...Federal Reserve Bank Lovey Brown ECO/372 August 9, 2012 The United States, was economically influenced by both domestic and global events in 2011. The Japanese earthquake left a major fiscal effect on the world. Monetary situations of importance is the reason states have central banks. These banks act as the state's money directors. Purpose and Function of Money Money has a main purpose and function in the economic world. It functions as a regulation of well-known dealings for government systems. Monetary units can be calculated by the quality of the other forms of currency such as commodities. The economic value of each unit of measurement is normally discovered by the government of which it is settled. In the United States, the Federal Reserve controls the domestic monetary system policy. There are primarily two ways a central bank controls its state's monetary system policy. The Federal Reserve can allocate interest rates to banks acquiring money from the Central Bank. The Federal Reserve can also regulate and set the Federal Reserve obligation for banking organizations. Managing a Nation's Monetary System Without an organization that controls states’ money, there would not only be a diverse nation, and possibly open to improper growth. Our nation faced prevailing economic depressions in the 1800s because of the want of a domestic monetary control system. In 1913, Congress decided that it was necessary to proportion the fiscal...
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...Course Name: Commercial Bank Management Course Code: FIN 425 Submission page - Submitted To – Fahim Muntaha Course instructor, school of business ASA University Bangladesh (ASAUB) - Submitted By – KAMRUL HASAN CHOWDHURY ID No: 081-12-0414 S.M.IBRAHIM ID No: 081-12-0396 ISHRAT NAHAR ESHA ID No: 081-12-0408 MD.MAHAMUD SULTAN ID No: 081-12-418 ROKSANAQ HUQ TABARI ID No: 081-12-424 Section: FIN-3C 3rd Batch, (Summer Semester, 2011) Date of Submission: 14th August, 2011 - Letter of Transmittal- Date: 14th August, 20011 To Fahim Muntaha Course instructor School of Business ASA University Bangladesh (ASAUB) Dear Sir, Here is a report that we have prepared for our, FIN-425: Commercial Bank Management. The topic of the report is the “Reserve and Liquidity Management of Islami Bank Bangladesh Ltd.”. It was an interesting & outstanding research for us & we learned a lot about the reserve and liquidity policy provided by IBBL. We would like to thank you for allowing us to work on this topic and for your constant guidance and support. We want to declare that, we took help from Internet website of the particular bank & advices from Cash Manager of IBBL. There might be fault in this report, please kindly consider us if there is any kind of mistake. I therefore, hope that you would kindly grant our report. Thanking you, Name | Signature | Kamrul hasan joy | | S .m. Ibrahim | | Mahamud sultan | | Eshrat nahar Esha | | ...
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...“The Federal Reserve Bank, which is the central bank of the United States, is a bank regulator and is responsible for monetary policy and defines money according to it liquidity “(Open Stax College). The Federal Reserve Bank (FED) is responsible for regulating currency within the United States economy to prevent inflation, recession, and the level of prices. The FED uses measures to track the money supple within the economy. Two measures the FED uses, to track money supply, are M1 and M2. “M1 money supply includes those monies that are very liquid such as, cash, checkable (demand) deposits, and travels checks “(Open Stax College). The M1 measures monies the majority of individuals and business use daily to conduct business or purchases. “The...
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...On CORPORATE FINANCE A study on Mobile Banking initiatives taken by Reserve Bank of India (RBI) to enable financial inclusion SUBMITTED BY A Naga Jyoti 1313009 Scope: This term paper envisages to study the major initiatives taken so far by Reserve Bank of India to enable financial inclusion using mobile device and the way forward to take the initiatives to the next level. Financial inclusion is the delivery of financial services at affordable costs to the disadvantaged and vulnerable segments of society. Indian banking sector has been facing severe challenges in bringing these under privileged sections of the society into the formal financial system. More than 70% of the population, in India, live in the rural areas and these people do not have any access to organized banking facilities. Extending the financial services to these unbanked population is a major challenge to the banks as operating cost of providing the services to this population is much higher than the monetary value that is carried by their financial transactions. Several innovative measures have been initiated by RBI to drive growth in financial inclusion like: 1. No-Frills Accounts (NFAs): RBI encouraged the banks to review their existing practices to enable financial inclusion. Banks extended financial services to the unbanked households by opening “no-frills” account (NFAs) with nil or very low minimum balance. Banks have even relaxed Know your Customer (KYC) norms for these people. ...
