Financial service-Banking Essay Example | Topics and Well Written Essays - 500 words

Financial service-Banking - Essay Example The U.S and European market had enjoyed a lot of freedom thanks to deregulation and privatization in the financial industry. However, this trend was to be detrimental a decade later. According to Anne Khademian the government’s efforts to manage the financial crisis has been monumental (841). She continues to add that the congress made major reforms in the financial industry. First there was the Dodd-Frank Wall Street Reform and the Consumer Protection Act. These acts were aimed at regulating the unregulated financial industry, which had crippled the economy. This was an attempt by the government to reverse the actions of subprime lenders and investors, financial market intermediaries and credit rating agencies. Due to the unregulated nature of the financial and banking industry financial institutions were offering high interest rate mortgages. In sub-prime lending, banks were lending out higher interest rates to their customers without considering the risk of default rates of their customers. The banks were also fast to approve the loans because of the high interest rates charged on the loans. During the financial crisis, at least four million people faced foreclosure due to their inability to pay loans. Consequently the banks were late in receiving their payments and meeting their credit obligations. The government had to step in and bail out the banks in an attempt to end the financial crisis. The U.S treasury and E.U commission pumped in billions of dollars and Euros to the banks in order to save them from liquidity. The government plays an important role when it comes to stabilizing the economy. This is achieved by either lowering or increasing the lending bank rates. In the journal article, the author says, â€Å"the response to the crisis caused by too much debt and interest rates manipulated interest rates too low† (Khademian, 842). During the financial crisis, the government lowered the interests lending rates to

Government Fiscal Policy Essay Example | Topics and Well Written Essays - 250 words

Government Fiscal Policy - Essay Example One of the segments of the economy that benefited the most was the banking industry. The banks in the United States had been acting unethically giving out loans to people that did not quality in order to boost their profits. A lot of Americans lost their homes in the middle of this fiasco. The stimulus package helped save over 3.5 million jobs in America particularly jobs in the manufacturing and construction sector. The Big 3 Auto makers also received financial help from the federal government. The reduction in taxes helped put more money in to the hands of American citizens. Classical economy theory states that the economy is always capable of achieving natural level of real GPD or output (Cliffnotes, 2013). I do not think that classical economy theory would have applied to the economic issues the nation was facing. The United States needed governmental intervention back in 2007-2009 to recover from the recession it was facing. The impact of the economic stimulus package on the governmental budget was that it increased the national debt in the long run and in the short run it increased the yearly budget of the

How will Spotify change the traditional music industry Assignment

How will Spotify change the traditional music industry - Assignment Example try, where consumers do not purchase their music, and where artists, producers and the company itself to not generate profits by directly selling music, surely, Spotify generates in a lot of changes in how the music industry works. In this case, the researcher would like to look at how Spotify changes the traditional music industry by using the five forces, which includes the following: Supplier Buyer Competitors Threats of New Entrants Threats of Substitutes In addition, the researcher would also try to integrate the different strategic maps used in the module, in able to provide a deeper breadth and insight into the analysis of the entry of Spotify in relation with the traditional music industry. In particular, the researcher would focus upon using the triangle map and the delta model to give deeper insights on the changes that Spotify will bring to the music industry. How would Spotify then affect the force of suppliers in the music industry? Of course, in the music industry, one of the main suppliers includes the company that distributes music to consumers, which in this case is the Swedish company Spotify. However, it is important to take note of the fact that the supply process is not a simple process, but it is rather complicated; this includes agreements with respect to the artists and the producers of the music that Spotify is about to offer to consumers. In the traditional music industry, the supply process goes this way: the company (which either distributes music through the sale of CDs or downloadable digitized music) pays royalty to the artists of the music. Then, the distributing company would earn profits through the direct sales of the copy of the music, to where the artists would also have some percentages. In this case, extra income for the company... The "How will Spotify change the traditional music industry" essay, describes the effect of the Spotify on the music business. While Spotify actually believes that â€Å"artist payments are increasing all the time as ad revenues and subscriptions go up†, it actually remains to be proven in the future. Such circumstances may pose threats with respect to the supply side of the music industry. However, the major change in the supply side (using the Delta model) would be in the form of redefining the customer relationship, wherein the supplier would need to establish long term relationships with their consumers in order for the company to ensure artists that they would get competitive royalties, as well as ensuring that they would attract enough ads so that they can get enough revenues to make artists happy and make their business profitable. With regards to the buyer side of the music industry, Spotify also introduces major changes. In traditional companies, they actually entice customers to own albums and other music collections for their favoured artists through their purchase of CDs or downloadable digital files. In this case, the central theme would include inducing consumers to actually own music, and expanding their personal collection. In this case, the major break with Spotify is that it does not induce consumers to own a personal collection of music; on the contrary, it entices consumers to enjoy the music that they want, when they want, and where they want, without actually owning it.

