Discussion formate Essay Example | Topics and Well Written Essays - 250 words

Discussion formate - Essay Example Google has done this recently and continues to do so. Of course, as a company’s product line grows and diversifies, they will naturally have new competitors as well as a greater number of competitors overall. As Google’s offerings have grown from search engines and advertising to smarts phones and online music, new competitors like Apple have emerged and competition has increased between the two companies (yahoo.com). Google is able to compete with Apple because they have similar resources and a similar market (5-4). In regards to Google and Apple, one can witness how when Apple comes out with a new phone or app, Google will respond with a similar product (and vice-versa). These are known as strategic actions and responses (5-6). Similarly, Google and Apple engage in pricing decisions â€Å"to increase demand in certain markets during certain periods† (5-7). Pricing and other â€Å"fine-tuning† methods are known as tactical actions and are much easier to i mplement than strategic actions. While Google is a â€Å"first-mover† in the search engine market, it is a â€Å"second mover† in the mobile phone market (5-8). Being a first-mover has allowed them to gain a majority of the market share. As a second-mover in the mobile phone market Apple still owns and maintains dominance.

Economic Concepts Assignment Example | Topics and Well Written Essays - 1000 words

Economic Concepts - Assignment Example Eventually, the importance of trading with each other will be realized as both parties become better off as a result of such trade. Economic Concepts 1. What is Michelle’s opportunity cost of producing potatoes? 200 potatoes = 50 chickens --> 200/200 potatoes = 50/200 chickens --> 1 potato = ? chicken or 0.25 Opportunity cost of producing one potato is ? chicken or .25. 2. What is Michelle’s opportunity cost of producing chickens? 50 chickens = 200 potatoes --> 50/50 chickens = 200/50 potatoes --> 1 chicken = 4 potatoes Opportunity cost of producing one chicken is 4 potatoes. 3. What is James’ opportunity cost of producing potatoes? 80 potatoes = 40 chickens --> 80/80 potatoes = 40/80 chickens --> 1 potato = ? chicken Opportunity cost of producing one potato is ? chicken. 4. What is James’ opportunity cost of producing chickens? 40 chickens =80 potatoes --> 40/40 chickens = 80/40 potatoes --> 1 chicken = 2 potatoes Opportunity cost of producing one chicken is 2 potatoes. 5. Which person has an absolute advantage in which activities? For Michelle: Opportunity cost of producing one potato is ? chicken. And opportunity cost of producing one chicken is 4 potatoes. For James: Opportunity cost of producing one potato is ? chicken. And opportunity cost of producing one chicken is 2 potatoes. ... This means that Michelle has the comparative advantage in producing one potato because it is cheaper for her to do this. 7. Which person has comparative advantage in chicken? For Michelle: The opportunity cost of producing one chicken is 4 potatoes. For James opportunity cost of producing one chicken is 2 potatoes. Hence, James has the lower opportunity cost for producing one chicken. This means that James has the comparative advantage in producing one chicken because it is cheaper for him to do this. 8. Suppose that they are thinking of each specializing completely in the area in which they have a comparative advantage, and then trading at a rate of 2.5 pounds of potatoes for 1 chicken, would they each be better off? Explain. Yes, both Michelle and James will be better off if they specialize in the area in which they have a comparative advantage and trade at a rate of 2.5 pounds of potatoes for 1 chicken. Michelle will specialize in producing potatoes while James will specialize in raising chickens. If Michelle will specialize in producing potatoes, she will produce 200 potatoes which when traded at a rate of 2.5 pounds for 1 chicken will produce 80 chickens (as shown below) as opposed to 50 chickens she would have produced if she specialized on raising them. 200 pounds of potatoes/ 2.5 pounds = 80 chickens. If James will specialize in raising chickens, he will produce 40 chickens which when traded at a rate of one chicken for 2.5 pounds of potatoes will produce 100 potatoes (as shown below) as opposed to producing 80 potatoes he would have produced if he specialized on planting them. 40 chickens x 2.5 pounds of potatoes = 100 potatoes. 9. How would you extend the above narrative to businesses, society as a whole or nations?

Impact of the Credit Crunch in the UK

Impact of the Credit Crunch in the UK Factors Influencing the Financial Institutions in the UK With Particular Reference to Credit Crunch A Comparative Study between Barclays and Northern Rock Bank I- Abstract Banks acts as intermediaries between surplus units depositing funds and investors or individuals seeking capital for investments. Thus, banks role is important in maintaining the flow of fund between these different parties. Banks like any other profit maximising firms are influenced by various factors that represent risks or opportunities. Therefore, banks business decisions are founded on aspects such as confidence in the market, the level of risks, the state of the economy, and their competitive strength. Regulation is essential for assuring compliance and integrity in the financial system, but rigid rules stifles the dynamicity of the banking industry and the financial sector as whole. Moreover, Central Bank role as a lender of last resort can rise the issue moral hazard by helping imprudent banks, however because banks are financial intermediaries, the impact of bank failure can have a detrimental effect on the financial system (systemic risk), and also on clients and customers, therefore bank supervision is vital due to their sensitive important role and their extensive impact. Furthermore, the development of events in the US financial market particularly the high default rate of subprime mortgage market led to a decrease in demand for tradable securities. This has affected confidence in the US and the global financial market, and consequently some financial institutions and banks such as northern rock in the UK faced difficulties in obtaining the necessary funds to maintain the business operation and remain solvent due to lack of short term liquidity. However, other banks faced similar difficulties but are using various methods to improve their balance sheets to overcome the current credit crisis. Moreover, governments and regulatory bodies are all taking the necessary measure to stimulate the market and tackle the core sources of the current credit crisis. II- Introduction Sustained economic development is often linked to efficient management of fund that is used to finance investments, which are projected to further create more wealth and opportunities for states, corporate and individual investors. Banks acts as intermediaries between surplus units depositing funds and investors seeking capital for investments. Thus, banks role is fundamental in maintaining the flow of fund between these different parties. Furthermore, the stability of financial and banking system is vital for the sustainability of economic growth and the preserve of investors confidence. Banks like any other profit maximising firms are influenced by various factors, these includes internal and external factors, which represent risks or advantages. Therefore, banks decisions are based on elements such as confidence in the market, the measurement and management of risks, the state of the economy, and their competitive power and market share. This study will look onto various factors influencing the financial institutions in the UK, with particular reference to Credit Crunch. This literature will comprise the banks management of risks, the role of authorities regulating and supervising the financial system, and explore the regulation of the banking industry and the financial system as a whole, in addition of the effect of regulation on banks performances. The analysis will include a comparative study between Barclays and Northern Rock Bank, taking into accounts the differences in their structure, size, as well as their reaction to changes in global financial markets. Furthermore, the Research will examine the fast moving global effect of the credit crunch; discuss the two banks business model, and explore their activities and behaviours. The study will also investigate the two banks high exposure to credit risks arising from risky investments, highlight the consequences of the heavy reliance on money market, and the use of securitisation for liquidity sources. IV- Methodology The research objective is to investigate the various factors that influence financial institutions in the UK, notably the banking industry. This research was based mainly on secondary research, the gathered data and information was sufficient for this research topic. However, sensitive data regarding the value of risk were not disclosed in both banks publication, such data is useful for the researcher to scrutinise banks estimation of risk and how realistic are the projections. Nevertheless, information about estimation of risks may be obtained directly from banks for further analysis of this specified area of banks management of risk. Research material relevant to the topic was collected from various academic sources; this is to explore issues and arguments regarding the regulation and supervision of the banking system. The two banks internet site was used to gather the background information along with the financial statements of the last six years, which were used in the research analysis to perform the comparison between Barclays and Northern Rock bank business strategies and financial performance. Publications from the Bank of England website were collected to study the central bank regulation and the management of the UK banking system, in addition to the historical data regarding interest, LOBOR, and inflation rate changes. Furthermore, articles from the Financial Services Authority (FSA) were gathered to study the role of the organisation and its contribution in supervising and stabilising the UK financial system. Recent publications from the Bank of International Settlement (BIS) were collected to study the role, the objectives and the effect of Basel directives on banks. Besides research the progress of current Basel II implementation along with the development of new requirements arising from the present credit crunch. Recent newspaper articles and various other media sources were gathered to collect the latest information regarding the development of the present credit crunch and its effect on banking industry, these includes sources such as BBC business, yahoo finance and the Financial Times website, and follow recent actions of regulators and banks management of the current crisis. Moreover, data from the two banks financial statements was collected to perform the Gap Analysis using Microsoft excel package to conduct a series of calculations. Other methods could have been used to assess bank risks such as value at risk (VaR) using regression analysis by utilising a computer package such as Microsoft Excel. The regression result will determine the degree of risk that the researched banks possess in their portfolio. However, the banks seldom disclose such sensitive information in published financial statements. This is to avoid adverse reaction by investors and credit rating agencies, which could therefore affect the banks stock prices, their reputation and confidence in the capital market. V- Literature review (Part I): The nature of banking The term bank can be applied to a wide range of financial institutions, from large banks to smallest mutually owned building society in the UK. The provision of deposit and loan distinguishes Banks from other financial institutions. Deposits products supply money on demand or following time notice. Deposits are liabilities for banks, thus must be well managed if banks want to make profit. Similarly, banks manage assets created through lending. Therefore, Banks main activity is being an intermediary between depositors and borrowers. Other non banks financial institutions, such as building societies and stockbrokers, also act as intermediaries; however it is the provision of loans and taking of deposits that distinguishes banks, though many banks provide various other financial services. 