Paul Poiret Biography

Name: Paul Poiret [pic] Born April 20, 1879— April 30, 1944 Biography: †¢ Born in Paris to a wealthy family an attended a Catholic lycee. †¢ After school he started an apprenticeship with an umbrella maker, which did not suit him. †¢ In 1896, as a teenager, he began working for Jacques Doucet, a prominent Parisian couturier of the time. †¢ In four years Poiret worked up the ranks to become head of the tailoring department for Jacques Doucet. †¢ Poiret designed for many actresses of the time, while working on the play L'Aiglon, he snuck into a dress rehearsal and his harsh critique of the sets and costumes got him fired from the movie.But, that did not stop actresses from requesting his designs. †¢ Joined the House of Worth in 1901 as an assistant designer, there he deigned clothes in a stark contrast to the opulent garments from Worth; his were more for the everyday woman. While he felt himself that his fellow designers looked down on him for his more simplistic designs, they were commercially very successful. †¢ While at the House of Worth, Poiret designed his first Asian-inspired piece, which was a simple Chinese-style cloak called Confucius.It offended a Russian princess, who though it was too simple, and not grand enough for anybody but peasants to wear. After opening his House of fashion the mandarin-robe-style cloaks were best sellers. †¢ In 1903 he opened his own couture house, in 1909 he relocated to a very large and spectacular location with a parterre garden. †¢ In the October 1908 publication of Les Robes de Paul Poiret, it featured Poiret’s designs using the pochoir method of printing, giving the images brilliantly saturated areas of color. Poiret worked with artist Paul Iribe to achieve this.Who juxtaposed Poiret’s graphically striking clothes to stylishly arranged backgrounds. With this they helped fuse fashion and art even further. †¢ Also, in 1908 Poiret introduced his lean, high-waisted silhouette. Featuring narrow lines, high waists, covered arms, and low decolletes, making the hourglass silhouette passe. †¢ Poiret’s designs removed the corset, which interfered with his narrow lines, and with that many other designers followed and corsets started to become a thing of the past. †¢ The Poiret Rose became a trademark for the designer after a hree-dimensional silk chiffon rose was sewn to the empire bodice of Josephine, one of the 1907 dresses that was featured in Les Robes de Paul Poiret. †¢ While producing his second album of designs, Les Choses de Paul Poiret (1911), Poiret asked artist Georges Lapape for inspiration for a new look. But Mme. Lepape was the one who inspired one of his most iconic designs, the jupe-culotte, with her sketch. †¢ In April of 1911 Poiret opened Martine, named after one of his daughters, which was a school where creativity could flourish and not be stifled by discipline or only being taught one way. Also, in the same year, 1911, the house of Poiret introduced their first fragrance, Rosine, named after another daughter. Poiret was involved in every aspect of the production of the fragrance. He expanded the fragrance to include soaps and lotions, which was then replicated by other designers. †¢ Poiret was a military tailor throughout the war and had to relaunch his business in 1919 after the war was over. †¢ But by 1929 the House was doing poorly and he sold his business, it is due to this that he lost the rights to his name. Poiret passed away on April 28th 1944 from Parkinson’s disease. Signature looks: [pic] [pic] [pic] Significance: Paul Poiret was incredibly significant because he pushed the boundaries on what was then considered fashion. He changed the shape of the femal body with his daring silhouettes. Poiret revolutionized the way fashion photography was done and essentially created editorials. Poiret also is a great example of a â€Å"spirit of the ti mes† with his lavish lifestyle and designs; he very much captured the spirit of the 1910’s and 20’s.Poiret was influenced by many other cultures and would often bring it in to his designs, especially Asian and Persian. The softly ballooning legs, turbans, and tunic effect become Poiret signature looks. Poiret is regarded by many as the first genius of fashion; he himself proclaims that he is the â€Å"King of Fashion† in his autobiography of the same name. He is also the first designer to have come out with a beauty line, which has since set the standard for fashion houses. Signature Looks Today: [pic] [pic] Works Cited †¢ Caroline Milbank, A-Z Fashion, Berg Fashion Library, Berg Publishers, online, 10/21/12.Images Cited †¢ Online Image, Timeless Fashion and Art, 2007, 10/21/12 †¢ Online Image, Sun Sentinel: Fashion and Style, December 15th, 2011. †¢ Online Image, FIDM Museum Blog, FIDM, August 19, 2009 †¢ Online Image, Zappos. com , Zappos, 10/21/12 Online Image, Styleite. com, Styleite Paris Couture Week, July 6th, 2011 ———————– Poiret’s jupe-culotte and tunic, 1913. Poiret’s fragrance, featuring trademark rose. Asian influenced designs, 1913. Modern couture take on Asian-influence fashion. Baggy trouser pants similar to Poiret’s jupe-culotte.

Risk of Entry by Potential Competitors in Fast Food Industry

6. The common sense of principle that defines the generally observed relationship between demand, supply, and prices: as increases the price goes up, which attracts new suppliers who increase in supply bringing the price back tom normal. However, in the marketing of high price (prestige) goods, such as perfumes, jewellery, watches, Cars, Liquor, a low price may be associated with low quality, and may reduce demand. Demand is how much desire consumer have for de product or service is available .When demand is great and supply is low the price of a product or service increase when demand is low and supply is great . The price of a product or service decreases. The effect on price is the quantification of supply and demand. Demand in many instances is driven by disposable income and free time. Henry ford recognized this in increasing the wages of his workers and decreasing their work time. 8. Relationship between risk and return The relationship between risk and return is a fundamental financial relationship that affects expected rates of return on every existing asset investment.The Risk-Return relationship is characterized as being a â€Å"positive† or â€Å"direct† relationship meaning that if there are expectations of higher levels of risk associated with a particular investment then greater returns are required as compensation for that higher expected risk. Alternatively, if an investment has relatively lower levels of expected risk then investors are satisfied with relatively lower returns. This risk-return relationship holds for individual investors and business managers.Greater degrees of risk must be compensated for with greater returns on investment. Since investment returns reflects the degree of risk involved with the investment, investors need to be able to determine how much of a return is appropriate for a given level of risk. This process is referred to as â€Å"pricing the risk†. In order to price the risk, we must first be ab le to measure the risk (or quantify the risk) and then we must be able to decide an appropriate price for the risk we are being asked to bear.

