Dissertation Manuscript
By
Sedric K. Morgan
Geopolitical Awareness and Understanding of the Current Monetary Policies: A Quantitative Study
Northcentral University, 2019 Comment by Author: Sedric NOTE: take a look at the Turnitin Analysis report. Consider the areas that are closely related to student paper(s) from University of Maryland. I highly suspect this is a matter of improper paraphrasing (by you as well as these other student(s)). The areas are sourced and the similarity may be more likely from the direct source.
Geopolitical Awareness and Understanding of the Current Monetary Policies: A Quantitative Study
Dissertation Manuscript
Submitted to Northcentral University
School of Business Administration
in Partial Fulfillment of the
Requirements for the Degree of
DOCTOR OF BUSINESS ADMINISTRATION
by
SEDRIC KARL MORGAN
San Diego, California Comment by Author: location of the university has changed since the 2018 DP/DM template. Please update the location to La Jolla, California for the Dissertation Proposal final. Thanks, Sharon.
September2020
Abstract Comment by Author: Meets AR checklist. The abstract contains the problem, purpose, findings, and recommendations. Comment by Author: Sedric format for the abstract section is one full paragraph. For content and format requirements of this section; please see the NCU DP/DM template, page iii, feedback comments.
Understanding how knowledge of debt, monetary policy and geopolitical risks impact confidence in the international banking community could be a way for stakeholders to better manage their investments. The purpose of this study was to determine if the international banking community feels confident that it can sustain another global economic crisis, and specifically whether geopolitical awareness impacts that confidence level. Rational choice theory is used for this studys theoretical framework and is combined with the principles of mission command to explain how members of the international banking community perceive and execute their role in the industry in the face of mounting risks. The research questions were: 1) Is the international banking community confident in its ability to handle another global economic crisis like the one experienced from 2007-2008? 2) Does geopolitical awareness have an impact on the confidence of the members of the international banking community regarding the sector's ability to handle another global economic crisis like the one experienced from 2007-2008? 3) Do changes in central bank monetary policy (i.e., going from quantitative easing to quantitative tightening) and the awareness of the rising debt levels around the world affect the confidence levels of the members of the international banking community on the sectors ability to handle another global economic crisis like the one seen from 2007-2008? The findings showed that the international banking community is confident in its ability to handle another economic crisis and that neither geopolitical awareness nor changes in central bank monetary policy or awareness of debt levels were significant factors in impacting confidence. More research is thus needed to understand what affects the industrys confidence, as future research should focus on the role that central banks play in affecting confidence levels.
Table of Contents
Chapter 1: Introduction 1
Statement of the Problem 2
Purpose of the Study 3
Theoretical Framework 4
Nature of the Study 5
Research Questions 6
Significance of the Study 7
Definitions of Key Terms 7
Summary 8
Chapter 2: Literature Review 10
Theoretical Framework 11
Literature Review 16
Pea Ridge 16
Rational Choice and Principles of Mission Command Apply to International Banking 19
2007-2008 Global Financial Crisis and Today 23
Subprime 23
Lehman 24
Where Things Stand 31
Risk and the Banking Community 34
Geopolitical Risk Effect on Liquidity 39
Over-Leveraged Institutions and Firms 41
Social Capital as Context 46
Significant Contribution to Behavioral Economic 50
Suggestions and Critiques 50
Social Capital and Social Change 52
A Comparison of Outcomes 56
China 60
How Relations between Great Countries Affect Other Countries 64
America and China Relations 65
Japan and the United Arab Emirates 67
How the US-China Relationship Impacts Japan and UAE 68
Summary 72
Chapter…
Dissertation Manuscript
By
Sedric K. Morgan
Geopolitical Awareness and Understanding of the Current Monetary Policies: A Quantitative Study
Northcentral University, 2019 Comment by Author: Sedric NOTE: take a look at the Turnitin Analysis report. Consider the areas that are closely related to student paper(s) from University of Maryland. I highly suspect this is a matter of improper paraphrasing (by you as well as these other student(s)). The areas are sourced and the similarity may be more likely from the direct source.
Geopolitical Awareness and Understanding of the Current Monetary Policies: A Quantitative Study
Dissertation Manuscript
Submitted to Northcentral University
School of Business Administration
in Partial Fulfillment of the
Requirements for the Degree of
DOCTOR OF BUSINESS ADMINISTRATIONby
SEDRIC KARL MORGAN
San Diego, California Comment by Author: location of the university has changed since the 2018 DP/DM template. Please update the location to La Jolla, California for the Dissertation Proposal final. Thanks, Sharon.
September2020
Abstract Comment by Author: Meets AR checklist. The abstract contains the problem, purpose, findings, and recommendations. Comment by Author: Sedric format for the abstract section is one full paragraph. For content and format requirements of this section; please see the NCU DP/DM template, page iii, feedback comments.
Understanding how knowledge of debt, monetary policy and geopolitical risks impact confidence in the international banking community could be a way for stakeholders to better manage their investments. The purpose of this study was to determine if the international banking community feels confident that it can sustain another global economic crisis, and specifically whether geopolitical awareness impacts that confidence level. Rational choice theory is used for this studys theoretical framework and is combined with the principles of mission command to explain how members of the international banking community perceive and execute their role in the industry in the face of mounting risks. The research questions were: 1) Is the international banking community confident in…
Dissertation Manuscript
By
Sedric K. Morgan
Geopolitical Awareness and Understanding of the Current Monetary Policies: A Quantitative Study
Northcentral University, 2019 Comment by Author: Sedric NOTE: take a look at the Turnitin Analysis report. Consider the areas that are closely related to student paper(s) from University of Maryland. I highly suspect this is a matter of improper paraphrasing (by you as well as these other student(s)). The areas are sourced and the similarity may be more likely from the direct source.
Geopolitical Awareness and Understanding of the Current Monetary Policies: A Quantitative Study
Dissertation Manuscript
Submitted to Northcentral University
School of Business Administration
in Partial Fulfillment of the
Requirements for the Degree of
DOCTOR OF BUSINESS ADMINISTRATION
by
SEDRIC KARL MORGAN
San Diego, California Comment by Author: location of the university has changed since the 2018 DP/DM template. Please update the location to La Jolla, California for the Dissertation Proposal final. Thanks, Sharon.
September2020
Abstract Comment by Author: Meets AR checklist. The abstract contains the problem, purpose, findings, and recommendations. Comment by Author: Sedric format for the abstract section is one full paragraph. For content and format requirements of this section; please see the NCU DP/DM template, page iii, feedback comments.
