...CHAPTER I: INTRODUCTION 1. THEME OF THE STUDY Risk management underscores the fact that the survival of an organization depends heavily on its capabilities to anticipate and prepare for the change rather than just waiting for the change and react to it. The objective of risk management is not to prohibit or prevent risk taking activity, but to ensure that the risks are consciously taken with full knowledge, purpose and clear understanding so that it can be measured and mitigated. It also prevents an institution from suffering unacceptable loss causing an institution to suffer or materially damage its competitive position. Functions of risk management should actually be bank specific dictated by the size and quality of balance sheet, complexity of functions, technical/ professional manpower and the status of MIS in place in that bank. 1.2 INTRODUCTION Risk: the meaning of ‘Risk’ as per Webster’s comprehensive dictionary is “a chance of encountering harm or loss, hazard, danger” or “to expose to a chance of injury or loss”. Thus, something that has potential to cause harm or loss to one or more planned objectives is called Risk. The word risk is derived from an Italian word “Risicare” which means “To Dare”. It is an expression of danger of an adverse deviation in the actual result from any expected result. Banks for International Settlement (BIS) has defined it as- “Risk is the threat that an event or action will adversely affect an organization’s ability...
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...How is farcical humour used in Blackadder? (Target from last piece: consider your points and whether they are fully representative of the character) “Blackadder” takes brief snapshots from arguably Britain’s darkest periods in history, in this series the First World War, and uses humour in adversity. Due to the distance from the event, the audience is able to witness the experience of the front line from a different, and arguably more human perspective. Extravagant, melodramatic characters such as Melchett act serve the dual purpose of being both humorous and serve to the greater effect of providing a (belated) scathing social commentary. Likewise, underneath both George’s seemingly indestructible patriotism and Baldrick’s brainlessness, the audience are presented with two soldiers who are heedless to the realities of the war. Moreover, Blackadder’s use of epigrammatic humour further illustrates the incompetence of the commanding class above him. Lord Melchett is unintelligent, pompous and completely ignorant of the fact that the men are terrified of their impending deaths. When visiting the front line, Melchett patronisingly asks, as if addressing an “intelligent foreigner”, “Are-you-looking-forward-to-the-big-push?” He has no concept of soldiers' fear, and cannot understand why Blackadder and Baldrick are reluctant to fight (and presumably die) in a plan that is ridiculous to the point of being hyperbolic. Even asking if Baldrick is “looking forward” to going over the top...
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...The pros and cons of regulating corporate reporting:A critical review of the arguments Robert Bushman, Wayne R. Landsman Accounting and Business ResearchVol. 40, Iss. 3, 2010 Introduction There were a series of scandals in the UK in the 90’s which resulted in the collapse of Barings Bank, due to this the Financial Services Authority changed the structure of financial regulation that consolidated regulation responsibilities. The aftermath of the financial crisis of 2007 to 2009 has drawn the financial accounting standard setting into the orbit of political processes focused on restructuring the regulation of the world’s financial markets. The crisis has ignited worldwide debate on issues of systemic risk and the role played by financial regulation in creating exacerbating the crisis. There have been proposals for how to regulate the financial markets and financial institutions should be changed to ease the potential for large scale financial meltdowns in the future. There are many aspects of the financial system under debate, including the alleged role played by financial accounting standards in deepening the trajectory of the crisis. The crisis has forced politicians, regulators and economists to scrutinise financial accounting standards and create pressure for change, which creates an opportune moment to consider how to organise the analysis of efficient regulatory choice. This paper lays out the basic arguments that have been put forth both for and against...
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...Review Essay In Canada recession was less severe and they face no banking failure due to the size and diversification in their large institution has maintained their stability. New Entrant was limited by Canadian government and I exchange chartered bank with provide them financial stability, in Canada focuses on banking sector that’s why brokers dealers and security market remain much at smaller .The banking system of branch was oliogiopolisty that imply the system which has limited supply of banking services and cost as compared to their competitors . In our previous work (Bordo et al., 1994) we analyzed that the Canadian banking is not categorized in higher cost as compared to US. The banking of Canada same returns on equity and largely used MMMFSs After 1987 they became a vital part of Canada banking, at that time government had given them permission to create MMMFs and half of total MMMFs are kept at bank which means that they are within the banking system. According to (Byung kyong & Niamh Sheridan,2012) Canada’s three large bank weighted average is two an half time smaller than Australia’s four major banks however non performing rate of housing loans in Australia and Canada are almost same in recent years. The mortgages in Canada are provided by Canada mortgage and Housing Corporation own by Government are assigned at weight of zero risk, therefore the lowest risk of residential mortgages of four large Canadian banking is almost 70% in comparison with 40% of major...