Intra-Inter-organizational Cooperation Essay

Intra-organization cooperation is the relationship that takes place within the organization allowing departments or sections to smoothly perform a transaction support so as to provide information, services and equipments within an organization. On the other hand, inter-organizational is strategy adopted by organizations of forming ties with other organizations in order to enhance there capacity of serving more clients or to acquire resources with ease especially from local markets. Such linkages are formed as a managerial response to the need of critical resources which are controlled by others in the environment thus enhancing the power of any one organization dealing with other environmental elements. Organizations enter into inter-cooperative relationships if they are sure that the relationship will benefit them. In terms of operation costs, inter-organization encounters complexity costs and loss of operating autonomy. Contrary, intra-organizational cooperation grants an organization the opportunity to express its autonomy in operation (Longoria, 2005). Inter-organizational cooperation brings about interdependency between organizations in that they rely on each other so that they may be able to benefit in return. Conversely, an intra-organizational cooperation is self sufficient for it strives to remain competitive in the market on its own by use of modern technology in production, research and innovation and organization design. Intra-organizational cooperation involves utilization of available capital labor and resources to maximize profits in performance, while inter-organizational cooperation’s helps to minimize conflicts in the market. Inter-organizational cooperation’s are driven by tactical and strategic objectives in that they save on cost through closer cooperation leading to maintenance of healthy business relationship. The management of inter-organizational cooperation’s is given more attention by the company due to their higher strategic importance.

Mathmos Ltd Dissertation Example | Topics and Well Written Essays - 4500 words

Mathmos Ltd - Dissertation Example In this report, an in-depth analysis of Mathmos Ltd has been done with the help of different tools such as SWOT Analysis, PESTEL Analysis, and Porter’s Five Forces Model etc in order to determine the key areas of strengths as well as weaknesses to improve and enhance the overall performance of the company. In the second part, different methods have been discussed that can be used to increase the revenues and establish the brand in the industry. The main objective of this paper is to identify managerial ways for Mathmos Ltd which is facing a decline due to lack of innovation and proper management. Recommendations are given that can be implemented to boost the business as increased competition offers many challenges in today’s world. Mathmos Ltd. Introduction: Mathmos Ltd is a privately owned company located in London, United Kingdom. It primarily sells Wholesale lamps, Ceiling Light, Ceramic Lamps, Modern Lamps and Tiffany Lamps. The annual revenues of the company are 4, 822,851. It strives to produce new light technologies to delight its customers. The Mathmos Mobile range was the first rechargeable LED which developed many products such as Aaron Rincover’s Bubble and color changing ‘aduki’ range etc. Bubble became very popular and also received many awards like an IDEA award, D&AD commendation, Red Dot Award and many more. Some of their products are also invented and designed with the help of external designers. Talented designers are always encouraged to be a part of Mathmos products. Background of the company: It was established in 1963 by Mr. Walker who invented the first lava lamp. The lamp immediately gained the attention of the customers and sales increased at a higher rate in UK. It also appeared in many movies and films. In 1989, the company was taken over by Cressida Granger and David Mulley. They modified the lamp according to the modern times and introduced a whole range of ambient lights. Initially, the products wer e designed and manufactured in the house but due to its popularity and increased demand, the company doubled in size each year. In the late 1990s, cheap duplicate copies of the lamp begun to appear in the market. This was a potential threat to Mathmos and change was required for the survival and success of the company. In 1998, the sole owner of the company was Cressida Granger as David left the company. The company was hit by the global recession and the size of the organization was reduced in order to compete in the rapidly growing environment. Since then Mathmos is following the strategy of constantly offering innovative designs. A program of new product development was launched to differentiate their products from the copied ones. Product manufacturing was shifted overseas to offer more competitive prices. Mathmos is a small company now but it still has a wide range of good quality products. Their main focus is towards lighting and it markets its product on the international lev el through retail and wholesale channels. Products: It offers a wide range of products which include: Lava Lamps LED & Mood lights Space Projector Airswitch lights Candlelights Lamp shades SWOT Analysis: SWOT stands for Strength, Weaknesses, Opportunities and Threats. It is a strategic tool to audit the organization and its environment. It specifies the objective of the business and evaluates these four factors to determine the key issues faced by an organization. Thus, we will determine the key issues faced by Mathmos on the basis of which future predictions and measures can be taken. The aim of this analysis is to discover new alternatives to increase the performance and profitability of Mathmos Ltd. Strengths: It is the pioneer in the light manufacturing equipments. It enjoys a dominant position in the light manufacture industry due to their high-quality products. It provides free advisory services by consulting spaces. It has a strong network of distribution channels which enhan ces its efficiency in the delivery of products at the right time. In order to stay in the world of

How do you view the unification of women on campus, and how would you Essay

How do you view the unification of women on campus, and how would you improve it - Essay Example Hence, it is essential for women to come together on campus and address the issues that are affecting them both in the school and the outside world. This paper will assess the issue of women coming together on campus, illustrating its benefits and ways of improving this unification. As mentioned above, the unification of women on campus is a positive event for many reasons. Firstly, it enables the preparation of young women for life after college. When women come together they should use this opportunity to teach the younger girls about their rights and empower them to stand up for themselves. Women would not have the opportunity to learn about such situations in detail and unification enables this educational procedure to occur. Unification of women is also a supporting mechanism for women as they are able to encourage each other in a world that places them at an unjustified disadvantage (Boswell, n.p). Unification on campus also trains women to be more expressive. The voice of a group of people is much louder than that of an individual; hence the women can work together towards achieving a common goal. Unification is also good in the sense that it enables the women at the college to form stronger ties with one another, and create both friendships and professi onal connections which will help them in the future. Unification of women is also good from the sense that it enables them to strategize and create new ideas that improve their lives in college and beyond. The more women that are present, the higher the chances that more problems facing women will be vocalized and therefore rectified. In addition, when working together the strategies being implemented to improve certain issues have a higher level of success (Boswell, n.p). I feel unification of women can be improved by formalizing the unions that are created by women on campus. This will give a better

International economical and political environment (digital living Essay

International economical and political environment (digital living room) - Essay Example Similarly, the companies like Sony, Microsoft and Nintendo are competing to occupy space in the digital gaming market. (Suster; Saxtoft; Sandoval). The growing competition in the Digital Living Room market is posing a serious threat to the different service providers regarding their ability to sustain. Thus, the directors need to devise strategies to operate jointly in the digital market to not only satisfy the increasing needs of the consumers but also in helping themselves to sustain. Moreover, the directors need to focus more on innovation and cost effectiveness to render more sophistication in the services provided. This would help in generating customer loyalty. The Digital Living Room market companies can also enhance the sphere of the User Interface applications through the development of the interactive sphere by conducting live chatting session with their friends through the television while viewing a certain program. Even the Digital Living Room market companies can coordin ate with other service networks like Skype to promote on-line calling experience through the television sets. ... Further service and customer touch points must be created in regional points to help understand customer feedback on the service offered. This would help the companies to customize their products and services, which would generate better sales and revenue for the firm. Effect of Economic Activity on the Digital Living Room Market The economic development of the various regions in the developed and developing world has created huge demand for changes in the digital living room market. The Digital Living Room Market is getting filled up with competitors like Apple, Google and Netflix to a name a few in the field of media content generation. Moreover, different players like Nintendo, Microsoft and Sony who are spontaneously innovating newer products to fill up the market are increasingly filling up the video gaming industry. It is expected that the competition between the digital players would reach new heights in a matter of a decade. The deal made between Apple and Faustian AT&T helpe d in the creation of gadget like iPhone, which revolutionized the cellular market. It rather broke the powerful influence of the mobile manufacturers in not letting other software providers to penetrate the cellular market. Again the development of Internet supported television sets are helping to create ample opportunities for the growth of Consumer Electronics industry (Suster; How IP Services Will Drive CE Evolution). The region of North America which was previously quite hostile to the digital development is gradually changing its face. Due to ongoing hostility the stock quotes of the different digital companies showed a declining trend from the period of 2004 to around 2008. The growing awareness of the North American about the digital environment created a demand