Understanding how knowledge of debt, monetary policy and geopolitical risks impact confidence in the international banking community could be a way for stakeholders to better manage their investments. The purpose of this study was to determine if the international banking community feels confident that it can sustain another global economic crisis, and specifically whether geopolitical awareness impacts that confidence level. Rational choice theory is used for this studys theoretical framework and is combined with the principles of mission command to explain how members of the international banking community perceive and execute their role in the industry in the face of mounting risks. The research questions were: 1) Is the international banking community confident in its ability to handle another global economic crisis like the one experienced from 2007-2008? 2) Does geopolitical awareness have an impact on the confidence of the members of the international banking community regarding the sector's ability to handle another global economic crisis like the one experienced from 2007-2008? 3) Do changes in central bank monetary policy (i.e., going from quantitative easing to quantitative tightening) and the awareness of the rising debt levels around the world affect the confidence levels of the members of the international banking community on the sectors ability to handle another global economic crisis like the one seen from 2007-2008? The findings showed that the international banking community is confident in its ability to handle another economic crisis and that neither geopolitical awareness nor changes in central bank monetary policy or awareness of debt levels were significant factors in impacting confidence. More research is thus needed to understand what affects the industrys confidence, as future research should focus on the role that central banks play in affecting confidence levels.
Table of Contents
Chapter 1: Introduction 1
Statement of the Problem 2
Purpose of the Study 3
Theoretical Framework 4
Nature of the Study 5
Research Questions 6
Significance of the Study 7
Definitions of Key Terms 7
Summary 8
Chapter 2: Literature Review 10
Theoretical Framework 11
Literature Review 16
Pea Ridge 16
Rational Choice and Principles of Mission Command Apply to International Banking 19
2007-2008 Global Financial Crisis and Today 23
Subprime 23
Lehman 24
Goldman Sachs 27
Where Things Stand 31
Risk and the Banking Community 34
Geopolitical Risk Effect on Liquidity 39
Over-Leveraged Institutions and Firms 41
Social Capital as Context 46
Significant Contribution to Behavioral Economic 50
Suggestions and Critiques 50
Social Capital and Social Change 52
A Comparison of Outcomes 56
China 60
How Relations between Great Countries Affect Other Countries 64
America and China Relations 65
Japan and the United Arab Emirates 67
How the US-China Relationship Impacts Japan and UAE 68
Summary 72
Chapter 3: Research Method 74
Research Methodology and Design 76
Population and Sample 77
Materials or Instrumentation 79
Operational Definitions of Variables 80
Data Collection and Analysis 85
Assumptions 85
Limitations 85
Delimitations 86
Ethical Assurances 86
Summary 87
Chapter 4: Findings 88
Validity and Reliability of the Data 89
Transferability 91
Dependability 91
Confirmability 93
Results 93
Research Question 1 95
Research Question 2 98
Research Question 3 100
Evaluation of the Findings 104
Research Question 1 104
Research Question 2 105
Research Question 3 106
What the Findings Mean 107
Summary 110
Chapter 5: Implications, Recommendations and Conclusions 112
Implications 113
Recommendations for Practice 121
Conclusions 123
References 125
Appendix A: Scatterplot of Dependent Variable - Confidence 133
Appendix B: Scatterplot: Dependent Variable - Confidence 134
List of Tables
Table 1 Demographics of Respondents 83
Table 2 Demographics of Respondents 95
Table 3 onfidence Levels of the Banking Community 96
Table 4 The Impact of Geopolitical Awareness on Confidence Levels 99
Table 5 The Effect of Central Bank Monetary Policy and Awareness of Increasing Debt Levels on Confidence Levels 103
List of Figures
Figure 1 The conceptual framework of rational choice and the principles of mission command 24
Figure 2 The principles of mission command meet factors affecting rational choice 25
ii
Chapter 1: Introduction
The 2008 global financial crisis showed that banks need to be prepared for the unexpected. As firms rushed to sell investments losing value, the market was overwhelmed and economies crashed. The Federal Reserve intervened with a new form of monetary policy known as quantitative easing (QE). QE enabled the Federal Reserve to rescue markets by serving as the buyer of last resort (Adrian & Shin, 2010; Heller, 2017). A decade later, markets were making new highs and the global economy appeared to have sufficient capital adequacy in case of any new financial emergency (Lupton, 2018). At the same time, fears of COVID-19, trade war fallout, and depression are evident in news media all over the world. These fears suggest that international banks should be prepared for uncertainty in the foreseeable future. Are they confident in their preparedness?
This is an important question to ask, as sovereign and corporate debt is climbing and as the Federal Reserve has indicated that it may not engage in QE every time a market crash or correction occurs (Dimon, 2017; Lupton, 2018). In other words, the banking sector should not get used to depending upon the central bank for support in every emergency.
Lupton (2018) has noted the risk banks face by stating that since 2007, the global sovereign debt has ballooned by 26 percentage points of GDP (p. 1). Dimon (2017) has also pointed out additional risk by noting that the Federal Reserve moving away from QE could be potentially disastrous for banks: "The effects of its reversal cannot be well known since no QE has ever been done on this scale and no one would completely know the myriad of effects that this would have on asset prices, capital expenditures, confidence, and other factors" (p. 1) Thus, it is important for the banking sector to know whether it can withstand another crisis were one to emerge.
It is vital that we have a study that is geared towards addressing this problem (Mauldin, 2018). To determine if there is any need for precautions to be taken now, the positioning and confidence of the international banks should be well understood. This will assist in developing a sense of whether a default in one part of the worldsuch as China, Italy, or the U.S.will affect the entire industry (Bouvatier&Delatte, 2015). In the aftermath of the 2008 crisis, the banking sector was in need of support from central banks around the world (Bruno & Shin, 2015). Today, it is unknown whether these same banks are any more or less confident in confronting a crisis of similar magnitude. While the Federal Reserve does conduct stress tests to see if capital adequacy will be an issue for banks, these tests do not reveal the full extent of risk. The crisis in the REPO markets at the end of 2019 showed as much.
Furthermore, in 2010, the Dodd Frank Act leveraged stricter financial regulations on the banking community. Deregulation in the U.S. under the Trump Administration, had an adverse effect, as Reuters (2018) reported that regulated banks were increasingly underwriting leveraged buyout company loans following relaxing of tax guidelines by the Republicans focused on risk reduction. In short, there is plenty of reason for investors to worry.
Statement of the Problem Comment by Author: Meets Academic Reader checklist for this section: Research problem is specified and supported in the literature. The problem is aligned with the student's degree and is feasible. Comment by Author: Sedric consider beginning this section by clearly identifying the problem and then provide evidence and support that the problem is current and worthy of a dissertation research study. For content and format requirements of this section; please see the NCU DP/DM template, p. 1, first checkbox for this section.
