...Research in Higher Education Journal Centering the business capstone course on the banking crisis: concrete integrated pedagogy Khalid A. Razaki Dominican University Wayne Koprowski Dominican University Peter Alonzi Dominican University Robert Irons Dominican University Abstract The recent financial crisis offers instructors rich material for business programs regarding the relations between accounting, business law, economics, and finance, as well as ethical issues. This paper offers a concrete approach to developing a business capstone course built around the financial crisis and the lessons it offers business students. Complete pedagogical modules are offered for each discipline, including suggestions for specific assignments in each discipline. Key Words: Capstone Course, Banking Crisis, Pedagogy Centering the Business Capstone Course, Pate 1 Research in Higher Education Journal INTRODUCTION A capstone course is essential in the business school curriculum. It provides each student the time to refresh their grasp of and to hone their ability to apply the principles, tools, and methods of the fields comprising the business curriculum. Further, it gives students the opportunity to integrate the insights of the various fields. The effectiveness of the capstone course can be enhanced by centering the capstone course on the 2008 financial crisis. All students share the common experience of the 2008 crisis’s violent shaking of the economy. It immediately affected each...
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...American University in Bosnia and Herzegovina International Finance and Banking BSAD 120 Principle of Banking GROUP PROJECT Financial Crises: Asia 1997 and Global Recession 2008 Group members: Professor: Vesna Plakalovic Faris Njemcevic Ibrahim Music Avdo Halilovic Sabit Ceho 1. Explain both crises in your own words As for the Asian crisis which has occurred in year 1997/1998 we can say that something that looked really small, and not important has impacted most of the Asian countries but the World as well. As for the crisis beginning, we can say that it has begun in the Thailand. Problems started in the USA where was a lot of loans and credits that lead towards the collapse and bankruptcy of most of the banks and financial institutions in the USA. Looking for the investment and good return of investments, Americans banks and investors have decided that the Middle East and Asian countries are perfect investing area. When American companies started to invest into Asian countries like Thailand ,which has really low GDP and standard of life, big money income into poor countries it has only one possible outcome. GDP in Thailand and other surrounding countries started to appreciate really fast which was almost uncontrollable. Problem was that many experts have noticed and put a warning on ,was that GDP...
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...Argentina’s 1980-1982 Banking Crisis In Argentina’s crisis of 1980’s financial institutions were forced to rely heavily on Central Bank financial assistance when they encountered deposit withdrawals. The largest investment bank and the second largest commercial bank failed. More than 70 institutions had to be liquidated or placed in intervention between 1980 and 1982. Bank Runs: After Mexican Peso Crisis, foreign investors’ feared Argentina with a weakening economy would devalue its currency, initiated a capital flight. As a result, lower wages, lower salaries, and high unemployment rates began to rise. Widespread fear of a financial meltdown triggered Bank Runs. Suspension of Payments: Banks, suspended payments denying the ability to withdraw funds. Debt for Deposit Swap: The government offered government bonds swap for deposits with few takers. Deposit Insurance: The Central Bank established a deposit-insurance program to rebuild confidence. Bank Nationalization and Restructuring: The Central Bank closed some banks, and nationalized others. The 1982-86 Banking Crisis in Chile Reaction Phase Toxic Assets Removal: Banks were assessed for their long-term viability. Viable banks sold ‘bad loans’ to the Central Bank, with a repurchase agreement. Most banks used this facility to the tune of $5 billion. Liquidity Enhancement Central Bank’s Secured and subsidized Loans on Collateral: Government provided secured loans (using bank assets as collateral)...
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...Part A “Ireland’s banking crisis bears the clear imprint of global influences, yet it was in crucial ways home-made.” (Regling and Watson 2010) The economic conditions in Ireland which preceded the bank guarantee were created by a mix of both internal and external macro factors and domestic policy decisions. We will examine these factors in detail and see how government policy, reckless lending policies by the banks and a lack of any real regulatory oversight of the banking sector culminated so dramatically in that faithful decision on 30th September 2008. From the late eighties onwards, Ireland experienced a period of unprecedented economic expansion. This expansion can be divided into two distinct phases, the export driven growth of the early to late 1990’s - ‘the true ‘Celtic Tiger’ period” (Honahan. P, 2010) - and the major asset bubble in commercial and residential property from 2000 to 2007. The 1990’s saw a dramatic expansion in Ireland’s economy. A large increase in workforce participation due to demographic changes, increased productivity and a huge influx of foreign direct investment combined with other factors resulted in GNI per-capita doubling in less than a decade from 1990 (World Bank, Databank) . These factors formed the basis for the ensuing housing boom. As employment increased, so did incomes and immigration which created increased demand for housing stock. The steady expansion in employment, standards of living and incomes (due largely to social partnership...
