...issue no. 10 Supply Chain Finance A Third Report from Demica Demica Report Series April 2009 Issue no.10 Summary Continuing tight credit conditions have made liquidity scarce. Corporations want to extend payment terms for their supply chain, but suppliers are finding it difficult or impossible to accommodate this requirement. Demica’s latest research report into Supply Chain Finance (SCF) compares the situation in the UK and Germany and reveals that 88% of UK firms and 55% of German companies have identified that key suppliers are unable to sustain further lengthening of payment periods. As a solution to this situation SCF is generating much enthusiasm amongst banks and their corporate customers as a means of substituting for lower credit availability. Supply Chain Finance structures not only allow large corporations to extend their credit terms with suppliers, but their suppliers can also use the credit quality of their receivables debtors to finance their receivables at favourable rates based on the individual debtor credit profile. Some 43% of German companies and 61% of British firms are planning to monetise their receivables/payables to provide liquidity within their supply chain. This report updates Demica’s first two Supply Chain Finance research projects from 2007 and 2008 and reveals that the majority of Germany and UK firms believe their banking relationships have irrevocably changed over the last 18months. Supply Chain Finance – a Growing Need Pressure...
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...Effects of Monetary Injection Chapter 31 Open-Economy Macroeconomics: Basic Concepts Open and Closed Economies * A closed economy is one that does not interact with other economies in the world. * There are no exports, no imports, and no capital flows. * An open economy is one that interacts freely with other economies around the world. An Open Economy * An open economy interacts with other countries in two ways. * It buys and sells goods and services in world product markets. * It buys and sells capital assets in world financial markets. THE INTERNATIONAL FLOW OF GOODS AND CAPITAL An Open Economy * The United States is a very large and open economy—it imports and exports huge quantities of goods and services. * Over the past four decades, international trade and finance have become increasingly important. The Flow of Goods: Exports, Imports, Net Exports Exports are goods and services that are produced domestically and sold...
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...1 EGC Montauban Business School Bachelor degree THESIS THE FINANCIAL CRISIS AND ITS CONSEQUENCES ON THE GERMAN FINANCIAL SYSTEM Thesis presented by Florian DAVID Promotion Mulliez florian.david@egc-montauban.fr The 10th August 2009 2 Figures....................................................................................................................... 3 Introduction............................................................................................................... 4 1. The roots of the crisis ....................................................................................... 6 1.1 Macroeconomic situation.............................................................................. 7 1.2 The behaviour of the involved actors............................................................ 8 1.2.1 The approach of the borrowers ............................................................. 8 1.2.2 Banks and financial institutions ............................................................. 9 1.2.2.1 A new way to grant credits ............................................................. 9 1.2.2.2 A new way to earn money............................................................ 10 1.2.2.3 The emergence of new risks ........................................................ 10 1.2.3 Rating agencies .................................................................................. 11 1.2.4 Internal Audit .............................................
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...International business thrives in the country of Germany. They have a variety of characteristics and features of tradition within the country. Taking an overview of areas such as culture, legal system, geography, political system, and history is just the beginning to this unique country. Through the research provided, it should be a useful indicator of whether or not Germany is a desirable place to pursue international business in. The national flag of Germany consists of three equal horizontal bands of black (top), red (middle), and gold (bottom). The colors of black, red, and gold have played an important role in German history and can be traced all the way back to medieval times where there was a banner of the Holy Roman Emperor. This original banner had a black eagle with red claws and beak on a gold field. The Holy Roman Empire was a German-majority, multi-ethnic empire in central Europe until 1806, when it was defeated at the Battle of Austerlitz. After this battle, German-states that were part of the Holy Roman Empire came under French rule and several German organizations began agitations to free Germany from foreign rule and create a unified country. Among these organizations were two prominent ones by the names of Lutzow Free Corps and Jena Student’s League. The members of these two organizations wore uniforms of black with gold and red accessories and used flags of those colors as well. When Germany was unified in 1871 under Otto Von Bismarck, it chose a national...