Salhin et al. (2016) showed managerial confidence hasve an impact on return on investment (ROI). More examination was needed on how confidence among members of the finance industry affects investment between sectors (Salhin et al., 2016). Pikulina et al. (2017) found overconfidence among professional investors can lead to high risk situations leading to adverse effects on investment. Overconfidence is linked with financial crisis as investments become so over-leveraged that the slightest disruption bring disaster (Ho et al., 2016). Understanding the connection between confidence and investment in banking is needed (Lee et al., 2019). Do middle managers and regular employees impact industries sustainability (Buyl et al., 2019)? It is not known what effect regular banking employees attitudes have on industry sustainability, further research is needed (Buyl et al., 2019). Lupton (2019) asserted with rapid debt growth worldwide it is unclear whether the industry can sustain this growth without undue risk taking. Midlevel banking workers are vital to a banks success (Buyl et al., 2019). The world may face another disaste following the collapse of sub-prime in the United States coupled with the tidal wave of leveraged loans defaulting across the global banking sector where relief was found through central banking intervention (Haitsma et al., 2016; Heller, 2017). Comment by Author: Edit this sentence for clarity and to facilitate the Readers understandings. Thanks, Sharon.
The study problem is one of sustainability in the industry. Lupton (2019), Dimon (2018) and Buyl et al. (2019) questioned the sustainability of todays banking industry. Confidence may play a part in determining whether the industry is sustainable (Buyl et al., 2019). However, it is unclear how confidence can be definedemotion metaphors may be an indication of the type of confidence that workers in the banking industry have (Ho & Cheng, 2016). Confidence is vital since it determines how money is invested, what markets will do, and where it is placed (Heller, 2017). Bankers confidence is important to assess because it impacts how investors invest (Giles, 2017). Thus, this study addresses the problem of knowing to what extent bankers have confidence in their sector as the sector faces one of the biggest crises in history with the COVID-19 lockdowns of 2020.
Purpose of the Study Comment by Author: Meets Academic Reader checklist for this section: Purpose statement is aligned with problem statement. Purpose contains method, design, and geographic location of the study. Purpose includes a description of the sample population for the study.
The purpose of this quantitative descriptive study was to determine whether there is confidence among bankers around the world with respect to the sectors ability to face a worldwide financial crisis. The relationship between geopolitical awareness and confidence was determined by using a structured survey tool. Survey participants represented four international banksHSBC, J. P. Morgan-Chase, Deutsche Bank and Bank of China. Participants remained anonymous by accessing the survey through SurveyMonkey.
Geopolitical awareness is knowledge of geopolitical current events. Geopolitical risks represent risks linked with wars, terrorism, and tension between states (Caldara &Iacoviello, 2018). The model for measuring risk developed by Caldara and Iacoviello was used to measure geopolitical tensions. In the survey, the participants were asked if they see geopolitical risk in the world. Their responses were then measured against the model showing how much geopolitical risk is present. The scope of the data collection was limited to bankers with profiles on LinkedIn.
Economic and financial challenges lie ahead. Investors want to know how confident their bankers are (Giles, 2017). This study evaluated the extent to which bankers from around the world have confidence in their sectors ability to manage the coming challenges.
Theoretical Framework
Rational choice theory is based on the idea that actors use reason to determine whether a particular decision will be beneficial or costly. The assumption is that an individual has to know what risks lie ahead in order to make an effective decision about how to move forward. It requires substantial powers of critical thought an analysis, i.e., the ability to pose questions, collect data, analyze the most relevant information, and make a decision accordingly.
This research was conducted from the standpoint of rational choice theory. The idea that investors, like bankers, concern themselves with issues such as benefit vs. cost seemed appropriate considering that most investments are placed into risk-on assets, such as equities in any given portfolio. But what happens if risks are inappropriately assessed? What happens if confidence is misplaced or insufficient? By looking at the banking sector from the standpoint of rational choice, one is faced with such questions. Thus, the questions used to guide this research arose as a natural response to the application of this theoretical perspective.
Mark Carney, former head of the Bank of England, observed that worldwide financial, political, social and economic challenges "have made it more difficult for central banks to set policy in order to achieve their objectives" (Giles, 2017). What this suggests is that banks are in the unenviable position of facing a world of uncertainty. Markets tend to shrink from uncertainty. Moreover, as Van Lerven (2016) noted on the topic of relying on central bank intervention, "After more than a year since its initial inception, a review of the programs impact reveals that policy makers should think twice before further expanding the program-and could benefit from considering more direct ways of increasing spending in the real economy" (p. 237). In short, there are even costs to be considered with respect to trusting that the Federal Reserve can and will support markets indefinitely. That understanding alone is enough to justify this studys inquiry.
Nature of the Study
This study is quantitative in nature. 1000 bankers from four different international banks were surveyed. Their demographics were considered and focus was given to understanding the variables that affected their confidence. The main theoretical implication of this research is that it could provide insight into how bank managers manage employees confidence in the face of growing financial risks at the macro and micro levels.
The methodology for this study is presented in Chapter 3. What was measured and why is described in detail so as to ensure generalizability (Lincoln & Guba, 1985; Seale, 1999). Providing a detailed statement of the methods used herein also allows other researchers to reconstruct the study for the purpose of ensuring reliability (Golfshani, 2003).
Research Questions
The main purpose of these research questions was to assess bankers confidence in terms of facing a coming economic or financial crisis. The second purpose of these questions was to see what variables or factors impact bankers confidence. The research questions for this study were: Comment by Author: Meets Academic Reader checklist for this section: esearch questions are aligned with the problem and purpose. Research questions are measurable, answerable, and well formatted.
RQ1. Is the international banking community in the West more confident in its ability to handle another global economic crisis like the one experienced from 2007-2008 than the community in the East?
H0. There is no significant relationship between working in the banking community in the West/East and confidence that the industry can handle another economic crisis.
H1. There is a significant relationship between working in the banking community in the West/East and confidence that the industry can handle another economic crisis.
RQ2. Does geopolitical awareness have an impact on the confidence of the members of the international banking community regarding the sector's ability to handle another global economic crisis like the one experienced from 2007-2008?
H0. There is no significant relationship between geopolitical awareness and confidence that the industry can handle another economic crisis.
H1. There is a significant relationship between geopolitical awareness and confidence that the industry can handle another economic crisis.
