Aristotle Essay Example | Topics and Well Written Essays - 500 words

Aristotle - Essay Example Aristotle argues that genuine understanding of a thing requires a grasp of why that thing is necessarily as it is. Such understanding is best facilitated by or represented in a demonstrative argument. We must proceed deductively from premises more absolutely intelligible than the conclusion to the conclusion by way of a causally explanatory middle term. The premises of demonstrations are themselves indemonstrable and serve as starting points or first principles (archai) within the given domain of inquiry. According to Aristotle, we arrive at these principles by direct derivation from experience, by what is sometimes called "intuitive induction" (epagoge), the results of which are grasped by a special intellectual capacity, nous. Let us follow Aristotle and say that every dialectical argument is either a syllogism or an epagoge (Topics I 12). By 'a dialectical argument' let us mean, as Aristotle does, any argument put forward in conversation, proceeding on premisses admitted by the other party, and not requiring any special knowledge. It follows that every Socratic elenchus is a dialectical argument.

Contract and Chicago Medical School Essay Example for Free

Contract and Chicago Medical School Essay Facts: In December 1973 Robert Steinberg, the plaintiff, applied for admissions to the Chicago Medical School. He paid an application fee of $15, but his application was rejected. After being rejected he filed against the school, claiming that they did not evaluate his application according to the academic entrance criteria printed in the school’s bulletin. Steinberg argues that the school based its decision primarily on nonacademic consideration such as family connections between the applicant and his family to donate large sums of money to the school. Steinberg assets that by evaluating his application to these unpublished criteria, the school breached the contract it had created when it accepted his application fee. The trail court granted the defendant’s motion to dismiss, and Steinberg appealed. Issue: What is a contract? Rules: Mutual Assent- the parties to a contract must by show of words or condut that they have agreed to enter a contract. The usual method of mutual assent is by offering and acceptance. Consideration- each party to a contract must intentionally exchange a legal benefit or incur a legal deteriment as an inducement to the other party to make a renturn change. THIS FOR THAT basically. Legality of subject matter- the purpose of a contract must be not criminal, tortuous, or otherwise against public policy Capacity- the parties to a contract must have mental understanding of what they are entering into. Application: The contract that Steinberg and Chicago Medical School entered into meets the four requirements for a contractual contract. Therefore it is binding and legally enforceable. Conclusion: The court agreed with Steinberg’s position and that both parties did indeed enter a enforceable contract and under this contract by accepting the application fee the school must evaluate give him valuable consideration and his application evaluation was to be based on the criteria stated in the school’s bulletin. Steinberg accepted the school’s promises in good faith and he was.

