วันพฤหัสบดีที่ 30 กรกฎาคม พ.ศ. 2552

How California Could Turn Its IOUs Into Dollars

California has over $17 billion on deposit in banks that have refused to honor its IOUs, forcing legislators to accept crippling budget cuts. These austerity measures are unnecessary. If the state were to deposit its money in its own state-owned bank, it could have enough credit to solve its budget crisis with funds to spare.

"We make money the old-fashioned way," said Art Rolnick, chief economist of the Minneapolis Federal Reserve. "We print it." That works for the federal government's central bank, but states are forbidden by the Constitution to issue "bills of credit," a term that has been interpreted to mean the state's own paper money. "Sacramento is not Washington," said California Governor Arnold Schwarzenegger in May. "We cannot print our own money." When legislators could not agree on how to solve the state's $26.3 billion budget deficit, the Governor therefore did the next best thing: he began paying the bills with IOUs ("I Owe You's," or promises to pay bearing interest).

The problem was that most banks declined to honor the IOUs, at least after July 24. "They said something about not wanting to enable the dysfunctional state legislature," observed a San Diego Union-Tribune staff writer, "which is kind of funny as the federal government has been enabling the dysfunctional financial sector for almost a year."

On July 21, California legislators were strong-armed into a tentative agreement on budget cuts, a forced move that was called "painful" by the Speaker of the Assembly and "devastating" by the executive director of the California State Association of Counties. The cuts involve more job losses, more bleeding of school funds, more closing of facilities. Worse, they will not solve the budget crisis long-term. The state's economy is expected to continue to deteriorate along with its revenues. But without banks to honor the state's IOUs, California has no time to negotiate or explore alternatives. There is no "quick fix," says UCLA Professor Daniel Mitchell.

Or is there?

MORE THAN ONE WAY TO SOLVE A BUDGET CRISIS

Among the banks rejecting California's IOUs are six of particular interest: Citibank, Union Bank, Bank of America, Wells Fargo, U.S. Bank, and Westamerica Bank. These banks are interesting because they are six of the seven depository banks in which the state of California currently deposits its money. (The seventh is Bank of the West, which loyally said it would accept the IOUs indefinitely.)

Banks operate under federal or state charters that grant them special rights and privileges. Chartered banks are endowed with a gift that keeps on giving: they can "leverage" the value of their deposits into anywhere from ten to thirty times that sum in interest-bearing loans. This "multiplier effect" is attested to by many authorities, including President Obama himself. He said in a speech at Georgetown University on April 14:

"[A]lthough there are a lot of Americans who understandably think that government money would be better spent going directly to families and businesses instead of banks - 'where's our bailout?,' they ask - the truth is that a dollar of capital in a bank can actually result in eight or ten dollars of loans to families and businesses, a multiplier effect that can ultimately lead to a faster pace of economic growth."

Combine this with another interesting fact: according to the California Treasurer's report, as of May 2009 the state had aggregate deposits and investments exceeding $55 billion. Of this sum, $1.1 billion was held in demand deposit accounts (non-interest-bearing accounts allowing unlimited deposits and withdrawals) and $16.5 billion was in NOW accounts (interest-bearing accounts allowing unlimited deposits and withdrawals). According to the Treasurer's office, the non-interest-bearing demand deposits are held at the seven depository banks named earlier, while the NOW accounts are held at Citibank and Union Bank. Applying a "multiplier effect" of ten to the total sum on deposit at these seven banks ($17.6 billion), the banks collectively have the ability to make $176 billion in loans. At 5%, $176 billion can generate $8.8 billion in interest for the banks.

Rather than showing their gratitude by reciprocating, however, six of the seven depository banks have refused to honor California's IOUs. Worse, three of these six actually received federal bailout money from the taxpayers, something that was supposedly done to keep credit flowing to the states and their citizens. Citibank got $45 billion in bailout money, Wells Fargo got $25 billion, and Bank of America got $45 billion, not to mention guarantees of $300 billion for Citibank and $118 billion for Bank of America. When Governor Schwarzenegger asked for a loan guarantee for a mere $6 billion to bolster California's credit rating, on the other hand, he was turned down. Californians compose one-eighth of the nation's population.

When the state's appeal for aid was rejected by the banks, California State Treasurer Bill Lockyer said he was "disappointed." He and other state leaders should show their disappointment with their feet. California could pull its deposits out of those depository banks refusing its IOUs and put them instead in its own state-owned bank, following the lead of North Dakota, which now has the only state-owned bank in the country. Set up in 1919 to escape Wall Street predators, the Bank of North Dakota has been generating low-interest credit for the state and its residents for nearly a century. North Dakota is one of only two states (along with Montana) currently able to meet their budgets.

A state-owned bank could be fast-tracked into operation in a matter of weeks. With over $17 billion available to deposit in its own bank, California could create $170 billion or more in credit -- enough not only to meet its budget shortfall but to fund many other much-needed projects; and rather than feeding an ungrateful Wall Street, the bank's profits would return to the state and its people.

Ellen Brown, J.D., developed her research skills as an attorney practicing civil litigation in Los Angeles. In "Web of Debt," her latest book, she turns those skills to an analysis of the Federal Reserve and "the money trust." She shows how this private cartel has usurped the power to create money from the people themselves, and how we the people can get it back. Her websites are http://www.webofdebt.com/ and http://www.ellenbrown.com/ Her eleven books include the bestselling "Nature's Pharmacy," co-authored with Dr. Lynne Walker, which has sold 285,000 copies.