Should Britain adopt the Euro Essay Example | Topics and Well Written Essays - 1000 words

Should Britain adopt the Euro - Essay Example This transformation has been successful in meeting its goal. Greece has since adopted the Euro while Sweden, Denmark and Britain, the latter of which is not considered a European country, have not. Many legislators and economists have suggested that it is simply a matter of when, not if, the UK will adopt the Euro. This discussion examines the benefits the UK will retain when this eventually happens and answers the legitimate concerns of those opposed to the transformation. Certain indisputable results have occurred following the conversion to the Euro. It has eliminated the costs and risks involved when exchanging foreign currency with other counties of the EU and made more transparent the cost of products. By adopting the Euro, Britain would be allowed a place on the European Central Bank (ECB) board thus being able to participate in the economic policy of the EU.   This would enhance the political influence of the UK which in turn would produce beneficial long-term opportunities for its economy. According to many published studies conducted regarding the effect of the Euro, using a common currency has already proven to augment trade and competitiveness within the countries that use it. One study that measured the influence of the Euro on trade discovered â€Å"countries that share a common currency trade about three times as much as countries without a common currency† (Micco et al, 2003). It is clear that trade between Britain and EU countries would escalate if the same currency was used. Differences in types of money present barriers to trade because of the cost factors involved in converting it. Large corporations would save significant amounts and open up previously unfeasible opportunities of trade to smaller companies. Reducing the cost of trade will make Britain more competitive as companies will be able to charge less for products yet yield

Airline Industry and the Economy Essay Example | Topics and Well Written Essays - 2250 words

Airline Industry and the Economy - Essay Example The shape of the economy is determined by its fiscal and monetary policies, market regulations, capital and export markets, degree of stability and competition, factor endowment and social ahead capital. Fiscal and monetary policies involve government expenditures, money supply, interest rates, currency exchange and inflation rates, and the operation of the banking system. The objectives of fiscal and monetary measures are to keep government from deficit spending and provide stability in money supply, interest rates, prices and the banking system. Once these conditions are emplaced and government spends within limits to avoid heavy external debt, capital credit is available for industries, purchasing power is strong and the economy produces a wide range of goods for the export market. As for market regulation, some of its cornerstones are the efforts to maintain a healthy balance between competition and cooperation and to discourage monopoly and oligopoly. The reason is that where co mpetition is completely unregulated and trade monopolies or oligopolies are allowed to operate, the large enterprises are likely to devour the smaller ones. Factor endowment relates to the supply of land and capital and the size and health of the workforce, while social ahead capital has to do with the availability and quality of power, water, communication systems, housing and transportation. The economy will have difficulty taking off if land and capital are hard to come by and labor supply could not meet the demand of industries in terms of skilled and able-bodied workforce. The economic engine will likewise sputter if water and power supply is unreliable, housing is scarce and expensive, and communication and transportation systems are inefficient. In the transport sector, the airline industry is the most sensitive to economic ups-and-downs and the most vulnerable to natural and man-made disasters, terrorist acts, wars and extreme weather events. This was once again demonstrated in 2001 when air travel worldwide grounded to a halt in the aftermath of 9/11. Flag carriers Swissair of Switzerland and Sabena of Brazil folded up, while several US airlines placed themselves in bankruptcy proceedings to avoid complete collapse. From 2001 until 2005, the airline industry worldwide suffered losses reaching $43 billion, which was equivalent to the combined capitalization of 13 US airlines in today's terms. Even British Airways, the world's biggest international airline, was unable to pay shareholder dividends for four years, had to trim 5,800 jobs and to introduce pay cuts to managers. In the US, the government came to the rescue of the distressed airline industry by allotting a $15-billion bailout fund. The industry used the assistance to hire back some 10,000 workers that were laid off at the height of the crisis, which was the primary concern of the state. In the absence of such economic upheavals, the main concerns of the airline industry are the costs of aircraft acquisition and maintenance, fuel and salaries. These are the direct operating costs of airlines,

The Limits of Efficiency Essay Example | Topics and Well Written Essays - 750 words