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...MICROFINANCE STANDARDS RATIOS A maturing microfinance industry needs standardized methods to measure and analyze financial performance and risk management. The proposed Microfinance Financial Reporting Standards: Measuring Financial Performance of Microfinance Institutions (the Standards) seeks to address this need. These Standards are designed for use by all microfinance institutions (MFIs): non-governmental organizations, non-bank financial institutions or companies, commercial banks, rural banks, credit unions, and cooperatives. Below are the detailed description of each ratio and table. 1. Profitability Ratios All MFIs, from non-profit NGOs, to for-profit banks, must be profitable over the long-term in order to be self-sustaining. Profitability allows an MFI to continue operating and to grow. Profitability ratio is any ratio that measures a company's ability to generate cash flow relative to some metric, often the amount invested in the company. Profitability ratios are useful in fundamental analysis which investigates the financial health of companies. An example of a profitability ratio is the return on investment which is the amount of revenue an investment generates as a percentage of the amount of capital invested over a given period of time. Other examples include return on sales, return on equity, and return on common stock equity. Operational Self-Sufficiency (originally called “Operating Self-Sufficiency” or OSS) and Financial Self-Sufficiency (FSS)...
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...Justin Lowery 10-11-2013 Week 9 Thesis paper: In Today’s culture, the original horror movie genre, takes the horror movie form seriously, and provides an often-scary portrait of evil. While it’s remakes, or rebuts, know in today’s society, are more vulgar, and tell more of a back story, in the inner mind, of the antagonist, however this being in a comical, yet more violent and macabre demeanor. The two prime examples of this are, John Carpenters Halloween (1978), and Rob Zombie’s Halloween (2007). The Original Halloween was a low budget film, with a budget of one hundred thousand dollars. With a cast P.J Soles as Linda, Nancy Loomis as Annie, Charles Crypers as Sheriff Meeker, Donald Pleasance as Dr. Sam Loomis, and introducing Jamie Lee Curtis as Laurie Strode. The quick back-story of the movie, takes place on Halloween night 1963, the night he killed his sister. Then flashes back to the present, where he escapes from the sanitarium on a dark, and rainy night, and leads to the stalking of his sister Laurie Strode, and the taught and torment he puts her, and her friends through. The script was written in a form of pubertal darkness. The antagonist is known as the shape. The key visual points of the movie, are from the (POV) of the antagonist. This was one of the first movies, ever to put you, in the eyes, of the antagonist. This set a trend for other feature films, that occurred on later dates. For example, the title's The Hills Have Eyes, and Black Christmas. This...
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...Assess interpretations of Hatshepsut The female pharaoh, Hatshepsut, is arguably one of the most influential people of ancient Egypt. For thousands of years, the workings of Hatshepsut have been subject to multiple interpretations, from both her time and the modern day. An evaluation of the effectiveness of her reign can be resolved from the reliability and validity of evidence presented today, both primary and secondary. In one respect, Hatshepsut is viewed as the female pharaoh who had a particularly unsuccessful reign that was devoid of any real achievements. Historians writing in the 1970’s and 1980’s often made sexist and unfounded assumptions about Hatshepsut’s rule, including her apparent scheming to take the throne from the rightful heir, her inability to lead a military, and her untimely and unnatural death. Steindorff and Seele for example, describe Hatshepsut as a ‘high handed woman who kept her co-ruler on the sideline and thwarted his ambitions’. A suggestion like this however is challenged heavily by primary evidence and modern research. The idea that Hatshepsut’s relationship with Thutmose III wasn’t that of dictator and slave is shown through the acts of genuine respect she performed, such as not ‘getting rid’ of him when he was young as many other powerful figures would have, erecting monuments of both him and her, and also giving him control of the army. Historian Gardiner, similarly, emphasises Hatshepsut as ‘virile’ and ‘unable to achieve such power without...
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...The Effects of Culture on International Banking Disclosures George Hooia* aGriffith University, Australia Abstract This paper investigates the influence of national culture on banking disclosures. Seventeen developed and developing countries with a representative sample of 37 listed domestic commercial banks were examined in 2004. Long-term orientation is found to be a non-significant cultural value with banking disclosures. The explanatory power for banking disclosures is found to be similar to the findings in Gray and Vint (1995) with a cross-section of industries. More importantly, this study recommends that long-term orientation should not be used as part of the cultural framework for disclosures due to bias data. Hence, Gray’s (1988) hypothesis on the secrecy / transparency dimension should be maintained with respect to the original four cultural values. JEL Classification: G21, M41, O57 Keywords: Culture, banking disclosures, transparency 1. Introduction The objective of this paper is to report on the empirical findings of the two research questions proposed by Hooi (2004) that may improve the Gray and Vint (1995) model of cultural influence on accounting disclosures. The first proposal was that extending the Gray and Vint study with the new inclusion of Hofstede and Bond’s (1988) cultural value of long-term orientation gives the opportunity to better understand the association between national culture and accounting disclosures. The second proposal...
