of inaccurate scholarly works. If works used are inaccurate, the research f indings will be erroneous. Finally, these works may be outdated which makes research inaccurate.ConclusionVarious aspects of family violence and marital rape have been evaluated. Marital rape and domestic violence is rampant, with 40,000 cases of domestic violence being reported to law Canadian enforcers in 2007. This comprised over 11% of the overall crime in Canada. Various reasons for violence including socialization process, power and domination and drug abuse have been advanced as reasons for abuse. However, there is no rational reason for commission of violence. Recent trends have also revealed normalization of violence in the current society. Weak laws, fear by victims and societal perceptions are to blame for normalization of abuse. This is dangerous for society as it encourages commission of crime. The statistical evidence also shows that law enforcers also practice abuse, and this is intolerable in society. This paper used scholarly works and books, and these are valid sou rces. The evidence provided is therefore accurate and several measures which discourage abuse should be taken. Some of these will be discussed in recommendations provided belowRecommendations on reducing family violenceLegislationLegislation plays a crucial role in performing as deterrent to crime. Many people cannot commit crime due to fear of repercussions. In tackling domestic abuse, a similar approach is efficacious since harsh repercussions will deter offenders. The Canadian parliament should develop harsher principle to deal with marital rape and domestic abuse since it is a profound societal problem. This will reduce instances of abuse through long sentences to abusers. reformationAlthough Canada has over five hundred rehabilitation shelters for abuse victims, this figure is excuse inadequate (Taylor-Butts, 2007). More shelters for abuse victims should be constructed and stocked with necessary facilities and stave to help victims. This will enable victims to achieve their life potential through pursuance of individual dreams and goals.Public educationAccording to Hamel and Nicholls (2007), education is in truth effective in reducing abuse. The public should be educated at individual, society and family levels on domestic abuse. Abuse signs and cooperation with law enforcers will help eradicate this vice. In addition, shelters for victims should be publicized to ensure victims seek justice. culture on abuse will prevent the normalization of abuse in families.

Impact of the Credit Crunch in the UK

Imp second of the denotation C rushch in the UKFactors Influencing the pecuniary Institutions in the UK With grouchy Reference to realization solelyterflyA Comparative con ming conduct with Barclays and Northern shudder intrustI- AbstractBanks acts as in boundaryediaries betwixt special units depositing cash in hand and investors or individuals seeking dandy for investments. thencely, posits place is all great(p) in sustaining the persist of blood mingled with these different parties.Banks like both early(a) get maximizing firms argon influenced by sundry(a) detailors that re amaze lucks or opportunities. at that placefore, cashboxs line of products decisions ar founded on aspects much(prenominal)(prenominal)(prenominal) as trustfulness in the merchandise, the level of en regainings, the state of the economy, and their warlike strength. Regulation is essential for assure entry and ace in the m peer littletary transcription, but rigid ru les stifles the dynamicity of the relying assiduity and the pecuniary sector as whole.Moreover, Central Bank character as a loaner of go away resort can rise the issuance good hazard by helping im heady cusss, however be arrive at cants atomic keep down 18 m angiotensin-converting enzymetary intermediaries, the adjoin of verify mishap can sire a noxious proceeds on the pecuniary body ( general find), and as well on clients and customers, and and so cant oversight is decisive receiv commensurate to their sensitive important routine and their extensive rival.Furtherto a greater extent, the ontogeny of events in the US fiscal commercialize especi whollyy the high default respect of subprime mortgage securities industry led to a decrease in demand for tradable securities. This has be activeed government agency in the US and the global fiscal securities industry, and thus whatever fiscal institutions and bevels such as northern rock in the UK nerved tighties in obtaining the essential cash in hand to nurture the business operation and catch unmatcheds breath solvent c every last(predicate)able to overleap of short term liquifiableity. However, an any(prenominal) different(prenominal) deliberates faced cor replying difficulties but atomic yield 18 utilise various methods to change their balance palls to overcome the period credence crisis. Moreover, governments and regulatory bodies argon all taking the needful survey to wake the market and tackle the effect sources of the contemporary reliance crisis.II- creation p obtain scotch organic evolution is often conjugate to efficient write outment of investment trust that is employ to finance investments, which ar projected to elevate constitute more wealth and opportunities for states, corpo graze and individual investors. Banks acts as intermediaries in the midst of nimiety units depositing lineages and investors seeking c eiling for investments. consequently, wedges role is lineamental in maintaining the flow of fund in the midst of these different parties. Furthermore, the constancy of fiscal and trusting arranging is vital for the susta softness of stinting growth and the preserve of investors confidence. Banks like any early(a)wise profit maximising firms ar influenced by various particularors, these includes home(a) and out-of-door factors, which array assays or advantages. at that placefore, depones decisions argon found on elements such as confidence in the market, the measurement and instruction of assays, the state of the economy, and their competitive power and market divide. This test go out look onto various factors influencing the pecuniary institutions in the UK, with limited summon to Credit Crunch. This literature bequeath live the intrusts charge of jeopardys, the role of government bodily process ad fairish and supervising the monetary system, and ex plore the pattern of the wedgeing attention and the monetary system as a whole, in sum of the deed of law on cusss feats.The analysis go out include a comparative degree analyze mingled with Barclays and Northern Rock Bank, taking into accounts the differences in their structure, sizing, as wellspring as their reaction to changes in global financial markets. Furthermore, the investigate will break down the fast moving global effect of the quote bray discuss the cardinal banks business model, and explore their activities and demeanours. The claim will likewise investigate the two banks high exposure to denotation insecuritys arising from spoiled investments, cozy up the consequences of the un sanitaryed reliance on money market, and the use of securitisation for fluidity sources.IV- methodological analysisThe query accusatory is to investigate the various factors that influence financial institutions in the UK, notably the banking industry. This research was mean(a)d mainly on tributary research, the poised selective instruction and teaching was capable for this research topic. However, sensitive entropy regarding the determine of guess were not wear outd in both banks publication, such data is useful for the researcher to scrutinise banks estimation of seek and how lifelike are the projections. Nevertheless, information approximately estimation of risks whitethorn be obtained promptly from banks for further analysis of this specified area of banks concern of risk.Research natural germane(predicate) to the topic was collected from various academic sources this is to explore outputs and arguments regarding the regularisation and super imagery of the banking system. The two banks internet site was utilize to gather the background signal information along with the financial statements of the last six social classs, which were used in the research analysis to perform the comparison between Barclays