Assignment Example | Topics and Well Written Essays - 250 words - 4

Task Example K-Swiss decides to utilize superstars and competitors to focus available of shoppers who are not kidding about execution in the games they play. What they are fundamentally saying to clients is something along the lines of â€Å"this high-performing competitor utilizes these particular shoes; in this manner you should utilize them also in the event that you view yourself as a genuine athlete.† The message that they pass on again and again is that they produce top quality shoes and clothing for top quality competitors. Likewise, the Kenny Powers advertisements are clever and have an impact of expanding brand mindfulness since individuals that wouldn’t in any case be keen on an item become more acquainted with about that item just in light of the fact that they appreciate viewing the diverting plugs. K-Swiss advancements could really be viewed as meeting every one of the four kinds of Maloney’s rewards that a client anticipates. Right off the bat, K-Swiss shoes are reasonable on the grounds that they address an issue of competitors who want elite just as agreeable shoes. Furthermore, the capacity to redo hues makes them advance to the faculties and to the more easygoing purchaser also.

English - Drama and Farce - The bear Essay Example | Topics and Well Written Essays - 250 words

English - Drama and Farce - The bear - Essay Example Popov in a clever manner, who seems, by all accounts, to be grieving the demise of his significant other kicked the bucket about seven months back. The play endless supply of the heroes Luka, who is the footman of Mrs. Popov, a senseless and bonehead old individual that keeps up the propensity for offering vent to his thoughts without making any investigations of the comments he will convey. Since he has been serving Mrs. Popov, Luka likewise feels frustrated about the demise of her significant other. Therefore, he attempts to reassure his crying special lady in such an inept way, that looks maddening to her, and welcomes the chuckling of the crowd in this manner. Mrs. Popov reviews the sweet recollections of the minutes she had gone through with her perished spouse, while Luka intrudes on her by expressing that since different individuals from the house, including hirelings and creatures, have beaten their distress, she ought to likewise mirror them and thus ought to take an interes t in different exercises of regular daily existence. Also, rather than sharing the sadness stricken woman, Luka mourns on the loss of his uniform eaten by the mice. He reprimands the military for this demonstration of the mice, which couldn't control their fiendishness through and through. Another character, Mr. Smirnov, is additionally managed by Luka in a similar way, which welcomes his annoyance as it were. Moreover, the statements of adoration and warmth showed by the old Smirnov additionally upset Mrs. Popov, and she searches for the removal of the rich dumb individual in one manner or the other. The play contains a few components of a sham in it, where simply like joke, the play under examination additionally makes humor out of both exchange and activities. Both Luka and Smirnov perform acts in a stupid and brainless manner, and bolster their foolishness with the assistance of preposterous discoursed, intended to support Mrs. Popov, however these demonstrations and words incense and unsettle her as it were. Another trait of joke saw by the Bear is this that the characters profess to be exceptionally insightful and

Intermezzo Cafe at Krannert Center

Intermezzo Cafe at Krannert Center I have a serious problem with eating out. Its maybe my favorite way to spend money because Im always hungry (and often hangry). From The Mindy Project/Giphy But Im also a broke college kid, and in light of graduating in a  few months, Ive been trying to eat out less to save money. However, Im still going to be frequenting  Intermezzo Cafe, located inside the Krannert Center for the Performing Arts. Its just a 5-minute walk from the Quad and has a relatively wide selection of sandwiches and other entrees to get you through the day. They serve breakfast, lunch, and sometimes dinner, if theres a performance happening at Krannert that evening. And Fridays? Fridays are Monster Baked Potato day! Unfortunately, I cant find a picture, but just imagine the biggest baked potato youve ever seen, smothered in cheese, bacon, green onions, and sour cream. Their prices are great, and youd be hard-pressed to find food thats as tasty or relatively healthy for less money. The meals I buy there average between $3-$8. Students, faculty, and staff all hang around there during  lunchtime, especially those from the College of Fine + Applied Arts because a lot of their buildings are near Krannert, so its not just me whos a fan of Intermezzo. And if youre coming around for a college visit, youll realize Intermezzo/Krannert is also right by the Admissions and Records Building. If you have a little time to kill, stop at Intermezzo for a caffeine jolt and one of their impressive chocolate muffins. I also highly recommend  their soy sausage sandwich for breakfastâ€"only $2.75! Its served on a whole-wheat English muffin with cheese and grilled peppers and onions. And if you get rid of the cheese, its vegan! Trust me, its good, maybe especially good for fake meat made out of beans. From  The Simpsons/Giphy As always, please feel free to ask me any questions you might have (food-related or otherwise)! Maggie Class of 2017 After starting my time at Illinois Undeclared in the Division of General Studies, I’m majoring in English and Economics with a minor in Informatics from the College of Liberal Arts and Sciences. I’m from the relatively small town of Manhattan, Illinois.

