The Financial Instructions Have Been Exposed Finance Essay - Free Essay Example

Sample details Pages: 27 Words: 8141 Downloads: 10 Date added: 2017/06/26 Category Finance Essay Type Analytical essay Did you like this example? For a further knowledge of what the topic is all about, this section will permit to have an overview of what operational risks are from the Basel definition and scientific publishers. The BIS (Bank for International Settlement) has created in 1974 the Basel Committee on Banking Supervision (BCBS) in Basel in Switzerland. The aim is to create a worldwide banking regulation by publishing a set of minimum capital requirements for banks to contribute to the financial system stability. The bad thing is that the Committee cannot force countries to follow those rules. The representatives members are from central banks and regulatory authorities mainly from leader countries i.e. G 20 countries and they use to have a meeting 4 times per year. It has been created because of the systemic impact of Herstatt Banks bankruptcy in Germany. In 1988, Basel I was focused on the capital measurement system with the COOKE ratio. The goal of this ratio is that 8% of a credit has to b e financed by banks equity. Then in 2004, Basel II has been developed and composed of a risk management based on three Pillars. The first one deals with the maintenance of the regulatory capital calculated for the three major components of risk that a bank can face to i.e. the credit risk, the operational risk and the market risk. The credit risk can be computed following three ways (Standardized, Foundation IRB and Advanced IRB Approach). The operational risk which can also be calculated thanks to three approaches (Basic Indicator Approach (BIA), Standardized Approach (STA), and the Internal Measurement Approach) even if we will see that there are others ways of calculation and finally the market risk which has as preferred approach the VaR (Value At Risk). Then, the second Pillar deals in one hand with the regulatory response to the first Pillar, giving to regulators much more freedom to improve tools over those available to them under Basel I, in another hand provides a framew ork for dealing with all the other risks that a bank may face to, such as systemic risk, pension risk, concentration risk, strategic risk, reputational risk, liquidity risk and legal risk, which the agreement combines under the title of residual risk. And then it gives to banks the ability to review their risk management system. Internal Capital Adequacy Assessment Process (ICAAP) is the result of Pillar 2 of Basel II accords. Thus, the Third Pillar has to complement the minimum capital requirements and supervisory review process by developing a set of disclosure requirements which will allow the market participants to gauge the capital adequacy of an institution and permit a market discipline supplements regulation as sharing of information facilitates assessment of the bank by others including investors, analysts, customers, other banks and rating agencies which leads to good corporate governance. So this Basel II agreement has as goal to create an international standard for banki ng regulators to control how much capital banks need to put aside to guard against the types of financial and operational risks banking (and the whole economy) mainly thanks to the Mac Donough ratio. This ratio does not only take into account the credit risk but also the operational risk and the market risk (BCBS 196). Here is the complete formula to compute the Mac Donough ratio: Besides, Basel II also forced banks to manage operational risk in an explicit way to assign value equity i.e. the new accord demanded to banks to hold a capital requirement for operational risk but also had motivated financial institutions to have more precise measure and a better management of this type of risks. So Basel II agreement improved much more the tools of Basel I, the market was more transparent for credit risk, customer data, accounting systemsÃÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¦, the emerging markets had a chance to decrease their risk premiums in the long term. The agreement was very popular because several countries adopted it all around the world. However, the shortages of investment demands for the financial assets issued in the emerging economies occurred in the short term, due to additional risk calculations, it also did not take into account the activities which were not in the bank statement and resulted as a main problem. So regarding the news that occurred since 2007 with financial scandals and crises of subprime, financial and economic crises but also in response to the bankruptcy of Lehman Brothers, the BIS decided to improve Basel II and replace it by Basel III, which has been adopted in 2010. It covers microprudential (bank-level) and macroprudential (across the banking sector) elements, it establishes goals like improving the banking sectors ability to absorb shocks thanks to the creation of stress test, market liquidity risk and capital adequacy thanks to bank leverage. Basel III try to improve risk management and governance and strengthen banks transp arency and disclosures. On the same principle of Basel II, there are three Pillars. The Pillar 1 focus firstly on the capital by raising the requirements to the quality and the level of capital: (common equity 4.5% of risk-weighted assets), the capital conservation buffer (common equity of 2.5% of risk-weighted assets, total common equity standard 7%), the countercyclical buffer (a range of 0-2.5% comprising common equity), secondly on the risk coverage i.e. the strengthened securitizations, the significantly higher capital for trading and derivatives activities and the strengthening of the counterparty credit risk framework, and thirdly by computing the leverage ratio. The Pillar 2 is about the risk management and supervision with supplemental requirements compared to Basel II. And the Pillar 3 revised disclosures requirements but also enhanced it. To conclude, Basel III manages better the risk coverage, has a higher and better-quality capital, leverage ratio became the backstop to the risk-based requirement, for example in periods of stress the buildup of capital can be drawn down and finally it permits the introduction of two global liquidity standards and respect more the systemic risk. The weakest point are that already some critics occurred, like Slovik (2012) who said that the new requirement will increase the incentives of banks to game the regulatory framework which could further negatively affect the stability of the financial system. But also we can regret that the static risk-weights on asset classes fail to capture time-variation in relative assets risks. The requirements, for most of the part, are focused on individual risk of financial firms, the risk-weights approach is an attempt to target relative prices for lending and investments of banks, rather than restrict quantities or asset risks directly and also it does not employ more direct bank-level or asset-level leverage restrictions. Basel III eventually comes into full force in 2018 after a period of review and testing from 2013 to 2018. In that period of time banks will have time to raise capital in an orderly fashion for markets by following step by step, year per year, the ratio implemented to be ready for 2018. As the regulation advice and Basel bring out, managing all the risks (specific, systemic, liquidity, counterparty, interest rate, FOREX, operationalÃÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¦) are the most important to not lose money for companies. This interrogation is very important for the financial sector because it is one of the main reasons where most of the problems come from leading a loss of money and then customers. Almost all of the banks and big brokers have nowadays a risk management department but it is still quite new in this financial sector and has been created and developed this last 10 years. Thats why, the financial sector has to copy what has already been done in others industries sectors to manage industrial risks thanks to ERM (Enterprise Risk Management) implemented for example in the car industry, nuclear, chemistryÃÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¦ As we saw earlier, there are many risks and all those risks are different and operational risks do not have to be mixed up with credit risks and market risks. To develop this point, credit risk is the risk of loss inherent to the default of a borrower in relation to the repayment of its debts (bonds, bank loans, commercial loans ). This risk is divided into two types i.e. default risk which occurs in case of failure or delay of the borrower on the payment of principal and / or interests of its debt and the recovery rate risk in case of default and risk of degradation of the quality of the credit portfolio. Market risk is also a risk of losses on balance sheet positions on all assets and liabilities company and off-balance sheet records that are incurred but not yet actually received or paid, due to market price changes. This risk includes both instruments related risks rel ating to interest rates that the foreign exchange risk and the risk commodities (like stocks). These two risks differ from the operational risk which is composed of direct or indirect risk of loss resulting from inadequate or failed operational due agents, procedures, systems or external events from the Basel definition. For example, Power (2005) established that the operational risk assessment differs from traditional risks of the bank including the absence of known outstanding Operational risks began to be managed from Basel Agreement II in order to allocate an amount of equity. Before those companies were not managing those risks and realized that after scandals, frauds and crises that it was mandatory to take into account the operational risk in the management of the banks. This topic is current because it has been highlighted thanks to the different crises, fraud and events that occurred this last 4 years. These events have showed that managing risk especially operating risks i s essential from different point of views i.e. for the image and reputation of the bank, for the financial point of view, but it also costs money to resolve problems and then to communicate on it after its resolution. Besides, operational risks are linked to people, to the management, the intra and inter-communication. A good management can avoid spending money for mistakes that you be averted and keep a good reputation. Thus it will go through a huge improvement for banks and huge development for brokers these next few years. First of all, operational risk at the creation of Basel was not a preoccupation and Basel I was not focused on it. However on Basel II, the committee studied it and the following definition has been published and transposed in European legislation (Directives 48/2006 and 49/2006) and national legislation (NBR Regulation NSC no. 24/29 of 14.12.2006) on the following definition i.e. Operational risk is the risk of loss resulting from inadequate or failed due to procedures, human factors and systems or from external causes. Legal risks are included and strategic risks are not (BCBS, 2003). Nonetheless, this definition evolved and not everybody agreed on this definition, Vanini (2003) criticized it and completed it on the way that, for him, the Basel definition is too strict and creates problems in the implementation of it i.e. only potential processes of losses are taken into account and not the possibility of gain. His point of view is interesting because by going further on that idea, it means that main actors are the people who can make faults but also detect it at the same time so it is quite complex to determine a strategy to control the management and behavior of people when exactly those people are applying it. Besides Vanini deplores that the Basel definition do not take into account the previous losses and the future one and that losses are only direct whereas most of them are indirect. However, from this text, at the beginning previous losses wont be studied but then with the implementation of the management of operational risks there should not have previous losses as Vanini says at least. However after few years of implementation of management of risk operational, previous losses will be highly reduced so Vanini point of view can be discussed further. Moreover, indirect and direct losses from non management of operational risks are not clearly defined and can be mixed up regarding the Basel definition. To come back to Basel II agreement, the committee structured the operational risks in 7 types : internal and external frauds, employment relation and safety at work, customer, business and product relations, damage to physical assets, business disruption and system failures and execution of operations, deliveries and process which allow us to study on different