...Rodrigo Albornoz Prof. Gordon. WSC 001 11/17/2014 College Or Costllege? What do you think should raise more, inflation or college tuition? History has shown that the cost to study in US colleges raises faster than the US inflation (Lorin). Why is this happening? Or even worse, why would the system support such incongruence? This could be because the high education level offered requires such high prices, or maybe, it is a way to improve the economy by teaching society that there is no better investment than education. Anyway, let’s try to discover the answer by delving in these two different aspects that, in fact, are the main reasons of education on society: To support the learning and improve the economy. Thinking and researching about our first point we find that it is fact that European academies have an excellent academic system, and we also find that Germany is offering free education to Americans and other international students without requiring “scholarships” (“German Colleges”). Perhaps the US education is perfect, and so, even better that German education? According to Paulo Freire, that is not the answer either. In Paulo Freire’s essay, he describes an important weakness in the American academic system. Freire refers to the “Banking Concept” as a symbolism of what is really happening between some students and professors. Students are described as a bank account to deposit information. As students never think critically about what is learned, they just assimilate...
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...Short answer The main macroeconomic cause of gfc US households actually reduced their savings from 2000. The household savings rate in the US actually became negative! Graphs ppt People save more when higher IR, Spend more when low IR 1. Monetary policy (low short term IR) The literature has identified a number of channels through which monetary policy might have contributed to the build-up in financial imbalances. Most of these are thought to have worked through policy rates that were kept low for too long.8 Loose monetary policy (a low short-term rate) may have i) reduced the cost of wholesale funding for intermediaries, leading those intermediaries to build-up leverage ii) may more generally have caused banks to take more risks, including credit and liquidity risks (iii) may have increased the supply of and demand for credit (mortgages), causing asset (house) prices to rise 2. Global imbalances ( low long term IR) Rising global imbalances are associated with a greater spread of current account positions across countries and larger net flows of capital between countries. global excess of desired savings relative to desired investment—a “savings glut(과잉)”— had reduced long term rates globally, including in the United States.(significant increase of supply of saving cause a low ir), it argued that high capital inflows were an important reason of low IR from 2003- 2007 High capital inflows in turn (i) can reduce the cost of wholesale funding for domestic...
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...alleviation, financial sustainability, developed world, microfinance programs, empowerment, Grameen America, Acción USA, Project Enterprise Authors Department Master Thesis number Supervisor Keywords Abstract This study strives to examine how microfinance activities can be successfully applied in the developed world. This is done through a field study in New York City. Throughout interviews and observations with three of the largest actors in New York: Acción USA, Grameen America and Project Enterprise, as well as interviews with their clients, the lending processes and key characteristics of the organizations have been mapped. Furthermore, the Federal Reserve Bank of New York has been interviewed on the general opinion of microfinance in the US. Previous theory elaborates on some of the major challenges with implementing microfinance activities in the developed world, such as lack of funding and cultural differences hindering the lending processes to be carried out as they are in the developing world. Henceforth, problems regarding regulation, awareness and outreach are discussed. Throughout the observation of the institutions we can confirm that some of the challenges brought up in theory actually are apparent. We do, however, question the criticism towards the use of groupbased lending programs in the developed world. Our study does, in...
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...1 How has the asset composition of savings and loan associations differed from those of commercial banks? Explain why and how this distinction have changed (or may change) over time. Savings and loan associations have traditionally concentrated in mortgage lending, while commercial banks have concentrated in commercial lending. Savings and loan associations are now allowed to diversify their asset portfolio to a greater degree and will likely increase their concentration in commercial loans (but not to the same degree as commercial banks). Classify the types of financial institutions mentioned in this chapter as either depository or nondepository. Explain the general difference between depository and nondepository institution sources of funds. Depository institutions include commercial banks, savings and loan associations, and credit unions. These institutions differ from nondepository institutions in that they accept deposits. The source of funds: Commercial Banks and Savings Institutions- Deposits from households, businesses, and government agencies. Credit Unions-Deposits from Credit Union members Nondepository institutions include finance companies, mutual funds, insurance companies, pension funds, and Money market funds. Sources of funds: Finance companies sell securities to households and businesses to obtain funds Mutual Funds (Dominant in total assets) –sell shares to households, businesses...