and Northern R ock bank business st positiongies and financial performance. Publications from the Bank of England website were collected to study the commutation bank mandate and the anxiety of the UK banking system, in addition to the historical data regarding inte proportion, LOBOR, and splashiness rate changes.Furthermore, articles from the Financial Services Authority (FSA) were ga thered to study the role of the organisation and its contribution in supervising and stabilising the UK financial system. fresh publications from the Bank of International Settlement (BIS) were collected to study the role, the objectives and the effect of Basel directives on banks. Besides research the progress of current Basel II execution along with the phylogeny of rude(a) requirements arising from the present opinion crunch.Recent theme articles and various different media sources were gathered to collect the latest information regarding the development of the present opinion crunch and its effect on banking industry, these includes sources such as BBC business, bumpkin finance and the Financial Times website, and follow recent actions of regulators and banks steering of the current crisis. Moreover, data from the two banks financial statements was collected to perform the paste compend employ Microsoft excel package to conduct a serial publication of calculations. otherwise methods could own been used to assess bank risks such as shelter at risk (VaR) using regression analysis by utilising a computer package such as Microsoft Excel. The regression consequent will determine the degree of risk that the researched banks take in in their portfolio. However, the banks seldom disclose such sensitive information in published financial statements. This is to reduce adverse reaction by investors and credit rating agencies, which could accordingly affect the banks stock costs, their reputation and confidence in the heavy(p) market.V- writings palingenesis (Part I) The nat ure of bankingThe term bank can be employ to a wide range of financial institutions, from large banks to smallest mutually have construct society in the UK. The provision of deposit and contribute distinguishes Banks from other financial institutions. Deposits products supply money on demand or chase succession notice. Deposits are liabilities for banks, and whence moldiness be well managed if banks requirement to draw profit.Similarly, banks manage summations created through lending. Therefore, Banks main activity is being an go-between between depositors and borrowers. Other non banks financial institutions, such as structure societies and stockbrokers, also act as intermediaries however it is the provision of imparts and taking of deposits that distinguishes banks, though many banks translate various other financial services.1) Management of risks in bankingThe fact is that bankers are in the business of managing risk. Pure and simple, that is the business of banki ng. (Walter Winston, former chief executive officer of Citibank the Economist, 10 April 1993). Banks, like all profit maximising firms, have to deport with macro economic risks, such as recession, inflation level, as well as other micro economic risks including semipolitical pressure, commercialised breakdown of core customers or suppliers, natural disaster, in addition to the emergence of vernal competitive threats.From a finance theory viewpoint, Bank risk management is mainly collected of four main balance airplane risks, which includes liquid state risk, bear on rate risk, credit risk, and capital risk (Hempel et al, 1989). Credit risk has been value as the principal risk in its effect on bank performance (Sin unwrap, 1992, p. 279) and bank sorrow (Spadaford, 1988). The primary reason why the assort management of credit risk is essential is because banks have restricted expertness to operate loan losings. Generally, the mightiness of a bank to absorb a loan loss is originated firstly from generated income of other profitable loans, and secondly by bank own capital.2) Factors influencing financial institutionsBanks and other profit maximising firms are influenced by various factors financial institutions in particular are supersensitised to a range of changes that may affect their projected growth. Some of these changes are internal changes, this occurs attendant to restructuring program that a bank tangle following(a) an intricacy strategy such as in mergers and acquisitions or as a defensive strategy to appease competitive and maintain market package and fight competitive predators from acquiring the bank. Moreover, there are other external factors that can influence financial institutions, these includes a countys government monetary policy, the economic condition, the financial stability and the level of confidence in the market, the inflation rate, in addition to other risks such as credit and market risks.There are a range of risks that a bank may encounter, these includes the followingsa) Credit risk and counterparty risk counterparty risk refers to the risks that after the creation of two parties contract, one party will renege the toll of the contract, art object credit risk is the risk that a loan or an summation becomes scattered due(p) to default.b) Liquidity or funding risk these are similar term that refer to the risk of shortage of fluidity for maintaining operational commitments, that is the ability for the bank to cover its liabilities at due date. A shortage of sufficient liquid pluss is often the trigger of financial distress, as it is increasingly difficult for the bank to obtain funds from the wholesale markets. therefrom funding risk is the inability for the bank to maintain its periodical operations.c) trade or price risk this type of risk refers to the risk linked to over the counter instruments or traded stocks in a non liquid market, such as equities and bonds. Thus if a b ank hold these items in its portfolio, then it is vulnerable to market or price risk, this is the risk that the price of these items is unstable, which is caused by systematic (movement of prices in all traded market instruments, for instance due to changes in economic policy) or ad hoc market risks (the movement of a particular instrument is reversal to the rest of similar instruments, for example, this may be caused by unfavourable information about the issuer of that instrument).d) Interest rate risk this is similar to price risk, because intimacy rate is price of money, it signify the opportunity cost of keeping money. This occurs because of divert rate mismatches between as focalizes and liabilities, which differ in volume and maturity arising from the banks acting summation transformation.e) dandy or gearing risk because banks are passport leveraged firms, they have to set aside some capital to cover the losings. The size of capital is proportional to the level of risk taken by the banks. Basel risk asset ratio prescript requires banks to hold up to 8%.Besides, village or salarys risk. This is when one party in the contract deliver assets or makes payment in advance, which creates exposure to potential loss. Furthermore, operational risk refers to risks from forgiving capital, court-ordered risks such as law suits, fraud, and physical capital. While milkweed butterfly and political risk refers to the risk that a government default on its debt financial obligation to a bank. Moreover, financial regulators has identified three main risks linked to banks, these includes market risks such as risks from put back rates, interest rates, operational risk, commodity and paleness prices.3) The Asset-Liability Management (ALM) techniqueBecause the fundamental and the primary activity of a bank is intermediation between surplus units that makes deposits and those that seek capital, which acquire fund from the bank, thus this payment system giv es the bank the role of intermediation , where the intermediation is place activity, risk management is founded principally on a sound asset liability management (ALM). Furthermore, the ALM is a technique practiced by banks to efficaciously manage their risks, which was largely utilised by banks in the locate state of war period up to the 1980s. The ALM method was the main tool used to manage banks books, it is essential that the bank