1) Management of risks in banking The fact is that bankers are in the business of managing risk. Pure and simple, that is the business of banking. (Walter Winston, former CEO of Citibank; the Economist, 10 April 1993). Banks, like all profit maximising firms, have to deal with macroeconomic risks, such as recession, inflation level, as well as other micro economic risks including political pressure, commercial breakdown of core customers or suppliers, natural disaster, in addition to the emergence of new competitive threats. From a finance theory viewpoint, Bank risk management is primarily composed of four main balance sheet risks, which includes liquidity risk, interest rate risk, credit risk, and capital risk (Hempel et al, 1989). Credit risk has been recognised as the principal risk in its effect on bank performance (Sinkey, 1992, p. 279) and bank failure (Spadaford, 1988). The primary reason why the correct management of credit risk is essential is because banks have restricted ability to absorb loan losses. Generally, the ability of a bank to absorb a loan loss is originated firstly from generated income of other profitable loans, and secondly by bank own capital. 2) Factors influencing financial institutions Banks and other profit maximising firms are influenced by various factors; financial institutions in particular are susceptible to a range of changes that may affect their projected growth. Some of these changes are internal changes, this occurs subsequent to restructuring program that a bank adopt following an expansion strategy such as in mergers and acquisitions or as a defensive strategy to remain competitive and maintain market share and fight competitive predators from acquiring the bank. Moreover, there are other external factors that can influence financial institutions, these includes a countys government monetary policy, the economic condition, the financial stability and the level of confidence in the market, the inflation rate, in addition to other risks such as credit and market risks. There are a range of risks that a bank may encounter, these includes the followings: a) Credit risk and counterparty risk: counterparty risk refers to the risks that after the creation of two parties contract, one party will renege the terms of the contract, while credit risk is the risk that a loan or an asset becomes lost due to default. b) Liquidity or funding risk: these are similar terms that refer to the risk of shortage of liquidity for maintaining operational commitments, that is the ability for the bank to cover its liabilities at due date. A shortage of sufficient liquid assets is often the trigger of financial distress, as it is increasingly difficult for the bank to obtain funds from the wholesale markets. Thus funding risk is the inability for the bank to maintain its daily operations. c) Market or price risk: this type of risk refers to the risk linked to over the counter instruments or traded stocks in a non liquid market, such as equities and bonds. Thus if a bank hold these items in its portfolio, then it is vulnerable to market or price risk, this is the risk that the price of these items is unstable, which is caused by systematic (movement of prices in all traded market instruments, for instance due to changes in economic policy) or specific market risks (the movement of a particular instrument is opposite to the rest of similar instruments, for example, this may be caused by unfavourable information about the issuer of that instrument). d) Interest rate risk: this is similar to price risk, because interest rate is price of money, it represent the opportunity cost of keeping money. This occurs because of interest rate mismatches between assets and liabilities, which differ in volume and maturity arising from the banks performing asset transformation. e) Capital or gearing risk: because banks are highly leveraged firms, they have to set aside some capital to cover the losses. The size of capital is proportional to the level of risk taken by the banks. Basel risk asset ratio principle requires banks to hold up to 8%. Besides, settlement or payments risk. This is when one party in the contract deliver assets or makes payment in advance, which creates exposure to potential loss. Furthermore, operational risk refers to risks from human capital, legal risks such as law suits, fraud, and physical capital. While sovereign and political risk refers to the risk that a government default on its debt obligation to a bank. Moreover, financial regulators has identified three main risks linked to banks, these includes market risks such as risks from exchange rates, interest rates, operational risk, commodity and equity prices. 3) The Asset-Liability Management (ALM) technique Because the fundamental and the primary activity of a bank is intermediation between surplus units that makes deposits and those that seek capital, which acquire fund from the bank, thus this payment system gives the bank the role of intermediation , where the intermediation is key activity, risk management is founded principally on a sound asset liability management (ALM). Furthermore, the ALM is a technique practiced by banks to effectively manage their risks, which was largely utilised by banks in the post war period up to the 1980s. The ALM method was the main tool used to manage banks books, it is essential that the bank maintain its assets and liabilities under control to minimise risks and remain solvent. Besides, banks are keeping their managers updated with newer techniques and skills to maintain their efficiency and competitiveness for the future, for instance, ALMA is an association that comprise around 40 financial institutions, which are international and local banking groups and building societies, mostly UK and Irish. However it is growing its membership and links around Europe. Its objective is to offer an informal and inclusive forum regarding the balance sheet management issues (Byrne, J. 2004). Due to the development of banking activities, innovative instrument became increasingly used by banks to manage their assets such as off balance sheet instruments, where banks moved from interest earning income products to non-interest income sources, thus this required that banks risk management should adopt newer techniques other then just the ALM to includes the risks originating from the off balance sheet instruments. Moreover, one of the new methods included in managing market and then credit risks is the Value at Risk (VaR), which involves giving an estimate of losses arising from the volatility of banks assets. 4) Credit Culture A recent research conducted by the Australian institute of bankers on the issue of Improving Asset Quality (Brice, 1992), which focused on the significance of credit culture. The great emphasis on credit culture was due to its influence on bank performance and in some occurrences bank failure ( Spadaford (1988) and Brice (1992)). Spadaford (1988) stated in his study of 162 bank failures in the United States that the analysis showed that 98% of bank failure occurred due to asset quality problems, among these problems are poor management of loan policy, inadequate systems to ensure compliance with internal rules and procedures, and the lack of supervision on senior and key management members in the organisation. McKinley (1991) has defined four main cultures that influence bank performance. predominantly the immediate performance-driven, which emphasis on earnings targets, followed by Market share/production-driven that focuses on being the biggest with greater production volume, along with Values-driven that balances between credit quality and generated income. In addition to the Unfocused (current priority-driven) bank, such bank lacks vision and appropriate strategy often set short term targets which consequently lead to unsuccessful ventures. VI- Literature review (Part II): Banks regulation The base of regulating financial institutions is founded on three broad frameworks. Primarily, the consumer protection argument, this is based on the notion that investors and depositors cannot be demanded to perform risk assessment of financial institutions they deal with, nor monitor standard of service or performance of these institutions. The consumer protection underlying principle is based on three types of regulation; firstly, compensation schemes created to repay all or part of losses caused by the insolvency of financial institutions; secondly, rules and regulations such as capital adequacy requirements designed to prevent insolvency; and lastly promote fairness in business or market practices by setting rules and standards. The latter regulation reveals market imperfections arising from principle agent problems, asymmetric information, and the issue of determining the true value of financial products or services, which are established well after the transaction or contract was formed (Dale, R and Wolfe, S. 1998). Furthermore, there are other concerns associated with consumer protection rationale. The provision of compensation to depositors and investors for losses sustained from the insolvency of financial institutions will further encourage these institutions to pursue risky investment decisions, thus there will be minimal or no incentive for prudence. This indicates that risky firms will be able to attract trade with identical terms and ease as prudent institutions, thus affecting financial market standards and discipline, and rising potential insolvency incidences. Therefore, the resulting losses must be covered by the deposit insurance scheme, investor protection fund, or in some cases by the tax payer. Thus, prudential controls on financial institutions are essential to minimise losses and to balance the regulatory incentives with the excessive risk-taking. The third aim of financial regulation is to promote integrity of markets, encompassing various issues such as market manipulation, fraud, transparency, and fairness; market integrity emphasis on organising the market as whole beyond just the relationship between financial firms and their consumers. Supervisors implementing the financial regulation consider systematic risk as the factor that causes great concerns. That is the risk that failure of one or more distressed financial institution could spread and cause a contagion effect, which could cause the collapse of other prudent institutions. It is their vulnerability to the contagion effect that single out financial institutions from other non financial firms. 