cases regarding on what face more a broker. For the seven types of operational risks, an example will be given to better understand the meaning of each one. Internal frauds are inaccurate information about positions, theft by an employee, insider acting for its own account ; external frauds are robbery, forgery, damage to hacking ; employment relationship are workers compensation claims, violation of health and safety of employees, discrimination claims, liability ; customer, business and product relations are default counseling, documentation misleading, breach of banking secrecy, bad choice of customers and providers, money laundering ; damage to physical assets are acts of terrorism, vandalism, earthquake, fire, flood ; business disruption and system failures are failures of equipment or software, failure of computer or telecommunication systems, power outages and finally execution of operations, deliveries and process are composed of saving data error, failure in collateral management, gaps in legal documentation, failure of suppliers. Jobst (2007) agrees on the definition but prefers to split it in two categories : internal and external operational risk. For him, various risks compose internal risks. The first one is people risks i.e. the loss exposure is attributed to the potential failure of the management, the organizational structure or other human failures. Most of those failures are caused by a poor management, a poor or inexistent training for managers and employees but also because of an inadequate controls, poor staffing resources, or other factors. The second one is the process risk which means that failures are linked to the breakdown of established processes, inadequate process mapping within business lines and technology or system risk. For both internal and outsourced operations, risks reflect the operational exposure to disruptions and outright system failure. These risks usually show up for regular business operations, such as breaches in internal controls and monitoring, internal and external fraud, legal claims or business disruptions and improper business practices. Moreove r Jobst (2007) goes further by defining it as the risk of some adverse outcome resulting from acts undertaken or neglected in carrying out business activities, inadequate or failed internal processes and information systems, misconduct by people or from external events. He is the first who included legal risk from the failure to comply with laws as well as prudent ethical standards and contractual obligations, but excluded the strategic and reputational risk. However these two previous risks are linked to the non-management of operation risks and can arise as a consequence (or impact) of operational failures as well as from other events by saying that other risk terms are seen as potential consequences of operational risk events. For example, reputation risks is potentially dangerous in the non management of operational risks because there is a negative advertising regarding an institutions business practices, whether true or not, and will cause a decline in the customer base, cost ly litigation or revenue reductions. The strategic risks have current and prospective impact on earnings or capital arising from adverse business decisions, improper implementation of decisions, or lack of responsiveness to industry changes. Strategic risk is a function of the compatibility of an organizations strategic goals, the business strategies developed to achieve those goals, the resources deployed against these goals, and the quality of implementation. On the other side of external risk, Jobst (2007) expands his point of view based on environmental factors i.e. political or regulatory regime change, new competitor that changes the business paradigm, natural disasters or not, terrorism, vandalism, and other such factors that are outside the control of the firm. Jobst gave a very large definition and I think that this list of events can help to change the management of the company and push to take risks i.e. operational risks to compete and get better result to face to proble ms but it should not have to be taken into account as operational risks because most of those events are already linked to market risks. Another point of view has been given by Jarrow (2008), he also defines operational risks in two types but on a different way than Jobst i.e. the risk of a loss due to the firms operating technology and the risk of a loss due to agency costs. For him, there are no gains, only losses with different economic characteristics. The determination of economic capital is, regarding the current methodology for the operational risk, overstated because the computation omits the banks net present value generating process. He thinks that it is conceptually possible to estimate the operational risk processes parameters by only using market prices, the non-observability of the firms value makes this an unlikely possibility, except in rare cases. Instead, we argue that data internal to the firm, in conjunction with standard hazard rate estimation procedures, pro vides a more fruitful alternative. For Jayamaha (2005), operational risk differs from others banking risks and Basel II needs a separation between the capital allocations for operational risk. To conclude, there are various definitions, none of them are wrong but interpreted by each of the authors. That is all the complexity of operational risks. It is based on the probability that a risk occurs. And the risks as we saw before are various so even more difficult to assess, prevent, manage and communicate to restore a good reputation and image towards professional and individuals. For Basel Committee (BCBS 222), the risk management has to be part of the politic of the banks and the decisions in terms of risk coverage, analysis and interpretation, scalability and comparability across group institutions have to be taken as a priority i.e. A bank should determine the risk reporting requirements to best suit its own business models and risk profiles. For Basels supervisors, they expect that risk management reports will be complete but how it can be possible whereas operational risks are various, it can be difficult to implement a worldwide operational management rule because products proposed by banks to customers are different from a country to another but also from the establishment with a level and origin of risk different to each others. Thereby this graduating project focus on the management of operational risks and its control regarding all the institutions that regulates it. In 2001, the Basel committee realized a survey on 89 international banks, a bank has been affected by an average of 528 instances of operational risks, mainly on retail banking, generating an average loss per unit average of 10 000 ÃÆ' ¢Ãƒ ¢Ã¢â€š ¬Ã… ¡Ãƒâ€šÃ‚ ¬. It follows a gross loss average of ÃÆ' ¢Ãƒ ¢Ã¢â€š ¬Ã… ¡Ãƒâ€šÃ‚ ¬90 million per institution, there are lots of famous example like Socià ©tà © Gà ©nà ©rale in 2008 ($4.9 billion) due to unauthorized trades done by t he trader Jerome Kerviel, Sumitomo Corporation in 1996 ($2.9 billion), Orange County in 1994 ($1.7 billion), Daiwa Bank in 1995 ($1.1 billion), Barings Bank in 1995 ($1 billion) and Allied Irish Bank in 2002 ($700 million)ÃÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¦ To take into account the percentage of those risks, a risk mapping has been done and imposed for and by banks. For Bon Michel (2011) This approach is part of an effort to streamline the complexity in an uncertain world. With the crisis it highlights the fact that figures of ratios and ratings mean everything and nothing at the same time in the financial sector and everything is about interpretation and comparison. So this mapping risk was created to reassure directors, managers, rating agencies, regulators, pressÃÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¦. But for Bon Michel (2011) can we really trust the results of the mapping? The answer is that the construction of intelligence risks can generate a change in the perception of risk by the sam e individuals and thus of their actions. Taleb (2009) thinks that Rationality itself could be an obstacle to the identification of a risk often characterized by the interdependence of causes because of the complexity. Operational risks, as we saw on Basel, are linked to people so that risk is, by nature, strongly linked to the human component (Power, 2005). The Basel committee worked on Basel III thus the operation risks will be more controlled and highlighted. Like that, the banks would less suffer of the impact of the human impact and its bad management of operating risks in case of crises and scandals like as seen earlier for Socià ©tà © Gà ©nà ©rales case in 2008 or even for Barings in 1995, Calyon in 2006 or famous internal frauds such as JP Morgan Chase in 2006, Bank of China in 2007 or commercial litigation in 2006 with the Deutsche Bank or fire in the headquarter of the Credit Lyonnais in 1996, these scandals do not give a positive image of the bank. The press uses to relay it in the headline for few days or months. Customers read it and after the word of mouth begin. This external communication cannot be controlled by the bank. Generally, this is the worse for a company. The employees and managers suffer also of that so training has to be done to surpass the impact of the event and be able to give an answer to all the attack they have from the family and customers. The intangible assets are a very important notion than operating risks affect for years like the brand name, the image, the reputation. Even external events affect banks like attacks because citizens do not trust in institutions, fear appearÃÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¦ During the crises, the bankruptcy of a bank or a scandal like Madoffs system was able to affect the entire sector and by definition all the others banks, which lead that customers wanted to withdraw their economies. So ethic has the reputation to be a bad word in finance and it has to change by re-establishing a go od image of the finance sector, in what way a new culture. The change has to be done from the top of the management i.e. operational risks could be avoided if a good management is implemented and if the employees would care about their banks. In this globalized world, people have to be reassured; the confidence is one of key word and important data that everybody forgot because the goal was to make money. Thus, the aim of the management of operational risks is to reinforce transparency and restore confidence. That goal always existed but events, scandals have updated it. Operating problems also come from an error from the machines or an error from the human. Thus to avoid it, it could be possible to implement very strict strategies to eliminate it by capitalizing the mistakes whether voluntary or not. The best point to manage it is to determine the risk to control it and mitigate the impact on the first step and on the second step to understand why and how it happened to correct and avoid that kind of case. The banks should, as what has been seen, do more daily controls and audits in a restrictive point of view and also train employees. A bonus could be given if the employee reacts in a good way, do not try to fraud and promote its company simply has been a good employee. In my previous company i.e. a broker, there were a risk manager and all the employees received at the beginning a training to face to potential problems. This should be compulsory because it permits to go through all the problems with customers but also in intern with the crash of the trading platformÃÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¦ In France, it is coming but not in this way, they force employees to pass an internal exam to be able to face to it, some companies ask to pass the AMF (French Market Authorities) certification. Like that employees know what they can or cannot do to face at an internal or external situation; they wont try to cheat, hide or fraud because they will be aware of th e damage that it can cost for them, for the department, for the company and at the end for the customers. Besides, different departments are involved in the management of operating risks, like the general inspection, IT, back office, communication, customer services, investors relationsÃÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¦so all those employees have to be trained to face to it hereby one of the solutions is to reinforce the corporate culture, like that, employees will be involved in their job as well in the improvement of their company. Sometimes, board of directors and managers are not also in the best position for that, because they could not have the best behaviors and reactions i.e. panic of the management of Kerviel case in selling position during the United States of American day off. They can forget the common sense and act as individual careerists. Or they can