Reading response Essay Example | Topics and Well Written Essays - 500 words - 31

Reading response - Essay Example The criticism and the deep analysis of the subversive black comedy that follows increases my knowledge and confirms my desire to follow up the art further. It further reminded me of an instance some years back when a colleague was greatly against my choice of favorite African art and drama. I was however on the verge of losing the argument. This was simply because even though I felt that the art was my favorite, I did not have any facts or historical information about it. Her opinion challenged me to research and discover my field to some length. This meant that the next time a similar argument arose, I was ready to challenge her back and convince her of my stand and opinion as not far-fetched. The mention of a number of artists who were the origin and the founders of the subversive black comedy creates in me a perception that the author is indeed an authority in the field. It amazes me how the author clinically articulates and relates the reasons for the origin of the art and its progress to the perception that it creates among people and how most misinformed people today perceive it negative. It is particularly satisfying to me when the author analytically brings out the relationship between the controversial novel, â€Å"Black no More† by George Schuyler with the African American comedy development. The flashback to the times and actions of artists and comedians such as Gregory, who in my own opinion was properly using humor to communicate the evils of racial segregation in America, is very satisfying. Humor, as noted from the reading is an easier way of communicating issues that seem rather painful without having to create the pain. Looking more closely at the reading, therefore, I believe that there are a number of observation that make the reading worth the space and time. First, the author’s command of art and historical perspective of Subversive Black Comedy is amazing. It is

Government corruption and the entry strategies of multinationals Essay

Government corruption and the entry strategies of multinationals - Essay Example us of this paper is to undertake a review of the article of Rodriguez et al entitled â€Å"Government Corruption and the entry strategy of multinationals† and it is submitted at the outset that it is firstly necessary to undertake a contextual review of the central issues facing MNEs, government corruption and entry mode strategies, which I shall undertake in section 1 as a precursor to the detailed consideration of Rodriguez et al’s arguments in the article. The limitations of the law as a tool for regulation of MNEs by states was further evidenced by the dictum of Slade LJ in the case of Adams v Cape ([1990] Ch 433) per Slade LJ where he asserted that â€Å"we do not accept as a matter of law that the court is entitled to lift the corporate veil against a defendant company which is the member of a corporate group merely because corporate structure has been used so as to ensure that legal will fall on another member of the group rather than the defendant company† (p.544). Moreover, the UK courts have struggled to address the commercial reality of group companies, indicating a distinct preference for maintaining the sanctity of the separate legal entity principle, which on the one hand arguably facilitates potential for entry mode abuse of the MNE structure or alternatively impedes entry mode depending on the nature of state corruption. Indeed, Rodriguez et al highlight the importance of entry mode strategy to MNE success and therefore it is submitted that the interrelationship between effective governance, corruption and entry level strategy is, which is arguably ignored by Rodriquez et al in their article. Additionally, group company structures often create problems of effective regulation and accountability, yet existing principles of law have arguably been stretched to ignore separate legal personality within a group, which clearly shapes entry mode strategy (Nygh, 2002). This further indicates a different dimension to the debate regarding corruption and MNE

Lenovo Research Paper Example | Topics and Well Written Essays - 1250 words

Lenovo - Research Paper Example Shipping is one of the mechanisms that reduce the costs of the business in distribution, labor and administration. This company falls under an oligopoly type of a market structure. Just like any other global company, the company faces competition but its high quality products and services has built a good name for the company. Diversity in employees is the reason as to why the company is able to produce more innovative and diverse commodities because the company understands the needs of its consumers. Cost structure of the company is the main reason as to why the company is doing very well in the global market because it is in a position to offer affordable prices to its diverse customers. The company’s labor cost is relatively because of immigration. Healthcare costs and immigration contributes to the cheap skilled labor available and diversity of the products to cater for all customers with different purchasing powers. Inequality existing globally has helped the company to c ome up with strategies of diversifying prices and commodities too. Lenovo Group Ltd is a very famous Chinese multinational company that deals with computer technology. It has its headquarters s in China, North Carolina, Beijing, China and United States. This company solely designs personal computers, develops and manufactures the computers, tablets, smartphones, servers, workstations and electronic storage devices. The company also deals with softwares for IT management and smart televisions. The company operates in more than sixty countries but it is able to sell in more than 160 countries. Elasticity of demand is the degree at which demand for a certain commodity or a service differs with the price. In many cases, an increase in sales results from a decrease in price while a decrease in sales results from an increase in prices. The company’s revenue is always high even when the demand in the countries falls. Its shipment volume is very high thus compensating the lost

International Business Essay Example for Free

International Business Essay What is e-Bay’s core competency? How does it relate to its chosen strategy? e-Bay’s competencies lie in its software, which allows people to trade with little supervision. It also has competencies in dispute resolution, an automated item listing service, an online financial service and a communications platform. The integration of these allow e-Bay to have a more efficient and effective trading tool used and policed by the buyers and sellers in the site. What are the implications to the challenges identified in the case regarding e-Bay’s strategy today and the future? The challenge on translation software has the least amount of impact considering that even the users of the site are content with â€Å"pretty good. † An improvement in this area though, would make the service more reliable. Government regulation challenges are perhaps one of the most difficult. With new laws constantly passed in countries, some laws that touch on trade could prove a hindrance to e-Bay’s expansion and could restrict their operations. Unless the world becomes more open to the flow of goods, then e-Bay would constantly face problems. The digital divide is a less serious problem. With technology catching up to many countries and becoming more available and cheaper, it is only a matter of time before the internet becomes available to poor communities. Cultural attributes is one of the most problematic. Since beliefs take so much time to shape and that reactions are unpredictable, it is important for e-Bay to be able to make their strategies localized and adapt it to the current system. Finally, international expansion is an unpredictable challenge, but could prove successful if their users continue to support and trust the company for their trading needs. Which candidate should the committee nominate for the assignment? Why? The first choice would be Brett Harrison because of his experience in running line activities and supervisory staff and being rated as an excellent worker. More importantly, he has knowledge about the country which is one of the most important things in running the operations of the company there. If he doesn’t agree because of familial considerations, then, Ravi Desai should take his place, not only because of his knowledge of the country but also because he has experience in handling large operations. Should all the candidates receive the same compensation package? If not, which factors influence each package? The candidates should all receive the same principle in their compensation package: a common basic salary and a bonus dependent on their performance and contributions to the company.