Essay about Birth and Demise in The League of Nations

Birth and Demise in The League of Nations They say time is a great teacher. How true. History has taught us that peace must be kept at all costs. The tragic story of the League of Nations centers around the man who conceived it and offered it to the world. The man who developed its charter and who died from exhaustion after his own country, the United States, refused to ratify it in the senate . On November eleventh, 1918 an armistice was declared in Europe. The President of the United States, Woodrow Wilson, saw this as an opportunity to form an international organization of peace. The league was brought forth to provide security against future wars. However, the league did not fulfill the hopes of its founders, it did not†¦show more content†¦The American Presidents speech was the force that leads to the signing of the Treaty of Versailles on June 28, 1919. Conversely, after congress had voted, only three of Wilsons fourteen points were accepted without compromise and six of the others were rejected altogether. Th e reason for this uncertainty by the congress was because, the Fourteen Points were all couched in broad, rather vague terms, well designed to serve their propaganda purpose, but hardly suited to the negotiations of which in the sequel, they were to become the basis . Wilson wanted the League of Nations because he believed that World Wars would continue to occur as long as each nation was responsible for their own defense. Wilson wanted the nations of the world to stand together in the League of Nations, and promise to defend the territory and freedom of any member attacked by another nation. Wilson believed that in order to keep peace the League needed the authority to impose economic sanctions against aggressor states but the League did not have any military forces to back up these economic threats. He believed that even a powerful nation, knowing that it would face combined opposition of all the powerful nations, would not go to war. In Europe, Wilson also met some confrontation with the Fourteen points. TheShow MoreRelatedPoor National Integration in Pakistan, Causes , Effects , Remedies.1421 Words   |  6 PagesPoor National Integration In Pakistan, Causes ,Effects ,Remedies. There is a crisis of national integration in Pakistan since its birth. It is the victim of poor national integration. Lack of integration in Pakistan is fundamental problem and it has been subjected to comment by intellectuals in the country. This has been hitting the head lines of the newspaper. Due to lack of national integration in the country, Pakistan has been pushed to a vicious circle. It has made Pakistan a sorry state ofRead MoreThe Life And Accomplishments Of Marie Curie Essay1370 Words   |  6 PagesDegree in mathematics. In the midst of her studies she fell in love and In July, 1895, Curie married fellow scientist Pierre Curie, and together they studied radioactive materials. They also managed to find time to start a family; in 1897 Curie gave birth to her first baby girl, Irene. Although she was now a mother, Curie managed to continue her scientific studies and schooling. Like her childhood, Maries adult life was not without its tragedies as well. In August, 1903, Curi e experienced a miscarriageRead More Causes of the Second World War Essay example2220 Words   |  9 Pagesfrom the League of nations which also showed his lack of desire for peace. At the same time he also withdrew from the disarmament conference again showing peace was not a big priority for him. Infact he straight away, against the Treaty of Versailles, began to build up Germanys army, navy and airforce (Luftwaffe), spending a huge proportion of Germanys income on the military; in 1935 Hitler introduced conscription. Hitler also, chiefly through propaganda, attempted to increase Germanys birth rate;Read MoreSpeech by Nathuram Godse in the Court (Assassinated Mahatma Gandhi)2421 Words   |  10 Pagesallegiance to any isms, political or religious. That is why I worked actively for the eradication of untouchability and the caste system based on birth alone. I openly joined anti-caste movements and maintained that all Hindus were of equal status as to rights, social and religious and should be considered high or low on merit alone and not through the accident of birth in a particular caste or profession. I used publicly to take part in organized anti-caste dinners in which thousands of Hindus, BrahminsRead MoreHistory of the Battle of Queenston Heights1834 Words   |  7 Pagesmost Americans have no idea what the fighting was about or who the U.S. was battling against. The lack of familiarity with the War of 1812 is likely true, Hickey explains, because the president at the time, James Madison, was hardly in the same league as Abraham Lincoln or Franklin Roosevelt. And there was no great general like Washington or Eisenhower to rally the American troops to victory. Moreover, the cause of this war is complex and not well understood. Meanwhile the reasons behind the WarRead MoreAbortion: A Social Injustice Essay2006 Words   |  9 Pages1973 which legalized it nationwide. It was, at first, endorsed as being a woman’s right, but has more recently been viewed by most as the murder of an innocent child. Besides this shift in views, abortion has caused diverse effects on our culture and nation, as well as the death of upwards of 56 million children according to Life News. Our society has been deeply impacted by the effects of abortion and the loss of millions of innocent lives, and Christian organizations such as Operation Rescue are workingRead MoreEssay on African American Athlete: Their Role in American Culture3741 Words   |  15 Pagesseparated from the whites. For example, the YMCA was an established program in America that catered to urban white communities encouraging families to participate in all types of sporting activities. The YMCA programs offered sponsored teams and leagues to encourage a healthy lifestyle and provide an outlet for the average white American to participate in sport. The YMCA, however, did not include black Americans. In 1928, due to economic and political pressures, the YMCA was encouraged to pro videRead MoreThe barbers Trade union Summary1884 Words   |  8 Pagesvehemently favours art for the sake of life. Mulk Raj Anand’s concentration has always been on the eradication of social stigmas like casteism, untouchability, unequal social gradation and stratification based on birth. He believes that man should be known by his worth and not by birth. He utilizes art with a view to fulfilling this intent. The social blots have been in the Indian society for ages together. Anand has a deep sense of sympathy for the depressed, their plight and predicament andRead MoreAfrican American History 122001 Words   |  9 PagesCharles Banks influenced Mississippi and became a leader for blacks all over in 1905 to 1920. Being that Banks was born in the time of promise, he lived through the period in which many blacks dreams were dashed away. Daniel and Sallie Banks gave birth to Charles was born on March 25, 1873, in Clarksdale, Mississippi. Banks lived with his Grandmother and brother and sisters: Joeannia, Mary, G. Joseph, and Marriah Holley. Father Banks was a farmer and Charles’ mother was in control of the house andRead MoreThe State Centric Construction Of The International Politics3219 Words   |  13 Pagesconducting a â€Å"Selective Genocide† in East Pakistan. The intervention by India was not authorized by the United Nation Security Council (UNSC) chiefly for two reasons: firstly, the cold war politics impeded the UNSC members to reach a solution that wouldn’t deter their respective allies in the subcontinent. Secondly, all the member states strongly agreed to abide by the article 2(7) of the United Nations (UN) charter. As for the second circumstance, the paper discusses the intervention in Somalia, by the

