Risk assessment for commercial loans

Introduction The twelve member- countries that make up the European Union (EU) formed in the year 2002 have for a long time now been using the euro as their common currency.Advertising We will write a custom term paper sample on Risk assessment for commercial loans specifically for you for only $16.05 $11/page Learn More The use of this currency was implemented at Maastricht with an aim of strengthening the European Union as a key player in the world economy as well as to decrease the distortions and uncertainties that have been attached to the many currencies that have been used in the market1. The 1997 adoption of the euro zone took place with an aim of ensuring that budgetary discipline was maintained within the EU. Germany was during this time the greatest influence towards the implementation of the agreement (Williamson, 600). As a way of ensuring that the European Monetary Union (EMU) effectively performed its role, the 12 member countries came to an agreement referred to as the rule or the special international institution also referred to as the Stability and Growth Pact (SGP). The role of this rule was to enhance as well as ensure that there was economic homogeneity among all country members of the EMU before they introduced the use of the Euro as a common currency as well as internal stabilization of the Euro zone2. The use of the Euro by the member states was a way of agreeing that all money spent and borrowed is kept under control as a way of enhancing the stabilization. By maintaining budget discipline among the member countries, the pact seeks to ensure that it prevents excessive deficits and debts thus promoting monetary stability. Here, economic policies within the member countries are coordinated at the European level. The pact has more often been discussed during the past as well as the current times with debates ranging on whether it has been a success or not. Some countries such as Germany, France and Portugal h ave continuously been found to fall short of the criteria set by this pact and have instead used their strong political power over other countries to reduce the strength of the pact.Advertising Looking for term paper on business economics? Let's see if we can help you! Get your first paper with 15% OFF Learn More It is the poor and unequal performance of the Euro among these member states led to the reformation of the SGP in 2005 as a way of seeking more flexibilities within these states3. This paper explores on the implementation of the Stability and Growth Pact with focus being on its various functions and importance to the members of the European Union as well as to the global economy. The Stability and Growth Pact (SGP) of the European Union (EU) History The history of the European Union dates back to the early years of 1969 when governments and presidents made a decision to create a monetary and economic union and make it an official European integration goal4. T his was followed by the Werner Plan of 1970 which saw to the proposition to have coordination of the economic policy among the six member states as well as the development of a system where there were fixed parties and use of one common currency. This plan was however hindered by the collapse of the Bretton-Woods-System which was a system, functional between 1945 and 1971, where foreign exchange rates all around the globe were fixed5. After a number of years of with unpredictable floating rates, the European Community (EC), with an exception of the United Kingdom, came to an agreement to form the European Monetary System (EMS) in 1979. The implementation of this system was to allow for moderate floating rates for all its currencies. Though revaluations could be done on the bilateral -rates, the allowed flow of currencies was only within a 2.25% band on either side. Failure to obey this regulation would call for the intervention of the central banks.Advertising We will write a c ustom term paper sample on Risk assessment for commercial loans specifically for you for only $16.05 $11/page Learn More This system incorporated the use of currencies in the years that followed up to 1992 when it broke down as a result of critics and propaganda against a number of currencies that included the Swedish crone, Sterling Pound and the Italian Lira. Despite its reformation, this system did not come to gain its former value gain with a number of the currencies leaving the system while others expanded their bands to 15% hence not much could be fixed. Prior to the downfall of this system, a number of stern actions towards monetary integration were embarked on. After the 1988-1989 Delor Report, complete capital movement liberalization was attained in 1990. 1992 saw to the creation of a treaty through which the European Community through which a number of achievements were made. These achievements included the establishment of a common market, incorpo ration of modern aspects of political and economical integration to the treaty system as well as the establishment of the European Union (Hule, 32). The Maastricht agreement of 1992 defined 3 monetary integration stages6. Stage one ran between 1990 and 1994 and had various technical necessities that included central bank legislation and capital movements. Stage two which ran between 1994 and 1999 aimed at strengthening economic- policy convergence between state members as well as the establishment of the European Monetary that would act as a monitoring body. Stage three was to ensure that eligibility criteria be identified. The pact It became very distinct and clear in the 1990’s that the Maastricht treaty’s criteria and regulations were not a guarantee to a transitioned without hiccups on the common currency factor7.Advertising Looking for term paper on business economics? Let's see if we can help you! Get your first paper with 15% OFF Learn More The 1997 Amsterdam treaty had a political pact which was linked to the convergence criteria which was erstwhile agreed upon in Maastricht with four legal documents in its roots; article 99 and article 104 of the Maastricht treaty, June 17th general council resolution, and July 7th regulation 1466 and 1467 of the council8. The stability and growth pact is made up of three main elements; political adherence by all parties, preventive elements and dissuasive elements. Preventive elements are convergence programs that ensure monetary convergence in the European community which is to be reported by all members to the commission. The dissuasive elements are mainly the excessive budget deficit procedure. Of most importance to the pact are the obligations which are to be met by the members, the council and the commission but not the convergence criteria. Member countries have a commitment to a balanced budget or a certain medium run surplus and they ensure all the required goals are met to make this a reality. One function of the commission is reporting of the excessive budgets to the members as a criterion of early warning and facilitation of strictness, timeliness and effectiveness in the functioning of the pact. The commission is the core guardian which monitors the main body of the stability and growth pact. It carries out coordination matters whilst decision making is left to the council in order to make the body run smoothly. The council also has the critical function of enhancing timely and rigorous implementations of the pact elements if there happens to be violations in the convergence criteria9. The Convergence Criteria In addition to the self-commitment of all significant players in EMU, the accord on certain criteria of convergence is very crucial for the SGP10. These criteria approved on in 1992 and yet again in 1997, and functional from 1997 on for likely and authentic members, are as follows; Price stability: inflation should be less than 1.5 per cent greater than in the three countries’ most price stable. Interest rates Convergence: the long term interest rates has to be less than 2% higher than in the 3 countries most price stable. Exchange rate stability: the exchange rate’s is not permissible to lead the groups of the  EMS (in fact 15 per cent whichever side) or its innermost rate to be de-evaluated for at least 2 years (this decisive factor leads to a two years delay of any additional attainment, so that an improvement of the Euro zone is not possible before the year 2006, and improbable before the year 2007). Budgetary balance budget and a debt criterion): national budget shortfalls are not permissible to go beyond 3 per cent comparative to GDP and the overall lack of debts is not tolerable to surpass 60 per cent comparative to GDP, even though these duties are declining continually11. The first 3 of these criteria have proven to be and are particularly significant during the accession progression to the â €Å"monetary union†, the fourth is additionally important for assessment of the existing EMU. While on or after accession on the first 3 criteria are not in national capability, but mainly in the accountability of the â€Å"European Central Bank† (ECB), the responsibility for the 4th relics with the national governments. This has raised an eyebrow amongst many scholars on whether a common policy is a possibility in an area where there are differing fiscal policies12. Precisely due to the reason that the member states remain committed, it is not enough to have self control which is interdependent and the European Union has to do the monitoring and the controlling of the processes. Economic point of view The method of thinking following the SGP represented from unswervingly from the assumption of optimum legal tender sections (which in actual fact is there or thereabouts a theory of â€Å"in service† currency regions). At the center of this theory (in whatever alt ernative) 2 â€Å"influences† are analyzed: the influence of economic directness within the individual area and the influence of economic union13. Both powers act in favor of â€Å"monetary union: the more open countries are (the more they trade Relative† to the GDP), the more they are damaged economically by exchange rate changes and consequently it makes logic to bring in a single currency (in addition to due to the cost cutting effect of trade facilitation by the regular currency); the more there is economic union between countries, the reduced amount of likely non-symmetric shocks are and the less likely it is essential or even makes logic to accurate for shocks by means of the available exchange rate changes14. The Convergence Criteria are unswervingly drawn from this examination, particularly from the convergence account and to a third significant account: to provide self-assurance in the monetary union. All tangible goals that are to be reached (the slim inflati on, rates of interest, and exchange rates corridors, and the existing numbers in lieu of budgetary discipline) in actual fact have been brought in to promote economic union before – and optimistically during the monetary union (MU) at the individual rate and level15. This is particularly true for the criterion measuring price increases, because large price increases and differences between the member countries put demands on the set exchange rates and for that reason these countries cannot outline a most favorable currency region (and might also have troubles in forming an operating currency region). This is measured by the inflation rate decisive factor in the diminutive run, at the same time as the interest rate decisive factor has been set up to compute inflation prospects in the long run16. The exchange rate measures has been put into practice to integrated marketplace forces into the scheme as some variety of routine stabilizers and as scheming forces. If the marketplace believes that union will be sustainable to a sufficient amount, then the exchange rate will not be critically re-valued by the marketplace. Also the budgetary criterion is due to putting weight on the states so as to guarantee this important sustainability. Large shortfalls may lead to price increases in the average run and a far above the ground debt ratio hence means that more hazard of budget deficit in the long run. As a final point, to extend confidence in this joint self commitment of all affiliate countries, the supporting obligations have been subjected to a code. This makes it potential to take lawful actions at the â€Å"European Court of Justice† (Court) to elucidate, who has dishonored the treaty17. One may justifiably doubt if this attentiveness on the â€Å"convergence account† and the particular focus on the â€Å"self-assurance account† are sufficient to ensure the changeover of the associates of the ‘monetary union† into a most favo rable currency region (or at least an operating currency area). Some extra as well significant forces have considered: from the economist’s opinion especially labor markets and wage suppleness, from the politician’s standpoint particularly centralization of observation, and authorizing power. The stability and growth pact institution The SGP is a structure of rules about the association between states within a group of people to provide global public merchandise like economic stability and also growth18. These â€Å"merchandise† are â€Å"globally public† due to the significance of â€Å"stability and growth† contained by an area which is economically extremely mutually dependent and owing to the reality that countries can take pleasure in the reimbursement from â€Å"stability and growth† without paying the cost. Growth in particular pertaining to the leading economies in the union leads due to the widespread marketplace and to trade put in to effect the effects to expansion in the EU as a sum total and to more augmentation in all of its associate countries, and monetary steadiness leads to extra predictability of the monetary surroundings and for that reason reduces threats and costs for all the members19. Furthermore the SGP is a multifaceted organization, because it is entrenched into the institutional structure of the European Union in a multi-layer organization. It can be analyzed as an economic organization in this logic either with regard to its tangible rules (for example the information used for the union criteria) at the height of â€Å"supremacy† or with revere to its overall structure (for example what competencies what a particular body has) at the height of â€Å"surroundings†20. The following argument will be centered on the competencies with only a few considerations with reference to the previous criteria, although a tangible history of only faintly more than ten years is not exceptionall y long for an â€Å"environmentally oriented† institutional organization to develop fully. This associates that the procedure of potential transformation of the SGP is quite sluggish, and that this procedure is centered on the splitting up of competencies between associate countries, the Commission, and lastly the Council. Furthermore the study is entirely focused on general necessities and regulations (e.g. â€Å"we need convergence criteria†); not on existing measures (e.g. â€Å"what criteria should be implemented†)21. This also entails, that the study is educational in the logic, that the recent communal discussion in relation to the SGP is not very much reproduced in it, for the reason that this discussion is focused on punctual modification of the agreement (which seems not to be very effective, predominantly in the middle and extended run), and not on legitimate questions similar to anchoring the SGP in a novel European constitution and also on how (which happens to be extremely significant for the future of EMU)22. The inquiry to be responded is, if there is equilibrium of players and a stability of power included in the SGP that will show the way the economic procedure to the outcome desired. Connection of the SGP to the political system of the European Union The SGP in its current design features three more troubles, directly associated to the political organization of the Union: the equilibrium of actors and consequently the equilibrium of power are not made certain; the means of alteration are indistinct; and each and every one if this leads to the truthful unfeasibility of sanction. The three pertinent actors for the SGP are the Council, Commission, and lastly the associate state(s). The association between these players is not very obvious, which has shown the way to a grievance by the Commission at the â€Å"Court† against the â€Å"non action† of the Council in the case of countries like Germany and France in the autumn of 2003. In the month of July 2004 the Court affirmed this as an infringement of the pact, which to some extent changed the equilibrium of power in favor of the â€Å"guardian of the treaties†23. Until in recent times the Commission was having a serious shortfall in pressure compared to the associates states, since the final choice concerning an â€Å"excessive deficit procedure† and concerning sanction was politically motivated, to be decided on – by competent majority in the Council. Therefore, the associates, in particular the big ones which include France, Germany, and Italy, in actual fact were capable to triumph over any stern restriction on the budgetary guidelines, on condition that at least there was a hazard that adequate other countries may have comparable problems in close proximity to the future. It has been demonstrated by some researchers in advance of the EMU that this is a vital problem related to the SGP, for the reason that in actua l fact there was never be severe consequences for the countries which were violating the agreement. This was viewed to be a specific risk for confidence in the steadiness of the monetary merger. Although not sufficient time has passed over to confirm this thesis in an empirical manner, the proof seems to be fairly clear and confirming. On the other hand, at the moment the Court has elucidated that the main Council and also the associate states are also closely connected by the SGP. But still after this pronouncement the query remains opened, if the Court will be capable to really consign the Council and the associate states. In actual fact the Court does not have real sanctioning authority. The Court still made clear that the Council on one side does not have the right to stop the extreme deficit procedures entirely, but at the other face has the right to setback the procedure owing to reasons particular probably impromptu by this organization. Thus also the way of change of the tre aty is very much connected to this issue of power. This is one significant reason why no more than negligible alterations of the pact came about during the debate about the Convention24. These transformations do not correct for authority imbalance and do not describe the relationship amid the Council, the Commission, the Supreme Court, and the associate countries more clearly, but they are slight ones nurturing the flexibility of the accord: deliberation of the business phase and of augmentation and employment consequences, and also the recommendations found in several fields25. Fiscal rules rationale Fiscal regulations in a monetary merger can serve up a double purpose; that of fostering the acceptance of time dependable fiscal policy within states and improving the policy harmonization between the countries concerned. Drawing some parallel with the monetary strategy, an effectual way to show aggression on the politically persuaded shortfall bias and a main obstruction to the mediu m and the long term fiscal restraint in many states is from end to end a rules based fiscal structure that holds back the prudence of policy makers and promotes the adoption of plausible, time consistent policy. Moreover, rules are capable of playing a crucial responsibility in coordinating the fiscal policies athwart different controls, especially by plummeting detrimental spill-over. The architects of the EMU were predominantly mindful of the supra-national measurement26. Under unchecked caution, the political communications can encourage time-inconsistent policies, which may include a fiscal debit bias. The most advantageous fiscal policy is recurrently viewed all the way through the prism of inter-temporal tax even, with the current net present value of expenditure equivalent to the net present value of the revenues. With this probably being the case, the budget is upheld in structural equilibrium but deficits can be able to arise from the liberated play of routine stabilizers. However, such a strategy might not be followed by policymakers for a variety of the reasons relating to the political structural design. Alesina and Perotti (31) said persuasively that the conflicting fiscal results across industrialized countries, chiefly in the 1970s and also in the 1980s, could not be put in plain words by the prevailing economic hypothesis absent from any political and economy issues27. The literature gives you an idea about that a plethora of inter-related aspects like fragmented regimes, a high quantity of high spending ministers acting autonomously, relative electoral systems, electoral vagueness, and short government durations, can all proceed to make sub-optimal, time inconsistent fiscal guiding principles (Roubini and Sachs, 1989; Grilli, Masciandaro, and Tabellini, 1991; Kontopoulos and Perotti, 74; Milesi-Ferretti, Perotti, and Rostagno, 613)28. Before the coming on of the Maastricht treaty, the results of unconstrained caution manifested themselves thro ughout various structures of time inconsistent policies. For the most part, many countries had persistent and indefensible deficits that fed in the course of the rapid public arrears accretion, countries like Belgium, and Greece saw their arrears spiraling higher than 100 percent of the GDP for the duration of the 1980s or in the early hours of 1990s with deficits suspended around 10 percent of the GDP