Impact of the Credit Crunch in the UK

Impact of the Credit Crunch in the UK Factors Influencing the Financial Institutions in the UK With Particular Reference to Credit Crunch A Comparative Study between Barclays and Northern Rock Bank I- Abstract Banks acts as intermediaries between surplus units depositing funds and investors or individuals seeking capital for investments. Thus, banks role is important in maintaining the flow of fund between these different parties. Banks like any other profit maximising firms are influenced by various factors that represent risks or opportunities. Therefore, banks business decisions are founded on aspects such as confidence in the market, the level of risks, the state of the economy, and their competitive strength. Regulation is essential for assuring compliance and integrity in the financial system, but rigid rules stifles the dynamicity of the banking industry and the financial sector as whole. Moreover, Central Bank role as a lender of last resort can rise the issue moral hazard by helping imprudent banks, however because banks are financial intermediaries, the impact of bank failure can have a detrimental effect on the financial system (systemic risk), and also on clients and customers, therefore bank supervision is vital due to their sensitive important role and their extensive impact. Furthermore, the development of events in the US financial market particularly the high default rate of subprime mortgage market led to a decrease in demand for tradable securities. This has affected confidence in the US and the global financial market, and consequently some financial institutions and banks such as northern rock in the UK faced difficulties in obtaining the necessary funds to maintain the business operation and remain solvent due to lack of short term liquidity. However, other banks faced similar difficulties but are using various methods to improve their balance sheets to overcome the current credit crisis. Moreover, governments and regulatory bodies are all taking the necessary measure to stimulate the market and tackle the core sources of the current credit crisis. II- Introduction Sustained economic development is often linked to efficient management of fund that is used to finance investments, which are projected to further create more wealth and opportunities for states, corporate and individual investors. Banks acts as intermediaries between surplus units depositing funds and investors seeking capital for investments. Thus, banks role is fundamental in maintaining the flow of fund between these different parties. Furthermore, the stability of financial and banking system is vital for the sustainability of economic growth and the preserve of investors confidence. Banks like any other profit maximising firms are influenced by various factors, these includes internal and external factors, which represent risks or advantages. Therefore, banks decisions are based on elements such as confidence in the market, the measurement and management of risks, the state of the economy, and their competitive power and market share. This study will look onto various factors influencing the financial institutions in the UK, with particular reference to Credit Crunch. This literature will comprise the banks management of risks, the role of authorities regulating and supervising the financial system, and explore the regulation of the banking industry and the financial system as a whole, in addition of the effect of regulation on banks performances. The analysis will include a comparative study between Barclays and Northern Rock Bank, taking into accounts the differences in their structure, size, as well as their reaction to changes in global financial markets. Furthermore, the Research will examine the fast moving global effect of the credit crunch; discuss the two banks business model, and explore their activities and behaviours. The study will also investigate the two banks high exposure to credit risks arising from risky investments, highlight the consequences of the heavy reliance on money market, and the use of securitisation for liquidity sources. IV- Methodology The research objective is to investigate the various factors that influence financial institutions in the UK, notably the banking industry. This research was based mainly on secondary research, the gathered data and information was sufficient for this research topic. However, sensitive data regarding the value of risk were not disclosed in both banks publication, such data is useful for the researcher to scrutinise banks estimation of risk and how realistic are the projections. Nevertheless, information about estimation of risks may be obtained directly from banks for further analysis of this specified area of banks management of risk. Research material relevant to the topic was collected from various academic sources; this is to explore issues and arguments regarding the regulation and supervision of the banking system. The two banks internet site was used to gather the background information along with the financial statements of the last six years, which were used in the research analysis to perform the comparison between Barclays and Northern Rock bank business strategies and financial performance. Publications from the Bank of England website were collected to study the central bank regulation and the management of the UK banking system, in addition to the historical data regarding interest, LOBOR, and inflation rate changes. Furthermore, articles from the Financial Services Authority (FSA) were gathered to study the role of the organisation and its contribution in supervising and stabilising the UK financial system. Recent publications from the Bank of International Settlement (BIS) were collected to study the role, the objectives and the effect of Basel directives on banks. Besides research the progress of current Basel II implementation along with the development of new requirements arising from the present credit crunch. Recent newspaper articles and various other media sources were gathered to collect the latest information regarding the development of the present credit crunch and its effect on banking industry, these includes sources such as BBC business, yahoo finance and the Financial Times website, and follow recent actions of regulators and banks management of the current crisis. Moreover, data from the two banks financial statements was collected to perform the Gap Analysis using Microsoft excel package to conduct a series of calculations. Other methods could have been used to assess bank risks such as value at risk (VaR) using regression analysis by utilising a computer package such as Microsoft Excel. The regression result will determine the degree of risk that the researched banks possess in their portfolio. However, the banks seldom disclose such sensitive information in published financial statements. This is to avoid adverse reaction by investors and credit rating agencies, which could therefore affect the banks stock prices, their reputation and confidence in the capital market. V- Literature review (Part I): The nature of banking The term bank can be applied to a wide range of financial institutions, from large banks to smallest mutually owned building society in the UK. The provision of deposit and loan distinguishes Banks from other financial institutions. Deposits products supply money on demand or following time notice. Deposits are liabilities for banks, thus must be well managed if banks want to make profit. Similarly, banks manage assets created through lending. Therefore, Banks main activity is being an intermediary between depositors and borrowers. Other non banks financial institutions, such as building societies and stockbrokers, also act as intermediaries; however it is the provision of loans and taking of deposits that distinguishes banks, though many banks provide various other financial services. 1) Management of risks in banking The fact is that bankers are in the business of managing risk. Pure and simple, that is the business of banking. (Walter Winston, former CEO of Citibank; the Economist, 10 April 1993). Banks, like all profit maximising firms, have to deal with macroeconomic risks, such as recession, inflation level, as well as other micro economic risks including political pressure, commercial breakdown of core customers or suppliers, natural disaster, in addition to the emergence of new competitive threats. From a finance theory viewpoint, Bank risk management is primarily composed of four main balance sheet risks, which includes liquidity risk, interest rate risk, credit risk, and capital risk (Hempel et al, 1989). Credit risk has been recognised as the principal risk in its effect on bank performance (Sinkey, 1992, p. 279) and bank failure (Spadaford, 1988). The primary reason why the correct management of credit risk is essential is because banks have restricted ability to absorb loan losses. Generally, the ability of a bank to absorb a loan loss is originated firstly from generated income of other profitable loans, and secondly by bank own capital. 2) Factors influencing financial institutions Banks and other profit maximising firms are influenced by various factors; financial institutions in particular are susceptible to a range of changes that may affect their projected growth. Some of these changes are internal changes, this occurs subsequent to restructuring program that a bank adopt following an expansion strategy such as in mergers and acquisitions or as a defensive strategy to remain competitive and maintain market share and fight competitive predators from acquiring the bank. Moreover, there are other external factors that can influence financial institutions, these includes a countys government monetary policy, the economic condition, the financial stability and the level of confidence in the market, the inflation rate, in addition to other risks such as credit and market risks. There are a range of risks that a bank may encounter, these includes the followings: a) Credit risk and counterparty risk: counterparty risk refers to the risks that after the creation of two parties contract, one party will renege the terms of the contract, while credit risk is the risk that a loan or an asset becomes lost due to default. b) Liquidity or funding risk: these are similar terms that refer to the risk of shortage of liquidity for maintaining operational commitments, that is the ability for the bank to cover its liabilities at due date. A shortage of sufficient liquid assets is often the trigger of financial distress, as it is increasingly difficult for the bank to obtain funds from the wholesale markets. Thus funding risk is the inability for the bank to maintain its daily operations. c) Market or price risk: this type of risk refers to the risk linked to over the counter instruments or traded stocks in a non liquid market, such as equities and bonds. Thus if a bank hold these items in its portfolio, then it is vulnerable to market or price risk, this is the risk that the price of these items is unstable, which is caused by systematic (movement of prices in all traded market instruments, for instance due to changes in economic policy) or specific market risks (the movement of a particular instrument is opposite to the rest of similar instruments, for example, this may be caused by unfavourable information about the issuer of that instrument). d) Interest rate risk: this is similar to price risk, because interest rate is price of money, it represent the opportunity cost of keeping money. This occurs because of interest rate mismatches between assets and liabilities, which differ in volume and maturity arising from the banks performing asset transformation. e) Capital or gearing risk: because banks are highly leveraged firms, they have to set aside some capital to cover the losses. The size of capital is proportional to the level of risk taken by the banks. Basel risk asset ratio principle requires banks to hold up to 8%. Besides, settlement or payments risk. This is when one party in the contract deliver assets or makes payment in advance, which creates exposure to potential loss. Furthermore, operational risk refers to risks from human capital, legal risks such as law suits, fraud, and physical capital. While sovereign and political risk refers to the risk that a government default on its debt obligation to a bank. Moreover, financial regulators has identified three main risks linked to banks, these includes market risks such as risks from exchange rates, interest rates, operational risk, commodity and equity prices. 3) The Asset-Liability Management (ALM) technique Because the fundamental and the primary activity of a bank is intermediation between surplus units that makes deposits and those that seek capital, which acquire fund from the bank, thus this payment system gives the bank the role of intermediation , where the intermediation is key activity, risk management is founded principally on a sound asset liability management (ALM). Furthermore, the ALM is a technique practiced by banks to effectively manage their risks, which was largely utilised by banks in the post war period up to the 1980s. The ALM method was the main tool used to manage banks books, it is essential that the bank maintain its assets and liabilities under control to minimise risks and remain solvent. Besides, banks are keeping their managers updated with newer techniques and skills to maintain their efficiency and competitiveness for the future, for instance, ALMA is an association that comprise around 40 financial institutions, which are international and local banking groups and building societies, mostly UK and Irish. However it is growing its membership and links around Europe. Its objective is to offer an informal and inclusive forum regarding the balance sheet management issues (Byrne, J. 2004). Due to the development of banking activities, innovative instrument became increasingly used by banks to manage their assets such as off balance sheet instruments, where banks moved from interest earning income products to non-interest income sources, thus this required that banks risk management should adopt newer techniques other then just the ALM to includes the risks originating from the off balance sheet instruments. Moreover, one of the new methods included in managing market and then credit risks is the Value at Risk (VaR), which involves giving an estimate of losses arising from the volatility of banks assets. 