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...The statement ‘everything depends on the psychology of investors’ is useful in explaining the AFC. It started with Thailand, where the overvalued baht was pegged to the US dollar. An appreciation of the USD put strain on the Thai government’s position to maintain the peg, and coupled with Thailand’s current account deficit, investors and currency speculators suspected an imminent devaluation. The loss of investor confidence and speculation led them to dispose of their baht for the USD, and the baht further depressed in value. By this time, the Thai government was no longer able to maintain the overvalued baht, and international capital flew out of the country, compounding the decline of stock and property market indices. The government was forced to release the peg, which triggered off the AFC. The loss of investor confidence was like a contagion that spread over the region- many investors did not just invest in one country, but in multiple countries in SEA, and the situation in Thailand had them pulling out of investments in the other countries as well when they re-assessed the risk factors in Thailand’s neighbouring countries and saw similar symptoms afflicting them. Indonesia was the next to be hit by speculative runs after Thailand. Thailand suffered from a -54.6% rate of change in the value of its baht against the USD, but Indonesia suffered the wildest fluctuation in the value of the rupiah, with a -83.6% rate of change. This contagious loss of confidence and panic effect...
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...adhere to some outlined conditions that are spelt out in the article of agreement in order for them to secure the loans; otherwise, the loans are withheld (White, 2012). Equally, a healthy population significantly contributes to economic development of a nation in various ways. This paper outlines how Haiti, one of the developing states, has used loans and grants for development. In addition, the paper outlines how a healthy population affects Haiti’s economic development. How Funding from IMF and World Bank and Other Financial Institutions Affects Haiti’s Economic and Political Development Since her independence up to date, Haiti remains to be heavily indebted because the country borrows from World Bank, IMF, bilateral friends, and from regional banks such as IADB. By June 2009, Haiti’s debts totaled to $1.2 billion (Frankema & Masé, 2014), whereby most of these debts are taken with an aim of funding development projects and correcting her balance-of-payments. However, the funds are never directed to the intended purpose, since they are misused and embezzled by corrupt government officials and military regimes who have been ruling the country (Frankema & Masé, 2014). For instance, it is estimated that $900 million had been borrowed by Baby Doc, one of the former dictators, before leaving the country (Frankema & Masé, 2014). As a result of the country being...
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...1.0 Question a Explain sovereign risk. Broadly defined, sovereign risk refers to the risk that a host government or sovereign power will default on its payment obligations. For example, a host government or sovereign power may unilaterally repudiate its foreign obligations or many prevent local firms from honouring their foreign obligations. Sovereign risk reflects potential adverse effects resulting from a country’s political conditions. In other words, sovereign risk reflects the possibility that political conditions could prevent the counterparty in a swap agreement from meeting its payment obligations. Various political conditions could prevent the counterparty from meeting its obligation in the swap agreement. For example, the local government might take over the counterparty and then decide not to meet its payment obligations. Alternatively, the government might impose foreign exchange controls that prohibit the counterparty from making its payments. Sovereign risk differs from credit risk because it is dependent on the financial status of the government rather than the counterparty itself. A counterparty could have very low credit risk but conceivably be perceived as having high sovereign risk because of its government. It does not have control over some restrictions that are imposed by its government. Comment on the most common indicator of sovereign risk with current examples. Spain's Government Bond Yield for 10 Year Notes rallied 58 basis points during the last...