1) Targets of regulation The major objectives of Financial regulation is to set guidelines for the activities of Banks, insurance companies, investment firms, exchanges, and fund management companies. The diverse principles for financial regulation mentioned above vary in their relation to these various institutions of the financial services sector. Banks are distinguished by what is referred to as short- term and unsecured value certain liabilities (deposits) and illiquid value-uncertain assets (loans). Banks conforms to deposits insurance and other type of consumer protection, partly because banks balance sheet consists of a variety of complex instruments and depositors are not capable to measure the riskiness of their deposits. However, depositor protection creates moral hazard problem. Furthermore, banks regulation focuses more on systemic risk. That is the possibility of a bank run that can spread to a number of banks and trigger a wider instability in the financial system. According to this notion, bank runs are the result of action by depositors retrieving their funds in response to amounting fear and uncertainty of the bank future arising from bank asset losses that could render it insolvent. Due to potential risk of losing all or some of their assets, depositors tend to make a run when initial signs indicate some troubles. Moreover, recent research found that the occurrence of a bank run can not be entirety explained by the decline of banks underlying assets (LaWare, J.1991.p34), (Diamond and Dybvig, 1983).The emphasis is on a banks maturity transformation notably the transfer of illiquid assets (bank loans) into liquid claims (bank deposits), taking into account that the banks loan portfolio substantially decline in value in an event of liquidation than on going concern. What triggers a rational bank run is that the uncertainty and the higher probability that the loan portfolio liquid value is less than the value of liquid deposits. This notion demonstrates how bank runs can possibly arise and affect even healthy banks. Thus distressed bank have to liberate its assets at liquidation value, therefore leading to possible insolvency. 2) Techniques of regulation While procedures of conduct of business regulation do not differ among various types of institutions, but in terms of prudential regulation there are fundamental differences that reveal the distinctive risk features of banks, insurance firms, and investment companies. Because bank failure has a greater effect on the whole market, and can create systemic crisis, governments and central banks have set bank regulation for creating extra protection in provision of extra fund by setting the lender of last resorts facilities, and deposit protection, however, these facilities creates moral hazard. Moreover, the deposit protection fund may exceeds the available protection from deposits insurance schemes, demonstrating policymakers greater emphasis for protecting the banking institutions rather then just depositors, as well showing the regulatory objectives of sustaining the banking system, while preventive regulation focuses more on tackling excessive risk taking by setting capital adequacy requirements for assets. Institutional regulation varies between states; in the UK for instance there was a single mega regulator, all regulation is institutional, each group/ institution have a diversified activity which all work under a single agency that overlook the supervision. Alternatively, in a system of multiple regulatory agencies specialised by duty, a fixed institutional regulation is unattainable due to the fact that these agencies are divers in functions, which calls for the appointment of a lead regulator for diversified groups (Taylor, M. 1995). 3) Regulation of the financial system By tradition banks are providers of loans among other services to firms and individual investors, temporary banks falls in deficits when their expenditure exceeds receipts; however banks generally adjust their liquidity position by using capital or wholesale market. Problems occur when banks capital is misused in funding high risk investments; this is often the consequences of bad governance by senior management in controlling the banks assets or it is the outcome of a contagion effect resulting from systemic risk. Moreover, the central bank controls and monitor commercial banks activities and set rules to regulate the banking system. This is to create stability and to promote confidence in financial market, which are vital elements in maintaining steady economic growth. 4) Bank failure Regulation of banks must be explored in context of bank failure. As any substantial problem produces the need for the introduction of changes in the regulatory framework, because the regulators attempt to correct any loophole in the system. Major bank failures in the history of banking occurred in the US in the year 1929. At that period there were 25,000 operating banks, however by 1934 the number had reduced to 14,000. These incidences consequently led to the implementation of more restrictive bank rules, such as single state operations, which until recently remained the feature of the US banking system. The subsequent major bank failure was the fringe banking crisis in the UK in the year 1973. 5) Reasons for regulating banks The principle reason is the systemic risk, because the financial system is susceptible to level of confidence, therefore external regulation is essential in maintaining the stability and reduces further volatility. The second reason represents the social cost that a failure of bank causes, which have a greater impact then a failure an ordinary firm. The insolvency of a firm affects the shareholders, while the failure of a bank will have a greater number of affected customers (depositors), which could also be spread across larger geographical locations. As well as the effect it will have on providing savings for potential investors which will have a detrimental impact on the economic growth. The third reason is the possible lack of knowledge by the public, it is suggested that they lack the necessary background information to distinguish between safe and risky investments partly due to asymmetric information because depositors do not have access to the same information available for banks. Thus comprehensive risk assessments necessitate additional information to that included in financial reports. Hence for this particular reason regulators had introduced depositor protection. Although the above arguments support regulation, however there should be some caution on the use of excessive control over banks. It is primarily the issue of sustained cost in terms of resources on banks and the regulators. Because the central bank has to set teams of experts to perform the prudential control, likewise banks have to employ skilled resources capable to produce the necessary required returns to the regulator. Such costs can be large, thus it is a matter of cost benefit analysis to establish whether the gain of applying prudential control exceeds the incurred costs. Other possible dangers of excessive regulation are the fall of competition, increase in costs and the diminishing pace of financial innovation and development. Furthermore, heavy regulation on a particular centre may lead to the migration of the activities to locations that have lenient regulation, which has been the principle factor in the development of offshore banking centres that led to the need for a global regulation system for international banks, which is known as a level playing field. 6) The supervision of the financial system in the UK The above arguments about prudential regulation are based on banks but it can also be applied on various other financial institutions. Furthermore, the current UK financial regulation system utilise the same measures in authorising and supervising financial institutions without a distinction between insurance firms, building societies, or banks. The FSA is the principle regulator of the financial system in the UK. The FSA was established in 1997, succeeding the Securities and Investments Board (SIB), which was supervising the investment industry. However, the FSA has progressively thought to become the main controller responsible for regulating insurance and investment industry, building societies, and banks. In addition to regulating financial exchanges such as Euronext.liffe and the Stock exchange besides clearing houses, along with other functions such as the responsibility of regulating the access of companies to Official List in cooperation with the UK Listing Authority. The initial development occurred in 1998, when the Bank of England transferred its responsibility of regulation and supervision of banking to the FSA, which was succeeded with the passing of the Financial Services and Markets Act (FSMA) 2000 that provided the FSA with full power as the main regulator. The FSMA requires the FSA to attain the following objectives: Promote public awareness of financial system Maintain confidence in the UK financial market Secure consumer protection Reduce financial crime. 7) The FSA approach to supervision The FSA approach to supervision is risk based; the primary phase is to assess the risks associated with four objectives above. The FSA attain this through gathering information from various sources including customers and supervision of firms. The secondary phase is risk weighing and estimating impact, by giving each risk the probability of occurring, thus giving it a score or value. Thus firms with high magnitude impact require greater supervision. This is to reduce systemic risk and consumer losses. However, firms that possess highly sophisticated and effective risk assessment systems require less supervision by the FSA. Finally, after the risks are identified, assessed and weighted, the FSA select the appropriate measures to respond using various tools, which can be summed as follows: Those aimed to influence the behaviour of consumers, operators, and the industry Those aimed to influence the behaviour particular firms. The first category encompasses consumer education, the discloser of information, and compensation method, while the second category includes the provision of authorisations to firms and discipline, in addition to reimbursement of losses. 