in countless years. Secondly, most EU states ran highly pro-cyclical fiscal courses of action, particularly during high-quality times (Jaeger, 20). This also leant to be more probable under alliance governments (Skilling, 29) and wherever political powers were dispersed (Lane, 2665)29. Thirdly, most governments in most of the countries tended to create long term welfare states assurances with slight concentration to how it was possible to pay for them, foremost to the accretion of large implied liabilities (Alesina and Perotti, 24). In addition to this, electoral deliberations affecte d proposed fiscal policy outcomes across all of the European democracies (Alesina, Roubini, and Cohen 213). Spillovers on or after lax fiscal policies in a monetary merger created their own common pool difficulty, justifying region wide fiscal regulations. The aptitude to pass on in any case some of the costs of extravagant fiscal policies to other associates can worsen the common pool trouble and intensify the tendency in the direction of time inconsistent policies in any monetary amalgamation. In the euro region, the most commonly raised issues include: A country that is running into fiscal some intricacies could be bailed out by some other countries or probably by the ECB obtaining its debt. Although prohibited by the â€Å"Maastricht treaty†, many of the observers deem that this pathway would be selected to stave off a crisis in the banking system. The probability of such a rescue leads to ethical hazard problem30. Price constancy could be put at risk as the ECB incurs pr essure from extravagant states to lower the interest rates and also to be able to inflate the debt away. Any announced price rises targets could consequently lack trustworthiness, leading to an inflation preconceived notion (Kydland and Prescott, 481; Barro and Gordon, 591). This defeat of credibility might manifest itself throughout the depreciation of the euro, even though some policy in the counterpart countries obviously also plays a role in such a circumstance31. Expansionary fiscal strategy in one country may perhaps add to area-wide interest rate. Domestic policy makers fell short to take into consideration the feel of the local fiscal policy on the other countries in the region. The relation between local fiscal plan and interest rates is hence loosened32. Procedure for excessive deficit A deficit superior than 3 percent of the GDP will trigger the EDP on condition that the surplus is not well thought-out to be outstanding, provisional, and close to the allusion value. This decisive factor is also content if the shortfall has declined considerably and incessantly and comes close up to 3 percent of the GDP. A comparable caveat for the arrears ratio is still looser: in this realm, all that requirements to come to pass is for the proportion to be approaching the 60% of the GDP threshold at a reasonable pace. When putting in order its original report below the EDP, the Commission takes into consideration as to whether the shortfall exceeds administration investment and at the same time considers â€Å"all other relevant factors, including the medium term economic and budgetary position of the member state†33. Exceptional conditions An exception is characterized to have stemmed from â€Å"an occasion externalized from the command of the associate states†¦ which has a most important consequence on the financial situation of the common government, or when ensuing from a harsh economic slump†. In such a case like this one case, a stern econo mic slump is defined as a plunge in actual GDP by at least 2%. A drop between 0.75 and 2% may perhaps be exceptional, given the supporting confirmation. It is usually not the same case when it is less than o.75%. The shortfall is termed to be provisional if it will â€Å"fall under the value which is used for reference subsequent to the end of the odd event or the harsh economic slump†. The SGP is not known to define the nearness principle. All the three must be relevant for this run away clause to be made use of34. First stage: in three months after the coverage date, the ECOFIN Council comes to a decision whether an extreme deficit possibly exists. If that is the case, it will right away issue a suggestion giving: four months to obtain â€Å"effective accomplishment† and; A time limit for the elimination of the unnecessary deficit, which is characteristically the year that follows its classification, therefore barring the special circumstances. Second stage: After a period of four months, on condition that the ECOFIN Council thinks that the associate states is not putting into practice the measures, or that they are insufficient, or that information indicates that the disproportionate shortfall will not be approved within the instance limits which are specified, it will budge on to the subsequent step. If the state is deemed as to have taken some effective act, the modus operandi is positioned in abeyance35. Otherwise, in one month, the Council goes ahead and gives notice for the associate states to take, in a specified instant limit, the measures required to reduce the shortfall. This phase is only appropriate to countries in the concluding stage of the EMU. The Council might request the associate state to present regular reports to keep an eye on the adjustment efforts which are under the enhanced fiscal observation. Final stage: If the associate state is in conformity with the given notice, the course of action is detained in abeyance. If this is not the case, the ECOFIN Council moves to the sanctions stage surrounded in two months. By this schedule, sanctions are able to be imposed in ten months of the coverage date. A non interest incurring deposit will hence be requisite. The first phase of the deposit includes a fixed constituent of 0.2% of GDP and a changeable component equivalent to 1/10 of the difference amid the deficit and the 3%, in percent of the GDP. Each subsequent year, the Council might decide to strengthen the sanctions by having need of one more deposit (variable constituent only). No solitary deposit can go beyond 0.5% of the GDP. If the extreme deficit has not been approved two years subsequent to the time that the deposit was completed, it shall be transformed into a fine. If, prior to a time when two years are up, the lead Council thinks about the excessive shortfall to be corrected, it consequently abrogates the modus operandi and precedes the deposit. Fines are however not reimbursed. Interests on deposits, and the fines, shall also be distributed amongst member countries without too much deficits (Schwartz, 9). Criteria for good fiscal rule The SGP is required to be judged along two equivalent dimensions; first, does it promote the adoption of time consistent strategies, remedying shortfall biases? Secondly, is there an advantage in having a supra-national law at all? The answer to both these questions is definitely a yes, despite a variety of enforcement impenetrability36. As a rule based structure, the SGP is well suitable to addressing the shortfall bias in the fiscal policy. As with monetary strategy, time consistent procedures can be attained by fastening the hands of the policymakers, by having nothing to do with unconstrained judgment, and by taking on a rule based structure. In a lot of ways, the framework for organizing fiscal policies of the EU countries shows the characteristics of a replica fiscal regulation and is generally suitable in the circumstance of th e economic union (Kopits and Symansky, 97). It is elegant, insofar as it remains simple, and also clearly defined, and crystal clear, particularly with respect to the parts that relay to unpleasant policy mistakes37. Also, the description of gross policy faults (deficits exceeding 3 percent of GDP) is sufficient regarding the goal of upholding stability in the economic union. Absent policies to correct the fiscal pressure correlated to aging, the monetary policy might face some major difficulties above the longer run. In addition, persistent breach of the 3 percent limit can destabilize the merger over the average run. In addition, the SGP doles out as a practical external promise technology, which is particularly valuable in nations with histories of macro-economic or even fiscal unpredictability, or politically induced shortfall biases. However, onlookers have raised issues over whether the structure is sufficiently flexible and also enforceable and also as to whether it allows fo r enough ownership. Critics have said that the EDP mechanism is too dull and perfunctory. Also, the â€Å"preventive arm† is seen as deteriorating to take country precise sustainability issues into account adequately, calling like in CBS in all affected countries in spite of the circumstances38. Mostly, on the other hand, this disapproval fails to provide due credence to the necessitation for any regulation to be straightforward and crystal clear, chiefly if it is supranational (Schuknecht, 48). Others have strained attention to shortages in the enforcement apparatus as the principal gap in the SGP’s protective covering (Buti, Eijffinger, and Franco, 20). Inman (1999) claims that at the same time as the EU fiscal structure is effective, it trips up on the enforcement that happens to be partisan rather than sovereign, and resulting from the peer-driven nature it has39. Enforcement harms tend to be connected to possession, as several have argued that SGP is too concentra ted and not adequately respectful of the subsidiary (DeGrauwe, 112). Criticisms General disapproval of the SGP is mostly about its pro-cyclical nature, the very weak consequences on the growth and also the employment and the possibility of exploitation, its universal incredibility, and the real criteria are approximately completely random. â€Å"Handling† of reported data happens for the duration of the configuration process of the monetary unification and it was expected that it will be probable to rule it out in the course of the yearly convergence and constancy reports. This leads to the extremely weak impacts on growth that are mostly due the reasons that are outlined a while before. Neither the pro cyclical quality of the agreement nor the disregard of public investment does assist economic expansion. Even supplementary, the whole agreement seems to hold only development effects that are constructed completely on prospects about the â€Å"spill-over-effects† and t he favorable market behavior. If the common legal tender will be commenced, than optimistic trade effects will take place, fostering invention and consequently leading to development. Nothing is given to ensure this. If the monetary unification is believable than the self-confidence of the economic players will be made stronger, lowering indecision, improving prospect, fostering ventures, and consequently leading to development. Nothing is made available to ensure this (Brunila, 58). If there is financial convergence prior to the