Overview of Insider Trading

Overview of Insider Trading Insider trading is the trading of a corporation’s stock or other securities (e.g. stock options or bonds) by individuals related to the company with potential access to non-public information about the company which is not disclosed to general public generally. In most countries trading by corporate insiders such as directors officers key employees and large shareholders may be legal, if this trading is done in a way that does not take advantage of non-public information which ultimately harm the investors confidence. However insider trading to refer to a practice in which an insider or a related party generally member of the company trades based on material non-public information obtained during the performance of the insider’s duties at the corporation, or otherwise in breach of a fiduciary or other relationship of trust and confidence or where the non-public information was misappropriated from the company. The illegal kind of Insider Trading is the trading in a secu rity (selling or buying a stock) based on material information that is not available to the general public. It is prohibited by the US Securities and Exchange Commission (SEC) because it is unfair and would destroy securities markets by destroying investor confidence. DEFINITION OF â€Å"INSIDER† Insider means any person who is or was connected with the company or is deemed to have been connected with the company and is reasonably expected to have access, by virtue of such connection, to unpublished price sensitive information in respect of securities of the company , or who has received or has had access to such unpublished price sensitive information. Unpublished price sensitive information means any information which relates to the following matter or is of concern , directly or indirectly , to a company, and is not generally known or published by such company for general information , but which is published or known , is likely to materially affect the price of securities of that company in the market. The following unpublished information can be considered as price sensitive: 1) Financial results of the company 2) Intended declaration of dividend 3) Issue of hares by way of public rights, bonus, etc 4) Any major expansion plans or execution of new projects 5) Amalgamation , mergers and takeovers 6) Disposal of the whole or substantially the whole of the undertaking 7) Such other information as may affect the earning of the company 8) Any changes in policies , plans or operations of the company Connected persons include the following 1) Director of the company 2) Person deemed to be director of the company 3) Person occupying the position as an officer or an employees of the company 4) Person holding a position involving a professional or business relationship between himself and the company and who may reasonably be expected to have an access to unpublished price sensitive information relating to that company Therefore a company insider is someone who has access to the important information about a company that affects its stock price or might influence investors decisions. This is called material information. A public company, if it is smart, limits the number of people who have access to material information and, therefore, are considered insiders. This is done for a couple of reasons. First, they want to limit the likelihood that anyone will â€Å"leak† the information. Second, being an insider means being subject to severe limits on when you can trade in the company stock, usually only the middle month of each quarter. The company’s senior management are insiders. So are some of the financial analysts. The top sales people usually also are insiders, although a regional sales manager who only sees his or her own region’s results may not be one. The individuals in Investor Relations and/or Public Relations who prepare the public announcements also are insiders. If t he company is developing a new product that could be a big seller, the key people in the Research Development team would also be considered insiders, provided the information they have is material. Other individuals who are not employees, but with whom the company needs to share material information, are also insiders. This list could include brokers, bankers, lawyers, etc. WHY INSIDER TRADING Insider trading may be attempted to 1) Benefit the company through unethical purchase and sale of the companys shares by withholding price sensitive information , and 2) Benefit the individuals indulging in this unethical practice CATEGORIES OF INSIDERS These are persons connected with the company having access to price sensitive information. Broadly then can be a) Primary insider e.g. directors, stock exchange, merchant bankers, registrars, brokers of the company, top executives, auditors, bank etc b) Secondary insider i.e dealer, agents and other employes etc c) Others having acess to price sensitive information due to their proximity with the company WHY CONTROL INSIDER TRADING Basic objective of controlling insider trading is to protect investors . other related objective are protecting the interest and reputation of the company, maintaining confidence in stock exchange operations, maintaining public confidence in the financial system as a whole. SIGNIFICANT PENALITIES Sections 10(b) and 14(e) of the Securities Exchange Act of 1934 give the SEC the authority to seek a court order requiring violators to give back their trading profits. The SEC can also ask the court to impose a penalty of up to three times the profit the violators realized from their insider trading. In addition to the financial penalties, there are criminal penalties. Many now feel those penalties are not strong enough and are working to increase them substantially. A bill in the US Senate, for instance, seeks to make defrauding shareholders a felony punishable by up to 10 years in prison.A penalty up to Rs 5 lakh can be imposed on an insider who indulge in dealing, communicating or counseling on matters relating to insider trading. PROHIBITION ON DEALING, COMMUNICATING OR COUNSELLING ON MATTERS RELATING TO INSIDER TRADING It has been laid down that no insider shall 1) Either on his own behalf or on behalf of nay other person, deal in securities of a company listed on any stock exchange on the basis of any unpublished price sensitive information; or 2) Communicate any unpublished price sensitive information to any person, with or without his request for such information, expect as required in the ordinary course of business or under any law; or 3) Counsel or procure any other person to deal in securities of any company on the basis of unpublished price sensitive information. INVESTIGATION INTO THE AFFAIR OF INSIDERS In case SEBI, on the basis of written information in its possession, is of the opinion that it is necessary to investigate and inspect the books of accounts, other records and documents of an insider, it may appoint an investigating authority a) To investigate into the complaints received from investors, intermediaries or any other person on any matter having a bearing on the allegations of insider trading; and b) To investigate knowledge or information in its possession to protect the interest of investors in securities against breach of these regulations SECURITY ANALYSIS AND INSIDER TRADING The analysts of security gather and compile information and they talk to corporate officers and other insiders and issue recommendations to traders. Thus their activities might easily cross legal lines if they are not careful about it . The CFA Institute has quoted in its code of ethics that analysts should make every effort to make all reports available to all the broker’s clients on a timely basis. Analysts should never report material nonpublic information, except in an effort to make that information available to the general public. Moreover analysts’ reports may contain a variety of information that is collected without violating insider trading laws. EFFECTS OF INSIDER TRADING THE EFFECT OF STOCK MARKET INSIDER TRADING A distinction has to be made between trading by insiders and trading by insiders on the basis of nonpublic information. As Insiders are legally allowed to buy and sell stocks. The Securities and Exchange Commission (SEC) requires insiders to disclose their trades, and the financial newspapers report such trading. Investors find this information a source of valuable clues about companies. Insider trading puts a bad effect on stock market as people who earlier are willing to invest will now hesitate to invest as they will fear about the market fluctuation as market becomes more risky so as a result they would prefer not to invest. MARKET AND PRICES Stock prices too are generated by supply and demand. But supply and demand for stocks are not disembodied concepts. They are generated, obviously enough, by suppliers and demanders people with preferences, objectives, expectations, knowledge, and, therefore, plans. Part of what goes into an intention to buy or sell shares in a company is expectations about its future based on knowledge about its management, organization, and so on. These expectations are incorporated into the share price, and