RQ3. Do alterations in monetary policy and the awareness of the rising debt levels around the world affect the confidence levels of the members of the international banking community on the sectors ability to handle another global economic crisis like the one seen from 2007-2008?
H0. There is no significant relationship between awareness of monetary policy and debt levels and confidence that the industry can handle another economic crisis.
H1. There is a significant relationship between awareness of monetary policy and debt levels and confidence that the industry can handle another economic crisis.
Significance of the Study
The significance of this research is rooted in the focus it brings to the issue of confidence and what it means to markets. Confidence has an impact on everything from precious metals to equities to bonds and even blockchain (Haitsma et al, 2016). It is vital that bank managers understand how confidence can impact their businesses. Therefore, the timeliness of this study cannot be overstated considering that the COVID-19 crisis erupted as this study was getting underway. Thus, this study has aimed to address a very real and significant concern. If managers can see what confidence levels are like, they may be able to adjust strat.......studys results have advanced the guiding framework by showing what factors impact confidence and how confidence may impact decision making. By addressing this issue, stakeholders can be better positioned to engage the critical thought process. In the end, this research facilitates managers critical thinking by giving them another data point that can be used to prepare their firms or the industry overall for a coming crisis of confidence.
Definitions of Key Terms Comment by Author: Nice work on the terms Sedric. Format/typo indent the term headings as you did for the term Confidence.
Confidence. Confidence is an integral part of the banking and investment process: as Ordonez (2018) states, securitization relies on confidence (p. 1). Confidence is trust in ones abilities; it is the sense that one can rise to the challenge. Confidence in banking suggests that one has awareness of risks and is adequately positioned to respond to them (Ordonez, 2018).
Debt Awareness. Debt awareness refers to the awareness of one to debts that can impact ones future ability to invest (Lupton, 2018).
Geopolitical Awareness. In this study, geopolitical awareness is an awareness of geopolitical forces and maneuverings. It includes awareness of unresolved issues in the geopolitical realm, and what factors might increase tension between nations or trigger crises in the global socio-political and economic order (Dijink, 2002).
Global Economic Crisis. The 2008 economic crisis is the standard example of a global economic crisis, but this can be any type of event that triggers a financial crisis or economic hardship resulting in stress on financial institutions (Bennett &Segerberg, 2011).
Quantitative Easing. Quantitative easing (QE) describes the new form of monetary policy initiated by the Federal Reserve and other central banks around the world in response to (Heller, 20l7). It involves the large-scale purchasing of securities and bonds by the bank for the purposes of providing liquidity for markets. Essentially, it is the central bank acting as the buyer of last resort.
Quantitative Tightening. Quantitative tightening (QT) is the opposite of QE and describes the policy of unwinding the central banks balance sheet after a period of QE. Whereas QE provides liquidity for a market, QT drains liquidity (Armas et al., 2014).
Summary
The purpose of this quantitative study is to measure the extent to which bankers in the international banking sector are confident that they can face the challenges of an economic crisis like that of 2008 or like that currently being experienced around the world as a result of COVID-19 lockdowns. The reason this study is important is that confidence is a key indicator of trust, and investors want to know if their investment is in trustworthy hands. How bankers show or maintain confidence can impact decision making with respect to investment funds. Applying rational choice theory to the issue of confidence in banking can help to show how the cost vs. benefit argument plays a part in the critical thinking process or whether there are other variables impacting bankers confidence. The next chapter of this study provides a literature review of pertinent studies and articles.
Chapter 2: Literature Review Comment by Author: MeetsAcademic Reader checklist for this chapter: Literature review is aligned with the variables/constructs outlined in the problem, purpose, and research questions and flows in a logical sequence.Academic Reader checklist for this chapter: Literature review is current and includes synthesis of ideas around themes, including how study fits within theoretical/conceptual framework. Literature review is sufficient in breadth and depth for a dissertation.
This quantitative descriptive study focuses on what factors impact bankers confidence and how confidence impacts decision making in banking. Considering that there is now $17 trillion in negative yielding debt around the world, the prospects of central banks having enough dry powder to address a recession or a depression is surely one that bankers have consideredparticularly since their very livelihood stands to be affected should a significant and long-term downturn take place (Ainger, 2019). Understanding the knowledge and confidence levels of bankers in the present circumstances by measuring their awareness of geopoitical risk and determining whether that awareness impacts their outlook could be a way for stakeholders to better manage their investments.
This chapter provides a discussion of the theoretical framework used in this study. It then proceeds to summarize the literature relevant to this subject by looking at research on the Global Financial Crisis of 2007-2008, how it happened, how it was handled, and what the lasting effects have been; how geopolitical risk is related to finance issues, such as liquidity drain, leverage, flight to safe havens. It also discusses the current geopolitical risks facing the global banking community today and what it means in the future.
Databases. Comment by Author: Nice discussion on your literature search strategy Sedric!
The databases accessed for this literature review included Taylor & Francis Online, JSTOR and others using the Google Scholar search engine. The search parameters included key words international finance banking geopolitics, china and us symbiotic relationship, geopolitical risk banking, international banking economic crisis, banking qe, and numerous others. Many search terms were gathered by snowballing literature, with one article providing terms that would be used to generate more returns, and those articles offering new terms. There was no constraint on range of years, though most literature focused on articles written post-2008, as this marked the shift in central banking monetary policy that has led the international banking community to where it is today. Instead, articles were selected for content, whether qualitative or quantitative, and a range of subjects, including economics, finance and banking as it related to Russia, China, Europe, Japan, the U.S., currency, trade, debt, equities, bonds, gold, real estate, politics, geopolitics, oil, and more. The point of these searches was to obtain a sufficient macro-level view of the industry, with context being provided both by recent (past ten years) studies and older studies that have proved seminal and helpful for understanding the evolution of the industry over the years.
Theoretical Framework
Rational choice theory was used as theoretical framework for this study. Originally developed by Cornish and Clark (1987) and applied to criminology, it has been used by sociologists, economists, and various other researchers in a multitude of disciplines. The underlying basis of this theory is that people base their decisions on how to act by looking at the effects likely to follow the act. This is known as evaluating the risk vs. reward or as conducting a cost/benefit analysis (Buskins, 2015). By looking at both risk and reward, the individual makes a rational choice based on the information obtained. The information suggests the best course of action within reason. In economics, rational choice has become the dominant paradigm (Buskins, 2015). The typical definition of rational choice theory in economics is that people will use rational calculations to make decisions that they believe will allow them to reach their goals. The underlying assumption of the theory is that most individuals will attempt to maximize their position or advantage while minimizing risk or losses. The key concepts in this theory are that in order to effectively make rational choices, one must know the costs or the benefits as they are and not merely as they appear in ones mind. If one is not confident about the costs and benefits, one cannot proceed effectively in the decision-making process: this is one of the basic axioms of how rational choice is made even in situations where uncertainty looms (Loomes&Sugden, 1982).