monetary union, then the convergence will be also being sustainable and also later afterwards. Almost not anything is provided to make sure this, besides the yearly reports of associate countries, the harmonization of financial and economic politics, and a payable to political cause already strained. Especially a blend of low price rises’ rates and an impartial budget might even lead to deflation forces and consequently may decrease actual developmen t rates, dropping over to the other part of the EU (particularly if occurring in a big country)40. This shows the way to some concluding remarks about centralization, the prominent voting authority, and the sanctions. If the budgetary restraint is taken critically as a necessary component of the monetary union to keep away from the bailing out of â€Å"sluttish† associates, then more efficient management is needed (Bishop, 300). Political decisions build the possibility to define â€Å"exceptional circumstances† that permit for a divergence from the SGP in each single case on a country to country foundation. This has some advantages as well as some disadvantages. Particularly the disadvantages could be abridged by a centralization of a checking and the voting competences in the supra-national body which is like a commission, while an intergovernmental body (similar to the Council) could create suggestions if and what â€Å"Unique circumstances† exists that give good reason for a divergence from the SGP. Another answer might be the reweighting of the appointment authority in the Council for SGP based decisions in accordance to the budgetary regulation of the associates: the voting authority of affiliates with a fair budget or a budget excess should be enhanced, at the same time as the voting influence of members infringing the deficit measure is supposed to be reduced (Artis, 89). One might also put forward stripping affiliates that breach the pact of their voting control completely or to initiate a similar practice according to the price rises standards41. Works Cited Alesina, Alberto and Roberto Perotti. â€Å"The Political Economy of Budget Deficits,† Staff Papers, International Monetary Fund, Vol. 42, No.1, pp. 1-31. Alesina, Alberto, Nouriel Roubini, and Gerald Cohen. Political Cycles and the Macroeconomy. Cambridge, Massachusetts: MIT Press, 1999. Artis, Michael J. The Economics of the European Union. Oxford: Oxford University Press.2001. Barro, Robert, and David Gordon, 1983, â€Å"A Positive Theory on Monetary Policy in a Natural Rate Model,† Journal of Political Economy, Vol. 91, No. 4, pp. 589-610. Bishop, Graham â€Å"The Future of the Stability and Growth Pact†, in: International Finance 6 (2), pp. 297-308. Buti, Marco, Sylvester Eijffinger, and Daniele Franco â€Å"Revisiting the Stability and Growth Pact: Grand Design or Internal Adjustment?† European Economy Economics Papers, No. 180 (Brussels: European Commission). 2003. Brunila, Anne The Stability and Growth Pact: the Architecture of Fiscal Policy in EMU. Basingstoke: Palgrave. 2001. DeGrauwe, Paul.Economics of Monetary Union. Oxford: Oxford University Press.2001 Hule, Richard and Matthias Sutter: â€Å"Can the Stability and Growth Pact in EMU Cause Budget Deficit Cycles?† in: Empirica 30 (1), pp. 25-38. Inman, Robert. P. â€Å"Do Balanced Budget Rules Work? U.S. Experience and PossibleLessons for the EMU,† NB ER Working Paper No. 5838 (Cambridge, Massachusetts: National Bureau of Economic Research).1996 Jaeger, Albert â€Å"Cyclical Fiscal Policy Behavior in EU Countries,† IMF Staff Country Report No. 01/201 (Washington: International Monetary Fund). 2001. Kontopoulos, Yianos, and Roberto Perotti, â€Å"Government Fragmentation and Fiscal Policy Outcomes: Evidence from OECD Countries,† Fiscal Institutions and Fiscal Performance, ed. by James Poterba and Jurgen von Hagen (Chicago, Illinois: University of Chicago Press). 1999. Kopits, George, and Steven Symansky, â€Å"Fiscal Policy Rules,† IMF Occasional Paper No. 162 (Washington: International Monetary Fund). 1998. Kydland, Finn, and Edward Prescott, â€Å"Rules Rather Than Discretion: The Inconsistency of Optimal Plans,† Journal of Political Economy, Vol. 85, No. 3, pp. 473-92. Lane, Philip R., â€Å"The Cyclical Behavior of Fiscal Policy: Evidence from the OECD,† Journal of Public Economics, Vol. 87, pp. 2661-675. Milesi-Ferretti, Gian Maria, Roberto Perotti, and Massimo Rostagno, 2002, â€Å"Electoral Systems and Public Spending,† Quarterly Journal of Economics, Vol. 117, No. 4, pp. 607-57. Schuknecht, Ludger, â€Å"EU Fiscal Rules: Issues and Lessons from Political Economy,† European Central Bank Working Paper, No. 421 (Frankfurt: European Central Bank). 2003. Schwartz, Anna J. â€Å"Risks to the Long-Term Stability of the Euro†, in: Atlantic Economic Journal 32 (1), pp. 1-10 Skilling, David, â€Å"The Political Economy of Public Debt Accumulation in OECD Countries Since 1960,† mimeo, New Zealand Treasury. 2000. Williamson, Oliver E.â€Å"The New Institutional Economics: Taking Stock, Looking Ahead.† in: Journal of Economic Literature 38 (3), pp. 595-613. 2000 Footnotes 1 Williamson, Oliver E.â€Å"The New Institutional Economics: Taking Stock, Looking Ahead.† in: Journal of Economic Literature 38 (3), pp. 595-613. 2000 2 Kopits, Georg e, and Steven Symansky, â€Å"Fiscal Policy Rules,† IMF Occasional Paper No. 162 (Washington: International Monetary Fund). 1998. 3 Lane, Philip R., â€Å"The Cyclical Behavior of Fiscal Policy: Evidence from the OECD,† Journal of Public Economics, Vol. 87, pp. 2661-675. 4 Jaeger, Albert â€Å"Cyclical Fiscal Policy Behavior in EU Countries,† IMF Staff Country Report No. 01/201 (Washington: International Monetary Fund). 2001. 5 Hule, Richard and Matthias Sutter: â€Å"Can the Stability and Growth Pact in EMU Cause Budget Deficit Cycles?† in: Empirica 30 (1), pp. 25-38. 6 Hule, Richard and Matthias Sutter: â€Å"Can the Stability and Growth Pact in EMU Cause Budget Deficit Cycles?† in: Empirica 30 (1), pp. 25-38. 7 Lane, Philip R., â€Å"The Cyclical Behavior of Fiscal Policy: Evidence from the OECD,† Journal of Public Economics, Vol. 87, pp. 2661-675. 8 Schwartz, Anna J. â€Å"Risks to the Long-Term Stability of the Euro†, in: Atlanti c Economic Journal 32 (1), pp. 1-10 9 Skilling, David, â€Å"The Political Economy of Public Debt Accumulation in OECD Countries Since 1960,† mimeo, New Zealand Treasury. 2000. 10 Skilling, David, â€Å"The Political Economy of Public Debt Accumulation in OECD Countries Since 1960,† mimeo, New Zealand Treasury. 2000. 11 Artis, Michael J. The Economics of the European Union. Oxford: Oxford University Press.2001. 12 Bishop, Graham â€Å"The Future of the Stability and Growth Pact†, in: International Finance 6 (2), pp. 297-308. 13 Artis, Michael J. The Economics of the European Union. Oxford: Oxford University Press.2001. 14 Artis, Michael J. The Economics of the European Union. Oxford: Oxford University Press.2001. 15 Alesina, Alberto, Nouriel Roubini, and Gerald Cohen. Political Cycles and the Macroeconomy. Cambridge, Massachusetts: MIT Press, 1999. 16 Alesina, Alberto and Roberto Perotti. â€Å"The Political Economy of Budget Deficits,† Staff Papers, Inte rnational Monetary Fund, Vol. 42, No.1, pp. 1-31. 17 Williamson, Oliver E.â€Å"The New Institutional Economics: Taking Stock, Looking Ahead.† in: Journal of Economic Literature 38 (3), pp. 595-613. 2000 18 Williamson, Oliver E.â€Å"The New Institutional Economics: Taking Stock, Looking Ahead.† in: Journal of Economic Literature 38 (3), pp. 595-613. 2000 19 Milesi-Ferretti, Gian Maria, Roberto Perotti, and Massimo Rostagno, 2002, â€Å"Electoral Systems and Public Spending,† Quarterly Journal of Economics, Vol. 117, No. 4, pp. 607-57. 20 Milesi-Ferretti, Gian Maria, Roberto Perotti, and Massimo Rostagno, 2002, â€Å"Electoral Systems and Public Spending,† Quarterly Journal of Economics, Vol. 117, No. 4, pp. 607-57. 21 Kopits, George, and Steven Symansky, â€Å"Fiscal Policy Rules,† IMF Occasional Paper No. 162 (Washington: International Monetary Fund). 1998. 22 Kopits, George, and Steven Symansky, â€Å"Fiscal Policy Rules,† IMF Occasional Paper No. 162 (Washington: International Monetary Fund). 1998. 23 Lane, Philip R., â€Å"The Cyclical Behavior of Fiscal Policy: Evidence from the OECD,† Journal of Public Economics, Vol. 87, pp. 2661-675. 24 Kydland, Finn, and Edward Prescott, â€Å"Rules Rather Than Discretion: The Inconsistency of Optimal Plans,† Journal of Political Economy, Vol. 85, No. 3, pp. 473-92. 25 Lane, Philip R., â€Å"The Cyclical Behavior of Fiscal Policy: Evidence from the OECD,† Journal of Public Economics, Vol. 87, pp. 2661-675. 26 Kydland, Finn, and Edward Prescott, â€Å"Rules Rather Than Discretion: The Inconsistency of Optimal Plans,† Journal of Political Economy, Vol. 85, No. 3, pp. 473-92. 27 Alesina, Alberto and Roberto Perotti. â€Å"The Political Economy of Budget Deficits,† Staff Papers, International Monetary Fund, Vol. 42, No.1, pp. 1-31. 28 Alesina, Alberto and Roberto Perotti. â€Å"The Political Economy of Budget Deficits,† Staff Papers, Inte rnational Monetary Fund, Vol. 42, No.1, pp. 1-31. 29 Lane, Philip R., â€Å"The Cyclical Behavior of Fiscal Policy: Evidence from the OECD,† Journal of Public Economics, Vol. 87, pp. 2661-675. 30 Barro, Robert, and David Gordon, 1983, â€Å"A Positive Theory on Monetary Policy in a Natural Rate Model,† Journal of Political Economy, Vol. 91, No. 4, pp. 589-610. 31 Kydland, Finn, and Edward Prescott, â€Å"Rules Rather Than Discretion: The Inconsistency of Optimal Plans,† Journal of Political Economy, Vol. 85, No. 3, pp. 473-92. 32 Barro, Robert, and David Gordon, 1983, â€Å"A Positive Theory on Monetary Policy in a Natural Rate Model,† Journal of Political Economy, Vol. 91, No. 4, pp. 589-610. 33 Artis, Michael J. The Economics of the European Union. Oxford: Oxford University Press.2001. 34 Artis, Michael J. The Economics of the European Union. Oxford: Oxford University Press.2001. 35 DeGrauwe, Paul.Economics of Monetary Union. Oxford: Oxford University P ress.2001 36 DeGrauwe, Paul.Economics of Monetary Union. Oxford: Oxford University Press.2001 37 Kopits, George, and Steven Symansky, â€Å"Fiscal Policy Rules,† IMF Occasional Paper No. 162 (Washington: International Monetary Fund). 1998. 38 Schuknecht, Ludger, â€Å"EU Fiscal Rules: Issues and Lessons from Political Economy,† European Central Bank Working Paper, No. 421 (Frankfurt: European Central Bank). 2003. 39 DeGrauwe, Paul.Economics of Monetary Union. Oxford: Oxford University Press.2001 40 Bishop, Graham â€Å"The Future of the Stability and Growth Pact†, in: International Finance 6 (2), pp. 297-308. 41 Artis, Michael J. The Economics of the European Union. Oxford: Oxford University Press.2001. This term paper on Risk assessment for commercial loans was written and submitted by user Marlee Ratliff to help you with your own studies. You are free to use it for research and reference purposes in order to write your own paper; however, you must cite it accordingly. You can donate your paper here.

