...Analysis III Current economic developments such as unemployment, the raising of the National Debt Ceiling, and seeking immunity from prosecutors in a Mortgage deal are economic trends that Bank of America is facing today. According to Rugaber (2011), the Labor Department reported that unemployment benefits adjusted to 400,000, decreasing 1,000 from the previous four months (para.3-4). While in Washington, D. C., Brown (2011), reported that “after months of partisan gridlock, both houses of the U.S. Congress have approved a bill to raise the federal borrower limit and cut government spending (para.1). On the other hand, Touryalai (2011) confirms that Bank of America is seeking immunity in a Mortgage deal with prosecutors that would make the bank pay a hefty fine which would be used toward writing down certain homeowner’s mortgages (para.2). The trends described above are issues that Bank of America and other financial institutions are currently tackling and adapting to as they develop. The following business analysis will outline on how each development is affecting the organizational and operational philosophy of the bank; possible strategies that the bank can use to adapt will also be described; implementation of tactics to address each trend will be elaborated on; how the human resource management plays in helping the company achieve its business goals, and last the analysis will give a summary on whether Bank of America is a company worth to invest in or not. The unemployment trend...
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...------------------------------------------------- The US Fiscal Outlook & China’s Role in the US Treasury Market ------------------------------------------------- -Fixed income project key words FISCAL, DEBT CEILING, TREASURY, THE FED, CHINA Written by Gong Li 1155019071 Jiang Peng 1155038183 Yang Mengdi 1155020855 Zhang Yiwen 1155010794 Zheng Qianfei 1155038175 Written by Gong Li 1155019071 Jiang Peng 1155038183 Yang Mengdi 1155020855 Zhang Yiwen 1155010794 Zheng Qianfei 1155038175 CONTENT Executive Summary 1 1, The US Fiscal Outlook 3 -Recent and historical fiscal outlook 3 -The US debt ceiling and recent crises 4 -Financial cliff (2013) and its impacts to the US economy 5 -The US fiscal future 6 2, Fiscal Situation and Treasury Market 9 -The role of US department of the treasury 9 -The role of the Federal Reserve 9 -The US treasury market 10 -The Fed, the interest rates, the QE and the taper 12 -The prediction of the future interest rate 13 -Summary 14 3, China’s involvement in the US Treasury market 15 -China’s Ownership of US Treasury Securities 15 -Reasons of China’s preference for the US Treasuries 16 -The Symbiosis between China and the US in Terms of US Public Debt Holdings 18 -Our Suggestion on China’s Future Position in the US Treasury Market 20 References 22 Executive Summary The state and local governments continue to face fiscal challenges in the short- to medium-term term. According to the Government Accountability Office, the fiscal situation in the...
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...The return of financial repression CARMEN M. REINHART* Professor Peterson Institute for International Economics Periods of high indebtedness have historically been associated with a rising incidence of default or restructuring of public and private debts. Sometimes the debt restructuring is more subtle and takes the form of “financial repression”. Consistent negative real interest rates are equivalent to a tax on bond holders and, more generally, savers. In the heavily regulated financial markets of the Bretton Woods system, a variety of financial domestic and international restrictions facilitated a sharp and rapid reduction or “liquidation” of public debt from the late 1940s to the 1970s. The restrictions or regulatory measures of that era had their origins in what would now come under the heading of “macroprudential” concerns in the wake of the severe banking crises that swept many countries in the early 1930s. The surge in public debts that followed during the Great Depression and through World War II only made the case for stable and low interest rates and directed credit more compelling to policymakers. The resurgence of financial repression in the wake of the 2007-2009 financial crises alongside the surge in public debts in advanced economies is documented here. This process of financial “de-globalisation” may have only just begun. * Research associate at the National Bureau of Economic Research, Research Fellow at the Centre for Economic Policy Research. ...