changes in expectations bring about changes in price. The more knowledgeable the participants, the more fully do prices perform their communications work. Nothing would undermine confidence in markets more than the belief that prices are out of date. CIVIL PENALITIES FOR INSIDER TRADING A. AUTHORITY TON IMPOSE CIVIL PENALITIES 1. JUDIIAL ACTIONS BY COMMISSION AUTHORIZED According to judicial actions by commission authority whenever it will come to the notice of commission that any person has violated any provision and regulations there under by purchasing or selling a security or security-based swap agreement while in possession of material, nonpublic information in, or has violated any such provision by communicating such information through the facilities of a national securities exchange through a broker or dealer, and which is not part of a public offering by an issuer of securities. A. This section bring an action in a United States court to seek and the court shall impose a civil penalty to be paid by a person who directly or indirectly controlled the person who committed such violation. B. may bring an action in a United States court to seek and the court shall have jurisdiction to impose a civil penalty to be paid by the person who committed such violation 2. AMOUNT OF PENALTY FOR PERSON WHO COMMITS VIOLATION The amount of the penalty which might be imposed on person who commits such violation shall be evaluated by the court in accordance of the facts and circumstances and will not exceed three times the profit gained or loss incurred as a result of such unlawful sale, purchase or communication. B. AMOUNT OF PENALTY FOR CONTROLLING PERSON The amount of penalty which might be imposed on the person who directly or indirectly control the person who commits such violation will be evaluated by the court in accordance of the facts and circumstances and will not exceed three times the amount of the profit gained or loss incurred as a result of such controlled person’s violation. C. LIMITATION ON LIABILITY 1. LIABILITY OF CONTROLLING PERSONS No controlling person shall be subject to a penalty under section (a)(1)(B) unless the Commission finds that. A. the controlling person knew the fact that such controlled person was likely to engage in the act constituting the violation and failed to take required steps to prevent such act before they occurred. B. such controlling person knowingly or unknowingly failed to establish or maintain any procedure required under the act of the Investment Advisers Act of 1940 and such failure substantially lead to the occurrence of the act constituting the violation. 2. ADDITIONAL RESTRICTIONS ON LIABILITY No person shall be subject to penalty under subsection (a) of section solely by reason of employing another person who is subject to penalty under subsection unless such employing person is liable as controlling person (1) of this subsection. shall not apply to actions subsection (a) of this section. D. AUTHORITY OF COMMISSION The Commission by such rules regulations as it considers necessary in the public interest and primarily for the protection of investors may exempt in whole or some part unconditionally or for specific terms and conditions, any person from this section. E. PROCEDURE FOR COLLECTION 1. PAYMENT OF PENALTY TO TREASURY A penalty imposed under this section shall be payable into the Treasury of the United States except as otherwise provided in section 308 2. Collection of penalties A person on whom such penalty is imposed shall fail to pay such penalty within the time prescribed in the court’s order then the Commission may refer the matter to the major Attorney General who will recover such penalty by action in the appropriate court. 3. REMEDY NOT EXCLUSIVE The actions authorized by section might be brought in addition to some other actions that the Commission are entitled to bring. 4. JURISDICTION AND VENUE For purposes of section 27 under this section shall be actions to enforce a liability or might be a duty created by this title. 5. STATUTE OF LIMITATIONS No action will be included under this section for more than 5 years after the date of the sale or purchase. This section shall not be construed to bar limit in any manner action by the Commission or under any other provision of this title nor shall it in any manner any action to recover penalties, or to seek any other order regarding penalties, imposed in any action commenced between 5 years of such transaction. F. Authority to award bounties to informants Notwithstanding the provisions of this section there shall be paid from amounts imposed as a penalty under this section and recovered by the Commission or the Attorney General and not to exceed 10 percent of such amounts as the Commission deems appropriate to the person who provide information leading to the imposition of such penalty.Any determinations under this section including in what amount to make payments shall be in the solely decided of the Commission except that no such payment shall be made to any member or officer or employee of any appropriate regulatory agency. ARTICLES Insider Trading by David D. Haddock Since the depths of the Great Depression the Securities and Exchange Commission has always tried to prevent insider trading to become that common in U.S. securities markets. Insiders that can be a firm’s principal owners or directors, and management as well as its lawyers accountants that routinely possess information that is unavailable to the general public. This is Because some of that information can affect the prices of firm’s securities as soon as it becomes public and because of this insiders can profit by buying or selling in advance. Even before the thirties insiders were held liable under the common law if they fraudulently or intentionally misled traders who were uninformed into accepting inappropriate prices. But the Securities Exchange Act of 1934 also forbid insiders from even profiting from superior information. One of the most famous instances of insider trading was of Charles F. Fogarty’s who purchased Texas Gulf Sulphur shares during 1963-1964. Fogarty, who was an executive vice president of Texas Gulf already knew that the company had discovered a rich mineral lode in Ontario and that it will not be publicize before concluding leases for mineral rights. So In the meantime Fogarty decided to purchase 3,100 Texas Gulf shares and earned $125,000 -150,000. The basic argument that is against insider trading is that the insiders should not be permitted or allowed to earn such profits at the expense of uninformed traders. Yet in all other markets where information is important for insider trading is well established and very widely accepted. For example to explain it quite well mineral leases are normally and routinely bought by those better able as Texas Gulf Sulphur’s behavior exemplified than the sellers to evaluate a site’s potential and the Cattle buyers rely on superior estimates of what packers will pay when they will negotiate. And so it goes in markets for art or for real estate or for professional athletes who are indeed in practically every market with substantial variations in the prices. In all those markets a few buyers routinely profit from knowledge that most sellers do not possess, and a few sellers profit from knowledge that most buyers do not possess. One reason frequently cited by policymakers and commentators is that insider trading undermines public confidence in the securities markets.If people fear that insiders will regularly profit at their expense, they will not be as willing to invest and frequent opportunities to trade at observable prices. Efficient securities market it is argued a require a to avoid frightening away speculators who wish to contribute to securities market liquidity and those investors who could invest their savings in markets and with less risk of insider predation. Related to this argument is very important thing that is the harm that insider trading can cause to the specialists. A specialist is the one who the stock exchange appoints to ensure that a any buyer of a particular security that is listed by the exchange can find a seller. These specialists must sell or buy to any trader whose order cannot be discharged against any other orders arriving side by side. For example if a buyer wants a hundred shares of IBM but no one wants to sell at that point of moment then the IBM specialist will sells from his inventory of IBM stock. The specialist charges a bid-ask spread to cover that cost. A bid-ask spread implies that a bit higher price is asked from someone who wishes to purchase a security than will be offered to someone who wishes to sell. An inside trader can however can sell securities to the that specialist who is the one when only he knows that the securities will soon be worth less and will be of no use. After the price had fallen the insider is very well free to repurchase the securities again from that specialist for the lower price than the intrinsic value. If it happens the specialist bears loss. If insider trading reoccurs then the security’s specialist cannot continue without recouping the funds that have been lost to informed traders. If in insider trading increased