Project Appraisal to Working Capital Essay Example

Project Appraisal to Working Capital Essay Example Project Appraisal to Working Capital Essay Project Appraisal to Working Capital Essay GOI came out with a new textile policy that outlines the direction of policy reforms to be followed in near term. The steps outlined in the policy are geared mainly towards removing the bias in policy towards the small scale sectors and promoting modernization. Technical Feasibility Location and site The site chosen for the cotton spinning unit is in Gujarat which has many advantages such as ? Project located in well developed industrial area where land availability and conversion of land and getting necessary approval is easy. ?Low labor cost ?Easy availability of skilled and semi skilled labor ?Favorable industrial environment ?One of the new textile hub in India ?Peaceful labor environment ?All infrastructural facilities such as roads, natural gas for power plant and effluent discharge facility with water. Technology and Manufacturing process The company has initiated the process of setting up world class integrated textile plant in order to make it one of the leading textile companies in the country. The adoption of new and latest technology will transform their manufacturing process into an efficient mode. NC textiles proposes to set up a spinning unit with a capacity of 52224 spindles, fully automated with almost non touch manufacturing process, automation would also reduce the number of workmen resulting in non dependence on workmen. The report explains the entire manufacturing process in detail and how the production would be carried out. Availability of raw materials Cotton: The main raw material for the plant is cotton which is easily available in Indian markets at reasonable prices. Fuel: Company has made provisions to establish captive power plants of matching requirements. The supply line of gas is already available. Power: The power demand for the spinning unit has been estimated to be about 4 MW. The power requirements will be met by installing a 4 MW gas based captive power plant by the company itself. Firefighting: Appropriate equipment and gadgets such as carbon dioxide and dry powder extinguishers are considered. Plant lighting: The entire plant area, work shed will be provisioned with adequate luminous lighting as per laid down industry standards. Further, all internal transport routes and general working areas are provided with adequate lighting. Pollution control measures The provision of water treatment plant and effluent treatment plant of matching capacities has been made to recover and recycle the water and minimize the water requirement. Financials Project cost and Means of Finance The total cost of the project is estimated to be 211 crores which will be financed through DER of 2. 2. The company proposes to bring in additional capital from its existing operations amounting to 60 crores which becomes the part of promoter’s contribution. The table below gives the project cost and means of finance: ParticularsCotton spinning unit at Gujarat (Rs lacs) Location XYZ Capacity 52224 spindles Cost of project Land 500 Building 2050 Plant and machinery13978 Misc. fixed assets2207 Total 18 735 Preliminary expenses375 Interest during construction1281 Contingency expenses335 Margin money for working capital380 Total 2410 Grand total21100 Means of finance Internal sources6000 Term loan15100 Grand total21100 From the above table, it can be concluded that the cost of the project has been estimated to be around 21100 lacs which the company is planning to finance through debt of Rs 15100 lacs and equity of Rs 6000 lacs. The DER for the project comes to around 2. 52. Overall comments on plant and machinery The cost of entire plant and machinery is estimated at 13978 lacs inclusive of freight, insurance, and taxes including custom duty. The suppliers for most of the equipments have already been finalized after suitable negotiations. The comparative analysis related to the cost of plant and equipment has found to be comparable with other projects of similar capacity. Finally, the proposed plant, machinery and equipments are suitable for the envisaged production capacity and incorporate the well established and proven technology. Breakeven analysis As per the estimates, the company is to achieve breakeven point at the sales of Rs 7137 lacs at the capacity utilization of 90% in the year 2014. This is illustrated in the following table (Rs in lacs) Capacity 90 % (2014)Variable (%)Fixed (%)Variable costsFixed costs Sales (A)10499 Expenses Raw materials3929100%3929 Power and fuel713100%713 Wages 35080%20%28070 Factory overheads24280%20%19349 Adm. Expenses20880%20%16642 Interest 1794100%1794 Depreciation 1592100%1592 Total 88275281 (B)3547 Contribution (A- B)5218 Breakeven (sales)7137 Break even (capacity)67. 98% DSCR calculation DSCR helps to understand the debt servicing capability of the company. Generally, higher the ratio, greater is the ability of the company to pay its debt. The project of cotton spinning unit will start its commercial operations in 2013 and start generating revenue. The profit that will be generated will first be used to pay off its debts in the form of installments and interest. This ratio forms a crucial part from banker’s point of view as it helps the bank to know the financial status of the company in near future. The profits generated in future are calculated based on certain assumptions which are the used to calculate DSCR (Rs in Lacs). Year ending 31 march20132014 EBITDA46955058 PAT549947 Depreciation18291829 Deferred tax liability189182 Interest19071657 Total44744616 Interest19071657 Installment18881888 Total37943544 DSCR1. 181. 30 ISCR2. 52. 79 The above table shows two ratios DSCR (debt service coverage ratio) which seems to be reasonable and it can be said that the company will be able to service its debt without any difficulty. ISCR (interest service coverage ratio) tells the ability of the company to pay the interest on debt on time. The above values of this ratio seem to be satisfactory without causing any problem to the com pany. Normally, the above ratios are calculated for the entire period of debt (period for which the debt service is availed) and the average of these ratios is considered for bank’s purpose. Management The project is being promoted by one of the largest companies in the country, NC textiles. The promoters have long experience of setting up of new textile projects, running and operating plants with complete range of textile fabrics, backed by well qualified team of professional and management personnel. The management has a good track record of execution of projects of similar costs and has serviced its debts timely. The vast experience of the management personnel is the major strength of the company which makes it eligible for sanctioning of loan. The company has planned expansion with the best technology and machinery from suppliers of good reputation to become competitive in international market. The company is also known for maintaining good industrial relations and has a very good reputation in the domestic market. Economic The project has also been considered useful for the society as a whole. The project would be creating a large number of employment opportunities for the locals thus providing self sufficiency and financial support to the workers. This distribution of income would ultimately lead to increase in saving and the standard of living for the people. Finally, the project aims to develop textiles of world class quality that will be able to give stiff competition to international brands and thus leading to the growth of Indian economy. The above section explains the appraisal system followed at PNB. This appraisal is carried out by the technical cell of the bank and it is based on this report that the viability of the project is determined. The techno-economic viability of the project is of major concern for the bank and forms an important step in decision making. The appraisal system at PNB is very crucial for sanctioning of financing facility and with the help of it, the bank gets to know in depth detail of the company and the project being undertaken. CREDIT RISK RATING What is Credit Risk? The risk that the borrower might fail to meet the obligations towards the bank in accordance with the agreed terms and conditions is called credit risk. It measures the inability or unwillingness of the borrower to pay its debt. Identification of credit risk forms the crucial part of risk management and is very important for the bank. It helps the bank in determining the potential defaulters and abstain the bank from providing financing facility to such borrowers or in case they provide, than provide them at a higher r