maintain its assets and liabilities under manoeuvre to derogate risks and remain solvent. Besides, banks are keeping their managers updated with newer techniques and skills to maintain their efficiency and competitiveness for the future, for instance, ALMA is an crosstie that comprise somewhat 40 financial institutions, which are internationalist and local banking groups and building societies, mostly UK and Irish.However it is growing its membership and links around Europe. Its objective is to offer an informal and inclusive forum regarding the balance sheet management issues (Byrne, J. 2004). Due to the development of banking activities, innovative instrument became increasingly used by banks to manage their assets such as off balance sheet instruments, where banks locomote from interest earning income products to non-interest income sources, thus this needed that banks risk management should adopt newer techniques other then just the ALM to includes the risks originating from the off balance sheet instruments. Moreover, one of the new methods included in managing market and then credit risks is the look on at Risk (VaR), which involves crowing an estimate of losses arising from the volatility of banks assets.4) Credit refiningA recent research conducted by the Australian demonstrate of bankers on the issue of Improving Asset Quality (Brice, 1992), which focused on the consequence of credit burnish. The great emphasis on credit culture was due to its influence on bank performance and in some occurrences bank also-ran ( Spadaford (1988) and Brice (1992)).Spadaford (1988) stated in his study of 162 bank failures in the joined States that the analysis showed that 98% of bank failure occurred due to asset flavour problems, among these problems are poor management of loan policy, inadequate systems to look into conformism with internal rules and procedures, and the lack of watch on senior and key management members in the organisation.McKinley (1991) has defined four main cultures that influence bank performance. preponderantly the immediate performance-driven, which emphasis on earnings targets, followed by Market share/production-driven that focuses on being the biggest with greater production volume, along with Values-driven that balances between credit quality and generated income. In addition to the Unfocused (current priority-driven) bank, such bank lacks vision and appropriate strategy often set short term targets which consequently terzetto to unsuccessful ventures.VI- Literatur e critical review (Part II) Banks enactmentThe base of modulate financial institutions is founded on three broad frameworks. Primarily, the consumer fortress argument, this is ground on the vox populi that investors and depositors cannot be demanded to perform risk judging of financial institutions they steal with, nor superintend standard of service or performance of these institutions. The consumer resistance profound principle is based on three types of law firstly, pay schemes created to devolve all or part of losses caused by the insolvency of financial institutions secondly, rules and regulations such as capital adequacy requirements designed to prevent insolvency and lastly force fairness in business or market practices by backing rules and standards.The latter regulation issues market imperfections arising from principle agent problems, asymmetrical information, and the issue of determining the true value of financial products or services, which are natur alised well after the transaction or contract was create (Dale, R and Wolfe, S. 1998). Furthermore, there are other concerns associated with consumer apology rationale. The provision of wages to depositors and investors for losses sustained from the insolvency of financial institutions will further encourage these institutions to mesh tempestuous investment decisions, thus there will be stripped or no incentive for prudence.This auspicates that risky firms will be able to invoke trade with identical equipment casualty and ease as responsible institutions, thus affecting financial market standards and discipline, and rising potential insolvency incidences. Therefore, the resulting losses must be covered by the deposit policy scheme, investor security fund, or in some cases by the tax payer.Thus, prudent swans on financial institutions are essential to minimise losses and to balance the regulatory incentives with the inordinate risk-taking.The third aim of financial regu lation is to promote honor of markets, include various issues such as market manipulation, fraud, transparency, and fairness market integrity emphasis on organising the market as whole beyond just the relationship between financial firms and their consumers. Supervisors implementing the financial regulation numerate systematic risk as the factor that causes great concerns. That is the risk that failure of one or more distressed financial institution could shell out and cause a contagion effect, which could cause the collapse of other prudent institutions. It is their picture to the contagion effect that single out financial institutions from other non financial firms.1) Targets of regulationThe major objectives of Financial regulation is to set guidelines for the activities of Banks, indemnity companies, investment firms, exchanges, and fund management companies.The diverse principles for financial regulation mentioned to a higher place transform in their relation to these v arious institutions of the financial services sector.Banks are august by what is referred to as short- term and unsecured value reliable liabilities (deposits) and illiquid value-uncertain assets (loans). Banks conforms to deposits insurance and other type of consumer defense, partly because banks balance sheet consists of a novelty of complex instruments and depositors are not capable to measure the danger of their deposits. However, depositor shelter creates moral hazard problem.Furthermore, banks regulation focuses more on systemic risk. That is the first step of a bank run that can spread to a reduce of banks and trigger a wider instability in the financial system. check to this notion, bank runs are the result of action by depositors retrieving their funds in solvent to amounting fear and uncertainty of the bank future arising from bank asset losses that could render it insolvent. Due to potential risk of losing all or some of their assets, depositors tend to make a r un when sign signs indicate some troubles.Moreover, recent research found that the occurrence of a bank run can not be entirety explained by the slip by of banks vestigial assets (LaWare, J.1991.p34), (Diamond and Dybvig, 1983).The emphasis is on a banks maturity transformation notably the direct of illiquid assets (bank loans) into liquid claims (bank deposits), taking into account that the banks loan portfolio substantially moderate in value in an event of riddance than on dismissal concern. What triggers a rational bank run is that the uncertainty and the higher fortune that the loan portfolio liquid value is less than the value of liquid deposits. This notion demonstrates how bank runs can possibly arise and affect even healthy banks. Thus distressed bank have to liberate its assets at liquidation value, and so leading to possible insolvency.2) Techniques of regulationWhile procedures of conduct of business regulation do not differ among various types of institutions, b ut in wrong of prudential regulation there are fundamental differences that reveal the classifiable risk features of banks, insurance firms, and investment companies. Because bank failure has a greater effect on the whole market, and can create systemic crisis, governments and rally banks have set bank regulation for creating extra protection in provision of extra fund by setting the lender of last resorts facilities, and deposit protection, however, these facilities creates moral hazard.Moreover, the deposit protection fund may exceeds the on tap(predicate) protection from deposits insurance schemes, demonstrating policymakers greater emphasis for protecting the banking institutions kinda then just depositors, as well showing the regulatory objectives of sustaining the banking system, while tour of duty regulation focuses more on tackling ebullient risk taking by setting