Article Source: http://EzineArticles.com/?expert=Ellen_Brown

วันอังคารที่ 28 กรกฎาคม พ.ศ. 2552

Free Government Grants For Women - Anyone?

Are you aware that US government allocates more than USD500 billion as grants for its citizens every year? Have you ever known that some of these government grants are meant specifically for women? It is not a joke. You may visit the website of US Government's grant to find out the truth. In the year of 2009, US government has allocated USD99.7 billion grants for women. If you are one of the candidates mentioned below, don't wait anymore and grab these great opportunities immediately.

Previously, many people assumed that most of the government grants for women are awarded to those women who run the non-profit agencies or organizations that serve the community. In fact, these grants are awarded in many areas with the objective of developing "independent women" in today's fast changing world.

Currently, who are the candidates for these grants?

• Women who are seeking for higher education

Women are eligible to obtain fund for purchasing computers and IT equipments, obtaining higher academic qualification in colleges and universities, pursuing job training for skill enhancement, etc.

• Women who are planning to start for small business

Women who have the intention to start their own small businesses are encouraged to apply for these grants. Anyhow the approvals of these grants are based on the potentiality of the businesses proposed. Government will not simply approve the grant without any study. If you have a very solid proposal, go ahead to submit your application!

• Women who are having existing business and planning for expansion

Those business women who have good credit score and have the capability to maintain and expand their businesses are eligible to apply these grants.

• Women whose household income is low

These grants are applicable especially for those women who have become their household's main source of income.

Besides, US women citizens are allowed to apply for grants for the purpose of obtaining health care insurance. They can also submit their application if they have any particular personal and family needs. Last but not the least; the best part of these grants is: Dear women, you never have to pay this free money back. It is absolutely FREE for you!

For more information about stimulus package credit card debt and paying off credit card debt, visit CreditCardDebtSolver.com.

Article Source: http://EzineArticles.com/?expert=Jeslyn_Jessy

วันอาทิตย์ที่ 26 กรกฎาคม พ.ศ. 2552

How to Find the Right Financial Services Firm

The global financial crisis has created one of the worst recessions since 1982 and this has caused millions of investors to have many sleepless nights as they struggle to find a strategy that will protect them during the bad times yet allow them to participate in the growth during times of expansion. While there is nothing wrong with this many financial services firms have promised the world yet undelivered on the promises that they made to their clients, causing them to lose money. The current economic situation underscores this lack of follow through which has taken place with in the financial services industry. In response to these different challenges many investors are now searching for those financial services firms that will protect them while providing consistent growth. To find the right firm for your situation requires that you consider a number of different factors.

Do they have a wide variety of different strategies that they can use? Whenever you are dealing with any financial services firm you want to make sure that they have many different strategies that you can use in both bull as well as bear markets to make money. What happens to most people work only with those firms which sound good, when it comes to strategy they have the one standard that they use on virtually all clients, buy and hold. This lack of ideas means that when the bear markets do come you could see sizable losses in your account as prices are cut dramatically.

What will be done to protect you against risk? Whenever you are investing in anything there will always be a certain degree of risk involved. To protect yourself from holding the Enron's of the world requires that you work with a financial services firm that will show you how you can protect yourself against the different forms of risk such as hedging, using sell stops or diversification.

Clearly choosing the right financial services firm can be challenging. However, by making sure that they offer a wide variety of strategies and knowing that that they have different ways to protect you against risk will help you to be able to avoid some of the severe declines which are known to occur during bear market and to participate in the growth associate with bull markets, helping you to have consistent profits.

To learn more about the different ways that you can invest please visit the managing wealth creation website today to claim your free DVD.

Get the information you need about Financial Services such as Asset Protection, Estate Planning and Tax Minimisation.

Article Source: http://EzineArticles.com/?expert=Ray_McCaskey

Business Electricity Prices - What You Can Do to Reduce Them

UK Business Electricity Prices are not as simple to reduce as normal domestic prices for several reasons. However there are things you can do to help bring them down. Here I look at a few of the most simple.

Ensure your business is being charged the correct UK Business Electricity Prices. Most of the major utility companies categorise into business/property size and charge according to this. You should always ensure you are being charged the correct rate.

Business Electric prices are often unnecessarily high because of the amount of items that are left switched on. If you went around your business at the end of the day and looked at how many pcs, monitors, lights, vending machines (I could go on) are left switched on for no reason overnight you would probably be astounded. Simply switching these off during the night could save you a fortune.

Another reason for UK Business Electricity Prices being high is unnecessary use during the day. When it's a bright sunny day and the sunlight is streaming in through the windows, I bet you still have the lights on.

I bet you also have heating on whilst some of your staff have fans running all day to cool them? Not only could you reduce your heating bill by turning the heating down but you woud also slash your electricity bill by not having the fans switched on.

A lot of reducing Uk Business Electricity Prices really is common sense.

However, when it comes to finding the cheapest supplier, it's a little more difficult as there is no Uk Business Electricity Prices comparison service like there is for domestic services. However that doesn't mean you can do nothing. You should always get quotes directly from other suppliers every so often.

In addition to the major suppliers, for smaller businesses its always worth considering the Utility Warehouse Discount Club who provide a service aimed directly at small business.

What I like is that once you have left your details you will be contacted and asked a series of questions before being presented with a comprehensive quotation before you decide whether or not you want to switch your supply. They also offer, gas, telephone and mobile. And if you're looking for a non-geographic number for your business then they can provide this too - all on one bill.

