...The ability for social capital to be harnessed for both positive and negative purposes is especially apparent in the discussion of the “urban crisis.” The issue was brought to the forefront during the 1950s and 1960s during a period when black families began moving into historically white neighborhoods. Homeowners’ associations, community groups, and other neighborhood-based organizations, which seem to be benign groups promoting positive social capital, are criticized by some scholars such as Thomas Sugrue as insidious organizations designed to impose racial order. He argues that racism and aggression, using the negative social capital of white homeowners’ organizations, is the cause of the urban crisis because it forced black homeowners...
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...FINANCIAL CRISIS ................................................................5 Credit and Debt Markets....................................................................................................5 Equity Markets ...................................................................................................................6 THE GFC AND EQUITY CAPITAL RAISING..................................................6 THE NATURE OF THE AUSTRALIAN EQUITY MARKET...........................10 THE STRUCTURE OF CAPITAL RAISING IN AUSTRALIA ........................12 Initial Equity Capital Raising...........................................................................................12 Secondary Equity Capital Raising..................................................................................15 Placements ................................................................................................................................. 21 Rights Issues .............................................................................................................................. 24 Share Purchase Plans ................................................................................................................ 29 Dividend Reinvestment Plans ..................................................................................................... 32 Comparing the Australian, UK and US Secondary Equity Capital Raising Systems .................. 33 Debt Capital Raising...
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...How volatile capital flows and increasing credit could lead to another Crisis in Asia We have seen since the global financial crisis that there has been a surge in capital from the developed world to the developing world. As returns rates are lower in the developed world due to expanding monetary policy, more opportunity for higher investment is overseas. This increase in liquidity to the emerging Asian market has several implications if not managed could have drastic consequences. As the Asian market is experiencing rapid domestic growth, higher international credit flows into the region tends to hamper the ability of policy makers to constrain credit, especially if most of the credit is extended from foreign institutions. This has concerns as if local firms and households shift from domestic currency liabilities to avoid possible monetary tightening; it could negate the ability of domestic monetary policy makers. This in turn exposes domestic firms and households to currency risk. (Avdjiev, McCauley, & McGuire, 2012). This is a concern as this can affect the exchange rate as borrowers exchange foreign for domestic currency for the purpose of purchasing domestic goods affecting the trade balance of Asian economies. If we look at the impact of the western worlds monetary policy on Asia, the imminent reduction of quantitative easing in the US could lead to a retraction of investment. This could seriously lead to a deterioration of growth and a problem of paying short-term...
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...global motor vehicle market by increasing sales to more than two million automobiles per year. BMW’s strategic objective is to ensure that: The BMW Group is the leading provider of premium products and premium services for individual mobility. (http://www.ukessays.com/essays/marketing/the-corporate-strategies-and-objectives-of-bmw-marketing-essay.php) 1: PIRO 2: Value chain Processes are the ways that an organization uses it resources to generate value. These stem from the many discrete activities a firm performs in designing, producing, marketing, delivering and supporting its product and service. For instance, BMW has implemented a corporate finance structure with an international focus to reduce its exposure to local and foreign capital market fluctuation. As explained through the value chain, BMW's process are illustrated Process has been the development of technology and innovation across multiple section of the BMW business. This has been assisted through strategic alliances formed with suppliers to increase BMW's purchasing and manufacturing competency. Furthermore, research and development has been able to take advantage of the market research and analysis with regards to customer behavior and purchasing patterns to develop technology products and service, For instance, connected drive and dynamic Drive which offer intelligent driver assistance were the result of such process and system in place. Ways BMW use for human resource is academy training, in March 2003...