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...be interesting to read. I thought it will be about different times and different countries financial history (about bank crisis, currency crashes and so on) and how these countries survived in different times. Furthermore, before I bought this book, I read the brief of the book it sounded interesting, than I wanted to read and to know more about it. Author’s credentials Carmen M. Reinhart is the Dennis Weatherstone Senior Fellow at the Peterson Institute for International Economics. Previously she was professor of economics at the University of Maryland. She has held a positions in IMF. Kenneth S. Rogoff is the Thomas D. Cabot Professor of Public Policy and professor of economics at Harvard University. He received his PhD in Economics from MIT. He is a commentator for NPR, the Wall Street Journal. And the Financial Times. Carmen M. Reinhart and Kenneth S. Rogoff made a big contribution to financial history, collected data which covered sixty-six countries and different time periods and wrote about financial crisis, inflation,international debt currency crashes and debasements. They are first researches in the history about the financial crisis over many years. The author’s were trying to explain in the book, that ‘This Time is Different’ syndrome is wrong that financial crisis is happening to other countries not to us, because we are doing better as we learn from the past. Summary At the beginning of the book authors is introducing with various crisis and their dates. In...
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...Overview and Summary The International Monetary Fund is an intergovernmental organization that oversees the global financial system by taking part in the macroeconomic policies of its established members, in particular those with an impact on exchange rates and the balance of payments. This organization has just recently downgraded its economic outlook for the United States and Europe through the end of the year. Originally, the International Monetary Fund had expected the United States to grow at around 2.5 percent to 2.7 percent. Instead, its outlook decreased this growth in 2011 to around 1.5 percent and 1.8 percent in 2012. For Europe, the International Monetary Fund lowered its projection of economic growth from 2 percent to 1.6 percent this year and 1.7 percent in 2012 to 1.1 percent. The reason for this decrease in its economic growth projections is due to events on the political plain. Over the summer, the United States congress increased its debt ceiling without effectively implementing strong policies to decrease its deficit. President Obama has proposed $3 trillion in tax increases and spending cuts over the next ten years. This proposal is going to be considered by a congressional panel which has been charged with finding at least $1.5 trillion in deficit reduction. Any proposal that has been presented to raise revenue has also been met with stiff resistance from the Republican Party. This has also impeded progress in finding a way to reduce the United States budget deficit...
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...macroeconomic stability. To focus on these significant benefits, we examine three issues: (1) the importance of capital markets in facilitating superior economic performance, (2) how the capital markets foster job creation, and (3) the necessary preconditions for the development of well-functioning capital markets. Our analysis focuses on two particular sets of comparisons. First, within the United States, how has macroeconomic performance improved over time as the capital markets have become more dominant? Second, across countries, can one explain the superior macroeconomic performance evident in recent years in countries that have well-developed capital markets such as the UK and the US relative to countries such as Germany and Japan, in which the capital markets are much less developed? We highlight the impact of capital market development on the economic performance of the United States because the capital markets are most well-developed in this country. Lessons from the US experience are nonetheless indicative to other economies of the value of well-functioning capital markets. 2 Executive Summary The ascendancy of the US capital markets — including increasing depth of US stock, bond, and derivative markets — has improved the allocation of capital and of risk...
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...two decades, there has been a global sea change in the theory and practice of central banking. The currently dominant ‘best practice’ approach to central banking consists of the following: (1) central bank independence (2) a focus on inflation fighting (including adopting formal ‘inflation targeting’) and (3) the use of indirect methods of monetary policy (that is, short-term interest rates as opposed to direct methods such as credit ceilings). This paper argues that this neo-liberal approach to central banking is highly idiosyncratic in that, as a package, it is dramatically different from the historically dominant theory and practice of central banking, not only in the developing world, but, notably, in the now developed countries themselves. Throughout the early and recent history of central banking in the US, England, Europe, and elsewhere, financing governments, managing exchange rates, and supporting economic sectors by using ‘direct methods’ of intervention have been among the most important tasks of central banking and, indeed, in many cases, were among the reasons for their existence. The neo-liberal central bank policy package, then, is drastically out of step with the history and dominant practice of central banking throughout most of its history. Keywords: financing, institutions, central banks, history, development JEL classification: E5, N2, O2 Copyright © UNU-WIDER 2006 * Professor of Economics and Co-Director, Political Economy Research Institute (PERI), University...