4) Credit Culture A recent research conducted by the Australian institute of bankers on the issue of Improving Asset Quality (Brice, 1992), which focused on the significance of credit culture. The great emphasis on credit culture was due to its influence on bank performance and in some occurrences bank failure ( Spadaford (1988) and Brice (1992)). Spadaford (1988) stated in his study of 162 bank failures in the United States that the analysis showed that 98% of bank failure occurred due to asset quality problems, among these problems are poor management of loan policy, inadequate systems to ensure compliance with internal rules and procedures, and the lack of supervision on senior and key management members in the organisation. McKinley (1991) has defined four main cultures that influence bank performance. predominantly the immediate performance-driven, which emphasis on earnings targets, followed by Market share/production-driven that focuses on being the biggest with greater production volume, along with Values-driven that balances between credit quality and generated income. In addition to the Unfocused (current priority-driven) bank, such bank lacks vision and appropriate strategy often set short term targets which consequently lead to unsuccessful ventures. VI- Literature review (Part II): Banks regulation The base of regulating financial institutions is founded on three broad frameworks. Primarily, the consumer protection argument, this is based on the notion that investors and depositors cannot be demanded to perform risk assessment of financial institutions they deal with, nor monitor standard of service or performance of these institutions. The consumer protection underlying principle is based on three types of regulation; firstly, compensation schemes created to repay all or part of losses caused by the insolvency of financial institutions; secondly, rules and regulations such as capital adequacy requirements designed to prevent insolvency; and lastly promote fairness in business or market practices by setting rules and standards. The latter regulation reveals market imperfections arising from principle agent problems, asymmetric information, and the issue of determining the true value of financial products or services, which are established well after the transaction or contract was formed (Dale, R and Wolfe, S. 1998). Furthermore, there are other concerns associated with consumer protection rationale. The provision of compensation to depositors and investors for losses sustained from the insolvency of financial institutions will further encourage these institutions to pursue risky investment decisions, thus there will be minimal or no incentive for prudence. This indicates that risky firms will be able to attract trade with identical terms and ease as prudent institutions, thus affecting financial market standards and discipline, and rising potential insolvency incidences. Therefore, the resulting losses must be covered by the deposit insurance scheme, investor protection fund, or in some cases by the tax payer. Thus, prudential controls on financial institutions are essential to minimise losses and to balance the regulatory incentives with the excessive risk-taking. The third aim of financial regulation is to promote integrity of markets, encompassing various issues such as market manipulation, fraud, transparency, and fairness; market integrity emphasis on organising the market as whole beyond just the relationship between financial firms and their consumers. Supervisors implementing the financial regulation consider systematic risk as the factor that causes great concerns. That is the risk that failure of one or more distressed financial institution could spread and cause a contagion effect, which could cause the collapse of other prudent institutions. It is their vulnerability to the contagion effect that single out financial institutions from other non financial firms. 1) Targets of regulation The major objectives of Financial regulation is to set guidelines for the activities of Banks, insurance companies, investment firms, exchanges, and fund management companies. The diverse principles for financial regulation mentioned above vary in their relation to these various institutions of the financial services sector. Banks are distinguished by what is referred to as short- term and unsecured value certain liabilities (deposits) and illiquid value-uncertain assets (loans). Banks conforms to deposits insurance and other type of consumer protection, partly because banks balance sheet consists of a variety of complex instruments and depositors are not capable to measure the riskiness of their deposits. However, depositor protection creates moral hazard problem. Furthermore, banks regulation focuses more on systemic risk. That is the possibility of a bank run that can spread to a number of banks and trigger a wider instability in the financial system. According to this notion, bank runs are the result of action by depositors retrieving their funds in response to amounting fear and uncertainty of the bank future arising from bank asset losses that could render it insolvent. Due to potential risk of losing all or some of their assets, depositors tend to make a run when initial signs indicate some troubles. Moreover, recent research found that the occurrence of a bank run can not be entirety explained by the decline of banks underlying assets (LaWare, J.1991.p34), (Diamond and Dybvig, 1983).The emphasis is on a banks maturity transformation notably the transfer of illiquid assets (bank loans) into liquid claims (bank deposits), taking into account that the banks loan portfolio substantially decline in value in an event of liquidation than on going concern. What triggers a rational bank run is that the uncertainty and the higher probability that the loan portfolio liquid value is less than the value of liquid deposits. This notion demonstrates how bank runs can possibly arise and affect even healthy banks. Thus distressed bank have to liberate its assets at liquidation value, therefore leading to possible insolvency. 2) Techniques of regulation While procedures of conduct of business regulation do not differ among various types of institutions, but in terms of prudential regulation there are fundamental differences that reveal the distinctive risk features of banks, insurance firms, and investment companies. Because bank failure has a greater effect on the whole market, and can create systemic crisis, governments and central banks have set bank regulation for creating extra protection in provision of extra fund by setting the lender of last resorts facilities, and deposit protection, however, these facilities creates moral hazard. Moreover, the deposit protection fund may exceeds the available protection from deposits insurance schemes, demonstrating policymakers greater emphasis for protecting the banking institutions rather then just depositors, as well showing the regulatory objectives of sustaining the banking system, while preventive regulation focuses more on tackling excessive risk taking by setting capital adequacy requirements for assets. Institutional regulation varies between states; in the UK for instance there was a single mega regulator, all regulation is institutional, each group/ institution have a diversified activity which all work under a single agency that overlook the supervision. Alternatively, in a system of multiple regulatory agencies specialised by duty, a fixed institutional regulation is unattainable due to the fact that these agencies are divers in functions, which calls for the appointment of a lead regulator for diversified groups (Taylor, M. 1995). 3) Regulation of the financial system By tradition banks are providers of loans among other services to firms and individual investors, temporary banks falls in deficits when their expenditure exceeds receipts; however banks generally adjust their liquidity position by using capital or wholesale market. Problems occur when banks capital is misused in funding high risk investments; this is often the consequences of bad governance by senior management in controlling the banks assets or it is the outcome of a contagion effect resulting from systemic risk. Moreover, the central bank controls and monitor commercial banks activities and set rules to regulate the banking system. This is to create stability and to promote confidence in financial market, which are vital elements in maintaining steady economic growth. 4) Bank failure Regulation of banks must be explored in context of bank failure. As any substantial problem produces the need for the introduction of changes in the regulatory framework, because the regulators attempt to correct any loophole in the system. Major bank failures in the history of banking occurred in the US in the year 1929. At that period there were 25,000 operating banks, however by 1934 the number had reduced to 14,000. These incidences consequently led to the implementation of more restrictive bank rules, such as single state operations, which until recently remained the feature of the US banking system. The subsequent major bank failure was the fringe banking crisis in the UK in the year 1973. 5) Reasons for regulating banks The principle reason is the systemic risk, because the financial system is susceptible to level of confidence, therefore external regulation is essential in maintaining the stability and reduces further volatility. The second reason represents the social cost that a failure of bank causes, which have a greater impact then a failure an ordinary firm. The insolvency of a firm affects the shareholders, while the failure of a bank will have a greater number of affected customers (depositors), which could also be spread across larger geographical locations. As well as the effect it will have on providing savings for potential investors which will have a detrimental impact on the economic growth. The third reason is the possible lack of knowledge by the public, it is suggested that they lack the necessary background information to distinguish between safe and risky investments partly due to asymmetric information because depositors do not have access to the same information available for banks. Thus comprehensive risk assessments necessitate additional information to that included in financial reports. Hence for this particular reason regulators had introduced depositor protection. Although the above arguments support regulation, however there should be some caution on the use of excessive control over banks. It is primarily the issue of sustained cost in terms of resources on banks and the regulators. Because the central bank has to set teams of experts to perform the prudential control, likewise banks have to employ skilled resources capable to produce the necessary required returns to the regulator. Such costs can be large, thus it is a matter of cost benefit analysis to establish whether the gain of applying prudential control exceeds the incurred costs. Other possible dangers of excessive regulation are the fall of competition, increase in costs and the diminishing pace of financial innovation and development. Furthermore, heavy regulation on a particular centre may lead to the migration of the activities to locations that have lenient regulation, which has been the principle factor in the development of offshore banking centres that led to the need for a global regulation system for international banks, which is known as a level playing field. 6) The supervision of the financial system in the UK The above arguments about prudential regulation are based on banks but it can also be applied on various other financial institutions. Furthermore, the current UK financial regulation system utilise the same measures in authorising and supervising financial institutions without a distinction between insurance firms, building societies, or banks. The FSA is the principle regulator of the financial system in the UK. The FSA was established in 1997, succeeding the Securities and Investments Board (SIB), which was supervising the investment industry. However, the FSA has progressively thought to become the main controller responsible for regulating insurance and investment industry, building societies, and banks. In addition to regulating financial exchanges such as Euronext.liffe and the Stock exchange besides clearing houses, along with other functions such as the responsibility of regulating the access of companies to Official List in cooperation with the UK Listing Authority. The initial development occurred in 1998, when the Bank of England transferred its responsibility of regulation and supervision of banking to the FSA, which was succeeded with the passing of the Financial Services and Markets Act (FSMA) 2000 that provided the FSA with full power as the main regulator. The FSMA requires the FSA to attain the following objectives: Promote public awareness of financial system Maintain confidence in the UK financial market Secure consumer protection Reduce financial crime. 7) The FSA approach to supervision The FSA approach to supervision is risk based; the primary phase is to assess the risks associated with four objectives above. The FSA attain this through gathering information from various sources including customers and supervision of firms. The secondary phase is risk weighing and estimating impact, by giving each risk the probability of occurring, thus giving it a score or value. Thus firms with high magnitude impact require greater supervision. This is to reduce systemic risk and consumer losses. However, firms that possess highly sophisticated and effective risk assessment systems require less supervision by the FSA. Finally, after the risks are identified, assessed and weighted, the FSA select the appropriate measures to respond using various tools, which can be summed as follows: Those aimed to influence the behaviour of consumers, operators, and the industry Those aimed to influence the behaviour particular firms. The first category encompasses consumer education, the discloser of information, and compensation method, while the second category includes the provision of authorisations to firms and discipline, in addition to reimbursement of losses. 8) Capital adequacy (Basel Capital Accord, 1988). Liquidity is essential for any firm to maintain its daily operation, whereas solvency refers to the ability of a bank to meet its commitments in terms of liabilities at due time. However, there is a distinction between liquidity and solvency. There is a general understanding that if a bank is thought to remain solvent then it should be able to borrow fund from open market to meet its short term liquidity requirements. Likewise, the presence of liquidity problems that cannot be resolved through the wholesale market suggests that other lenders believe that the risk of insolvency of that particular bank is great. Furthermore, if a bank struggle to find short term funds in the markets, it will face difficulties in paying its claims. Therefore the Bank of England and the FSA requires banks to efficiently managing their liquidity as a principal policy element of reducing the risk of insolvency. The Basel committee on Banking Supervision has introduced Basel Capital Accord II; it included new amendments to the assessment of capital adequacy of banks. This new approach was ought to be implemented in year 2006, which contains three pillars: Minimum capital requirements Supervisory review of capital adequacy Public disclosure. Basel II accord focuses on credit risk and market risk. In pillar 1, the treatment of market risk was not altered but changes were made on the treatment of credit risk notably operational risk. The bank for international settlement and the Basel committee on banking supervision have founded the financial stability institute (FSI) to assist central banks across the world to improve their financial systems. The new Basel II requirements set challenges on banks to develop and increase efficiency on their capital management. In this section, there is a discussion of the effect of Basel II on Banks in Europe and North America, and how the new directives are going to improve the cohesion of trade between the International Banks. Furthermore, this study will examine the banks resource capability to meet Basel II requirements, and discuss the impact and the implementation of the proposed guidelines. The Basel II framework is a tool that international financial institutions have created to be used by banks around the world as a common standard. The principle of Basel II is that banks are required to hold in reserve certain level of capital as a protection to maintain bank operation when making losses. It promotes transparency of banks activities and encourages efficient management of capital. It is estimated to total 8% of bank assets. The Basel II framework has set standards for banks in managing their capital and requires the discloser of information to detect any risks. The guidelines promote efficien