...Professor and Class, Banks create money by accepting deposits and making loans, this make the money supply larger than just the value of currency in circulation. (Krugman & Wells Pg. 392) For example if I had $800 cash at home and decided to put it in the bank (I now have a checkable deposit), the bank turns around and loan someone $500 out of the money I deposited and a percentage is put in reserves. That person now has $500 cash in which they spend $400 at a Kay’s Jeweler. Kay’s Jeweler deposits the $400 to the bank and the bank lends $350 to another borrower and put a percentage in reserves. The impact creating money has on the economy during an inflationary gap can cause locally produced items to be less expensive, which can have a positive impact on a country’s trade deficit. But in the long run the economy will increase consumption causing prices to increase too. Creating too much money can also cause the devaluation of our currency which in turns causes imported items to be more expensive. The impact creating money has on the economy during a recessionary gap can prove to be beneficial in stabilization of the economy. Creating money will lower interest rates which will encourage people to spend again. More money being spent will boost business which in turns stimulates the economy. Demands will be higher than supply which is great for the unemployment rate because it will decrease due to people working. During a recessionary gap banks can contribute to the recovery...
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...Professor and Class, Banks create money by accepting deposits and making loans, this make the money supply larger than just the value of currency in circulation. (Krugman & Wells Pg. 392) For example if I had $800 cash at home and decided to put it in the bank (I now have a checkable deposit), the bank turns around and loan someone $500 out of the money I deposited and a percentage is put in reserves. That person now has $500 cash in which they spend $400 at a Kay’s Jeweler. Kay’s Jeweler deposits the $400 to the bank and the bank lends $350 to another borrower and put a percentage in reserves. The impact creating money has on the economy during an inflationary gap can cause locally produced items to be less expensive, which can have a positive impact on a country’s trade deficit. But in the long run the economy will increase consumption causing prices to increase too. Creating too much money can also cause the devaluation of our currency which in turns causes imported items to be more expensive. The impact creating money has on the economy during a recessionary gap can prove to be beneficial in stabilization of the economy. Creating money will lower interest rates which will encourage people to spend again. More money being spent will boost business which in turns stimulates the economy. Demands will be higher than supply which is great for the unemployment rate because it will decrease due to people working. During a recessionary gap banks can contribute to the recovery...
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...Co-Creating Our Future on Planet Earth Creating Unity from our human diversity. Skip to content * Home * About * Last 2000 Posts in Order ← Civil war up, humanism down: Pepe Escobar, by Pepe Escobar The Oracle Report, Monday, April 13, 2015 → :) :) :) Iceland Stuns Banks: Plans To Take Back The Power To Create Money Posted on April 13, 2015 by Jean By Raúl Ilargi Meijer Zero Hedge April 1, 2015 Submitted by Raul Ilargi Meijer via The Automatic Earth blog, Who knew that the revolution would start with those radical Icelanders? It does, though. One Frosti Sigurjonsson, a lawmaker from the ruling Progress Party, issued a report today that suggests taking the power to create money away from commercial banks, and hand it to the central bank and, ultimately, Parliament. Can’t see commercial banks in the western world be too happy with this. They must be contemplating wiping the island nation off the map. If accepted in the Iceland parliament , the plan would change the game in a very radical way. It would be successful too, because there is no bigger scourge on our economies than commercial banks creating money and then securitizing and selling off the loans they just created the money (credit) with. Everyone, with the possible exception of Paul Krugman, understands why this is a very sound idea. Agence France Presse reports: Iceland Looks At Ending Boom And Bust With Radical Money Plan Iceland’s government is considering a revolutionary monetary proposal...
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...Co-Creating Our Future on Planet Earth Creating Unity from our human diversity. Skip to content * Home * About * Last 2000 Posts in Order ← Civil war up, humanism down: Pepe Escobar, by Pepe Escobar The Oracle Report, Monday, April 13, 2015 → :) :) :) Iceland Stuns Banks: Plans To Take Back The Power To Create Money Posted on April 13, 2015 by Jean By Raúl Ilargi Meijer Zero Hedge April 1, 2015 Submitted by Raul Ilargi Meijer via The Automatic Earth blog, Who knew that the revolution would start with those radical Icelanders? It does, though. One Frosti Sigurjonsson, a lawmaker from the ruling Progress Party, issued a report today that suggests taking the power to create money away from commercial banks, and hand it to the central bank and, ultimately, Parliament. Can’t see commercial banks in the western world be too happy with this. They must be contemplating wiping the island nation off the map. If accepted in the Iceland parliament , the plan would change the game in a very radical way. It would be successful too, because there is no bigger scourge on our economies than commercial banks creating money and then securitizing and selling off the loans they just created the money (credit) with. Everyone, with the possible exception of Paul Krugman, understands why this is a very sound idea. Agence France Presse reports: Iceland Looks At Ending Boom And Bust With Radical Money Plan Iceland’s government is considering a revolutionary monetary proposal...
