Role Of Monetary Policy In Financial Crisis - Free Essay Example

Sample details Pages: 18 Words: 5332 Downloads: 5 Date added: 2017/06/26 Category Finance Essay Type Analytical essay Did you like this example? 1. Introduction To begin with, it is noted that over the last year or so, financial institutions in the major economies have reported losses on a large scale. Some of these have become insolvent, or have had to be taken over or rescued by their governments. Don’t waste time! Our writers will create an original "Role Of Monetary Policy In Financial Crisis" essay for you Create order The 2008 Global Financial Crisis Credit Crisis has affected millions of Americans specifically and others around the World in general terms. Associated with all of that has been a massive swing in the appetite of the World financial markets for risk, and in their capacity to accept risk. Thus, the result has been a shift from an easily available credit to tight credit. This crisis which began in industrialized countries has shifted dramatically spread to emerging market and developing economies. Many wealthy investors or so have pulled their capital from countries, even those with small levels of perceived risk, and hence causing values of stocks and domestic currencies to plunge. Moreover, the crisis has now moved from containing the contagion to coping with the global recession and changing regulations to prevent a reoccurrence of such a problem. Some security and foreign policy effects of the crisis also are beginning to appear. In addition, policy proposals to change specif ic regulations as well as the structure of regulation and supervision at both domestically and internationally levels have been coming forth through the legislative process. As one can bear in mind, In June 2009, the Obamas administration announced its plan for regulatory reform of the U.S. financial system. For example, in Congress, numerous bills have been introduced that deal with issues such as establishing a commission or selecting a committee to investigate causes of the financial crisis, provide oversight and greater accountability of the Federal Reserve and Treasury lending activity, acting towards the problems in the housing and mortgage markets, provide funding for the International Monetary Fund, address problems with consumer credit cards and establish a systemic risk monitor. Therefore, the transmission of the crisis from the U.S. and Europe to the rest of the world came through a number of channels. The financial institutions in most emerging market economies had not been involved in practices that are seen in the institutions that populate the financial centers in the major industrial countries. To that extent, financial institutions in the emerging economies either shied away from the more exotic instruments, including such things as credit default swaps and collateralized debt obligations, or were prevented by regulation from holding or trading such instruments. Banking had to come of the most à ¢Ã¢â€š ¬Ã…“boringà ¢Ã¢â€š ¬?, old fashioned ever! (The New York Times has reported on last September 2009 about the moves to replace the bust securitized mortgage market with a similar scheme dealing in life insurance policies, products that are as distasteful as they are foolhardy). The question is, can anything be done to ensure more responsible financial practice? If we are suppose to talk about the US economy, we would notice that President Barak Obama marked the anniversary of Lehman collapse with a plea to bankers to not get complace nt, telling them to get their house in order, or else face further regulation. We can indicate that over the past year, the financial male storm has battered the global information and communication technology industry, affecting profits and pushing down the industry in a manner reminiscent of the 2001 à ¢Ã¢â€š ¬Ã¢â‚¬Å" 2002 dotcom busts. It is gradually finding its feet again, but it isnt out of the woods yet. The global financial tumult has forced a number of companies to reanalyze their cost benefit analysis, ensure efficiency and improve productivity. Companies in sectors such as telecom and finance have already realized the need of IT outsourcing as a solution in the changed market dynamics. Therefore, this research paper provides a review of how the financial crisis has affected many regions of the world, proposals for a regulatory change, indication about the role of Monetary Policy the level of Political Economics that have been intervening in the Financial Crisis. I t also identifies some basic challenges facing the globe suggests possible solutions for the Banking Field to overcome the crisis. 2. Literature Review The financial crisis was triggered by the bursting of a credit-fuelled bubble. Regulation and regulators did not cause this fatal bubble, but they did indirectly help it to grow by fostering the illusion of financial security. Many developing country economies are yet growing strongly, though the forecasts have been downgraded in the space of few a few months. What does the turmoil mean for such developing countries? And for how much longer can growth persist? What are the channels through which the crisis could spread to and how are the effects being felt and in what cases? What is the role for development policy and what do policy-makers need to know? Brooke Masters (2009) claimed: So far, most countries are avoiding a regulatory race to the bottom à ¢Ã¢â€š ¬Ã¢â‚¬Å" if anything, they are going the other way. The UK, for example, is pressing ahead with its own liquidity rules, while the Netherlands has pushed through curbs on bankersà ¢Ã¢â€š ¬Ã¢â€ž ¢ bonuses. Even Singapore, which has long been favored by financiers for its à ¢Ã¢â€š ¬Ã…“light-touchà ¢Ã¢â€š ¬? regulatory regime, considering tightening up its rules. However, Joshua Aizenman (2009) indicated that costly regulation can mitigate the probability of the crisis. We identify conditions where the regulation level supported by the majority is positive after the reform, but below the socially optimal level. A big portion of the financial crisis has had to do with under regulation and regulator duplicity with malefactors. If we look at the banking rules, we shall discover that allowing investment and commercial banks to merge, without a specification of a tighter capital rules, and hence, these new mega banks became overleveraged without examining their loans or the instruments that derived from the bad loans these banks made in the first place. In his writings about Liberalism Ludwig von Mises (1927) indicated that government intervention in markets would lead inevitably to unintended consequences that resulted in further government intervention. It is difficult to correct a problem when the cause of the problem is misunderstood. The presidential and vice-presidential candidates in the United States have all said that à ¢Ã¢â€š ¬Ã…“Wall Street greedà ¢Ã¢â€š ¬? has led to the financial mess we are in. On the very face of it, this does not seem likely. Even if greed leads to problems, is it possible that greed has suddenly become much greater than before? To raise an interest rate at some a time is a mistake and is likely to make a bad situation even worse. In many respects, central banks, including the Federal Reserve, have drawn heavily on