the spread and it would decrease a security’s attractiveness relative to certificates of deposit and government bonds and other assets. Raising new capital would definitely will be more costly for a firm whose securities are subjected to repeated insider trading. Therefore everything being equal insider trading makes it harder for a firm to raise money when opportunities to undertake new projects arise. Of course insiders can also profit by borrowing and selling securities when the price is apt to fall. Some argue that insider trading more likely to harm companies because damage is easier to inflict. That argument turn has been countered major actions by a company require teams not individuals. A number of financial economists and law professors take the position that insider trading ought to be legal. They put their case on the basic proposition that insider trading makes the stock market more efficient. the insider will have no incentive to trade on the information .If insider trading was legal insiders will bid the prices of stocks up or down in advance of the information being released. The result is that the price would more reflect all information both public and confidential about a company at any given time. Besides specialists the other group systematically injured by insider trading are price-function traders those who trade securities because they believe the present price is inappropriate. If an insider secretly buys securities the result is increase in price. some price function traders believe that security is now overpriced they sell but soon regret their action. Few people have the expertise to realize trading profits repeatedly. CASES SIX PEOPLE CHARGES IN INDISER TRADING CASE BILLIONAIRE RAJ RAJARATNAM, FIVE OTHERS CHARGED IN CASE updated 7:40 p.m. ET Oct. 16, 2009 One of America’s wealthiest men was among six hedge fund managers and corporate executives arrested Friday in a hedge fund insider trading case that authorities say generated more than $25 million in illegal profits and was a wake-up call for Wall Street. Raj Rajaratnam, a portfolio manager for Galleon Group, a hedge fund with up to $7 billion in assets under management, was accused of conspiring with others to use insider information to trade securities in several publicly traded companies, including Google Inc. U.S. Attorney Preet Bharara told a news conference it was the largest hedge fund case ever prosecuted and marked the first use of court-authorized wiretaps to capture conversations by suspects in an insider trading case. He said the case should cause financial professionals considering insider trades in the future to wonder whether law enforcement is listening. Joseph Demarest Jr the head of the New York FBI office, said it was clear that â€Å"the 20 million dollars in illicit profits come at the expense of the average public investor. The Securities and Exchange Commission, which brought separate civil charges, said the scheme generated more than $25 million in illegal profits. Robert Khuzami, director of enforcement at the SEC said the charges show Rajaratnam’s secret of success was not genius trading strategies. Galleon Group LLP said in a statement it was shocked to learn of Rajaratnam’s arrest at his apartment. We had no knowledge of the investigation before it was made public and we intend to cooperate fully with the relevant authorities. Rajaratnam, 52, was ranked No. 559 by Forbes magazine this year among the world’s wealthiest billionaires, with a $1.3 billion net worth. According to the Federal Election Commission. he is a generous contributor to Democratic candidates and causes. The FEC said he made over $87,000 in contributions to President Barack Obama’s campaign, the Democratic National Committee and various campaigns on behalf of Hillary Rodham Clinton, U.S. Sen. Charles Schumer and New Jersey U.S. Sen. Robert Menendez in the past five years. The Center for Responsive Politics, a watchdog group, said he has given a total of $118,000 since 2004 all but one contribution, for $5,000, to Democrats. The Associated Press has learned that even before his arrest, Rajaratnam was under scrutiny for helping bankroll Sri Lankan militants notorious for suicide bombings. Papers filed in U.S.District Court in Brooklyn allege that Rajaratnam worked closely with a phony charity that channeled funds to the Tamil Tiger terrorist organization. Those papers refer to him only as Individual B. But U.S. law enforcement and government officials familiar with the case have confirmed that the individual is Rajaratnam. At an initial court appearance in U.S. District Court in Manhattan, Assistant U.S. Attorney Josh Klein sought detention for Rajaratnam, saying there was â€Å"a grave concern about flight risk† given Rajaratnam’s wealth and his frequent travels around the world. His lawyer, Jim Walden, called his client a â€Å"citizen of the world,† who has made more than $20 million in charitable donations in the last five years and had risen from humble beginnings in the finance profession to oversee hedge funds responsible for nearly $8 billion. Walden promised â€Å"there’s a lot more to this case† and his client was ready to prepare for it from home. Rajaratnam lives in a $10 million condominium with his wife of 20 years, their three children and two elderly parents. Walden noted that many of his employees were in court ready to sign a bail package on his behalf. NOMURA CAUGHT IN INSIDER TRADING SCANDAL By Emi Emoto and Aiko Hayashi TOKYO Nomura Holdings, Japan’s largest brokerage house, said on Tuesday that it had fired an employee at the centre of an insider trading ring and warned the fallout could harm its business. The insider trading scandal, the broker’s second in five years, comes on top of falling profits and $1.4 billion in subprime losses, after which the firm replaced its CEO. Recently appointed CEO Kenichi Watanabe bowed in apology for the scandal, which drew harsh comments from government officials and sent the firm’s share price down 3.9 percent. It also led to a drop-off in business at the firm on Tuesday as some institutional investors stopped placing orders due to compliance concerns, a source on the Nomura trading floor said. Watanabe said the employee at the centre of the probe had been dismissed for violating company rules and warned the case would have an unspecified impact on earnings. It was significant that we were involved in something that hurt the brokerage industry he said, adding he saw the case as an individual matter, rather than a sign of wider problems at his firm. The employee at the centre of the scandal worked in the MA advisory department where he repeatedly used insider information about merger and acquisition deals, a source with direct knowledge of the matter said. The 30-year old, from Nomura’s Hong Kong unit, was suspected of giving information on merger deals to two acquaintances who then profited on stock trades, Kyodo News agency said. N.J MAN ADMITS INSIDER TRADING By Carrie Johnson Washington Post Staff Writer Thursday, June 17, 2004; Page E03 In this case a new jersey insurance broker committed that he is guilty to insider trading using that information that he had received from the husband of a secretary who took care of mergers and acquisition at a new York law firm. Ronald A. Manzo, 60, also lied to regulators at the Securities and Exchange Commission who were investigating purchases of seven stocks in 1998 and 1999, federal prosecutors in New York said.He earned more than $980,000 through the scheme, they said. Manzo could be sentenced to 40 years in prison and be fined millions of dollars. Prosecutors unsealed a related guilty plea by Fiore J. Gallucci, who allegedly passed information about pending deals from his wife, an assistant at Skadden, Arps, Slate, Meagher Flom LLP, to Manzo to curry favor with him. Gallucci, 62, received some money from Manzo but did not trade in the stocks himself. His wife, who no longer works at Skadden. did not know he was improperly sharing the information and was not charged with breaking the law. Separately, the SEC sued Gallucci, Manzo and Gary B. Taffet, a former chief of staff to New Jersey Gov. James E. McGreevey (D), for insider trades that resulted in $3 million in profit. The SEC said that Manzo tipped off Taffet using the information he had acquired from Gallucci. Gallucci and Manzo are in negotiations to settle the civil charges but Taffet, who was not charged with a crime, is fighting the allegations. â€Å"We are disturbed at the SEC’s decision to bring charges against Mr. Taffet, whose stock trading was not based on illegally obtained information.The reality is that Mr. Taffet did not know or deal with any insider at the companies he traded, nor did he knowingly disclose nonpublic information to any third party. Managers at Skadden, one of the most prominent dealmaking law firms in the world, said they cooperated with the investigation. Regulators said the practice of insider traders using information gathered from law firm employees is not uncommon. The crux of this case is that people who are in possession of material nonpublic information for legitimate reasons need to carefully consider to whom they can entrust this information.