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...About Ratings & Segments on IRB Approach João Pires da Cruz1 Introduction The Basel Committee on Banking Supervision, on the process of definition of the New Capital Accord, establishes a stepwise framework for regulatory capital allocation for credit risk, starting on what is designated as Standard Approach, in which banks must allocate capital according to regulatory rules, and finishing on what is designated as the Advanced IRB Approach, in which banks must allocate capital based on their own risk evaluation and on the committee guidelines for that evaluation. The committee defines several guidelines for the IRB Approach depending on the type of credit exposure but, technically, we can group the several lines of attach into two ways of deal with the credit portfolio, the rating approach, for the major exposures like banks, sovereigns and corporate; and the segmentation approach for retail and small business exposures. The most accepted credit risk frameworks are rating based models since, historically, the aim of the models was the bond market, the market of debt securities issued by stable corporations, banks and states. In this market, the assumption that a debt security is less risky than other debt security become the essence of the market, since debt issuers need to disclose information to lower the price of the debt security, affected by a risk premium over the interest rate. And the disclosed information includes rating agencies evaluations of financial figures...
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...Liquidity Requirements For Basel III The Basel Committee was birthed to aid the banking sector’s ability to deal with the impact of the changing financial environment. The committee hopes to improve risk management through times of financial and economic stress. These goals are executed through creating criteria for each bank to follow to regulate and improve management. The Basel Committee has outlined the regulations through a set of reform measures. The first version was released in 2009 and labeled Basel I, the second publication was labeled Basel II and released in 2010. Currently the efforts of the Basel Committee are outlined in Basel III, which aims to strengthen banks’ transparency through requirements of proper leverage ratios and capital requirements. The Basel Accords are built upon one another to better improve requirements. It directs banks that hold riskier assets to have more cushion to absorb the risk known as capital on hand so the portfolio is safer should a financial change occur. This is regulated by the publication made in the notes of the balance sheet. Banks must also maintain higher common equity including capital cushioning of 2.5% of assets. Liquidity requirements of Basel III are outlined in the Liquidity Coverage Ratio (LCR). It promotes short-term resilience of the bank’s liquidity risk profile. The bank must hold stock of high quality liquid assets (HQLA) that can easily be converted to cash in private markets to meet liquidity...
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...≈√ Guidelines on Credit Risk Management C r e d i t A p p r ova l P r o c e s s and Credit Risk Management These guidelines were prepared by the Oesterreichische Nationalbank (OeNB) in cooperation with the Financial Market Authority (FMA) Published by: Oesterreichische Nationalbank (OeNB) Otto Wagner Platz 3, 1090 Vienna, Austria Austrian Financial Market Authority (FMA) Praterstrasse 23, 1020 Vienna, Austria Produced by: Oesterreichische Nationalbank Editor in chief: Gunther Thonabauer, Secretariat of the Governing Board and Public Relations (OeNB) ‹ Barbara Nosslinger, Staff Department for Executive Board Affairs and Public Relations (FMA) ‹ Editorial processing: Gabriela de Raaij, Heidi Koller, Markus Lietz, Wolfgang Spacil, Doris Wanka (all OeNB) Ursula Hauser-Rethaller, Karin Zartl (all FMA) Design: Peter Buchegger, Secretariat of the Governing Board and Public Relations (OeNB) Typesetting, printing, and production: OeNB Printing Office Published and produced at: Otto Wagner Platz 3, 1090 Vienna, Austria Inquiries: Oesterreichische Nationalbank Secretariat of the Governing Board and Public Relations Otto Wagner Platz 3, 1090 Vienna, Austria Postal address: PO Box 61, 1011 Vienna, Austria Phone: (+43-1) 40 420-6666 Fax: (+43-1) 404 20-6696 Orders: Oesterreichische Nationalbank Documentation Management and Communication Systems Otto Wagner Platz 3, 1090 Vienna, Austria Postal address: PO Box 61, 1011 Vienna, Austria Phone: (+43-1)...