Causes and Consequences of the Wall Street Crash of 1929 Essay

Causes and Consequences of the Wall Street Crash of 1929 - Essay Example Many thought that the stock market was the wisest place to make investments to secure their future. As more people invested in the stock market, the prices of stock continued to rise and with the rise of stock prices, more people were encouraged to invest because they believed that the rise in stock prices would continue indefinitely and that they would eventually get very high returns for their investments (Svaldi, 2004). By nineteen twenty eight, the rising stock prices had brought about the stock market boom and this changed the way investors viewed the stock market. The stock market was no longer a place where long term investments were made but had now become a place where people could get rich quickly by making short term investments due to the high interest rates given for their stocks (Klein, 2001, 325 - 351). The news of people having made millions from their investments in the stock market, even common people who would normally not have been a part of the stock market envir onment, encouraged many more people to invest. Many of those people who wanted to invest in the stock market did not have the money to do so and many chose to buy stock ‘on margin.’ This meant that the potential investor would put down his own money to buy the stock while the rest was borrowed from a stock broker, and this tended to be about ten to twenty percent of their own money. Buying stock ‘on margin’ was a very risky venture because if the prices of stock went down below its buying price, then the broker from whom the money to buy the stock was borrowed would issue a ‘margin call’ which meant that the investor had to come up with the money to pay back his loan almost immediately. Buying stock on margin was very popular for those people who did not have enough money to invest, and the continued rise in stock prices encouraged many more people to invest in this manner, not thinking of the risks which they were exposing themselves to throug h their ventures (Williamson, 2008). By the early nineteen twenty nine, many Americans were scrambling to make investments in the stock market because the profits from such investments seemed to be assured. This assurance of profits led many companies to invest their money in the stock market and these were not the only major investors. Banks were so confident in the stock market that they, without consulting their customers, invested their customers’ money in the stock market because with stock prices continually rising, the environment seemed perfect for investment (Mclynn, 2002). When the Wall Street crash occurred in October of the same year, many people and institutions were taken by surprise. A prelude to the crash occurred in March nineteen twenty nine when stock prices began to drop and there was an overall panic when stock brokers began making margin calls. However, confidence in the stock market was restored when banker Charles Mitchell made the announcement that hi s bank would continue lending to those who wished to invest (Burke, 2001). Mitchell and other bankers tried to again reassure the public to have confidence in the stock market but this was not enough to stop the great crash that occurred later that year. During the spring of nineteen twenty

Department of Defense (DOD) Information Technology infrastructure Research Paper

Department of Defense (DOD) Information Technology infrastructure Audit - Research Paper Example This will achieved by CompTech’s detective controls. The company will provide an alarm system that uses laser technology to detect intrusion and report it immediately to the police. This will ensure that the confidentiality of data and information within the DOD is safeguarded from intruders. The department of Defense (DOD) within its directives provides that DOD information must be protected from security breaches by one or more physical controls (Online Information for Defense Community 2012). It is in this regard that that the CompTech Inc. will provide physical security through locks which inhibit access to sensitive data and information within the DOD. Physical barriers will be installed within the DOD to prohibit access to data warehouses. The physical barriers that CompTech Inc. will provide for the DOD include passwords to entry and exit doors including the elevators. Through physical protection, the privacy of data within the department will be guaranteed. In order to comply with the information security program that is recommended by the DOD, CompTech Inc. will ensure that the department recovers quickly from any losses of data that emanate from security breaches. The company will achieve this through the design and installation of data recovery software that will act as a corrective control for data losses. This will ensure availability of data for use without any delays hence implementation of quick corrective measures. The Critical Program Information within DOD’s requirements and directives will be adhered to by CompTech Inc. in its procedural controls. The company will design and present training applications will help employees within the department to have adequate skills and knowledge on safeguarding the system. This will lead to a situation where the integrity of information within the DOD is maintained. CompTech Inc. will provide the DOD with secure systems which are designed and installed with firewalls,

Discussion Board Forum Forrest Gump Movie Review

Discussion Board Forum Forrest Gump - Movie Review Example By contrast, the All American hero (Gump) kyte-flyes above the drama, blissfuly ignorant of what is really going on, to raise from a crippled moronic child and become a sports star, a Superman during the war, chummy to three Presidents, and a billionaire, of course. So, if you are a conservative, you come out of the theater thinking "They got what they deserved, both of them" and wholeheartedly adhere to the movie's morals and sociological analysis. However, if the metacodes are read with more sensitive antennae, a different picture can be perceived. Existentialist ideas are in the background throughout the movie. Chance and destiny are counter played in the lifes of Jenny and Gump; there is no higher purpose, no good and evil, no God. There is only life. In this context, the countercultures are just one aspect of life. It is just by chance that Jenny is immersed in them and Gump is not, their roles in the movie are starkly black and white, to drive home the message. They could easily have exchanged their roles, their trajectories, their "destinies". Real life is a mixture of both, and any human being can during his/her lifetime partake in hell and heaven. The elements of the counterculture have always been there and will always be, as long as there is a human alive.

How Knowledge Is Generated

How Knowledge Is Generated Knowledge is generated through the interaction of critical and creative thinking. Obliquely, the statement defines knowledge as of an Idea which may be achieved from the mind, but something of pre-existing idea its not. Knowledge can be generated through the interaction of critical and creative thinking. would be a statement of which knowledge is defined as of something that may be discovered through the interaction of both creative and critical thinking. According to Khalil Gibran, No man can reveal to you nothing but that which already lies half-asleep in the dawning of your knowledge. May knowledge be defined as of something to be discovered but is else generated through the engagement of ones mind and a notion? Assume that one might discover an idea. Is it of being in conscious of specific pre-existing concept? Knowledge may be discovered by being aware of certain idea; this requires the application of both critical and creative thinking. Critical thinking may achieve certain level of understanding; creative thinking motivates an idea of an understanding of pre-existing concept. Both creative and critical thinking are necessary to generate a ripe understanding of knowledge. Knowledge requires the well understanding of its concept and basis. According to Plato, The learning and knowledge that we have, is, at the most, but little compared with that of which we are ignorant. Based on the statement specified above, knowledge is achieved by the engagement of all ways of knowing which include; language, emotions, perception, and reasoning. But as of something that exists before the finding; could the origin of knowledge be of nothing, but all the ways of knowing be defined as of the tools required for the discovery and exploration? But if knowledge itself is generated through the ways of knowing, it may as well be defined as its product; hence the ways of knowing may as well be its limit. This is influenced by the understanding of knowledge itself, as whether it is something that is produced or discovered. But may one that is discovered be produced or is it that one that is produced be discovered? The understanding of knowledge and its origin through, or by the ways of knowing requires a process of intricacy and qualms. By the ways of knowing we note that knowledge is to some extent, linked or explored in ones mind in a meticulously abstract way. The process of learning requires the ways of knowing as the tools which are obligatory to generate or discover knowledge, either way knowledge is involved and in function. The way in which knowledge is expressed or explored is in variety to the ways of knowing, these are explored in diverse subjects and ideas which are of the product of knowledge itself. This includes the contribution of the ways of knowing in the areas of knowledge. The areas of knowledge apply the understanding of assured knowledge and concept in both practical and theoretical studies and understanding. The general extent of knowledge is to which it may be classified. A way of knowing may be understood as a concept of dominance in specified areas of knowledge. As for instance; Science is the study of natural theoretical concept to which life and its function may be measured. The application of both creative and critical thinking is necessary as the presence of an idea or theory requires inventive aptitude which is generated generally through creative thinking. An Idea will be actualized or generally accepted only through the well thought of critical thinking, whilst in unison; doubts and uncertainties are argued. According to John F. Kennedy, The greater our knowledge increases the more our ignorance unfolds. The concept or theory is but only to be understood through the engagement of both creative and critical thinking. Further understanding of the implementation of knowledge may be discussed over subject such as art and music. Generally, these subjects require the well implication of creative thinking. According to William Pollard, Without chang e there is no innovation, creativity, or incentive for improvement. Those who initiate change will have a better opportunity to manage the change that is inevitable. As imaginative matters are fashioned, the work of true artist requires creativity. As of critical thinking may define the term creative itself, it may as well be in function of analyzing the extent to which according to man is exquisite. Both creative and critical thinking are the quality to which the value of knowledge may be measured. This links the function of both creative and critical thinking to the areas of knowledge. The extent to which knowledge is said to be necessary in the areas of knowledge may be hesitated. But if knowledge is of pre existing concepts and ideas; may both creative and critical thinking be defined as the mutual connection between man and knowledge? As it may seemed if assumed, the ways of knowing be only the way in which we relate to knowledge. To that extent may knowledge be defined as an entity to which the ways knowing is redundant to its origin. This may explain the needles of both creative and critical thinking in the areas of knowledge. But if thoughts be defined as of the connection between man and concepts it may as well be assumed, that it is required in exploring the areas of knowledge, that to generate knowledge may be understood as to generate knowledge in ones mind or conscience. The implication in the statement above may be of an abstract idea of subjective interpretation or perception of the term itself. The understanding of the statement itself may define knowledge subjectively according to ones awareness. The elucidation of knowledge itself is vague and does not entirely utter a statement of absolute meaning. The statement itself spares subjectivity to be applied in communicating its gist. By stating that knowledge is generated from the engagement of critical and creative thinking, knowledge may be conveyed as something that is generated from the mind. As the statement remains unclear of the idea of knowledge itself, it may as well be supposed that the only known definition of knowledge in the statement is to that of the subjective understanding of ones. As it is read and possibly understood, the statement may denote an account to which one might find it different from anothers construal. May the statement define itself as of the subjectivity signification of many? For nothing must be signified identically to all but at the same time, one shares the common thoughts of many. According to Oscar Wilde, Most people are other people. Their thoughts are someone elses opinions, their lives a mimicry, their passions a quotation. This may be both the limit and the addition to the understanding of the statement. The knowledge to what we understood may be the significant elucidation to one but many as well. Ultimately knowledge may be kept a secret to which we tolerate and seek without expecting any answer, for what we are seeking is ever perhaps be forever amid the thought of ours. It is only human to wish to validate our prior knowledge, to vindicate our prior decisions, or to sustain our earlier beliefs. In the process of satisfying our ego, however, we can often deny ourselves intellectual growth and opportunity.- Daniel J. Kurland. But subjectivity itself is that what parts us as diverse individuals. Bibliography and recourses: http://www.criticalreading.com/critical_thinking.htm http://thinkexist.com/.html http://xmltwo.ibo.org/dp2006-03/dp_x_tokxx_guu_0603_1_e/9