The Limits of Efficiency - Essay Example And so unions formed, and enough of a public outcry was raised to stir Congress to action. The COPE Act sounds like a promise to return to the easier days before regulation in some parts of the cable television and Internet industry. Because it can take months for cable companies to be awarded franchises, this bill sets up a system of "national cable franchising" in Title I (Summary of COPE Act). The bonus is that applications will now be awarded in thirty days. However, this will lead to the elimination of competition, and insufficient media infrastructure in poor communities, and so this bill threatens the access of many to affordable media. As a result, it should not be made into law as it is currently written. It may seem that creating one franchising standard nationwide would be a positive change. As it stands now, cable providers have to work out local franchising agreements with every local government where they want to offer their programming. Because telephone companies want to enter the cable television industry, they also have to go through this maze of negotiation, and one force behind the COPE Act is the telephone companies' complaint that the negotiation process is excessively "burdensome"(COPE Act of 2006). However, for this bill to be fair to all Americans, it should contain more specific requirements for infrastructure. There are currently no requirements for providers to set up infrastructure to all neighborhoods within a particular market, and so people in rich neighborhoods could end up with more choices, and therefore better pricing, than those in poor neighborhoods (COPE Act of 2006). Without this requirement, companies are likely to avoid areas where collections and maintenance costs could be higher, because of higher occurrences of delinquent accounts and vandalism. If one segment of the American population has the chance to receive lower cable prices, then all segments should have that chance. Also, by creating a national set of franchising requirements, this bill takes away the ability of state and local government to regulate the cable industry in the area of consumer protection, giving that ability instead to the FCC, an already burdened government agency that does not have the time to regulate the cable industry's consumer practices as well. The FCC is not currently authorized to order refunds, as state and local governments are - the FCC only has the power to fine companies, and that money just goes to the government - not to the victims (COPE Act of 2006). Another area of concern has to do with public, educational, and government channels, or PEG TV. If cable companies no longer have to answer to municipal and state governments, it will no longer have the incentive to give up channels for public/community access space (Davies). This will even further reduce the amount of non-commercial media available