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...MONEY & BANKS …. THE HIDDEN TRUTH BEHIND GLOBAL DEBT . 1) What is money... how is it created and who creates it? 2) Why is almost everyone up to their eyeballs in debt... individuals, businesses and whole nations? 3) Why can’t we provide for our daily needs - homes, furnishings cars etc. without borrowing? 4) How much could prices fall and wages increase if businesses did not have to pay huge sums in interest payments which have to be added to the cost of goods and services they supply...? 5) How much could taxes be reduced and spending on public services such as health and education be increased if governments created money themselves instead of borrowing it at interest from private banks…? "If you want to be the slaves of banks and pay the cost of your own slavery, then let the banks create money…" Josiah Stamp, Governor of the Bank of England 1920. WHAT IS MONEY....? It is simply the medium we use to exchange goods and services. * Without it, buying and selling would be impossible except by direct exchange. * Notes and coins are virtually worthless in their own right. They take on value as money because we all accept them when we buy and sell. * To keep trade and economic activity going, there has to be enough of this medium of exchange called money in existence to allow it all to take place. * When there is plenty, the economy booms. When there is a shortage, there is a slump. * In the Great Depression, people wanted to work, they wanted...
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...below: Conditions required creating loan deposit 1. There should be more than one commercial bank and numerous branches. That is banking facilities should be at the door of the people. 2. There should be sufficient supply of money in the market. 3. The citizens must be familiar with banking transaction. 4. Central bank should have effective and dynamic credit system policy. Techniques of creating loan deposit A commercial bank generally creates loan deposit in two ways – 1. Deposited created from loans 2. Loans created form deposits These are described below: 1. Deposits created from loan When banks provide loans to a person or business entity, it doesn’t provide it in cash. Bank asked the loan taker to open an account with the bank and credit the sanctioned amount to that account. Afterward the borrower draws the amount through cheque. Thus in this way commercial Bank creates deposit through loan. Its techniques are a) Granting call money or short term loan b) Sanctioning advances, cash credit and bank overdraft 2. Loan created from deposit When people keeps deposit in a bank that is treated as primary deposit .Bank creates loan from these money. Without preserving total deposit money in cash from, banks keep a certain portion of that amount in liquid form and the rest supply as loan to others. 3. Other ways to create loan deposit a) Purchase of assets When banks purchase assets, it doesn’t pay the price in cash. The bank pays through crossed cheque...
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...amount of money in the supply. By controlling the amount of money, the Fed can affect the macro-economic indicators and steer the economy away from runaway inflation or a recession. The Federal Reserve The Federal Reserve uses three main tools in order to control the money supply. The first tool is open-market operations. These operations consist of the buying and selling of government bonds to commercial banks and the public. Open-market operations are the most important tool that the Fed can use to influence the money supply (Brue, 2004, p. 252). By buying bonds from the open market, the Federal Reserve increases the reserves of commercial banks that in turn will increase the overall money supply in the country. The opposite is true if the Fed sells bonds on the open market. By doing so, the Fed reduces the reserves of banks and, in turn, takes money out of the system. By being able to control how much money the commercial banks can lend, the Fed has a very powerful tool to adjust the economy. The second tool in the Federal Reserve’s arsenal is the adjustments of reserves ratio. The reserves ratio is the required amount in which a bank must have at all times. By raising or lowering the reserve ratio, the Federal reserves can expand or limit how much a bank will loan out money. If the fed decides to lower the ratio than banks will have more money to give out in loans. The same goes the other way, if the fed raises the required reserve than banks will have less money to loan...
