...Bijon Islam (Roll: 21) Faruk Ahmed (Roll: 20) EMBA 14th Batch IBA, Dhaka January 04, 2012 January 04, 2012 Ms. Homayara L. Ahmed Assistant Professor Institute of Business Administration University of Dhaka Sub: Term Paper Submission- The Idea of Ethics and the Eurozone Crisis Dear Madam: Thank you for giving us the opportunity for working on such an exciting topic. Looking at the Eurozone crisis from an ethical perspective reveals several insightful and interesting insights including a look into the idea of equality among the member states, financial camouflage practices and the focus on immediate gains both in private sector and at national level. We have tried to map out such factors that have contributed to ethics mismanagement among the euro member states which have finally culminated into the crisis. We hope that you enjoy reading this paper as much as we did writing this and look forward to your views. Please feel free to contact us anytime if you feel the need for any additional support that we may provide. Kind Regards Bijon Islam – Roll 21 (EMBA 14) Faruk Ahmed – Roll 20 (EMBA 14) pg. 1 CONTENTS EXECUTIVE SUMMARY ...................................................................................................................................................3 1. A. B. C. D. E. 2. A. B. 3. A. B. C. D. E. F. 4. 5. 6. THE STORY......................................................................................................................
Words: 4299 - Pages: 18
...currency will collapse. The intrinsically diverse European economies, ranging from moderate command-and-control orientation to heavy market influence, defy conglomeration and governance with a single currency. The uniform currency experience has ended in disaster. Because the Euro Zone effort to implement a homogenous monetary policy in a heterogeneous international body is economically untenable, the Euro as a currency will collapse. In 1986, European countries gathered together to initialize the ‘perfectly integrated competitive market economy’, using principles developed by economist Robert Mundell in the 1960s. These concepts emphasize liquidity of physical and financial assets, flexible interest rates, comparable business cycles and asymmetric fiscal policies for use in creating seamless interaction between international bodies within the economic area. This ‘Euro Zone’ exists as the pilot project of sorts for these principles. In 1992, they developed their own uniform currency, predictably named the Euro. Issuance of the Euro marked the beginning of the end for the Euro Zone as an economic power. From the very beginning, the Euro concept suffered from fatal design flaws. Before passing in 2006, economist Milton Friedman ominously warned, “The euro is going to be a big...
Words: 1808 - Pages: 8
...At the end of the 1920s, the United States boasted the largest economy in the world. With the destruction wrought by World War I, Europeans struggled while Americans flourished. Upon succeeding to the Presidency, Herbert Hoover predicted that the United States would soon see the day when poverty was eliminated. Then, in a moment of apparent triumph, everything fell apart. The stock market crash of 1929 touched off a chain of events that plunged the United States into its longest, deepest economic crisis of its history. Nine thousand banks failed during the months following the stock market crash of 1929.It is far too simplistic to view the stock market crash as the single cause of the Great Depression. A healthy economy can recover from such a contraction. Long-term underlying causes sent the nation into a downward spiral of despair. First, American firms earned record profits during the 1920s and reinvested much of these funds into expansion. By 1929, companies had expanded to the bubble point. Workers could no longer continue to fuel further expansion, so a slowdown was inevitable. While corporate profits, skyrocketed, wages increased incrementally, which widened the distribution of wealth. The richest one percent of Americans owned over a third of all American assets. Such wealth concentrated in the hands of a few limits economic growth. The wealthy tended to save money that might have been put back into the economy if it were spread among the middle and lower classes. Middle...
Words: 1533 - Pages: 7
...growth and development is one of the fundamental economic objectives. The Brundtland Report defined sustainable development as “meeting the needs of present generation without compromising the needs of the future generation.” Meeting both generational needs involves attaining certain objectives e.g. undertaking viable investments that are capital in nature. These objectives cannot be attained given the low level of domestic resources; therefore the rationale for borrowing is to bridge the domestic resources gap to accelerate economic growth and development, because no government is an island on its own. Public debt arises as a result of the inadequacy of funds on the part of the government to execute capital projects. It is stated in the fiscal Responsibility Act that debt should be tied to capital projects. It is counterproductive to see several duplicated items in the budget without tangible effects on the populace being classified as “capital projects”. Notably, scarcity arising from uneven distribution of natural and intellectual resources has definitively made public debt to be inevitable. Domestic and external debts are the source of public debt. Therefore, the two main reasons why the authority of developing countries such as Nigeria usually borrow fund is either for macroeconomic reasons (to either finance higher investment or higher consumption) and to circumvent hard budget constraint. This implies that the government of a country borrow to boost economic activities,...