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...KRAH SISTEMA POVERENJA I OSNOVA FINANSIJSKE KRIZE 2008. Dana 15. septembra 2008 godine, američka poznata investiciona banka Lehman Brothers objavila je da je otišla pod stečaj. To je bila, videćemo kasnije, inicijalna kapisla svetske ekonomske krize koja će ovim događajem dobiti jači zamah. Tog 15-og septembra je čuveni Američki ekonomista Bernejnk (Bernanke) dao izjavu da SAD možda u ponedeljak neće imati ekonomiju. Slično je razmišljao i Robert Lukas, predstavnik nove klasične makroekonomije i osnivač škole racionalnih očekivanja. Lukas je tada rekao da bi recesija možda ličila na one krahove koji su uobičajeni za kapitalizam da nije došlo do sloma Lehman Brothers-a. Pesimizam je dolazio i od onih koji su inače razmišljali drugačije od Lukasa. Tako je Blajnder (Alan Blinder ), profesor na Prinstonu, saradnik demokratske stranke i tradicionalni etatista rekao da je krah Lehman Brothers-a izazvao opštu paniku u finansijskom sistemu SAD-a, krediti su zamrznuti i to je predstavljalo ključnu grešku koja je ubrzala krizu. Bankrot Lehman-a je označio početak sistemske krize i ogromnog gubitka poverenja. Kako je moguće da je jedan izolovan događaj kao što je krah jedne banke bio ovoliko poguban za američku i svetsku ekonomiju ? Pokušaćemo da simuliramo kako su stvari tekle fokusirajući se na tri ključna perioda, događaje pre 15. septembra, situaciju koja je neposredno prethodila bankrotu i ono što se desilo posle bankrota. Pokušaćemo ovde da ukažemo na značaj poverenja za finansijski...
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...CHINA’S PERCEIVED ONGOING BANKING CRISIS By Group B Giang Nguyen 1385858 Kiet Nguyen 1402739 Tu Nguyen 1390178 Ngoc Lo 1329692 Dung Dao 1390184 Hiep Ngo 1385862 Thanh Nguyen 1385991 Anh Nguyen 1390169 Khoi Pham1385967 An assignment for ECO 3353 - Spring term, Dr. Dominic Minadeo Troy University April 30, 2014 Abstract In 2013, China, the second largest economy in the world, has experienced a banking crisis that had severely consequences on China itself and several other countries. This resulted from a rapidly rise of short-term lending from the shadow banking system, which has been considered an unofficial lending market that operates outside the scope of regulations and has recently been plunged into crisis. This paper synthesizes the overall indexes and information about the ongoing banking crisis in China, which includes: recent China economic analysis, how the crisis impacts on domestic and global economy, comparing China’s banking system to several countries in the world and the forecast for China in the near future. How the crisis took off In today’s globalized world, no country is immune from the financial crisis, even the second largest economy of the world. An increase in risky and complicated financial practices in China can possibly drive the economy to a terrible crisis. The financial crisis resulted from a rapidly rise...
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...Current financial crisis and banking industry Institute of affiliation Name Current Financial Crisis and Banking Industry The current financial crisis traces its origin in the United States of America, which has affected many banks worldwide. This financial crisis especially in commercial banks has been very costly and has led to bankruptcy of major banks around the globe. Reinhart etal. (2011) described the financial crisis as an equal opportunity menace, which affects poor and rich countries. The financial crisis derives its origin from the public and private sectors. It comes in various sizes and shapes and it can spread across borders within a short time, therefore requiring coordination of policies aimed at reducing its impacts. Financial crisis usually consist of a set of events which include disruption of financial intermediation, changes in asset prices and credit volume, large scale balance sheet deviations and the increased need for government support in form of recapitalization and liquidity support. Various theories have been formulated focusing on the origin of the financial crisis which recognize the contribution of movements in assets and credit markets. This paper will focus on Normal Accident Theory and Disaster incubation theory. Perrow (1981) formulated the Normal accident theory. In his thesis, he stated that serious accidents are inevitable, especially in special technological systems. His main focus was whether the decision...