So if you are looking for cheaper Business Electricity Prices and fancy saving money on your other services then the Utility Warehouse Discount Club For Business is well worth a look. You can find out much more about their business and domestic services at http://www.paulsblogspot.com/gasandelectricpricesreduced.html

Article Source: http://EzineArticles.com/?expert=Paul_Hayhurst

วันศุกร์ที่ 24 กรกฎาคม พ.ศ. 2552

Free Government Grants For Women - A Little Help From Free Grant Money Can Change Your Life

As a woman, you are faced with many challenges. You are a mother, an aunt, a sister, a girlfriend, a wife and a daughter. Too often, you get so caught up in the label that you really don't take time to do something for yourself. You may have dreams of starting your own business, you may want to turn your hobby into a full time career or you may want to return to school to learn a new skill. This is where free government grants for women can come in handy.

With these grants you can get the funds you so desperately need. If you need medical assistance, there are grants that can cover medical costs. Many women use these medical grants to cover mammograms as well as heart and cholesterol checks. For many women these funds can also assist them in getting the medications they need. This is a tremendous benefit in ones life.

If you've always dreamed of turning your hobby into a full time career, a free government grant for women can assist you in making that dream a reality. These funds can be used to start your own business. With helping with start-up and operating costs, you could be well on your way to the career of your dreams.

If you need to further your education so that you can have a stable career, these government grants can assist you with paying for your college tuition and books. Education is important in the working world. Nowadays you need a degree to get most positions. A free government grant for women can assist you in obtaining that education.

Obtaining these funds is not a difficult process. You simply need to research the grants that are out there, find the ones you qualify for and apply for them. You have just as good a chance as the next women in obtaining these funds. These grants can vary from a few hundred dollars to a few thousand dollars.

Change you life by applying for a free government grant for women. After all, as women don't you owe it to yourself?

If you want to find out exactly what type of grants for dept relief you can apply for, all you have to do is click here.

Article Source: http://EzineArticles.com/?expert=Ashley_Jefferson

วันพุธที่ 22 กรกฎาคม พ.ศ. 2552

Gas Prices Comparison Sites - How to Make Sure You Get the Best Results

A gas prices comparison should provide you with the cheapest available prices. However, I've tested out the various comparison services and rather surprisingly they didn't always give me the same results.

Below are a few tips to help ensure you get the most accurate gas prices comparison.

Whether you use Uswitch, Energy Helpline or MoneySupermarket, they all generally require the same information. I would always recommend you have a recent bill to hand.

Most gas bills that you receive are estimated bills and as these can vary wildly from reality, I would advise you take extreme care. I would recommend phoning your gas company with an update reading at the end of your billing period and then base your gas prices comparison on this.

Most of the information the gas prices comparison sites ask for is simple like address, postcode, supplier etc and then you are usually asked to provide either how much you spend each month or how much gas you use. As the price you pay is usually based on the estimates I would always enter how much gas I have used.

To get this figure simply take the closing meter reading from your new bill based on your actual reading and deduct the previous actual meter reading you have. You then need this by the number of months between these readings to give you a monthly figure.

You need to also make sure you enter the exact tariff you are on into the gas prices comparison service - if they don't have it don't use them as they won't give you an accurate reading.

Following these steps should help to ensure you get offered the best price for your needs.

As I said earlier, I did a test of the three major comparison services just to make sure that they all offered me the same tariff. And what surprised me is that they didn't. You can see what happened and which gas prices comparison service offered me the best price at http://www.paulsblogspot.com/cheapgaselectricityprices.html

If you don't fancy having to keep switching your gas supplier to stay on a cheap tariff then the Utility Warehouse Discount Club could be what you are looking for. They guarantee that the prices you pay will always be competitive with the big six suppliers.

Article Source: http://EzineArticles.com/?expert=Paul_Hayhurst

วันจันทร์ที่ 20 กรกฎาคม พ.ศ. 2552

USA Government Grants - Free Money and You Never Pay it Back

With the availability of over $800 billion in free USA government grants, individuals are claiming federal funding for their personal use. Whether it is to help make mortgage payments, get rid of debt, or go back to school, the money is available to those who know where to go to find these funds.

As a result of applying for and receiving USA government grants, there money that is awarded is provided tax-free and never has to be paid back. There particular grant you obtain will have restrictions and guidelines on how the money can be spent, but as long as those terms are not violated you will never be asked to repay the government grant money.

USA government grants are available to:

* Help start a home business
* Pay off medical bills
* Buy your first home

There are hundreds of government grant programs provided by federal, state and local agencies. In addition to USA government grants, there are also private foundation grants provided by organizations to to help individuals reach their goals. These funds are also provided tax-free and with no repayment terms.

Once you search the grant directory, you'll likely notice that there are numerous grant programs that you can qualify for. There's nothing preventing you from applying for all those programs as many times as you like. Applying is just a matter of finding the available funds, following the application guidelines and submitting your request. Typically there is no credit check, down payment or collateral needed. As long as you are at least 18 years old and a tax paying citizen, you are free to apply for USA government grants.

To begin, access the list of USA government grants to see what grants you can apply for today. Potentially get your grant check check in as little as 7 days and never pay if back.

=>> Apply for Grants

See how to obtain free government money to pay off credit card debt, go back to school or even buy your new home.