Words: 1339 - Pages: 6
...Tom Fernandez Professor James Terry HIST-102-H1 25 April 2013 The 2003-2007 real estate boom which led to the eventual 2008 meltdown of the U.S. financial markets unfortunately was not contained to the big banks and investment firms based mostly in New York City. By the time bailouts were implemented by the United States government, the effects of the financial crisis were exported to Europe. States similar, but not limited to Portugal, Ireland, Italy, Greece, and Spain (PIIGS) have each been in the media spotlight in recent years as attempts to rescue their respective financial markets are implemented. Unfortunately, many efforts made by Eurozone member states and other international actors have failed in alleviating the financial stresses of the region. Considering this, then, is there really a permanent solution that can not only relieve financial markets but also prevent the crises from spreading? To date, the European Unions’ collective response up to this point has been insufficient in order to curb the further slide into Europe’s second recession. I contend, then, that Europe and the Euro would greatly benefit from following many if not all of Germany’s internal budgetary constraints in order to fix the overall problem of debt and spending. One of original intentions of the euro when it was established in 1992 was to limit the amount of budget deficit a sovereign member state could have. Furthermore, the euro was designed to prevent a “bailout” should a state be...
Words: 3864 - Pages: 16
...facts, key indicators and back ground information of Venezuela you found after research are presented in the Appendix. Use that information to answer the following questions: Moderate poverty and inequality have decreased from 1998 onwards due to the program called ‘Missiones’ according to the World bank (see appendix). 1. Use the fact sheet Venezuela whether this can be confirmed with figures. Assess: a. Level of development b. Income inequality 2. Assess Venezuela’s export structure. What is it based on? Use GDP and expenditure components for Q 3 and Q4 to assess Venezuela’s attractiveness from the table: 3. How can you see 2014 and 2015 are forecasts? 4. Characterize the phase of business cycle Venezuela has faced in 2013 and 2014 (Explain which key indicator(s) are used to answer the question) 5. Make a ‘first level analysis’ of the aggregate components of GDP to explain the economic (GDP) growth during 2013. 6. Explain the influence of imports on GDP in 2013. 7. Make a ‘second level’ analysis of the aggregate components of GDP to find some reason(s) for the movement of the various components. ‘The decrease in revenues from exports, mainly oil is consistent with lower oil production’ According to an internal government report, international reserves even plummet 33% in a year. 8. Which external position indicator has directly been influenced by the decrease in revenues of oil exports? ...
Words: 2111 - Pages: 9
...Business: Undercapitalization and Bankruptcy Robert Solomon AIU Online Business: Undercapitalization and Bankruptcy There exists many ways to succeed and the world of business is certainly one of them but any time one opens oneself up to risk, the possibility of failure rears its ugly head. Genius it is argued though is when preparation meets opportunity. The first thing to do before setting out on the uncharted seas of financial security is to make sure you are aware of the dangers and pitfalls. The road is rough and has laid waist to many who have tried before you so be sure that you have what it takes, financially and intellectually. Fortunately there are solutions to this problem, albeit the people you will need to talk too are few and far between, it is good advice before you start that will give you that edge when the going gets rough and the pizazz to ride the crest of the wave when things go well. Business: Undercapitalization and Bankruptcy While there are many reasons to cling to the security of the hourly wage paycheck, the hopes and dreams of personal freedom is something that we, as humans, still crave. In this particular case, that freedom leads to the status of the self-employed businessperson. The problem is that just wanting success is never enough to accomplish it. Although freedom leads to self-sufficiency in an ever-changing, increasingly global market, the mere desire for success is a delusion in terms of real-world achievement. So the real question...