Risk is a major factor in determining the extent to which rational choice theory has utility, and critics have often used the concept of Subjective Expected Utility (SEU)the approach to decision-making focusingon the subjectiveassessment of variables and probabilitiesto levy their attacks (Bauman et al., 1984). However, as Anand (1995) pointed out, SEU is a false paradigm that places unnecessary constraints on rational agency (p. 1). Colander et al. (2009) noted that the illusion of control and temptation to lure economists and bankers into erroneous ways do not negate the utility of rational choice theory.On the contrary, it makes it necessary since rational choice theory is best understood from the perspective of duty and responsibility. Actors have a duty to act rationallyit is not a matter of whether most do or do not; the duty is what matters as this is what drives stakeholders to be invested on their accounts.
In instances where uncertainty abounds, critics have argued that rational choice theory fails to hold much predictive or explanative power (Sen, 1977). For that reason, rational choice theory is opposed by scholars within the field of behavioral economics who posit that individuals do not always or necessarily make rational decisions with a view to maximizing their assets or position. Sen (1977) argued that actors in economics are rational fools and that none should be considered rational as none truly demonstrates rationalityi.e., actions that can all and entirely be explained logicallythe reason being that actors do not really have as much choice in matters as it appears. However, Sen (1977) approached the theory of rational choice from his own framework, which precludes the existence of choice even in the most restrictive and constraining of environments. Even a slave has choices to make. Simon (1972) proposed the idea of bounded rationality, which is that individuals tend to have only limited knowledge about an issue and/or options available and thus they are not going to be able to make the best possible decision.
Simon (1972) noted that the counterargument is that at some point decisions need to be made and there will inevitably be a moment when information gathering comes to an end. One may believe or feel that adequate information was obtained or that more information would be helpful; hoever, given the nature of reality and the fact that time does not stop, one can assume that most rationally-minded individuals will attempt to make rational decisions based on whatever information they were able to accumulate up to that point. There are numerous examples of leaders or individuals who made poor decisions, who did not demonstrate the concept of accepting prudent riskone of the U.S. Armys six principles of Mission Commandbut these exceptions prove the rule.This is what students of economic theory study to improve their perception of how best to act in a given situation. For that reason, the theory of rational choice is best applied as it represents the ideal approach that one seeks to take in decision making.
To better explain how this theoretical framework should be applied, it is helpful to consider it in terms of an historical anecdote, using the principles of Mission Command as a launch point for exploring and explaining this theory. The case in question is the failure of Confederate Commander Van Dorn at Pea Ridge in 1862 during the American Civil War to accept prudent risk and act rationally.His failure turned into his opponents success, as his opponent engaged in a more rational approach to the conflict and as a result won the day (Hanson, 2013). Situated within this simple example is a larger analogy for how the framework must consider all the principles of Mission Command to explain how banks work as a group of teams within an industry where they are all essentially battling (at times), or working with forces of economics to facilitate the achievement of financial and economic goals. First, the historical example and consideration given to how rational choice theory aligns with the principles of Mission Command are discussed, and second, the application to banking is described.
Conceptual Diagram
Figure 1The conceptual framework of rational choice and the principles of mission command.
Figure 1 shows the relationship between information, understanding (beliefs) and action and the impact that desire has on each of those factors is equal. Desire can influence which information is acceptable to a person; it can influence understanding, and action. The influence is mutual, too, as the desire will influence the action of the individual, and action will in turn affect ones desire. Desire is informed by the data one obtains but desire can also influence which data one seeks. One can be biased by desire, but one can also use information to shape ones desire and reduce bias created by uninformed or unrestrained desire. Action will impact goals, and the achievement or failure to achieve goals will likewise influence action. Goals are shaped by the information one has obtained. Principles must be used to shape all of thesehow desire is formed, what information is sought, what actions are commenced and what goals are identified. Without principles at the heart of the decision making the form is lost and the relationships have no measure. Therefore, the idea of mission command can serve as an adequate source of principles for rational choice decision making. Elster (2018) explained, rational-choice theory must tell the agents how best to realize their desires, given their beliefs. Furthermore, the theory must prescribe which beliefs it is rational for the agents to hold, given their evidence or information. Though a belief may be rational, it can be false, and understanding may not always be the main driver of action: desire can cloud the application of reason. Therefore, using the principles of Mission Command to help frame the application of rational choice theory to this study is helpful. Mission Command principles illustrate the proper application of reason in the decision-making framework for maximum positive effect, as shown in Figure 2 below.
Figure2 The principles of mission command meet factors affecting rational choice. Comment by Author: Sedric Just a consideration: I suspect Figure 1 and 2 were self-developed, correct? If so, nice work. If no then Be sure this is not copyrighted material. If so, be sure to obtain permission to use in your dissertation manuscript. . See section 5.06 (p. 128) in APA6. Also: https://ncu.libguides.com/APAStyle/copyrightinformationhttp://blog.apastyle.org/apastyle/2016/01/navigating-copyright-part-1.htmlhttps://academicwriter-apa-org.proxy1.ncu.edu/learn/browse/QG-28
Figure 2 shows the relationship between the principles of mission command and how they should be applied if one is going to act rationally and effectively. One must first understand the operational statethe external environment. One must also define the desired state: what one wants to achieve. The problems or obstacles must be faced and acknowledged so that a strategy can be devised. Risk must be assessed and accepted, but it must be assessed and accepted prudently in accordance with the principles, a safe plan is based upon the acceptance of prudent risk, which is one of the principles of mission command. As Figure 2 shows, the six principles of mission command are: 1) teamwork, 2) shared understanding, 3) clear intent, 4) discipline, 5) execution, and 6) accepting risk prudently. When these principles are aligned and followed, they lead to the decision-making stage. That stage will be impacted by the forces of desire and environmental factors, as occurred with Van Dorn, which is seen in the next section. When the decision-making stage is fortified by the above principles, the flow of information from desire to action to goals is stable and appropriate and decisions are more likely to be made rationally.
Literature Review
Pea Ridge Comment by Author: Sedric, I believe you have been using APA, 6th edition, correct? If so, then this is a level 3 heading. Please place in APA style format. If you transitioned to APA style 7th edition, then this formatting is correct.