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...ECN 220 In the 1800’s, monetary policy was nothing like it is today. Banks and local governments printed their own forms of money giving rise to over 30,000 different varieties of currencies. Often, banks had insufficient funds and couldn’t handle the withdrawals of their customers which would force them to close resulting in the loss of peoples’ entire life savings bringing economic devastation to their families and to the region. In order to put an end to this monetary madness, President Woodrow Wilson signed the Federal Reserve Act in 1913 creating a central bank for the United States known as the Federal Reserve. The Federal Reserve was put in place in order to establish and maintain the publics’ confidence in our nation’s monetary and banking system as well as maintaining a stable, healthy, growing economy. The Federal Reserve consists of two parts, the Board of governors, which guides most of our monetary policies and twelve regional Federal Reserve Banks and their branches. The primary role of these twelve regional banks is to act as a sort of “operating arm” for the banks in their regions. They work together with the board of governors to create and implement monetary policies, supervise the actions of banks and bank holding companies, as well as providing financial services like clearing checks between private banks, providing currency and loans, and holding bank reserves to provide greater security and so the Fed can monitor the actual level of each bank’s reserve...
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...Bailout Money Awarded to Major Bank Executives Their Impacts on Utilitarianism and Deontology Price TUI University Abstract This paper explores two published articles that report on banks receiving billions of taxpayers’ dollars awarded from the government known as the Trouble Asset Relief Program (TARP), who in turn paid their top executives billions of dollars for bonuses. TARP is a program to assist in the stability and strengthen its financial sector by paying for bad mortgages and other trouble assets. In order to prevent economic collapse, the Bush administration changed the programs goals. (Gold, 2008) Using the TARP funds to support and pay off executive’s bonuses poses a moral dilemma within society, which I will later discuss in the paper. The purpose of this paper is to answer the question, Should top executives of the major banks that received bail-out money be allowed to receive large bonuses? I will present my personal view on the matter using the bases of my values, beliefs and research that I have done on the topic. In addition, I will explain how bailout money awarded to major bank use for executives bonuses impacts on utilitarianism and deontology. Bailout Money Awarded to Major Bank Executives and their Impacts on Utilitarianism and Deontology The United States began experiencing the recession during the early years of 2000. On September, 11, 2001 a tragedy in New York City occurred when the World Trade Center Towers were struck with...
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...it. After the Great Depression, Banks were regulated by local business owners and small partnership, but by 1980 Investment banks went public and in that way getting a lot of investors money. That was the beginning of 30 years of Deregulation allowing banks to make risky investments during the Ronald Reagan, Bush and Clinton’s administration. By the 1990 the largest financial company in the world was created ad this was dominated by 5 investments banks such as Goldman, Morgan and Stanley and Lehman and Brothers, 3 insurance companies (AIG,MBIA, AMBAC) and 3 grading companies. All three created their own loan chain for investment all over the world. In the old system loan money went to local Lenders, but in the new system lenders sold their loans to investment banks creating Collaterized Debt Obligations (CDO), the investment banks then sold the CDO’s to investors to all over the world. Now went home owners pay their mortgages money goes to investors all over the world. The purpose of the Grading companies was to grade how good these investments were, but at the same time they were pay by the investment banks, creating a ticking time bomb. Lenders did not care whether the loan can be paid or not, so they started to make risky loans, investment banks did not care either because while they more CDO’s were sold, more profit they will make. During 2000 and 2004 mortgages quadruple. This risky loans known as subprime loans were preferred by banks because they carried higher interest...
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...Enabling Mobile Money Policies in Sri Lanka The Rise of eZ Cash Simone di Castri July 2013 4—5 GSMA — Mobile Money for the Unbanked Creating enabling mobile money policies in Sri Lanka: The rise of eZ Cash Introduction For the Central Bank of Sri Lanka (CBSL), 2012 was the culmination of a 5-year effort to establish an enabling regulatory framework for mobile money that opened the market to both bank and non-bank providers and extended services to Sri Lanka’s unbanked population. Marking this shift was the launch of eZ Cash, a new mobile money service that has signed up over 1 million customers in just one year. eZ Cash is operated by Dialog Axiata PLC (Dialog), a mobile network operator (MNO) that was awarded a licence to operate as a payment services provider following revisions to the central bank’s regulations.1 As Ajith Nivard Cabraal, Governor of the Central Bank of Sri Lanka, explains, “Achieving financial inclusion through progressive regulation and innovation has been a principal and consistent ethos of the Central Bank of Sri Lanka.” The Sri Lankan case offers important lessons for both regulators and MNOs working to achieve the dual objectives of financial inclusion and economic growth. Lessons for regulators: ■■ ■■ ■■ ■■ ■■ Enabling regulatory frameworks play a fundamental role in expanding the reach and improving the efficiency of the financial sector. Building an inclusive digital financial system requires a level playing field...