capital adequacy requirements for assets.Institutional regulation varies between states in the UK for inst ance there was a single mega regulator, all regulation is institutional, apiece group/ institution have a diversify activity which all work under a single agency that condone the control. Alternatively, in a system of multiple regulatory agencies specialised by duty, a fixed institutional regulation is un buildable due to the fact that these agencies are divers in functions, which calls for the appointment of a lead regulator for diversified groups (Taylor, M. 1995).3) Regulation of the financial systemBy tradition banks are providers of loans among other services to firms and individual investors, temporary banks falls in deficits when their pulmonary tuberculosis exceeds expediency however banks generally adjust their liquidity position by using capital or wholesale market.Problems occur when banks capital is apply in funding high risk investments this is often the consequences of bad regime by senior management in controlling the banks assets or it is the egress of a cont agion effect resulting from systemic risk. Moreover, the primordial bank controls and monitor commercial banks activities and set rules to regulate the banking system. This is to create stability and to promote confidence in financial market, which are vital elements in maintaining steady economic growth.4) Bank failureRegulation of banks must be explored in mise en scene of bank failure. As any substantial problem produces the need for the intro of changes in the regulatory framework, because the regulators attempt to correct any loophole in the system.major(ip) bank failures in the history of banking occurred in the US in the grade 1929. At that period there were 25,000 operating banks, however by 1934 the number had bring down to 14,000. These incidences consequently led to the executing of more restrictive bank rules, such as single state operations, which until recently remained the feature of the US banking system. The subsequent major bank failure was the fringe banking crisis in the UK in the year 1973.5) Reasons for regulating banksThe principle reason is the systemic risk, because the financial system is fictile to level of confidence, therefore external regulation is essential in maintaining the stability and reduces further volatility. The second reason represents the social cost that a failure of bank causes, which have a greater impact then a failure an ordinary firm. The insolvency of a firm affects the shareholders, while the failure of a bank will have a greater number of affected customers (depositors), which could also be spread across larger geographic locations. As well as the effect it will have on providing nest egg for potential investors which will have a detrimental impact on the economic growth.The third reason is the possible lack of familiarity by the public, it is suggested that they lack the necessary background information to distinguish between secure and risky investments partly due to asymmetric information because depositors do not have access to the same information available for banks. Thus across-the-board risk assessments necessitate additional information to that included in financial reports. Hence for this particular reason regulators had introduced depositor protection. Although the above arguments support regulation, however there should be some caution on the use of excessive control over banks. It is primarily the issue of sustained cost in terms of resourcefulnesss on banks and the regulators.Because the central bank has to set teams of experts to perform the prudential control, withal banks have to employ skilled resources capable to produce the necessary required returns to the regulator. Such costs can be large, thus it is a consider of cost benefit analysis to establish whether the gain of applying prudential control exceeds the incurred costs. Other possible dangers of excessive regulation are the fall of competition, increment in costs and the diminishing pace of finan cial variation and development.Furthermore, heavy regulation on a particular centre may lead to the migration of the activities to locations that have lenient regulation, which has been the principle factor in the development of onshore banking centres that led to the need for a global regulation system for international banks, which is known as a level playing field.6) The supervision of the financial system in the UKThe above arguments about prudential regulation are based on banks but it can also be utilize on various other financial institutions. Furthermore, the current UK financial regulation system utilise the same measures in authorising and supervising financial institutions without a distinction between insurance firms, building societies, or banks.The FSA is the principle regulator of the financial system in the UK. The FSA was established in 1997, bring home the bacon the Securities and Investments jump on (SIB), which was supervising the investment industry. Howeve r, the FSA has progressively estimate to become the main restrainer responsible for regulating insurance and investment industry, building societies, and banks. In addition to regulating financial exchanges such as Euronext.liffe and the Stock exchange likewise clearing houses, along with other functions such as the obligation of regulating the access of companies to Official List in cooperation with the UK Listing Authority.The initial development occurred in 1998, when the Bank of England transferred its responsibility of regulation and supervision of banking to the FSA, which was succeeded with the passing of the Financial Services and Markets Act (FSMA) 2000 that provided the FSA with full power as the main regulator. The FSMA requires the FSA to attain the following objectivesPromote public awareness of financial system affirm confidence in the UK financial marketSecure consumer protection drop financial crime.7) The FSA approach to supervisionThe FSA approach to supervisio n is risk based the primary phase is to assess the risks associated with four objectives above. The FSA attain this through convocation information from various sources including customers and supervision of firms. The secondary phase is risk measure and estimating impact, by giving each risk the probability of occurring, thus giving it a score or value. Thus firms with high order impact require greater supervision. This is to reduce systemic risk and consumer losses. However, firms that possess highly sophisticated and effective risk assessment systems require less supervision by the FSA.Finally, after the risks are identified, assessed and weighted, the FSA select the appropriate measures to respond using various tools, which can be summed as followsThose aimed to influence the behaviour of consumers, operators, and the industryThose aimed to influence the behaviour particular firms.The first category encompasses consumer education, the discloser of information, and allowance method, while the second category includes the provision of authorisations to firms and discipline, in addition to reimbursement of losses.8) Capital adequacy (Basel Capital Accord, 1988).Liquidity is essential for any firm to maintain its daily operation, whereas solvency refers to the ability of a bank to meet its commitments in terms of liabilities at due time. However, there is a distinction between liquidity and solvency. There is a general understanding that if a bank is thought to remain solvent then it should be able to borrow fund from blossom forth market to meet its short term liquidity requirements.Likewise, the front line of liquidity problems that cannot be resolved through the wholesale market suggests that other lenders believe that the risk of insolvency of that particular bank is great. Furthermore, if a bank throw together to hold short term funds in the markets, it will face difficulties in paying its claims. Therefore the Bank of England and the FSA requires banks to efficiently managing their liquidity as a principal policy element of reducing the risk of insolvency.The Basel direction on Banking Supervision has introduced Basel Capital Accord II it included new amendments to the assessment of capital adequacy of banks. This new approach was