In the principles of Mission Command, there is considerable overlap. Each of the six principles is essentially integrated and interwoven with one another so that to be without one is really to be without all. The failure of the Confederates to counter the Union attack at Pea Ridge in 1862 resulted from a variety of problems.These problems can be analyzed from the perspective of the Armys six principles of Mission Command and show why the problems began to mount for the Confederate Commander.As soon as he failed to create shared understanding and act prudently with respect to the upcoming fight, Van Dorn failed to collaborate well with his colleagues.He did not accept their considerations as valid or hared his own thinking on the matter at hand. He insisted on attacking instead of resting and thus the risk he took was imprudent (Hanson, 2013). Van Dorn could have succeeded had he taken the advice of McCulloch, by resting his men and himself, and devising his plan. He also could have succeeded had he accepted risk prudently, by accepting the risk of cutting off his line of communication by swinging to the rear of the enemybut he did not accept this risk prudently. Instead, he should have made sure that McCulloch understood the importance of being there to support Van Dorn. By not communicating effectively, Van Dorn took risks without precautionand eliminated the potential for shared understanding. Ultimately, Van Dorn failed in building a cohesive team as he rejected McCullochs advice to let the troops rest. Van Dorn wanted to beat Curtis to the punch and obtain glory for himself in this manner (Hanson, 2013, p. 9). Van Dorn was exhausted and not in a position, mentally or physically, to act in the most desirable or ideal rational manner. His advisors were more rational and his opponent most rational.
Van Dorn committed several violations of the principles of Mission Command, but his first and biggest was his failure to create a sense of shared understanding, as this is the lynchpin that allows so many of the other principles to fall into place (ADRP 6-0, 2012). Since rational choice is predicated upon understanding, Van Dorn handcuffed himself by failing as a leader to establish understanding. Creating a shared understanding depends upon collaboration. Collaboration depends upon communication. Communication depends upon a two-way flow of information, with consideration and respect for those communicating (ADRP 6-0, 2012). It depends upon trust and respectbut it also depends upon using ones own intelligence and skill and contributing to the decision-making process instead of relying solely upon others for information, as Van Dorn did when he neglected to do standard reconnaissancewhich would have presented him new and helpful information regarding Curtiss plans (Hanson, 2013). Van Dorn did not listen to McCulloch when the latter advised against attacking Curtis following a lengthy trek across Arkansas: McCulloch saw that rest for the men would be good. Van Dorn saw only the opportunity to seize the day and thereby his own glory (Hanson, 2013). There was no shared understanding of what was at stake or why, despite the supposed advantage in attacking immediately, an alternative plan could also succeed and allow the men to be fresh and ready for a fight. Van Dorn saw an opportunity for glory; McCulloch saw the risk of disaster (Hanson, 2013).
The risk of disaster was exactly what Van Dorn should have considered more prudently. However, half exhausted himself from the trek across Arkansas, Van Dorn was not in a prudent frame of mind. This led to his second major violation of the principles of Mission Command: he did not accept prudent riskhe just accepted risk. Had Van Dorn been prudent about waiting to attack and prudent about circling around to Curtiss rear, he very likely might have placed himself and his men in a better position to win. However, he failed to communicate effectively with McCulloch, whom he had essentially dismissed because McCulloch did not seem to grasp Van Dorns insistence that a glorious victory against the Union was within reach if only, they acted immediately (Hanson, 2013). Van Dorn should not have simply relied on the information given him by Price and McCulloch, as this was further imprudence on his part (Hanson, 2013). He was in command and should have contributed something to the data by ordering a quick reconnaissance mission to see if Curtiss position had changed at all or if the layout of the land was as reported. Doing so would have brought back new information about the roadblock that caused McCulloch to be distracted, which led to Price lacking the support he needed to counter the Unions defenses.
Yet if Van Dorn had done a better job of collaborating with McCulloch and coordinating a plan with a clear intenti.e., the need to overwhelm Curtis and unite their forceshe would have demonstrated better adherence to the principles of Mission Command and thereby brought out a victory. By taking rest, Van Dorn would have given himself time to establish a disciplined initiative among the men (Hanson, 2013).
The overall theme that runs through the case study of the failure of the Confederate Commander at Pea Ridges is the theme of poor understanding. Van Dorn was in no stateand neither were his mento carry out a flawless execution. ADRP 6-0 (2012) noted, effective commanders build teams within their own organizations and with unified action partners through interpersonal relationships (p. 2-2). Had Van Dorn been more concerned about his men, he would have rested them and allowed his own mind to recalibrate so that it would be fresh and ready for the days ahead.
In summation, Van Dorn simply did not bother to build effective relationships, and it set the stage for a total lack of collaboration, communication, initiative, and clarity of vision. Prudence governs understanding and acts as the light that allows knowledge to go to work effectively. Van Dorn clouded his own understanding and the understanding of his men by not giving them rest, not surveying the scene through his own reconnaissance, and not communicating his overall strategy and the important details of the strategy that would have allowed his men to be more flexible in their execution of the mission.
Rational Choice and Principles of Mission Command Apply to International Banking
Risk is an accepted part of international banking and finance, however, as with the principle of mission command, risk must be accepted prudently. The events that led to the 2007-2008 global financial crisis were precipitated by imprudent risk taking by several large investors and institutions (Harris, 2013). Rational choices were made by some but not made by others (Greenfield, 2010). Goldman Sachs identified the risky and highly over-leveraged nature of the situation and acted accordingly by purchasing credit default swaps [an insurance hedge against the subprime market bubble bursting] (McLean & Nocera, 2011). The bank was thus protected financiallybut it was also protected politically thanks to Henry Paulson being U.S. Treasury Secretary at the time (McLean & Nocera, 2011). Paulson was a former Goldman CEO and now was the one man with the most power to protect the sector should those, like AIG, who would have to make good on the credit default swaps they sold to firms like Goldman, suddenly find themselves unable to come up with the money in the event of the bottom falling out of the subprime market. Paulson ended up signing off on the Troubled Asset Relief Program (TARP), which bailed out AIG, which in turn could pay off the insurance hedge purchased by Goldman (McLean & Nocera, 2011). Goldman was able to create a sense of shared understanding with Paulson and the U.S. Treasury regarding the need for TARP, and thus the bank did not suffer any negative consequences from the fallout of the mortgage bubble bursting, while those who had only purchased the troubled mortgage-backed securities, asset-backed commercial paper and collateralized debt obligations were in a much riskier position.