important threads of monetary policy research in responding to the financial crisis. Lang Wang (2005) had explained with a binding capital requirement, the effects on bank lending supply depend on the size, the capital level, the balance sheet liquidity of banks and the capital distribution and market structure in t he banking sector. In a similar context, Thorbecke (1997) finds that expansive monetary policy tends to increase ex-post stock returns. He reported that small firms tend to be affected more severely by the change in monetary policy stance. In addition, Paul Krugman (1999) indicated But when a financial disaster struck Asia, the policies those countries followed in response were almost exactly the reverse of what the United States does in the fact of a slump. Currently the traditional monetary policy of the Federal Reserve is to focus on targeting the federal funds rate, now that this rate has approached the zero-bound; it has shifted to focus on other ways to lower the cost of credit in the marketplace. Federal Reserve programs have intended to offset disruptions to interbank lending short-term credit financing. Since the credit crunch is caused by conservative lending policies during periods of financial duress and reduced profitability, one may finds that monetary policy is somehow ineffective in alleviating the credit crunch. Instead loan regulation can erase it. George Macesich (1992) argued that the poor performance of monetary policy can be attributed historically to the ease with which money has so often been made a political issue. He stated that For Monetary Policy to be credible, and thus successful, the hands of the Monetary Policy- makers are better tied than left free. Sun Ruijun and Bao Erwen (2008) have reported The in-depth development of economic globalization has made economic ties and interdependence between countries even closer, boosting the sustained growth of world economy, and benefiting many countries. The global financial crisis is more than just an economic event: It puts pressure on the geopolitical system and is driving states to change their behavior. Taking a snap shot on the GCC states, one can clearly define how largely it has been insulated from the global credit crunch because they are the proud owners of some of the worlds largest oil deposits. Much of this has been caused by massive infrastructure and development projects such as Qatars liquefied natural gas facilities, Dubais fanciful real estate explosion and Bahrains attempts to convert itself into a financial Mecca. The economic system has an effect on the political outcomes. Well-functioning financial institutions, in turn, can increase the political support for anti-corruption measures. Kira Boerner Christa Hainz (2006) argued When banks possess a perfect screening technology that allows them to deny credit to those debtors who use the money for financing an entry fee, the corrupt officials will still borrow from their relatives. However, compared to the case without financial institutions, the interest of corrupt officials and relatives in corruption decreases: Both parties have the opportunity to save at a bank. In similar terms, Torsten Persson (2000) had explained Economic policy is the equilibrium outcome of a well defined no cooperative game under preemptive assumptions about economic political behavior. At all levels, the present financial crisis requires a co-ordinate response on a global scale. The real risk to the world economy is the temptation to revert to protectionism by each individual country in order to solve their own domestic problems. 3. Research Methodology In choosing the correct research method to be used in this research paper, the survey research method by Questionnaires will be the basic research design. Each respondent will be supplied with a questionnaire titled How banks can overcome the Global Financial Crisis? The questionnaire is estimated to take no longer than 6 minutes for each reached individual regardless of the age. A survey of 68 individuals located in many counties throughout the country will provide the database for this study. The sample was selected on a probability basis from as much decision maker playing role individuals as possible in Bahrain. The questionnaire took place in Bahrain the response from the respondents took almost one week. Questionnaires were distributed randomly depending on many aspects such as: age, gender, employment condition most important of all, the level of knowledge regarding the topic under study. This research paper sampling volume totaled 68, out of which, males represen ted 38 and the rest 30 were for females. The original sample was 70, in which the researchers found that 2 individuals were students below the age of 18 and were unemployed. That made a quiet confusing decision to remove the two from the total sample, since at that age and being unemployed is not a truly decision maker respondent. 4. Challenges As the world look beyond the economic crisis, what are the most urgent challenges that are needed to be addressed? Gaining a proper perspective on the crisis itself is a first challenge. In recent decades, it has been demonstrated that a market which operates responsibly offers a more secure life and a best hope to people who seek a better standards of living wherever in the world they may live. This is absolutely fundamental. While it is true that the direct causes of the crisis the combustible mixture of excess leverage in both consumer and financial markets, the bank failures, the credit collapse have led to some painful consequences, it would be folly to conclude that the foundations of market economics have been irreparably damaged. A second challenge facing the Global is how to deal intelligently with the huge fiscal challenges ahead. The response of central banks and governments to the economic crisis may very well have averted a global catastrophe. However, massive fiscal obligations have been assumed by governments and this might take many years to unwind. What is needed is for countries to create and develop smart à ¢Ã¢â€š ¬Ã…“exità ¢Ã¢â€š ¬? strategies. Furthermore, as the private sector returns to some growth, this requires a determined pullback in government expenditure. Not an easy task: as we all know, the politics of unwinding government programs can be daunting. Here political courage and good public policy go hand in hand. The third challenge needs an urgent attention. It is acknowledged that the global economy is out of balance and that this is one of the reasons for the financial crisis. Massive reliance on external demand carries with it real consequences as does the excessive reliance on foreign investors to finance consumption and deficits for long periods of time. As one could realize, such imbalances can cause serious and long-lasting economic damage. There is also the challenge, or opportunity, of what to do with a countrys immense foreign exchange reserves. A Chinese think tank has come up with an exciting idea: that the reserves could be put to good use through the development of a à ¢Ã¢â€š ¬Ã‹Å"Marshall Planà ¢Ã¢â€š ¬Ã¢â€ž ¢ for Africa, Asia and Latin America. Such a development fund, or loan facility, would increase living standards in the targeted countries. The fifth challenge is enormously complex challenge that deserves attention. Sometimes we feel that we have loaded so many expectations onto the climate change agenda that it cannot help but fail. You would think that tackling this issue will give us infinite new sources of cleaner energy, and allow for the transfer of substantial amounts of financial and technological support to emerging economies. On the global side, No existing architecture is found to be proficient in preventing global crises from erupting. Since financial crises occur even in relatively tightly regulated economies, the likelihood that a supranational infl uence could prevent an international crisis from occurring is questionable. The financial crisis has been characterized as a à ¢Ã¢â€š ¬Ã…“wake-up callà ¢Ã¢â€š ¬? for investors who had put their faith confidence in. For example, credit ratings placed on securities by credit rating agencies operating under what some have referred to as à ¢Ã¢â€š ¬Ã…“wicked incentives and conflicts of interest.