The Elephant vanishes :: essays research papers

  Ã‚  Ã‚  Ã‚  Ã‚  In â€Å"The Elephant Vanishes Stories† by Haruki Murakami, he uses a mixture of fantasy and reality to engage the reader into the main idea of object or people disappearing. Most of his stories may seen as if they came from life but he adds mystery to each one of them when something is missing or vanishes and the circumstances around it becomes unreal.   Ã‚  Ã‚  Ã‚  Ã‚  In â€Å"The Wind-Up Bird and Tuesday’s Women† Murakami starts off by surrounding the plot around a man who quits his job for no apparent reason at all, who irons his shirts in a particular manner, and avoid the sexual urges of a woman. With these traits this can be fairly odd and he spends his day looking for a cat. The reader has no clue as to where the cat was and how his wife knew that if could possibly be in the abandoned house not to far down. She states, â€Å"My guess is that the cat’s probably in the yard of that vacant house at the end of the passage.† (Pg. 9) In this story the cat disappears and the girl who tried to help him find it has disappeared. Murakami leads the reader to believe this is reality even though [we] do not know if it is or not and no one will ever know. In this particular story it does not matter whether it is fantasy or reality because when it comes to short stories every possible detail cannot be convey in just a couple pages, something are bound to be left out on the author’s part.   Ã‚  Ã‚  Ã‚  Ã‚  Another one of Haruki Murakami’s story â€Å"The Little Green Monster† is also a cross between fantasy and reality, but mostly fantasy. The narrator, whom is a woman, notices a green monster coming out of her oak tree. In reality little green monsters do not come from out of trees that could â€Å"read minds† and speak of how much they loved someone. This is completely fantasy but it is very interesting of how Murakami has changed his usual narrator of a man to a woman to show how love could come from just about anywhere in different shapes and forms and be denied.

liberalism Essay -- essays research papers

There is no guessing where the oligarchs stand. "All power and wealth to the oligarchy" is their motto. Those existing in the lower ranks of poverty are of no concern to the upper class, exploiting other members of society are what they do best. The tory we find at the other end of the scale. In tory society tradition rules; taking the group's well being rather than the individual is primary. Somewhere in the middle we have the liberals (some bleeding hearts, some not so much). Reason, rationality, logic, and thought are the theoretical source of legitimacy of the liberal. They believe that logic and intellect are infallible guides to action. Individualism is fundamental to the culture. Individual self-interest is assumed to be the motivation of all actions. They feel that competition brings out the best in people and that this competition is necessary for the survival of society. The hierarchy of a liberal is one of merit. He believes that merit will be rewarded with wealth. Anyone in a liberal culture who is not rich is considered to be without merit. The poor deserve to be poor, liberals feel, since all individuals are free to achieve then those who don't must have something wrong with them. The liberal would like the whole world to be middle class and feel sure that if the poor would only accept the cultural attributes and attitudes of the middle class their problems would be over. For if the poor had middle-class attitudes, they would soon have middle class incomes and poof! all their problems would be gone. Despite the liberal's competitiveness, they do have what one might refer to as a soft sport for children of the poor. They don't believe these children should be made to suffer due to their parent's ineptitude. They feel that every individual should start out equally well equipped to compete. Therefore, liberals do invest in welfare to aid the children of the poor. Since the adult poor cannot be trusted or expected to implement these programs, extensive governmental organizations staffed by good liberals are necessary to correctly carry them out. They manage to give some help to the poor but succeed in not hurting or changing the way of living of the rich. This parallels quite closely with the relationship between international lending institutions and third world countries. Agencies such as the World Bank and International Monetary... ...equences: increased school fees force parents to pull children from school, literacy rates go down, poorly educated generation not equipped for skilled jobs. This then brings us full circle although this is not how the liberal sees it. They do not see that their "help" has backfired and gotten these countries in an even more intolerable situation. Instead they feel they have been validated. From their point of view they have reached out to the poor, given them the means and assistance needed to become successful and yet they are still impoverished. For the liberal this proves that the poor are indeed too dumb or lazy to ever move up in life. These countries continue in poverty after assistance, thus they are failures in the economic competition. Liberals see the debt problem and all the misery that results from it as not the fault of the International Monetary Fund, the World Bank, or any other International Financial Institution but rather the country's. There is poverty because of exploitations. There is exploitation because of vulnerability. There is vulnerability because of a lack of power. REFERENCES Global Exchange. www.globalexchange.org/wbimf/facts.html