Firms like Lehman had not acted rationally by accepting only prudent risk: they had constricted their own risk management teams and thus were not even aware of the risk mounting at the time. In one sense one could argue that this validates Simons (1972) objection to rational choice theorybut it simply shows what happens to highly leveraged firms that fail to act rationally.Firms that act rationally (like Goldman) do quite well for themselves even in adverse environments. This is the point also made by Kanagaretnam et al. (2015), when banks act with prudence and accept only prudent risk, they are far less likely to suffer negative consequences in times of economic or financial turmoil. Goldmans example showed the tenacious foresight of uniting political supports with financial ones so that if ones insurance provider (in this case, AIG) suddenly found itself strapped by a liquidity crisis, the federal government could intervene with a bailout of $700 billion and make sure that the bank received its pay (McLean & Nocera, 2011). Goldman understood the possibility of a major default and the effects it would have: by having Paulson in position to outflank the rising tide of defaults via TARP, Goldman effectively engineered its own coup de grace at a time when other firms were losing everything.
The lesson learned from this example is that rational choice theory can easily and simply be applied to the international banking community with predictive and explanative power. Simon (1972), stated that rational choice theory applies because some people sometimes act irrationally or fail to consider or seek out all the data needed to make a wise decision. People and institutions are expected to act rationally by stakeholders. Van Dorn had as much of a duty to act rationally as a commander as Goldmans executives did in the years leading up to the 2007-2008 crisis. Van Dorn failed in his duty, just as Lehman and Bear Stearns failed in theirs. Goldman did not. Goldman not only survived the crisis but managed to make a large profit (McLean & Nocera, 2011).
The theoretical framework of rational choice theory is applicable to the present economic situation in the context of this study as well. Especially when considered in the light of the philosophy of mission command, one sees an entirely new set of principles or duties the banking industry should be mindful of to avoid repeating the same mistakes of the past. The only question is whether those mistakes can be avoided or if the current situation is beyond the control of anyone and the only thing the banking community can do is engage in reactionary decision making. Dimon (2017) and Lupton (2018) acknowledged that by weighing the costs and benefits of increasing debt and leverage among governments and corporations, the conditions for banking success at this point are rather perilous. When the added element of geopolitical risk is thrown into the mix, the situation can be judged to be even markedly worse. Do these considerations warrant a reaction of concern among members of the international banking community? Should investors and stakeholders take heed? Or is all well and does Van Dorn have a handle on the situation? When investors purchase equities (risk assets) they do so because they judge the return on their investment will be greater than the cost (consisting of both the price of the asset and the associated downside risk). But what happens when one inaccurately assesses the factswhen one does not accurately understand the benefits or does not properly identify the risks involved in the transaction? By examining the international banking industry through this lens and asking these questions, the problem can be more easily seen, and the research questions that this study asks to come to the fore organically like the voice of McCulloch pleading for rest and prudent action prior to the onset of a major battle.
International banks cannot be confident unless they understand the risks of leveraging and the need to have enough liquidity to meet obligations should a situation like 2007-2008 rear its head once more. Simon (1972) would not be remiss to point out today, however, that knowing the costs and benefits of any action has become increasingly difficult. Indeed, the out-going governor of the Bank of England, Mark Carney has acknowledged how difficult global issuesgeopolitical conditionshave made things for the banking industry (Giles, 2017). At Jackson Hole in 2019, Carney went so far as to suggest that the days of USD as reserve currency, or rather as currency hegemon, were numbered and the end now in sight. Such a change in status of a currency and a nation that have been at the apex of financial markets and economic development since World War II, would surely create havoc (as well as opportunity) for certain banks, stakeholders and investors. The key would be to consider the most rational course of action by creating shared understanding, accepting prudent risk, and planning accordingly. In other words, awareness of what is going on in the global economy has made it challenging for banking leaders in the community to know how to adjust their policies and proceduresbut it does not mean that appropriate action cannot be applied. What it does suggest is that banks need to engage in proper assessment, proper cultivation of a spirit of mission, effective communication, adequate risk management, and prudent risk-taking. They need to be mindful of the faults of Van Dorn, AIG and Lehman and think more like Goldman. While they may not be looking at collateralized debt obligations and credit default swaps or plotting a rear attack against the enemy, they will have their own unique sets of circumstances to prepare against. As Van Lerven (2016) pointed out in reference to QE and which stands to be reiterated here: after more than a year since its initial inception, a review of the programmes impact reveals that policy makers should think twice before further expanding the programmeand could benefit from considering more direct ways of increasing spending in the real economy (p. 237). In short, risk is risingnow the question is: who is ready for it?
2007-2008 Global Financial Crisis and Today
To begin to assess the literature on what it means for banks to be ready to accept prudent risk, and to act rationally in the face of economic and financial crises, one must begin withthe most recent crisis to shake the global markets and see what can be learned from it. For that reason, the subprime crisis, its origins as well as fallout presents several lessons. Lewis (2010) provided a strong analysis of what took place in the background of the crisis, and McLean and Nocera (2011) provided even more substantial details in their analysis of the lead-up to the crisis. However, both focus primarily on the domestic character of the crisis and the reality is that it was global. Thus, starting with their takes on the subprime crisis of 2007-2008 can provide some groundwork, but there is also a need to expand to international studies to see what other researchers have said about banking, human capital, rational choice, and so on. Crucial to the success of this literature review is establishing grounds for the relationship between risks such as geopolitical risk, economic/financial risk.
Subprime
Numerous factors precipitated the subprime crisis. Some blame AIG for insuring what were essentially poorly bundled and shoddily rated mortgages (Lewis, 2010). Companies such as Fannie Mae, Countrywide Financial, the Federal Reserve, Moodys, Merrill Lynch, Bear Stearns, Goldman Sachsand others were all involved, indicating that the financial crisis was not an isolated incident that sprang from one faulty policy or from one group of bad actors (Vo, 2015). Rather, it was a train wreck set in motion decades prior to the crash. As McLean and Nocera (2011) show, the crisis originated in the 1990s with the Clinton Administrations desire to get more people into affordable housing, which accelerated the trend of risky lending that ultimately led to securitization of subprime loans. Yet, one could go even further back, as Lewis (2010) did by implicating Lewis Ranieri of Salomon Brothersthe banking executive who created the concept of the mortgage-backed security, which allowed the original lender to divest himself of the risk by selling bundled loans to investors seeking yield (Ashton, 2009). Brown (2019) showed that it is the same thirst among yield-starved investors that appears to be driving todays equities bubble, which is related to the boom-bust cycle of corporate leveraginga cycle indicating that the bust phase is approaching.