The Pitfall of The Handmaids Tale Essay Topics

The Pitfall of The Handmaid's Tale Essay Topics The more research you can do in order to secure better at your upcoming profession, the better. There are respective patterns that writers can use if writing an argumentative essay even though there is not any particular model of organization. It's your job for a reader to piece together the events to attempt to get to the truth. Monthly, the handmaids are to visit the doctors for health examinations to make certain they are prepared if they were to find pregnant. The government would need to work hard if it were to receive a foreign loan for this amount. The objective of the state's government was supposed to control their birth rates in the nation. If it is possible to write a really convincing piece on a real-world application utilizing unique facts and research, then your likelihood of receiving admission to a top level university will certainly grow! The government as operating on the aim of controlling the reproduction through using the women. With the show, Miller retains that for the large part, whilst tweaking the race of the folks around her. Atwood isn't particularly hopeful about women and power and agency as a way of changing the conditions in which they're trapped. So if one was planning to begin their career as an author by means of this medium, they may have to look elsewhere! The author's novel is a mixture of many incidents that have happened sooner or later in history and for that reason the novel forces a person to review or reassess their own reality. Without individual identity it's much simpler to stereotype groups since they are told to wear exactly the same color, perform precisely the same duties, and act in similar ways. The individuals of Gilead are broken up into various classes and each class has an established color. All you need to do is select a topic from the list of persuasive essay topics above and we'll write the paper for you in almost no time. The show appears to have taken a different stance on this issue. There are five forms of argumentative essays. There are three sorts of argumentative essays. So without further ado, below are some effective writing tips to generate your common app essay stick out! All persuasive essays are like argumentative essays. Thinking can damage your chances, and I mean to last. Persuasive essays share a good deal of resemblance with argumentative essays. Textbooks are obsolete and needs to be replaced by iPads. Students need to be careful about posting on social networking. Finding the most suitable arguments can help you prove your point and win. We're simple to remember, said Diane. But John was a legitimate professional. Gossip, Lies and the Handmaid's Tale Essay Topics Margaret Atwood described something which may occur if nothing is done to modify the present trends. In general, there have been a number of creepy fairy tales that were written previously like the one by Hans Christian Anderson. Lady Shalott understands life by means of a mirror. The Garden of Eden was made by God so as to let Adam and Eve live in peace and to have the ability to reproduce. As stated by the second principle, the ranks of fairy tales made by ordinary people today are addressed. The cinematic flourishes also arrive in the normal fashions. It creates a feeling of paradise, almost enjoy the Garden of Eden. This will gradually lead to the conclusion of the journey, as soon as the archetypal hero finally regains their freedom. It's the crisis at the middle of Gilead's social and political life. Gilead government was formed so as for deriving women from the individuality in order to make women to have the ability to reproduce for the upcoming generation (Blackford 261). Offred, as a result of creation of Gilead, is put in a precarious position in society. Gilead is frightening as it presents a mirror image of what is going on in the world around us.

Money Bank and Funds Free Essays

string(54) " virtually begins at home, with the household sector\." â€Å"Money† is a fascinating object. The process of creating money and using money has always generated enthusiasm amongst mankind for over thousands of years. The main reasons for such enthusiasm are built around the dynamics of the above process. We will write a custom essay sample on Money: Bank and Funds or any similar topic only for you Order Now Even more fascinating is the fact, that this process is perhaps the only subject that is foxing both the pundits and the commoners alike. Such being the importance of money, any narration regarding the process shall always provide enough excitement. Keeping this in view, the role and importance of financial intermediaries is being featured for the benefit of readers. A glimpse of this coverage is provided in the following pages to lead them to a wider canvas. Financial Intermediaries Financial intermediaries play a vital role in building economies. World over, in different economies it is typical to find that the sources of funds and the uses of funds are not one and the same. This process is also so complexly structured that while individual contributions comprise the major source of funds to the market, the utilization of funds is done by different sectors in the economy. Capital formation comprising of Savings and Investment holds the key to this process. In this causal sequence, Savings play the role of the initiator. The ability of an economy to generate savings depends on the combined abilities of the general public and the government. It is here that the financial system comes into play by converting the savings into productive results. Significance of Financial Intermediation The savings process is facilitated by the financial Intermediaries. In simple terms, financial intermediaries perform the function of facilitating supply of funds to the user of funds, by obtaining the same from the depositors or savers of funds. The term ‘financial intermediaries’ includes different institutions like Banks, Insurance companies, Investment companies, Developmental Financial Institutions, Non-banking Finance Companies, Mutual funds, Pension funds etc. While the role of above institutions is singular with respect to financial intermediation, the functions that are performed by each one of them are different. In a nutshell, these types of intermediation revolve around liquidity position of funds, risks in loans, and pooling of risks to take advantage of economies of scale. To sum up, the function of financial intermediation has arisen out of the need on the part of savers to reach the investors and the inability of investors to find savers. Developed economic systems may not require the need of full-fledged financial intermediaries, unlike the developing systems. This is due to the fact that the gap between the saver and the investor is absolutely minimal. This is referred to as â€Å"financial disintermediation†. The process of financial disintermediation is best achieved