Article Source: http://EzineArticles.com/?expert=David_Sklonic

วันเสาร์ที่ 18 กรกฎาคม พ.ศ. 2552

The Chief Requirements For Opening a Merchant Account

Before we start dealing with the principal requirements for opening a merchant account, it is essential to understand the basics. So, let's get going.

What is a merchant account?

In very simple words, a merchant account is a sort of financial agreement between a merchant bank and the entrepreneur, where the former grants the latter a new line of credit. Each time, a business transaction is made, the merchant bank will step in to collect and transfer the amount to your savings bank account. The processing costs and interchangeable fees will be automatically deducted from the deposited amount. Additionally, the merchant bank will submit a request for payment in the bank that has provided you a customer card. In nutshell, the main objective of a merchant account is to conduct a business transaction competently and proficiently.

Why are so many safeguards and cross-checks associated with a merchant account?

A merchant account is typically associated with innumerable risks like credit risk, fraud risk and contingent liability risk. In a bid to minimize these risk, several safeguards and cross-checks are implemented. You will be able to understand the significance of the safety measures only after you understand the volatility of these risks. So, let's try to decipher these risks.

Credit risk- It is the risk that the merchant bank takes with regard to the amount of money you owe to the bank. Merchant accounts are generally given to individual with poor or no credit rating. Hence, the risk that the bank takes is quite high.
Fraud risk- As your business is internet-oriented; therefore the probability of fraud risk is exceptionally high. The typical example of fraud risk is credit card transactions made by an unauthorized credit card holder. This risk is unavoidable, but fully preventable.
Contingent liability risk- This is the most dreadful risk that may even enforce you to close your enterprise. The best example of contingent liability risk is a situation where a large number of customers start asking you to give back their money. This risk is unforeseeable and disastrous for any entrepreneur.

Am I eligible for a merchant account?

If you have a high-risk business like online video gaming, credit card restoration agency, online pharmacy and so forth, then it would be very difficult to obtain a merchant account. The set up fees would be exceptionally high and the transaction fees would also be unreasonably high. Besides this, you would also be expected to maintain a reserve. This shouldn't be viewed as a negative requirement because the reserve acts as a safety net in distressing business times. It serves as an escrow for the bank and allows you to deal with unanticipated business problems with ease. In the end, the entire reserve amount is solely yours. The total amount of reserve and how it is established by the merchant bank is fairly variable.

What are the geographical requirements for setting up a merchant account?

The geographical requirements for a merchant account are as follows:
• Your enterprise should be a US corporation.
• Your merchandise should be stored and deported from US.
• You should have a valid postal mailing address in US.
• All your business transactions should be in US dollars.
• Your bank guarantor should have an authentic social security number and a good credit rating.
• Lastly, the server of your business website should be US-based.

Some more requirements that need to be taken into account

Apart from the above crucial requirements, you would need to fulfill some more essentials too.
If your business activity is regulated by federal or state government, then without delay get a business license. Also, make arrangements for a personal guarantee. Finally, fill up the application form very carefully. Give detailed information about yourself, your partners and suppliers. Furthermore, without any hesitation, divulge the details of your internet server, method of delivery and cash flow. Lastly, authorize the merchant bank to perform a credit check. Once, all this is done, sit back and relax for this is all that needs to be done to open a merchant account.

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Article Source: http://EzineArticles.com/?expert=Anubha_Shyam

วันพฤหัสบดีที่ 16 กรกฎาคม พ.ศ. 2552

Introduction to Check Truncation System

Introduction: Check truncation is the reduction of the number of steps involved in the processing of checks, either through the local check clearance system, or the national one. Essentially, it involves the electronic transmission of the image of the check, instead of the check in its physical form, from the point of origin to its destination.

How it Works: Consider the case of a Bank customer, Mr. Muhammad Ali, having an account with Bank A, who issues a check for USD 10,000.00, favoring Mr. Grave Thomson, a customer of Bank B, both of the Banks located in the same city.

In the normal course, Mr. Thomson would deposit this check at his Bank, and his Bank, in turn, would forward the check physically to Bank A, through the local check clearance system. Bank A, would then, honor the check; subject to it being in order, and the Drawee's account having sufficient balance to pass the check. Bank B would get the advice of realization of this check, through the normal clearance system, and then afford firm credit to Mr. Thomson's account, enabling him to withdraw the relative amount.

Now, where the check truncation practice is in vogue, in the above example, Mr. Thomson would still deposit the check of USD 10,000.00 at his Bank. However, his Banker, instead of forwarding the check to the Drawee Bank physically, would only transmit the electronic image of the check.

The Drawee Bank, in turn, would honor the check in the same fashion, as in the manual system, and the transaction comes to its logical conclusion, with the drawer's account being debited, and the beneficiary's account credited, with the proceeds of the said check.