à ¢Ã¢â€š ¬? Moving forward to a sixth challenge, the Council on Foreign Relations explained the problem in a report on systemic regulation, as follows: One regulatory organization in each country should be responsible for overseeing the health and stability of the overall financial system. The role of the systemic regulator should include gathering, analyzing, and reporting information about significant interactions between and risks among financial institutions; designing and implementing systemically sensitive regulations, including capital requirements; and coordinating with the fiscal authorities and other government agencies in managing systemic crises. We argue that the central bank should be charged with this important new responsibility. Centers of financial activity such as New York, London, and Tokyo, race with each other and multinational firms can determine where to carry out particular financial transactions. This is to be addresses as one of the considerations in policy making. A seventh challenge is that a large financial institution that may be defined as large to fail represents the heavy arm that the world economy depends greatly on. If an institution is considered to be à ¢Ã¢â€š ¬Ã…“unsuccessful too big to fail,à ¢Ã¢â€š ¬? its bankruptcy would cause a major risk collapse to the system as a whole. Yet, if there is an implicit promise of governmental support in case of failure, the government may create a moral hazard, which is the motivation for an entity to be engaged in somewhat risky behavior, knowing that the government wil l rescue it if it fails. A further challenge is that the nature and size of accumulating financial and systemic risks have not been well identified by the existing micro regulation. It even didnt impose appropriate remedial actions. Even though some analysts and institutions were sounding alarms before the crisis erupted, there were hardly any regulatory tools available to handle with the increase of risk in the system as a whole or the risks being forced by other firms either in the same or different sectors. It seemed to be an insufficient response to some of these risks either by the authorities responsible for the mistake of individual financial institutions or specific market segments. A last fundamental challenge deals with the nature of regulation and supervision. Banking regulation tends to be specific and detailed and places requirements and limits on bank behavior. Federal securities regulation, however, is based primarily on disclosure. Registration with the Securit ies and Exchange Commission is required, but that registration does not imply that an investment is safe or secured, only that the risks have been fully disclosed! 5. Analysis Discussion When the U.S financial System falls down, it may bring major parts of the rest of the world down with it. The global financial crisis has opened the World eye on an important point: that the United States is still a major center of the financial world. Hence, Regional financial crises (such as the Asian financial crisis, Japanà ¢Ã¢â€š ¬Ã¢â€ž ¢s banking crisis or even the current Dubais Credit Crisis) can occur without seriously infecting the rest of the global financial system as does the United States economy. The reason behind, is that the United States is the main guarantor of the international financial system, the provider of dollars widely used as currency reserves and as an international intermediate for exchange, besides being a contributor to much of the financial capital that around the world seeking higher yields. The rest of the world may not appreciate it, but a financial crisis in the United States often takes on a global hue. To analyze the questionnaire, the researchers have used the SPSS program and the regression analysis in order to define some relationships that best help identify the problem under study. The descriptive statistical analyses questionnaire will be used, including calculations of sampling error, and statistical adjustments for unequal selection probabilities. Cross-classification analyses with demo-graphic, ANOVA, linear regression and T-Test is much more applied in order to explain some judgments. Since the researchers think that the gender is one of the independent variables that could test many hypothesis, three hypothesis were applied based on the dependant variable: First Hypothesis: There is no relationship between gender and understanding what is going on in the current financial news. Second Hypothesis: There is no relationship between gender and being informed about the à ¢Ã¢â€š ¬Ã…“Global Financial Crisisà ¢Ã¢â€š ¬?. Third Hypothesis: There is no relationship between gender and the deci sion that thinks of governments around the world should take in the financial sector towards their economies. The table below, represents the Statistical Data Analysis of the designed questionnaire: Table 1: SPSS Statistics for all questionnaire questions One-Sample Test  Question No.  Test Value = 0 Test Value = 0 N t df Sig. (2-tailed) Mean Difference 95% Confidence Interval of the Difference t df Sig. (2-tailed) Mean Difference 95% Confidence Interval of the Difference  Lower Upper Lower Upper Question_1 68 23.758 67 0 1.441 1.32 1.56 23.758 67 0 1.441 1.32 1.56 Question_2 68 17.636 67 0 4.206 3.73 4.68 17.636 67 0 4.206 3.73 4.68 Question_3 68 21.715 67 0 1.706 1.55 1.86 21.715 67 0 1.706 1.55 1.86 Question_4 68 22.401 67 0 3.868 3.52 4.21 22.401 67 0 3.868 3.52 4.21 Question_5 68 13.683 67 0 2.074 1.77 2.38 13.683 67 0 2.074 1.77 2.38 Question_6 68 8.596 67 0 2.029 1.56 2.5 8.596 67 0 2.029 1.56 2.5 Question_7 68 10.618 67 0 3.5 2.84 4.16 10.618 67 0 3.5 2.84 4.16 Question_8 68 17.868 67 0 2.191 1.95 2.44 17.868 67 0 2.191 1.95 2.44 Question_9 68 23.953 67 0 2.676 2.45 2.9 23.953 67 0 2.676 2.45 2.9 Question_10 68 15.557 67 0 5.059 4.41 5.71 15.557 67 0 5.059 4.41 5.71 Question_11_1 68 14.691 67 0 3.529 3.05 4.01 14.691 67 0 3.529 3.05 4.01 Question_11_2 68 18.302 67 0 4.809 4.28 5.33 18.302 67 0 4.809 4.28 5.33 Question_11_3 68 21.056 67 0 5.029 4.55 5.51 21.056 67 0 5.029 4.55 5.51 Question_11_4 68 17.835 67 0 4.426 3.93 4.92 17.835 67 0 4.426 3.93 4.92 Question_11_5 68 20.978 67 0 4.897 4.43 5.36 20.978 67 0 4.897 4.43 5.36 Question_12 68 16.241 67 0 2.735 2.4 3.07 16.241 67 0 2.735 2.4 3.07 Question_13 68 14.707 67 