Money and anking
ankers hold more liquid assets than most business firms. Why?

As is the case for all businesses, one obvious adverse liquidity outcome for banks is the inability to pay liabilities as they fall due. And, liquidity risk is even broader, including the realization of a market loss as a result of the premature or forced sale of assets to raise liquidity and loss of business opportunity or franchise due to a lack of liquidity.

ut, banks face even more difficult liquidity challenges than do most businesses. anks protect customers against liquidity problems by taking in money which can be withdrawn on demand or at short notice, and by providing committed loan facilities to corporate customers and overdraft facilities to personal sector customers. y insuring others against liquidity risk, banks become exposed to it themselves because of the mismatch between the term structure of the assets and liabilities on the balance…...

mla

Bibliography

Abell, Alicia. "Credit Unions Offer Employees Financial Options at No Charge to Employers." The Chronicle of Philanthropy 23 Oct. 2003. Available:   (Accessed 29 Apr. 2005).http://philanthropy.com/jobs/2003/10/30/20031030-213134.htm 

Chaplin, Graeme, Ernblow, Alison and Michael, Ian. "Banking System Liquidity: Developments and Issues." Financial Industry and Regulation Division, Bank of England. Available:   (Accessed 29 Apr. 2005).http://www.bankofengland.co.uk/fsr/fsr09art2.pdf 

"Efficiency of U.S. Banking Firms -- An Overview." FRBSF Economic Letter, 28 Feb. 1997. Available:   (Accessed 29 Apr. 2005).http://www.frbsf.org/econrsrch/wklyltr/el97-06.html 

Sharma, Paul. "Liquidity Risk." 8 Oct. 2004. Available:   (Accessed 29 Apr. 2005).http://www.fsa.gov.uk/Pages/Library/Communication/Speeches/2004/SP201.shtml 

Money and Banking
Capital controls in developing countries

According to the Investopedia (2013), capital control is seen as any measure that is taken to control the flow of foreign capital into or even out of the domestic economy an these measures are always taken by the central banks or the governments. These controls normally come in the form of tariffs, volume restrictions, taxes, outright legislations and other market-based forces and these controls do affect several classes of assets like the equities, foreign exchange trades and even bonds. Apparently tight capital controls are common among the developing nations since their capital reserves are comparatively lower and hence more volatile.

There have been a lot of discussion on the positives or negatives of capital controls especially among the developing economies. There are a good number of economists who feel that the controls inherently limit the progress of the economies and their efficiency yet other take…...

mla

References

Investopedia (2013). Capital control. Retrieved December 9, 2013 from  http://www.investopedia.com/terms/c/capital_conrol.asp 

Marcos Chamol et, al (2010). Can Capital Controls Help Developing Countries Cope with Global Financial Instability? Retrieved December 9, 2013 from  http://carnegieendowment.org/2010/05/04/can-capital-controls-help-developing-countries-cope-with-global-financial-instability/21mv

Money and Banking
Monetary Policy

If the central bank has an interest rate target, why would an increase in the demand for bank reserves lead to a rise in the money supply?

An increase in the demand for reserves will raise the central bank's fund target. So as to preclude such a possibility, the central bank will purchase bonds, thus increasing the amount of non-borrowed reserves. As a result, this shifts the supply curve for reserves to the right, thus maintaining the central bank's funds rate from increasing. The open market purchase will at that time instigate a rise in the monetary base and the money supply.

MS1 MS2

Interest ate (4%) L2 (Y1)

L1 (Y1)

M/P

As indicated in the diagram, the assumption is that the central bank targets an interest rate of 4% per annum. Considering this, the money demand increases are offset by a change in the money supply. In the diagram above, the initial…...

mla

References

Bogetic, Z., 2002. Costs and Benefits of Unilateral Monetary Unions. Montenegrin Economic Papers, (1).

Dellas, H. and Tavlas, G.S., 2009. An optimum-currency-area odyssey. Journal of International Money and Finance, 28(7), pp.1117-1137.