react as a paternalist by trying to support the company and his employees to the event that occurred. Nevertheless to rebuild a good relationship with the customers, the big famous banks created online bank with less fees and more attractive contracts, products and new names than their mother societies. Those brokers were not impacted by the crises and by the bad image of the banker. The reason why, is because there are new companies with no background like the major banks where most of population believe that they are not clear, corrupted and use to make a lot of speculation. Customers built this bad image on operating risks that occurs for banks. To conclude, the impact of a non-management has to be measured recently, the BIS wrote in 1998 a document on the management of operational risks. It has not been done since the crises and the internal events, fraud that occurred these last 5 years. Customers, customers, prospects, employees, directors are suffering of the non-management of operations risks and it has to be studied. Foremost the assessment and the management of operational risks are different regarding activities in the financial sector and countries. Power (2005) said that The operational risk assessment differs from traditional risks of the bank including the absence of known outstanding. It is diffuse, multifaceted and ambiguous. Thus, we have to adapt the estimation of operational risks regarding the human component, where businesses are based and the type of companies i.e. banks, credit establishment, brokers based Spain, France, England, China, India, United StatesÃÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¦ Banks are split in different activities; traditionally it is composed of deposit banks, retail and investment banking. Besides recently, banks developed new services like by selling assurance productsÃÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¦, and the online banking account from retail banking i.e. e-banking and the online banking specialized in stock exchange for individual investors. It really was an expectation of customers. Thus most of French banks have their o wn subsidies; usually banks developed it under another different brand name to manage separately the reputation and operating risks related to both of their brand name. Besides, online brokers benefit of a huge development these last ten years and was forced to focus on risk management. From that, a new position inside the company has been created i.e. the compliance officer for investment services (RCSI), compliance and internal control officer (RCCI). The compliance officer is an essential element in the protection of its establishment against operational risks; that person also plays a role in protecting the integrity of the markets and guarantees the primacy of customers interests. That position will emerge stronger from the current crisis in financial institutions. The importance to control and manage risks has raised the function of Risk Manager all around the world. This decision coincides with Basel II and the focus on the management of operation risks. Thereby we are goi ng to focus on what has been done and developed in those companies and how it has been treated on the research side as Garrity (2007) summed up it as below with the seven types of operational risks defined in Basel II crossed with all the types of financial business lines in this sector. Graph 1 : Garrity (2007) Basel II operational risks crossed with financial businesses These seven types of business lines hold to different groups activities. The corporate finance is mainly composed of mergers and acquisitions, securitization, privatization, debt securities, stock market, loans, initial public offering, secondary market. The financial markets has as activities debt securities, foreign exchange, raw materials, own position securities, fixed value income, stock market, brokerageÃÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¦ the retail banking is known by everyone for our daily life i.e. loans and deposits, banking activity, trust and wealth management. The commercial banks are used by compan ies to finance projects, real estate program, exportation, factoring, leasing, warranties, bill of exchange. The payment and settlement are payment and collection, transfer of funds, cleaning and settlement. Then for agencies services, it is based in escrow, certificates, securities lending. Asset management is to manage the assets in different ways (centralized, separated, retail, institutions, closed or open way). And finally the retail brokerage, specialized companies usually online one which execute operations on financial markets for customer in B to C. All the business lines are defined in detail in Annex 1. Not all those types of financial companies will be studied; we are going to focus more on Asset Management, Hedges Funds, Credit establishment and Retail brokerage. First of all, asset management sector benefits of a huge worldwide expansion, it means that each banks usually has its own asset management department. It is also possible to find independent asset managemen t companies and management on behalf of third parties. But we will more focus on banks departments. The structures of these departments are quite similar to banks and will have to follow Basel II rules and the European directive. To avoid bankruptcy or financial difficulties, few solutions have been implemented based on Basel II regulation by obliging banks the establishment of ratios for example to increase their equities linked to operational risks. Investment banking already had theirs owns and specific regulations like the European directive UCITS III since 2003 to implement ratios i.e. increase the minimum capital requirement of UCITS (Undertakings for Collective Investment in Transferable Securities) funds or be careful to have a minimum of equity of 0.02% of the total capital requirement amount. Another ratio is that companies have to hold at least 25% of the total amount of overhead; this is called the principle of the obligation of means. The goal is to protect companies in case of operational problems if companies need quickly available cash to survive until the resolution of problems. Asset management department, which were not concerned by the Cooke ratio established by Basel, defined a prudential ratio as a percentage of equities for each activity of banks. This evolution is due to a change in the calculation of McDonough ratio related to operational risks because the computation is now taking into account the asset management activities of banks. LEFAMA, lassociation europà ©enne des gà ©rants dactifs, a suscità © à   ce jour deux à ©tudes : la premià ¨re, publià ©e dà ©but 2001, porte sur les risques opà ©rationnels One the other hand, the definition of operational risks for Hedge Funds is slightly different. For CAPCO (2003), it includes the operating environment of the fund i.e. middle and back office functions such as trade processing, accounting, administration, valuation and reporting. This combination of Multiple Risks spans these categories. The evidence of non managing risks has been highlighted mainly for Hedge Funds. A survey  [1]  noticed that over 10 years (1996-2006) half of the hedge funds went to bankruptcy because of an insufficient control of operational risk only as it is confirmed in the article INFORMER LES INVESTISSEURS DES RISQUES OPÉRATIONNELS DES HEDGE FUNDS (2009) published in a bank revue. For most of them, fraud is the main reason i.e. embezzlement or false valuations of capital as CAPCO (2003) shows in the graph below. Figure 1: CAPCO (2005) graphs showing the different types of risk failure and the detail of operational risks The opacity of the management regarding operational risk exists because those companies are not forced to provide information to investors about the management process and the risks linked to operational risks. Besides, hedge funds have a specific structure; usually they are off shore companies trading on OTC (Over The Counter) trading on il liquid products market or by doing arbitrage. With this kind of activity, operational risks are specific so less easy to prevent. Regulations tried to implement for each complex product a prospectus. The published prospectus alert investors to be aware of the risks known However, all the operations risks cannot be mentioned on it because lots of are not defined. Besides, Giraud (2004) confirm that managers and investors are more focused on the level of financial risks instead of Hedges Funds operational risk, they should more care about risks related to the operational weaknesses which are much higher. From researches, it has been established that one fund out of three do not have a department in charge of risk management which means that there are no control on the levels of risks that investors are exposed to. So a better management of operational risks has to be done to reinstall the trust of investors. One of the main solutions is to select a good manager who knows and cares about risks by doing key risk indicators and reporting without being too expensive and binding to establish or ideally to have a specialized risk analysis department with a tighter regulatory control at the first, second and third level with a review of the funds books and records. This would allow having a full transparency viewing of the strengths and weaknesses of the funds operations and a measure of the appropriate risk premium that should be expected to justify towards investor a higher level of operational risk. Hedge Funds could also reinforce the relationship between investors and the company thanks to a permanent dialogue. The risk department could identify the potential weaknesses of every vehicle i.e. legal entity which receive or acquire assets backed debt that investors want to invest in. Those information could help investors to choose a potential investment and to take into consideration not only the financial characteristics of the fund (historical returns, risk fac tors, volatility), but also the operational risk profile of the fund as it is already practiced in the industry sector like said Giraud (2004). However, due to a lack of maturity and opacity in this industry, it is not easy to assess the quality and success likelihood of the investment strategy, even if the operational due diligence process is highly specialized in line with the investment style (as different investment strategies result in different operational requirements). However for Giraud (2004) operational due diligence process will not replace the traditional background checks on the companies and individuals involved in the hedge fund activity. Besides, operational due diligence does not overlap with the responsibility of the auditors, even if it does provide an insight into the strengths and weaknesses of the administration of the fund. However the implementation of financial and operational due diligence can be implemented with the support of the analysis of internal and external department. This process could be a first step in the regulation that regulator are making stronger. Then, credit establishments have to follow Basel rules since the creation and implementation of Basel II (BCBC, 2006) and others regulations referring to this industry. Besides, those companies have developed an important internal control. To evaluate operational risks, risk mapping has been created in this sector to define all the types of potential operational risks in the desire to streamline the complexity in an uncertain world as said Bon Michel (2011). Besides, he adds that only experts can create this map because they know all the risks and have all the knowledge of risk held at those who have mastered specific skills and operational who face this risk daily. However, we can ask ourselves about the rationality and veracity of the results of a risk mapping, in a world where cheating or not showing the true financial results is a usual and normal rule. Taleb (2009) think in another way i.e. the rationality itself is it not an obstacle to the identification of a risk often characterized by the interdependence of causes due to the complexity Figures means lots of things and nothing at the same time so as we can interpret figures and results. Thus to control and manage the operational risks, Bon Michel (2011) showed that if there are dedicated managers, employees will be more flexible and would more agree in a change of the management which could change behavior and then actions. Thus, for retails banks, the operation risks are those that use the most of equities after credit risks. For retail banks, this is to minimize regulatory risk capital by identifying, monitoring and controlling operational risk for frequent small losses and not just for large potential losses. The goal is to identify events with actual or potential losses, internal or external incidents that create slight impacts or important frequencies. Therefore, a