0 2.676 2.31 3.04 14.707 67 0 2.676 2.31 3.04 Question_14 68 26.329 67 0 2.765 2.56 2.97 26.329 67 0 2.765 2.56 2.97 Anova Model Sum of Squares df Mean Square F Sig. 1 Regression 4.074 1 4.074 4.173 .045a Residual 64.440 66 .976   Total 68.515 67    a. Predictors: (Constant), Question_1    b. Dependent Variable: Question_8    Coefficientsa Model Unstandardized Coefficients Standardized Coefficients t Sig. B Std. Error Beta 1 (Constant) 1.481 .368  4.025 .000 Question_1 .493 .241 .244 2.043 .045 a. Dependent Variable: Question_8    Table 2: Anova statistics coefficients relationship Q1 Q8 à ¢Ã¢â€š ¬Ã¢â‚¬Å" Hypothesis. From the Questionnaire, we have selected the relationship among the following questions. However, Gender will always be constant. Question (1): Please indicate your gender: Male Female Question (8): In general, how knowledgeable do you consider yourself to be when it comes to understanding what is going on in the current financial news? I know enough to be able to explain whatà ¢Ã¢â€š ¬Ã¢â€ž ¢s happening in the financial industry to other people. I understand enough to make sense of the detail behind the financial news stories. I just follow the headlines but my understanding of financial news is fairly vague. I donà ¢Ã¢â€š ¬Ã¢â€ž ¢t really understand whatà ¢Ã¢â€š ¬Ã¢â€ž ¢s going on in the financial news. Question_8: On the One-Sample Test it is showed that the Significance is = 0.00 which is less than 0.05, so we reject any initial premise that the average Question_8 is not equal to 0. Since the answer to this question fell where the value of t = 17.868, positive, meaning that people have a significant understanding and knowledge about the current financial news. About 35.3 % of the answers to question 8 went in to that both, males females find themselves having enough understanding to make sense of the detail behind the financial news stories. On lower confidence levels, 29.4% find themselves confident enough to answer bitterly regarding the financial crisis. Question (9): How informed are you about the à ¢Ã¢â€š ¬Ã…“Global Financial Crisisà ¢Ã¢â€š ¬? that is said to be impacting the U.S. economy the rest of the Globe? Very informedà ¢Ã¢â€š ¬Ã¢â‚¬ I have actively sought additional information on this story. Somewhat informedà ¢Ã¢â€š ¬Ã¢â‚¬ I know a bit about it, but wouldnà ¢Ã¢â€š ¬Ã¢â€ž ¢t be able to hold my own in a conversation about it. Informedà ¢Ã¢â€š ¬Ã¢â‚¬ Ià ¢Ã¢â€š ¬Ã¢â€ž ¢ve read/seen stories about it when Ià ¢Ã¢â€š ¬Ã¢â€ž ¢ve come across them in the news. Not informed at allà ¢Ã ¢â€š ¬Ã¢â‚¬ I donà ¢Ã¢â€š ¬Ã¢â€ž ¢t know anything about this story. Question_9: The mean for this particular sample is 2.68, which is statistically significantly different from the test value of Zero.  34 out of 68 sample volume representing almost 50% who have been really informed to have read/seen stories about the global financial crisis when coming across it in the news. The researchers find that the relationship between gender and being informed about the à ¢Ã¢â€š ¬Ã…“Global Financial Crisisà ¢Ã¢â€š ¬? is positive with (.493) and based on the t-value of (2.043) and p-value of (0.045), this relationship is statistically significant.   Hence, there is a statistically significant positive linear relationship between people gender being informed and know ledged enough about the crisis. Question (13): What role, if any, do you think that governments around the world should take in the financial sector towards their economies? Hands onà ¢Ã¢â€š ¬Ã¢â ‚¬ the government should intervene whenever the financial sector is at risk. Intermediaryà ¢Ã¢â€š ¬Ã¢â‚¬ the government should act as an intermediary between concerned parties. Laissez Faireà ¢Ã¢â€š ¬Ã¢â‚¬ the government should not interfere with economic affairs beyond the minimum. Completely hands offà ¢Ã¢â€š ¬Ã¢â‚¬ the government should let Wall Street solve its problems on its own. Case by caseà ¢Ã¢â€š ¬Ã¢â‚¬ the government should take a case-by-case approach. ANOVAb Model Sum of Squares df Mean Square F Sig. 1 Regression 14.714 1 14.714 7.132 .010a Residual 136.168 66 2.063   Total 150.882 67    a. Predictors: (Constant), Question_1    b. Dependent Variable: Question_13    Coefficientsa Model Unstandardized Coefficients Standardized Coefficients t Sig. B Std. Error Beta 1 (Constant) 1.326 .535  2.480 .016 Question_1 .937 .351 .312 2.671 .010 a. Dependent Variable: Question_13    Table 3: Anova statistics coefficients relationship Q1 Q13 à ¢Ã¢â€š ¬Ã¢â‚¬Å" Hypothesis. The relationship between gender and the choice to think of the role that governments around the world should take in the financial sector towards their economies is positive (.937). Based on the t-value (2.671) and p-value (0.010), it is to be clarified that this relationship is statistically significant.   Hence, there is a statistically significant positive linear relationship. Most of the questionnaires answer to question 13 went to choose that the role of government can be best suggested as to: Hands onà ¢Ã¢â€š ¬Ã¢â‚¬ the government should intervene whenever the financial sector is at risk. Question (4) Which of the following best describes the highest level of education you have attained? Some high school High school graduate Some college College graduate Some post graduate studies Post graduate degree Question (13): What role, if any, do you think that governments around the world should take in the financial sector towards their economies? 1 Hands onà ¢Ã¢â€š ¬Ã¢â‚¬ The government should intervene whenever the financial sector is at risk.    3 1 7 1 8 2 Intermediaryà ¢Ã¢â€š ¬Ã¢â‚¬ The government should act as an intermediary between concerned parties.    2 7 3 1 2 3 Laissez Faireà ¢Ã¢â€š ¬Ã¢â‚¬ The government should not interfere with economic affairs beyond the minimum.    3 7 4 - 1 4 Completely hands offà ¢Ã¢â€š ¬Ã¢â‚¬ The government should let Wall Street solve its problems on its own.    1    2    - 5 Case by caseà ¢Ã¢â€š ¬Ã¢â‚¬ The government should take a case-by-case approach. 1 2 3 4    5 Table 4: Cross Checking Analysis between Q4 Q13. To provide a better understanding of a cross classification, the table below indicates that, most of people holding a college degree, agreed with the choice that governments should intervene whenever the financial sector is at risk and in need for its support. Therefore, we see that the Global Financial Crisis can be broken down into major phases. Although each phase has a policy focus, it seemed that until the crisis has passed, no phase is directly having a clear ending point. The following three phases represent the most important phases related to our previous Literature Review: 1. Financial Markets Regulation As a coordination term of reforms in national regulatory systems, meetings have been made by many world leaders, to decide what changes may be needed in the financial system to address some issues by the United States and other nations center on à ¢Ã¢â€š ¬Ã…“fixing the systemà ¢Ã¢â€š ¬? as a way of preventing future crises from occurring. Much of this involves the technicalities of regulation and oversight of financial markets, derivatives, and hedging activity, as well as standards for capital adequacy. 