Benefits of Check Truncation: The following are the major benefits of the check truncation system

* It is fast: An electronic image travels faster than a check in its physical form, between two Banks, and hence the processing of the check is also fast.
* It is safe: Electronic transmission of the check is safer, as there is no risk of loss or misplacement of the check.
* It is secure: The level of transaction security is enhanced in electronic transmission as the scope of malpractice with physical checks like deliberate mis-sorting, replacement, tampering with checks, etc., is either eliminated or minimized.
* It is economical: The cost of transferring checks in physical form is more expensive compared to electronic transmission.
* It is user-friendly: All parties connected with the processing of checks benefit from its user-friendly properties. For instance, reconciliation, the bane of check processing, is a breeze with electronic processing of checks.
* It is efficient: Elimination of human handling of checks also eliminates the typical human errors, associated with repetitive and tedious jobs.
* It is effective: The entire system of check clearance is streamlined in its electronic version, making it an effective way of dealing with millions of instruments on a daily basis.
* No geographical limitations: Electronic clearance systems can cover a larger geographical area with ease and convenience, whereas, physical transfer of checks can be carried out over a limited area, on account of the time and safety factors.
* Better customer service: Electronic clearance enhances customer service through faster and more efficient service.
* Eliminates manipulative practices: Electronic check processing eliminates the leverage of 'float' by the drawers' of the checks. Float is the time between the presentation of a check and its eventual payment.

As can be seen, there are several benefits of the check truncation system, both for the customers, as well as the Bankers. It is one of the areas of successful technological innovations in Banking, that has enhanced customer service, as well as contributing to the growth of Bank's business.

Article Source: http://EzineArticles.com/?expert=Muhammad_Haidar

วันอังคารที่ 14 กรกฎาคม พ.ศ. 2552

Introduction to Risk Management

Risk is a fact of life. Risk is inherent in all human activities. Risk is a natural phenomenon that has its uses. All Risk is not bad. Risk is also related to reward. If one were to take a philosophical view of risk, it is difficult to imagine life without risk, and risk can also be invigorating to the mind, extracting the best out of it.

However, in the context of Risk Management in a business, we are concerned with the negative impact of risk, and how it can be eliminated or at least minimized.

A business may face risk from various quarters. Basically there are two categories or classes of risk. One, that is by chance, and the other by design. Let us assume that a Company is faced with a certain situation that occurs once in a blue moon. Being unprepared for this situation, the Company loses, say, USD: 10,000.00. However, in order to be prepared for this risk the Company might have had to spend USD: 100,000.00. This risk was purely by chance. On the other hand, many American Banks have gone under the burden of their poor housing mortgages. This is a risk by design. These Banks got themselves into trouble with their eyes open.

Dealing with Risk:
Whatever the category or class of risk, the first step that businesses need to take to deal with it is to set up a mechanism to foresee and forestall risk. The second step would be to minimize the risk that cannot be altogether eliminated. The third step would be to transfer or divert the risk. And the fourth step would be to accept the remaining part of the risk and try to go with the tide, that is, to endure the risk, and the pain associated with it, and then to bounce back into action.

The following sequence of steps may be taken to deal with Risk in order to get the best results possible. It needs to be borne in mind that there is no single, perfect way of dealing with risk. Much depends on the nature of the risk, the surrounding circumstances, and the resources available at a particular time to deal with risk. But the wisdom of being prepared for risk cannot be disputed.

1) Identification of Risk: Look and you shall find! Risk is everywhere. Every activity or even inactivity has certain inherent risks. The idea is to break down every activity into independent components, and identify the risk associated with each and also as a whole.

Identification of risk is part of the ground work in risk management, and the more thorough and efficient the ground work, the better the end result. Every business activity must be studied end to end, and all potential problems, and risks associated with them, must be mapped and dealt with.

2) Elimination of Risk: Once the risks are identified, the next step is to naturally eliminate them. Of course, not all risks can be eliminated. Nor all of them need to be endured. To the extent possible, and viable, risks must be eliminated through a combination of strategies, depending upon the context, the nature and the extent of the probable risks faced.

3) Mitigation of Risk: Risks that cannot be eliminated must be reduced. The quantum of loss to a business from risk depends upon the severity of the risk. By reducing the severity of such risks, a business can reduce the potential loss on account of it.

4) Acceptance of Risk: "What cannot be cured must be endured". But one can make one's life safer and more comfortable by accepting the inevitable in a planned way, and channeling the risk within the ecosystem of the organization in such a way as to make the impact of it bearable.

5) Diversion or Transfer of Risk: Another way of dealing with risk is to imaginatively divert or transfer risk to another entity. In other words, one's risks may be outsourced to others, an example being insurance.
All said and done, risk can be dealt with in many ways, and there is no perfect way of dealing with it, except that being prepared for it can give us a better chance of tackling it.

However, the methods employed to deal with risk must not amount to the cure being worse than the disease.

Article Source: http://EzineArticles.com/?expert=Muhammad_Haidar

Banks and Camels

Introduction: What does a Bank have to do with CAMELS? Plenty! It could be the deciding factor in a Bank being allowed to function, or even being shut up. The higher the Bank climbs up the CAMELS, more the chances of it being done in! This is one score a Bank would do well to keep low!

Actually, CAMELS is the acronym for the six factors that form the basis for an international Bank rating system. These six factors are: Capital Adequacy, Asset Quality, Management Quality, Earnings, Liquidity, and Sensitivity to Market Risk.

Under this rating system, Banks are rated in relation to the quality of these six factors. The strength of these six factors would determine the overall strength of the Bank. The quality and strength of these six factors underlines the inner strength of the Bank and how far it can take care of itself against the market forces. Further, it also enables the regulatory authorities to focus on the Banks that are not doing well and to pay special attention to them.

The regulatory authorities not only study the financial statements of the Bank, but also carry out on site inspection, and thereafter rate the Bank. The rating system is based on a scale of 1 to 5 with 1 being the highest score and 5 the lowest. Banks scoring 1 would be considered as among the top bracket in regard to their financial soundness, and those scoring 5 would be seen to be at the bottom of the ladder.