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...responsibility for bank’s activities. As time goes by, there has been increasing recognition of both the limitation of regulation and its role. [2] Perhaps, the market discipline will play a greater role in financial and to bring benefits in future. Nevertheless, an effective system of regulation still play an important role in minimising the risk of bank failure and to maintain consumers’ confidence in the banking system. Banking Regulation: Objectives and Rationales The main objectives of banking regulation are to protect the investors and provide prevention of bank failures and depositor runs as well as minimisation of the risk of contagion that these may create.[3] The term regulation is used in a broad sense, Goodhart used it to refer to the different ways in which the activities of banks are monitored and controlled by governments and financial regulatory bodies.[4] Since it is difficult to establish the clear meanings of the term of regulation, there are two approaches taken by Evans[5] and also Hadjiemmanuil.[6] Beside, it is also important to understand the crisis management techniques available to bodies such as Financial...
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...Management and Technological Engineering, Volume X (XX), 2011, NR2 FINANCIAL CRISIS EFFECTS ON ROMANIAN BANKING SYSTEM Anca Maria Roşu Academy of Economic Studies of Bucharest, Institute of Doctoral Studies, anca.rosu@yahoo.com Keywords: financial crisis, effects, marketing strategy, banking services, Romania Abstract: The financial turmoil has prompted a reality check of the banking system. This paper builds on an overview of the global financial crisis effect in Romania, emphasis the reaction of the banks in the economic crisis context and how their behavior changed and extends with measures undertaken for mitigating the effect of the crisis to enable a better understanding of the changes and trends of bank marketing strategies during crises. The purpose of the paper is to give suggestions on possible policy responses to the changing consumer buying behavior and to address the effects of the crisis on banking sector strategies. 1 Introduction The National Bureau of Economic Research defines a crisis as a major reduction in economic activity for several months, reflected in the decrease of GDP, decline of individual’s income, reduction of the level of employment, decline of industrial production and consumption. The majority of banking crises follow a common pattern of causes and consequences [Klomp, 2010]. Banking crises are initiated by deregulatory measures, which lead to overly rapid...
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...Understanding customer behavior in retail banking The impact of the credit crisis across Europe February 2010 Contents Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 Executive summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 Key findings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 The impact on trust . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 Loyalty: the end of an era? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24 Reasons customers look elsewhere Measuring satisfaction Conclusion 8 How Ernst & Young can help . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26 Contacts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28 Introduction ...
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...Basel I DEFINITION OF 'BASEL I' A set of international banking regulations put forth by the Basel Committee on Bank Supervision, which set out the minimum capital requirements of financial institutions with the goal of minimizing credit risk. Banks that operate internationally are required to maintain a minimum amount (8%) of capital based on a percent of risk-weighted assets. Basel II is the second of the Basel Accords, (now extended and partially superseded[clarification needed] by Basel III), which are recommendations on banking laws and regulations issued by the Basel Committee on Banking Supervision. BREAKING DOWN 'Basel I' The first accord was the Basel I. It was issued in 1988 and focused mainly on credit risk by creating a bank asset classification system. This classification system grouped a bank's assets into five risk categories: 0% - cash, central bank and government debt and any OECD government debt 0%, 10%, 20% or 50% - public sector debt 20% - development bank debt, OECD bank debt, OECD securities firm debt, non-OECD bank debt (under one year maturity) and non-OECD public sector debt, cash in collection 50% - residential mortgages 100% - private sector debt, non-OECD bank debt (maturity over a year), real estate, plant and equipment, capital instruments issued at other banks The bank must maintain capital (Tier 1 and Tier 2) equal to at least 8% of its risk-weighted assets. For example, if a bank has risk-weighted assets of $100 million, it is required to maintain...