2. Staying with Macroeconomic Effects Since the financial crisis has been spread to real sectors to negatively affect whole economies; many countries, particularly those with emerging and developing markets, have been pulled down by the ever widening flight of capital from their economies and by falling exports and commodity prices. In such cases of recessionary economic conditions, rising unemployment, governments have turned to traditional monetary and fiscal policies. 3. Security, Political Social Effects On February 12, 2009, the U.S. Director of National Intelligence, Dennis Blair, said: instability in countries around the world caused by the global economic crisis and its geopolitical implications, rather than terrorism, is the primary near-term security threat to the United States. These effects can be found in terms of political leadership inside the countries, protectionism, state capitalism effects of poverty flows of aid resources. We have always believed that we should have lofty aspirations and continually challenge ourselves to do better. But in the politically charged and confusing debate around climate change, it is easy to forget fundamental realities. For example, that climate change affects every human on earth and therefore we must find new ways for all nations to contribute, according to their pointed strengths and capabilities. Possible Policy Responses: Much better understanding of appropriate policy responses is required by the current macro economic and social challenges: à ¢Ã¢â€š ¬Ã‚ ¢ There must be a better understanding of what can provide financial stability, how cross-border cooperation can help to provide the public good of international financial rules and systems, and what the most appropriate rules are with respect to development. à ¢Ã¢â€š ¬Ã‚ ¢ Rationalize thinking of whether and how developing countries can minimize financial contagion. à ¢Ã¢â€š ¬Ã‚ ¢ The implications of the current economic slowdown is in need to be managed by developing countries after a period of strong and continued growth. 6. Suggested Solutions to overcome the Credit Crisis So what should we do? By simple means, Americans in particular are going to have to save more of their income and consume less, and Asian economies will have to encourage for a greater domestic demand. In both cases, this is far easier said than done in reality. There is no magic set of policy prescriptions to prompt individuals to change their routine lifestyle so as to considerably enhance savings and consumption. First, for the globe (banking sector) with recovery, there must be a credible exit strategy put in place by the federal government. This is made in order to achieve balanced budgets over an economic cycle. However, this goal will be unattainable unless some of healthcare costs are controlled, consumption taxes are raised to a certain level, public security reforms are implemented, and the role of à ¢Ã¢â€š ¬Ã…“pay as you goà ¢Ã¢â€š ¬? spending is embraced. In the case of the Asian economies, and especially China, the shift towards stretched consumption should spot light on strengthened pension schemes and increased government spending on healthcare, education accommodations. Second, the whole nations generally the banking field specifically will have to come to terms with the issue of exchange rate flexibility. With the global recovery, Chinaà ¢Ã¢â€š ¬Ã¢â€ž ¢s exports for example are growing once again and more capital is flowing back into the country, raising expectations for currency appreciation. The alternative is future price inflation in certain asset classes. Chinese central bank Vice Governor Ma Delun recently highlighted the risk that asset bubbles could begin to build within China as the economy roars back to life. There needs to be an outlet and that outlet should be to allow the currency to appreciate. For the role of business going forward, as a third suggested solution, is that we must encourage our political leaders to work harder to create an international environmental change plan that is fair, effective, reasonable and sustainable. In each of our countries we can do more to advance policy that integrates economic expansion, energy and the environment. We must push our governments to adopt and accept policies that incent new technologies rather than encouraging them to hide behind false hope of weakened intellectual property rights or bubbling protectionism. A forth issue to overcome the crisis is that businesses themselves, throughout the world, have to step up to the plate. Even in challenging times, we need to greatly enhance our investment in research and development and commercialization of lower carbon energy, products and services. Direct business-to-business engagement is needed to be built as well as foreign investment and technology partnerships. For example, whats happening in China currently is that such partnerships create innovative capacity in both the developers and the adopters of new technologies. Though it might seem a little bit strange, a fifth solution is that we are to build a flourishing and peaceful world. Success will require a degree of cooperation among countries and peoples extraordinary in our lifetimes. The global economic crisis has been defined as a powerful mechanism and, in one respect at least, it has been beneficial. In shaking our confidence and our institutions, it has forced us all to think about how we can create a better world. This definitely is a crisis that must not be wasted! In recent public debate, some have argued that the task of building such a harmony should fall primarily on China and the United States the so-called G2. This would be viewed as dealing with a host of political, economic and security issues. In terms of interest, the welfare of China, the United States and the Globe as a whole would be better served in a multi polar world guided by efficient multilateral institutions. To some extent, we may hear the views of diverse business influential from around the world on what it takes to aspire to the f ront ranks of municipal urban accomplishment and superiority. In our view, à ¢Ã¢â€š ¬Ã…“value quality of livingà ¢Ã¢â€š ¬? should be the final determinant of rank. 7. Conclusion In the face of sliding world demand, efforts to raise domestic productivity and Competitiveness become critical factors for protecting export market shares. Not everyone is convinced of the qualities of globalization, especially if it was in difficult economic times. Looking around the world, the benefits of rapid globalization are not equitably shared. In the Worlds largest economies output has stopped shrinking financial markets are beginning to soften and confidence is re-emerging. It is inspiring; however, we cannot ignore that in most parts of the world unemployment is still on the rise, business continues to face hard-hitting conditions, a large amount of global manufacturing capacity remain creep, governments are saddle many financial institutions are still unstable. The scope for increasing the competitiveness of the South Asian economies is large and includes policies to improve the availability of infrastructure, lower the transaction cost of private investment th rough better governance, and reduce restrictions on trade and investment. Finally, in an environment of constrained resources, greater attention to improving Implementation capacity and corruption prevention in public spending becomes even more important.