Words: 1041 - Pages: 5
...of currency attacks in an emerging market. There are three following stages that lead an economy to full financial crisis. 1. Initiation of financial crisis 2. Currency crisis 3. Full-fledged financial crisis Stage 1: Initiation of Financial Crisis The reasons that leads an emerging market country towards financial crisis initiation includes the first two basic paths and some additional factors and they all make the problems of moral hazard and adverse selection worsen. A. Mismanagement of financial liberalization B. Severe fiscal imbalances C. Asset price decline D. Increase in interest rate E. Increase in uncertainty Financial liberalization is the eradication of restrictions from all the domestic financial institutions and markets and allowing them to trade with the financial firms of other nations. It has a benefit of financial development in long run but in short run it lead financial institutions to riskier lending (credit boom) and its mismanagement takes an economy towards a bubble. The financial institutions, regulators of bank, and other lenders in emerging economy do not have much expertise to cope the risk of this business line and hence have a weak credit culture. For attracting the foreign capital and rapidly increasing the lending, domestic banks defray high interest rate. Further, if the policies of government fix the domestic currency value with dollars, it encourages the capital inflow and foreign investors consider investment...
Words: 3700 - Pages: 15
...EXECUTIVE SUMMARY The purpose of the following report is to evaluate Competition Bike Inc. operations and the possible direction of the company in the next few years. Figures were obtained from comparative balance sheets and profit and loss statements from the relevant years as well as additional information that were forwarded for review. This information enabled the development of percentage and ratio analysis, which was then used to create the report. Administrative expenses were indirectly related to generating income. Managers usually have more control over administrative expenses than any other cost. In FY8 when net sales were down, managers had the ability to reduce expenses in this area more easily than in other categories. Administrative costs include professional services, annual meetings, meetings and travel, office supplies, and telephone and market information. The investigation for FY6, FY7 and FY8 revealed that the company had improved its position compared to previous years. The profitability of the company was significantly better while the liquidity had remained reasonably steady. The solvency of the company had increased, not affecting the long-term obligations of the business. Horizontal Analysis Income Statement Competition Bike sales and profitability has varied widely over the last three years. Net sales between FY6 and FY7 increased to 33% and subsequently falling to 15% between FY7 and FY8. The largest growth rate over the 3 years occurred in...
Words: 3717 - Pages: 15
...Economic structure and growth When the Europeans set up trading posts around the area of Bangladesh, the British dominated the region. As such, Bangladesh was part of British India until the region was split up into India and Pakistan in 1947. Pakistan was comprised of West Pakistan (current Pakistan) and East Bengal (current Bangladesh. This awkward arrangement of a two-part country with its territorial units 1,600 km apart left the Bengalis marginalized and dissatisfied. In 1971, East Bengal separated from Pakistan and was renamed Bangladesh. Ever since, economic development has been very slow, hampered by political turmoil. It is one of the poorest countries in the world with nominal GDP per head of only USD 1,483 and 36% of the population living below the poverty line of USD 1 per day. The low level of human development is also reflected in the UN’s human development index, which ranks Bangladesh 146th out of 182 countries. Economic development is also hampered by a high vulnerability to inundations. Each year, about a third of the country is flooded during the annual monsoon rains. This severely affects the agricultural sector, washing away crops. While the agricultural sector is not especially important in terms of economic size, since it accounts only for 18% of GDP, it employs 45% of the country’s labor force. The industrial sector contributes 29% to GDP and within this sector the textiles and garment sector is a key growth driver. Unfortunately, the industrial sector...
Words: 7689 - Pages: 31
...provide basic understanding of effective public financial management systems to the participants in a better, quicker and efficient way by making them familiar with various internal and external techniques available to strengthen the fiscal transparency and management that is catalyst for economic growth and development. This UNITAR e-learning course will give a holistic overview of the concept and techniques of public financial management. The course will discuss the role of internal controls and audit system as well as the role of external audits in ensuring efficiency and integrity in public financial management and in combating corruption. The course is designed especially for public officials and development practitioners, but is also open to the general public who want to be aware of public financial management instruments and techniques. Some previous knowledge of public financial management and familiarity with financial concepts will be assumed in this course. ------------------------------------------------- Learning Objectives At the end of the course, the participants should be able to: * Discuss the concept of public financial management and recognize the difficulties faced by various sectors in ensuring and maintaining fiscal transparency and effective management; * Clearly describe the legal and institutional framework required to ensure effective public...