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...EXORBITANT PRIVILEGE EXORBITANT PRIVILEGE The Rise and Fall of the Dollar and the Future of the International Monetary System Barry Eichengreen Oxford University Press, Inc., publishes works that further Oxford University’s objective of excellence in research, scholarship, and education. Oxford New York Auckland Cape Town Dar es Salaam Hong Kong Karachi Kuala Lumpur Madrid Melbourne Mexico City Nairobi New Delhi Shanghai Taipei Toronto With offices in Argentina Austria Brazil Chile Czech Republic France Greece Guatemala Hungary Italy Japan Poland Portugal Singapore South Korea Switzerland Thailand Turkey Ukraine Vietnam Copyright © 2011 by Barry Eichengreen Published by Oxford University Press, Inc. 198 Madison Avenue, New York, NY 10016 www.oup.com Oxford is a registered trademark of Oxford University Press All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior permission of Oxford University Press. Library of Congress Cataloging-in-Publication Data Eichengreen, Barry J. Exorbitant privilege : The Rise and Fall of the Dollar and the Future of the International Monetary System / Barry Eichengreen. p. cm. Includes bibliographical references and index. ISBN 978-0-19-975378-9 1. Money—United States—History—20th century. 2. Devaluation of currency—United States—History—21st century. 3. United States—Economic...
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... In the conclusion we will discuss the current situation, highlight that there is no perfect system. There are many factors that effect economic performance and in order to be successful the changes in the world should be accommodated with the changes in institutions and organisational characteristics. The main characteristics of industrialisation are changes from agricultural to industrial economic structure, substitution of machines for human skills and replacement of home-made by purchased in stores goods. The First Industrial Revolution happened in early 18th century in textile industry in UK, they had technological means, right institutional and organisational characteristics, government encouragement, and a large and varied trade network. Britain became the world's leading industrial power, producing more than half its iron, coal and cotton cloth, with most of their raw materials sourced from the colonies. By early 19th century USA took over UK’s leading role, both of them were able to succeed due to mechanisation and large pools of skilled labour. The pioneers of the Theory of Late Development described later industrialised countries as economies that started...
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...INTERNATIONAL FINANCE ASSIGNMENT Question Because of a recent ban on the import of U.S. made tennis rackets to Germany (in retaliation for anticipated restrictions on the import of German-made goods to the U.S.), a U.S. sporting goods manufacturer expects to create a German subsidiary to manufacture and distribute tennis rackets in Germany. The project life is expected to be two years (at which time, an end to protectionist sentiment in the U.S. will lead to an end to trade restrictions). The required investment in the project is a. DM 25,000,000 in plant and equipment, b. DM 5,000,000 in working capital. The projected after-tax cash flows from the project are DM 20,000,000 for the next two years, in addition to DM5,000,000 from the liquidation of working capital in two years. The spot exchange rate (S$/DM) is $0.6500/DM1 . The interest rate in the U.S. (RUS ) is 6 percent per year while the German interest rate (RDM ) 11 percent per year. Assuming that the firm has a WACC of 12%, showing all calculations indicate whether the project should be accepted. Solution Predicted Exchange Rates If the real rate of interest is the same in all countries (due to the international mobility of capital) the International Fisher Effect implies that differences in nominal interest rates will signal differences in the expected rates of inflation across countries. Given that RUS is 6 percent per year and that the German interest rate RDM is 11 percent...
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...From the Director Indian Institute of Foreign Trade, having been set up by the Government of India in the year 1963, has achieved a niche in the domain of International Business by blending business knowledge with creative research, pioneering executive development programmes, international linkages and industry interventions into the curricular corpus. At IIFT, we have been an active learner all these years by continually focusing on maintaining global perspective on issues but with realistic grounding in local conditions. This practical approach has given our students an unbeatable edge in the national as well as international arena. It is because of its allaround achievements that the Institute was awarded the status of Deemed University in May 2002 and accredited in May 2005 as “A” grade institution by National Assessment and Accreditation Council (NAAC) an autonomous institution of University Grants Commission. Leading surveys have rated IIFT as one of the top ten business schools in the country. IIFT achieved its stature on the strengths of its faculty members, who have been active nationally and internationally in academia, students, dedicated staff members and excellent infrastructure. There is regular exchange of faculty and students to and from the leading international Business Schools with which IIFT has strategic alliance. The programmes offered at the Institute have not only addressed the requirement of the different times but always have had orientation towards...