by reducing the cost of funds thereby facilitating direct capital formation, which spurs economic growth. The greatest advantage in this process is the fact that it reduces the time gap between saving of money and utilization. The process of financial intermediation is always fraught with risks. Risks both for the givers of funds and the takers of funds, besides the risks for financial intermediaries themselves. The risk factor arises in the first place out of the need for the availability of information and in the second place the need for players to be aware of the available information. Consequently, the need for regulations and the role for a regulator are felt. Financial Intermediation in Indian context In India, without exception, a single type of intermediary does not perform the task of financial intermediation. Different types of financial intermediaries exist and their functions are discussed below. Banks: Banks comprise the oldest form of financial intermediaries in India. The Indian financial scene is dotted with a number of banking institutions. All these banks are segregated into various categories. This segregation has been done on the basis of their incorporation and the businesses performed by them. Consequently, we have various kinds of banking institutions. These are: i. Commercial banks, ii. Regional Rural Banks, iii. Local Area Banks, iv. Co-operative banks. The above classification suggests that banks have been divided under various types depending on the need to achieve the different economic objectives. While making the above classification, geographical factors, need for sectoral deployment of funds involving allocation of funds for Agriculture, Industry, and Service sector etc. have been taken into consideration. However, gradually, the needs of industrial sector have become so huge and complex that separate institutions have been set up for farming the industrial sector. Development Financial Institutions (DFIs): Deployment of funds in the Industrial sector is a major challenge. Industry’s requirements vary depending upon their short-term and long-term needs. The activities of short-term lending and long-term lending are separate and specialized functions. After understanding this finer aspect, the Government of India took initiative to set up specialized institutions for this purpose. For this reason, we find that most of the DFIs – such as the Industrial Development Bank of India (IDBI), are statutorily formed. These institutions provide finances for most of the greenfield projects in the Indian economy and have made a significant contribution by way of financing long –term projects. It is significant to note here that DFIs have been influenced by the changes in the Indian banking scenario to such an extent that these institutions are conlemplating to become universal banks. Insurance Companies: The path of reformation in the Banking industry has also caught up with the other intermediaries as well. In this respect, Insurance industry is witnessing path-breaking changes. In fact, in many countries Insurance companies perform a leading role as financial intermediaries. In India, Life Insurance Corporation of India (LIC) continues to play a very vital role in mobilizing savings and delivering Insurance, though the industry is experiencing the competition from players both Indian and Foreign. With the entry of banks into the arena of insurance business it is interesting to find the beneficial impact of convergence of banking and insurance business. Non-Banking Finance Companies (NBFC): The process of Intermediation virtually begins at home, with the household sector. You read "Money: Bank and Funds" in category "Essay examples" This sector is the basic source of funds for the intermediaries. Such being the important role of the households, NBFCs as independent institutions, have come into existence to meet their financial requirements. The services offered by the NBFCs cater to the whole gamut of needs of the household sector in particular and savers in general. * Emerging Disintermediation in India** With a rapid growth in the intermediation process, the need for financial disintermediation at some stage cannot be overlooked. Realizing fully well that developed systems find lesser need for financial intermediation, in the Indian context the policy reforms aimed at encouraging free market institutions have been moving the financial markets towards disintermediation. The onset of the process of economic liberalization in 1991 has brought about a sea change in the financial markets. The abolition of the office of Controller of Capital Issues (CCI) and the establishment of Securities and Exchange Board of India (SEBI) in 1992 was done essentially with a view to giving an impetus to the capital markets. The market happenings in 1992-94, did strike a hard blow to this mechanism. During the past three years the process of consolidation has begun. Though a reduction in the number of IPOs does suggest to a slackening of the Capital markets, there is also a brighter side of investors becoming more suave. Sources of Funds A discussion on financial intermediaries has to begin with the ‘raw material’ for this activity, i. e. funds. Financial intermediaries are required to raise funds in order to fulfill the needs of both fund-based and non fund-based activities. Considering the various sources and choices available, the financial intermediary considers the following variables in deciding about the ways and means of raising funds. These are: Maturity, Cost of funds, Tax implications, Regulatory framework and Market conditions. Maturity is vital since the intermediary has to plan for the repayment of debt. Since investors look for returns as against the intermediary looking for good spread and income, Cost of funds turns out to be crucial. Tax treatment on returns on some of the instruments could be different – with certain exemptions Thus, Tax implications are useful for tax planning for both the intermediary and the saver. The instruments have to fulfill a plethora of rules and regulations which require the knowledge of Regulatory framework. For designing a particular type of instrument knowledge of Market conditions is essential. Different Sources of Funds In addition to providing low-cost funds, the shareholder route is a popular and easy way for the common public to become ‘owners’ of companies. As the name suggests, the money belongs to the shareholders. Financial institutions have been innovating different methods for raising money from the prospective shareholders. ‘Reserves’ is another source of funds. Incidentally, it is to be known that some of the Reserves are created statutorily. Borrowing by a company is another source of funds for the company, which are repayable with interest. Unlike equity, the funds raised by way of loans are to be repaid. ** **Sources of Funds unique to a Bank The previous classification of sources of funds does not fully explain the avenues for Banks. By virtue of being one of the earliest financial intermediaries, and possibly the most prudent as well, banks have a privileged access to a few more instruments. Considering the fact that different types of financial intermediaries have accessibility to varied types of funds at different rates of interest, it has become necessary for the RBI to lay down norms in this regard. Financial Intermediaries look towards liquidity in the market for enhancing their scope