8) Capital adequacy (Basel Capital Accord, 1988). Liquidity is essential for any firm to maintain its daily operation, whereas solvency refers to the ability of a bank to meet its commitments in terms of liabilities at due time. However, there is a distinction between liquidity and solvency. There is a general understanding that if a bank is thought to remain solvent then it should be able to borrow fund from open market to meet its short term liquidity requirements. Likewise, the presence of liquidity problems that cannot be resolved through the wholesale market suggests that other lenders believe that the risk of insolvency of that particular bank is great. Furthermore, if a bank struggle to find short term funds in the markets, it will face difficulties in paying its claims. Therefore the Bank of England and the FSA requires banks to efficiently managing their liquidity as a principal policy element of reducing the risk of insolvency. The Basel committee on Banking Supervision has introduced Basel Capital Accord II; it included new amendments to the assessment of capital adequacy of banks. This new approach was ought to be implemented in year 2006, which contains three pillars: Minimum capital requirements Supervisory review of capital adequacy Public disclosure. Basel II accord focuses on credit risk and market risk. In pillar 1, the treatment of market risk was not altered but changes were made on the treatment of credit risk notably operational risk. The bank for international settlement and the Basel committee on banking supervision have founded the financial stability institute (FSI) to assist central banks across the world to improve their financial systems. The new Basel II requirements set challenges on banks to develop and increase efficiency on their capital management. In this section, there is a discussion of the effect of Basel II on Banks in Europe and North America, and how the new directives are going to improve the cohesion of trade between the International Banks. Furthermore, this study will examine the banks resource capability to meet Basel II requirements, and discuss the impact and the implementation of the proposed guidelines. The Basel II framework is a tool that international financial institutions have created to be used by banks around the world as a common standard. The principle of Basel II is that banks are required to hold in reserve certain level of capital as a protection to maintain bank operation when making losses. It promotes transparency of banks activities and encourages efficient management of capital. It is estimated to total 8% of bank assets. The Basel II framework has set standards for banks in managing their capital and requires the discloser of information to detect any risks. The guidelines promote efficien Impact of the Credit Crunch in the UK Impact of the Credit Crunch in the UK Factors Influencing the Financial Institutions in the UK With Particular Reference to Credit Crunch A Comparative Study between Barclays and Northern Rock Bank I- Abstract Banks acts as intermediaries between surplus units depositing funds and investors or individuals seeking capital for investments. Thus, banks role is important in maintaining the flow of fund between these different parties. Banks like any other profit maximising firms are influenced by various factors that represent risks or opportunities. Therefore, banks business decisions are founded on aspects such as confidence in the market, the level of risks, the state of the economy, and their competitive strength. Regulation is essential for assuring compliance and integrity in the financial system, but rigid rules stifles the dynamicity of the banking industry and the financial sector as whole. Moreover, Central Bank role as a lender of last resort can rise the issue moral hazard by helping imprudent banks, however because banks are financial intermediaries, the impact of bank failure can have a detrimental effect on the financial system (systemic risk), and also on clients and customers, therefore bank supervision is vital due to their sensitive important role and their extensive impact. Furthermore, the development of events in the US financial market particularly the high default rate of subprime mortgage market led to a decrease in demand for tradable securities. This has affected confidence in the US and the global financial market, and consequently some financial institutions and banks such as northern rock in the UK faced difficulties in obtaining the necessary funds to maintain the business operation and remain solvent due to lack of short term liquidity. However, other banks faced similar difficulties but are using various methods to improve their balance sheets to overcome the current credit crisis. Moreover, governments and regulatory bodies are all taking the necessary measure to stimulate the market and tackle the core sources of the current credit crisis. II- Introduction Sustained economic development is often linked to efficient management of fund that is used to finance investments, which are projected to further create more wealth and opportunities for states, corporate and individual investors. Banks acts as intermediaries between surplus units depositing funds and investors seeking capital for investments. Thus, banks role is fundamental in maintaining the flow of fund between these different parties. Furthermore, the stability of financial and banking system is vital for the sustainability of economic growth and the preserve of investors confidence. Banks like any other profit maximising firms are influenced by various factors, these includes internal and external factors, which represent risks or advantages. Therefore, banks decisions are based on elements such as confidence in the market, the measurement and management of risks, the state of the economy, and their competitive power and market share. This study will look onto various factors influencing the financial institutions in the UK, with particular reference to Credit Crunch. This literature will comprise the banks management of risks, the role of authorities regulating and supervising the financial system, and explore the regulation of the banking industry and the financial system as a whole, in addition of the effect of regulation on banks performances. The analysis will include a comparative study between Barclays and Northern Rock Bank, taking into accounts the differences in their structure, size, as well as their reaction to changes in global financial markets. Furthermore, the Research will examine the fast moving global effect of the credit crunch; discuss the two banks business model, and explore their activities and behaviours. The study will also investigate the two banks high exposure to credit risks arising from risky investments, highlight the consequences of the heavy reliance on money market, and the use of securitisation for liquidity sources. IV- Methodology The research objective is to investigate the various factors that influence financial institutions in the UK, notably the banking industry. This research was based mainly on secondary research, the gathered data and information was sufficient for this research topic. However, sensitive data regarding the value of risk were not disclosed in both banks publication, such data is useful for the researcher to scrutinise banks estimation of risk and how realistic are the projections. Nevertheless, information about estimation of risks may be obtained directly from banks for further analysis of this specified area of banks management of risk. Research material relevant to the topic was collected from various academic sources; this is to explore issues and arguments regarding the regulation and supervision of the banking system. The two banks internet site was used to gather the background information along with the financial statements of the last six years, which were used in the research analysis to perform the comparison between Barclays and Northern Rock bank business strategies and financial performance. Publications from the Bank of England website were collected to study the central bank regulation and the management of the UK banking system, in addition to the historical data regarding interest, LOBOR, and inflation rate changes. Furthermore, articles from the Financial Services Authority (FSA) were gathered to study the role of the organisation and its contribution in supervising and stabilising the UK financial system. Recent publications from the Bank of International Settlement (BIS) were collected to study the role, the objectives and the effect of Basel directives on banks. Besides research the progress of current Basel II implementation along with the development of new requirements arising from the present credit crunch. Recent newspaper articles and various other media sources were gathered to collect the latest information regarding the development of the present credit crunch and its effect on banking industry, these includes sources such as BBC business, yahoo finance and the Financial Times website, and follow recent actions of regulators and banks management of the current crisis. Moreover, data from the two banks financial statements was collected to perform the Gap Analysis using Microsoft excel package to conduct a series of calculations. Other methods could have been used to assess bank risks such as value at risk (VaR) using regression analysis by utilising a computer package such as Microsoft Excel. The regression result will determine the degree of risk that the researched banks possess in their portfolio. However, the banks seldom disclose such sensitive information in published financial statements. This is to avoid adverse reaction by investors and credit rating agencies, which could therefore affect the banks stock prices, their reputation and confidence in the capital market. V- Literature review (Part I): The nature of banking The term bank can be applied to a wide range of financial institutions, from large banks to smallest mutually owned building society in the UK. The provision of deposit and loan distinguishes Banks from other financial institutions. Deposits products supply money on demand or following time notice. Deposits are liabilities for banks, thus must be well managed if banks want to make profit. Similarly, banks manage assets created through lending. Therefore, Banks main activity is being an intermediary between depositors and borrowers. Other non banks financial institutions, such as building societies and stockbrokers, also act as intermediaries; however it is the provision of loans and taking of deposits that distinguishes banks, though many banks provide various other financial services. 1) Management of risks in banking The fact is that bankers are in the business of managing risk. Pure and simple, that is the business of banking. (Walter Winston, former CEO of Citibank; the Economist, 10 April 1993). Banks, like all profit maximising firms, have to deal with macroeconomic risks, such as recession, inflation level, as well as other micro economic risks including political pressure, commercial breakdown of core customers or suppliers, natural disaster, in addition to the emergence of new competitive threats. From a finance theory viewpoint, Bank risk management is primarily composed of four main balance sheet risks, which includes liquidity risk, interest rate risk, credit risk, and capital risk (Hempel et al, 1989). Credit risk has been recognised as the principal risk in its effect on bank performance (Sinkey, 1992, p. 279) and bank failure (Spadaford, 1988). The primary reason why the correct management of credit risk is essential is because banks have restricted ability to absorb loan losses. Generally, the ability of a bank to absorb a loan loss is originated firstly from generated income of other profitable loans, and secondly by bank own capital. 