Premarital Cohabitation Essay Example for Free

Premarital Cohabitation Essay Over the past 30 years countries have experienced a phenomenon that has raised many questions about the future of the institution of marriage. Western societies, such as the United States, Canada, and countries in Western Europe have witnessed a virtual explosion in the number of unmarried cohabitating couples. Quite a number of studies have been done to research what effect, if any, this trend has on the subsequent marriage, and how does this affect any children as a result of this union. According to some estimates, since the 1970s, the number of couples that live together has more than tripled. However, there are two sides to the story – one, proposes that premarital cohabitation is like a trial marriage and allows people to eventually marry the one they are more comfortable and compatible with. The other point of view is that premarital cohabitation leads to a higher divorce rate in the society and may also have other negative effects. However, research suggests that there is little merit to the claim that cohabitation effectively serves as a trial marriage. Furthermore, studies indicate that premarital cohabitation is actually detrimental because it leads to higher divorce rates and dissolution of marriage. Why Would People Prefer to Cohabit To understand the effects of cohabitation it is necessary to review why people cohabit in the first place. About 50% of cohabitating individuals express the belief that living together without is a way to determine compatibility before getting married. Based on the premise that premarital cohabitation allows couples to determine compatibility, this practice should result in more stable marriages. However, evidence suggests that the contrary is true. Cohabitation is linked to lower levels of marital satisfaction. Couples who previously lived together are reported to spend less time together in shared activities. They report higher levels of marital disagreement, less supportive behavior, less problem-solving, more marital problems, and greater perceived likelihood of marital dissolution (Amato 2003). Premarital Cohabitation Leads to Higher Divorce Rates Research has shown that cohabitation is extremely unstable. For example, Canada has experienced a ninefold increase in the numbers of cohabitating couples, as well as a fourfold increase in the number of divorces over the past 30 years. Recent studies have not only indicated that cohabitation is negatively linked to marital stability, but studies also indicate that living in common law is related to a decrease in quality of marriage (Hall 1995). In a survey conducted by the Australian Institute of Family Studies Family Formation Project showed that after 5 years of being married, 13 per cent of those who had cohabited before marriage would divorce, versus six per cent of non-cohabiters. Ten years later, the difference increased to 26 per cent for those who had cohabited and 14 per cent for those who had not. After 20 years, there was a further increase of 56 per cent of people who had cohabited versus 27 per cent of those who had not (Weston 2007). Many reasons are cited for the resulting instability and the higher divorce rate among former couples who formerly cohabitated. Cohabitators are thought to hold more unconventional values and attitudes than those who marry without cohabitating. Those who cohabitate are thought to have a weaker commitment to marriage in general, or they may have higher expectations about the quality of marriage than those who do not cohabitate. Cohabitators are also thought to have socioeconomic or personality characteristics that are linked to higher likelihood of union dissolution (Dourleijn 2006). Among these socioeconomic and personality factors which are thought to be linked to higher instances of marital dissolution are parental divorce, less education, lower income, premarital pregnancy and childbirth, being non-white, and having had a previous divorce (Cohan 2002). According to research conducted and published in the American Sociological Review, it was concluded that Overall association exists between premarital cohabitation and subsequent marital instability. The dissolution rates of women who cohabit premaritally with their future spouse are, on average, nearly 80 percent higher than the rates of those who do not. (Bennett, Blanc, and Bloom 1988). Based on the US data, researchers have shown that ‘marriages that are preceded by living together have 50 per cent higher disruption rates than marriages without premarital cohabitation. In Sweden, researched showed that cohabiters were more likely to divorce even if the period of marriage is counted from the beginning of cohabitation. A subsequent study also found that premarital cohabitation, regardless of the nature or reason; it is associated with an increased risk of marital instability. Based on the work of Bennett, Blanc and Bloom (1987) whose findings correspond with previous findings, the following conclusions can be made: knowing that cohabiters and non-cohabiters differ in the sense of higher risk of divorce, the researchers set about to explore if there are other characteristics which were unique to these two groups, or a factor which can show that it is not premarital cohabitation alone which leads to higher divorce rate. While no one factor was found to support the argument that cohabitation caused the difference, researchers did not find a characteristic to dispute the argument. According to their data sample, women who cohabited were younger than those who did not. They are also more likely to have had a premarital conception, and were twice as likely to have had a premarital birth. For those who marry at a young age, or who have had a premarital birth have higher divorce rates. However, the first birth within a marriage has a stabilizing effect, and for these couples divorce rates are one quarter lower. These results are consistent with previous research. In 1985, it was found that for every year of age an adult attains before marrying, the risk of dissolution decreases by 16%. Education achieved for women is negatively related with the possibility of divorce. However, for this aspect other factors may also be involved. When social background was considered, similar findings were found. Social background is measured by using the occupation of the main breadwinner in the household. This factor indicates level of education achieved, parent’s marital status etc. It was found that women in households with a white collar worker as the breadwinner had higher divorce rates than other women. Another interesting finding concerns the duration of how long the couple have been together. The researchers assume that people who cohabit can be roughly divided into two groups: those who believe in the institution of marriage, and those who don’t. In such a case, the less committed group should be seen to have higher divorce rates. This should be observable if the relationship between cohabitation and dissolution should decrease with increase in duration. This is proved by the data researchers had collected. Their findings show that for up to two years of marriage the divorce rates of people who had cohabited before was almost three times. This reduced to twice for people who were married for two to eight years. After eight years, the differences in divorce rates of cohabiters and non-cohabiters are statistically insignificant. Thus one interpretation of this is the fact that people who cohabit have characteristics that make them more likely to have higher chances of a divorce. Another finding points to the fact that women who cohabit premaritally for more than three years have a 54 percent higher divorce rate than those who have cohabitated for shorter periods of time. This is because the former groups of people have such characteristics which make them less willing to commit. These include valuing one’s independence and being more self-reliant (Bennett 1987). Other Adverse Effects The increase in the rate of premarital cohabitation raises important concerns about the institution of marriage from a societal perspective. One concern is that individuals may find cohabitation to be an attractive arrangement and will be more likely to view marriage as undesirable. Another concern is that the high rate of dissolution among couples will reinforce the view that â€Å"intimate relationships are fragile and temporary,† thereby reducing the view within society that marriage is a rewarding lifetime commitment. In addition, research shows that cohabitation is linked to delayed marriage, an increase in nonmarital fertility, less commitment to marriage, and greater approval of divorce and nonmarital cohabitation. Furthermore, societies which have experienced a sharp increase in premarital cohabitation rates have also experienced an upward trend in divorce, premarital sex, and premarital pregnancy rates, while marriage and marital fertility rates have declined (Balakrishnan 1995). Conclusion: Although a number of individuals believe that cohabitation provides a means by which couples may determine their compatibility before getting married, there is a vast body of strong evidence that suggests otherwise. Married couples who previously lived together report high levels of marital disagreement, spend less time together, and are more likely believe that their marriage will end in dissolution. These couples tend to be less supportive of each other, and they institute fewer problem solving skills. Cohabitation has been linked to lower commitment levels among couples, diminished views on the marital relationship in general, and a higher divorce rate. These ill effects are directly linked to the cohabitation trend, which has exploded over the course of the past few decades. Researchers believe that cohabitation leads to unstable marriages because those who cohabitate tend to have weaker commitment to marriage in general, or they may have higher expectations for the quality of married life. Cohabitators are also more likely to hold unconventional views on marriage. It has also been observed that those who cohabitate tend to have other socioeconomic and individual characteristics that are linked to a higher rate of marriage dissolution. In addition to the higher divorce rate that seems to be directly related to the dramatic increase in cohabitation, other undesirable effects have also resulted. Societies that have experienced a surge in premarital or nonmarital cohabitation have also seen a sharp increase in premarital pregnancies, delayed marriage, and greater acceptance and approval of divorce and nonmarital cohabitation.