of operations. However, liquidity is a double-edged knife. Excess liquidity or lack of liquidity affects the financial system resulting in either a reduction or an increase in the rate of interest. The cyclical effect is felt by the economy. For controlling liquidity levels in the economy, RBI exercises control through the mechanisms of CRR and SLR. CRR is the reserve to be maintained by banks with the RBI. SLR is the reserve that is maintained by banks for investment in cash, gold or unencumbered approved securities. Deposits The customers’ confidence level reflects the strength of a bank. There is no better way of reflecting the same by any other indicator than Deposits. In the wake of globalization, the avenues for banks for raising funds in the capital market have increased, both in the national and international markets. In terms of value to the Banking system, banks that have a greater deposit base have more value than the banks with a poor deposit base. Banks accept deposits in different ways. Such acceptance could be different in terms of the period, amount, rate of interest and the type of depositor. All the deposit accounts could be classified under Transaction accounts and Non-transaction accounts. The types of accounts that a customer – individually, jointly or corporate can have, are varied. Having said that Deposits are an important source of funds for the banks, a banker is wary about the types of deposits. A term deposit is a dependable source, but the cost is higher than Demand deposits that are low cost funds for the banks. Consequently, the composition of deposits has a direct impact on the profitability of the bank. Application of Funds The real challenge for the financial intermediaries begins at the very end of the first stage i. e. after mobilization of deposits. The meter virtually starts ticking from that time onwards since the deposits are to be repaid by the bank to the customer after a certain period with interest. In order to honor this commitment, financial intermediaries use their funds in different ways. Broadly, the purposes under which they are used can be classified under: i. loans and advances, ii. investments, iii. fixed assets. Loans â€Å"Loan† is a distinct activity wherein funds are taken from the saver and given to the investor. By nationalizing major banks in 1969 and 1980 Government of India sought to direct the utilization of bank funds for socially disired, objectives reflected in priority sector lending. Priority sector lending includes Agriculture and Small Scale Industry as focus areas that would promote equitable development of regions and promote employment avenues. Loans can be classified as secured loans and unsecured loans based on the availability of security or otherwise. Investments The best way to earn attractive return on money is by following an Investment strategy. Since banks have to service their borrowings and deposits at a reasonably good rate and put the funds into more profitable use, Investments in securities offer an option, though in many instances, this is a statutory requirement. There are three main reasons for the Banks to invest in government securities. These are: (i) in case need arises; government securities meet the liquidity requirements of a bank; (ii) it forms a second line of security, for emergency borrowing from RBI, and (iii) for meeting statutory SLR requirements, aimed at protecting the interests of depositor. Banks are also selectively restricted from investing in equity shares. Investments are made in equity shares either through primary issue or by secondary market. Investment initiatives in equity by banks are expected to boost a sagging capital market. Apart from the primary functions of deposit collection and lending, banks also perform treasury operations. The necessity arises out of liquidity compulsions in operations. Banks invest in bonds and debentures as a part of their regular treasury operations and also on behalf of customers. Fixed assets however, constitute a very small amount of investment by banks. The Management of Financial institutions revolves around two basic functions: i. the ability of the intermediary to raise funds, and ii. to deploy them. These two activities determine the sustenance as well as profitability of the intermediaries. Lending Function Apart from the fact that Lending constitutes the major source of income for the bank, the process of lending also depends on the bankers’ appraisal skills. The banks’ funds can be applied in two major areas i. e. investments in securities and credit accommodation. In the process, banks essentially look to balance the ‘spreads’. Apart from the necessity of complying with the regulatory prescriptions, requirement of profitability virtually forces banks to develop an organized credit deployment mechanism. The credit policy of banks is determined by the demand and supply of loanable funds of banks. Firstly, on the demand side of the economy there are the consumers of goods and services. Secondly, the need for credit comes from the corporate sector in the manufacturing, trading and services sectors. Credit management is a specialized area. This is due to the fact that there are different types of credit, and each type of credit is characterized by certain unique factors. Loan is a broad term used to explain the different types of credit facilities – short/medium term extended in the credit market. The selection of the type of loan by a borrower depends on three factors namely, need for credit, cost factor, and cash flow requirements. Since a loan has a demand side and supply side as well, loans can be classified accordingly. Demand side loans will be individual loans while Supply side loans can be classified as commercial loans. As in the case of a borrower, for the bank, providing the loans depends on three factors, namely the nature of credit, the type of security and the purpose of loan. Based on these parameters, further classification of the banks’ advances is done. Loans are also further classified under secured and unsecured loans. Banks have been providing advances to different sectors of the economy and at the same time providing loans to the needy sectors. The sectoral classification of bank loans is made as under: i. priority sector, ii. public sector, iii. banking sector, and iv. others. Loan Appraisal and Disbursal Preliminary appraisal involves an analysis of the market, technology, financial, and managerial skills of borrowing. Once the bank decides to finance, other critical issues are the decisions relating to the mode of financing. Finance is given for land, site development, building, plant and machinery and also for working capital. Banks arrive at the amount of Maximum Permissible Bank Finance (MPBF) through various appraisal methods. **Non-fund Based Services* Non-fund based Services Non-fund based advances in the form of: Letters of Credit and Guarantees offer a very attractive proposition to the banker. Since funds disbursement arises only on default or the happening or non-happening of an event, bank holds only contingent liability. Payments and clearing operations Clearing and remittences constitute important services under ancillary services. The major role of a bank involves mobilizing savings and channelizing them into investments. Complementing these activities are ancillary services of the banks which facilitate the entire payment and settlement system of financial transactions How to cite Money: Bank and Funds, Essay examples