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...Natural disasters and large scale human error can have mixed impacts on a country’s GDP (e.g. New Zealand’s 2011 Christchurch earthquake, Japan’s March 2011 earthquake and tsunami, the 2010 U.S. Gulf of Mexico oil spill, floods and cyclones in Queensland in early 2011). Using one of the above examples, explain why natural and human- induced disasters often have mixed impact on GDP. (100 – 150 words) A series of disasters in recent years has affected economic growth in a country's GDP. Natural disasters are a "negative supply shock" as production processes are disrupted and business assets are damaged. (Reserve Bank of Australia, 2011) The floods and cyclones in Queensland in 2011 have largely impacted the GDP mostly due to the disruption of coal production. The floods also affected the agricultural areas, slowing down production and decrease in the quality of the products. The RBA (2011) has made a conclusion that the GDP growth in those quarters could be around "1/2 percentage point lower" than what it could've been. Use your example to briefly demonstrate the limitations of the current methods used to measure GDP. (about 50 – 100 words) The current methods used to measure GDP have limitations as it is "not necessarily a good measure of production as a contribution to economic well-being." (Mitchell & Wray) The social, health, and environmental costs of these disasters are not deducted from the value of the goods and services produced. GDP also excludes quality improvements...
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...Abstract After foreign direct investment, the second largest type of flows into developing countries, are workers’ remittances (ReenaAggarwal, 2006). Pac news reports” Fiji is estimated to have received $247million (US$165m) in inward remittances in 2007. However, the report said that the true size of remittances including unrecorded flows through formal and informal channels is believed to be larger. The report noted that the acting deputy governor of the Reserve Bank of Fiji, Barry Whiteside, had highlighted that remittances to Fiji in 2006 amounted to $313million (US$210m)”. (PACNEWS, 2008).This case study outlines the developmental impact of remittances on the welfare of the recipients. Alleviating poverty and increasing education levels for the poor with remittance as assistance. The level of education that can be achieved with remittance as an aid and what would have been evident had remittance not subsist. Further to this, through this case, it can be interesting to distinguish how remittances affect other pacific island countries in similar context. What are the factors that lead to remittances and how remittance income is actually utilized? Contradictions on remittances has been based on increased dependence, but this gives rise to another major question as to where remittance income is used and has there been development in those areas or not and what could have been the circumstance/status had remittance income not being one of the major source of income. This case...
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...Assignment Task The four largest Australian Banks have faced considerable pressure from the community and the government in recent times. This pressure has arisen due to their interest rate increases in association with their high reported earnings. As accountants, we are responsible for preparing financial statements and “calculating” the profit figures. In your opinion, do you think the big banks are managing their reported earnings to show lesser profits than what they are actually earning (i.e. using earnings management techniques)? You are required, and must, read and incorporate academic journal articles and other relevant materials to justify your viewpoint. INTRODUCTION Accounting can be broadly defined as the ‘measurement and communication’ of economic information to the decision makers (Watts and Zimmerman 1986). Accounting is divided into internal and external accounting on the basis of the users of the information (Spohr 2005). Spohr (2005) further highlights that the responsibility for preparing the external accounting information and publishing it lies with the managers of the firm. These managers rely on their inside knowledge of the firm’s current state to provide an accurate and fair picture of the financial state of the firm. The existence of accounting regulations and guidelines aims to improve the relevance and accuracy of the financial reports. However, this insider knowledge gained by managers can lead to information asymmetry. This occurs when...
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...ECOn3104- Assignment 1 Carry Trade: Impacts Abroad INTTRODUCTION The carry trade phenomena refers to the process whereby an investor borrows money in a relatively low interest rate currency (funding currency) and effectively invests in a high interest rate currency by converting funds into the high interest currency and lending the amount to yield a higher return. We can show how the European Central Bank (ECB) to permanently increase the money supply will have a direct affect on the domestic Australian economy. This form of carry trade behavior will cause instability in the domestic exchange rate to which the Reserve Bank of Australia (RBA) can respond with an appropriate policy. BODY: * European Central Bank action To understand the full extent of the carry trade, we must appreciate the operations of the ECB in managing the money supply and effectively stimulating necessary changes to proceed with a carry trade strategy. The ECB having direct control of the money supply enables them to increase the money supply through looser monetary policy, for example. This is seen graphically in Figure 1 of appendix A [krugman, Obstfeld & Melitz, 2012]. From the graph we can see the Australian money market is initially at equilibrium at point 1 and the foreign exchange market at 1’, equating to an exchange rate of E$/€1. Now with the ECB action we illustrate the increase in money supply by a shift to the left of the expected Euro interest rate. Foreign exchange...