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...Indian Financial Sector Reforms: A Corporate Perspective Jayanth R. Varma Reproduced with the permission of Vikalpa, the journal of the Indian Institute of Management, Ahmedabad, in which the paper was first published (January-March 1998, 23(1), 27-38). Ó Vikalpa (http://www.iimahd.ernet.in/vikalpa). All rights reserved Until the early nineties, corporate financial management in India was a relatively drab and placid activity. There were not many important financial decisions to be made for the simple reason that firms were given very little freedom in the choice of key financial policies. The government regulated the price at which firms could issue equity, the rate of interest which they could offer on their bonds, and the debt equity ratio that was permissible in different industries. Moreover, most of the debt and a significant part of the equity was provided by public sector institutions. Working capital management was even more constrained with detailed regulations on how much inventory the firms could carry or how much credit they could give to their customers. Working capital was financed almost entirely by banks at interest rates laid down by the central bank. The idea that the interest rate should be related to the creditworthiness of the borrower was still heretical. Even the quantum of working capital finance was related more to the credit need of the borrower than to creditworthiness on the principle that bank credit should be used only for productive...
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...announced by the U.S. subprime-based investors Accredited Home Lenders Holding and New Century Financial), key issues remain to be resolved. At the most basic level the questions are two. What caused the crisis? And in light of one’s answer to this first question, what should be done to minimize the risk of repetition if not of identical events then at least of something similar? To say that these questions remain to be satisfactorily answered is not the same as saying that there has been a shortage of attempts. Standard operating procedure starts by rounding up the usual suspects: unethical mortgage brokers, greedy bankers, naïve homeowners, and illinformed investors. Lists focusing less on individuals than mechanisms emphasize agency problems between brokers and banks, the originate-and-distribute model, excessive leverage and short-term funding, the perverse incentives created by executive compensation practices, conflicts of interest within the rating agencies, and permissive monetary policies. These long lists of causes lead to correspondingly long lists of reforms: regulate mortgage brokers, rating agencies, and executive compensation; force banks to keep a participation in any securities they originate; require banks to hold more capital; and revisit whether monetary policy should respond to credit booms and asset bubbles. This of course is only a very incomplete summary of a vast and rapidly-growing literature. The limitations of this standard operating procedure...
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...increase. In 2014, in his opening remarks at the Bundesbank/German Research Foundation/IMF Conference, Mr Min Zhu, Deputy Director of the International Monetary Fund (IMF) stated remarked: “Housing booms have different characteristics across countries and time periods. What is common is that when the bust comes, it very often damages financial stability and the real economy. The tools for containing housing booms are still being developed. The evidence on their effectiveness is only just starting to accumulate. The interactions of various policy tools can be complex. But all this should not be an excuse for inaction. The interlocking use of multiple tools might overcome the shortcomings of any single policy tool.” Indeed, as there are no magic bullets to ensure a stable housing market, it is prudent to therefore to review differing policies that are currently used by other countries to help stabilize their housing markets. In the paragraphs bellows are housing market policy examples or measures drawn from the United States of America, Canada and Brazil. In the United States, … From Canada,…. Lessons learned from Brazil. In summary, a steady increase in Melbourne’s housing market are likely given the population demand on housing. To foster stability in housing market, Melbourne can learn from policies enacted in other countries...
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...SPLITTING THE CHECK: AN IN-DEPTH LOOK AT DARDEN RESTAURANTS, INC. vs. BARINGTON CAPITAL GROUP LP Table of Contents Executive Summary 4 Position 5 Sense 6 Uncover 7 Solve 8 Build 9 Achieve 10 Bibliography 23 Executive Summary This is the first paragraph of your executive summary. It should be indented, it should be double-spaced, and it should be in 12 pt Times New Roman font (as should the rest of the body of your term paper). An executive summary should be no longer than two pages (and preferably shorter), and should be written after your paper has been completed. It is a complete summary of your recommendations, and the reader should get a clear picture from this section alone. Assume that the reader reads nothing else. Darden Restaurants, Inc., a multi-billion dollar full-service restaurant company, is facing – and will be facing many difficult challenges. In addition to billions in lost revenue from the economic downturn and a severe shortage in their most served menu item, they have recently been challenged by a new minority shareholder who is pressuring them to reorganize their corporate structure. This activist investor, Barington Capital Group, LP, is known for being particularly aggressive and frequently getting what they want. Darden’s revenues are down significantly over the last couple of years in their two flagship – and typically most profitable restaurants, Red Lobster...