Impact of the Credit Crunch in the UK Impact of the Credit Crunch in the UK Factors Influencing the Financial Institutions in the UK With Particular Reference to Credit Crunch A Comparative Study between Barclays and Northern Rock Bank I- Abstract Banks acts as intermediaries between surplus units depositing funds and investors or individuals seeking capital for investments. Thus, banks role is important in maintaining the flow of fund between these different parties. Banks like any other profit maximising firms are influenced by various factors that represent risks or opportunities. Therefore, banks business decisions are founded on aspects such as confidence in the market, the level of risks, the state of the economy, and their competitive strength. Regulation is essential for assuring compliance and integrity in the financial system, but rigid rules stifles the dynamicity of the banking industry and the financial sector as whole. Moreover, Central Bank role as a lender of last resort can rise the issue moral hazard by helping imprudent banks, however because banks are financial intermediaries, the impact of bank failure can have a detrimental effect on the financial system (systemic risk), and also on clients and customers, therefore bank supervision is vital due to their sensitive important role and their extensive impact. Furthermore, the development of events in the US financial market particularly the high default rate of subprime mortgage market led to a decrease in demand for tradable securities. This has affected confidence in the US and the global financial market, and consequently some financial institutions and banks such as northern rock in the UK faced difficulties in obtaining the necessary funds to maintain the business operation and remain solvent due to lack of short term liquidity. However, other banks faced similar difficulties but are using various methods to improve their balance sheets to overcome the current credit crisis. Moreover, governments and regulatory bodies are all taking the necessary measure to stimulate the market and tackle the core sources of the current credit crisis. II- Introduction Sustained economic development is often linked to efficient management of fund that is used to finance investments, which are projected to further create more wealth and opportunities for states, corporate and individual investors. Banks acts as intermediaries between surplus units depositing funds and investors seeking capital for investments. Thus, banks role is fundamental in maintaining the flow of fund between these different parties. Furthermore, the stability of financial and banking system is vital for the sustainability of economic growth and the preserve of investors confidence. Banks like any other profit maximising firms are influenced by various factors, these includes internal and external factors, which represent risks or advantages. Therefore, banks decisions are based on elements such as confidence in the market, the measurement and management of risks, the state of the economy, and their competitive power and market share. This study will look onto various factors influencing the financial institutions in the UK, with particular reference to Credit Crunch. This literature will comprise the banks management of risks, the role of authorities regulating and supervising the financial system, and explore the regulation of the banking industry and the financial system as a whole, in addition of the effect of regulation on banks performances. The analysis will include a comparative study between Barclays and Northern Rock Bank, taking into accounts the differences in their structure, size, as well as their reaction to changes in global financial markets. Furthermore, the Research will examine the fast moving global effect of the credit crunch; discuss the two banks business model, and explore their activities and behaviours. The study will also investigate the two banks high exposure to credit risks arising from risky investments, highlight the consequences of the heavy reliance on money market, and the use of securitisation for liquidity sources. IV- Methodology The research objective is to investigate the various factors that influence financial institutions in the UK, notably the banking industry. This research was based mainly on secondary research, the gathered data and information was sufficient for this research topic. However, sensitive data regarding the value of risk were not disclosed in both banks publication, such data is useful for the researcher to scrutinise banks estimation of risk and how realistic are the projections. Nevertheless, information about estimation of risks may be obtained directly from banks for further analysis of this specified area of banks management of risk. Research material relevant to the topic was collected from various academic sources; this is to explore issues and arguments regarding the regulation and supervision of the banking system. The two banks internet site was used to gather the background information along with the financial statements of the last six years, which were used in the research analysis to perform the comparison between Barclays and Northern Rock bank business strategies and financial performance. Publications from the Bank of England website were collected to study the central bank regulation and the management of the UK banking system, in addition to the historical data regarding interest, LOBOR, and inflation rate changes. Furthermore, articles from the Financial Services Authority (FSA) were gathered to study the role of the organisation and its contribution in supervising and stabilising the UK financial system. Recent publications from the Bank of International Settlement (BIS) were collected to study the role, the objectives and the effect of Basel directives on banks. Besides research the progress of current Basel II implementation along with the development of new requirements arising from the present credit crunch. Recent newspaper articles and various other media sources were gathered to collect the latest information regarding the development of the present credit crunch and its effect on banking industry, these includes sources such as BBC business, yahoo finance and the Financial Times website, and follow recent actions of regulators and banks management of the current crisis. Moreover, data from the two banks financial statements was collected to perform the Gap Analysis using Microsoft excel package to conduct a series of calculations. Other methods could have been used to assess bank risks such as value at risk (VaR) using regression analysis by utilising a computer package such as Microsoft Excel. The regression result will determine the degree of risk that the researched banks possess in their portfolio. However, the banks seldom disclose such sensitive information in published financial statements. This is to avoid adverse reaction by investors and credit rating agencies, which could therefore affect the banks stock prices, their reputation and confidence in the capital market. V- Literature review (Part I): The nature of banking The term bank can be applied to a wide range of financial institutions, from large banks to smallest mutually owned building society in the UK. The provision of deposit and loan distinguishes Banks from other financial institutions. Deposits products supply money on demand or following time notice. Deposits are liabilities for banks, thus must be well managed if banks want to make profit. Similarly, banks manage assets created through lending. Therefore, Banks main activity is being an intermediary between depositors and borrowers. Other non banks financial institutions, such as building societies and stockbrokers, also act as intermediaries; however it is the provision of loans and taking of deposits that distinguishes banks, though many banks provide various other financial services. 1) Management of risks in banking The fact is that bankers are in the business of managing risk. Pure and simple, that is the business of banking. (Walter Winston, former CEO of Citibank; the Economist, 10 April 1993). Banks, like all profit maximising firms, have to deal with macroeconomic risks, such as recession, inflation level, as well as other micro economic risks including political pressure, commercial breakdown of core customers or suppliers, natural disaster, in addition to the emergence of new competitive threats. From a finance theory viewpoint, Bank risk management is primarily composed of four main balance sheet risks, which includes liquidity risk, interest rate risk, credit risk, and capital risk (Hempel et al, 1989). Credit risk has been recognised as the principal risk in its effect on bank performance (Sinkey, 1992, p. 279) and bank failure (Spadaford, 1988). The primary reason why the correct management of credit risk is essential is because banks have restricted ability to absorb loan losses. Generally, the ability of a bank to absorb a loan loss is originated firstly from generated income of other profitable loans, and secondly by bank own capital. 2) Factors influencing financial institutions Banks and other profit maximising firms are influenced by various factors; financial institutions in particular are susceptible to a range of changes that may affect their projected growth. Some of these changes are internal changes, this occurs subsequent to restructuring program that a bank adopt following an expansion strategy such as in mergers and acquisitions or as a defensive strategy to remain competitive and maintain market share and fight competitive predators from acquiring the bank. Moreover, there are other external factors that can influence financial institutions, these includes a countys government monetary policy, the economic condition, the financial stability and the level of confidence in the market, the inflation rate, in addition to other risks such as credit and market risks. There are a range of risks that a bank may encounter, these includes the followings: a) Credit risk and counterparty risk: counterparty risk refers to the risks that after the creation of two parties contract, one party will renege the terms of the contract, while credit risk is the risk that a loan or an asset becomes lost due to default. b) Liquidity or funding risk: these are similar terms that refer to the risk of shortage of liquidity for maintaining operational commitments, that is the ability for the bank to cover its liabilities at due date. A shortage of sufficient liquid assets is often the trigger of financial distress, as it is increasingly difficult for the bank to obtain funds from the wholesale markets. Thus funding risk is the inability for the bank to maintain its daily operations. c) Market or price risk: this type of risk refers to the risk linked to over the counter instruments or traded stocks in a non liquid market, such as equities and bonds. Thus if a bank hold these items in its portfolio, then it is vulnerable to market or price risk, this is the risk that the price of these items is unstable, which is caused by systematic (movement of prices in all traded market instruments, for instance due to changes in economic policy) or specific market risks (the movement of a particular instrument is opposite to the rest of similar instruments, for example, this may be caused by unfavourable information about the issuer of that instrument). d) Interest rate risk: this is similar to price risk, because interest rate is price of money, it represent the opportunity cost of keeping money. This occurs because of interest rate mismatches between assets and liabilities, which differ in volume and maturity arising from the banks performing asset transformation. e) Capital or gearing risk: because banks are highly leveraged firms, they have to set aside some capital to cover the losses. The size of capital is proportional to the level of risk taken by the banks. Basel risk asset ratio principle requires banks to hold up to 8%. Besides, settlement or payments risk. This is when one party in the contract deliver assets or makes payment in advance, which creates exposure to potential loss. Furthermore, operational risk refers to risks from human capital, legal risks such as law suits, fraud, and physical capital. While sovereign and political risk refers to the risk that a government default on its debt obligation to a bank. Moreover, financial regulators has identified three main risks linked to banks, these includes market risks such as risks from exchange rates, interest rates, operational risk, commodity and equity prices. 3) The Asset-Liability Management (ALM) technique Because the fundamental and the primary activity of a bank is intermediation between surplus units that makes deposits and those that seek capital, which acquire fund from the bank, thus this payment system gives the bank the role of intermediation , where the intermediation is key activity, risk management is founded principally on a sound asset liability management (ALM). Furthermore, the ALM is a technique practiced by banks to effectively manage their risks, which was largely utilised by banks in the post war period up to the 1980s. The ALM method was the main tool used to manage banks books, it is essential that the bank maintain its assets and liabilities under control to minimise risks and remain solvent. Besides, banks are keeping their managers updated with newer techniques and skills to maintain their efficiency and competitiveness for the future, for instance, ALMA is an association that comprise around 40 financial institutions, which are international and local banking groups and building societies, mostly UK and Irish. However it is growing its membership and links around Europe. Its objective is to offer an informal and inclusive forum regarding the balance sheet management issues (Byrne, J. 2004). Due to the development of banking activities, innovative instrument became increasingly used by banks to manage their assets such as off balance sheet instruments, where banks moved from interest earning income products to non-interest income sources, thus this required that banks risk management should adopt newer techniques other then just the ALM to includes the risks originating from the off balance sheet instruments. Moreover, one of the new methods included in managing market and then credit risks is the Value at Risk (VaR), which involves giving an estimate of losses arising from the volatility of banks assets. 