good method of me asurement and control of operational risk should normally result in a capital saving relative to a fixed type approach. The report done by Operational Riskdata eXchange Association highlights the increasing of external fraud and also event risk. Also, if the event types execution, delivery and process management and customers / products and business practices are two of the three most common and costly risks every years, it has been established that external fraud is increasing very fast. To better understand the situation, this type of event represented 32% of gross losses by the end of 2009, against 9.5% in 2006. The phenomenon has been updated by the growth of online fraud, with different methods such as phishing or pharming used for identity theft and embezzlement. The retail banking contributes 60% of gross loss in operational risks which lead it to the largest in the financial sector and around 30% of total losses identified have as minimum amount 20,000 euros. By comparison, Trading Sales contributes to a significant loss (22.6%), followed by commercial banks (14.3%). However it is difficult to warn it because there is an evolution in the nature of operational risk and the heaviness of the organization. Device controls is both mature and evolving. Control functions as we will see later tend to be organized continuously, in terms of organization, profiles and tools to achieve a qualitative and quantitative control. However, beyond the most publicized case, all banks are aware that zero risk does not exist and that the ability of individuals to attempt circumventing existing devices is unlimited. The efficiency of the devices must be constantly questioned, especially as industrialization permanent control and operation of sophisticated tools can sometimes have adverse effects in terms of efficiency. Indeed, the pyramidal structure of responsibilities and refinement of controls define the actors in charge of monitoring and frequency of exercise. This assi gnment and the accompanying standardization are likely to create a normalization of the year. The inherent consequence of this structural repetition and frequency control is the risk of slowing controllers, even less attention between two controls. In addition, the growing use of sophisticated tools is likely to reduce alertness naturally controllers. Therefore, the tasks of responsible control bodies in retail banks (but also in other business activities) involved  the constant mobilization of the staff to maintain their curiosity, to maintain the sense of analysis inherent in any controller responsive and responsible and finally to train controllers and analysts covering the multidisciplinary expertise and business culture of control. Governing institutions should strengthen the banks responsible for the monitoring authorities in these guidelines and provide legitimacy to the realization of these intentions. This is applied in France, where it notes that large institutions have quickly adopted the AMA (Advanced Measurement Method) method for the quantification and management of operational risk. This has not been widespread in the European Union, particularly in the United Kingdom where most of the major players keep the application of the standard method. As seen earlier, banks created new kind of services like e-banking. This comes from a rapid development of e-commerce and the creation of new mechanisms of payment through Internet. Thus, the creation of e-banking permits to all customers to have access anytime to their bank account and manage it by themselves in their home or anywhere in the world through Internet connection without going physically to their bank. The advantage is that there is no direct contact between customers and the bank. Internet is used for three types of Internet banking. Firstly, based on information, customers connect to have information about their account (basic level). The risk is relatively low, because the informa tion systems are not generally connected with the server and the banks internal network. This may be offered by the bank or by an external source. Secondly, it is used to communicate i.e. there in an interaction between the banking system and customers. Interaction may be limited to the corresponding electronic account consulting, applying for loans, changing static information (change of name or address). And finally, the riskier type of using Ebanking is to do transactions. There is a direct connection between the banks internal networks under very strict control. Customer transactions may include: access accounts, pay bills, transfers, etc. For Tanase and ÃÆ'†¦Ãƒâ€¦Ã‚ ¾erbu (2010), it reduces potential losses arising from operational risk. However, customers can do whatever they want and create account via online method without seeing someone which can be more difficult to prevent in case of problems such as identity theft. As a conclusion, it is important to not forget microfinance which is not in the business lines types. On that type of finance, Tchakoute Tchuigoua (2011) agrees to say that Basel regulation focused on the regulatory approach is adapted to the banking sector but not for microfinance institutions (MFIs). He regrets that nobody cares about MFI and nothing has been proposed regarding a conceptual framework for analyzing operational risk management issues in microfinance institutions. Through organizational architecture and literature on forms of integration of MFIs, provided by organizations theory, operational risk can be regarded as the result of deviant and unethical behavior. MFI are known to be based in developing countries and most of the money used to lend to poor people are from equities. So the Basel regulation cannot fit with MFI because the rules aims are to increase the equities to face problems in case of non-reimbursement or operating risks. However, the first risk is the underestimation of capital which may have fatal consequences for the lending institution in case of realization of operational risk. The second risk is the overestimation of equities leading to allocate a significant part of resources and to immobilize some part of the capital to cover risks. This is the basic indicator case approach which leads banking organizations to have capital above the regulatory minimum requirement. This supplement includes that the establishment of sustainable finance allow some investment projects to develop and strengthen skills of MFIs. Thus we can hope that soon a new regulation taking care of MFI will be published and adopted. All those types of business lines have their own way to deal with Basel II and all the regulations. However in the main line, some solutions have to be implemented in all those companies. One of the most important solutions that have to be implemented is to prevent operating risks and solve operating losses. A strategy of control has been carried out in the banking syst em. Three defined steps of control permit to minimize the financial impact of these risks and improve the performance of companies. This strategy is based on three levels : the first level is the internal control done by direct employees evolving inside the department, then the second level is also the internal control done by indirect employees or managers who evolve inside the department for permanent or temporary controls and the third level is internal audit done by general inspection which is the specific department of banks and external audit done by regulators, states or public organisms. For example, the internal control is done regarding procedures applied by the compliance officer or by employees for the first or second level like managers, the third level for the internal audit where a specialized department checks the operations to ensure that policies and procedures are followed and finally external audits based on an external and independent institutions allowed to check all the steps for the first level to the third and all the documents like the composition of the financial statements. Those three actions are mandatory for all the companies to reduce operational risks and its cost in the financial statement by controlling the tools and the employees applying rules. For further understanding, the highest losses stemming from operational risk have been recorded in Socià ©tà © Gà ©nà ©rale in 2008 ($4.9 billion) due to unauthorized trading by the trader Jerome Kerviel. The amount of loss faced by financial institutions, according to De Fontouvelle (2003), is composed mainly of 100 operational loss events exceeding $100 million since the end of 1980s. First of all to focus on internal controls, for Arnold, Larsen, Hollinger, ODoherty, and Milne (2008), banks did not care about it and it represents a problem. This task is usually done by a spawned allegations of moral hazard and for Chernobai, Jorion, and Yu (2011) the consequences of a we ak internal control environment shows the result of events and scandals which makes loss an enormous amount of money. However, for Alberto Balestra (2006), internal control exists and follows the procedures but because of lack of compliance companies makes big losses. Controls are usually done after the main task and are not part of the main task. Besides, if there are some anomalies, researches are not always done further to discover the incident. Secondly, Basel committee agreement defined how banks have to do to manage the internal audit of its operational risk like to create an operational risk management function responsible for codifying firm-level policies and procedures concerning operational risk management and risk-reporting system for operational risk; and for developing strategies to identify. For the GCAP (Global Call to Action Against Poverty) the internal control is defined by checking all the following points : The financial information and operating data are accu rate and reliable, the policies and internal procedures are followed, the business risks of the institution are identified and minimized, resources are used efficiently and economically, the institutions objectives are being achieved and the external regulations are met. J. Cernes agreed to say that Internal audit sees his expanded role, including the control of new skills related to this development. Although for Balestra (2006), the operational risk manager can have difficulties to do it so it has to ask help from rely alson reengineers for this operational auditing. New departments and functions have been created like the Stress test to check if the company can survive to a huge financial loss. They reproduce the Kerviel case and also go further and imagine a worse case, this simulation or the worst case that could happen. From the external point of view of an independent auditor, C. Cox (2008) director of the Securities and Exchange Commission (SEC) agreed that his agency fai led to act for nearly a decade on credible allegations about Bernard Madoff, whose fraudulent internal controls allowed a Ponzi scheme that cost hedge fund investors as much as $50 billion The goal of these auditors is to check the financial statements, records, transactions, and transactions of a structure by an external party to express an opinion on the financial statements of the IMF (International Monetary Fund). However, the impartiality of the controls is not always fair and institutions like supervisory authorities and rating agencies didnt predict the crises and wait that the situation become obvious or even some days after the announcement of social plan to downgrade countries, banks and companies. To conclude, for Leippold and Vanini (2003), the operation risk occurs at low frequency but it has a high impact and mainly it comes from of human behaviors. For Jeffery Atik (2010) Not all risks can be anticipated. Indeed, it is difficult to manage risks that have never been imagined (those that are outside of experience). Unfortunately, it occurs by experience that unanticipated and unimagined events do occur in reference to those crises. So we can see the difficulties and limits to understand the impact of the operational risks. Several measures have been taken regarding the past events, especially this last 10 years on the assessment with risk mapping and solutions to prevent and manage it. To bring more data to what has been done, it is important to see on the spot, how banks are facing with and how they are doing the calculation of capital requirements for operational risk using different methods and the difference between themselves to find an adapted management on the financial sector after the recent past events of these last four years. Tell us what you found out what the results of your investigation were and what you think they tell us in relation to the original problem you set out to study and also your knowledge of the area in general. Don’t waste time! Our writers will create an original "The Financial Instructions Have Been Exposed Finance Essay" essay for you Create order