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...Journal of Contemporary Eastern Asia ISSN 2383-9449 Fumitaka Furuoka, Beatrice Lim, Catherine Jikunan and Lo May Chiun (2012) Economics Crisis and Response: Case Study of Malaysia’s Responses to Asian Financial Crisis Journal of Contemporary Eastern Asia Vol. 11, No. 1: 43-56 Journal abbreviation: J. Contemp. East. Asia Stable URL: http://eastasia.yu.ac.kr/documents/Fumitaka_11_1.pdf www.JCEA-Online.net Open Access Publication Creative Commons License Deed Attribution-No Derivative Works 3.0 Journal of Contemporary Eastern Asia, Volume 11, No.1: 43-56 http://dx.doi.org/10.17477/jcea.2012.11.1.043 Economics Crisis and Response: Case Study of Malaysia’s Responses to Asian Financial Crisis Fumitaka Furuoka, Beatrice Lim, Catherine Jikunan and Lo May Chiun The paper chooses the “Asian Financial Crisis” as a case study to examine its impact on Malaysian economy and describes how Malaysian government responded to the crisis. It also focuses on the Asian financial crisis’ impact on the employment of banking sector in Malaysia. In the finance, insurance, real estate and business service sector, a number of 6,596 workers were retrenched. Banks were forced into mergers and acquisition as well as downsizing, trim lean, organizational changes and introduction of new technologies. Excess workers were offered a “voluntary separation scheme.” These retrenched workers became the urban poor facing high cost of living and no opportunity for jobs as there is no safety net provided. 1. Introduction...
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...India and the Global Financial Crisis What Have We Learnt? 1 - Duvvuri Subbarao _________________________________________________________ Thank you for inviting me to deliver the 2011 K R Narayanan Oration. It is an honour to which I attach a lot of value. President Narayanan 2. Late President Narayanan was a distinguished diplomat, a reputed parliamentarian, a capable minister and above all an erudite scholar. Born at the very bottom of India’s social pyramid, he rose on to occupy the highest office in the country with no assets other than hard work, integrity and humility. ‘A working President’, as he described himself, he never allowed dogma to overwhelm his beliefs and convictions. 3. President Narayanan was in office from 1997 to 2002, a time when globalization, as we are experiencing it in the current times, was taking root. At the banquet he hosted for the visiting US President Bill Clinton in New Delhi in March 2000, President Narayanan remarked: “Mr. President, we do recognise and welcome the fact that the world has been moving inevitably towards a one-world... But, for us, globalization does not mean the end of history and geography, and of the lively and exciting diversities of the world.” This was a thoughtful remark. As much as globalization may be inevitable, history and geography need not be destiny. If we learn the lessons of experience, we will not repeat the same mistakes. This indeed is the topic for my 1 K.R. Narayanan Oration by Dr. Duvvuri...
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...relationship between the capital base of banks and the 2007-2010 financial crisis and Great Depression (120 words) Most Economists would agree that the 2007-2010 crisis, was the worst global financial crisis since the great depression. During both of these times, the capital base of banks was severely compromised. Therefore, bank regulations are needed to improve the quality of banks’ capital base to become more resilient during economical crisis. During the Great Depression, major banks failures resulted after the stock market crash. These failures began as debtors defaulted on loans and depositors withdrew their deposits en masse. Outstanding debt increased as prices and income fell. Bank failures increased as desperate banks called loans yet, borrowers did not have the time or money to pay. In addition, capital investment slowed and banks struggled to build up their capital reserves by making fewer loans. Many would say that the Federal Reserve allowed the money supply to shrink to 1/3 and transformed what was a normal recession to the Great Depression by restricting emergency lending to failing banks. However, the Federal Reserve could not react in part because the Federal Reserve Act, which required 40% gold backing of Federal Reserve notes issued. During this time, the Federal Reserve hit this allowable credit limit. Reduced capital reserves resulted in many bank failures to sustain the crisis during this time. During the 2007 – 2010 crisis again, many banks...
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...Evolution of Basel Norms and their contribution to the Subprime Crisis The article highlights the emergence of the Basel Accord in 1998 and how it has evolved over the course of the last 23 years. Contrary to the popular belief capital regulations have been considered the biggest underlying factor of the subprime crisis owing to securitization, the shadow banking system and the flexibility given to banks in risk assessment. The recent Basel III norms though aim to mitigate the already caused damage, the results are still left to be witnessed. Evolution of Basel Norms and their contribution to the Subprime Crisis The article highlights the emergence of the Basel Accord in 1998 and how it has evolved over the course of the last 23 years. Contrary to the popular belief capital regulations have been considered the biggest underlying factor of the subprime crisis owing to securitization, the shadow banking system and the flexibility given to banks in risk assessment. The recent Basel III norms though aim to mitigate the already caused damage, the results are still left to be witnessed. The Financial Crisis of 2008 shook the financial world and is still in tatters even after 3 years of its outbreak. From the New York investment bank Bear Stearns collapse in June 2007, Northern Rock liquidity support (Sep’ 07), Bank of America purchases of Countrywide Financial (Jan’ 08), Nationalization of Fannie Mae and Freddie Mac by the federal government (July 08), Lehman Brothers...