4) Credit Culture A recent research conducted by the Australian institute of bankers on the issue of Improving Asset Quality (Brice, 1992), which focused on the significance of credit culture. The great emphasis on credit culture was due to its influence on bank performance and in some occurrences bank failure ( Spadaford (1988) and Brice (1992)). Spadaford (1988) stated in his study of 162 bank failures in the United States that the analysis showed that 98% of bank failure occurred due to asset quality problems, among these problems are poor management of loan policy, inadequate systems to ensure compliance with internal rules and procedures, and the lack of supervision on senior and key management members in the organisation. McKinley (1991) has defined four main cultures that influence bank performance. predominantly the immediate performance-driven, which emphasis on earnings targets, followed by Market share/production-driven that focuses on being the biggest with greater production volume, along with Values-driven that balances between credit quality and generated income. In addition to the Unfocused (current priority-driven) bank, such bank lacks vision and appropriate strategy often set short term targets which consequently lead to unsuccessful ventures. VI- Literature review (Part II): Banks regulation The base of regulating financial institutions is founded on three broad frameworks. Primarily, the consumer protection argument, this is based on the notion that investors and depositors cannot be demanded to perform risk assessment of financial institutions they deal with, nor monitor standard of service or performance of these institutions. The consumer protection underlying principle is based on three types of regulation; firstly, compensation schemes created to repay all or part of losses caused by the insolvency of financial institutions; secondly, rules and regulations such as capital adequacy requirements designed to prevent insolvency; and lastly promote fairness in business or market practices by setting rules and standards. The latter regulation reveals market imperfections arising from principle agent problems, asymmetric information, and the issue of determining the true value of financial products or services, which are established well after the transaction or contract was formed (Dale, R and Wolfe, S. 1998). Furthermore, there are other concerns associated with consumer protection rationale. The provision of compensation to depositors and investors for losses sustained from the insolvency of financial institutions will further encourage these institutions to pursue risky investment decisions, thus there will be minimal or no incentive for prudence. This indicates that risky firms will be able to attract trade with identical terms and ease as prudent institutions, thus affecting financial market standards and discipline, and rising potential insolvency incidences. Therefore, the resulting losses must be covered by the deposit insurance scheme, investor protection fund, or in some cases by the tax payer. Thus, prudential controls on financial institutions are essential to minimise losses and to balance the regulatory incentives with the excessive risk-taking. The third aim of financial regulation is to promote integrity of markets, encompassing various issues such as market manipulation, fraud, transparency, and fairness; market integrity emphasis on organising the market as whole beyond just the relationship between financial firms and their consumers. Supervisors implementing the financial regulation consider systematic risk as the factor that causes great concerns. That is the risk that failure of one or more distressed financial institution could spread and cause a contagion effect, which could cause the collapse of other prudent institutions. It is their vulnerability to the contagion effect that single out financial institutions from other non financial firms. 1) Targets of regulation The major objectives of Financial regulation is to set guidelines for the activities of Banks, insurance companies, investment firms, exchanges, and fund management companies. The diverse principles for financial regulation mentioned above vary in their relation to these various institutions of the financial services sector. Banks are distinguished by what is referred to as short- term and unsecured value certain liabilities (deposits) and illiquid value-uncertain assets (loans). Banks conforms to deposits insurance and other type of consumer protection, partly because banks balance sheet consists of a variety of complex instruments and depositors are not capable to measure the riskiness of their deposits. However, depositor protection creates moral hazard problem. Furthermore, banks regulation focuses more on systemic risk. That is the possibility of a bank run that can spread to a number of banks and trigger a wider instability in the financial system. According to this notion, bank runs are the result of action by depositors retrieving their funds in response to amounting fear and uncertainty of the bank future arising from bank asset losses that could render it insolvent. Due to potential risk of losing all or some of their assets, depositors tend to make a run when initial signs indicate some troubles. Moreover, recent research found that the occurrence of a bank run can not be entirety explained by the decline of banks underlying assets (LaWare, J.1991.p34), (Diamond and Dybvig, 1983).The emphasis is on a banks maturity transformation notably the transfer of illiquid assets (bank loans) into liquid claims (bank deposits), taking into account that the banks loan portfolio substantially decline in value in an event of liquidation than on going concern. What triggers a rational bank run is that the uncertainty and the higher probability that the loan portfolio liquid value is less than the value of liquid deposits. This notion demonstrates how bank runs can possibly arise and affect even healthy banks. Thus distressed bank have to liberate its assets at liquidation value, therefore leading to possible insolvency. 2) Techniques of regulation While procedures of conduct of business regulation do not differ among various types of institutions, but in terms of prudential regulation there are fundamental differences that reveal the distinctive risk features of banks, insurance firms, and investment companies. Because bank failure has a greater effect on the whole market, and can create systemic crisis, governments and central banks have set bank regulation for creating extra protection in provision of extra fund by setting the lender of last resorts facilities, and deposit protection, however, these facilities creates moral hazard. Moreover, the deposit protection fund may exceeds the available protection from deposits insurance schemes, demonstrating policymakers greater emphasis for protecting the banking institutions rather then just depositors, as well showing the regulatory objectives of sustaining the banking system, while preventive regulation focuses more on tackling excessive risk taking by setting capital adequacy requirements for assets. Institutional regulation varies between states; in the UK for instance there was a single mega regulator, all regulation is institutional, each group/ institution have a diversified activity which all work under a single agency that overlook the supervision. Alternatively, in a system of multiple regulatory agencies specialised by duty, a fixed institutional regulation is unattainable due to the fact that these agencies are divers in functions, which calls for the appointment of a lead regulator for diversified groups (Taylor, M. 1995). 3) Regulation of the financial system By tradition banks are providers of loans among other services to firms and individual investors, temporary banks falls in deficits when their expenditure exceeds receipts; however banks generally adjust their liquidity position by using capital or wholesale market. Problems occur when banks capital is misused in funding high risk investments; this is often the consequences of bad governance by senior management in controlling the banks assets or it is the outcome of a contagion effect resulting from systemic risk. Moreover, the central bank controls and monitor commercial banks activities and set rules to regulate the banking system. This is to create stability and to promote confidence in financial market, which are vital elements in maintaining steady economic growth. 4) Bank failure Regulation of banks must be explored in context of bank failure. As any substantial problem produces the need for the introduction of changes in the regulatory framework, because the regulators attempt to correct any loophole in the system. Major bank failures in the history of banking occurred in the US in the year 1929. At that period there were 25,000 operating banks, however by 1934 the number had reduced to 14,000. These incidences consequently led to the implementation of more restrictive bank rules, such as single state operations, which until recently remained the feature of the US banking system. The subsequent major bank failure was the fringe banking crisis in the UK in the year 1973. 5) Reasons for regulating banks The principle reason is the systemic risk, because the financial system is susceptible to level of confidence, therefore external regulation is essential in maintaining the stability and reduces further volatility. The second reason represents the social cost that a failure of bank causes, which have a greater impact then a failure an ordinary firm. The insolvency of a firm affects the shareholders, while the failure of a bank will have a greater number of affected customers (depositors), which could also be spread across larger geographical locations. As well as the effect it will have on providing savings for potential investors which will have a detrimental impact on the economic growth. The third reason is the possible lack of knowledge by the public, it is suggested that they lack the necessary background information to distinguish between safe and risky investments partly due to asymmetric information because depositors do not have access to the same information available for banks. Thus comprehensive risk assessments necessitate additional information to that included in financial reports. Hence for this particular reason regulators had introduced depositor protection. Although the above arguments support regulation, however there should be some caution on the use of excessive control over banks. It is primarily the issue of sustained cost in terms of resources on banks and the regulators. Because the central bank has to set teams of experts to perform the prudential control, likewise banks have to employ skilled resources capable to produce the necessary required returns to the regulator. Such costs can be large, thus it is a matter of cost benefit analysis to establish whether the gain of applying prudential control exceeds the incurred costs. Other possible dangers of excessive regulation are the fall of competition, increase in costs and the diminishing pace of financial innovation and development. Furthermore, heavy regulation on a particular centre may lead to the migration of the activities to locations that have lenient regulation, which has been the principle factor in the development of offshore banking centres that led to the need for a global regulation system for international banks, which is known as a level playing field. 6) The supervision of the financial system in the UK The above arguments about prudential regulation are based on banks but it can also be applied on various other financial institutions. Furthermore, the current UK financial regulation system utilise the same measures in authorising and supervising financial institutions without a distinction between insurance firms, building societies, or banks. The FSA is the principle regulator of the financial system in the UK. The FSA was established in 1997, succeeding the Securities and Investments Board (SIB), which was supervising the investment industry. However, the FSA has progressively thought to become the main controller responsible for regulating insurance and investment industry, building societies, and banks. In addition to regulating financial exchanges such as Euronext.liffe and the Stock exchange besides clearing houses, along with other functions such as the responsibility of regulating the access of companies to Official List in cooperation with the UK Listing Authority. The initial development occurred in 1998, when the Bank of England transferred its responsibility of regulation and supervision of banking to the FSA, which was succeeded with the passing of the Financial Services and Markets Act (FSMA) 2000 that provided the FSA with full power as the main regulator. The FSMA requires the FSA to attain the following objectives: Promote public awareness of financial system Maintain confidence in the UK financial market Secure consumer protection Reduce financial crime. 7) The FSA approach to supervision The FSA approach to supervision is risk based; the primary phase is to assess the risks associated with four objectives above. The FSA attain this through gathering information from various sources including customers and supervision of firms. The secondary phase is risk weighing and estimating impact, by giving each risk the probability of occurring, thus giving it a score or value. Thus firms with high magnitude impact require greater supervision. This is to reduce systemic risk and consumer losses. However, firms that possess highly sophisticated and effective risk assessment systems require less supervision by the FSA. Finally, after the risks are identified, assessed and weighted, the FSA select the appropriate measures to respond using various tools, which can be summed as follows: Those aimed to influence the behaviour of consumers, operators, and the industry Those aimed to influence the behaviour particular firms. The first category encompasses consumer education, the discloser of information, and compensation method, while the second category includes the provision of authorisations to firms and discipline, in addition to reimbursement of losses. 8) Capital adequacy (Basel Capital Accord, 1988). Liquidity is essential for any firm to maintain its daily operation, whereas solvency refers to the ability of a bank to meet its commitments in terms of liabilities at due time. However, there is a distinction between liquidity and solvency. There is a general understanding that if a bank is thought to remain solvent then it should be able to borrow fund from open market to meet its short term liquidity requirements. Likewise, the presence of liquidity problems that cannot be resolved through the wholesale market suggests that other lenders believe that the risk of insolvency of that particular bank is great. Furthermore, if a bank struggle to find short term funds in the markets, it will face difficulties in paying its claims. Therefore the Bank of England and the FSA requires banks to efficiently managing their liquidity as a principal policy element of reducing the risk of insolvency. The Basel committee on Banking Supervision has introduced Basel Capital Accord II; it included new amendments to the assessment of capital adequacy of banks. This new approach was ought to be implemented in year 2006, which contains three pillars: Minimum capital requirements Supervisory review of capital adequacy Public disclosure. Basel II accord focuses on credit risk and market risk. In pillar 1, the treatment of market risk was not altered but changes were made on the treatment of credit risk notably operational risk. The bank for international settlement and the Basel committee on banking supervision have founded the financial stability institute (FSI) to assist central banks across the world to improve their financial systems. The new Basel II requirements set challenges on banks to develop and increase efficiency on their capital management. In this section, there is a discussion of the effect of Basel II on Banks in Europe and North America, and how the new directives are going to improve the cohesion of trade between the International Banks. Furthermore, this study will examine the banks resource capability to meet Basel II requirements, and discuss the impact and the implementation of the proposed guidelines. The Basel II framework is a tool that international financial institutions have created to be used by banks around the world as a common standard. The principle of Basel II is that banks are required to hold in reserve certain level of capital as a protection to maintain bank operation when making losses. It promotes transparency of banks activities and encourages efficient management of capital. It is estimated to total 8% of bank assets. The Basel II framework has set standards for banks in managing their capital and requires the discloser of information to detect any risks. The guidelines promote efficien