Words: 14542 - Pages: 59
...Financial Management for NPO I. Introduction “Ten years ago, management was still a dirty word for those involved in nonprofit organizations. Nonprofits prided themselves on being free of the taint of commercialism and above such sordid considerations as the bottom line… Today, nonprofit organizations have learned that they need management and leadership even more than business does…” (Montana and Petit, 2009) The years when “management” was a prohibited word in nonprofit organizations are long gone. Nowadays, nonprofit leaders are starting to realize what an essential role financial management plays in NPOs. Moreover, as the number of nonprofit organizations around the world keeps rising, more nonprofit leaders and managers have aimed to develop their skills in financial management. As a matter of fact, the nonprofit sector is one of the fastest-growing sectors around the world: just in the United States there are 1.5 million nonprofit organizations and growing, employing one in 10 American employees. In this paper, we will look at: 1) the financial management process, 2) the importance of financial management for nonprofit organizations, 3) financial management for nonprofits organizations. II. What is Financial Management? One of the most accepted definitions of financial management was given by Kuchal, stating that “Financial Management deals with procurement of funds and their effective utilization in the business” (as cited in Paramasivan & Subramanian...
Words: 2485 - Pages: 10
...Business Proposal and Peer Review Feedback Chris Cook ECO/561 March 17, 2014 Willard Berry Business Proposal and Peer Review Feedback Week Four Revision Several areas in the economic analysis for Sony's virtual feedback harness require update. The first area is the method to determine the profit maximizing quantity. Profit is maximized, or loss minimized, at the output at which marginal revenue (or price in pure competition) equals marginal cost, provided that price exceeds average variable cost (McConnell, Brue, & Flynn, 2009, p. 189). To determine these factors, Sony must quantify resource demands as well as optimum product price. When Sony launched the Playstation 4 it cost $381 to manufacture. Sony sold the product at $399, only $18 above the manufacturing cost (Hesseldahl, 2013). Profit on this product was almost at maximum levels before the product launched. However, Sony's strategy considered the profit gained from sales of software and gaming accessories as critical to the products overall success. Sony was willing to sell the game system at a loss because of the expected profits in the ancillary market (Hesseldahl, 2013). The feedback harness would follow the same plan as the game system itself because the true profit comes from sales of new games that support this new technology. Each succeeding game system requires the purchase of new software as new systems will not support previous versions of games. The second area requiring update is the selected...
Words: 1874 - Pages: 8
...The Indian Rupee Crisis Economics Essay-1 In this paper we are going to examine the cause and the impact of rupee depreciation on the Indian economy. Since last few months Indian rupee came under great stress as overseas investors are paring their exposure to Asia’s third-largest economy amid international uncertainty and mounting worries over the domestic economy. In 2009 – 2010 the exchange rate was hovering around the 43 – 45 rupees per US Dollar level. And now it is around 55 – 56 levels, the main reasons to examine are increase in import bill, higher inflation, fiscal mismanagement and all resulting in higher cost of borrowing. The rupee has lost more than 15% of its value this year, making it one of the worst performing currencies in Asia. This paper reviews the probable reasons for this depreciation of the rupee and the outlook for the same. It also reflects on the policy options to help prevent the depreciation of the Rupee. This paper will firstly discuss about the economy of currency to give an overview of the problem and the factors related to it. Afterwards it will be examining the causes of the Indian rupee depreciation with respect to the Indian economy and the global economy. And after that it will analyse the impact of the same on trade and business. Finally, recommending the policy actions in response of the falling currency. II. LITERATURE REVIEW: These papers include the work which have been used as a basis or reference for formulating the policies regarding...
Words: 3340 - Pages: 14
...The International Monetary Fund The International Monetary Fund is an international organization that provides financial assistance and advice to member countries. This article will discuss the main functions of the organization, which has become an enduring institution integral to the creation of financial markets worldwide and to the growth of developing countries. History: The International Monetary Fund was originally laid out as a part of the Bretton Woods system exchange agreement in 1944. During the earlier Great Depression, countries sharply raised barriers to foreign trade in an attempt to improve their failing economies. This led to the devaluation of national currencies and a decline in world trade. This breakdown in international monetary co-operation created a need for oversight. The representatives of 45 governments met at the Bretton Woods Conference in the Mount Washington Hotel in the area of Bretton Woods, New Hampshire in the United States, to discuss framework for post-World War II international economic co-operation. The participating countries were concerned with the rebuilding of Europe and the global economic system after the war. There were two views on the role the IMF should assume as a global economic institution. British economist John Maynard Keynes imagined that the IMF would be a cooperative fund upon which member states could draw to maintain economic activity and employment through periodic crises. This view suggested an IMF that helped...
Words: 2456 - Pages: 10