Ireland, Peter N. (n. d). "Money, Banking, and Financial Markets." Lecture Notes, Department of Economics, Boston College, irelandp@ bp. edu. Retrieved 30 June 2016 from: http://irelandp.com/ec261/chapter17a.pdf

Minford, P., 2002. The costs and benefits of Economic and Monetary Union to the UK economy -- the 'fifth (overview) test'. Cardiff Business School.

monetary multiplier?
The economics textbook definition of the "money multiplier" assumes lending banks automatically expand their credit money supply to a multiple of their aggregate, or saved reserves of money. The Federal Reserve requires all banks, after the crash of 1920, to keep a certain amount of money in reserve in relation to the money lent by the bank. In the U.S. The required reserve ratio usually hovers around ten percent, implying that the money supply should be about ten times larger than the aggregate reserves of banks. The significance of the multiplier is that the more banks are required to keep in reserve; theoretically the less they will be able to lend. Thus, in its basic form, that multiple is equal to the reciprocal of the required reserve ratio. The theory behind the requirement also assumes the FED issues loans in compliance with the multiplier, although this is often…...

mla

Works Cited

The Fed Today." (2003) EEP: Economic Education Publications Website. Retrieved on August 1, 2004 at  http://www.dallasfed.org/educate/pubs/fedtoday.html 

Discount Rate." (2004) Investopedia. Retrieved on August 1, 2004 at  http://www.investopedia.com/terms/d/discountrate.asp 

Federal Reserve System: General Information." (2004) FED Official Website. Retrieved on August 1, 2004 at  http://www.federalreserve.gov/generalinfo/faq/faqfrs.htm#4 

Hummel, WF. (2004) "Money Multiplier." Money: How it Works. http://wfhummel.cnchost.com/multipliermyth.html

12-8) if Tulip is paid $60,000 for her equity, that is a no bonus scenario. The entry would be:

Tulip, capital $60,000

Cash $60,000

If Tulip is paid $80,000 that is a bonus to the retiring partner. The remaining partners would pay out Tulip based on their new income sharing ratios, which would be 5:3, reflecting the degree of increased share each has of the partnership with the withdrawal of Tulip. The payout is $20,000.

Tulip, capital $60,000

Holland, capital $12,500

Flowers, capital $7,500

Cash $80,000

If Tulip is paid $30,000 this reflects a bonus to the remaining partners. Since Tulip's value was $60,000 the remaining $30,000 would be allocated to Holland and Flowers based on the new ratios.

Tulip, capital $60,000

Holland, capital $18,750

Flowers, capital $11,250

Cash $30,000

12-12) Return on equity is the net income for each partner divided by the average equity. Average equity is calculated based on the starting and ending equity levels…...

Money
The existence of money makes exchange easier, compared with barter systems, because money provides a stable store of value. If exchange is conducted with physical goods only – as in a barter system – then there are many points of friction that will inhibit exchange. First, goods have different physical characteristics that can put limitations on exchange. Some goods are perishable, others too large to transport, still others difficult to transport. Two goods may have equivalent value, but these physical limitations create barriers to exchange. How does one exchange a house for a year's supply of fish, for example? They might have roughly the same value, but you can't take all the fish at once, you can't trust that the fish will be delivered later, and moreover if the person wishes to take back the house because the deal fell through, but the other person ate all the fish, there…...

Ascent of Money
As we will see in this short essay, The Bank of Amsterdam, the Bank of England and the Federal eserve are linked in the history of money and banking. We will investigate the roles that each of these institutions played in providing a critical institutional foundation for the expansion of the world trading system. We will explore the Bank of England's role in providing a guiding influence in the functioning of the gold standard. The creation of the Federal eserve was linked to the actions of the Bank of England which was what it was modeled upon.

While not a true central bank, the bank of Amsterdam was a precursor and was founded to help the Dutch finance their wars against Spain. Paper money was issued based upon the public credit (Ferguson, 2008, 47). This type of institution spread to England where the Bank of England was founded in…...

mla

References

Ferguson, N. (2008). The ascent of money: A financial history of the world . New York, NY: Penguin

Press.

Gold standard. (2010, February 1). Retrieved from http:/ / the.net/encyclopedia/article/officer.gold.standard.

North, G.C. (2011, August 15). Gold standard or nixon standard. Retrieved from  http://lewrockwell.com/north/north1020.html .

He also recommends investing in a oth IA, rather than a traditional 401K, because the oth accounts are safer and usually pay back higher dividends. He says, "Generally 401k and 403b accounts underperform IA accounts because they offer less options and flexibility for investments and impose higher fees" (Green 101). He talks about how the stock market is not such a good investment anymore since it fell in 2008, and he offers ways to make the stock market more effective. These are all good ways to get finances back on track once you have saved some money, and they make you feel more effective in managing your own financial future.