2) Factors influencing financial institutions Banks and other profit maximising firms are influenced by various factors; financial institutions in particular are susceptible to a range of changes that may affect their projected growth. Some of these changes are internal changes, this occurs subsequent to restructuring program that a bank adopt following an expansion strategy such as in mergers and acquisitions or as a defensive strategy to remain competitive and maintain market share and fight competitive predators from acquiring the bank. Moreover, there are other external factors that can influence financial institutions, these includes a countys government monetary policy, the economic condition, the financial stability and the level of confidence in the market, the inflation rate, in addition to other risks such as credit and market risks. There are a range of risks that a bank may encounter, these includes the followings: a) Credit risk and counterparty risk: counterparty risk refers to the risks that after the creation of two parties contract, one party will renege the terms of the contract, while credit risk is the risk that a loan or an asset becomes lost due to default. b) Liquidity or funding risk: these are similar terms that refer to the risk of shortage of liquidity for maintaining operational commitments, that is the ability for the bank to cover its liabilities at due date. A shortage of sufficient liquid assets is often the trigger of financial distress, as it is increasingly difficult for the bank to obtain funds from the wholesale markets. Thus funding risk is the inability for the bank to maintain its daily operations. c) Market or price risk: this type of risk refers to the risk linked to over the counter instruments or traded stocks in a non liquid market, such as equities and bonds. Thus if a bank hold these items in its portfolio, then it is vulnerable to market or price risk, this is the risk that the price of these items is unstable, which is caused by systematic (movement of prices in all traded market instruments, for instance due to changes in economic policy) or specific market risks (the movement of a particular instrument is opposite to the rest of similar instruments, for example, this may be caused by unfavourable information about the issuer of that instrument). d) Interest rate risk: this is similar to price risk, because interest rate is price of money, it represent the opportunity cost of keeping money. This occurs because of interest rate mismatches between assets and liabilities, which differ in volume and maturity arising from the banks performing asset transformation. e) Capital or gearing risk: because banks are highly leveraged firms, they have to set aside some capital to cover the losses. The size of capital is proportional to the level of risk taken by the banks. Basel risk asset ratio principle requires banks to hold up to 8%. Besides, settlement or payments risk. This is when one party in the contract deliver assets or makes payment in advance, which creates exposure to potential loss. Furthermore, operational risk refers to risks from human capital, legal risks such as law suits, fraud, and physical capital. While sovereign and political risk refers to the risk that a government default on its debt obligation to a bank. Moreover, financial regulators has identified three main risks linked to banks, these includes market risks such as risks from exchange rates, interest rates, operational risk, commodity and equity prices. 3) The Asset-Liability Management (ALM) technique Because the fundamental and the primary activity of a bank is intermediation between surplus units that makes deposits and those that seek capital, which acquire fund from the bank, thus this payment system gives the bank the role of intermediation , where the intermediation is key activity, risk management is founded principally on a sound asset liability management (ALM). Furthermore, the ALM is a technique practiced by banks to effectively manage their risks, which was largely utilised by banks in the post war period up to the 1980s. The ALM method was the main tool used to manage banks books, it is essential that the bank maintain its assets and liabilities under control to minimise risks and remain solvent. Besides, banks are keeping their managers updated with newer techniques and skills to maintain their efficiency and competitiveness for the future, for instance, ALMA is an association that comprise around 40 financial institutions, which are international and local banking groups and building societies, mostly UK and Irish. However it is growing its membership and links around Europe. Its objective is to offer an informal and inclusive forum regarding the balance sheet management issues (Byrne, J. 2004). Due to the development of banking activities, innovative instrument became increasingly used by banks to manage their assets such as off balance sheet instruments, where banks moved from interest earning income products to non-interest income sources, thus this required that banks risk management should adopt newer techniques other then just the ALM to includes the risks originating from the off balance sheet instruments. Moreover, one of the new methods included in managing market and then credit risks is the Value at Risk (VaR), which involves giving an estimate of losses arising from the volatility of banks assets. 4) Credit Culture A recent research conducted by the Australian institute of bankers on the issue of Improving Asset Quality (Brice, 1992), which focused on the significance of credit culture. The great emphasis on credit culture was due to its influence on bank performance and in some occurrences bank failure ( Spadaford (1988) and Brice (1992)). Spadaford (1988) stated in his study of 162 bank failures in the United States that the analysis showed that 98% of bank failure occurred due to asset quality problems, among these problems are poor management of loan policy, inadequate systems to ensure compliance with internal rules and procedures, and the lack of supervision on senior and key management members in the organisation. McKinley (1991) has defined four main cultures that influence bank performance. predominantly the immediate performance-driven, which emphasis on earnings targets, followed by Market share/production-driven that focuses on being the biggest with greater production volume, along with Values-driven that balances between credit quality and generated income. In addition to the Unfocused (current priority-driven) bank, such bank lacks vision and appropriate strategy often set short term targets which consequently lead to unsuccessful ventures. VI- Literature review (Part II): Banks regulation The base of regulating financial institutions is founded on three broad frameworks. Primarily, the consumer protection argument, this is based on the notion that investors and depositors cannot be demanded to perform risk assessment of financial institutions they deal with, nor monitor standard of service or performance of these institutions. The consumer protection underlying principle is based on three types of regulation; firstly, compensation schemes created to repay all or part of losses caused by the insolvency of financial institutions; secondly, rules and regulations such as capital adequacy requirements designed to prevent insolvency; and lastly promote fairness in business or market practices by setting rules and standards. The latter regulation reveals market imperfections arising from principle agent problems, asymmetric information, and the issue of determining the true value of financial products or services, which are established well after the transaction or contract was formed (Dale, R and Wolfe, S. 1998). Furthermore, there are other concerns associated with consumer protection rationale. The provision of compensation to depositors and investors for losses sustained from the insolvency of financial institutions will further encourage these institutions to pursue risky investment decisions, thus there will be minimal or no incentive for prudence. This indicates that risky firms will be able to attract trade with identical terms and ease as prudent institutions, thus affecting financial market standards and discipline, and rising potential insolvency incidences. Therefore, the resulting losses must be covered by the deposit insurance scheme, investor protection fund, or in some cases by the tax payer. Thus, prudential controls on financial institutions are essential to minimise losses and to balance the regulatory incentives with the excessive risk-taking. The third aim of financial regulation is to promote integrity of markets, encompassing various issues such as market manipulation, fraud, transparency, and fairness; market integrity emphasis on organising the market as whole beyond just the relationship between financial firms and their consumers. Supervisors implementing the financial regulation consider systematic risk as the factor that causes great concerns. That is the risk that failure of one or more distressed financial institution could spread and cause a contagion effect, which could cause the collapse of other prudent institutions. It is their vulnerability to the contagion effect that single out financial institutions from other non financial firms. 1) Targets of regulation The major objectives of Financial regulation is to set guidelines for the activities of Banks, insurance companies, investment firms, exchanges, and fund management companies. The diverse principles for financial regulation mentioned above vary in their relation to these various institutions of the financial services sector. Banks are distinguished by what is referred to as short- term and unsecured value certain liabilities (deposits) and illiquid value-uncertain assets (loans). Banks conforms to deposits insurance and other type of consumer protection, partly because banks balance sheet consists of a variety of complex instruments and depositors are not capable to measure the riskiness of their deposits. However, depositor protection creates moral hazard problem. Furthermore, banks regulation focuses more on systemic risk. That is the possibility of a bank run that can spread to a number of banks and trigger a wider instability in the financial system. According to this notion, bank runs are the result of action by depositors retrieving their funds in response to amounting fear and uncertainty of the bank future arising from bank asset losses that could render it insolvent. Due to potential risk of losing all or some of their assets, depositors tend to make a run when initial signs indicate some troubles. Moreover, recent research found that the occurrence of a bank run can not be entirety explained by the decline of banks underlying assets (LaWare, J.1991.p34), (Diamond and Dybvig, 1983).The emphasis is on a banks maturity transformation notably the transfer of illiquid assets (bank loans) into liquid claims (bank deposits), taking into account that the banks loan portfolio substantially decline in value in an event of liquidation than on going concern. What triggers a rational bank run is that the uncertainty and the higher probability that the loan portfolio liquid value is less than the value of liquid deposits. This notion demonstrates how bank runs can possibly arise and affect even healthy banks. Thus distressed bank have to liberate its assets at liquidation value, therefore leading to possible insolvency. 2) Techniques of regulation While procedures of conduct of business regulation do not differ among various types of institutions, but in terms of prudential regulation there are fundamental differences that reveal the distinctive risk features of banks, insurance firms, and investment companies. Because bank failure has a greater effect on the whole market, and can create systemic crisis, governments and central banks have set bank regulation for creating extra protection in provision of extra fund by setting the lender of last resorts facilities, and deposit protection, however, these facilities creates moral hazard. Moreover, the deposit protection fund may exceeds the available protection from deposits insurance schemes, demonstrating policymakers greater emphasis for protecting the banking institutions rather then just depositors, as well showing the regulatory objectives of sustaining the banking system, while preventive regulation focuses more on tackling excessive risk taking by setting capital adequacy requirements for assets. Institutional regulation varies between states; in the UK for instance there was a single mega regulator, all regulation is institutional, each group/ institution have a diversified activity which all work under a single agency that overlook the supervision. Alternatively, in a system of multiple regulatory agencies specialised by duty, a fixed institutional regulation is unattainable due to the fact that these agencies are divers in functions, which calls for the appointment of a lead regulator for diversified groups (Taylor, M. 1995). 