Purpose: The purpose of this rating system is to examine the financial and other soundness of the Bank, and alert the top management of the Bank to take timely measures to address any deficiencies and stop the Bank from sliding to the bottom of the heap.

The CAMELS rating is carried out with reference to the following factors:

1) Capital Adequacy: Every Bank is expected to have sufficient capital to address its needs in relation to the risk it undertakes in its operations. The ratio of the capital of a Bank in relation to its risk weighted assets must meet the minimum requirements.

The Basel II Accords promoted by the Bank for International Settlements, Basel, Switzerland, stipulates a minimum Capital Adequacy Ratio of 8%. This is the bare minimum required, and Banks are strongly recommended to have a comfortable Capital Adequacy Ratio that takes care of any untoward occurrences.
The need for sufficient capital cannot be overestimated. It is the base on which the Bank stands, and its strength can be gauged by the strength of its base. The edifice of the Bank draws its strength and succor from the foundation of capital.

In line with the need for a strong capital base of a Bank, the Bank for International Settlements has come out with an elaborate set of recommendations that are expected to put in place, a mechanism that is proactive and responsive to the needs of the Bank in countering the threat to its well-being from the elements of risk. For this purpose, weights are allotted to each type of risk the Bank faces in its day to day operations, and accordingly, the amount of capital required to face up to this risk is worked out.

2) Asset Quality: The term Asset Quality refers to the quality of the loan portfolio of the Bank. Lending being one of the primary activities of a commercial Bank, the welfare of the Bank is dictated to a large extent, by the quality of its loan portfolio. A sound loan portfolio means a steady income for the Bank, apart from adding to the solvency of the Bank and consequently its rating.

To ensure asset quality, the Bank has to follow a sound lending regimen that ensures compliance of all the related norms. Some of the parameters for judging the soundness of a loan account are the components of safety, security, liquidity, purpose, profitability, etc.

In the process of lending, Bank has to take all reasonable precautions to ensure the safety of its funds. The evaluation of credit proposals must focus on the technical feasibility and the financial viability of the project, or venture under consideration. The purpose of the loan must be in consonance with activities that relate to productive application of capital. The result of such application should be the generation of a stream of income necessary for repayment of the loan. The quality of loan assets, to a large extent determines the viability of a Bank as a running concern.

3) Management: By Management is meant the art and science of accomplishing the goals of the institution by deploying all the necessary resources appropriately. Management includes Planning, Organizing, Staffing, Directing, and Controlling functions.

Planning is concerned with drawing up the blueprint for the objectives and goals of the Bank, and lay the path to reach them. Planning is a all encompassing activity that touches upon all the activities of the Bank.

Organizing is the next step after planning, and is concerned with putting in place the necessary infrastructure, including human resources to achieve the Bank's corporate goals.

Staffing, as the term indicates, is concerned with filling up the various positions in the Bank with suitable people.

Directing means channeling the energies of the employees towards achieving the Bank's corporate goals, by motivating the employees with rewards, both monetary, as well as in terms of their career goals.

Controlling is a function of management that involves establishing a performance standard for the employees and taking suitable steps in regard to the principle of reward and punishment.

A Bank that scores high in this area, namely, management, is bound to come up with a strong performance, and also contribute to the solidity of the Banking industry, as a whole.

4) Earnings: The earnings of a Bank refer to the net profit made by it. Profit is the difference between income and expenditure. The major sources of income for the Bank are interest earned on the loans and other income derived from general banking activities like, remittances, bills, etc. Apart from these, related activities undertaken by the Bank like Bancassurance, etc, also contribute to the Bank kitty.

The expenditure of the Bank may relate, among other things, to salaries, wages, administrative overheads, rents, rates, taxes, etc. The net surplus that remains after taking care of all the expenses is the net profit.
A healthy Bank should be able to generate decent profits regularly and keep itself, as well as its investors, in good health.

5) Liquidity: Liquidity is simply the ease with which an asset of the Bank can be encashed in times of need, or its fair value. It is that quality of an asset that enables a Bank to respond to any financial situation requiring urgent infusion of money or money's worth. This quality of the asset ensures that a Bank faces the minimum stress in dealing with such situations.

Apart from a financial crisis or crisis like situations, liquidity is also required to meet regular financial obligations of the Bank, especially without dipping into its reserves. Liquidity marks the ability of the Bank to field expected as well as unexpected financial problems and issues.

6) Sensitivity to Market Risk: Market forces are a major reason for shifts in the fortunes of businesses. Favorable movements can boost the fortunes of a Bank, while unfavorable ones can send the Bank packing to the cleaners. Market forces generally relate to the changes in Interest Rates, Currency Rates, Commodity Rates, and Stock Prices. Further these changes are inter-related in a complex way, and disturbances in one area are usually accompanied with the same in other areas.

A sound Bank is expected to have sound risk management practices in place, to take care of both known and unknown risks. The asset-liability match of the Bank must be in consonance with risk management principles.

Conclusion: The current Banking Crisis, which is quite unprecedented, underlines the importance of regulatory issues and the affects of incompetence in this area.

CAMELS, as a rating system for judging the soundness of Banks is a quite useful tool, that can help in mitigating the conditions and risks that lead to Bank failures.

Article Source: http://EzineArticles.com/?expert=Muhammad_Haidar

วันพฤหัสบดีที่ 9 กรกฎาคม พ.ศ. 2552

How to Be Financially Secure

I know that there are families out there that have lost their homes, jobs and lives because of stress and worry.