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...others. In July 2011, the AFP announced that it had charged two subsidiaries of the RBA, NPA and Securency, as well as six former banknote executives, with paying bribes to foreign officials 'in order to win banknote supply contracts. In August 2011, the AFP reported that a seventh individual had been charged. At the time, the RBA wholly owned NPA and owned 50 per cent of Securency. Facts related to various scandals and governance failings- The AFP investigation relates to alleged bribes paid to public officials in up to six countries including Indonesia, Malaysia and Vietnam between 1999 and 2005. The allegations are that senior managers from Securency and NPA used international sales agents to bribe foreign public officials to secure bank note contracts. The charges against the individuals relate to subsections and of the Criminal Code Act 1995 which carry a maximum penalty of 10 years’ imprisonment and/or a $1.1 million fine. The case is the first of its kind under Australia's foreign bribery legislation which came into effect in December 1999. AFP investigations were pursued concurrently with related investigations by overseas law enforcement agencies involving cooperation with the UK's Serious Fraud Squad, the Malaysian Anti-Corruption Commission and Attorney-General's Chambers as well as the Indonesian National Police. In October 2011 Securency and NPA pleaded guilty to three charges each of conspiring to bribe foreign public officials and were ordered to pay penalties...
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...pwc.com.au/mba PwC analysis of the major banks results for full year 2012 Modest growth, potential for more ... The most recent Australian bank results show the extent of headwinds facing the Australian banks. After two years of double-digit profit growth, underlying cash earnings rose by only 3.6% in 2012. All of that growth came early in the year; with profit showing no growth in the second six months compared to the first half-year. At the same time, the banks continued to strengthen their capital base with average shareholder funds rising by 8.5% in 2012 compared to 2011, so that return on equity (RoE) fell from 16.4% in 2011 to 15.6% in 2012, reinforcing our long-held view that bank RoEs are in transition to an era where 15% will set the upper bound, not the lower bound, for Australian bank average RoEs. This cautious outlook is reinforced by global developments since our last report six months ago, and in particular that global growth expectations have been revised downwards, leading to further monetary policy easing across the globe, including in Australia. At the same time ECB President Draghi’s commitment in July to do “whatever it takes” marked a much more constructive period for dealing with Eurozone concerns and supporting lower risk yields in many markets including wholesale funding markets for our banks over the past few months. The in-principle agreement to create a Eurozone banking union is a tangible sign of meaningful change. Domestically, the main...
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...Reserve Bank of India: Functions and Working RESERVE BANK OF INDIA www.rbi.org.in ž¸¸£·¸ú¡¸ ¹£ö¸¨¸Ä ¤¸ÿˆ 2 Foreword The Reserve Bank of India, the nation’s central bank, began operations on April 01, 1935. It was established with the objective of ensuring monetary stability and operating the currency and credit system of the country to its advantage. Its functions comprise monetary management, foreign exchange and reserves management, government debt management, financial regulation and supervision, apart from currency management and acting as banker to the banks and to the Government. In addition, from the beginning, the Reserve Bank has played an active developmental role, particularly for the agriculture and rural sectors. Over the years, these functions have evolved in tandem with national and global developments This book aims to demystify the central bank by providing a simple account of the Reserve Bank’s operations and the multidisciplinary nature of its functions. The Bank today focuses, among other things, on maintaining price and financial stability; ensuring credit flow to productive sectors of the economy; managing supply of good currency notes within the country; and supervising and taking a lead in development of financial markets and institutions. The book serves to highlight how the Reserve Bank’s decisions touch the daily lives of all Indians and help chart the country’s economic and financial course. We hope that readers would find the book...