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...American history there has always been a conflict between the federal government intervening in the banking business vs. the Federal government staying out of the banking business * In 1830 when Andrew Jackson (the founder of the Democrat Party) was elected president. He terminated the fed government sponsored US Bank, and resolved the conflict. * The fed government basically stayed out of the banking business until the ’30s, when FDR took office, and the fed government intervened deeply into the ‘banking business,’ which was defined by the IRS, FDIC, Comptroller of the Currency, SEC (if public-owned), and State Bank Supervisors etc. * By defining what the ‘business of banking’s was the statutes, regulations, and enforcement personnel administering these laws, bankers were boxed into doing business as defined by state and federal governments. * Still In present day Banks are financial institutions that hold too much control over the economy and if they fail there are enormous consequences hence the need for government bailouts, in which government financial assistance is provided to banks or other financial institutions who appear to be on the brink of collapse. WHY THE NEED FOR REGULATORS * Bank regulations are a form of government regulation which subject banks to certain requirements, restrictions and guidelines. * To create transparency between banking institutions and the individuals and corporations with whom they conduct business. * To reduce...
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...14 1.0 : Introduction Zenith Bank Nigeria Plc was founded in May 1990 with the headquarters in Victoria Island, Lagos State Nigeria under the management of Macaulay Pepple, who was the pioneer chairman and Jim Ovia, who was the chief executive officer (ZenithBank.com). However, they are rated the second biggest Finance Industry in Nigeria and the best bank for a consistent 2 year period from 2008-2010 as well as the most respected bank in Nigeria (ZenithBank.com). Since 1990, Zenith Bank has operated in Nigeria and now operates in five other African countries in addition to the United Kingdom. It offers varied financial services such as current account, savings, commercial letter of credit, credit cards, mortgage, loan,investment banking and other financial products and services (ZenithBank.com). For several years, Zenith Bank has consistently announced profits from its wide ranging operations as a result of the growing opportunity offered by the Nigerian market. Nigeria is a nation of 150 million people with less than 50% bankable population as of 2000 (CBN, 2010). In 2010, over 65% of the population have become customers to one bank or another, thus presenting a growth opportunity for financial institutions such as Zenith (naijalowa.com). While the Nigerian market holds tremendous opportunity for existing operators like Zenith, the financial industry in the country is driven by a range of macro-economic factors which holds both positive and negative implications for the...
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...ICB Independent Commission on Banking Final Report Recommendations September 2011 ICB Independent Commission on Banking Final Report Recommendations September 2011 Official versions of this document are printed on 100% recycled paper. When you have finished with it please recycle it again. If using an electronic version of the document, please consider the environment and only print the pages which you need and recycle them when you have finished. © Crown copyright 2011 You may re-use this information (excluding logos) free of charge in any format or medium, under the terms of the Open Government Licence. To view this licence, visit www.nationalarchives.gov.uk/doc/open-governmentlicence/ or e-mail: psi@nationalarchives.gsi.gov.uk. Where we have identified any third party copyright information you will need to obtain permission from the copyright holders concerned. Any enquiries regarding this publication should be sent to: Independent Commission on Banking Victoria House Southampton Row London WC1B 4AD This document is also available from our website at http://bankingcommission.independent.gov.uk/ ISBN 978-1-845-32-829-0 Produced by the Domarn Group, London. Final Report Contents Contents ...................................................................................................................... 1 List of acronyms .........................................................................................
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...BASEL III NORMS AND INDIAN BANKING: ASSESSMENT AND EMERGING CHALLENGES C.S.Balasubramaniam Professor, Babasaheb Gawde Institute of Management Studies, Mumbai Email: balacs2001@yahoo.co.in ABSTRACT Banking operations worldwide have undergone phenomenal changes in the last two decades since 1990s. Financial liberalization and technological innovations have created new and complex financial instruments/products have increased their role and turnover in financial markets and have rendered banking operations vulnerable to a variety of risks. The financial crisis episodes surfaced since 2006 have highlighted this paradox to a number of central banks operating in different countries and RBI and Indian banking sector is no exception to this phenomenon. Basel framework has been drawn by Bank for International Settlements (BIS) in consultation with supervisory authorities of banking sector in fifteen emerging market countries with the basic objective of advocating codes of bank supervision and promoting financial stability amidst economic crises. This research paper is divided in three parts .The opening part attempts to briefly describe the changes in the banking scenario since 1991 reforms and the necessity of introducing Basel III to the Indian Banking sector. Part II presents the Basel standards framework and explains why the transition from Basel II to Basel III norms has become necessary to bring in measures and safety standards which would equip the banks to become more resilient...
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