Classical Chinese Garden Of Suzhou And Japanese Dry...

The Interpretation of Nature in Classical Chinese Garden of Suzhou and Japanese Dry Landscape Garden of Ryoan-ji Luis Barragà ¡n, the influential Mexican minimalist architect and Pritzker Prize winner once said that, â€Å"In the creation of a garden, the architect invites the partnership of the Kingdom of Nature. In a beautiful garden the majesty of nature is ever present, but it is nature reduced to human proportions and thus transformed into the most efficient haven against the aggressiveness of contemporary life.† Such design principle, with a strong emphasis on the unity of man and nature as a way to build freedom and independence in the natural environment of gardens away from the unrest social political atmosphere, has not only been seen in Western minimalist architecture, but also has been extensively utilized in Classical Asian architecture. Classical Chinese Garden of Suzhou and Japanese Dry Landscape Garden are two typical examples that demonstrate such harmonious coexistence between artificiality and nature. Thus, with a focus on a comparison between the selected examples of Humble Administrator’s Garden of Suzhou (see fig. 1) and Ryoan-ji Dry Landscape Garden (see fig. 2), this essay aims to analyze the design techniques of the two gardens and how they respond to their social political and religious environments by conveying different interpretations of nature. Garden of the Humble Administrator, which consists of numerous pavilions and bridges set among a maze of

Lokpal Bill Free Essays

KONERU LAKSHMAIAH UNIVERSITY SEMINAR PRESENTION TOPIC: LOKPAL BILL SUBMITTED TO: SUBMITTED BY: Dr. V. SARADA B. We will write a custom essay sample on Lokpal Bill or any similar topic only for you Order Now SEKHAR BABU M. C. A [2ND YEAR] Lokpal Bill is not a new word for Indian people. It is frequently used against corruption. Anna Hazare creates a new history for the demand of Jan Lokpal Bill in the year of 2011. There is a discussion about a struggling history of Jan Lokpal Bill and important of Lokpal Bill in India in the context of corruption. What is Jan Lokpal Bill? Jan Lokpal Bill is a proposed anti-corruption law drowns up by prominent civil society activists to deter corruption effectively. Word of Jan Lokpal Bill derives from Lokpal which means ombudsman (Legal Representative) in India. Lokpal word has been derived from the Sanskrit words â€Å"loka† (people) and â€Å"pala† (protector/caretaker). So Lokpal is meant as the ‘protector of people’. Jan Lokpal Bill is referred as citizens’ ombudsman bill also in India. Ombudsman would create the law called the Lokpal Bill. It would be an independent body similar to the Election Commission of India. The Lokpal will have a three-member body with a chairperson. The chairperson will be a chief justice or Supreme Court judge. Other two members will be high courts judges or chief justices. Importance of Jan Lokpal Bill: It is being expected that Lokpal bill will reduce corruption in India. The Jan Lokpal bill provides powers to of filing complaints of corruption against the prime minister, other ministers and members of parliament with the ombudsman. The Lokpal Bill gives us a right, except for a public servant, to file a complaint and the Lokpal has to complete the inquiry within six months. History of Lokpal Bill: There is a struggle for Lokpal Bill of last 42 years. First time, the bill was presented during the fourth Lok Sabha in 1968. It was passed there in 1969. Lokpal Bill was revived in 1971, 1977, 1985, 1989, 1996, 1998, 2001, 2005 and 2008. In 2010, Lokpal Bill, awaits an okay from a select committee. According to former chief justice of Delhi high court and rights activist Rajinder Sachar, Lokpal Bill is â€Å"shamefully toothless and meant to give a false reassurance to the people that the government is serious in its fight against corruption†. But former chief justice of India M N Venkatachelliah said that the PM must be out of its purview. Statement of M N Venkatachelliah was supported by Rahul Gandhi also. Role of Anna Hazare in Jan Lokpal Bill: Who is Anna Hazare? Kisan Bapat Baburao Hazare or Anna Hazare, is a social activist and a social worker. He used to work as a driver in the Indian Army and has been greatly influenced by Swami Vivekanada, Ghandiji and Acharya Vinobha Bhave. He is especially recognized for his contribution to the development of Ralegan Siddhi, a village in Ahmednagar district, Maharashtra. After voluntary retirement from the army, Hazare came to Ralegan Siddhi  village in 1975. Initially, he led a movement to eradicate alcoholism from the village. Next, he motivated the residents of the village intoshramdan (voluntary labour) to build canals, small-scale check-dams and percolation tanks in the nearby hills for watershed development; efforts that solved the problem of scarcity of water in the village that also made irrigation possible. He helped farmers of more than 70 villages in drought-prone region in the state of Maharashtra since 1975. He also motivated the residents of the village to build a secondary school in the village through voluntary labour. Lokpal Bill movement In 2011, Anna Hazare led a movement for passing a stronger anti-corruption Lokpal (ombudsman) bill in the Indian Parliament. As a part of this movement, N. Santosh Hegde, a former justice of the Supreme Court of India and Lokayukta of Karnataka, Prashant Bhushan, a senior lawyer in the Supreme Court along with the members of the India Against Corruption movement drafted an alternate bill, named as the Jan Lokpal Bill (People’s Ombudsman Bill) with more stringent provisions and wider power to the  Lokpal  (Ombudsman). Hazare has started a fast up to death from 5 April 2011 at Jantar Mantar in Delhi, to press for the demand to form a joint committee of the representatives of the Government and the civil society to draft a new bill with more stronger penal actions and more independenceto the  Lokpal  and  Lokayuktas (Ombudsmen in the states), after his demand was rejected by the Prime Minister of India Manmohan Singh. The movement attracted attention very quickly through various media. It has been reported that thousands of people joined to support Hazare’s effort. Almost 150 people are reported to join Hazare in his fast. He said that he   Ã‚  would not allow any politician to sit with him in this movement. Many social activists including Medha Patkar,Arvind Kejriwal and former IPS officer Kiran Bedi have lent their support to Hazare’s hunger strike and anti-corruption campaign. This movement has also been joined by many people providing their support in Internet social media such as twitter and facebook. In addition to spiritual leaders Swami Ramdev,Swami Agnivesh and former Indian cricketer Kapil Dev,   many bollywood celebrities like Shekhar Kapur, Siddharth Narayan, Anupam Kher, Madhur Bhandarkar, Pritish Nandy, Priyanka Chopra, Prakash Raj,Aamir Khan, Chetan Bhagat showed their public support through twitter. As an outcome of this movement, on 6 April, 2011 Sharad Pawar resigned from the  group of ministers  formed for reviewing the draft Lokpal bill 2010. Anna Hazare started his