Arthritis :: essays research papers

Osteoarthritis is a degenerative arthritis, a condition in which joint cartilage degenerates or breaks down. New tissue, which grows at the ends of bones, now has no cartilage cap to control it. Instead, this new bone forms into strange lips and spurs that grind and grate and get in the way of movement of the joint. Osteoarthritis is common in older people after years of wear-and-tear that thin the cartilage and the bones. Osteoarthritis can also result from diseases in which there is softening of the bone, like Paget's disease in which the long bones of the body curve like a bow, or osteoporosis with its bowing of the shoulder called "dowager's hump," or other bone degeneration. Other forms of arthritis can also cause a secondary osteoarthritis. Osteoarthritis is not an inevitable problem of aging. Those who don't suffer from it may have their heredity and possibly the strength of their immune systems to thank. Medical science is not quite sure of all the factors that com e into play in deciding who gets osteoarthritis and who doesn't. Rheumatoid arthritis is an inflammatory arthritis. It is second only to osteoarthritis in the number of its victims. It affects primarily the small joints in the hands and feet and the synovium, causing crippling deformities. This is an arthritis that usually starts in middle age or earlier. Estimates of the incidence of rheumatoid arthritis run as high as one person in every hundred, and females are two to three times as likely to suffer from it. It seems to start more in the winter and after some siege of sickness, but it is not considered an infective arthritis. Nobody knows what causes rheumatoid arthritis. There may be some hereditary trait, and there seems to be some connection to viral infections like German measles and serum hepatitis, the liver disease brought on by an injection of one kind or another. Because of this, scientists theorize that rheumatoid arthritis may be an autoimmune disease, one in which the body acts as though it were allergic to itself. The immune system gets mixed up and attacks normal joint tissue instead of the stuff it is supposed to attack. Polyarteritis Nodosa is also an inflammatory arthritis, fortunately it is a rare form of arthritis. It can lead to complications that are dangerous to life. It affects four times as many males as females, mostly young adults.

Language and reason as ways of knowing Essay

Knowledge is also said as ‘ways of knowing’. It means ‘information and skills acquired through experience and education’. The acquisition of knowledge is done by three main factors; perception, language and reason. In this essay we sought to see the strengths and limitations of those learning approaches. Let’s take an example, how do we know that in a bottle, labeled crystal, there is water? We would use this example to explore the three cases. Perception is the way of taking messages and processing it by the brain to obtain meaningful information. Using the example above, we would do anything possible to conclude that what we are consuming from the bottle is water. That is we would observe, smell, taste, etc. We can see that we use our senses to identify the substance. We would observe the bottle, its labeling (name, ingredients etc.), colour of the substance and advertisement on the substance; we would smell the substance and even taste it (this would be last because we fear it might be harmful). All this shows that using our senses, we can identify objects and moving organism; this is the major strength of perception (immense knowledge is gained). Another point would be upon losing one of the senses; we are able to intensify the others, which help us even more in detection but surplus always comes with its difficulties. Subliminal perception is the way trying to identify objects with the memory only, for example a patient may not remember someone’s name but seems to know that person, and thus that patient tries to associate a name that goes well with that person that he/she declares to be unidentifiable. The problem is that even with our senses, we are limited in perception and it’s very frustrating to know how little we know. Sometimes our senses may deceive us, we may see the substance transparent but it is not necessarily water but another liquid. We can have perceptual illusions where we believe an object to have a specific shape but actually differs from what we have thought of. We may also have hallucination, we may feel, see, hear, taste and smell something when there is really nothing of such kind. We also tend to conclude on the very first bit of information received as we have been in such situation before (experience). Language is a method of communication which involves a sender, a message and a receiver to express thoughts. It was developed by humans and when using it, the rules were grammar and the symbols were words. The advantage of this method of learning is that it’s very simple (user-friendly) to use and every person in the world uses it. So communication is easy, thus enriching the ability to acquire knowledge. The greatest advantage is that there are many ways to communicate the thought, therefore enabling people to understand in a way or other. Using the example above, we can give important information, express what we feel and enquire about the substance in the bottle and also in different ways so that all the people involved can understand. There are also seven functions of language, which guides us to where each piece of information acquired can be classified. Despite language having a strong face of learning, it still has its disadvantages. The example above, the bottle of supposedly water, we have used our senses to identify it but without language it is impossible to give the facts, views etc correctly and even harder to communicate the information in different ways; some people uses too many words to explain only a word(can be a different language). Also different people have different views and not all will agree on what one has said about the substance. Reason is a way to justify what we have acquired as knowledge based on previous experiences. If we cannot do so, therefore we have not gained any knowledge. Taking the above example again, we say if that substance is water because it’s tasteless; we say so because we have heard, read and experimented on water. The strength of reasoning would be the rationality and logic arguments. Rationality is what allows us to say things that do make sense, we will not say that the substance in the bottle is water because of the shape of the bottle; it does not make sense. The rationality of a statement shows how the processing of all the information acquired is done and says whether it’s â€Å"good† or not (there is really a bad reason as long as a person can justify it). Being logical depends on the argument put forward as example given above. To be logical, the deductive argument must be correct and validate the argument; this differentiates between a â€Å"good† reasoning and â€Å"bad† reasoning, using above example, 1) all liquid that is pH 7 is water and the substance in the bottle is of pH 7, thus the substance in the bottle is water (this a valid deductive argument) . But sometime the arguments may be valid but does not sound, all substances that are colourless are harmless and the substance in the bottle is colourless, therefore it’s harmless (concentrated hydrochloric acid is also colourless but is very harmful).  To conclude knowledge gained through perception, language and reason is a great advantage to us, human beings but often can be deceptive and invalid. We should be more careful when taking in information, processing, expressing and justifying it. Here again we see that they are all linked!

Physician Assisted Suicide and American Federalism essays

Physician Assisted Suicide and American Federalism essays According to Brian Bix, law is most often considered with deciding who gets to decide cases. In Americas political system, this question is often distinguished. Much controversy and debate is focused on federalism. At what level should decisions be made, (individual, municipal, state or federal) and which sort of government should decide? This question of who decides is called federalism. The United States is a federal community with powers separated between the federal government and other governments below the federal government, in example, the states. Americas federalist system has valid, yet controversial policies for the way issues are considered in the country. Physician-assisted suicide is just one of them (1). According to Kathryn Tucker, attorney for the respondents in the Washington vs. Glucksberg case, this case presents the question, whether the 14th Amendments guarantee of liberty protects the decision of mentally competent terminally ill adults to bring about impending death in a certain, humane, and dignified matter? (2) It also asks the question, whether a state denies equal protection when it permits terminally ill patients equal protection when it permits terminally ill patients who are on life support to a humane death with medical assistance but prohibits terminally ill patients who are not on life support to exercising the same right by self-administering medication prescribed for that purpose? (Tucker 2) Does the Supreme Court have the powers delegated to them in the United States Constitution to agree or disagree with this issue or is this a case where it is left up to the state to decide? No, they do not. The Court uses the Commerce Clause to show that this case is a federalist issue, but it does not withhold the issues to which the decision is based on. Washington vs. Glucksberg is a judicial case where the court considered the constitutionality of Washington&ap...