Washington Mutuals Covered Bonds free essay sample

Wa ashingt Mu ton utuals C Covered Bond ds September of 20 was not a calm time fo the world’s capital mark 008 or s kets. On Sept tember 7 fede erallybacke mortgage loan compani Freddie M and Fann Mae were placed into c ed l ies Mac nie conservatorsh by hip the U. S. governme a move de ent, esigned to sta abilize the em mbattled lenders. On Mond day, Septemb 15, ber global investment bank Lehma Brothers filed for Cha an apter 11 bank kruptcy protection. Broa US ad equity market inde y exes dropped by as much as 5 percent as rumors s d h t spread about potential liqu uidity crises at other majo financial in or nstitutions. A slight marke recovery th following d was attrib et he day buted to rum mors that the Federal Reserve was wo e orking on a ba ailout for the insurance co e ompany Ame erican Intern national Grou (AIG). We will write a custom essay sample on Washington Mutuals Covered Bonds or any similar topic specifically for you Do Not WasteYour Time HIRE WRITER Only 13.90 / page 1 up Ea arly on the morning of Sep m ptember 16, W Washington M Mutual’s cove ered bonds tr raded down to 75, from 83. 05 the pre evious day (see Exhibit 1 Washingto Mutual (W 1). on WaMu) was one of the la argest saving and loans in the Unite States. Its covered bon program, i gs ed nd initiated two years earlier just r, before the housing market had begun a precipitous slid consisted of â‚ ¬6 billion in covered b e g d de,bonds outsta anding. Like many large ba m anks, WaMu was now in c considerable d distress. Th situation at WaMu had deteriorated in recent mo he t onths, with th bank repor he rting $6 billion loss n for ye ear-to-date June 2008. By e early Septemb WaMu’s covered bond had dropp by around 13% ber, ds ped d from January, as investors fore i ecast a possib distressed acquisition or seizure o the bank b the ble d of by Feder Deposit Insurance Co ral I orporation (F FDIC). With the chaos of September 15-16, the b f bonds appea ared to have dropped fur rther. Yet, ev ven at these prices, the b bonds were s still at a prem mium  relativ to the bank unsecured debt, which was trading as low as 30 c ve k’s d cents on the d dollar. Co overed bonds were new instruments in the Unite States, hav s ed ving been iss sued by only two y dome estic banks to date (Bank of America and WaMu) Could the low prices o these bonds be o k ). of justifi by the poor fundamen outlook a WaMu? An even if the bonds were cheap, might they ied ntal at nd e t drop f further? Thes questions w se were on the m minds of many analysts stu y udying the situ uation at WaM Mu. Covered Bonds Co overed bonds were fixed i s income obligations issued by a financi institution and secured by a d ial n dpool o mortgages or other asse They diffe of ets. ered from mo ortgage backe securities ( ed (MBS), in whi an ich issuer would pool mortgages, p r pass them thr rough to a sp pecial-purpos vehicle, and then allocate the se d return from that vehicle to inv ns v vestors. In the case of cove e ered bonds, t underlyin mortgages were the ng kept o the balance sheet of the issuer. The m on e mortgages ser rved as collat teral for the covered bonds In a s. standard mortgage e-backed secu urity, the inve estor in the se ecurity had re ecourse only t the mortgag in to ges Professo Daniel B. Bergs ors stresser and Robin Greenwood and R Research Associate J James Quinn prepa ared this case. This case was develop from s ped publishe sources. HBS ca ed ases are developed solely as the basis for class discussio Cases are not in s on. ntended to serve as endorsements, so s ources of primary data, or illustratio of effective or in y ons neffective managem ment. ght nt Harvard College. T order copies or request permission to reproduce mat To n terials, call 1-800-545-7685, Copyrig  © 2009 Presiden and Fellows of H write Ha arvard Business Sc chool Publishing, Booston, MA 02163, o go to www. hbsp or p. harvard. edu/educators. This publica ation may not be digitized, photoco opied, or otherwise reproduced, poste or transmitted, w ed, without the permis ssion of Harvard Bu usiness School. 209-093 Washington Mutuals Covered Bonds the pool; an investor in a covered bond had recourse to the issuer, as well as a claim that was secured by the mortgages. 2 The mortg ages collateralizing the covered bond were called the â€Å"cover pool†. Covered bonds were typically structured so as to receive a rating of AAA or AA from the major rating organizations (AAA denoted instruments of the highest quality). One important difference between covered bonds and MBS was that the set of mortgages securing the covered bond were dynamic; in contrast, mortgages comprising a MBS remained static once the security was issued. In the case of a covered bond, mortgages that experienced delinquencies were generally substituted out of the pool, with performing mortgages replacing them. Just as the individual mortgages in the cover pool were dynamic, the total size of the cover pool was dynamic as well. The amount of overcollateralization (i. e., the extent to which the size of the cover pool would exceed the face value of the covered bonds) would adjust dynamically depending on the financial health of the issuer. Exhibit 6 shows how recently, as WaMu had been downgraded by the major rating agencies, the â€Å"Asset Percentage† used to calculate the sufficiency of the cover pool had been reduced from 86. 6% to 67. 0%. Thus with $7. 78 Billion in bonds outstanding under the covered bond program, the required size of the cover pool for the WaMu covered bonds had risen from roughly $8. 98 Billion (8. 98 x 86. 6% = 7. 78) up to $11. 61 Billion (11.61 x 67. 0% = 7. 78). Covered bond trustees usually relied on the ratings agencies to establish the quality of the underlying collateral. 3 In recent market turmoil, this task had become more difficult. As mortgage default rates increased, the ratings agencies became increasingly conservative in assigning value to mortgage pools, valuing them at substantial discounts to face value. A variety of models could be used to assess the market value of a mortgage pool, all considered measures of asset quality such as the loan-to-value ratio and the credit quality of the borrowers as summarized by their FICO scores. 4 In the event of a collateral downgrade, the trustee would ask the issuer to replenish assets in the pool. The inability or refusal to update assets at the trustee’s request would constitute issuer default. While new in the United States,5 covered bonds were a long-standing part of the housing finance system in Europe, dating back to bonds issued in 1769 in Prussia. In Continental Europe these bonds, called ‘Pfandbriefe’ or (‘Pledge letters’) in the German-speaking countries, amounted to â‚ ¬2. 1 trillion (see Exhibit 2). By 2008, covered bonds were the second largest fixed income market in Europe. 