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...THE INTERNATIONAL MONETARY FUND AND EXCHANGE RATE CRISIS MANAGEMENT∗ CHONG-YAH LIM Albert Winsemius Chair Professor of Economics Director, Economic Growth Centre (EGC) School of Humanities and Social Sciences (HSS) Nanyang Technological University (NTU) S3-01B-38, Nanyang Avenue, Singapore 639798 acylim@ntu.edu.sg The article analyzes the limits of the IMF as a global multilateral economic agency to handle serious balance of payments disequilibria. Capital control and growth rates in developing Asia and the twin deficit problem of the United States are also discussed. It also assesses the probability of the reemergence of an exchange rate crisis in Southeast Asia and the wisdom of having an Asian IMF. “Lenin was right. There is no subtler, no surer means of overturning the existing basis of society than to debauch the currency.” — John Maynard Keynes The Economic Consequences of Peace Keywords: Exchange rate crisis; capital control; growth rates in China and ASEAN; East Asian financial crisis; US twin deficits; IMF; AMF. 1. Post-Crisis Per Capita Income A not well-known fact is that all the six economies in Southeast Asia adversely affected by the 1997/1998 financial crisis have not, until today (November 2005), some eight years later, recovered from the pre-crisis per capita income level in US dollar terms (see Table 1). Thailand’s per capita income in 1996 was US$3,084. After the impressive post-crisis recovery eight years later in 2004, it decreased by 18.3% to US$2,519...
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...globalization, the free flow of international capital contributes a lot to the development of the world economy, however, many short-term speculative capital wandering around the world with rapid speed and complex means have impacted on developing countries’ financial markets, which constantly induce financial instability and crisis. And fluctuations due to capital flows also makes the international financial turmoil have a huge ripple effect and zoom effects. Financial globalization has exacerbated the instability and the risk of global economy and financial development, so financial security is increasingly becoming an important part of national security .In this essay, we are going to talk about the impact of financial globalization on China’s financial market and what the measures will be taken to ensure the security of China’s economy. The main performance of financial globalization 1. Globalization of capital flows is the most prominent manifestations of financial globalization. Since the 1980s, the scale of international capital flows has continueally expanded, while financial technology and financial innovation and the development of various financial derivative helps accelerate the speed of cross-border flows of international capital. By using computer and modern finncial technology, on one hand hundreds of millions of funds can move from one side of the earth to antother within few seconds, on the other hand the international capital can quickly flow to a country or just...
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...compensation packages which encouraged bankers to over-leverage themselves, and the collapse of the sub-prime housing market. While it is probable that some of these factors played a role in the crisis, none of them can accurately explain the near complete collapse of the financial system that began in late 2007. In fact, the cause of the financial crisis can be directly traced to the failure of government regulators to recognize the dangers of interactions between several different laws designed to protect the system. In their book entitled Engineering the Financial Crisis, authors Jeffery Friedman and Wladimir Kraus lay out an argument asserting that the crisis was caused by an unforeseen interaction between capital requirements for banks and the use of Mark to Market accounting methods. They further contend that there was a “master regulatory mistake that precipitated the crisis: using the bond ratings produced by Moody’s, S&P, and Fitch as the determinant of the capital levels required of banks by law” (Friedman 148). The book contains four chapters; the first is devoted to the refutation of several prevailing theories as to the cause of the financial crisis, the second and third explore the 2 regulatory failures which Friedman and Kraus believe are responsible for the crisis, and the final chapter is a more broad take on the psychology of market behavior as well as the ideology of its players, including regulators. The first element of conventional wisdom...