3) Regulation of the financial system By tradition banks are providers of loans among other services to firms and individual investors, temporary banks falls in deficits when their expenditure exceeds receipts; however banks generally adjust their liquidity position by using capital or wholesale market. Problems occur when banks capital is misused in funding high risk investments; this is often the consequences of bad governance by senior management in controlling the banks assets or it is the outcome of a contagion effect resulting from systemic risk. Moreover, the central bank controls and monitor commercial banks activities and set rules to regulate the banking system. This is to create stability and to promote confidence in financial market, which are vital elements in maintaining steady economic growth. 4) Bank failure Regulation of banks must be explored in context of bank failure. As any substantial problem produces the need for the introduction of changes in the regulatory framework, because the regulators attempt to correct any loophole in the system. Major bank failures in the history of banking occurred in the US in the year 1929. At that period there were 25,000 operating banks, however by 1934 the number had reduced to 14,000. These incidences consequently led to the implementation of more restrictive bank rules, such as single state operations, which until recently remained the feature of the US banking system. The subsequent major bank failure was the fringe banking crisis in the UK in the year 1973. 5) Reasons for regulating banks The principle reason is the systemic risk, because the financial system is susceptible to level of confidence, therefore external regulation is essential in maintaining the stability and reduces further volatility. The second reason represents the social cost that a failure of bank causes, which have a greater impact then a failure an ordinary firm. The insolvency of a firm affects the shareholders, while the failure of a bank will have a greater number of affected customers (depositors), which could also be spread across larger geographical locations. As well as the effect it will have on providing savings for potential investors which will have a detrimental impact on the economic growth. The third reason is the possible lack of knowledge by the public, it is suggested that they lack the necessary background information to distinguish between safe and risky investments partly due to asymmetric information because depositors do not have access to the same information available for banks. Thus comprehensive risk assessments necessitate additional information to that included in financial reports. Hence for this particular reason regulators had introduced depositor protection. Although the above arguments support regulation, however there should be some caution on the use of excessive control over banks. It is primarily the issue of sustained cost in terms of resources on banks and the regulators. Because the central bank has to set teams of experts to perform the prudential control, likewise banks have to employ skilled resources capable to produce the necessary required returns to the regulator. Such costs can be large, thus it is a matter of cost benefit analysis to establish whether the gain of applying prudential control exceeds the incurred costs. Other possible dangers of excessive regulation are the fall of competition, increase in costs and the diminishing pace of financial innovation and development. Furthermore, heavy regulation on a particular centre may lead to the migration of the activities to locations that have lenient regulation, which has been the principle factor in the development of offshore banking centres that led to the need for a global regulation system for international banks, which is known as a level playing field. 6) The supervision of the financial system in the UK The above arguments about prudential regulation are based on banks but it can also be applied on various other financial institutions. Furthermore, the current UK financial regulation system utilise the same measures in authorising and supervising financial institutions without a distinction between insurance firms, building societies, or banks. The FSA is the principle regulator of the financial system in the UK. The FSA was established in 1997, succeeding the Securities and Investments Board (SIB), which was supervising the investment industry. However, the FSA has progressively thought to become the main controller responsible for regulating insurance and investment industry, building societies, and banks. In addition to regulating financial exchanges such as Euronext.liffe and the Stock exchange besides clearing houses, along with other functions such as the responsibility of regulating the access of companies to Official List in cooperation with the UK Listing Authority. The initial development occurred in 1998, when the Bank of England transferred its responsibility of regulation and supervision of banking to the FSA, which was succeeded with the passing of the Financial Services and Markets Act (FSMA) 2000 that provided the FSA with full power as the main regulator. The FSMA requires the FSA to attain the following objectives: Promote public awareness of financial system Maintain confidence in the UK financial market Secure consumer protection Reduce financial crime. 7) The FSA approach to supervision The FSA approach to supervision is risk based; the primary phase is to assess the risks associated with four objectives above. The FSA attain this through gathering information from various sources including customers and supervision of firms. The secondary phase is risk weighing and estimating impact, by giving each risk the probability of occurring, thus giving it a score or value. Thus firms with high magnitude impact require greater supervision. This is to reduce systemic risk and consumer losses. However, firms that possess highly sophisticated and effective risk assessment systems require less supervision by the FSA. Finally, after the risks are identified, assessed and weighted, the FSA select the appropriate measures to respond using various tools, which can be summed as follows: Those aimed to influence the behaviour of consumers, operators, and the industry Those aimed to influence the behaviour particular firms. The first category encompasses consumer education, the discloser of information, and compensation method, while the second category includes the provision of authorisations to firms and discipline, in addition to reimbursement of losses. 8) Capital adequacy (Basel Capital Accord, 1988). Liquidity is essential for any firm to maintain its daily operation, whereas solvency refers to the ability of a bank to meet its commitments in terms of liabilities at due time. However, there is a distinction between liquidity and solvency. There is a general understanding that if a bank is thought to remain solvent then it should be able to borrow fund from open market to meet its short term liquidity requirements. Likewise, the presence of liquidity problems that cannot be resolved through the wholesale market suggests that other lenders believe that the risk of insolvency of that particular bank is great. Furthermore, if a bank struggle to find short term funds in the markets, it will face difficulties in paying its claims. Therefore the Bank of England and the FSA requires banks to efficiently managing their liquidity as a principal policy element of reducing the risk of insolvency. The Basel committee on Banking Supervision has introduced Basel Capital Accord II; it included new amendments to the assessment of capital adequacy of banks. This new approach was ought to be implemented in year 2006, which contains three pillars: Minimum capital requirements Supervisory review of capital adequacy Public disclosure. Basel II accord focuses on credit risk and market risk. In pillar 1, the treatment of market risk was not altered but changes were made on the treatment of credit risk notably operational risk. The bank for international settlement and the Basel committee on banking supervision have founded the financial stability institute (FSI) to assist central banks across the world to improve their financial systems. The new Basel II requirements set challenges on banks to develop and increase efficiency on their capital management. In this section, there is a discussion of the effect of Basel II on Banks in Europe and North America, and how the new directives are going to improve the cohesion of trade between the International Banks. Furthermore, this study will examine the banks resource capability to meet Basel II requirements, and discuss the impact and the implementation of the proposed guidelines. The Basel II framework is a tool that international financial institutions have created to be used by banks around the world as a common standard. The principle of Basel II is that banks are required to hold in reserve certain level of capital as a protection to maintain bank operation when making losses. It promotes transparency of banks activities and encourages efficient management of capital. It is estimated to total 8% of bank assets. The Basel II framework has set standards for banks in managing their capital and requires the discloser of information to detect any risks. The guidelines promote efficien

Employment Labor and Anti-Discrimination Law Essay

You are an employee at a nice paper mill and want to impress the boss by burning the midnight oil (cut not too close to the wood pulp). For four consecutive weeks, you work forty-five, forty-two, thirty-nine, and thirty-one hours. If you are a nonexempt employee covered by the Fair Labor Standards Act, how many hours of overtime pay, if any, would you be entitled to? What would be the rate? Fair Labor Standards Act Fair Labor Standards Act (FLSA) of 1938 is concerned with child labor, maximum hours, minimum wages, and overtime provisions. Overtime An employee who works more than forty hours over week must be paid 1.5 times his or her regular pay rate for all hours over forty. Employers whose jobs are categorized as executive, administration, or professional, as well as outside salespersons and computer employees, are exempt. Employees who are not exempt include manual laborers and other blue-collar workers who perform tasks involving repetitive operation with their hands (non-management production line employees, for example). Other non-exempt employees include police officers, firefighters, licensed nurses and other public safety workers. Employers can pay overtime to exempt employers if they want to, but they cannot otherwise waive or reduce the overtime requirements. The employee will be paid overtime for the weeks he or she worked the forty-five, forty-two, but not the thirty-nine or the thirty-one hour week.