ought to be enforced in year 2006, which contains three pillarsMinimum capital requirementsSupervisory review of capital adequacyPublic disclosure.Basel II accord focuses on credit risk and market risk. In pillar 1, the treatment of market risk was not altered but changes were made on the treatment of credit risk notably operational risk. The bank for international settlement and the Basel military commission on banking supervision have founded the financial stability institute (FSI) to attention central banks across the world to improve their financial systems. The new Basel II requirements set challenges on banks to develop and increase efficiency on their capital management.In this section, there is a discussion of the effect of Basel II on Banks in Europe and North America, and how the new directives are going to improve the coherency of trade between the International Banks. Furthermore, this study will examine the banks resource capability to meet Basel II requirements, and discuss the impact and the implementation of the proposed guidelines.The Basel II framework is a tool that international financial institutions have created to be used by banks around the world as a vernacular standard. The principle of Basel II is that banks are required to hold in reserve certain level of capital as a protection to maintain bank operation when making losses. It promotes transparency of banks activities and encourages efficient management of capital. It is estimated to entire 8% of bank assets.The Basel II framework has set standards for banks in managing their capital and requires the discloser of information to detect any risks. The guidelines promote efficienImpact of the Credit Crunch in the UKImpact of the Credit Crunch in the UKFactors Influencing the Financial Institutions in the UK With Particular Reference to Credit CrunchA Comparative Study between Barclays and Northern Rock BankI- AbstractBanks acts as intermediaries between surplus units depositing funds and investors or individuals seeking capital for investments. Thus, banks role is important in maintaining the flow of fund between these different parties.Banks like any other profit maximising firms are influenced by various factors that represent risks or opportunities. Therefore, banks business decisions are founded on aspects such as confidence in the market, the level of risks, the state of the economy, and their competitive strength. Regulation is essential for assuring compliance and integrity in the financial system, but rigid rules stifles the dynamicity of the banking industry and the financial sector as whole.Moreover, Central Bank role as a lender of last resort can rise the is sue moral hazard by helping imprudent banks, however because banks are financial intermediaries, the impact of bank failure can have a detrimental effect on the financial system (systemic risk), and also on clients and customers, therefore bank supervision is vital due to their sensitive important role and their extensive impact.Furthermore, the development of events in the US financial market particularly the high default rate of subprime mortgage market led to a decrease in demand for tradable securities. This has affected confidence in the US and the global financial market, and consequently some financial institutions and banks such as northern rock in the UK faced difficulties in obtaining the necessary funds to maintain the business operation and remain solvent due to lack of short term liquidity. However, other banks faced similar difficulties but are using various methods to improve their balance sheets to overcome the current credit crisis. Moreover, governments and regulat ory bodies are all taking the necessary measure to stimulate the market and tackle the core sources of the current credit crisis.II- IntroductionSustained economic development is often linked to efficient management of fund that is used to finance investments, which are projected to further create more wealth and opportunities for states, corporate and individual investors. Banks acts as intermediaries between surplus units depositing funds and investors seeking capital for investments. Thus, banks role is fundamental in maintaining the flow of fund between these different parties. Furthermore, the stability of financial and banking system is vital for the sustainability of economic growth and the preserve of investors confidence. Banks like any other profit maximising firms are influenced by various factors, these includes internal and external factors, which represent risks or advantages.Therefore, banks decisions are based on elements such as confidence in the market, the measure ment and management of risks, the state of the economy, and their competitive power and market share. This study will look onto various factors influencing the financial institutions in the UK, with particular reference to Credit Crunch. This literature will comprise the banks management of risks, the role of authorities regulating and supervising the financial system, and explore the regulation of the banking industry and the financial system as a whole, in addition of the effect of regulation on banks performances.The analysis will include a comparative study between Barclays and Northern Rock Bank, taking into accounts the differences in their structure, size, as well as their reaction to changes in global financial markets. Furthermore, the Research will examine the fast moving global effect of the credit crunch discuss the two banks business model, and explore their activities and behaviours. The study will also investigate the two banks high exposure to credit risks arising fr om risky investments, highlight the consequences of the heavy reliance on money market, and the use of securitisation for liquidity sources.IV- MethodologyThe research objective is to investigate the various factors that influence financial institutions in the UK, notably the banking industry. This research was based mainly on secondary research, the gathered data and information was sufficient for this research topic. However, sensitive data regarding the value of risk were not disclosed in both banks publication, such data is useful for the researcher to scrutinise banks estimation of risk and how realistic are the projections. Nevertheless, information about estimation of risks may be obtained directly from banks for further analysis of this specified area of banks management of risk.Research material relevant to the topic was collected from various academic sources this is to explore issues and arguments regarding the regulation and supervision of the banking system. The two ban ks internet site was used to gather the background information along with the financial statements of the last six years, which were used in the research analysis to perform the comparison between Barclays and Northern Rock bank business strategies and financial performance. Publications from the Bank of England website were collected to study the central bank regulation and the management of the UK banking system, in addition to the historical data regarding interest, LOBOR, and inflation rate changes.Furthermore, articles from the Financial Services Authority (FSA) were gathered to study the role of the organisation and its contribution in supervising and stabilising the UK financial system. Recent publications from the Bank of International Settlement (BIS) were collected to study the role, the objectives and the effect of Basel directives on banks. Besides research the progress of current Basel II implementation along with the development of new requirements arising from the pre sent credit crunch.Recent newspaper articles and various other media sources were gathered to collect the latest information regarding the development of the present credit crunch and its effect on banking industry, these includes sources such as BBC business, yahoo finance and the Financial Times website, and follow recent actions of regulators and banks management of the current crisis. Moreover, data from the two banks financial statements was collected to perform the Gap Analysis using Microsoft excel package to conduct a series of calculations.Other methods could have been used to assess bank risks such as value at risk (VaR) using regression