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...The debt crisis of Nigeria and Greece Introduction National debt is a problem that can inflict any country including the developed countries. Almost all countries go into budget deficit one way or the other and end up borrowing money. The most direct effect of the government debt is to place a burden on future generations of taxpayers. When these debts and accumulated interest come due, future taxpayers will face a difficult choice. Inheriting such a large debt cannot help but lower the living standard of future generations. In the 1960s and 1970 some developing countries were encouraged to borrow money to service old debts and also to finance development projects in their country like infrastructure. This has been necessitated by the availability of huge oil earnings deposited by OPEC member countries and were eager to lend at very low rates. Moreover, it is misleading to view the effects of government debt in isolation. Government debt can be divided into two categories namely domestic debt and international debt. The International debt is facilitated by the formation of such institutions like the International Monetary Funds (IMF) the International Bank for Construction and Development (World Bank). Governments borrow money from the private sector and foreign governments if they can't pay for all their spending with taxes and government revenues. A government will issue bonds at bond auctions every so often and market participants will come in and bid for them. Market participants...
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... | |Managing | |Financial Records | |[pic] |[pic] | | | | |INTERNATIONAL |INTERNATIONAL RECORDS | |COUNCIL ON ARCHIVES |MANAGEMENT TRUST | Managing Public Sector Records: A Study Programme Managing Financial Records MANAGING PUBLIC SECTOR RECORDS A STUDY PROGRAMME GENERAL EDITOR, MICHAEL ROPER; MANAGING EDITOR, LAURA MILLAR Managing Financial Records International Records International Management Trust Council on Archives Managing Public Sector Records: A Study Programme Managing Financial Records © International Records Management...
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...The Journey From Deregulation to Regulation - Are We Walking In Circles? Executive Summary This paper attempts to explore the cycle from deregulation to regulation against the backdrop of events from 2001 to 2008, with some reference to later laws such as Dodd-Frank. The context is against the quote from Aristotle that “law is order, and good law is good order”. A Brief history of Deregulation: Regulations have been considered a blessing and a curse since time immemorial. It could be argued, especially with those of a theological mindset, that religions introduced the first forms of regulations. The penalty for deviations were well laid out, and often times had precedent, but exceptions were always sought and loopholes were often explored. Modern economics, regardless of which school of thought is followed, can be compared to a religion1. There are tenets, or commandments. There are different religions, from Keynes, to Marx to Milton. Without extending this analogy, it is relevant to point out that economic theories either rely on governments to participate wholeheartedly in the state of economic affairs by regulating businesses, corporations and industries, or to let the system weed out the weaker in favor of the stronger. In the United States, bitter past experience shaped the regulations surrounding businesses. The Great Depression was the first indicator that the system needed to be made more robust, which in turn led to regulations that formed the base of what our current...
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...Banking Academy | City University of Seattle | CORPORATE FINANCE THE GLOBAL FINANCIAL CRISIS 2008 Group’s member:Nguyễn Như Nam (C)Phan Thu AnNguyễn Thùy DungHoàng Bá SơnNgô Thị Ánh TuyếtDate: 28/11/2014 | AbstractIn 2008 the world was fell into the worst financial crisis since the Great Depression of 1929-1933. Although this crisis has gone, however, its consequences for the economy of many countries is very serious, even now many nations are still struggling to escape difficulty. Just in a short period, the crisis originating from America has spread to all continents. It led to a series of serious consequences such as the falling in stock markets, increasing in unemployment rates, large financial institutions had been collapsed or bought out, and governments in many strong countries had to come up with rescue packages to bail out their financial systems. So why does it have tremendous destructive power? What are its causes and its development? What are the consequence it bring to the world? And what are the lessons drawn from this terrible event? Derived from these questions above, this paper will generalize about the global financial crisis 2008. | Table of Contents Abstract i 1. Background 1 2. Reasons 2 2.1 The housing bubble 2 2.2 Fed had lower interest rates for a long time. 2 2.3 The subprime boom 3 2.4 Securitization (MBS, CDO) and Credit default swaps (CDSs) 3 2.5 The credit rating companies. 5 2.6 Structured investment vehicle...
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