The Nervous System Essays - Sensory Systems, Nervous System

The Nervous System Essays - Sensory Systems, Nervous System The Nervous System The Nervous System Vertebrates have a spinal column or backbone. Vertebrates have neurons that are outside that spinal column called Peripheral Neurons and neurons inside the spinal column and head called Central Neurons. i) Peripheral Neurons a) Efferent Nerves (motor nerves) send signals from central nerves to effector organs; b) Afferent Nerves (sensory nerves) send signals from sensory receptor to the central nervous system. ii) Central Nervous System (CNS) is made up of your brain and spinal cord; both are made up of cells called neurons; most neurons are Interneurons, which connect all neurons together; nerves are bundles of neurons Reflex Arc Since your spinal cord is part of your brain, it is able to make quick "decisions" to ensure the safety of the organism. These "decisions" are called Reflex Arcs and involve the connection of stimulus to a response through the shortest path. This path is usually: Receptorsensory neuroninterneuronmotor neuroneffector organ Example: pain reflex, pupil reflex, Babinski reflex, Moro reflex Mechanoreceptors Mechanoreceptors detect movement. Your ears detect movement of air called sound waves. Your skin has mechanoreceptors too. Both ear and skin receptors are implanted in the roots of hairs. As the hair moves, the receptor detects the movement. Ear The ears have tiny hairs in the Cochlea. The cochlear hairs resonate at the same frequency as pitches of sounds. Your brain receives messages from those receptors and interprets the sound. Deafness If the sound vibration is stopped at any point, the Conduction (transmission) of the signal is broken. This is called Conduction Deafness. It occurs because of damage to the auricle and pinna, tympanic membrane, hammer, anvil, stirrup, oval window, on the cochlea. If the acoustic or auditory nerve becomes damaged, deafness also occurs. This is called nerve deafness. Chemoreceptors We have two types of chemoreceptors. They form our sense of smell and taste. 1) Smell: All chemoreceptors must be bathed in liquid (or mucus) because the chemical being sensed must be in a solution. Olfactory cells are special receptors in the nose, which detect chemicals in the air. 2) Taste: These receptors are on the tongue. They detect only five different chemicals causing taste, they are: bitter, sweet, salty, bitter and picante. Taste receptors are called taste buds. Flavors are a combination of both tasting and smelling at the same time. Bibliography Have fun

buy custom Developing an Evaluation Plan essay

buy custom Developing an Evaluation Plan essay In determining whether an evidence-based change brought out the intended result, evaluation is vital. The outcome of the analysis should point toward the formulation of possible alternative interpretation for the findings (Melnyk Fineout-Overholt, 2005). The general objective of an evaluation is to determine the effect of the adapted change. To examine the efficacy and probability of the implementation of the protocol, a three-month trial will be done. This is to enhance compliance of respiratory therapists and nurses in executing oral care on patients requiring mechanical ventilation. The evaluation process should answer the following questions: Was the oral care protocol initiated properly? Did the standardized oral care protocol increased nurses compliance with oral care? Did the occurrence of ventilator-associated pneumonia decrease after the oral care protocol was implemented? Was the oral care implementation recorded according to the new protocol? For three months, the present study will be implemented in a medical surgical intensive care unit with 20 beds. Patients requiring mechanical ventilation but do not have baseline pneumonia are included in the study. The participants in the process include all respiratory therapists and intensive care unit nurses. Methods for Evaluation of Effectiveness The nurse designated in infection control will document the data regarding the incidences on ventilator-associated pneumonia. A graph illustration of ventilator-associated pneumonia trends within 6 months will be placed on the chart. The graph will show the number of occurrences of ventilator-associated pneumonia each month. The graph will show the occurrence of ventilator-associated pneumonia each month from six months before the implementation of the protocol and after every month. To show correlation, the frequency of oral care and the documented amounts of time of oral care will also be charted from the start of the implementation of the protocol. Within an 8-hour time block, a trained research team member will perform a randomized direct observation audit and compare it with pre-implementation data. For evaluation use, significant data obtained and discussed during staff meetings will be recorded in abbreviated form. For evaluation use, comment suggestion sheets and questionnaires filled out by the nursing staff will also be collected and catalogued. All participants involved will be updated on monthly change in VAP rates and monthly level of compliance in oral care. The outcome will be evaluated by ventilator-associated pneumonia indicator measurements, such as incidence of VAP, average cost, length of ICU stay, and average ventilator days. For compliance degree with oral care, a post-observational audit and implementation chart will be conducted. Dependent Variables The quality of oral care and compliance of most nurses and respiratory therapists is not enough to reduce the incidence of ventilator-associated pneumonia in the patient population. This is happening even if they are knowedgeable of the importance of oral care for patients requiring mechanical ventilation. This happens because no consistent oral care guidelines, method, and frequency for performance exist at present. Independent Variables The education and experience of the nurses, their knowledge of the hospitals services and provision of ideal oral care based on the protocol, their attitude towards oral care procedures and the allotted time to perform the proceedings are the independent variables associated with the task. According to Furr et al. (2004), the proposed plan can be greatly affected by the nurses attitude towards oral care, their value and importance to the procedure, and their perceived unpleasantness of oral care performances. For example, the actual frequency of oral care determined and the quality of the oral care provided may be limited if observation within 24 hours was not conducted. Tools for Educating It is very important to let the staff understand the potential benefit of decreasing the occurrence of ventilator-associated pneumonia and the fundamental reasons supporting proper oral care. To establish the best practices prior to the development of the protocol, a review of literary studies will be conducted. The review will be compiled and presented through handouts and power point presentation to key stakeholders. The protocol will be outlined, and the results obtained from the past chart audits will be put in handouts and made available to all the staff and stakeholders. At different schedules, the administrative groups will be presented with the initial presentation of the protocol by using power point slides. On the other hand, respiratory therapists and intensive care unit nurses will be informed of the new oral care protocol through handouts and power point presentation during weekly meetings. Moreover, posters will be posted in various areas in the intensive care units ind icating the fundamental elements of the oral care protocol. Reminder posters will also be posted on the wall at the patients head of the bed. Assessment Tools For comments, suggestions, and feedback, comment suggestion papers and pre- and post-questionnaires will be distributed to all respiratory therapists and nurses. For the first three months, the education department will hold team meetings to address the oral care limitations, processes change and procedures related to the oral care protocol. The education department will be requested to discuss the importance of proper oral care for patients requiring mechanical ventilation. This will be done during the orientation process of newly-hired employess. Each month, staff meetings will be held to obtain feedback from the staff and share information. Changes will also be made according to the feedback. To see if there are differences after the introduction of the oral care procedures, all respiratory therapists and nurses will be surveyed about the oral care practices. To see if the occurrence of ventilator-associated pneumonia has improved in the hospital from the time when the protocol wa s implemented, chart audits will be conducted. To implement the protocol, the Plan-Do-Study-Act (PPDSA) cycle will be used by planning. The protocol will then be implemented and tested on a small scale at a time. Then it will be analysed and the results will be compared. The protocol then will be adjusted according to the analysed results. When proceedings are not improving accordingly, a champion will be placed to make sure that everything proceeds in the right direction. The identified champion will discuss the problems with the staff and will help keep all involved personnel on the same path. Dissemination of Evidence After the completion of the study, the findings will be disseminated to the clinicians and other personnel involved who will use the information in decision-making about patient care. Dissemination mediums should include both written and oral presentations (Melnyk Fineout-Overholt, 2005). Dissemination will be done for all the nursing community and members of the audience to understand and have access to relevant information regarding the development of the new oral care protocol standard. The key stakeholders will be the first to inform on the significance of oral care by means of verified and tested studies conducted in other intensive care unit institutions. The information process will be in the form of evidence-based research articles summaries, power points, graphs, and original summaries. Numbers will also be presented about the patients. An example of the use of numbers is the use of percentages for the reduction of ventilator-associated pneumonia after oral care procedures are done, and other hospital-related effects, including the decrease of the patients need of care and other cost factors. At first meeting, the same data will be shared with all the nursing staff involved in the oral care implementation. The meeting will also serve to disseminate strategies and information on the oral care changes that are significant to the nursing staff. New information will be derived and disseminated at a monthly meeting with the nursing staff. The information will be presented through power point presentations, handouts, and lectures. Gathering of information will be through questionnaires, suggestion sheets, and vocal reports from nurses. The information will be passed on to the key stakeholders in any form appropriate at their monthly meetings. Barriers anticipated include the lack of time to gather and present data in a filled out form, lack of available time for prioritization, attendance to meetings and completion of questionnaires. The new oral care proto col implementation will be published in the quarterly magazine circulated in the hospitals. The outline of the oral care protocol and the power point presentation will be posted on the the hospitals website so that the members of the nursing community can assess it. A brief presentation and general overview of the oral care protocol will be discussed in community meetings by the nurse practitioner. The dissemination process and evaluation will be considered successful if it involves careful planning, testing, and modification of the oral care protocol. To increase the oral care compliance of nurses and respiratory therapists, a multidisciplinary approach is necessary. All involved personnel should be committed, and the intensive care administration should encourage them to achieve a successful result. Buy custom Developing an Evaluation Plan essay