Amy Tans Mother Tongue Essay -- Amy Tan Writing Chinese Essays

Amy Tan's Mother Tongue In Mother Tongue, Amy Tan talks about how language influenced her life while growing up. Through pathos she explains to her audience how her experiences with her mother and the Chinese language she came to realize who she wanted to be and how she wanted to write. The author, Tan, has written the books The Joy Luck Club, and The Kitchen God's Wife. She is Asian-American, her parents are originally from China, but moved to Oakland, California. The audience in Tan's essay is people 20-35 years old who are culturally diverse. Tan focuses on this audience in order reach out to those who are in her past situation. In her house, there were two languages spoken: English and Chinese. Tan knew how to speak both well, but her mother did not. She constantly had to be the translator for her mother, which was embarrassing for Tan. She felt the world thought her mother was inferior because she could not speak English well, though her mother was an intelligent being. The language created a barrier. Tan did not do as well in English class as she did in math and science in school. All of the tests told her the same thing. Yet Tan was determined to write. She found her style through her mother by breaking through the barrier of language. Her m essage is to always believe in yourself and embrace your heritage no matter what anyone else believes. Mother Tongue is written in order of importance. Tan introduces the audience to the fact that ...

Chem

Organic Chemistry I Spring 2013 Practice test 1. Name the following compounds: a. 5-tert-butyl-7-isopropyl-6-sec-butyl-undecane b. cis-2-(5,6-dimethylheptyl)-6-(3-methylpentyl)piperidine c. trans -2-nonyl-3-octyl-tetrahydrofuran d. trans-1,6-dimethylbicyclo[4. 3. 0]nonane e. cis-6,8-ditert-butylspiro[3. 5]nonane f. 1,6-dimethylcyclohexene g. (Z)-3-bromo-4-fluoro-5-methyl-oct-4-ene h. (E)-8-(1-chloroethyl)nonadec-8-ene 2. Draw the structures of the following compounds: a b e c f d g h 3.Draw the structure of the following compounds in Newman projections and in chair conformations: a b c d e 4. Draw the most stable isomer of 1-tert-butyl-3-methylcyclohexane. a. Which atoms/groups are i. gauche to axial hydrogen on C2 A: t-butyl, C6, methyl, C4 ii. anti to equatorial substituent on C3 A: C5, C1 b. What is the relationship between: i. tert-butyl group and equatorial hydrogen on C2 A: gauche ii. equatorial hydrogen on C4 and C6 A: anti 5. Draw all isomers of 4-tert-butyl-2-ethyl-1-methylc yclohexane (ignore mirror images) in their most stable conformations.Arrange the structures from the least stable to the most stable. 6. Cyclohexylmethanol and 1-methylcyclohexanol are converted to their corresponding bromides. Write a suitable mechanism for each reaction, and assign each the appropriate symbol (SN1 or SN2). OH O H H Br H + :Br : SN2 :Br : O H H Br + H2O OH O H Br O + H2O + :Br : SN1 :Br : Br 7. Give the structure of the principal organic product formed by photochemical bromination of methylcyclopropane, draw the mechanism of the reaction. Br2, h? h? Br Br H . .Br Br Br Br 2Br . . + HBr Br + . Br

Indigenous Music of Australia Essay

Australia is a society of many cultures from all over the world. The music of Australia’s indigenous people represents a wide variety of music styles created by the Aboriginal and Torres Strait Islander cultures. The music styles range from contemporary to styles that are fused with European sounds. The music of these people has become an important part of the society and culture of the people even though the ceremonies may have changed. â€Å"The traditional forms include many aspects of performance and musical instrumentation which are unique to particular regions or Indigenous Australian groups; there are equally elements of musical tradition which are common or widespread through much of the Australian continent, and even beyond. † (â€Å"Indigenous Australian Music. † Wikipedia: The Free Encyclopedia. 13 May 2007. 17 May 2007. http://en. wikipedia. org/wiki/Indigenous_Australian_music) The Indigenous populations of Australia have learned from other travelers that have visited Australia for trade or other reasons. The colonization of Australia brought many changes to the way Aboriginal society functioned. It changed the land and how the people went about their daily lives. Before 1788 the Aboriginal and Torres Strait Islanders inhabited Australia. In 1788 the Aboriginal people lived on mainland Australia and the Torres Strait Islanders lived on the islands between Australia and Papua New Guinea, in what is now called the Torres Strait (Dreamtime. net. au. Australian Museum. 17 May 2007. http://www. dreamtime. net. au/indigenous/index. cfm). Many of the Europeans that came to Australia misunderstood the Aboriginal culture and created policies that did not benefit the people. They worked against the people by creating policies that benefited the farmers who moved across the continent using up natural resources and exploiting the Aboriginal people for labor. The European colonists did not understand the way the native people used the land for food and spiritual balance, thus causing many problems. The Indigenous cultures of Australia are one of the oldest in the entire world. â€Å"We’ve been here a long, long time† ( Koori Mail. October 1996). Their ability to adapt over time has allowed them to last. The Aborigines talked of â€Å"Dreamtime† or â€Å"the Dreaming†, which was their version of a creation story. The Rainbow Serpent created the Australian world. As she moved back and forth along the land she created great rivers and from her body the tribes, birds, and animals of Australia emerged. The Aborigines took great pride in the land because they believe that they emerged from it. They believed the Great Ancestral spirits put the plants, animals, and people in their places according to the land forms and spirits surrounding them (FrogandToad’s Indigenous Australia. The Travel Around Company. 19 May 2007 http://indigenousaustralia. frogandtoad. com. au/cultural. html). By the time Europeans arrived to colonize Australia there were more than 700 Aboriginal tribes. Each tribe had their own unique traditions, language, and customs. Traditional music of Australians indigenous people gives great meaning to their lives. There were three distinct types of Aboriginal music. The first was used for sacred ceremonies. The second type of music is semi-scared and is sung by men, with the women dancing. This music was used for initiation. The third type of music was not sacred and was used for entertainment. This is the only kind of music that can be performed by any person at any time. Music was used throughout the Aboriginals lives to teach what must be known about their culture, about their place in it, and about its place in the world of nature and super nature. Aboriginals encouraged their children at a very young age to dance and sing about everyday tasks. (Telford, Hans W. â€Å"Australian Aboriginal Music. † Santa Clara University. 20 May, 2007. http://www. scu. edu. au/schools/sass/music/musicarchive/AusGeneral. html). When the girl or boy reaches puberty he or she learns about totemic plants and animals of the clan and the mythology of their group, also known as karma songs. Karma is the Aboriginal type of oral literature that tells a historical story of the people ( Indigenous Australian Music). These songs have specific melodic formulas that distinguish them from other tribe’s songs.. Because the stories come from oral tradition the music is learned my imitating elders and is passed without writing everything down. Before a man marries he learns more lively and fun songs that are entertainment for the tribe. When he marries and becomes a responsible tribe member he is to depend on the karma songs to keep him strong. The man matures by the knowledge he acquires through song and when he is older his on her is based partly on his mastery of the secret sacred songs of the tribe (Telford, Hans W. ). Some clans in Aboriginal Culture may share songs known as emeba, fjatpangarri, and manikay. These songs are directly tied to the story telling of Dreamtime, when the features of the land were created and named. When they sing the songs in the correct order the tribe could navigate vast distances. They relate the person who keeps the song with the land itself (Indigenous Australian Music). A traditional for of music is Bunggul. This style of music is known for its intense lyrics, and is usually stories about epic journeys. These stories continue or repeat after the music stops (Indigenous Australian Music). A death wail is also a very traditional music style in Aboriginal culture. It is a mourning lament performed in ritual fashion after the death of a family or tribe member. Roy Baker, a descendent of the Murawari tribe describes the death wail, â€Å"You hear the crying and the death wail at night,† he recalled, â€Å"it’s a real eerie, frightening sound to hear. Sad sound†¦ to hear them all crying. And then after the funeral, everything would go back to normal. And they’d smoke the houses out, you know, the old Aboriginal way. † Aboriginal Australians used the resources around them to make their instruments. Most of their instruments fall into the idiophone class. An idiophone instrument is made from resonating material that does not have to be tuned (Encarta World English Dictionary). Their instruments consisted of two separate parts, which are stuck together to make a percussive sound. There are no string instruments in their culture, but they did use a skinned drum type instrument and wind instrument. Idiophones were the most common types of instrument and the most basic. The first example is sticks. Each singer would hold a pair of wooden sticks and clap them together. They could also be shaken to make a rattling sound. Boomerang clapsticks also were used in the same way. Aboriginal Boomerang Clapsticks[pic] If there were no sticks, hand clapping or slapping various parts of the body were substitutes for a pair of sticks or clapsticks. A rattle usually accompanied songs. These rattles were made by holding bunches of seed ponds in ones hand. [pic] Seed rattle. The most well known of all the Aboriginal instruments is the didjeridu. The didjeridu is usually formed when termites hollow out a tree branch. The branches are usually cut to about 5 feet and are smoothed to make a suitable mouthpiece. When blown the didjeridu is a rich and complex sound. The function of the didjeridu is to provide a constant drone on a deep not, somewhere around D flat. The note is broken up in rhythmic patterns and accents by the use of the player’s tongue and cheeks. Constant air pressure s maintained by simultaneously blowing out through the mouth and breathing in through the nose, known as circle breathing. Great stamina is needed to play the didjeridu. [pic] [pic] Most contemporary styles of indigenous Australian music come from the fusion with European traditions. It also represents from the fusion with mainstream styles of music such as rock and country. Artists like The Deadlys give us an example of this using rock, country, and pop. Common traditional musical instruments such and the didjeridu and clapsticks are used to give a different feel to the music (Indigenous Australian Music). Overall, most ancestors stay true to their past roots of music. The remaining indigenous Aboriginal tribes still practice their culture and pass it down from generation to generation. The traditions have all remained the same even though European colonization changed the tribes forever. Even though there aren’t as many tribes remaining, the people of Australia keep their music alive in traditional and contemporary ways. Works Cited â€Å"Indigenous Australian Music. † Wikipedia: The Free Encyclopedia. 13 May 2007. 17 May 2007. http://en. wikipedia. org/wiki/Indigenous_Australian_music (Dreamtime. net. au. Australian Museum. 17 May 2007. http://www. dreamtime. net. au/indigenous/index. cfm Telford, Hans W. â€Å"Australian Aboriginal Music. † Santa Clara University. 20 May 2007. http://www. scu. edu. au/schools/sass/music/musicarchive/AusGeneral. html.

