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relationship between financial banks and economic growth
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Debating the topic of the size of banks is much like debating the topic of the size of the government; should a one industry play such an imperative role in the economy? Although many argue that it is unrealistic to expect any industry of this size to not take advantage of their role, and—like the government, the concentration of power has a history of negative effect on the economy, it must be remembered that banking is a competitive industry that differs from the government in a multitude of ways. The endless speculations and conspiracy theories that banks are evil conglomerates can easily be dismissed by the reality of the function of banks. Though the profits of banks and thus the salaries of the individuals who run banks appear to overzealous, their significant contribution to the economy acts as validation. Furthermore, the banks’ predominance in the Canadian economy is not necessarily negative as it offers the expansion of the economy as a whole; services promote economic activity outside the norm, and so the establishment of small businesses is promoted. Most predominantly, banks regulate the economy in a competitive way that does not hinder activity, unlike the government’s attempts to intervene within the economy; when this regulation is originating from a competitive market as opposed to an invulnerable one (the government), the whole economy benefits. Therefore, banking and its involvement in the economy is beneficial.
The profits that banks receive as well as the higher than average salaries they administer are generally considered cause for concern among Canadians. However, the amount the banking industry contributes to the economy is regularly overlooked, thus making a balanced equation appear disproportionate. CE...
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...ess, Canadian. "Canadian bankers rank among highest-paid — and overpaid — bank CEOs in North America." Financial Post 30 May 2013, n. pag. Web. 21 Jan. 2014.
"Banks as Employers." Canadian Bankers Association. N.p., 19 Jul 2013. Web. 21 Jan 2014.
"2013 BAI - Finacle Global Banking Innovation Awards Winners Announced." Marketwired. N.p., 05 Nov 2013. Web. 21 Jan 2014.
"Canadians well-served by competition, choice and innovation in banking: CBA president." Canadian Bankers Association. N.p., 09 Oct 2013. Web. 21 Jan 2014.
Lundy, Matt. "Canadians increasingly becoming entrepreneurs and small business owners."Canadian Business 03 October 2012, n. pag. Web. 21 Jan. 2014.
"Tax Season 10 surprising stats about small business in Canada." CBC News. N.p., 17 Oct 2011. Web. 21 Jan 2014.
"Stability in Canada's Output, and Why It Matters." Bank of Canada. N.p.. Web. 21 Jan 2014.
The global economy has been recovering from the financial crisis which occurs in 2008, then has a weak growth for most developed countries over 2012 and 2013. But economic activity in Canada has expanded at a faster pace than most other major advanced countries in 2012; however, economic performance in Canada has been unsteady throughout 2013 (The Economic review, 2013). After the last quarter in 2010 GDP growth rate grows rapidly, the GDP grows slowly but steadily in 2012 which remains at around 3 percent. Real GDP growth rate in Canada grows slowly in the first quarter of 2013, but increased by 5 percent in the second quarter ,then remains the same level until the first quarter of 2014 (Statistics Canada, 2014). In 2014, the Canadian government take a series economic action plan as a guide for the economy development such as improving investment conditions, ...
This constant income has proven to support our economy by more than just improving life quality. Canada’s three main exports also allow Canada to keep a more balanced budget. With an extensive amount of money being put into importing goods from other countries, exporting gives Canada a fighting chance against the terrible trag...
Over the past two quarters Canada has experienced a continuous decline in GDP. Many factors contribute to the recession and decreases in the financial stability of our country. Factors that either contribute or reveal that Canada is in a poor economic position are increasing unemployment rates, surging price levels, and rising interest rates. These opposing contributions force consumers to save their money instead of putting it back into the economy. This then diminishes the economy, forcing the recession onto our citizens. The novel, Dinner Party Economics by Eveline J. Adomait and Richard G. Maranta and various reputable sources further explain the topics regarding to this upcoming recession. Canada has been hit by a brick wall of negative
The global financial crisis affected the many advance economies, particularly the United States. Unemployment significantly increased, people were evicted from their homes, and the search for employment was a dead end. However, Canada was not affected with the same force as the United States: “Canada’s financial sector was less affected than most advanced economies and it had the highest bank soundness rating in the World Economic Forum surveys from 2007-2008 through 2012-2013.” Despite the relatively stable status of the Canadian economy, Canada was very much involved in the review and improvement of international financial regulations. Canada was in a position to make changes to financial regulations due to their perceived experience in the matter, as Canada escaped the crisis relatively unscathed. Canadian delegates were placed in charge of four core areas in the reformation of financial policy and, “in all these areas, Canada was able to successfully push for reforms that resonated with its experiences and interests in enhanced financial sector regulation and supervision.” This crisis, and the successful reformations that came out of it, further installed Canada as a leader in economics, firmly inaugurating them as the world’s best bankers.