On a daily basis you try to be the strong one; you can't help wondering where the next paycheck is coming from, how you're going to feed your family and how you're going to keep your home.

Now with the troubling economy much of us want to have a second income without working ourselves to death. A lot of people are trying home businesses and internet businesses. There are a lot of them out there. There are a lot of way's to get started but you have to research and look at many of them that are scams. You have to take time and research and check into the how the where the way's of getting started. Like how much you are wiling to spend set a budget aside of what you can afford to put into this project.

Don't put yourself in a more financial bind than what you are already in. your struggling now don't make it worse for yourself.

Make sure you have the time to put into your business to market it and stay with it. You won't be rich over night, it takes time to see results. Talk it over with your family and make sure everyone is on board with the decision making process.

An online business can give you the financial security that you need. It can function as a steady income stream once you have firmly established and marketed it. An online business or home business can be a secondary income for you if you are already employed and are looking for some extra income.

I hope that this article has helped you in some way It has me, if so Please check out this website http://www.MaverickMoneyWatch.com

Article Source: http://EzineArticles.com/?expert=Lisa_Hartman

วันอังคารที่ 7 กรกฎาคม พ.ศ. 2552

TARP - Troubled Asset Relief Program

The Office of the Special Inspector General for the Troubled Asset Relief Program (SIGTARP) is one of the entities managing the distribution of the $700 billion in TARP funds. SIGTARP has a Special Inspector General, Neil Barofsky, and on April 21, 2009 he issued a report to congress on the criminal oversight of TARP.

Amazingly the report noted that there are already 20 criminal investigations and 6 audits looking at TARP funds have been mismanaged. One of the audits looks at the crazy big bonuses that AIG and its counterparts have been sucking out of TARP. Other areas of investigation are:

- use of funds by recipients
- executive compensation controls
- Bank of America support
- Any influences on Treasury or bank regulators in determining applications from banks seeking TARP funds

SIGTARP came about under Section 121 of the Emergency Economic Stabilization Act of 2008 (EESA), and gave it the powers noted in Section 6 of the Inspector General Act of 1978, which includes the ability to get documents and other information from Federal agencies. Of course SIGTARP itself costs money and it is taking $50 million from the Fed to carry out its mandate.

SIGTARP's has an official mission: "SIGTARP's mission is to advance economic stability by promoting the efficiency and effectiveness of TARP management, through transparency, through coordinated oversight, and through robust enforcement against those, whether inside or outside of Government, who waste, steal or abuse TARP funds."

SIGTARP is not alone, and works with the Financial Stability Oversight Board (FSOB), the Congressional Oversight Panel (COP), and the Government Accountability Office (GAO), and a host of other Federal entities.

John Santelli writes about the TARP troubled asset relief program and the troubled asset relief program bill without pulling any punches.

Article Source: http://EzineArticles.com/?expert=John_Santelli

วันอาทิตย์ที่ 5 กรกฎาคม พ.ศ. 2552

Applying For Government Grants For Women - Money You Never Have to Pay Back

Government grants for women and single mothers can provide individuals with financial aid, regardless of income, credit or other socioeconomic status. By applying for these funds, grants for women can provide cash to help pay for school, housing, and debt. While most people are aware that these funds exist, many do not know just how easy it is to find and apply for these funds.

Grant funds are most commonly provided by the government. Your local and state government agencies often provide money to various groups in order to help individuals reach their goals. That could mean providing down payment assistance on the purchase of a new home, or financial aid to help those facing financial hardship pay their bills. Single moms that are interested in starting a home business may also be able to obtain free government money to fund their new start-up.

What many people overlook, however, is the number of private grant funds available to women through various special interest groups. In particular, grants for student and business people are available in order to help women succeed in the business world. There is cash available to help women obtain a degree to increase their qualifications in a competitive job market, and grant money for job skills training or business development.

By accessing an up-to-date grant database, anyone over 18 years old and a tax paying citizen can quickly find grants that currently being made available, and submit their application. Once approved the cash grant is awarded to the applicant and never has to be paid back.

Apply for Free Grant Money by requesting access to the grant database. Once you find the money you may qualify to receive, you could have your cash grant in as little as 7 days.

=>> Government Grants for Women

Article Source: http://EzineArticles.com/?expert=Austin_Warty

วันศุกร์ที่ 3 กรกฎาคม พ.ศ. 2552

Things You Did Not Know About Online Banking

Online banking in simple terms refers to a simplified form of banking, just like the ordinary banking, wherein one can withdraw, deposit or transfer money, pay credit card loans, or everything over the internet, without any need to walk down to the local bank branch.

Basically, the online form of banking saves a lot of time spent on travelling and waiting in the long queues. It provides you an easier alternative to the conventional banking. However, this is not the end of the story. This is the new age of banking, and now apart from depositing, transferring or withdrawing money, you can also do lots more.

Many of the customers, who deal with international transactions, often need to tag a bank account to their PayPal, MoneyWire, BankWire, WU, MoneyBooker and other accounts. These days there's a separate option called "third party transfers" that may be enabled on your account by additional request, which will allow you to integrate any of the above-mentioned accounts like PayPal with your bank account effortlessly. Thereafter, it will make the cashflow between your various other accounts and the bank account a piece of cake, which would otherwise be extremely painful. Imagine what would be your situation, if you had to walk down 5times a day to your bank branch to receive payments from PayPal, or just rely upon your credit card to deal with all online transactions.