6 Part of the recent growth could be tied to Basel II banking regulations, coming into full effect in 2008. Torsten Althaus, head of the European covered bonds at credit rating agency Standard and Poors, explained: â€Å"With Basel II aligning regulatory with economical capital requirements, there are fewer incentives to use securitization for regulatory arbitrage. [†¦] Consequently, as there are fewer incentives to move assets off-balance-sheet, retaining assets on-balance-sheet allows issuers to fuel further covered bond issuance. †7 Covered bonds were predominately held by European investors and had generally been viewed as being extremely safe. This view derived in part from the high credit quality of the issuers, in part from the high value of the cover pool assets, and in part from the fact that the status of covered bonds in many European countries was enshrined in specific legislation. This gave covered bond investors a high level of confidence that, should an issuer default, they would be able to successfully enforce their legal claim to the assets in the cover pool. The low perceived risk of covered bonds had led many investors to view the bonds as a ‘rates-plus’ product – effectively a yield-enhanced substitute for sovereign debt. 8 2 Washington Mutuals Covered Bonds 209-093 Rating Covered Bonds The three major credit rating agencies all had specific approaches to rating covered bond issues. Broadly speaking, the ratings approaches focused on ‘notching’, or raising, the credit rating of the bond above the credit rating of the issuer in order to reflect the greater protection of the cash flows promised under the covered bond program. Although the methodologies differed by agency, all three implicitly linked the rating of the covered bond sponsor to the rating of the issue. Fitch Rating Methodology:9 Fitch started with credit quality of underlying sponsor. Fitch assumed that bonds had recourse to the underlying issuer, so the credit quality of the issuer would provide a floor for the credit quality of the covered bond. Starting from this floor, the credit rating was then ‘notched’ depending on the ‘discontinuity factor,’ which essentially reflected the bankruptcy remoteness of the assets in the covered pool. To calculate the discontinuity factor, Fitch looked at the strength of the asset segregation mechanism. One important factor was whether the overcollateralization of the covered bonds was kept out of reach of the unsecured creditors until the covered bonds had been fully repaid. In practice, this could be accomplished through the legislative framework under which the bonds were issued, or through protections built into the structure of the bond. In countries like Germany and France, covered bonds were governed by and issued under specific legislation. This legislation governed the structure of the instruments and the treatment of investors and collateral in the event of default. Covered bonds issued in the United States were issued under the general US contractual law environment, rather than any specific legal statute. In the Fitch rating approach, a low discontinuity factor implied complete separation; a high discontinuity factor implied that distress at the sponsor would result in delays or payment problems for the covered bond. In practice, very few covered bonds had a discontinuity factor of zero. Consider for example the case of Coreal Credit, a German Bank with a BBB- default rating, with a set of covered bonds that were 17. 8% overcollateralized by mortgage assets. Fitch calculated a discontinuity factor of 11. 7%, leaving the covered bond with a rating of AA, a notch below the highest rating. Another issue considered by Fitch was the difficulty bonds faced in replacing the swap agreement, which matched the payments on the bonds with the payments from the mortgages. This hedge could be disrupted by a default at the issuer level, and Fitch adjusted the discontinuity factor in line with the likelihood of disruption. These hedges were important because payments under the bonds often failed to match the currency, timing, or interest rate exposure of payments from the underlying mortgage. Moody’s Rating Methodology:10 Moody’s based their credit rating on a â€Å"joint-default analysis. † Moody’s model simulated the performance of the covered bond each month through maturity. The probability of issuer default in each month was based on the issuer credit rating. This probability in each month was multiplied by the relevant loss to give the expected loss to covered bond investors in each month. The resulting number was the expected loss on the covered bond, which was the source of the bond’s rating. The factors affecting the rating were divided into the issuer credit rating, which affected the issuer’s probability of default, the credit quality of the cover pool, the costs likely to be incurred in refinancing the cover pool in the event that the issuer defaulted, and market risks. Market risk was based on the likely impact of interest rate and currency movements during the period after the default, and reflected the possibility of disruptions in the swaps that were in place to hedge those risks. Standard and Poor’s Methodology:11 Standard and Poor’s focused on the probability of timely payment, rather than explicitly on default of the sponsor. Standard and Poor’s identified four 3 209-093 Washington Mutuals Covered Bonds contributors to the covered bond’s rating: (i) the legal framework, (ii) the quality of the collateral, (iii) the cash flows, especially losses due to credit, maturity, and currency mismatches, and payment delays and servicing costs imposed by disruption at the issuer, and (iv) the degree of overcollateralization. While it was possible that the covered bond was delinked from the rating of the issuer, in practice Standard and Poor’s recognized that default scenarios would likely impose significant payment delays, thereby linking the rating of the issuer with that of the issue. Washington Mutual Washington Mutual was the largest savings institution and 6th largest depository finance institution in the United States. Founded in 1889, the bank had survived the Depression and the savings and loans scandals of the 1980s. By late 2006, the bank had amassed assets of $346 billion, with $214 billion in deposits. Exhibits 3a and 3b show select financials. WaMu offered a range of financial services typical to savings and loan institutions, including: home and home equity loans; multi-family and other commercial real estate loans; credit facilities and cash management for small businesses; credit cards, annuities and insurance products; as well as securities and brokerage services. 12 Historically, WaMu had been a regional bank, with retail banking operations in California and the U. S. Northwest. However, starting in the 1990s, the bank undertook a major expansion initiative, led by CEO Kerry Killinger. Part of the expansion occurred through a series of acquisitions. In 1999, for example, WaMu purchased Long Beach Financial, a Californiabased lender specialized in subprime mortgages – loans to borrowers with poor credit. 13 Over the course of a few years, WaMu increased its retail banking network from 412 stores on the West Coast in 1996 to 1,700 locations across the country by 2003. 14 WaMu became known as a particularly aggressive lender, willing to extend loans even to clientswith low incomes or poor credit histories. 