A big portion of the last part of the book is devoted to the stock market and how to make it work for you. This is probably the most confusing part of the book. It is written as simply as possible,…...

mla

References

Green, Charles. The Money Game: Play to Win, Put the Odds in Your Favor. 2009.

economic crisis in Europe and the increasing costs for European countries to borrow money and bail out other Euro countries in financial distress. The EU nations that use the Euro have experienced a crisis among certain countries with high debt requiring bailouts for Greece and Ireland and the likelihood that Portugal and Spain may also need a bailout. Postponing the restructuring of high interest debts has led to further crisis rather than resolving any of the problems faced by insolvent countries. Huge transfer payments from the more powerful Euro countries, like Germany, to the failed economies of Greece and Ireland have made investors nervous and led to less investment at a crucial time. The author suggests that the debts of troubled countries need to be restructured now in order to create a sustainable payment to increase confidence and secure future payments.
Creditors will also have to shoulder some of the…...

mla

References

Bamberger, K.. (2010). Technologies of Compliance: Risk and Regulation in a Digital Age. Texas Law Review, 88(4), 669-739. Retrieved January 21, 2011, from ABI/INFORM Global. (Document ID: 1995143041).  http://www.egloballibrary.com/egl/html/institutes/1086/homepage/library.jsp 

Corder, J. (2009). The Federal Reserve System and the Credit Crisis. Public Administration Review, 69(4), 623-631. doi:10.1111/j.1540-6210.2009.02011.x http://ehis.ebscohost.com.csuproxy.egloballibrary.com/ehost/detail?hid=6&sid=feb1c9d6-ff89-462b-9741-b5b3cfdd54aa%40sessionmgr12&vid=8&bdata=JnNpdGU9ZWhvc3QtbGl2ZQ%3d%3d#db=buh&AN=42960193

Europe finance: Time for Plan B. (2011, January). EIU ViewsWire. Retrieved January 19, 2011, from ABI/INFORM Global. (Document ID: 2241366821).

While time did not have an incredibly large impact on the decisions made by respondents according to the instrument there was a statically significant change that calls for further research with larger populations to be undertaken. It is also possible that the specific creation and presentation of the scenarios included in the instrument had some level of influence on the results, as there are other considerations that are at play in each of the scenarios -- most importantly, the additional time required to change the course of action, which is distinct and wholly separate from the sunk-costs associated with the original course of action -- and this combined with the other design issues noted above and the lack of strong and clear determinations of mean differences means that the results of this research are ultimately inconclusive.
Conclusion

While the results of this research might not be entirely conclusive, they do help…...

mla

References

Soman, D. (2001). The Mental Accounting of Sunk Time Costs: Why Time is not Like

Money. Journal of Behavioral Decision Making 14(3): 169-85.

They could not foresee the housing market falling as it did, and the number of foreclosures it would create, and so, they aggressively continued to pursue the market when they should have been cutting back. The top executives left the company, but they were not fired, in fact, Killinger retired, comfortably it would seem. The customers of the bank, especially those with mortgages, are the ones who really will suffer in the long-term. The bank will rebound, but those with foreclosed homes never got the chance for a bailout, and so, they lost everything, while the executives and leaders of the bank are not charged with any wrongdoing. Luckily, the American taxpayers did not suffer, either, because JP Morgan Chase financed the takeover and the continuing operations of the bank.
In conclusion, WaMu's failure came about due to a number of reasons. They invested far too heavily in the sub-prime…...

mla

References

Adler, Joe, and Hopkins, Cheyenne. "FDIC's 'Big One': Long Prelude Gave Way to a Sudden End." American Banker, 29 Sept. 2008, Vol. 173, Issue 188.

Cocheo, Steve. "Kerry Killinger Builds His Dream Bank." ABA Banking Journal 93.8 (2001): 22.

Editors. "Washington Mutual, Inc." New York Times. 27 Sept. 2008. Business, 1.