Morris, B. (2011, May 18). Small Business Stats. Retrieved January 19, 2012, from Get busy
“Education thus becomes an act of depositing, in which the students are the depositories and the teacher is the depositor. Instead of communicating, the teacher issues communiques and makes deposits which the students patiently receive, memorize, and repeat. This is the "banking" concept of education, in which the scope of action allowed to the students extends only as far as receiving, filing, and storing the deposits. They do, it is true, have the opportunity to become collectors or cataloguers of the things they store. But in the last analysis, it is men themselves who are filed away through the lack of creativity, transformation, and knowledge in this (at best) misguided system. For apart from inquiry, apart from the praxis, men cannot be truly human. Knowledge emerges only through
Krahn, H., Lowe, G. Hughes, K. (2008). Work, Industry & Canadian Society. (5th ed.) Toronto, ON: Nelson Education Ltd.
In today’s America, bankers are often seen as heartless, money hungry pigs, and media outlets portraying bankers putting hardworking people on the streets. Regulation like FDIC and Dodd- Frank increases financial security and helps restore our repetition. Cases like ERON and Long-Term Capital Management, where people lost their entire savings, would not happened. Regulation is not the enemy. Instead of having lobbying groups to deregulate, accountable banks should embrace such regulation designed not only to improve consumer confidence, but also to preserve the integrity of our overall financial
The early decades of the nineteenth century saw the establishment of banks in the Caribbean largely as a convenience for the local governments. Throughout much of the nineteenth century, most Caribbean banks operated as an oligopoly with limited government influence – this directly translated into higher profits. However, over time, the banking environment could best be described as complex and dynamic. Competition increased, resulting into greater need for improved customer service, product innovation and cost reduction strategies. In order to achieve this, the banking sector was undergoing major structural reforms characterized by mergers and acquisitions. On July 23, 2001 Barclays and CIBC announced that they were in advanced discussions which were intended to lead to the combination of their retail, corporate and offshore banking operations in the Caribbean.
Hoogeveen, Margaret, et al. “Chapter Eight: Inequality in Canada.” Creating Canada: a History - 1914 to the Present, McGraw-Hill Ryerson, 2014.
Krahn, Lowe, Hughes (2008) Work, Industry, & Canadian Society. (5th ed.) Toronto, ON: Nelson Education Ltd.
Weller, C. E., & Hersh, A. S. (2002, April). Banking on multinationals: Increased competition from large foreign lenders threatens domestic banks (Issue Brief No. 178). Retrieved from Economic Policy Institute website: http://www.epi.org/publication/issuebriefs _ib178/
Banks sector is playing an important role in economies. The banking industry, as the classic and the most influential of financial intermediaries, facilitates economic operations. Financial sector in the worldwide country has been changes over these years by looking the changes of financial structure environment and economic conditions. Thus, banks are a very important point to financial system and play an important role as control and contribute growth to the economic sector.
This is followed in section 5 by an analysis of the recent changes in the banking industry. With the development of the financial system, declining entry barriers and the deregulation of the banking industry make banks no longer the monopoly suppliers of banking services and reduce their comparative advantages which they usually hold in the past. Whether the reasons give rise to the existence of banks are still powerful will be examined here, while section 6 offers a way of considering whether banks are declining by looking at the value added by the banks. When the value added by banks is examined, banks are not a financial intermediation, which not only conduct the traditional services but also provide more diversified