â€Å"Fast until Death† at Jantar Mantar, New Delhi, stating â€Å"I will fast until Jan Lokpal Bill is passed† The movement gathered quite a significant amount of support from India’s youth visible through the local support and on social networking sites like Facebook and Twitter. Differences between Government’s Lokpal and Jan Lokpal Bill: Lokpal Bill: -Government will not have any power: -To initiate action suo motu in any case -To receive complaints of corruption from public -To register an FIR -Police powers To investigate any case against PM in foreign affairs, security and defence -To jurisdiction over bureaucrats and government officers Jan Lokpal Bill 2011: -The Jan Lokpal Bill will have power: -To initiate investigations suo motu in any case -To complaints from the public -To initiate prosecution after completion of investigations -Police powers -To register FIR, proceed with criminal investigations and launch prosecution -To jurisdiction over politicians, officials and even judges -To merge the entire vigilance machinery into Lokpal Recent Updates about Jan Lokpal Bill: Once again, Anna Hazare has announced to fast unto death at Jantar Mantar from August 16 if the government doesn’t pass the Jan Lokpal Bill. It will be the second battle of independence for him. He suggests his followers to opt the path of non-violence. About Jan Lokpal Bill: The Jan Lokpal Bill 2011 is a draft anti-corruption bill. The bill is drafted by Justice Santosh Hegde (former Supreme Court Judge and present Lokayukta of Karnataka), Prashant Bhushan (Supreme Court Lawyer) and Arvind Kejriwal (RTI activist). The draft Bill predicts a system where a corrupt person would go to jail within two years if he found guilty. It seeks power to prosecute politicians and bureaucrats without government permission. Features of Jan Lokpal Bill: 1. An institution called LOKPAL at the centre and LOKAYUKTA in each state will be set up 2. Like Supreme Court and Election Commission, they will be completely independent of the governments. No minister or bureaucrat will be able to influence their investigations. 3. Cases against corrupt people will not linger on for years anymore: Investigations in any case will have to be completed in one year. Trial should be completed in next one year so that the corrupt politician, officer or judge is sent to jail within two years. 4. The loss that a corrupt person caused to the government will be recovered at the time of conviction. 5. How will it help a common citizen: If any work of any citizen is not done in prescribed time in any government office, Lokpal will impose financial penalty on guilty officers, which will be given as compensation to the complainant. . So, you could approach Lokpal if your ration card or passport or voter card is not being made or if police is not registering your case or any other work is not being done in prescribed time. Lokpal will have to get it done in a month’s time. You could also report any case of corruption to Lokpal like ration being siphoned off, poor quality roads been constructed or panchayat funds being siphoned off. Lokpal will have to complete its investigations in a year, trial will be over in next one year and the guilty will go to jail within two years. 7. But won’t the government appoint corrupt and weak people as Lokpal members? That won’t be possible because its members will be selected by judges, citizens and constitutional authorities and not by politicians, through a completely transparent and participatory process. 8. What if some officer in Lokpal becomes corrupt? The entire functioning of Lokpal/ Lokayukta will be completely transparent. Any complaint against any officer of Lokpal shall be investigated and the officer dismissed within two months. 9. What will happen to existing anti-corruption agencies? CVC, departmental vigilance and anti-corruption branch of CBI will be merged into Lokpal. Lokpal will have complete powers and machinery to independently investigate and prosecute any officer, judge or politician. 10. It will be the duty of the Lokpal to provide protection to those who are being victimized for raising their voice against corruption. To summarise, we can say, it will give more power to RTI act, corruption will be tackled and dealt with quickly, whistle blowers will (most likely) also get some protection for raising their voice against corruption. What is the need of Lokpal Bill in our society? Do you think Lokpal Bill is really needed in our society to make an ideal state? Government has already CVC, departmental vigilance and anti-corruption branch of CBI to stop corruption. What would be moral line of Lokpal Bill? Why a person will not be corrupt where money is everything? How an anti-corrupt society or state will fulfill the basic needs of people? Can a capitalist state be anti-corrupt which motive is nothing but profit? How a profit oriented society can serve basic need of people? How the difference between rich and poor will be filled? Government has already exposed the power of ‘STATE’ demolishing strike of Ram Dev Baba at Ramlila Maidan, New Delhi. We have seen the monopoly of Indian government in union budget 2011 also. In this context, people should think about the future of Lokpal Bill. Jan Lokpal Bill will improve existing anti-corruption systems. Existing System| System Proposed by civil society| No politician or senior officer ever goes to jail despite huge evidence  because Anti Corruption Branch (ACB) and CBI directly come under the government. Before starting investigation or initiating prosecution in any case, they have to take permission from the same bosses, against whom the case has to be investigated. | Lokpal at centre and Lokayukta at state level will be independent bodies. ACB and CBI will be merged into these bodies. They will have power to initiate investigations and prosecution against any officer or politician without needing anyone’s permission. Investigation should be completed within 1 year and trial to get over in next 1 year. Within two years, the corrupt should go to jail. No corrupt officer is dismissed from the jobbecause Central Vigilance Commission, which is supposed to dismiss corrupt officers, is only an advisory body. Whenever it advises government to dismiss any senior corrupt officer, its advice is never implemented. | Lokpal and Lokayukta will have  complete powers to order dismissal of a corrupt officer. CVC and all departmental vigilance will be merged into Lokpal and state vigilance will be merged into Lokayukta. | No action is taken against corrupt judgesbecause permission is required from the Chief Justice of India to even register an FIR against corrupt judges. Lokpal Lokayukta shall have  powers to investigate and prosecute any judge  without needing anyone’s permission. | Nowhere to go  Ã¢â‚¬â€œ People expose corruption but no action is taken on their complaints. | Lokpal Lokayukta will have to  enquire into and hear every complaint. | There is so much corruption within CBI and vigilance departments. Their functioning is so secret that it encourages corruption within these agencies. | All investigations in Lokpal Lokayukta shall be transparent. After completion of