Ivy, Bob and Shen, Linda. "Washington Mutual Hobbled by Increasing Defaults on Option ARMs." Bloomberg.com. 15 Sept. 2008. 11 Dec. 2008.  http://www.bloomberg.com/apps/news?pid=20601087&sid=aNSwdt57nTBI&refer=home

Usury
The definition of usury has evolved over time. The basic premise is that a lender charges a rate of interest that is too high. Today, the standard for usury is defined in law, but initially the practice had no formal definition. Usury was traditionally banned in Christian society, has been criticized in Indian texts, and remains banned in Islamic society. Islamic banking, for example, requires that the lender either earn money from fees, or more commonly the lender exchanges the financing for an equity share, so profit-sharing, as a means of earning money without charging interest (IIBI, 2015)

During the time of King Henry VIII, usury was defined as charging interest. The idea of paying interest was new at the time, as a means of compensating the lender for the risk associated with lending. Interest, however, was not a common concept at least in England before this time. As a result,…...

mla

References

IIBI (2015). Islamic banking. Institute of Islamic Banking and Insurance. Retrieved December 2, 2015 from http://www.islamic-banking.com/prohibition_of_interest.aspx

Investopedia (2015). Definition of usury. Investopedia. Retrieved December 2, 2015 from  http://www.investopedia.com/terms/u/usury.asp 

Perry, M. & Schweitzer, F. (2002) Antisemitism: Myth and hate from antiquity to the present. Palgrave MacMillan: New York.

social cultural effects money. Use concrete examples readings; addition
The social and cultural effects of money are quite considerable. However, they must be viewed within the proper sociological and, indeed, anthropological context for their effects to truly be appreciated. Money, regardless of the denomination or type of currency, is a capital means of procuring essential needs. Its value is strictly related to its ability to procure essential goods which are those pertaining to the basic elements that humans need to exist such as food, clothing and shelter. Therefore, the social and cultural effects of money are more accurately described as those relating to the things that money can afford or provide. Viewed from this perspective, there are several discernible ramifications that money engenders within contemporary and previous societies, all of which are related to the provisioning of essential elements of human existence.

Elucidated within the point-of-view of the preceding thesis, money…...

shadow banking system, its role in the subprime mortgage crisis, and failures of regulation within the shadow banking system. The term "shadow banking system" was coined by PIMCO's Paul McCulley in 2007 (Spanos, 2012) and refers to a banking system that includes financial intermediaries that are involved in creating credit across the global financial system, whose functions are not subject to regulatory oversight (Investopedia, 2012). The question has been debated as to whether shadow banking meets the definition of true banking. Given that the two systems perform similar functions, including credit intermediation and maturity transformation, the two should be considered parallel systems (Noeth and Sengupta, 2011).
The term shadow banking is used to describe any provision of credit taking place outside of the traditional deposit-funded lending system. This definition includes institutions that range from pawnbrokers and consumer finance companies to securities dealers as well as firms that issue corporate bonds.…...

mla

Reference List

Armstrong, R., 2010. Q+A -- Regulating the shadow banking system. Fox Business. [online] Available at: [Accessed 20 April 2012].

Beckworth, D., 2010. "Deposit insurance" for the shadow banking system. [online] Available at: [Accessed 20 April 2012].

Drum, K., 2012. The shadow banking system speaks: It's not time for austerity yet. MotherJones. [online] Available at: [Accessed 20 April 2012].

Hsu, J. And Moroz, M., 2009. Shadow banks and the financial crisis of 2007-2008. Research Affiliates LLC. [online] Available at: [Accessed 20 April 2012].

Opportunities to Improve elationship Banking at Al ajhi Bank
In an increasingly globalized and competitive marketplace, many banking professionals today are faced with the need to develop informed and timely responses to changes in consumer demand, as well as fluctuations in the global economy that can have a positive or negative effect on investments. In affluent nations, this need has become especially pronounced as billion-dollar deals are routinely involved, and bankers working relationship banking operations stand to assist banks in attracting and retaining wealthy private and highly fluid commercial enterprises as long-term clientele. The enormous amounts of money that are involved make it important to formulate such responses in ways that add value to the banking operation including providing a competitive advantage. In some banks, relationship banking at this level is termed "privilege banking" or "prime account management," but the common feature of these business units is targeting high net…...

mla

References

About Us. (2012). Al Rajhi Bank. Retrieved from http://www.alrajhibank.com.my/corporate_

about_al_rajhi.shtml.

Constantinides, G.M., Harris, M. & Stulz, R.M. (2003). Handbook of the economics of finance.

Boston: Elsevier/North-Holland.