Food Of A Food Desert - 1745 Words

Pedro Barrera Geography Matthew Piscelli November 19, 2014 Food Deserts One huge problem that the United States faces today are the large numbers of food deserts. A food desert, according to the United States department of Agriculture, is a neighborhood that has a difficult time getting quality and affordable food to their home. This means that people are not properly being fed and getting the nutrition needed for a healthy diet. The good quality food that is needed to maintain this balance is not near or affordable for the people living in these areas. Food deserts affect many people across the United States, especially those that are on the lower end of the social economic spectrum and live in rural areas. Many of these low-income families do not have the means to get to the supermarket and get the right products they need so they settle for lower quality but more cost efficient foods. A great example for a food desert would be the great city of Chicago who is ranked in the top two worst food deserts in the United State according to newson e.com. Food deserts primarily affect those who live in the rural areas and lower income neighborhoods. As stated by Daniel Block, there are social economic and demographic factors such as a low-income families, single parents and a low education level (Daniel Block 2005 page 1). Therefore the problem of a food deserts affect those with a low education level, single parent households and those with a low income. The lack ofShow MoreRelatedThe Food Of A Food Desert Essay1632 Words   |  7 Pagesthe deadliest places when left stranded without proper supplies are deserts. The most popular ones are the Sahara, Arabian, Mojave, and Food. Food? Yes, as much as people say that’s nonsense, a food desert is an occurring anomaly that impacts many people around the world, and in the United States. A food desert is a place where people do not have access to natural healthy food, however they do have access to cheap unhealthy food. Those areas today tend to be densely populated urban co mmunities thatRead MoreFood Deserts2346 Words   |  10 Pages Food Deserts There is growing trend of cities across the United States that do not have access to food such as places in Buffalo, Baltimore, or Detroit. According to the USDA, a food desert is to qualify as a â€Å"low-access community,† at least 500 people and/or at least 33 percent of the census tract s population must reside more than one mile from a supermarket or large grocery store (for rural census tracts, the distance is more than 10 miles). You can even look up a food desert locaterRead MoreFood Deserts And Its Effects On Unhealthy Food871 Words   |  4 PagesFood deserts are defined as areas of relatively poor access to healthy and affordable food. This phenomenon is thought to contribute to social disparities in diet and diet-related health outcomes, such as cardiovascular disease and obesity (Beaulac, Kristjansson, Cummins, 2009). The term â€Å"food desert† reportedly originated in Scotland in the early 1990s to describe poor access to an affordable and healthy diet (Beaulac, Kristjansson, Cummins, 2009). Although food deserts can mean a literal absenceRead MoreObesity and Food Deserts1293 Words   |  5 PagesThe issues of obesity and food deserts are important, and many people have questions about these topics. What makes this important though? To dig even deeper, what are the significant factors of both topics? The answer to the most pressing subject of modern times will now be determined. Why is the topic really that important? Essentially, who is it important to? A person has traditionally been considered to be obese if they are more than 20 percent over their ideal weight. Also, the recent peakRead MoreFood Deserts in Chicago1741 Words   |  7 Pagesto produce healthy foods. The increasing amount of food deserts and lack of family income contributes to African-American obesity rates, and lack of healthy choices. Ironically, these food desserts reside in communities plagued by poverty. These income restrictions also add to the problems that are part of being in a food desert. Literature Review Mari Gallagher(2006). Examining the Impact of Food Deserts on Public Health in Chicago Food deserts are places where healthy foods are not produced norRead MoreFood Deserts Essay865 Words   |  4 PagesFood deserts are one of the main causes of obesity in lower income areas, and while initiatives are being created to solve this problem, more than just a few initiatives are needed to change the obesity issue. Over 60 million people are obese in the world today. The socioeconomic statuses of the Americans play a major part in the obesity rates across the country. People with higher incomes are less likely to be obese than people with lower incomes. One in every seven preschool-aged childrenRead MoreFood Deserts Essay1839 Words   |  8 Pagesthousands of Chicagoans live in what’s known as a food desert. A food desert is in an area of focus that is short on access to fresh meat and produce. These areas are usually over populated with packaged and processed foods, which are not always healthy. They also have a significant amount junk that you can easily find in convenience stores and fast food restaurants. What exactly qualifies a neighborhood to be part of a food desert? Food deserts usually have a bunch of blocks without a corner groceryRead MoreThe Social Determinants Of Food Deserts And Food Insecurity Essay1680 Words   |  7 PagesThe Social Determinants of Food Deserts and Food Insecurity Diverse groups in American society are often the most marginalized and therefore the most vulnerable to issues that undermine the fair and uncomplicated pursuit of health and wellbeing. One of those issues is the lack of access to affordable healthy food and, in many cases, the inaccessibility to food in general. Areas where affordable and healthy foods are largely unavailable are called food deserts and the members of the diverse groupsRead MorePersuasive Essay On Food Deserts774 Words   |  4 Pagesgeneration calls â€Å"breakfast† instead of â€Å"snacks†. Even if they are having a snack, people here would probably choose chocolate instead of fruit. Why? Because there are food deserts EVERYWHERE in America. Specifically, in Georgia, nearly two million people live in one. And to be more specific, the metro Atlanta area has more food deserts than any other city in Georgia. But the excuse that they have for eating what they eat is plain out a terrible excuse: â€Å"t hey can not help the fact that they are notRead MoreEconomic Factors Of Food Deserts1936 Words   |  8 Pagesthe economic factors of food deserts in America. Determining aspects of food store locations, supply and demand, food pricing, income, and consumer preferences are discussed as some of the economic causes of food deserts. Ten articles are used to support this paper with unique standpoints on this topic. Subjects that these articles examine are consumer demand, healthful food pricing, business opportunity costs, effects of low income, heterogeneity and homogeneity of food choices, and the effects

What Does À La Une Mean in French

The French expression  Ãƒ   la une  means on the front page. Its a common way to talk about the days top news headlines or the stories that make up the news in general. The words within the phrase can also be used to refer to a variety of different things. This lesson will walk you through all of it and quickly add some new expressions to your French vocabulary. The Meaning of  Ãƒâ‚¬ la une À la une is pronounced ah lah oon. Its literal translation is on the one, though it refers specifically to news coverage. La une refers to the front page of a newspaper, so the French expression à   la une means on the front page or even just in the news.  It can also become part of more definitive phrases: Un article à   la une - lead storyà ªtre à   la une (des journaux)  - to hit the papers, make the newsÀ la une aujourdhui -  Todays headlines Note that la une does not contract to lune in this expression. Part of casual conversation, the expression falls into the informal register of the French language.   Related French Expressions When you break down  Ãƒ   la une, its parts can be used to refer to other things in French. Here are the most common examples, each of which is also in the informal register. La une can also refer to table one in a restaurant.la Une used to mean channel one on television (now its called TF1).À la une, à   la deux, à   la trois! means And a one, and a two, and a three!