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...colonies and a merchant marine, and developing industry and mining to attain a favorable balance of trade. 2. The practice, methods, or spirit of merchants; commercialism. The Mercantilists For Europe, the 17th century was "the most horrible century", engulfed by interminable national, religious and civil wars, made memorable for their particularly savage brutality. From ashes and smoke, the national state was formed and enshrined in the Reformation-inspired contractual "natural law" philosophy of Grotius, Hobbes and Pufendorf. With the rise of the State, the 17th Century marked the ascendancy of two classes of peoples needed by the State: bureaucrats to run it and merchants to finance it. It was from the assorted pamphlets, studies and treatises of these groups of practitioners that Mercantilism developed. In England and Holland, the bulk of the economic writing was done by merchants drawn from their rising bourgeois communities -- thus the term "Mercantilism". In France and Germany, where the bourgeoisie was smaller, economic arguments were articulated largely by state officials -- thus French Mercantilism is better known as "Colbertisme" (named after Jean-Baptiste Colbert, French minister of finance) and German Mercantilism as "Cameralism" (after the German term for the royal chamber). This difference in background between English-Dutch and French-German Mercantilists did not imply much difference in their economic doctrine. Both groups recognized the...
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...Besserbrau AG Besserbrau AG is a German beer producer headquartered in Ergersheim, Bavaria. The company was founded in 1842 by brothers Hans and Franz Besser and is publicly traded with shares listed on the Frankfurt Stock Exchange. Brewing in strict accordance with the almost 500-year-old German Beer Purity Law, Besserbrau uses only four ingredients in making its products: malt, hops, yeast, and water.While the malt, yeast, and water are obtained locally, Besserbrau imports hops from a company locatedin the Czech Republic. Czech hops are considered to be among the world’s finest.Historically, Besserbrau’s products were marketed exclusively in Germany. To take advantage of apotentially enormous market for its products and expand sales, Besserbrau began making sales in thePeople’s Republic of China three years ago. The company established a wholly-owned subsidiary inChina (BB Pijio) to handle the distribution of Besserbrau products in that country. In the most recentyear, sales to BB Pijio accounted for 20% of Besserbrau’s sales and BB Pijio’s sales to customer in China accounted for 10% of the Besserbrau Group’s total profits. In fact, sales of Besserbrau products in China have expended so rapidly and the potential for continued sales growth is so great that thecompany recently broke ground for the construction of a brewery in Shanghai, China. To finance construction of the new brewery, Besserbrau negotiated a listing of its shares on the London Stock Exchange to facilitate...
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...processes. Auditing firms audited mainly domestic companies, and were under the State Administration of Audit (SAA), whereas accounting firms focused on companies using foreign investments and were sponsored by the Ministry of Finance. C. Unlike in the U.K., where there was a good legislative and judicial environment during the early stages of the development of the profession, in China, a market-oriented legislative and judicial environment is still emerging. D. Unlike in the U.K., where auditors receive support from the established professional bodies, these support mechanisms are still lacking in China. II. The recent economic reform program stimulated the growth of the accounting profession in China. A. With the recognition by the State of joint stock company form, the demands for financial information from investors and other interested parties increased. B. The establishment of two stock exchanges helped rapid growth of the accounting activities. C. Various government regulations on the implementation of economic reform measures require the involvement of independent auditors. D. The laws on joint ventures with foreign companies require the audit of annual statements. E. International accounting firms were allowed to be involved in training local auditors and setting auditing standards. III. There are clear signals that Anglo-American...