Character Analysis Of Flossie Pours The Red Wine Into The...

Flossie pours the red wine into the goblets and offers Filippo one of them. He comments that it is a beautiful room, filled with eroticism, and she agrees. In looking around he sees Roman frescoes that are shameless so he suggests that they could have been a part of old Pompey, very long ago. The dog is now out of her Mistress’ sleeve and edging toward Filippo’s leg. Flossie begins to giggle and the conversation ceases. She then turns on the record player and begins singing an aria from Madame Butterfly. The dog is now breathing in passionate gasps and Filippo feels the urge to succumb to the lady’s talent and charms. He is somewhat confused but ambivalent to the heat and glow of the candles and the coldness of Flossie’s eyes, but his eyes†¦show more content†¦The music of Puccini is passionate and very suggestive. That is the connection and to me you look somewhat like Puccini, a man of good genes, sensual eyes, Roman nose, but your eyes betray y ou for they are that of a man who is insatiable and that frightens me.† All this time Filippo isn’t saying one word. She continues â€Å"Life, my dear, is full of vicissitudes such as we have just experienced. They are a part of life that surfaces with the right circumstances. Such an act as we experienced is in itself vulgar, coarse and animalistic, but necessary.† Filippo is now on his way out of the cave and unable to hear her last lingering words which were â€Å"And such acts can be deeply rewarding or tragically punishable, but only time will know which is appropriate.† *** It was a little after nine when Filippo went to his room. He took a quick glance at the mirror in the bathroom and decided that the evening couldn’t end without talking to Picca, but it was early and Picca hadn’t returned, so he left a note on his bed which read â€Å"Need to talk to you. I’ll be in my room–Filippo.† It was eleven before there was a knock on Filippo’s door. â€Å"Picca, come in, I’m drinking a very good Chianti, are you interested?† â€Å"Sure, and your eyes tell me you do have something to talk about. Did you wear out a few hormones? Red wine will do you some good. Salute!† Filippo opens up with â€Å"Maschera! Have you ever known a woman whose

The Propaganda Behind Dorothea Langes Migrant Mother Photograph free essay sample

An examination of of Dorothea Langes involvement in parliament and the controversies caused by her photograph, `Migrant Mother`. This paper examines Dorothea langes famous controversial photograph: Migrant Mother. The author looks at how the photograph became a symbol for propaganda for the New Deal. This photograph caused a stir in the government and became a controversial topic. The author looks at the career of Dorothea Lange and her involvement in government. From the paper: Dorothea Langes documentary photograph, Migrant Mother, became a symbol for a plethora of causes after successfully being created as propaganda to legitimize the New Deal. When Dorothea Lange shot Migrant Mother, she had completed her transition from portraitist to documentary photography and was working with the Farm Security Administration. Langes work was required to fit the New Deals ideology handed down from the Roosevelt administration. In order to achieve these mandates, Lange significantly manipulated her subjects. We will write a custom essay sample on The Propaganda Behind Dorothea Langes Migrant Mother Photograph or any similar topic specifically for you Do Not WasteYour Time HIRE WRITER Only 13.90 / page Due to these actions, her photograph is easily adaptable. Migrant Mother not only catalyzed relief aid to the migrants; people later manipulated it into other symbols.

Uno and World Peace free essay sample

The large scale destruction caused by World War II, convinced the world that if the human race was to be saved from total annihilation, a powerful world organisation was necessary to safeguard peace in the world. This was a noble and sane idea. On the 24th October 1945 the United Nations Organisation, the august world body, came into existence. It was welcomed by all the nations of the world. The main purpose of this world organisation is to maintain international peace and security. Its aim is to develop friendly relations among the nations of the world.This organisation is supposed to arrange for international cooperation for solving economic, social, cultural and humanitarian problems in the world. Promotion of respect for human rights and fundamental freedoms falls within the domain of this world body. The United Nations is based on the sovereign equality of all its members. All the members of this organisation are expected to fulfil their obligations in good faith. We will write a custom essay sample on Uno and World Peace or any similar topic specifically for you Do Not WasteYour Time HIRE WRITER Only 13.90 / page The members of this organisation are expected to settle their disputes by mutual negotiations and peaceful means. They are required to behave in a way which does not endanger the peace and security of the world.They are expected not to use force or threat of force against each other. The members are expected ta give every kind of support and assistance to this body in its peace-keeping actions Membership of the United Nations Organisation is open to all peace-loving countries, which believe in its Charter and are willing to fulfil their obligations as members of this organisation. There are six main organs of this world body : (1) the General Assembly, (2) the Security Council, (3) the Economic and Social Council, (4) the Trusteeship Council, (5) the International Court of Justice, and (6) the Secretariat. The General Assembly is the main deliberative body of the United Nations Organisation. All the member countries are represented in it. It usually meets once a year in the month of September, but a special sessions can be called as and when required. It has the right to discuss and make recommendations on all matters falling within its scope. It is like a world Parliament. The Security Council is the executive body of the organisation. It has fifteen members, five of them are permanent members, while ten are non-permanent members who are elected by the General Assembly. The five permanent members are : People’s Republic of China, the U. S. S. R. , France, the United Kingdom and the United States. The primary responsibility of the Security Council is to maintain peace and security in the world. It is in permanent session and generally meets once a fortnight. In the event of a threat to or breach of peace, the Security Council has to take steps to restore peace and security. Each member of the Security Council has one vote but each permanent member has the privilege of veto. The Economic and Social Council works for greater prosperity, stability and justice in the world.It studies and makes reports and recommendations on international issues, concerning economic, social, cultural, educational and health matters. The Trusteeship Council is responsible for administering such territories as have not yet attained self-government. The Council is charged with the obligation of promoting political, social, economic and educational advancement of these territories. The International Court of Justice consists of fifteen judges who are elected indepen-dently by the Security Council and the General Assembly. Every member-state of the United Nations has access to this Court. The administrative functions of the United Nations are performed by the Secretariat. The head of the Secretariat is the Secretary General, who is appointed by the General Assembly on the recommendation of the Security Council. If Though there can be no dispute about the laudable objectives |s of this world body, the functioning of the Security Council is far [. ’from satisfactory. The right of veto that can be exercised by each permanent member of the Security Council has attracted much criticism.People feel that the right of veto has given superior status to the permanent members of the Security Council, while non-permanent members have been reduced to the position of second-grade members. The question of universal peace is the concern of all the countries of the world and not only of the five permanent members, anyone of whom can veto any proposal however just and fair. So the idea of mortgaging the peace of the world to the Big Powers is losing ground and a suggestion is gaining ground that the right of veto should be abolished.The General Assembly has constituted a committee to study draft amendments to the U. N. Charter and to suggest how best the powers of the United Nations could be enhanced to enable it to fulfil the objectives for which it had been founded. While most of the Veto Powers are for maintaining the status quo regarding the Charter and the Veto system, some of the developing countries have suggested the abolition of the veto power, because this power has been misused on many occasions. India’s permanent representative at the United Nations, Mr. Rikhi Jaipal, told this committee that the veto system was clearly discriminatory.The recent use of veto by the United States to close the door on Vietnam, which sought United Nations’ membership led to sharp criticism of the use of veto power. Some people say that the U. N. O. is a useless body, because it has failed to prevent many acts of aggression or to remove the threats to peace, security and independence of ^ member-nations. Kashmir, Tibet, Suez, Hungary and Czechoslovakia, Vietnam, Indo-China, Arab-Israel and South African conflicts are some glaring instances where the principles of equal rights, sovereignty and self-determination of people were trampled upon and the U. N. O. is unable to help the weak against the strong. Racial discrimination is still practised in South Africa and slavery still exists in several Muslim countries. Nevertheless, this organisation has many achievements to its credit. According to Mr. U. Thant, the late Secretary General of the U. N. , this world body averted a Third World War at least on two occasions — first during the Korean Crisis in 1950 and 1951 and secondly in 1962 at the time of Cuban Crisis. It is not for nothing that the membership of this organisation has risen to more than 140.Many Afro-Asian and Latin American countries have gained their independence through U. N. influence, direct or indirect. So it cannot be said that it is in an effective body. It may be correct to say that in maintaining world peace and security this organisation has not achieved as much success as was expected of it, but it is wrong to say that the U. N. O. is a useless body. It has done and is still doing much praiseworthy work in solving economic, social and humanitarian problems. By far the biggest role of the U. N. O. s non-political. Its programmes continue to stimulate economic development, trade, respect for human rights, care of refugees, and mothers and children, education, agriculture, health, housing, family planning and many other matters in which all nations have a common interest. We must not forget that the U. N. O. ’s special and other agencies like UNESCO, UNICEF, FAO, WHO, IMF, UNCTAD are doing immense good to mankind. The U. N. O. came into existence because the major powers of the world were tired of war and desired for lasting peace.But unfortunately those very powers have not behaved well. If we spot out the conflicts and tensions that have plagued humanity during the last three decades, we can easily identify the direct involvement or indirect hand of one or other of these big powers in all the conflicts and tensions. These powers have been the greatest offenders so far as danger to world peace is concerned. Though not a penacea for all international evils, the U. N. O. is a very useful body with a good record of achievements.It has served as an international forum where leaders of all countries can meet one another, have close personal contacts and free and frank exchange of views, This world organisation has not succeeded in all cases, but it has definitely prevented many local and small quarrels turning into world wars. It has succeeded in creating an atmosphere in which no nation can preach openly the philosophy of war. On many occasions it has prevented outbreak of large-scale fighting by its timely intervention. Is it not an ignificant achievement that the nations of the world feel the existence of this body.It does not have military power at its command, but it is definitely the most powerful moral force on the earth. In most of the cases where the U. N. O. has failed, the main cause of failure is the attitude of one of the major powers. If this organisation is weak, it is because its founder members do want it to be so. The real testing time of the U. N. O. is yet to come. Unless the members of this world assembly rise to the occasion, it would meet the same fate as its predecessor, the League of Nations did.