American History and Technology essays

American History and Technology essays The advertisement sheet for Muller's "Alpha" Patent Gas-Making Machine provides much insight into the state and orientation of American technology in the 1870s. From the advertisement, we can discern a United States at the dawn of its rise to an industrial power, using technology to hold its own against the more advanced industrialized European countries such as The advertisement shows a rendition of a gas-making machine, a devise that could produce fuel for "lighting all places out of reach of coal gas." The sellers further touted a machine that would provide fuel for household activities such as lighting and heating, though paradoxically, the machine The advertisement most likely was published between the 1870s and the 1880s, a time that saw much research into various gas-making machines. During this time, much of the industrialized nations were dependent on coal gas, a by-product of the distillation of coal. Coal gas was often used for gas lighting and was also alternately referred to as "town gas." The downside, however, was the expense. The price of canned coal made the production of coal gas too expensive for many would-be manufacturers. England and Germany were the leading producers of coal gas oils, which were vital to manufacturing as well as for household uses. In the United States, coal gas was also important for the railway industry, the vital spine that held together a fledgling union that had just emerged from Civil To rise to the level of industrialization already enjoyed by its European counterparts, the United States thus turned to technology. The period from the 1860s to the early 1900s were thus years of extraordinary technological invention in the United States. This era saw the invention of the telephone, telegraph, the cotton gin and other techniques of mass production. Though obviously created b ...

Hostage Taking and Live Television Coverage Essay

Hostage Taking and Live Television Coverage - Essay Example Actions for a scene Commander According to Thompson (2006), the scene commander is charged with the overall operations devised to rescue victims who have been held hostage by criminals. One of the key roles of the scene commander is to secure the perimeter of the hostage scene as well as minimize any potential deaths or injuries. Though constitutionally the media enjoys the right to cover any public event including hostage taking incidents, the scene commander can either issue access to the crime scene or prohibit the media from accessing the crime scene depending on the nature of the crime taking place (Hammer, 2007). According to the Centre of Excellence Defense against Terrorism (2007), the scene commander should define or regulate the distance that the media team is allowed within the vicinity of the crime or hotspot. Additionally, the scene commander should regulate the press statements being broadcast by the media houses and the actual filming of the event on live broadcast thi s is to ensure that media coverage do not jeopardize the efforts of the law enforcement officers. Lastly, the scene commander is also required to control the interaction between the media and the criminals at the scene. According to Fourie (2001), the main objective for the scene commander is to devise possible measures to facilitate the safe rescuing of the victims using the efforts of the rescue teams as well as the tactical team. However, Noesner (2010) suggests that there is a need for the senior commander to monitor the media personnel to avoid commotions such as extreme approach to the area of crime that may agitate or raise suspicion among the robbers, which could result to endangering the lives of the hostages. Furthermore, all media statements should pass through the scene commander for moderation and filtering of any information that may leak relevant intelligence to the robbers concerning the ongoing rescue operation. Live media coverage of hostage taking incident Hammer (2007) observed that live television coverage of a hostage scene is essential in planning rescue mission but also presents an equal amount of risks to the law enforcers. The media constitutionally enjoys press freedom, which dictates that it is free from any force of manipulation in order to broadcast autonomously and therefore, this privilege prohibits even the law enforcement agency from forcefully terminating the live television coverage. In addition, shutting off the live television coverage may raise suspicion among the robbers and jeopardise any form of rapport that may have been already developed by the negotiation team. In his book, McKenna (2000) alternatively stated that there exist other means of regulating the entire live media coverage. McKenna (2000) pointed out that the scene commander might seek consensus with the media houses to delay the live coverage of the scene from five to ten minutes rather than asking them to stop broadcasting; this will offer the scene comma nder an opportunity to edit or regulate the content that will be aired on live television.

Goals Essay Example | Topics and Well Written Essays - 500 words - 2

Goals - Essay Example One might ask why, from all places around the globe, did I envision going to Italy. From various informative sources: books, films, magazines, online travel destinations, and friends’ shared experiences, I have slowly marveled at the magnificent attractions that Italy offers. The Language Travel Magazine, for one, indicated that â€Å"Italy is famous for its artistic culture and is an obvious study destination for students wanting to learn more about this rich heritage† (Language Travel Magazine, 2006, p. 1). The country boasts of beautiful cities, historical and structural edifices, the romantic language and the prominent people who were instrumental in contributing talents in the fields of arts, literature, paintings, architecture, and fashion, among others. Apart from all these, the distinct and superb food entrees have been known the world over and entice visitors to delve into a vast array of mouthwatering recipes and savory menus. Due to the enthusiasm and burning desire to reach this highly sought after destination, one actually planned an itinerary of things to do once I arrive in Italy. I will definitely wear my most comfortable shoes to indulge in visiting tourist attractions including the famous vineyards, go shopping, forget dieting, and feast my senses on all the beauty that surround the country. As a marveling tourist, I plan to visit the wonderful art galleries that contain a roster of world renowned paintings by Renaissance architects and painters like Michelangelo Buonarroti, Filippo Brunelleschi, and Leonardo da Vinci, among other talented and creative Italians through time. I definitely see myself as trekking the colosseum in Rome and the Tower of Pisa that both mesmerize me. I aspire to visit the wonderful monuments and antique museums in Sicily, Rome, Florence, and Venice. There are musical concerts