Employment Law Essay Example | Topics and Well Written Essays - 3000 words - 6

Employment Law - Essay Example But if however, there are no norms that could force Richard to work in an area, or department which he is not supposed to work in the normal course of his duties, the subsequent developments and his dismissal could perhaps be viewed as an unfair dismissal, depending upon what constitutes unfair dismissal in the context of this case and the contractual agreement between Richard and his employer Further it is seen that a dismissal could also be termed as an unfair one, â€Å"If your employer dismisses you for exercising or trying to exercise one of your statutory (legal) employment rights† which include, interalia â€Å"An employees  statutory employment rights include a right to a written statement of employment particulars.† (Employment: unfair dismissal, n.d.). Thus, it could be said that indiscipline arouse because Richard was asked to work in a department which was outside his job description.. In the event there is a contract of employment between Richard and his employer, it would specifically stipulate the kind of work that Richard would be expected to do, and dismissing him on ground that he refused to do work which he was not expected to do in the first place, could be viewed as a kind of unfair dismissal. The fact of indiscipline (walking out of the office) has been a natural consequence of Richard being asked to do work that was not really needed of him to perform, and he could hardly be held responsible for it. Another factor that is favourable for Richard is that he has been working for the last ten years or so, which speaks well of his long term employment track record. Further, under Section 98 (1) (a) of ERA 1996, it is necessary for the employers to exhibit the causes for their decision to dismiss the said employee, and again under Section 98 (4) (a), having complied with Section 98(a), the fact whether the decisions was reasonable or unreasonable depends â€Å" (a) on whether in the circumstances (including the size and administrative

Explain THE STORY Essay Example | Topics and Well Written Essays - 250 words - 1

Explain THE STORY - Essay Example Therefore, this approach would mean that the act of torture be undertaken for the happiness of the millions. I as well believe that if terrorist is left un-tortured, the victims to the explosion of the bomb would be so many. Therefore, it is right to torture the terrorist for him to reveal the information needed to help the people at stake. In scenario B and from Kant’s point of view it would not be ethical to frame the old man for the crimes he did not commit. It would be quite hard for the will of a maxim and its subjective principle becoming universal law to be proved. On Mill’s perspective based on utilitarian theory, it wouldbe the only thing to do given the vast crisis that is currently witnesses in the multiracial community. Convicting the old man for the crimes would have much positive impact on the socio-economic existence of the inhabitants here. On my own, I would suggest the NYPD intensify the search to bring the right culprit to book in a timely manner as it would be unfair to convict an innocent person both in the eyes of God and the law. The old man would as well be seriously affected in the event he clears his jail term and has to come back into the same society that he

First Exam Assignment Example | Topics and Well Written Essays - 1500 words

First Exam - Assignment Example 25). The first year of operation, the expansion of the company may be limited because of the evaluation of the cash flows to ascertain profitability of capital purchases. Leasing on a 36 month plan for 2013 ODYSSEY LX Leasing has several advantages that could lead to it being an advantage for the company. According to Parker, leasing has six main advantages that make it possible for businesses to use it as a method of acquisition of services (Parker, 2005, p. 48). Leasing offers chance of 100 percent financing which means that most leases come with a financing plan that makes it possible. The monthly contribution for the service may be cheaper. In fact, from the values obtained in the lease of the cars, it is evident that leasing offers lower monthly charges compared to purchase charges. The second advantage of leasing is the reduction of situations of obsolescence. Vehicles depreciate fast making them obsolete in a couple of years. Thirdly, leasing offers asset flexibility which mak es it easy to obtain assets. Total Initial Fees $15.00. Amount Due at Start of Lease $442.23; Total Monthly Payment $357.73. For the 36 months the total cost of the lease will be 357*36= 12, 852 The total monthly repayment is added to initial fees and the amount due at the start of the lease, initial cost, annual fees and the sales tax= 12852+784.25+69.50+25360=39065.75 Less the end value= 36065.75+15408.40 = 51, 474.15 The results of the financial evaluation of the lease indicate that the lease of the vehicle will be expensive in the long term. Lease reduces the taxable income of the company, which is more appropriate manner than depreciation which includes the use of the depreciation expense (Gitman, Juchau, & Flanagan, 2004, p. 66). However, the taxes saved today may be paid tomorrow making the approach different, but costly in some instances. The vehicle is useful in the long term service of the firm as such the lease may be expensive if used for five to 10 years. Therefore the option of lease for the 2013 ODYSSEY LX is not viable. Purchasing a 2013 ODYSSEY LX with a three-year payment Cost of purchase Initial Cost: $25,360.00; Term 36 months; Interest Rate 1.9%; Sales Tax: $1,648.40; Total Fee $15.00; Total Monthly Payment $773.41. The total cost of the purchase = 27842.72 + 1648.40+15+25360=54, 866.16 The cost of purchasing the van will be cheaper compared to leasing of the van from Honda. The purchase of the car in a three year plan will ensure faster payment for the car and accelerate the ownership transfer. However, monthly payments are high when you purchase than when you lease. The beauty of purchase is that you can sell the car in case of business challenges and allow for the development of the other aspect. There is no limitation on the mileage when using a purchased vehicle. Therefore, choosing whether to lease or buy is dependent of cost implications, advantages and disadvantages of the purchase or lease options. For the company, the longevity o f operations must be evaluated in order to achieve success. The purchase would be the most viable option based on the cost implications of the cars. The total cost of leasing a 2013 ODYSSEY LX for three years is $51, 474.15 while for a three-year purchase option is $54, 866.16. The five-year

Evidence Based Paper (Asthma) Research Example | Topics and Well Written Essays - 250 words

Evidence Based (Asthma) - Research Paper Example methodologically sound and clinically relevant research. Evidence-based practice has been defined as â€Å"the conscientious, explicit and judicious use of current best evidence in making decisions about the care of individual patients.† (Sackett, Richardson, Rosenberg, & Hayes, 1997, p. 5). Most notably, evidence-based practice stresses the use of research and evidence to guide clinical decision making and it is empty of intuitions and unsystematic observations. In other words, evidence-based practice in nursing requires clinicians to acquire the skill of applying the research evidence in clinical practice. In nursing, evidence-based practice emphasizes best research evidence relating to the effectiveness and safety of nursing interventions, the accuracy of nursing assessment measures, and the meaning of illness and patient experiences. It is important to recognize that evidence-based practice hypothesizes a hierarchy of evidence to guide clinical decisions, and personalizing the evidence to blend in a specific patient’s circumstances is central to evidence-based clinical decision. (DiCenso, Guyatt, and Ciliska, 2005, p. 4).

Evidence Based Paper (Asthma) Research Example | Topics and Well Written Essays - 250 words

Evidence Based (Asthma) - Research Paper Example methodologically sound and clinically relevant research. Evidence-based practice has been defined as â€Å"the conscientious, explicit and judicious use of current best evidence in making decisions about the care of individual patients.† (Sackett, Richardson, Rosenberg, & Hayes, 1997, p. 5). Most notably, evidence-based practice stresses the use of research and evidence to guide clinical decision making and it is empty of intuitions and unsystematic observations. In other words, evidence-based practice in nursing requires clinicians to acquire the skill of applying the research evidence in clinical practice. In nursing, evidence-based practice emphasizes best research evidence relating to the effectiveness and safety of nursing interventions, the accuracy of nursing assessment measures, and the meaning of illness and patient experiences. It is important to recognize that evidence-based practice hypothesizes a hierarchy of evidence to guide clinical decisions, and personalizing the evidence to blend in a specific patient’s circumstances is central to evidence-based clinical decision. (DiCenso, Guyatt, and Ciliska, 2005, p. 4).

Small & Medium Sized Enterprises in an International Environment Essay

Small & Medium Sized Enterprises in an International Environment - Essay Example Center of discussion in this paper are small and medium sized businesses that are imperative to the economy of a country mainly for their roles in job creation, innovation and technological advancement. In recent years, small start-up and even smallest of businesses, particularly those from the high-technology industries are internationalizing at an increased rate. Most of the small businesses are launched with a plan of conducting cross-border business activities. Within the free trade zone of European Union, more efforts are put in to unite the countries both economically and politically and this transition has made tremendous changes in the international business contexts. For small and medium sized businesses, it has become easier for them to broaden their business activities globally, bringing newer opportunities as well as threats. Basically, there are three approaches to the internationalization of small businesses; they are stage approach, network approach and the born global approach. Stage approach states that internalization of small businesses occurs gradually from the domestic marketing through the export as primary mode of entry to another country. The network approach states that internalization of small businesses occurs through developing successful networks of business relationships to facilitate global business operations. Born Global firms are those small businesses that are launched with cross-border business activities in mind. ... ternalization of small businesses occurs through developing successful networks of business relationships to facilitate global business operations (Hynes, 2010, p. 90). Born Global firms are those small businesses that are launched with cross-border business activities in mind (Longenecker, Moore, Petty and Palich, nd, p. 443). In recent years, small businesses that are launched with a view to gradually internationalize the firm’s activities and this has tremendously impacted the roles that are played by the small business in international business contexts. Importance of Small Businesses in International Business Contexts Small Businesses as Engine for Job Creation Out of the 30.23 million businesses in the United States, around 99.7 percent as accounted to be 30.14 million are considered as small businesses (Scarborough, 2011, p. 23). Though they are generally termed as ‘small’ as they employ fewer than 100 employees their contribution to the economy is greater both nationally and internationally. Small and medium sized businesses employ more than 51 percent of the nation’s total private sector workforce, but the assets these small businesses posses are considerably less than big multinational and other businesses (Scarborough, 2011, p. 23). Small businesses are critically important to the economy of a country and the international economy in general due to the roles it plays such as job creation, innovation, long term growth etc. Malchow-Moller, Schjerning and Sorensen (2009, p. 16) asserted that entrepreneurs, especially of the small businesses, are widely believed to play pivotal roles in terms of job creation and wage growth. The father of entrepreneurship, Schumpeter, explained this concept through ‘creative destruction’ as entrepreneurship replace