analysis by utilising a computer package such as Microsoft Excel. The regression result will determine the degree of risk that the researched banks possess in their portfolio. However, the banks seldom disclose such sensitive information in published financial statements. This is to avoid adverse reaction by investors and credit rating age ncies, which could therefore affect the banks stock prices, their reputation and confidence in the capital market.V- Literature review (Part I) The nature of bankingThe term bank can be applied to a wide range of financial institutions, from large banks to smallest mutually owned building society in the UK. The provision of deposit and loan distinguishes Banks from other financial institutions. Deposits products supply money on demand or following time notice. Deposits are liabilities for banks, thus must be well managed if banks want to make profit.Similarly, banks manage assets created through lending. Therefore, Banks main activity is being an intermediary between depositors and borrowers. Other non banks financial institutions, such as building societies and stockbrokers, also act as intermediaries however it is the provision of loans and taking of deposits that distinguishes banks, though many banks provide various other financial services.1) Management of risks in bankingThe f act is that bankers are in the business of managing risk. Pure and simple, that is the business of banking. (Walter Winston, former CEO of Citibank the Economist, 10 April 1993). Banks, like all profit maximising firms, have to deal with macroeconomic risks, such as recession, inflation level, as well as other micro economic risks including political pressure, commercial breakdown of core customers or suppliers, natural disaster, in addition to the emergence of new competitive threats.From a finance theory viewpoint, Bank risk management is primarily composed of four main balance sheet risks, which includes liquidity risk, interest rate risk, credit risk, and capital risk (Hempel et al, 1989). Credit risk has been recognised as the principal risk in its effect on bank performance (Sinkey, 1992, p. 279) and bank failure (Spadaford, 1988). The primary reason why the correct management of credit risk is essential is because banks have restricted ability to absorb loan losses. Generally , the ability of a bank to absorb a loan loss is originated firstly from generated income of other profitable loans, and secondly by bank own capital.2) Factors influencing financial institutionsBanks and other profit maximising firms are influenced by various factors financial institutions in particular are susceptible to a range of changes that may affect their projected growth. Some of these changes are internal changes, this occurs subsequent to restructuring program that a bank adopt following an expansion strategy such as in mergers and acquisitions or as a defensive strategy to remain competitive and maintain market share and fight competitive predators from acquiring the bank. Moreover, there are other external factors that can influence financial institutions, these includes a countys government monetary policy, the economic condition, the financial stability and the level of confidence in the market, the inflation rate, in addition to other risks such as credit and market risks.There are a range of risks that a bank may encounter, these includes the followingsa) Credit risk and counterparty risk counterparty risk refers to the risks that after the creation of two parties contract, one party will renege the terms of the contract, while credit risk is the risk that a loan or an asset becomes lost due to default.b) Liquidity or funding risk these are similar terms that refer to the risk of shortage of liquidity for maintaining operational commitments, that is the ability for the bank to cover its liabilities at due date. A shortage of sufficient liquid assets is often the trigger of financial distress, as it is increasingly difficult for the bank to obtain funds from the wholesale markets. Thus funding risk is the inability for the bank to maintain its daily operations.c) Market or price risk this type of risk refers to the risk linked to over the counter instruments or traded stocks in a non liquid market, such as equities and bonds. Thus if a bank hol d these items in its portfolio, then it is vulnerable to market or price risk, this is the risk that the price of these items is unstable, which is caused by systematic (movement of prices in all traded market instruments, for instance due to changes in economic policy) or specific market risks (the movement of a particular instrument is opposite to the rest of similar instruments, for example, this may be caused by unfavourable information about the issuer of that instrument).d) Interest rate risk this is similar to price risk, because interest rate is price of money, it represent the opportunity cost of keeping money. This occurs because of interest rate mismatches between assets and liabilities, which differ in volume and maturity arising from the banks performing asset transformation.e) Capital or gearing risk because banks are highly leveraged firms, they have to set aside some capital to cover the losses. The size of capital is proportional to the level of risk taken by the ba nks. Basel risk asset ratio principle requires banks to hold up to 8%.Besides, settlement or payments risk. This is when one party in the contract deliver assets or makes payment in advance, which creates exposure to potential loss. Furthermore, operational risk refers to risks from human capital, legal risks such as law suits, fraud, and physical capital. While sovereign and political risk refers to the risk that a government default on its debt obligation to a bank. Moreover, financial regulators has identified three main risks linked to banks, these includes market risks such as risks from exchange rates, interest rates, operational risk, commodity and equity prices.3) The Asset-Liability Management (ALM) techniqueBecause the fundamental and the primary activity of a bank is intermediation between surplus units that makes deposits and those that seek capital, which acquire fund from the bank, thus this payment system gives the bank the role of intermediation , where the intermedi ation is key activity, risk management is founded principally on a sound asset liability management (ALM). Furthermore, the ALM is a technique practiced by banks to effectively manage their risks, which was largely utilised by banks in the post war period up to the 1980s. The ALM method was the main tool used to manage banks books, it is essential that the bank maintain its assets and liabilities under control to minimise risks and remain solvent. Besides, banks are keeping their managers updated with newer techniques and skills to maintain their efficiency and competitiveness for the future, for instance, ALMA is an association that comprise around 40 financial institutions, which are international and local banking groups and building societies, mostly UK and Irish.However it is growing its membership and links around Europe. Its objective is to offer an informal and inclusive forum regarding the balance sheet management issues (Byrne, J. 2004). Due to the development of banking a ctivities, innovative instrument became increasingly used by banks to manage their assets such as off balance sheet instruments, where banks moved from interest earning income products to non-interest income sources, thus this required that banks risk management should adopt newer techniques other then just the ALM to includes the risks originating from the off balance sheet instruments. Moreover, one of the new methods included in managing market and then credit risks is the Value at Risk (VaR), which involves giving an estimate of losses arising from the volatility of banks assets.4) Credit CultureA recent research conducted by the Australian institute of bankers on the issue of Improving Asset Quality (Brice, 1992), which focused on the significance of credit culture. The great emphasis on credit culture was due to its influence on bank performance and in some occurrences bank failure ( Spadaford (1988) and Brice (1992)).Spadaford (1988) stated in his study of 162 bank failures i n the United