Is Oedipus Rex a Story of Tragedy or Fate Essay - 1272 Words

Oedipus Rex a play by Sophocles can be looked at in two ways as or as not a tragedy of fate. Author Lionel Trilling states that much ingenuity has been used to show that it is not a tragedy of fate and those critics use Poetics by Aristotle to back their claim, â€Å"the protagonist of a tragedy should be a man worthy of respect and admiration but have some discernible weakness or fault of character to which his tragic disaster may be attributed. In some important sense, that is, he is to be thought responsible for what befalls him† (Trilling 5). Although this description would seem to be accurate of Oedipus who Trilling sees as being admirable, wise, and courageous with the flaw of his pride, Trilling ultimately says that the tragic†¦show more content†¦Ultimately, Oedipus finds out about the heinous deed he has done, despite he has only killed a man he feels responsible for fulfilling the prophecy. Oedipus only acts on his emotions, had any other man been there i t would not have been a tragedy since another man would only be killing a king. Even though pride had led him to his decision in killing a man, it was by fate that Oedipus should meet his father on that crossroad. A new topic arises as to if Oedipus is really responsible for what he has done because the tragedy is actually one of fate. The question of is intent needed for culpability has been explored since 300 BCE by philosophers. The story of Oedipus embodies this question at the heart of its plot and Trilling argues in his Preface to the Experience of Literature that Oedipus is not responsible for fulfilling the prophecies. Oedipus meets a group of pilgrims on the road, and he slaughters them, when they do not move out of his way because of his pride. Oedipus at that point does not know that one of the pilgrims happens to be his father. Trilling uses Ethics by Aristotle to exculpate Oedipus from fulfilling the prophecy of killing his father, â€Å"for an act to have ethical significance, for good or bad, the person who commits it must have done so with consciousness and will. It is in these terms that Oedipus argues for his blamelessness in Oedipus at Colonus† (Trilling 4). Oedipus did not intendShow MoreRelatedOedipus Rex900 Words   |  4 PagesThe philosopher Aristotle wrote his work Poetics as a deconstruction of aesthetics approximately 50 years after the death of Sophocles, the author of Oedipus Rex. Aristotle was a great admirer of the works of Sophocles and is said to have considered Oedipus Rex to be the perfect tragedy and the basis for his thoughts in Poetics. He defines tragedy as, â€Å"an imitation of an action that is serious, complete, and of a certain magnitude; in language embellished with each kind of artistic ornament, theRead MoreThe Three Themes of Oedipus Rex1106 Words   |  4 PagesThemes of Oedipus Rex The contrast between trust in the gods oracles and trust in intelligence and pride plays out in Oedipus Rex. Of course, the irony is, that Oedipuss and the oracles’ methods both lead to the same fallout. Oedipuss hunt for truth reveals just that, and the truth confirms the oracles prophecies. Oedipus kills his father and marries his mother. The irony is that the reader knows this from the very start of this Greek drama. There is also irony in the fact that Oedipus is theRead MoreGreek Mythology And Mythology Of The Iliad, Oedipus Rex And Others1294 Words   |  6 Pagesthey used often in their works; examples of this are seen in the Iliad, Oedipus Rex and others. The existence of Greek mythology and narratives plays a significant role in shaping the arts, most notably dance and performance. It also prompted the Aristotle Poetics that discussed the value of six specific traits in every tragedy. It has even encouraged the usage in other fields of study, the most notably t he existence of the Oedipus complex. The inclusion of different narratives, and symbolisms helpRead MoreIntrusion Is Defined As A Pushing, Thrusting, Or Forcing?1326 Words   |  6 Pagesstart conflict or end it. Oedipus for example has tons of intrusions! One of the first one’s being Oedipus himself! At the beginning of the play all the Chorus is at the foot of the palace, near the memorial for Apollo. They are all seated there, but the scene does not tell the audience why at first. Oedipus intrudes by coming out of the palace and says â€Å"My children, new-sprung race of old Cadmus, why do you sit at my shrines?† Then the Priest stands up and approaches Oedipus, and explains to him whyRead More A Comparison of Tragedy in Hamlet, The Book of Job, and Oedipus Rex1246 Words   |  5 PagesInterpretations of Tragedy in Hamlet, The Book of Job, and Oedipus Rex    For ages, man has pondered upon the roots of destiny. Is the outcome of a mans life determined by human qualities and failings, the meddling of a divine power, or simple fate? Shakespeares Hamlet made the argument that tragedy is caused by human folly. The idea that divine intervention is at the root of human suffering is put forth in the Book of Job. In Sophocles Oedipus Rex, fate is given as the root of mansRead MoreTo What Extent are ‘Othello’ and Oedipus Rex Perfect Examples of Tragedy1149 Words   |  5 Pages‘perfect’ tragedy is the idea that the tragedy is faultless; it does what is expected; so makes the audience feel empathy and sympathy for the characters who suffer. There are two different types of tragedy: classical tragedy and Shakespearean tragedy. The tragic hero in this play is the main character, Othello. Othellos misfortune comes about because of his jealousy, trust, and his pride. This essay aims to look at, and compare, how Shake speare wrote his tragedy, and how other tragedies are writtenRead MoreThe Value Of Leadership In Oedipus Rex By Sophocles1326 Words   |  6 PagesBased on evidence, Athenians valued bravery, confidence and heroic strength in their leaders. For example, the entire reason Oedipus from Oedipus Rex by Sophocles became king of Thebes is because he defeated the Sphinx that was guarding the city, saving the citizens (info from the backstory). On page 11, a senator makes the comment, â€Å"if his bosom holds a grain of fear, curses like yours he never will abide.† The reader can assume the Athenians valued bravery because the senator makes a comment againstRead More Tragedy in Oedipus Rex, Hamlet, and the Book of Job Essay examples998 Words   |  4 PagesTragedy in Oedipus Rex, Hamlet, and the Book of Job In works of literature involving a tragedy, the question of the cause of the tragedy is often raised. The play Oedipus Rex by Sophocles, the play Hamlet by William Shakespeare, and the book of Job from the Bible all involve a tragedy resulting from different things. In Oedipus Rex the tragedy is a result of Oedipuss fate. In Hamlet the tragedy is caused by human folly. The divine intervention of God is what causes the tragedy in Job.Read More Sophocles’ Oedipus Rex Fulfills All of the Requirements of a Tragedy1088 Words   |  5 PagesSophocles’ Oedipus Rex Fulfills All of the Requirements of a Tragedy Throughout Poetics, Aristotle describes what traits a tragedy must have to be successful. To support these choices, he makes use of a small analysis of many tragedies, including many of Sophocles’ plays; Oedipus Rex is one of the plays mentioned in Aristotle’s Poetics. Some of these traits include a successful plot structure, recognition scenes, and a correct choice for its hero. In Oedipus Rex, Sophocles fulfills all ofRead MoreComparing Oedipus Rex And Death Of A Salesman By Arthur Miller1255 Words   |  6 Pagesa. Tragedy†¦ we all will go through this at least once in our lifetime. It is inevitable. It has been around since the beginning of time. The ancient Greek’s used it in a manner in which we still use it today in Modern times. b. Today I will be comparing the two works such as Oedipus Rex, which is a playwright written by the great Sophocles and another playwright named Death Of A Salesman written by Arthur Miller. c. Through out the years, there has been a lot of controversy on whether or not Death