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...its citizens. For a period of time, the government agreed, enacting various neutrality acts to ensure that the US wouldn’t interfere with international problems, but after various aggressions by the Japanese and Germans the US slowly became less isolationist. We broke our own neutrality acts with the “cash and carry” system and the Lend-Lease Act, and even took an offensive against the Japanese by freezing all of their assets in the US. It wasn’t until the attack on Pearl Harbor, however, that the US fully came out of its semi-isolationist state and officially declared war on Japan, Italy, and Germany. As expected the war forced the US to maintain an interventionist mentality, but even after the war the US continued to interfere in international affairs. With the heightened fear of communism among the nation the US claimed to be the international protector of democracy, aiding Western Europe and parts of Asia to fight the ideology. The US only became the fully international interventionist state idealized by Luce, however, after being forced to...
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...Selected Problems of International Trade Explain the cases “ Dassonville”, “ Cassis de Dijon” and “ Keck” ( or Keck and Mithouard). The European Union was created on the principle to guarantee the free movement of goods, capital, services, and people within the EU's 27 member states1. The goal at that time was to increase the specialisation, competition with the goal to offer better quality of services to the consumer at a lower price, larger economies of scale, improved utilization of resources and intended to drive economic integration whereby the once separate economies of the member states become integrated within a single EU wide economy. All cases mentioned above, Dassonville, Cassis de Dijon and Keck & Mithouard, were related to national legal barriers impeding the free movement of goods within European Union. Concluding in all of them, the Court has said that discriminatory and non-discriminatory rules of member states (therefore not actions of private corporations or individuals) that hinder trade shall be illegal. In detail, in the case of Dassonville it was perfectly possible for a French seller of Scotch whisky to sell a non certified whiskey without the certificate of authenticity, when it was not in the neighboring Belgium where a trader selling the same whisky would be subject to restrictions that would effectively reduce its ability to compete with the French trader. In the Cassis de Dijon case, there was a regulation applying both to imports...
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...International Business & Economics Research Journal – March 2010 Volume 9, Number 3 121 Cost Accounting In Auto Manufacturing Companies In Germany And The United States Robert Jinkens, USA RamMohan R. Yallapragada, Fayetteville State University, USA ABSTRACT Corporate accountants are mandated to prepare and distribute financial accounting reports for external U.S.ers at end of each accounting period. However, there are no similar statutory requirements for corporate accountants to provide managers of their companies with the management accounting information necessary for decision making in their bU.S.iness operations. Cost accounting is an important integral part of management accounting. Product costing has always been a much debated issue in management accounting. The area that has generated a host of conflicting views is the allocation of overhead costs to products. Traditional absorption costing is claimed to be resulting in an unfair allocation of overhead costs to products. New approaches such as the Activity Based Costing (ABC) did not receive widespread adoption. It is being realized in management accounting field that an emerging costing method known as Resource Consumption Accounting (RCA) is a better method for product costing. It is a method adopted by the German manufacturing companies. This paper describes the German cost accounting method and also compares the German cost accounting with the cost accounting in the United States, specifically in the automobile...
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...INTERNATIONAL FINANCIAL INSTITUTIONS • 1 Types o 1.1 Multilateral development bank o 1.2 Bretton Woods institutions o 1.3 Regional development banks o 1.4 Bilateral development banks and agencies o 1.5 Other regional financial institutions International financial institutions (IFIs) are financial institutions that have been established (or chartered) by more than one country, and hence are subjects ofinternational law. Their owners or shareholders are generally national governments, although other international institutions and other organizations occasionally figure as shareholders. The most prominent IFIs are creations of multiple nations, although some bilateral financial institutions (created by two countries) exist and are technically IFIs. Many of these are multilateral development banks (MDB). TYPES Multilateral development bank A multilateral development bank (MDB) is an institution, created by a group of countries, that provides financing and professional advising for the purpose of development. MDBs have large memberships including both developed donor countries and developing borrower countries. MDBs finance projects in the form of long-term loans at market rates, very-long-term loans (also known as credits) below market rates, and through grants. The following are usually classified as the main MDBs: • World Bank • European Investment Bank(EIB) • Asian Development Bank (ADB) • European Bank for Reconstruction and Development (EBRD) • Inter-American...
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