One of the big issues with the subprime crisis, however, was the institutional negligence, deception, and self-deception among investors. Michael Burry was one of a handful investors who realized early on that the mortgage-backed securities were compiled of shoddy subprime loans at a high risk of defaulting (Lewis, 2010). He bet against the market by stockpiling credit default swaps (insurance against the securities defaultingan event that he correctly foresaw likely to occur). The ratings agencieswere complicit in rating these securities as AAA-ratedi.e., as having a very low risk of defaultwhen the reality, as Burry concluded, was just the opposite due to the composition of the securities and the number of subprime loans compiled in them (Lewis, 2010). Burry saw what Lehman with its flawed corporate governance failed to see (Harris, 2013).
Lehman
Lehman had the same risk profile as Goldman at the time of the subprime crisis (Harris, 2013). The problem was that Lehmans corporate governance was flawed: the firm had acquired not one but five mortgage lenders leading up to its collapse. One of themBNCwas wholly involved in subprime lending. AnotherAurorahad been lending to borrowers who provided zero documentation of their income or net worth (Greenfield, 2010). The move appeared to be profitable during the housing boom. When the boom turned into a bust, Lehman held $150 billion worth of risky loans on its books just from 2006. The firm was not insured against them and was actively engaged in purchasing more, blissfully unaware of the mounting risk (Nilakantan, 2010). The risky loans themselves were not the worst part as Vo (2015) showed that by 2007 CDS had become the dominant credit marketalready 20 times larger than its size in 2000 and was three times exceeding the U.S. GDP, with a notional outstanding value of $57 trillion (p. 207). When defaults began increasing in number in 2007, Lehmans CFO revealed a complete lack of concern, telling investors that the rising risk was not going to have a significant impact on the institution. Lehmans corporate governance had failed to create an environment in which risk could be properly assessed (Harris, 2013). Harris (2013) noted a great deal of emphasis had been put on risk, but the actual cause of the crisis was poor corporate governance as risk management is but one function within the broader role of effective corporate governance. Corporate governance encompasses all the significant functions of the organization as it interacts with its stakeholders (Harris, 2013, p. 88). Even after Lehman was forced to shut down both BNC and Aurora, the company continued to buy mortgage-backed securities at one point having so many of these toxic securities that their value was four times the worth of investors equity in the company itself (Chang et al., 2011). The ratings agencieslike Moodysonly served to prop up the illusion, however, that these securities were worth having. From the perspective of rational choice theory with a view to the mission command example provided earlier, there was no shared understanding creating among the various entities: instead, there was shared mass-deception.
The Groundwork. Just as today there has been a rush for yield with the Federal Funds rate dropping to near zero and hovering there for years in the wake of the global financial crisis.In the lead-up to the housing bubble burst of 2007 interest rates had been suppressed as well. The tech bubble at the end of the 20th century had led to interest rates falling under 2% between 2002 and 2005. The rates, then as now, prompted more borrowing and over-leveraging [some homeowners began owning 2, 3 or 4 homes with no realistic salary to justify such extravagance] (Lewis, 2010). Today, low rates have led to corporate borrowing at a hyper rate (Lupton, 2018), thus indicating to sme that a potential risk crisis is looming (Dimon, 2018). The groundwork for the 2007-2008 crisis was similarly lain: low rates, extravagant borrowing, institutions looking the other way or showing negligent corporate governance. It created an environment in which speculators rushed into home buying to obtain a quick return. The Clinton Administration had pushed for easier lending standards, so that at the height of the bubble virtually anyone could receive a loan for a home well out of their price range (McLean & Nocera, 2011). In other words, demand for these homes was artificial but it was promoted because the financial transactions that followedparticularly the sale of mortgage-backed securities, collateralized debt obligations, credit default swaps and synthetics (Lewis, 2010). This was Ranieris gift child to the financial world. Lenders like Countrywide Financial were eager to get into the market and that eagerness reflected a larger culture throughout the banking and shadow banking industriesa culture of imprudent risk acceptance. The international demand for fixed yield spurred the culture on (McLean & Nocera, 2011). This was not exactly the kind of fixed yield that made much rational sense, as Burry and others uncovered (Lewis, 2010). With 20% of all mortgages having a high-risk character it was only a matter of time before the securities sold came back to destroy funds. The credit default swaps would have to be paid out and that meant Paulson would have to deliver at the Treasury. Comment by Author: Indeed! Appears to be APA style 7th edition nice work Sedric.
Goldman Sachs
Goldman is another example of a firm that sold collateralized debt obligations to help precipitate the crisisbut at the same time, it began buying credit default swaps in order to protect itself from the shoddy investments it was selling to clients (McDonald & Paulson, 2015). McDonald and Paulson (2015) pointed out that Goldman Sachs had 44 transactions with AIG, with a total notional value of $17.09 billion (p. 98). Goldman ended up being charged by the SEC with Fraud in Connection with the Structuring and Marketing of a Synthetic CDO (SEC, 2010) for misleading and omitting material facts about its financial products. Goldman paid $550 million to settle the case with the SEC but admitted no wrongdoing. Ironically, the charges had but a minimal impact on the firms share price. Goldmans stock was trading at $180 when charges were filed. It fell to just below $90 by the end of the following year in 2011. Today, the stock is trading over $200. Goldman made nearly $5 billion from its short on AIG alone during th
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1 Not confident at all2 A little worried3 No opinion4 Somewhat confident5 Very confidentQ2. You are geopolitically aware of what goes on in the world and that awareness impacts how you think; meaning at any given time you can describe relations between various states, how US foreign policy or sanctions impacts both the global economy and the local economies of states, and the extent to which tensions are rising or falling between various nations; and doing so impacts your views.
1 Not geopolitically aware at all2 Unsure, i.e., hear some things but don’t know what it means3 Neither aware nor unaware, i.e., can process information and talk about it if the subject comes up but do not think about it much4 Somewhat aware; I do make decisions every once in a while based on what I understand5 Very aware; all of my decisions are based on this awarenessQ3. You are aware of rising debt levels and central bank monetary policy and the role both play in the global economy.
1 Not aware at all2 Unsure, i.e., hear some things but don’t know what it means3 Neither aware nor unaware, i.e., can process information put out by the Federal Reserve or by bank analysts/CEOs and talk about it if the subject comes up but do not think about it much4 Somewhat aware; I do make decisions every once in a while based on what I understand on these relationships5 Very aware; all of my decisions are based on this awareness
In the health care practice, there are those aspects of culture that are sensitive and that the health care practitioners need to consider when making decisions related to the practice. Some of these cultural aspects are those that contradict with the principles of modern medicine. Therefore, by the practitioner having a good understanding of these sensitive aspects of culture, he/she will be able to make the appropriate decision for the
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