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...the industry and also the current globalization trend in which the world looks more like a global village than a big wide area we have seen banks especially retail banks adapt more and more strategies to either attract customers or retain customers. Banks have reinvented their marketing strategies to not only spur their rapid growth but also to ensure that they remain profitable in a business sector that has the greatest level of competition. This paper, therefore, seeks to evaluate and analyze the current marketing strategies of the 1st century bank as well as try to offer recommendations of other marketing strategies that the bank can either start using or stop using. This is to ensure its future survival and ascertain that it can remain effective, relevant, and trustworthy to not only win more customers but also gain new ones. Introduction The 1st century bank was founded in the year 2004, with the aim of serving communities of the Los Angeles state particularly those living in the western part of the state. The bank founders saw that the current existing banks within the area had lost the personal touch that banks were supposed to have with its clients; hence, they formed a bank that would re-establish the focus on attentive personal service, with local decision-making and the ability to ensure the success of its clients. The bank was established on the principles of personal approachability, flexibility, responsiveness, and distinguished services, with its main target...
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...Most of the money in our economy is created by banks, in the form of bank deposits – the numbers that appear in your account. Banks create new money whenever they make loans. 97% of the money in the economy today is created by banks, whilst just 3% is created by the government. The money that banks create isn’t the paper money that bears the logo of the government-owned Bank of England. It’s the electronic deposit money that flashes up on the screen when you check your balance at an ATM. Right now, this money (bank deposits) makes up over 97% of all the money in the economy. Only 3% of money is still in that old-fashioned form of cash that you can touch. Banks can create money through the accounting they use when they make loans. The numbers that you see when you check your account balance are just accounting entries in the banks’ computers. These numbers are a ‘liability’ or IOU from your bank to you. But by using your debit card or internet banking, you can spend these IOUs as though they were the same as £10 notes. By creating these electronic IOUs, banks can effectively create a substitute for money. Every new loan that a bank makes creates new money. While this is often hard to believe at first, it’s common knowledge to the people that manage the banking system. In March 2014, the Bank of England release a report called “Money Creation in the Modern...
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...of precious metal such as silver and gold, ancient people actually used these precious metal as the de facto ex change value when they traded among themselves. Some of the ancient civilisation include but not limited to the Roman, Greek, Egyptian, Chinese , Indian and Muslim. Usually house of worships or palaces were used as the repository for the ancient people to keep their extra wealth. These repository also provide ‘loan’ such as grain seed for farmers to plant and usually need to repay back with interest after the subsequent harvest season. Mediaeval Europe also saw the proliferation of banking system or banks. Country like Italy, in her rich cities such as Genoa, Venice and Florence, seen wealthy merchants set up ‘banks’ to facilitate its vibrant trading activities. Such bank included Medici Bank, established by Giovani Medici in 1397. The oldest bank in Italy, Monte Dei Paschi de Siena still operating with headquarter in Siena, Italy and it was formed way back in 1472. The emergence of modern banking system can be traced back to the 17th century of England. This is including what we always been told ie ‘fractional banking system’. During the 17th century, wealthy merchants will keep their precious metal such as gold and silver with their locksmith which having vaults for these metal. The locksmiths will issue receipts certifying the quantity and purity of the metals. The receipts cannot be assigned, meaning the actual owner can only redeem the metals...
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...between us which is regularly Although responsible the creating budgeting and controlling of accounting department. 5- There anther department which has a Bank branches which under department of Bank, that located 1. Branch of Hargaysia 2. Branch of Gebiley 3. Branch of Boraoama 4. Branch of Burco 5. Branch of Caynabo 6. Branch of Berbera 7. Branch of Lascanood 8. Branch of Ceerigabo General Secretary Department 1) This department responsible all the information about Bank. The document s which sending local and international, A branch of Bank and things has a near relationship. 2) Department of monitoring and inspector , auditing which responsible research and auditing and responsible for the Bank, the general director of Bank. Write latter which investigate, but they are not independent direct to what they are investigate. 3) Personnel department office Which is responsible the employee s affairs what related employees need , creating their programs and promotion , monitoring when employees makes bad action things which is an ethics ,that means transmitted bad thing to another and they transmitted the director of Bank . 4) General central cash department Department of personnel which responsible manage of money and care of money transmitted of branches, of bank anybody who need. The money which sent or receives and the authority only have general director of Bank, or the chairman he is no independent without command. ...
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