investigation, all case records shall be open to public. Complaint against any staff of Lokpal Lokayukta shall be enquired and punishment announced within two months. | Weak and corrupt people are appointed as heads  of anti-corruption agencies. | Politicians will have absolutely no say in selections  of Chairperson and members of Lokpal Lokayukta. Selections will take place through a transparent and public participatory process. | Citizens face harassment  in government offices. Sometimes they are forced to pay bribes. One can only complaint to senior officers. No action is taken on complaints because senior officers also get their cut. Lokpal Lokayukta will get  public grievances resolved in time bound manner, impose a penalty of Rs 250 per day of delay to be deducted from the salary of guilty officer and award that amount as compensation to the aggrieved citizen. | Nothing in law to recover ill gotten wealth. A corrupt person can come out of jail and enjoy that money. | Loss  caused to the government due to corruptionwill b e recovered  from all accused. | Small punishment for corruption-  Punishment for corruption is minimum 6 months and maximum 7 years. | Enhanced punishment –  The punishment would be minimum 5 years and maximum of life imprisonment. | How to cite Lokpal Bill, Papers

Analysis of Mcdonalds Performance free essay sample

McDonald’s restaurants and franchises have achieved great fame and fortunes since their inception in 1954 by Ray Kroc. Kroc had no idea of how far and wide the business would reach, but he had the strong idea of opening multi location restaurant serving each and every person. Since then the business flourishes and in 1965 went to public by its initial public offering and by 1985 it had a place in Dow Jones Exchange. The menu of McDonald’s is not limited to hamburgers and drinks but also include coffee, salads, chicken wings and goes greater with the regional tastes. Today McDonald’s is serving more than 68 million people in 119 countries through 33,500 restaurants about 20,000 of which are operated by the local franchisees1. McDonald’s competitors in the field of fast food chain are Pizza Hut (Yum Brands Incorporation), KFC, Taco Bell, and Long John Silver Chains. McDonald’s continued to remain at the top through its quality preference as the Annual report of the company emphasizes much focus on winning competitors through better quality. We will write a custom essay sample on Analysis of Mcdonalds Performance or any similar topic specifically for you Do Not WasteYour Time HIRE WRITER Only 13.90 / page Recent times study revealed that McDonald’s and its competitors are now focusing to reach each and every customer through reliability and affordability. Its 1 dollar menu can cherish you with adequate food at breakfast or any time you want. This paper discusses briefly about the past performance of McDonald’s Corporation. The main sources from the data collected are Annual Reports of the entity published annually at the year ended December 31. Through annual reports major financial ratios are calculated and financial performance of the entity has been analyzed. Discussion on stock performance is mainly dependent on performance of company’s stocks in New York Stock Exchange. It has been revealed by analyzing the financial performance of the company that it has made a remarkable progress during the past years and maintained adequate financial progress. Financial Statements for the year ended December 2011 revealed that company has adequate working capital requirements. It has maintained a good sufficient amount of cash flows during the year; $ 2,387 million (during 2010) which constitutes around 55% of its total current assets, similarly in 2011 it stood at $ 2,336 million and constitutes around 53% of its total current assets. Maintaining high liquid is always better for an organization, which indicates the ability to pay its debt more quickly. Financial Stability of McDonald’s is evident from the favorable financial ratios, these ratios advocates the success of this corporation. It has high current ratio around 1. 25 better than the industry average which stands at 1. 19. It means McDonald’s has more current asset than current liability and eventually 125% more current asset to pay its current debt/liability. Inventory turnover of McDonald’s is 20 times more than the industry average, i. . 231. 22 while industry average is 10. 52; this indicates that the management is handling sales efficiently, and inventory is sold 231 times during a financial year. It also has sustainable operating profit margin which stands at 31. 58% percent better than its competitors and industry average. It also shows a continued increasing graph operating profit margin from 17. 02% in the year 2007. It has al so witnessed a 5% increase in Return on equity from 33. 80% (2010) to 38. 24% (2011), thus supporting a sustainable growth for the owners. Analyzing stock performance of McDonald’s Corporation (MCD) also gives a better picture and increasing share value of the corporation since 2007. Stock prices of the corporation have shown a rapid increase and almost tripled since 2007. During the year 2011 the graph only witnessed a sharp increase i. e. 70. 46 in January 2011 and 98. 86 in December 2011 around $28 increase in a year advocates the stability of its performance in the stock market. By looking at the historical performance of McDonald’s one can easily go for investing in it because it has proved itself recession proof during the last 4 years. McDonald’s above average performance summed up in the beta’s of corporation stock, 0. 44. This number indicates the stock is less dynamic and more sustainable to the market as a whole. It has fallen from 0. 77 in the year 2008 when it was declared to be more volatile. However McDonalds today also is the better option for safe investors. The company is operating in 119 countries with strong brands association and demands in general public that is why stock fluctuation is rare. Morning Star international investment research suggest investors and prospective investors that despite having much challenging environment worldwide, more competitive prices and rapid increase in inflation, McDonald’s continues to strive and thrive for its sustainability and proved its success all the time. Morning Star is optimistic about the McDonald’s future performance and expects superior return on invested capital. They are confident because of its incredibly strong brand and generous growth opportunities internationally for McDonald’s4. McDonald’s unique ability to adapting the culture and traditions of its operating regions make it number one choice for its customers. It celebrates Christmas in America as well as Diwali in India. In today’s corporate world like all enormous organizations, McDonald’s too will have to be aware of its customers’ demands and markets in which it operates in order to remain ahead of the current economical crisis the world faces. Though the corporation’s current economic and financial statistics suggest that it has the capability of meeting all the challenges ahead and in future it will remain the same number 1 choice for its customers.