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...BBA 2004 BUSINESS ACCOUNTING AND FINANCIAL MANAGEMENT SEPT 2013 CONTENT | CONTENT | | 1.0 | TASK1 | | 2.0 | TASK 2 | | | COURSEWORK | | 1.O TASK 1 Coursework 1. Relevance. This is regarded as one of the two main qualities. This information supplied should be that which will satisfy the needs of its users. 2. Reliability. This is regarded as the other main, quality. Obviously, if such information is also subject to an independent check, such as that of the auditor, this will considerably enhance the reliance people can place on the information. 3. Objectivity. Information which is free from bias will increase the reliance people place on it. It is, therefore, essential that the information is prepared as objectively as possible. Management may often tend to give a better picture of its own performance than is warranted, and is therefore subjective. It is the auditor’s task to counter this view, and to ensure objectivity in the financial statements. 4. Ability to be understood. Information is not much use to a recipient if it is presented in such a manner that no one can understand it. This is not necessarily the same as simplicity. 5. Comparability. Recipients of financial statements will want to compare them both with previous financial statements of that company and with the results of other companies. Without comparability the financial statements would be little use. 6. Realism. This can be largely covered by the fact that financial...
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...Credit risk management with reference to Punjab national bank Naupad, thane Dissertation Submitted to the Padmashree Dr. D.Y. Patil University in partial fulfillment of the requirements for the award of the Degree of MASTERS IN BUSINESS ADMINISTRATION Submitted by: KUNAL JOSHI (Roll No. 01102) Research Guide MR. MANGESH JADHAV Assistant Professor Department of Business Management Padmashree Dr. D.Y. Patil University CBD Belapur, Navi Mumbai APRIL 2013 Declaration I hereby declare that the dissertation “Credit risk management with reference to Punjab national bank, naupada thane” submitted for the MBA Degree at University’s Padmashree Dr. D.Y. Patil Department of Business Management is my original work and the dissertation has not formed the basis for the award of any degree, associate ship, or any other similar titles. Place: Mumbai Date: KunalPratap Joshi CERTIFICATE This is to certify that the dissertation entitled “Credit risk management with reference to Punjab national bank, naupada thane” is the bonafide research work carried out by Mr. Kunal Joshi student of MBA, at Padmashree Dr. D.Y. Patil University's Department of Business Management during the year 2011 -2013, in partial fulfillment of the requirements for the award of the Degree of Master in Business Management and that the dissertation has not formed the basis for the award previously of any degree, diploma, associate ship, fellowship or any other similar title...
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...their impact on revenues. Relate these risks to bank capital. CONTENT I. ANALYTIC OVERVIEW Overview • Why risk management is critical to banks • Value drivers and business model of a bank. • Understanding differing perspectives: shareholders, regulators, and debt providers. Risk management • Major risk groups: credit, market, liquidity, operational. • Management objectives – risk versus return. • Lessons learned from recent risk management failures: sub-prime, CLOs, leveraged loans, trading losses and etc. Capital allocation • Types of capital: shareholder, regulatory and economic capital. • Economic capital: key management assumptions. • Regulatory capital Basel 1 versus Basel 2. • Managing capital structures: comparisons between banks. II. CREDIT RISK Identifying and quantifying the risk • Seven categories of credit risk: lending, contingent, issuer, pre-settlement, settlement, country/transfer, other. • Systems and procedures for quantifying and aggregating exposures. • • Bank rating models: classifying risks according to default and recovery probabilities; borrower and facility evaluations. Quantifying expected and unexpected losses. Managing credit risk • Limits and safeguards – policy, process and procedures. • Credit approval authorities and transaction approval process. • Aggregating exposure limits by customer, sector and correlated credits. • Credit...
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...MANAGEMENT Risk Management In Banks R.S. Raghavan < E X E C U T I V E ◆Risk is inherent in any walk of life in general and in financial sectors in particular. Till recently, due to regulated environment, banks could not afford to take risks. But of late, banks are exposed to same competition and hence are compeled to encounter various types of financial and non-financial risks. Risks and uncertainties form an integral part of banking which by nature entails taking risks. There are three main categories of risks; Credit Risk, Market Risk & Operational Risk. Author has discussed U M M A R Y > in detail. Main features of these risks as well as some other categories of risks such as Regulatory Risk and Environmental Risk. Various tools and techniques to manage Credit Risk, Market Risk and Operational Risk and its various component, are also discussed in detail. Another has also mentioned relevant points of Basel’s New Capital Accord’ and role of capital adequacy, Risk Aggregation & Capital Allocation and Risk Based Supervision (RBS), in managing risks in banking sector. effectively controlled and rightly managed. Each transaction that the bank undertakes changes the risk profile of the bank. The extent of calculations that need to be performed to understand the impact of each such risk on the transactions of the bank makes it nearly impossible to continuously update the risk calculations. Hence, providing...
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