As a matter of fact, you can also do telephone banking, and give out standing instructions to transfer money to a particular account on weekly/monthly basis, change your residential address, contact number and do lots more. The phone banking option comes in really handy when things go wrong, especially in case you lose your debit/credit card, or your netbanking pin gets revealed to an undesirable person accidentally.

So, in case you've been stopping yourself from getting engrossed into online banking in this e-commerce age, you must give it a try right away, and discover its rich features and goodness, all within just a few minutes.

Lana runs an extremely resourceful website where you can find out more about Online Banking, and many handy credit repair tips too.

Article Source: http://EzineArticles.com/?expert=Lana_Leicester

Finding Free Government Grants

The US Government, State and Private Grant Foundations give away billions of dollars of grant money to the public each year. These are awarded to individuals or groups of people from all walks of life for different purposes. There are actually many ways to finding government grants for free.

Grants are divided into categories to specifically cater different needs. If you wish to start or expand your business, you may want to apply for a business grant. If you've been dreaming of purchasing your dream house but are being held back by credit problems, a housing grant will make it easier for you to avail of low interest home loans. If you want to secure your personal future by furthering your education, an education grant will be best for you. Millions of dollars are also available to help the sick and the handicapped through the medical grant. Grants are also available for women, veterans and cultural minorities such as Hispanics, African Americans, American Indians, and Asians.

You should know that grant programs are not loans. You will not be required to have collateral, undergo credit check, have a security deposit or have a co-signer to be qualified. You can apply even if you have bad credit or have declared bankruptcy. You will be awarded with the amount you need provided that the amount is lawful and that you meet the requirements set by the Government Agencies or Private Foundations. Best of all, the money is all yours. You need not worry on repaying it.

At this time of worldwide economic crunch, the government is actually more than willing to give in order to jumpstart the economy. Take advantage of the grant-giving organizations and agencies database available. You would surely come across one that matches your needs and qualifications. Invest time in acquiring knowledge on how to write a good proposal because this is extremely essential in successfully securing a grant.

Minority small business grants are the pinnacle of financing ordinary peoples' business dreams. The United States is built from that very same dream of prosperity and the government wants ordinary people like us to build our own future and take charge of our own lives. Barack Obama is a great supporter of the people that make up our nation, and he's laid out tens of billions every year in funding from personal government grants to business and education grants for all to benefit. You can visit the links in this article to learn exactly how to obtain government grants for your needs.

Article Source: http://EzineArticles.com/?expert=Jack_Cardell

Credit Insurers to Be Hit by a Massive Rise in Premiums

Reinsurance premiums are expected to rise steeply in the months ahead as the credit crunch turns into a recession. As the renewal season gets into full swing, brokers expect that the major credit insurers, who offload risks to reinsurers through markets like Lloyds of London, will see a rise in premiums of more than 10 per cent.

A broker from Lloyds said that the rises were much greater than had been expected. However many people would think that they were getting what they deserved, given that they had withdrawn cover from so many companies recently.

The credit insurance industry covers businesses against bad debt, either through insolvency, or long term default by their customers. As the number of claims submitted by suppliers, increases, reinsurers are reviewing the rates that they will charge in future to buy risk.

80 per cent of the global credit insurance market is controlled by just a few companies, which include such leading players as Coface, Atradius and Euler Hermes. These companies have received a lot of bad press recently following the withdrawal of cover for suppliers to high street names like JJB Sports, DSG the owner of PC World and Dixons, as well as retailers in which Baugur, the Icelandic investment firm, had an interest.

Recently the decision by Atradius to reduce cover to the suppliers of PC World and Dixons resulted in their shares tumbling by more than 30 per cent in a single trading day. These three market leaders have also withdrawn cover to the ailing giants of the US car market, Ford Motor and General Motors, who have approached Congress for bailout funds following a dramatic fall in car sales.

A leading expert in the restructuring of companies felt that credit reinsurers had overreacted. Their knee jerk reaction had underlined their lack of understanding and knowledge of the companies. Rather than leaving themselves exposed they decided to withdraw cover to safe guard their interests come what may.

However this criticism was dismissed by a senior manager of a leading credit insurer, who said that the press loved stories of cover being pulled, as it boosted circulation, but there were many companies benefiting from credit insurance and these benefits would increase as the downturn deepened. Now was the time to act rather than be paralysed by fear, he said.

Gloomy predictions are rife as Britain slides into recession. Leading experts predict that business failures in the UK will rocket by over 50 per cent in the next year with the construction industry seeing the first wave of receiverships. 25 pre cent of all credit insurance policies in the UK are believed to be written for companies within the construction sector.

One question to which recent events inevitably give rise is whether we are likely to see a resurgence in insolvencies amongst reinsurers, along the lines of the early 1990s, as a result of the credit crunch - or whether stronger levels of capitalisation in the industry will lead to nothing worse than a little local restructuring.

The headlines of the past weeks and months have focused on banks, primarily in relation to sub-prime lending and derivative products, and the resulting hiatus in the availability of credit. As the case of AIG has shown, though, it would be unwise to regard insurance companies as immune from recent events.

Cheap Term life Insurance Quotes offers its UK clients information and articles surrounding Life Insurance. Visit Cheap Term Life Insurance and get a quote for Cheap Life Insurance to-day.

Article Source: http://EzineArticles.com/?expert=Michael_Challiner

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