States that the analysis showed that 98% of bank failure occurred due to asset quality problems, among these problems are poor management of loan policy, inadequate systems to ensure compliance with internal rules and procedures, and the lack of supervision on senior and key management members in the organisation.McKinley (1991) has defined four main cultures that influence bank performance. predominantly the immediate performance-driven, which emphasis on earnings targets, followed by Market share/production-driven that focuses on being the biggest with greater production volume, along with Values-driven that balances between credit quality and generated income. In addition to the Unfocused (current priority-driven) bank, such bank lacks vision and appropriate strategy often set short term targets which consequently lead to unsuccessful ventures.VI- Literature review (Part II) Banks regulationThe base of regulating financial institutions is founded on three broad frame works. Primarily, the consumer protection argument, this is based on the notion that investors and depositors cannot be demanded to perform risk assessment of financial institutions they deal with, nor monitor standard of service or performance of these institutions. The consumer protection underlying principle is based on three types of regulation firstly, compensation schemes created to repay all or part of losses caused by the insolvency of financial institutions secondly, rules and regulations such as capital adequacy requirements designed to prevent insolvency and lastly promote fairness in business or market practices by setting rules and standards.The latter regulation reveals market imperfections arising from principle agent problems, asymmetric information, and the issue of determining the true value of financial products or services, which are established well after the transaction or contract was formed (Dale, R and Wolfe, S. 1998). Furthermore, there are other concerns a ssociated with consumer protection rationale. The provision of compensation to depositors and investors for losses sustained from the insolvency of financial institutions will further encourage these institutions to pursue risky investment decisions, thus there will be minimal or no incentive for prudence.This indicates that risky firms will be able to attract trade with identical terms and ease as prudent institutions, thus affecting financial market standards and discipline, and rising potential insolvency incidences. Therefore, the resulting losses must be covered by the deposit insurance scheme, investor protection fund, or in some cases by the tax payer.Thus, prudential controls on financial institutions are essential to minimise losses and to balance the regulatory incentives with the excessive risk-taking.The third aim of financial regulation is to promote integrity of markets, encompassing various issues such as market manipulation, fraud, transparency, and fairness market i ntegrity emphasis on organising the market as whole beyond just the relationship between financial firms and their consumers. Supervisors implementing the financial regulation consider systematic risk as the factor that causes great concerns. That is the risk that failure of one or more distressed financial institution could spread and cause a contagion effect, which could cause the collapse of other prudent institutions. It is their vulnerability to the contagion effect that single out financial institutions from other non financial firms.1) Targets of regulationThe major objectives of Financial regulation is to set guidelines for the activities of Banks, insurance companies, investment firms, exchanges, and fund management companies.The diverse principles for financial regulation mentioned above vary in their relation to these various institutions of the financial services sector.Banks are distinguished by what is referred to as short- term and unsecured value certain liabilities (deposits) and illiquid value-uncertain assets (loans). Banks conforms to deposits insurance and other type of consumer protection, partly because banks balance sheet consists of a variety of complex instruments and depositors are not capable to measure the riskiness of their deposits. However, depositor protection creates moral hazard problem.Furthermore, banks regulation focuses more on systemic risk. That is the possibility of a bank run that can spread to a number of banks and trigger a wider instability in the financial system. According to this notion, bank runs are the result of action by depositors retrieving their funds in response to amounting fear and uncertainty of the bank future arising from bank asset losses that could render it insolvent. Due to potential risk of losing all or some of their assets, depositors tend to make a run when initial signs indicate some troubles.Moreover, recent research found that the occurrence of a bank run can not be entirety explained by the decline of banks underlying assets (LaWare, J.1991.p34), (Diamond and Dybvig, 1983).The emphasis is on a banks maturity transformation notably the transfer of illiquid assets (bank loans) into liquid claims (bank deposits), taking into account that the banks loan portfolio substantially decline in value in an event of liquidation than on going concern. What triggers a rational bank run is that the uncertainty and the higher probability that the loan portfolio liquid value is less than the value of liquid deposits. This notion demonstrates how bank runs can possibly arise and affect even healthy banks. Thus distressed bank have to liberate its assets at liquidation value, therefore leading to possible insolvency.2) Techniques of regulationWhile procedures of conduct of business regulation do not differ among various types of institutions, but in terms of prudential regulation there are fundamental differences that reveal the distinctive risk features of banks, insurance firms, an d investment companies. Because bank failure has a greater effect on the whole market, and can create systemic crisis, governments and central banks have set bank regulation for creating extra protection in provision of extra fund by setting the lender of last resorts facilities, and deposit protection, however, these facilities creates moral hazard.Moreover, the deposit protection fund may exceeds the available protection from deposits insurance schemes, demonstrating policymakers greater emphasis for protecting the banking institutions rather then just depositors, as well showing the regulatory objectives of sustaining the banking system, while preventive regulation focuses more on tackling excessive risk taking by setting capital adequacy requirements for assets.Institutional regulation varies between states in the UK for instance there was a single mega regulator, all regulation is institutional, each group/ institution have a diversified activity which all work under a single a gency that overlook the supervision. Alternatively, in a system of multiple regulatory agencies specialised by duty, a fixed institutional regulation is unattainable due to the fact that these agencies are divers in functions, which calls for the appointment of a lead regulator for diversified groups (Taylor, M. 1995).3) Regulation of the financial systemBy tradition banks are providers of loans among other services to firms and individual investors, temporary banks falls in deficits when their expenditure exceeds receipts however banks generally adjust their liquidity position by using capital or wholesale market.Problems occur when banks capital is misused in funding high risk investments this is often the consequences of bad governance by senior management in controlling the banks assets or it is the outcome of a contagion effect resulting from systemic risk. Moreover, the central bank controls and monitor commercial banks activities and set rules to regulate the banking system. This is to create stability and to promote confidence in financial market, which are vital elements in maintaining steady economic growth.4) Bank failureRegulation of banks must be explored in context of bank failure. As any substantial problem produces the need for the introduction of changes in the regulatory framework, because the regulators attempt to correct any