Moral Hazard in Banking
Moral hazard is an asymmetric information problem that occurs after a transaction. In essence, a lender runs the risk that a borrower will engage in activities that are undesirable from the lender's point of view, making it less likely that the loan will be paid back. Gary H. Stern's article, "Managing Moral Hazard with Market Signals: How Regulation Should Change with Banking", addresses the moral hazard problem inherent to the financial safety net provided by the government protection of depositors. Interest rates do not reflect the risk associated with bank activity, which in turn causes banks to finance higher-risk projects with price tags that are not parallel to the risk level.
A solution to the moral hazard problem lies within government supervision and regulation. In the article, Stern challenges the assertion that proposals that rely exclusively on government regulation will satisfy the problem of moral hazard, especially for TBTFs (Too Big to Fail banks). Stern states several factors to support such assertions:
The ability of regulators to contain moral hazard directly is limited, due to the exploitable tactics of regulatory reform.
Limited confidence that regulation and supervision will lead to bank closures before institutions become insolvent.
The limited ability of regulators to asses bank risk due to asymmetric information and reliance of internal bank models that may be inaccurate.
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The US has a sophisticated banking system that does a good job of allocating resources in productive place for their customers. However, in an area such as investment banking companies can use the deposited money for risky investments such as foreign government and corporate bonds. When these banks lose money on their investments or go out of business, all of the customer 's savings would be gone. Also, in this type of system bankers are more likely to commit fraud such as opening fake accounts vis a vis Wells
The article Mother Tongue, by Amy Tan is a personal look into how language, and the dialects of that language, can affect a person 's life. It 's a look into how the people inside the cultural circles who use dialect derivatives of a major language are treated by people who exist outside of those cultural circles. It shows us how society treats a person using a "broken" or "limited" dialect, and how society 's treatment of these people can also affect the children who grow up using these "broken" dialects. Tan wrote this article try and convey to the reader that English is a colorful, and ever-changing language that has many dialects. Tan makes the point, several times throughout the article, that society judges you based on the type of English that you use. Throughout the article, Tan uses both her mother, herself and society 's treatment of them as evidence to support her idea. The purpose of pointing this out is to show the reader that the language a person uses, whether it be taught to them in school or by a parent at home, isn 't indicative of a person 's intelligence or value, and they shouldn 't be judged as less for using it.
Finegan says this is something “living languages must do”. For me, I was raised in a military home in which we moved to a new region every couple of years. Coming from Germany, moving to Rochester, and then to Lowville, my dialect is a combination of all three speech communities. It is different than my parents, and will mostly be passed down to my children. As I age and move locations it is opted to change again as well. So it is not that I speak differently or incorrect than the rest of my family, my speech community is merely growing and changing as it is passed generation to generation. Richard Lederer stated in his article, “We are a teeming nations within a nation, a country that is like a world.” (150) He was portraying how our country, with a universal language, can be so diverted by each region’s version of the English language. I agree completely that although we all “sing” the same song of the American language, “we talk in melodies of infinite variety.” (150) The way our country was built was by different American regions doing their own work, for example, the south had plantations, where my ancestors were small town farmers who worked with manufacturing in mills and
The presence of systemic risk in the current United States financial system is undeniable. Systemic risks exist when the failure of one firm may topple others and destabilize the entire financial system. The firm is then "too big to fail," or perhaps more precisely, "too interconnected to fail.” The Federal Stability Oversight Council is charged with identifying systemic risks and gaps in regulation, making recommendations to regulators to address threats to financial stability, and promoting market discipline by eliminating the expectation that the US federal government will come to the assistance of firms in financial distress. Systemic risks can come through multiple forms, including counterparty risk on other financial ...
Reeves, Eric. “Genocide Without End? The Destruction of Darfur”. EBSCOHOST.com. H.W.Wilson, 1 Jan. 2003. Web.
As the killer was never truly found, the investigation turned into a historical research. It was so prominent that the research of Jack the Ripper became known as Ripperology. So whether the world will ever know the true identity of the killer of all killers, it will always be in study.
"The Genocide in Darfur and Its Consequences." By Kallie Szczepanski. N.p., n.d. Web. 01 Apr. 2014.