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...globally between investment banks, insurance company, Audit firms, financial services firms and other multinational corporations. What are the causes that these entire gigantic firms led to major losses? This economic crisis had cost ten millions of people lost their savings, their jobs and their homes. The first part of the video was about Iceland country. Iceland is such a beautiful country with fresh air, foods, efficient operations of geothermal and hydroelectric and where the economic was stable in marketing before the crisis happen. Iceland is one of the high standard living countries. In 2008, the population is very high about 320,000 and the GDP of the country was $13billion, the bank had major losses about 100billions. During the year of 2008, Iceland banks collapses due to borrowers unable to settle their debts from lenders. Unemployment triples in 6 months. The three banks in Iceland which are Iceland’s banking, Kaupping and GLINTR had borrowed money which is three times the economics of Iceland. Government had financial deregulation. The government could not able to protect the citizen during this crisis. Collapses of major bank in US and Iceland are main causes to this crisis The major Investment banks which are Lehman brothers, Merrill Lynch and Bears Stearns, Goldman Sachs, Morgan Stanley, the major Credit rating agencies which are Moody’s, Standard and Poor’s and Fitch, AIG insurance companies, Auditing firms, financial service corporation are the main reason causes...
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...I. Introduction A. Attention Getter: Wouldn’t it be nice if any student would attend college without the struggles of paying for school. B. Thesis Statement: The expensive of College tuition has neglected people to pursue their dreams. C. Preview Sentence: During my speech I will discuss my three reasons why college should be more affordable. Student loans, you will live a more comfortable lifestyle, and because every person deserves a better education. Translation- I’ll start by discussing how people are struggling to pay their loans to the bank. II. Body 1. Student loans Topic Sentence- Instead of the students thinking of how enjoyable and good of a time it’s going to be going to college. Students are worried of how are they going to be able to pay for school. A. According to Mark Kantrowitz, the publisher of edvisors.com, the class of 2015 will each graduate with $35,051 in student dept on average. B. As stated in huffingtonpost.com, during the last 30 years, the cost of obtaining a college degree has risen 1,120 percent. Transition- Let me share you why going to school will provide you with a better future. 2. Live a more comfortable lifestyle Topic Sentence- Going to college will provide you with many benefits. A. Susan Demas said that going to college, on average, make a whooping one million dollars more in a lifetime earnings than...
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...The SME products and functions of Prime Bank Limited [pic] Bangladesh University of business and technology (BUBT) The SME products and functions of Prime Bank Limited Prepared for: Md. zakir Hossain Lecturer Department of finance Bangladesh University of business and technology (BUBT) Prepared by: The extreme’z |SL No. | Name |Roll no. | |01. |Md. Safiul hasan |10113101056 | |02. |Ayesha siddika |10113101057 | |03. |Md. imadul haque khan |10113101075 | |04. |Fatema-tuz-zohora Tama |10113101077 | |05. |Farzana Anower |10113101090 | Intake: 25th section: 02 program: B.B.A Date of submission: 10th September, 2011 Date: 10th September, 2011 MD. zakir hossain Lecturer Department of finance Bangladesh University Of business and technology Dear Sir, It is our pleasure to submit the report on “The SME products and functions of Prime Bank Limited” as requirement of BUS-101...
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...Exchange rate volatility and its impact: Case of India and China Exchange Rate Exchange rate between two currencies is the rate at which one currency will be exchanged for another. How to calculate exchange rate Each country manages the value of its currency through varying mechanisms. The currency can either be free-floating or fixed. 1. Movable or Adjusted Peg System A system of fixed exchange rates, but with a provision for the revaluation (usually devaluation) of a currency. E.g. Between 1994 and 2005, the Chinese Yuan renminbi (RMB) was pegged to the United States dollar at RMB 8.2768 to $1. 2. Free Floating System In this system the exchange rate is allowed to vary against that of other currencies. It is...
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...current article “IMF programs: Who is chosen and what are the effects?” by Robert J. Barro, Jong-Wha Lee talks about the lending policies and practices of IMF which responds to economic conditions but are also sensitive to political-economy variables. Paper says that all developing countries have received IMF financial support at least once since 1970 with few exceptions including Botswana, Iraq, Malaysia, and Kuwait (Robert J. Barro, Jong-Wha, 2005) but the real question is why so many countries are sorting out financial assistance from IMF? and are these loans are really helpful for their economy? It further explains the determination and effects of IMF program on the country’s economic growth because it invokes a controversy among the claim of IMF which is to contribute the sustainable growth in the economy of its member countries and the calculations made from the current data of 130 countries which show that a higher loan participation reduces the economic growth plus a little indirect effects on other economic and political variables like investment, inflation, government consumption, international openness, the rule of law and democracy(Robert J. Barro, Jong-Wha,2005) which will lead us to investigate the importance of institutional and geopolitical influences in IMF program, approval and participation. From the results of this research paper we can say that IMF lending may be bad for the economy but good for the governments and individual politicians who arrange the...