How Our Food Has Changed and the Impact of Those Changes Essays

How Our Food Has Changed and the Impact of Those Changes Essays How Our Food Has Changed and the Impact of Those Changes Essay How Our Food Has Changed and the Impact of Those Changes Essay How Our Food Has Changed and the Impact of those Changes What do we eat? Food. Sounds simple enough, but is it? It used to be that food was all you could eat, but today there is a plethora of â€Å"edible food like substances† in our grocery store (Pollan). In today’s world, the fact that it is sold in a grocery store doesn’t necessarily mean that it’s nutritious or healthful. I’m going to step back into the past and show how food has changed in the last 50 years and the impact that it‘s having on us. It’s not just what we eat or how we eat, but how it affects us in everything from our physical health to our mental health to our pocket books. Food that was available 50 years ago was vastly different from what is available today. There was more â€Å"real† food available. There was certainly the beginning of junk food back then, but it was different. The fast food places were almost non-existent. We had a limited amount of junk that we could buy. Homemakers were actually homemakers back then. They cooked from scratch a lot of the time and dinner was meat and potatoes, and a vegetable or two. Dessert was homemade. Only certain fruits and vegetables were available at any given time. It depended on what was in season at the time. Then came the era of â€Å"fast. † Everything was fast, including food. Fast food places were popping up on every corner. We were in such a time crunch all of the time that we starting rushing through not only the eating, but also the preparation of our meals. Housewives thought that all the convenience foods were a great idea. It now took half the time to prepare a meal compared to making it from scratch. Surely the food was good and nutritious. Ah, the time it saved. It was thought to be wonderful; but at what price? Food today is not as nutritious as it used to be. This is a contributing factor and, quite possibly, a major cause of the rapid rise in degenerative diseases. The fresh fruits and vegetables that are eaten now contain up to 50% less minerals than they did in the 1930’s. This, along with the widespread use of pesticides, is slowly poisoning the human population. Due to the fact that our bodies aren’t getting the optimum nutrition that they should, they are less able to detoxify effectively. Pesticides are poisons that the body has to deal with, even though the doses are minute. Their use has also increased and this is likely to have toxic effects on the system. Even the water we drink contains additives from farming and pharmaceuticals that puts a strain on our systems (Draper). People now have less energy but also have less to do physically. People are so tired all the time. Energy drinks are consumed in massive amounts. Even children as young as 10 years old seem to need the boost that stimulants give people to keep them going. That in itself is a problem. As a result of ingesting the high fructose corn syrup present in many, if not most, of these drinks, sugar consumption is way up. In the past 50 years there has been a 19% reduction in calorie intake for boys, and 29% reduction for girls, but increased sugar consumption! As a result, children are getting fatter and fatter. Computers, diet, TV and less exercise are some of the causes. These are big changes from 50 years ago (Draper). In elementary schools in the 1960s, the lunch ladies actually cooked lunch every day. Food such as meatloaf, macaroni and cheese (not from a box! , or soup and sandwiches were served, always with a vegetable, milk, and small dessert (Dolson). In 1989, it was shown that school meals had major deficiencies. Today, many school lunch menus are more similar to fast food restaurants, making healthy choices more difficult. In many schools, Middle/Jr. High students can also buy sports drinks, and high school students are allowed carbonated beverages (Dolson). Phy sical exercise is no longer as important as it used to be. It has been reduced by a full 50%! Potential major problems are being created in our children just by the lack of activity alone (Draper). Add that to the fact that our food is not as nutritious and filled with chemicals, and to our high sugar intake, and we have a real problem on our hands. Fully 2/3 of Americans is overweight or obese and suffers from diet related diseases, like diabetes and metabolic syndrome. Medicine is learning how to keep alive the very people for whom the western diet is making sick (Pollan). According to Dr. Mark Draper, there has been a 30% reduction in the consumption of fresh fruits and vegetables. And those we do eat are less nutritious, due to the processing. To increase shelf life, chemicals that are termed ‘additives’ are added. As Dr. Draper states, â€Å"At worst these are mild poisons, and at best they are chemicals the body does not see as food. † Nutrition is no longer considered important. Shelf life is now more important. It is estimated that somewhere between 70 to 80% of all food eaten is processed in some way. There are over 3000 substances that may legally be added to our food. How can we tell what and how much is safe to eat? Some, like salt, have been around for thousands of years. It is used to preserve food and enhance the flavor of foods (Dolson, Food Additives Whats Safe? ). It is one of the most widely used additives, but still not totally healthful. New food additives need to go through a very long process to get approved by the Food and Drug Administration (FDA). Most of the studies, especially the preliminary ones, are done on animals. There are many additives and chemicals that are said to be safe in any amount; and there are some that are said to be safe in small amounts, but in large amounts, they can cause cancer. That is worrisome, because we don’t know how much is really in our food. As if that wasn’t bad enough, America is having a love affair with sugar. But that is not a very sweet deal. Sixteen ounces of a sugar sweetened soft drink contains the equivalent of 12 teaspoons of sugar (TLC Cooking). Most are sweetened with high fructose corn syrup, which is as bad, if not worse, than regular white sugar. If you read the ingredients on the packages of food sold in grocery stores, plenty of them have added sugar as an ingredient; some in more than one form. And this is even in foods that don’t typically taste sweet on the tongue, especially foods like low fat salad dressings, cream substitutes, and many seasonings. In the case of low fat products, a lot of the time when fat is taken out, sugar is added in. We now know without a doubt that sugar in your food, is taking a devastating toll on the health of the United States (Mercola). In Lick the Sugar Habit, author Dr. Nancy Appleton lists 76 ways sugar can ruin your health. Among them are: * Suppression of your immune system * Can cause a significant rise in total cholesterol and triglycerides * Feeds cancer cells * Contributes to obesity * Can cause gallstones, appendicitis, hemorrhoids and varicose veins * Can cause headaches and depression Can cause an increase in blood pressure Dr. Joseph Mercola goes into these in more detail at his website – http://articles. mercola. com/sites/articles/archive/2010/04/20/sugar-dangers. as px, or you can read Dr. Appleton’s book for the whole story. So, what does this mean for the human population? First of all, evidence is suggesting that life expectancy is being reduced; not increasing, as i s commonly reported. One of the more frightening aspects of this is the fact that young people are included. In fact, this generation of children is the first that are not expected to live as long a lifespan as their parents. Degenerative diseases are on the rise, represented by an increase in the body’s inability to cope with modern environmental challenges. Heart disease, cancers, arthritis, obesity, and diabetes are increasing significantly (Draper). Veterinarians know that grass or feed fed to animals needs to have sufficient nutrients or the animals will get sick. Many people are adamant about not giving their pets things that are bad for them, and yet popular opinion is that it’s okay to give our children a â€Å"treat† once in awhile. It would not be a problem if it truly was only â€Å"once in a while. The trouble is that children eat these things on a daily basis. What is the solution? Is there a solution? Of course there is. It will take awhile for things to turn around, but it can be done. We need to start by fortifying our processed food with additional nutrients in a form that is as close to food-state as possible. Processed foods make up approx 70% of the diet, and so w ould be the most effective way to get good nutrition to people at the present time. We would also need to: * Increase consumption of fresh vegetables and fruits (5-7 pieces per day). Gather more information on mineral contents of soil. *Create a sound nutritional base for well-being, regardless of current state of health. * Reduce consumption of processed foods. * Reduce stimulants: i. e. coffee, tea, colas, sugar drinks, energy drinks, etc. * Drink more water. Try to filter if possible. * Take a good multivitamin and mineral supplement, along with Omega 3 oils. * Many people would also benefit from extra Selenium and Vitamin C on a regular basis. *Get more physical activity on a daily basis (Draper). * Choose organic if you can afford it less pesticides and better tasting. Eat less sugar. * Forego fast food. For the long term, we need to improve our soil, so that it is possible to grow high nutritional status food. This could take up to 30 years, including research to identify the best way to accomplish this (Draper). In my opinion, one of the biggest changes we n eed to make is to greatly reduce the amount of sugar in our diet. If you could only do one thing, that would be the thing to do. Pesticides and lack of physical activity is most definitely not a good way to build health, but our systems are on sugar overload due to the saturation of sugar in our processed food. We could be taking care of two problems at once just by eating processed food less often. It all boils down to what we want out of life. When we are still young and healthy, it’s easy to think that this kind of thing will never touch us. But, do you really want to subtract years from your life in addition to spending your golden years in ill health? The way I see it, it doesn’t take much to live and eat healthier. One or two changes at a time can and will make a big difference. Your life may depend on it. Association, Organic Consumers. Mental Health Linked to Changes in Diet. 16 January 2006. Web. 6 March 2010. Center for Science in the Public Interest. 2009. Web. 18 April 2010. Claridge, CL, et al. Slow Movement. com. 2010. Web. 6 March 2010. Dolson, Laura. Are the Schools Feeding Kids Too Much Junk? 22 September 2004. Web. 13 April 2010 Food Additives Whats Safe? 14 February 2005. Web. 18 April 2010. Draper, Dr. Mark. How the Diet Has Changed Over 70 Years. June 2001. Web. 30 March 2010 Hicks, Betsy. Developmental Delay Resources. 23 February 2009. Web. 6 March 2010 Pollan, Michael. In Defense of Food. New York: The Penguin Press, 2008. Print. TLC Cooking. 2009. Web. 18 April 2010.