The Sudan genocide, a civil war that was started in the early 1980s when drought, famine and the spread of un-arable land caused traditional African herders and Darfur citizens to argue over land. For the next 22 years relationships worsened between the Arab and non-Arab tribes. The Western region of Sudan: Darfur was thrown into civil war by its own government and two rbel armies in an uprising that should have been seen coming for a long time. This essay will elaberate on the events that occurred in Sudan over the past twenty two years and to what extent the mass killings that occurred can be defined as Genocide. The insurgeny began in Febuary 2003; goning virtually uunnoticed by the international community and shadowed by the ongoing war in Irac. The Sudan governent has been blamed for virtually every event during the past 22 years of civil unrest that has led up to the mass killing of hundreds and thousands of civilians. The many different ethinic groups in Sudan were constantly arguing and fighting over any and all issues and problems that could be brought upon to their attention; this led to growing tension. The mass killings in Sudan could be classified as ethnic cleansing; a term used to describe the killing of an ethnic group of people because their role in that society is unjustified or they are invading on terriotory that they are not welcome on.
The "subprime crises" was one of the most significant financial events since the Great Depression and definitely left a mark upon the country as we remain upon a steady path towards recovering fully. The financial crisis of 2008, became a defining moment within the infrastructure of the US financial system and its need for restructuring. One of the main moments that alerted the global economy of our declining state was the bankruptcy of Lehman Brothers on Sunday, September 14, 2008 and after this the economy began spreading as companies and individuals were struggling to find a way around this crisis. (Murphy, 2008) The US banking sector was first hit with a crisis amongst liquidity and declining world stock markets as well. The subprime mortgage crisis was characterized by a decrease within the housing market due to excessive individuals and corporate debt along with risky lending and borrowing practices. Over time, the market apparently began displaying more weaknesses as the global financial system was being affected. With this being said, this brings into question about who is actually to assume blame for this financial fiasco. It is extremely hard to just assign blame to one individual party as there were many different factors at work here. This paper will analyze how the stakeholders created a financial disaster and did nothing to prevent it as the credit rating agencies created an amount of turmoil due to their unethical decisions and costly mistakes.
If financial markets are instable, it will lead to sharp contraction of economic activity. For example, in this most recent financial crisis, a deterioration in financial institutions’ balance sheets, along with asset price decline and interest rate hikes increased market uncertainty thus, worsening what is called ‘adverse selection and moral hazard’. This is a serious dilemma created before business transactions occur which information is misleading and promotes doing business with the ‘most undesirable’ clients by a financial institution. In turn, these ‘most undesirable’ clients later engage in undesirable behavior. All of this leads to a decline in economic activity, more adverse selection and moral hazards, a banking crisis and further declining in economic activity. Ultimately, the banking crisis came and unanticipated price level increases and even further declines in economic activity.
Hagan, John, and Patricia Parker. "KeyText: Six Reasons Why the Violence in Darfur Constitutes Genocide." KeyText: Six Reasons Why the Violence in Darfur Constitutes Genocide. N.p., 2005. Web. 15 Mar. 2014. .
This source is the most trustworthy source to find information. This source is great for the project because it gave a great amount of detailed information about the genocide in Darfur. The information was published by World without Genocide (www.worldwithoutgenocide.org) which is an organization to end genocide. Although the website is paid for by an organization, it does not mean it is one hundred percent reliable. Sometimes .org URLS can be biased and can give personal opinions on the topic. The pur...
In our society, there are many cultures with language and dialect variations, but Standard English is the language of the dominant culture. Therefore, it is necessary for all students to learn to write and speak Standard English effectively. However, for many students of Urban school districts, especially African Americans, writing and speaking effective Standard English can occasionally pose a problem. Many African American students speak a variation of Standard English (Black Vernacular Speech) whose linguistic patterns sometimes conflict with those of Standard English. It is true that African American speech is an essential aspect of their African American culture, so the educational system would be doing African American students a disservice by insisting that they learn Standard English as a primary discourse. It is also a fact however, that in order to be viewed as a successful, functional member of society, Standard English, if learned as a secondary discourse, should be written and spoken as fluently as the primary discourse.
Analyzing dialects can be difficult due to the fact that is it hard to transcribe the pronunciation of an individual dialect because English is not spelled the same way it is pronounced. Furthermore, one person’s interpretation of spelling a dialect might not match up with another’s, so the reader might not “hear” the dialect properly. Regardless, written versions of dialects are essential to discussing dialectical differences.
In a sociolinguist perspective “the idea of a spoken standardized language is a hypothetical construct” (Lippi-Green, 2012, pp. 57). They are the form of Britain English and American English that are used in textbooks and on broadcasting. Giles and Coupland observe that “A standard variety is the one that is most often associated with high socioeconomic status, power and media usage in a particular community” (1991, p. 38). Both native speakers and learners of English, where English is taught as a second or foreign language (hereafter ESL/EFL), speak dialect of English in everyday conversation (Kachru, 2006, pp. 10-11; Owens 2012, p.