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...Dr. Jekyll and Mr. Hyde, neither should the country of Qatar and the Republic of Congo, (DRC) where the average income in Qatar is over one hundred thousand dollars, while in the Democratic Republic of Congo, (DRC) it’s just under four hundred dollars which is a lot in a poor country. Positive vs. Negative One of the negative sides to receiving foreign aid in a developing countries such as Congo which received nearly $500 million in 2012, and $736 million dollars in 2013. The chances that countries will repay those loans is nearly nonexistent, there having poor countries rely on more loans from the World Bank, and the International Monetary Fund (IMF). With 80 million hectares of arable land and over 1,100 minerals and precious metals, the DRC has the potential to be one of the richest countries on the African continent and a driver for African growth, but foreign aid lock down this country with agreements that the IMF and the World Bank knows DRC cannot repay and force them to stipulation such as reducing trading, cut their budgets, reduces their currency value, which hurts the country economy, inflation set in, and goods and services are unaffordable, therefore hurting the poorest of the poor. As Ugandan President Yoweri Museveni said to George W. Bush in 2003, “I don’t want aid; I want trade. Aid cannot transform society.” (Daly, 2013) Another negative side to giving aid the DRC is that since the DRC cannot repay the loans, most of their infrastructure goes unattended...
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...high for people to own their own home in America “with bankers offering home buyers 0%-110% mortgages” encouraging buyers to want to buy a home even more, then with that America tried to meet the demand, supplying more houses due to constructing new ones. Luci ellis said that “Firstly, the US housing construction boom itself helped create this vulnerability. In contrast to some other countries, strong housing demand was met with additional supply that exceeded underlying needs. When the boom stopped, the United States was left with an overhang of excess supply that other countries have not built up” so By the end of that year, housing starts had fallen by around 40% “ therefore in the end the supply was greater than the demand and the US had spent money on houses that no one needed. However Paul Krugman, (September 2009) said that “Few economists saw our current crisis coming, but this predictive failure was the least of the field’s problems. More important was the profession’s blindness to the very possibility of catastrophic failures in a market economy” so if the economists could see it and banks were to ignorant to the possibilities then how could consumer demand be tamed, maybe if the US decided not to meet the consumer demand with so much supply and had approached it more cautiously then maybe they wouldn’t have lost as much money? “In a 2007 interview, Eugene Fama,...
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...international exchange rates and promote liberal economic policies. IMF will also provide short-term loan to assist members to overcome short-term imbalance of payment problems. On the other hand, World Bank offers loans to members to finance productive investments as well as assisting developing countries in its economy so as to reduce poverty within the country. Singapore joins both IMF and World Bank under the Bretton Woods Agreements Acts in 1966, 3 August. Before we join to become IMF as a member, during the Singapore-Malaya separation, we had sought for their technical assistance and to act as a broker in the negotiation with Malaysia for a common currency and banking system. In order to so, IMF first conducted a preliminary study to identify the concerns of Singapore and Malaysia regarding the common currency issue. IMF then acts as a broker in the final round of negotiations between 10 June 1966 and 5 July 1966. Before joining World Bank as a member, Singapore had sought for 2 loans where the first loan of US$15 million was used for the construction of the first phase of the Pasir Panjang ‘B’ Power Station and the second loan of US$6.8 million was used to construct Johor River Water Project. As a pre-requisite for the loan, the World Bank then requested our government to set up statutory authority (Public Utilities Board [PUB]) to manage the utilization and repayment of the loan. The advantages of Singapore joining as a member are being able to buy gold or other currencies...
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