15 In 2003, as part of this WaMu’s expansion, the bank introduced an advertising campaign backed by the slogan â€Å"The Power of Yes. † While some of WaMu’s loans were financed by the bank’s large deposit base, the majority were securitized –i. e. , pooled and packaged – and then sold to the secondary market. Sustained by a buoyant housing market, Wamu shareholders collected substantial profits between 2000 and 2004 (see Exhibits 3a and 3b). In 2004, for example, U. S. home prices appreciated by nearly 20 percent. Urban areas in California, Florida, Nevada, and Arizona experienced particularly rapid price appreciation. In an environment of rapid housing price appreciation, a borrower who suffered a decline in household income could avoid default by selling or refinancing the home. As housing prices rose, WaMu expanded its product mix from home loans and home equity loans into lines of credit, subprime mortgages, and other real estate products. WaMu was an early seller of mortgage products known as â€Å"option ARMs,† which were adjustable rate mortgages that offered low initial payments designed to escalate over time. For WaMu, these loans were attractive because they carried high fees, and allowed the bank to state profits for interest payments that borrowers had not paid yet. In 2003, adjustable rate mortgages comprised about a quarter of WaMu’s lending portfolio; by 2006, about 70 percent. 16 Housing prices in most U. S. markets peaked in 2005, as shown in Exhibit 4. As housing prices leveled off in 2006 and began to fall in 2007, (see Exhibit 4), WaMu profits initially remained relatively flat. In 2006, WaMu posted profits of $3. 5 billion on $13. 5 billion in total revenue. Nevertheless, the bank took some precautionary measures, cutting jobs in an effort to contain costs. 17 It was in this environment of cooling home prices that WaMu turned to the covered bond market in late 2006. 4 Washington Mutuals Covered Bonds 209-093 WaMu’s Covered Bond Program WaMu entered the covered bond market in September 2006 with a dual-tranche 4B EUR issue. 18 One tranche followed closely by analysts was a â‚ ¬2 billion 5-year fixed rate issue, maturing on September 27, 2011. The bond paid a coupon of 3. 875 percent and was not callable.  19 At the time the bond was issued, WaMu was the only covered bond issuer outside of Europe. (The remaining covered bonds were issued in May 2007 and matured in 2014). WaMu’s covered bonds were popular with investors – the initial placement of the bonds was four times oversubscribed. 20,21 While it was impossible to tell the exact identities of the current holders of the bonds, it was widely speculated that the Euro-denominated bonds had ended up with European pension funds and banks. The covered bonds initially traded at a yield to maturity of 3. 90%, compared to the yield on a 5-year German government bond of 3.62%. LIBOR, the average dollar denominated interbank rate was 5. 40% and EUROIBOR, the average interbank lending rate denominated in Euros was 3. 06%. The covered bonds were issued by WM Covered Bond Program (WMCB), a statutory trust organized in the State of Delaware. The covered bonds were secured by a series of mortgage bonds issued by WaMu Bank and purchased by WMCB, who sold the bonds via a placement agent to institutional investors. The mortgage bonds, in turn, were secured by a pool of residential mortgage loans owned and serviced by WaMu Bank. The covered bonds could also be secured by â€Å"substitution assets† pledged by WaMu Bank. 22 Exhibit 5 summarizes the structure of Washington Mutual’s covered bond program. Under the terms of the covered bond program, each series of mortgage bonds was held as collateral for a separate series of covered bonds, and would secure only that series of covered bonds. However, if Washington Mutual Bank were to default on any of its mortgage bond obligations, each series of the covered bonds would share pro rata in any proceeds from the cover pool. As holder of the mortgage bonds, WMCB was required to use the proceeds to pay interest and principal on the related series of covered bonds. However, as the covered bonds were denominated in Euros, WMCB first had to swap the dollar proceeds from the mortgage bonds into Euros. The swap program, typical of covered bond programs, was used to manage timing and currency mismatches between payments to the covered bond holders and payments from the underlying portfolio of mortgages. The asset monitor of the cover pool periodically applied an â€Å"asset coverage test† to check that the mortgages in the pool would be sufficient to pay the interest and principal on the covered bonds. A breach of the asset coverage test would constitute default for WaMu Bank, which would then allow the monitor (who also, in this case, acted as a trustee) to enforce its interest over the cover pool. Provided that WaMu Bank preserved investment grade status, the asset coverage test would be performed annually or anytime that a substitution was made in the cover pool. But, as WaMu Bank had recently been downgraded, the program required that the asset coverage test be performed monthly. The Asset coverage test: If on any â€Å"determination date†23 the adjusted aggregate loan amount was less than the aggregate principal amount of all outstanding mortgage bonds, then WaMu Bank was required to add additional eligible mortgage loans. The adjusted aggregate loan amount was the lower of (a) the sum of the Loan-to-Value current balance of each mortgage loan in the cover pool, which was itself the lower of (i) the unpaid principal balance and (ii) the indexed valuation of the loan multiplied by 0.75; and (b) AP times the sum of the â€Å"adjusted current balance† of mortgage loans in the cover pool, which itself was the lower of (i) the unpaid principal balance of the respective 5 209-093 Washington Mutuals Covered Bonds loan, and (ii) the index value of the mortgage loan. Indexed valuations were based on regional housing indices. 24 AP deno ted the â€Å"asset percentage,† usually 93 percent, although this figure could be revised downwards if the ratings agencies felt that expected loss rates on the underlying mortgages could be higher. The expected losses would be based on Standard and Poor’s or Fitch, two of the three ratings agencies. Some analysts felt that the ratings agencies had been increasingly cautious in recent months, revising upwards loss rates on mortgage backed loans. As shown in Exhibit 6, the asset percentage had been lowered to 67 percent. Under the terms of the covered bond program, WaMu Bank was not allowed to merge or consolidate with any other persons or entity, or to change its bank holding company status, unless the new entity acquired all assets of the issuer and agreed to the punctual payment of principal and interest on the mortgages bonds. Distress at WaMu WaMu’s 2007 first-quarter profit, reported in April, showed a roughly 20% decline relative to Q1 2006. At the time, the U. S. economy was approaching a sharp decline in housing starts and sales, and the business press warned against an inevitable run of foreclosures. CEO Kerry Killinger spoke publicly of â€Å"unprecedented deterioration† in the subprime-mortgage market. Inventories of unsold homes were reaching their highest levels in eighteen years, with the supply of single-family homes on the market, which had averaged six months historically, reaching 10 months nationally. In California, the supply of single-family homes in inventory stood at 15 months. By December 2007, WaMu’s stock price reached a low of $13. 07,25 as the bank cut its dividend by 73%. 26 Throughout banking and financial services, evidence pointed to sector-wide failure: In February, leading London bank HSBC, whose American mortgage unit HSBC Finance had originated the majority of U. S. subprime mortgages, announced $11 billion in write-downs to offset anticipated losses related to failed loans. 27 In March, Bear Stearns shut down two of its hedge funds, in the midst of large losses.