Tips for breaking through the barrier - Emphasis

Tips for breaking through the barrier Tips for breaking through the barrier You probably have something in common with everyone else whos ever had writers block: you eventually got going. The problem is, that may well have been because your report was due first thing the next morning and the alternative was the Job Centre. But imagine if something other than blind necessity could break through that wall of fear. If only there was something you could do to stop yourself spending the entire night before the deadline writing in a cold sweat and submitting something substandard. There is, says Emphasis CEO Rob Ashton. The key is to make the act of writing seem less threatening. In the writing process there comes a tipping point where the pain of not doing it outweighs the perceived pain of doing it, says Rob. The key to overcoming writers block is to bring forward that point to now, rather than midnight before its due in. Try these strategies to help you break through the barrier and youll be finished before you know it. Trick yourself Its actually possible for one part of your brain to fool another that it isnt afraid, according to Mark Forster, author of Do It Tomorrow and Other Secrets of Time Management. Forster suggests using the technique of telling yourself, Im not really going to write the [piece in question] now, Ill just and fill in the blank with an easy beginning task. For example: Ill just launch Microsoft Word, or Ill just get the research folder out. This simple act can be a breakthrough. Once youve taken that first action, you will have got over the initial step, says Forster. You may well find that you are hardly even aware that you are moving on to take some additional action. Map it out Facing down a whole unwritten document may be sending chills down your back, but the process of getting on with it can easily be broken down into non-threatening actions. One of these drawing a mind map is also a useful tool to make sure youve covered every who, what, when, where and how. Know your reader The best writing knows its audience, and realising how much you do know about your reader is a great motivational tool as well as helping you to write a document that will do its job. Filling in a reader profile questionnaire is another safe as well as highly effective place to start. Work in bursts When breaking through the block, youll feel less overwhelmed if you know youre going to stop at a certain point. Set a timer with an alarm for a short period of solid work, followed by a few minutes break, then a slightly longer stretch of work and so on. The more stressed you feel about the task, the shorter each burst of work should be. Gradually increase the work time between breaks until you reach your optimal length of time generally this will be no more than about 40 minutes. Stopping at the alarm even in mid-sentence may actually give you the urge to return to your writing. The mind craves completion and will want to get back to the task, says Forster. This helps you to build up a strong momentum. Listen to the Audio Tips interview with Rob Ashton here. And find out whats going on in our heads when writers block strikes here.

Labour rights for illegal immigrants Research Paper

Labour rights for illegal immigrants - Research Paper Example They are forced to work with unscrupulous employers for pittance, denied all benefits and allowances, including holidays and overtime pay, and made to live in constant and morbid fear of being caught and deported back to their countries of origin. Since they are marginalized and without support, they are often exploited by employers who use them as cheap laborers with little reward for their hard and arduous labor. Research Hypothesis: This paper will focus on the increasing number of immigrants that are specifically coming into the United States and the roles they play; both the positive and negative aspects of life in this country as well as to the significant reasons why they need to be supported by the native people here. Introduction: The US has always been a land of great opportunities for people coming from other underdeveloped countries of the world. Thousands of immigrants flock into the US in order to seek a better deal for themselves and their families and to get rid off p overty back home. â€Å"Individuals generally choose to emigrate to countries that are more technologically advanced, have greater resources and offer more opportunities† (Illegal Immigration 2010). But there are several risks and challenges involved. They think that entry into the United States is an end to all their poverty and misery and the start of a new and happy life for them as well as their families. However, the reality is just the opposite, as soon they start to realize that their problems have just begun, in terms of challenging work situations, risks of getting caught and deported and being marginalized in all walks of life when compared with native inhabitants. But the truth of the matter is that over America’s eventful history, the contribution of immigrants in this country has been immense. Most of the people who inhabit the United States have been immigrants at one time or the other, and it is only the North American Indians who could truly and justly call themselves the original inhabitants of this country. All others are immigrants who were lucky to gain immigration status over the course of time. It is believed that there are at least 10 million illegal Immigrants in the United States and their figures are increasing with each passing day. They are mostly employed in works, which require little education and less efficient skill sets. â€Å"Illegal immigrants make up a significant portion of the workforce in key industries. 1.4 million are employed in leisure and hospitality with another 1.7 million in construction and 1.0 million in manufacturing. In addition undocumented worker make up 25% of the total workforce in farming† (Legalization Has Many Perceived Benefits 2010). â€Å"It has accommodated an expanding labor supply that today includes 1.5 million immigrants per year whose spending on housing and consumer goods helps stimulate the economy and increase the demand for still more labor† (Immigration: impact on U.S. economy 2010). However, in true fairness to the immigrants, it should be said that they are contributing a lot to the economic development and progress of this nation, in all major areas of business, commerce and trade. â€Å"Illegal immigration into the United States is a highly profitable proposition for both employers and the U.S. government, and it also benefits Mexico, which

Look at attachment Essay Example | Topics and Well Written Essays - 250 words

Look at attachment - Essay Example I believe that Data is a ‘human’ being, technically speaking. Some leading philosophers have specified the primary features of a human being—rational, self-aware, and able to feel and express emotions—and Data possesses all of these. ‘He’ can even form relationships and is aware of the rights that he has. It is also correct to say that reproducing many of these machines will form a ‘race’, because this population will possess the basic aspects of a human race. Data has the right to refuse to undergo dismantling and reproduction. He is a free being, which implies that he has the right to decide for himself and his fate. He has what is called ‘free will’ or the competence to decide for his own welfare and happiness. Granting Data his right to choose will absolutely create precedence for other androids that will seek or fight for the same rights in the future. This movie is definitely metaphysical, for it discusses the notion of ‘being’. The concept of ‘being’ has long been a major problem of philosophy. It inflamed a number of remarkable philosophical debates. I think we should learn from the movie the ability to understand things that are not ‘human’, in the traditional sense of the concept. There are times that we should abandon our traditional knowledge or predetermined consciousness in order to go beyond the ‘reality’ that is in fact has been programmed for us. The JAG officer, I believe, therefore, is correct to grant Data the legal right to