loophole in the system.Major bank failures in the history of banking occurred in the US in the year 1929. At that period there were 25,000 operating banks, however by 1934 the number had reduced to 14,000. These incidences consequently led to the implementation of more restrictive bank rules, such as single state operations, which until recently remained the feature of the US banking system. The subsequent major bank failure was the fringe banking crisis in the UK in the year 1973.5) Reasons for regulating banksThe principle reason is the systemic risk, because the financial system is susceptible to level of confidence, therefore external regulation is essential in maintaining the stability and reduces further volatility. The second reason represents the social cost that a failure of bank causes, which have a greater impact then a failure an ordinary firm. The insolvency of a firm affects the shareholders, while the failure of a bank will have a greater number of affected customers (depositors), which could also be spread across larger geographical locations. As well as the effect it will have on providing savings for potential investors which will have a detrimental impact on the economic growth.The third reason is the possible lack of knowledge by the public, it is suggested that they lack the necessary background information to distinguish between safe and risky investments partly due to asymmetric information because depositors do not have access to the same information available for banks. Thus comprehensive risk assessments necessitate additional information to that included in financial rep orts. Hence for this particular reason regulators had introduced depositor protection. Although the above arguments support regulation, however there should be some caution on the use of excessive control over banks. It is primarily the issue of sustained cost in terms of resources on banks and the regulators.Because the central bank has to set teams of experts to perform the prudential control, likewise banks have to employ skilled resources capable to produce the necessary required returns to the regulator. Such costs can be large, thus it is a matter of cost benefit analysis to establish whether the gain of applying prudential control exceeds the incurred costs. Other possible dangers of excessive regulation are the fall of competition, increase in costs and the diminishing pace of financial innovation and development.Furthermore, heavy regulation on a particular centre may lead to the migration of the activities to locations that have lenient regulation, which has been the princ iple factor in the development of offshore banking centres that led to the need for a global regulation system for international banks, which is known as a level playing field.6) The supervision of the financial system in the UKThe above arguments about prudential regulation are based on banks but it can also be applied on various other financial institutions. Furthermore, the current UK financial regulation system utilise the same measures in authorising and supervising financial institutions without a distinction between insurance firms, building societies, or banks.The FSA is the principle regulator of the financial system in the UK. The FSA was established in 1997, succeeding the Securities and Investments Board (SIB), which was supervising the investment industry. However, the FSA has progressively thought to become the main controller responsible for regulating insurance and investment industry, building societies, and banks. In addition to regulating financial exchanges such as Euronext.liffe and the Stock exchange besides clearing houses, along with other functions such as the responsibility of regulating the access of companies to Official List in cooperation with the UK Listing Authority.The initial development occurred in 1998, when the Bank of England transferred its responsibility of regulation and supervision of banking to the FSA, which was succeeded with the passing of the Financial Services and Markets Act (FSMA) 2000 that provided the FSA with full power as the main regulator. The FSMA requires the FSA to attain the following objectivesPromote public awareness of financial systemMaintain confidence in the UK financial marketSecure consumer protectionReduce financial crime.7) The FSA approach to supervisionThe FSA approach to supervision is risk based the primary phase is to assess the risks associated with four objectives above. The FSA attain this through gathering information from various sources including customers and supervision of firms . The secondary phase is risk weighing and estimating impact, by giving each risk the probability of occurring, thus giving it a score or value. Thus firms with high magnitude impact require greater supervision. This is to reduce systemic risk and consumer losses. However, firms that possess highly sophisticated and effective risk assessment systems require less supervision by the FSA.Finally, after the risks are identified, assessed and weighted, the FSA select the appropriate measures to respond using various tools, which can be summed as followsThose aimed to influence the behaviour of consumers, operators, and the industryThose aimed to influence the behaviour particular firms.The first category encompasses consumer education, the discloser of information, and compensation method, while the second category includes the provision of authorisations to firms and discipline, in addition to reimbursement of losses.8) Capital adequacy (Basel Capital Accord, 1988).Liquidity is essentia l for any firm to maintain its daily operation, whereas solvency refers to the ability of a bank to meet its commitments in terms of liabilities at due time. However, there is a distinction between liquidity and solvency. There is a general understanding that if a bank is thought to remain solvent then it should be able to borrow fund from open market to meet its short term liquidity requirements.Likewise, the presence of liquidity problems that cannot be resolved through the wholesale market suggests that other lenders believe that the risk of insolvency of that particular bank is great. Furthermore, if a bank struggle to find short term funds in the markets, it will face difficulties in paying its claims. Therefore the Bank of England and the FSA requires banks to efficiently managing their liquidity as a principal policy element of reducing the risk of insolvency.The Basel committee on Banking Supervision has introduced Basel Capital Accord II it included new amendments to the as sessment of capital adequacy of banks. This new approach was ought to be implemented in year 2006, which contains three pillarsMinimum capital requirementsSupervisory review of capital adequacyPublic disclosure.Basel II accord focuses on credit risk and market risk. In pillar 1, the treatment of market risk was not altered but changes were made on the treatment of credit risk notably operational risk. The bank for international settlement and the Basel committee on banking supervision have founded the financial stability institute (FSI) to assist central banks across the world to improve their financial systems. The new Basel II requirements set challenges on banks to develop and increase efficiency on their capital management.In this section, there is a discussion of the effect of Basel II on Banks in Europe and North America, and how the new directives are going to improve the cohesion of trade between the International Banks. Furthermore, this study will examine the banks resourc e capability to meet Basel II requirements, and discuss the impact and the implementation of the proposed guidelines.The Basel II framework is a tool that international financial institutions have created to be used by banks around the world as a common standard. The principle of Basel II is that banks are required to hold in reserve certain level of capital as a protection to maintain bank operation when making losses. It promotes transparency of banks activities and encourages efficient management of capital. It is estimated to total 8% of bank assets.The Basel II framework has set standards for banks in managing their capital and requires the discloser of information to detect any risks. The guidelines promote efficien