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...Reserve Bank of India RESERVE BANK OF INDIA www.rbi.org.in ž¸¸£·¸ú¡¸ ¹£ö¸¨¸Ä ¤Îˆ RBI Central Office Building, Mumbai RESERVE BANK OF INDIA www.rbi.org.in ž¸¸£·¸ú¡¸ ¹£ö¸¨¸Ä ¤Îˆ 2 Contents Overview: Who We Are � Celebrating Our Platinum Jubilee � The Reserve Bank: Tradition and Change � Celebrating 75 years: Highlights Organisation and Structure: How We Operate � Management and Structure Main Activities: What We Do � Monetary Authority � Issuer of Currency � Banker and Debt Manager to Government � Banker to Banks � Regulator of the Banking System � Manager of Foreign Exchange � Regulator and Supervisor of the Payment and Settlement Systems � Developmental Role Research, Data and Knowledge Sharing: How We Communicate � Communicating with the Public � RBI Publications Addressing Current and Future Challenges Customer Service: How Can We Help You? 3 4 5 6 8 9 11 12 15 18 20 22 24 26 28 31 32 33 34 36 Overview: Who We Are The Reserve Bank of India (RBI) is the nation’s central bank Since 1935, when we began operations, we have stood at the centre of India’s financial system, with a fundamental commitment to maintaining the nation’s monetary and financial stability. 3 From ensuring stability of interest and exchange rates to providing liquidity and an adequate supply of currency and credit for the real sector; from ensuring bank penetration and safety of depositors’ funds to promoting and developing financial institutions and markets, the...
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...Speech Financial Inclusion and Banks: Issues and Perspectives Financial Inclusion and Banks: Issues and Perspectives* K. C. Chakrabarty Ms Naina Lal Kidwai, Vice President, Federation of Indian Chambers of Commerce and Industry (FICCI) and Country Head HSBC India & Director, HSBC Asia Pacific, Ms Meera Sanyal, Chairperson, FICCI’s Financial Inclusion Committee & Country Executive India, The Royal Bank of Scotland N.V., Ms Caitlin Wiesen, Country Director, UNDP, Mr Mathew Titus, Co-chair, FICCI’s Financial Inclusion Committee & Executive Director, Sa-Dhan, Ms Jyoti Vij, Assistant Secretary General, FICCI, members of the print and electronic media, ladies and gentlemen. It is indeed a pleasure to be present here today to address this gathering on the bankers’ role in promoting financial inclusion, their achievements, and the key issues and challenges being faced by them. Role of FICCI and UNDP 2. As you are all aware, financial inclusion is a mammoth task and it cannot be achieved without the active collaboration of all stakeholders. It is in this context that this particular seminar organised by FICCI, which is an apex industry association and brings a large number of stakeholders under its fold, and United Nations Development Programme (UNDP), which is at the centre of the UN’s efforts to reduce global poverty, assumes significance. FICCI has been playing a leading role in policy debates touching social, economic and political issues and I believe that corporates have a great...
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...The recent global financial crisis caused numerous serious problems around the world. Many countries like the United States, Spain and Greece suffered very heavy strikes during this financial crisis. The Australian banking system is no exception, has been impacted. Some financial institutions grasp this crisis into good opportunities, however other commercial banks are exposed to big challenge and face many risks like credit and liquidity risk. Given this situation, APRA outlines the regulations to ensure and consolidate the safety for Australian banking system, such as Liquidity and Credit quality. This report will analyse the difference between credit risk and liquidity risk at the beginning, then the regulations from APRA in terms of credit risk for the major and smaller banks will be discussed. Next, there will be 3 ratios of credit risk of the “big four” contrast to a major commercial bank in the UK. This report will be end with evaluating the credit risk of 5 major banks and give some findings are regarding with the credit risk of 5 banks. 1. Explain the difference between credit risk and liquidity risk for a bank. 1.1 Credit risk Credit risk is the risk that the promised cash flows from loans and securities held by FIs may not be paid in full (Lange & Saunders, 2013). Normally, all financial institutions have probability to face this risk. However, if borrowed principal is paid on maturity and interest payments are paid on the due date, FIs can eliminate credit...
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...Research Note: ATM - Automated Teller Machine FY13 • Robust demand Growing demand Increase in working population and growing disposable incomes will raise demand for banking and related services Housing and personal finance are expected to remain key demand drivers Rural banking is expected to witness growth in the future • Innovation in services Mobile, Internet banking and extension of facilities at ATM stations to improve operational efficiency Vast un-banked population highlights scope for innovation in delivery FY25E Total asset size: USD28.5 trillion Total asset size: USD1.8 trillion • • • Advantage India Business fundamentals • • Policy support • Rising fee incomes improving the revenue mix of banks High net interest margins, along with low NPA levels, ensure healthy business fundamentals • Wide policy support in the form of private sector participation and...
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