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...THE EAST ASIAN CRISIS Introduction: The East Asian crisis was a period of financial crisis that gripped much of Asia which beginning in July 1997 and raised fears of worldwide economic meltdown due to financial contagion.1 Several countries such as Malaysia, Thailand, Indonesia, the republic of Korea and the Philippines were hit directly while others such as Taiwan province of China, Singapore and especially Hong Kong, China were badly affected. What began as a speculative attack on the Thai baht in July 1997 quickly spread as ‘contagion’ to the other countries. Over a three-month period between July and October 1997, the baht fell nearly 40 per cent, the Malaysian ringgit and Philippine peso by about 27 per cent, the Indonesian rupiah by about 40 per cent and the Korean won approximately 35 per cent against the United States dollar. For countries that had been dubbed “miracle economies” this was a serious blow with wide-ranging economic, social and political ramifications.2 In this paper we would try to undertake an empirical analysis of the factors leading to the crisis by analysing on two major points: 1) How have these countries performed in the years leading to the crisis? 2) What was the policy response to the currency crisis and what similarities/differences were there in policy responses across countries? We try to do this by analysing the macroeconomic data of three countries, Malaysia, Thailand and the Republic of Korea, over a 13-year period, from 1990 to 2002. The...
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...the Asian Financial Crisis,” in Gregory W. Noble and John Ravenhill, eds., The Asian Financial Crisis and the Architecture of Global Finance, ed., Cambridge, 2000, pp. 1-35 [pic] Summary: The Asian financial crisis resulted from the sudden flight of large amounts of capital from Asian countries that lacked adequate systems of prudential regulation, and whose foreign exchange rate proved disastrously brittle. The crisis was unique in its unprecedented severity of corporate distress and banking sector problems, and its quickness in recovery from the crisis. While technical improvements in the financial system were institutionalized, the crisis did not bring fundamental structural revisions, in both political and economic arena. Doughty resistance from entrenched ideologies and interests in the U.S, the U.K, and the IMF prevented the reforms and rearrangements in the international financial system from happening. ➢ The East Asian crisis---the severest jolt to the world economy since the Oil Shock in early 1980s. ➢ Asian Crisis ---spread from Thailand to Indonesia, the Philippines, Malaysia and Korea. Sequences---Export decline ( loss of investors’ confidence( Currency devaluation due to lack of foreign reserve( IMF emergency fund requiring tight budget and monetary policy( increase in non-performing loans and damage in domestic industries ➢ Drastic increase in international private capital inflow in the ‘90s was key to understand this crisis. Liberalization...
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...The financial crisis which began in July 1997 in the East Asian countries, Thailand, Indonesia, Malaysia and Korea, has had devastating effects on their economies. Growth rates in these countries which were in excess of five percent before 1997, turned sharply negative in 1998 and, at the time of this writing it is not yet clear when these economies will turn the corner and resume positive rates of growth. This paper examines why these countries, which were part of what has been termed "the Asian miracle" and were able to eradicate so much poverty, are now undergoing severe economic contractions, with such harmful effects on their populations. A breakdown of information in financial markets is the key factor that has driven this crisis. After laying out an asymmetric information view of the Asian financial crisis, this paper goes on to use this framework to explore lessons from this crisis. 1. An Asymmetric Information View of the Asian Crisis The financial system plays a critical role in the economy because, when it operates properly, it channels funds from those who have saved surplus funds to those who need these funds to engage in productive investment opportunities. The major barrier to the financial system performing this job properly is asymmetric information, the fact that one party to a financial contract does not have the same information as the other party, which results in moral hazard and adverse selection problems. An asymmetric information view of financial...
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...Impact of the Asian Financial Crisis in 1997 and effect to Latin America Name: Institution: Date: Abstract In 1997, the Asian Financial Crisis spread rapidly all over the Asia and affected almost all the economies in the world. Prior to the Asian Financial Crisis, the Asian countries such as Thailand, Malaysia, South Korea, Indonesia, Hong Kong and Singapore experienced a remarkable growth in the economy that was considered the highest in the world. These Asian economies increased by a notable proportion of 6 to 10 percent annually in the GDP. However, what had been regarded as an Asian miracle seemed to crumple down rapidly 1997 when these Asian countries were faced with a severe financial crisis in their local stock and currency markets. When the economies started recovering from the crisis in 1998, the stock markets in several countries had considerably lost more than 70 percent of their worth, while their currencies depreciated in comparison to the US dollar (Pettis, 2001). The Asian Financial Crisis also affected several nations in the Latin America as they experienced a relentless economic meltdown that had detrimental effects to the economies. For instance, the financial crisis force multinational firms to close down due to liquidation, the banking system deteriorated and this forced high levels of lay-offs leading to unemployment. In addition, the financial crisis resulted in the loss of the people’s purchasing power in the Latin American while nations turned to...
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