Radio and European History Essay Example for Free

Radio and European History Essay Radio broadcasting has been viewed by governmental agencies across the globe as a contributing medium that served its growing audience. Across the years, radio broadcasting has provided entertainment and information to a diverse audience from local to, regional and international reach in commercial, social or political atmospheres. Radio broadcasting, according to Godfrey (2006), is a primary source material and an information tool as it directly observes and relates relevant events. Along with photographic records, physical remains and oral sources, radio and television broadcasts are potent sources of unfiltered evidence closer to an event, as Godfrey added. The acquisition of specific details that try to retain the images of an event through an actual experience has led Puddington (2003) to believe that media has challenged the shape of history. The significant claims on the importance of radio broadcasting drives home the idea that its classification as a primary source of data may is its contribution to history. More importantly, this paper shall strive to prove how radio broadcasting shaped European History as it gears up a strong hypothetical contention that radio broadcasting had a definite role in the shaping of European integration. The age of airwaves begun after the series of discoveries that led to the invention of the wireless telegraph. It soon signaled the birth of the radio telegraph that allowed a wide range of sounds, music and human voice to be transmitted in a new technology in 1914 according to Godfrey. Historically, it was also a crucial time fraught with misunderstanding and strife that divided Europe into armed camps. World War I broke out with Germany leading the war for control in Europe. History would recall that as early as 1872, Germany had entertained plans to control the European region as it dominated European diplomacy while France remained isolated from the rest according to Viault(1990). An ongoing international crisis had threatened to move the European powers closer to the brink of war by the 1900’s. Still in the throes of hectic plans and preparation, Germany had to content itself with waiting for a few more years before striking a match to light the flames of war. Earlier on, Europe was in its creative prime as artistic activities catered to a romantic era of the 1800 and onwards, a little over a century before radio ruled technology. It was also a century of inventions and research that became a turning point for technology to prosper. Europe while in an age of development was politically stocked under a conservative rule which soon gave way to a movement effectively fighting for reform. While Britain’s royal and upper classes rejected political democracy, France also became very authoritarian that soon culminated in the 1848 revolution which Viault (1990) related. A growing powerful ideology of nationalism also promoted a disintegration of the Austrian empire in Central Europe that soon resulted to a few alliances among nations while contributing to reckless disintegration across the regions of Europe. In effect, Europe was in mindless turmoil and at a crossroads during a century rich with creative thought yet devoid of an amplified objective. At the onset of World War I, wireless transmission proved to be an invaluable tool to the military although they were quite wary of its potential use in espionage and mass propaganda. Indeed this was the actual case as Ireland and Britain were able to recruit young draftees for World War I following the RMS Lusitania’s bombing off the coast of Ireland on the way to Lverpool by a German U-boat (Reader’s Digest, 2003). As the United States courted the use of radio for home entertainment, BBC (British Broadcasting Corporation) used the radio for news and entertainment with immediate plans to isolate it from political pressures as it battles with pay for radio entertainers as reported by the NY Times (Jun, 28, 1925). Radio broadcasting was also seen among countries in Europe as serving well in fostering good-will and amity among the nations of Europe and paving the way for unity as reported again in the NY Times (Jun 7, 1931). Such movement was instrumental in the recruitment of soldiers to serve in the allied force against Nazi Germany. In a specter of a growing 2nd World War brought about by rising Nazi Germany’s plan for domination, the radio technology was already seen as a tool in war efforts. At the outbreak of World War II, radio broadcasting reached the height of international worth as it carried news from the battlefront into the homes of listeners worldwide. Radio Commentator Edward Murrow had created sensations with eyewitness description of London during German bombing raids according to Godfrey (2006). Murrow had also reported on the Buchenwald Concentration Camps on April 11, 1945 according to Puddington (2003) which was instrumental in calling an end to the genocide. War was soon declared over the airwaves as Adolf Hitler set his conditions for war and genocide in Europe over Radio Hamburg in Viault (1990). The radio’s instrumental contribution to defeat the enemy camp of Hitler was made clear as allied camps tried to disrupt German military communications signals. Germany retaliated by jamming the signals and broadcast yet heavily lost amidst allied Europe’s hands. After the war, efforts to curb Russian communism was in the mainframe of Europe’s Radio Liberation programs that prayed for a Stalin and communist era to end. In the dark days of anti-Stalin struggle, the radio broadcast was again used as a weapon of psychological warfare according to Puddington (2003). Under a movement to free Europe from any communist rule after defeating Nazism, the Cold War between the US and USSR became a regional problem in Europe. Radio Free Europe (RFE) was established as a secretly American-funded station whose main objective was to spread the evils of communism. The Russians however weren’t quick to believe any evil broadcasts against their leader who defeated the evil Hitler and the Nazis as Puddington reasoned. By the 1970’s, Radio Liberty in Europe had ranked as the most influential international broadcast station with an impressive staff of exile writers and a growing Soviet audience in Puddington (2003). Stalin’s death in 1953 created a widening room for anti-communism ideas that had sacrificed the radio station and many of its staff and workers in the interest of international peace and harmony. Poland had once pleaded to abolish Radio Liberty and Radio Free Europe in order to maintain diplomatic ties with Russia but other European countries opted for the propaganda movement against communism to remain heard. Shortwave broadcasts around the Czech Republic continued despite jamming from the Soviet communist regime. Likewise in West Germany, the country researched and studied the Soviet system of governance dedicated to the cause of freeing East Germany. Radio stations were tapped all around Europe as visible stars in an anti-communist sentiment. In a landscape of remembrance for the human efforts to attain peace and freedom, the advent of radio has ultimately provided an integral element in the unity and integration of Europe. Through radio broadcasting, information was disseminated across a wider population that became instrumental in creating an alliance among nations who desired for peace and freedom rather than dominion. The historical separation of European countries in the 19th century prior to the advent of radio technology was soon disbanded in an effort to create an alliance of nations. The Universal Declaration of Human Rights spoke of the right to receive and impart ideas and information regardless of frontiers. Radio broadcasting as the prevalent technology in an era fraught with wars and conflicts became a tool that united European nations to unite for a common cause of peace and freedom. Radio Broadcasting has therefore shaped the modern world’s history as a modern global tool that permitted countries to unite under a common goal for peace.

Hobbs :: essays research papers

Hobbes gives us his estimation of the nature of mankind by initially showing that all men are generally equal. The strongest man can be beaten by the weakest, if the weaker man uses some other force. When it comes to intelligence Hobbes claims men are even more equal, since all men are of equal experience, which is the only way to gain wisdom. Once Hobbes shows that all men are equals he goes on to explain their interactions. These interactions lead to a war of every man verses every man. If two men want something of which there is only one then this leads to each trying to destroy the other. Competition also rises when men want what others have. Men join forces in order to bring down a man who possesses more than they want him to. War also rises from diffidence, according to Hobbes. Men must always be on guard, because they cannot trust others not to attack them. This causes men to go out and conquer others, since one cannot survive if always on the defensive. Hobbes has one more reason for the state of war: glory. Men want others to look up at them with respect. In order to gain such a reputation, a man will try to conquer others to gain their respect and by example the respect of others. So Hobbes concludes that there are 3 basic causes for war: competition, diffidence, and glory. This all leads to a state of war, all versus all. The state of nature is constantly at war, which Hobbes claims is not merely battle, but even the threat of battle. This constant state of war leads to no form of industry or culture, since every man lives in fear of all others. Hobbes’s gives an example of this fear by pointing out that even today we lock our doors, because we do not trust our fellow man. He also shows how many savage tribes have been observed in this state of constant war, when no sovereign rules. Hobbes’s goes on to claim that even now men slip into this state of civil war between each other. Kings are constantly fighting over land and are always on guard against enemies. Hobbes’s says that there is no justice or injustice in this original state of nature, because there are no laws or sovereign to enforce them.

Reform Movement in the United States Essay

The protestant revival movement that began in the 1790s in New England caused reforms in America. Between 1825 and 1850, the United States government made reforms that greatly increased the influence of democratic ideals: universal suffrage and individual rights. Such reforms included prisons, churches, women suffrage, temperance, and education. Prison reforms expanded democratic ideals through the change in policies and mission statements. Debtor prisons were abolished, the number of capitol crimes was reduced, and prison became a place of reform as well as punishment. As shown in document A, the Fourth Annual Report, Society for the Reformation of Juvenile Delinquents in the City of New York, 1829, stated, â€Å"To confine these youthful criminals . . . where little can be leaned but the ways of the wicked.† It is saying that the prisons originally were bad and that reforming people would be useless and therefore the reform of the prisons would fix this problem and therefore be able to save individual rights and become clean. Church reforms also expanded democratic ideals through allowing freedom of religion and expansion of different sects. As Charles G. Finney in 1834 said, â€Å"When the churches are . . . awakened and reformed . . . the reformation and salvation of sinners will follow.† He is saying that because the church reformed, the people will reform in the same way. Therefore, by using this information, one can say that because the church’s rights were more readily expressed, the people would also have more individual rights. Woman suffrage was the most dominate traits that greatly increased the democratic ideals of United States. As woman rights began to increase, women showed that they were more independent as shown through the cult of domesticity. Women were original similar to the status of slaves because they had no voice. This is shown in the engraving by Patrick Reason in 1835 where a woman is in shackles. It shows the original status of women which changes slightly to more universal suffrage in America. Temperance also expanded democratic ideals in that it gave people more rights to form what they felt was correct. Because it was lead by women, a group of  society usually suppressed, it was unique in that women started to voice their opinions. In the painting â€Å"The Drunkards Progress, From the First Glass to the Grave† in 1846, it shows that women were most affected by it and that they were motivated to change it. Women were able to speak out and affect the world and that shows individual rights. Education also played a role in expanding democratic ideals. Education was improved through new textbooks, publicized, and improved teaching training facilities increase the average education of the masses. This created a more knowledgeable mass and therefore universal male suffrage was more possible. Through the reforms of prisons, churches, women suffrage, temperance, and education, democratic ideals were expanded. Democratic ideals of universal suffrage and individual rights were spread throughout America. The reforms between 1825 and 1850 expanded democratic ideals.