Amadeus Essay -- essays research papers

At the age of the Enlightenment, Antonio Salieri becomes the most triumphant musician in the city of Vienna, however, without any warning his harmonious universe comes to an utter halt. Salieri’s absolute faith in the world, in himself, and in God is all at once diminished by this spontaneous child composer. When the two opposite ends meet, there emerges a fury, a rage, and a passion in Salieri to sabotage the boy that has secured Salieri’s deserved God given talent; to destroy the one pubescent child that has made him so mute and naked now in a world of discordance. Salieri’s entire reputation and boyhood prayer to attain fame thus rests on his ability to annihilate that child prodigy, Wolfgang Amadeus Mozart.In analyzing the two composers, Salieri and Mozart, there is a distinct line that clearly divides them. Salieri’s operas receive astounding receptions, making them the “talk of the city,'; shaking the roofs, buzzing the cafes, and even the name Sal ieri “sounds throughout all of Europe'; (2,3). The reason for Salieri’s success, as well as many musicians of the eighteenth century, is because they have become enslaved by the well-to-do and hence are “no better than servants'; (1,3). This applies especially to the king. For example, in Amadeus, His Majesty forbid any ballet in his operas. Imperial commands such as this are not to be interpreted in any way, in other words, they are to be merely obeyed without any dispute. Since operas tend to the needs of the high society in order to obtain recognition, the operas must communicate through the language of the nobility, that is, Italian. In addition, since the majority of the audience is made up of the upper class, the subject matter of the operas must consist of elevated themes. Such as, mythological heroes, kings, and queens, and so forth. According to the eighteenth century view, operas are supposed to be a sublime and an aggrandizing art. The elevated subject m atter is then chosen in order to venerate and honor the nobility. It’s purpose is to “celebrate the eternal in man'; says Van Swieten (2,4). Meaning that there is an element in a noble person that lasts without any end, like God who is immortal. God represents the everlasting and the eternality of existence, thus God gives inspiration to operas that... ...n do now is to die. And so he does. Although Mozart does suffer loss, the loss of his life and career, and is somewhat responsible for his downfall, he does not evoke sympathy or recognition. However, it is Salieri who contains all four elements of a tragic hero. Salieri loses practically everything he has faith in before Mozart appears. He suffers from the loss of dignity, esteem, and honor. Salieri also recognizes something he has never felt before, that is the “pain as I had never know it,'; (1,5), the pain from the beauty and delight of Mozart’s music. Thus, recognizing the limitations of his own talent, the mediocrity of his talent compared to the genius works of Mozart. He grows an awareness of disharmony in the universe that he has never encountered. Salieri clearly is culpable of his own tragedy. He is the Court Composer, his works are respected throughout Europe, and because he is not stupid, he does not say he is the better composer. Instead, he is the minor ity who actually appreciates Mozart’s music. There is definitely sympathy for Salieri, in that all human beings can work as hard as they want to at something and can still fail miserably. Amadeus Essay -- essays research papers At the age of the Enlightenment, Antonio Salieri becomes the most triumphant musician in the city of Vienna, however, without any warning his harmonious universe comes to an utter halt. Salieri’s absolute faith in the world, in himself, and in God is all at once diminished by this spontaneous child composer. When the two opposite ends meet, there emerges a fury, a rage, and a passion in Salieri to sabotage the boy that has secured Salieri’s deserved God given talent; to destroy the one pubescent child that has made him so mute and naked now in a world of discordance. Salieri’s entire reputation and boyhood prayer to attain fame thus rests on his ability to annihilate that child prodigy, Wolfgang Amadeus Mozart.In analyzing the two composers, Salieri and Mozart, there is a distinct line that clearly divides them. Salieri’s operas receive astounding receptions, making them the “talk of the city,'; shaking the roofs, buzzing the cafes, and even the name Sal ieri “sounds throughout all of Europe'; (2,3). The reason for Salieri’s success, as well as many musicians of the eighteenth century, is because they have become enslaved by the well-to-do and hence are “no better than servants'; (1,3). This applies especially to the king. For example, in Amadeus, His Majesty forbid any ballet in his operas. Imperial commands such as this are not to be interpreted in any way, in other words, they are to be merely obeyed without any dispute. Since operas tend to the needs of the high society in order to obtain recognition, the operas must communicate through the language of the nobility, that is, Italian. In addition, since the majority of the audience is made up of the upper class, the subject matter of the operas must consist of elevated themes. Such as, mythological heroes, kings, and queens, and so forth. According to the eighteenth century view, operas are supposed to be a sublime and an aggrandizing art. The elevated subject m atter is then chosen in order to venerate and honor the nobility. It’s purpose is to “celebrate the eternal in man'; says Van Swieten (2,4). Meaning that there is an element in a noble person that lasts without any end, like God who is immortal. God represents the everlasting and the eternality of existence, thus God gives inspiration to operas that... ...n do now is to die. And so he does. Although Mozart does suffer loss, the loss of his life and career, and is somewhat responsible for his downfall, he does not evoke sympathy or recognition. However, it is Salieri who contains all four elements of a tragic hero. Salieri loses practically everything he has faith in before Mozart appears. He suffers from the loss of dignity, esteem, and honor. Salieri also recognizes something he has never felt before, that is the “pain as I had never know it,'; (1,5), the pain from the beauty and delight of Mozart’s music. Thus, recognizing the limitations of his own talent, the mediocrity of his talent compared to the genius works of Mozart. He grows an awareness of disharmony in the universe that he has never encountered. Salieri clearly is culpable of his own tragedy. He is the Court Composer, his works are respected throughout Europe, and because he is not stupid, he does not say he is the better composer. Instead, he is the minor ity who actually appreciates Mozart’s music. There is definitely sympathy for Salieri, in that all human beings can work as hard as they want to at something and can still fail miserably.

NAFTA

Introduction Since the idea of a North American Free Trade Agreement (NAFTA) first entered the broader public consciousness in the early 1990s, there has been a remarkable reorientation within business, academic, and political circles in an effort to consider and better understand the nature of the North American relationship. The 1988 free trade agreement between Canada and the United States evoked intense debate and soul searching within Canada and comparatively little interest among Americans; but that situation changed as the horizons broadened to include Mexico and likely extension into other countries of Latin America, beginning with Chile. (Aggrawal, 363-372) By the early 1990s, Americans, along with Mexicans and Canadians, had fully entered into the dialogue. Remarkably, although perhaps not surprisingly, the nature of the issues raised, anxieties expressed, and ambitions to be realized through a closer trilateral relationship articulated within one country have resonated in the others. Although the alliances of foes and advocates have varied in the three countries, there have also been remarkable similarities. Canadians and Mexicans have tended to be more directly engaged in a debate over models of development and strategies of dealing with their common neighbor than have Americans. The NAFTA Debate The NAFTA agreement touched on such a wide range of issues and areas, including financial services, foreign investment, the auto sector, textiles, agriculture, labor, and the environment in the side agreements that it should not have been surprising that it evoked strong sentiments among a variety of interest groups in the United States and Mexico, although the Mexican public debate was significantly muted by the more closed nature of the political system. In the United States, the opponents of NAFTA were strange bedfellows: organized and unorganized labor, environmentalists, consumer groups, the protectionist left, and the populist right of Ross Perot, variously denouncing the agreement as a big-business plot to take advantage of low Mexican wages and lax Mexican government enforcement of environmental standards and labor laws. (Andrea, 54-69) On the protagonist side, the administration and its supporters, which included arch-conservative Rush Limbaugh and corporate scion Lee Iacocca, contended that NAFTA would expand American markets, improve environmental and labor issues along the U.S.-Mexican border, and sufficiently improve economic and labor conditions in Mexico to result in a significant reduction in Mexican immigration pressure on the United States. (Peter, 44-56) The Impact of NAFTA Given the limitations of time and space, I will touch on a select range of areas in considering the impact of NAFTA to date: industry, labor, immigration, and the environment.   As with other issues, continuity here is more striking than any significant departure from the past. At the time of the conclusion of NAFTA, Mexico was, and remains, the third largest trading partner of the United States after Canada and Japan, although its economy was only five percent the size of the combined American and Canadian economies. In 1992, the United States was the source of approximately seventy percent of Mexican imports and the market for seventy-six percent of its exports. As the result of GATT and general tariff reduction in Mexico, Mexican tariffs on U.S. imported goods by 1992 averaged ten percent in contrast to the one hundred percent that prevailed in 1981. (Gallagher, 43-51) NAFTA will have no effect on the number of jobs in the United States NAFTA will have neither a significant negative nor positive impact on the environment It will produce a small overall gain in U.S. real income The real wages of skilled workers may decline slightly For the United States, NAFTA is more a foreign policy than an economic issue. NAFTA provided for the phasing out of tariffs on apparel and textiles over ten years, with some items to have duty-free access to Mexico immediately. All tariffs on autos and auto parts are to be eliminated over ten years; in agriculture, Mexico and the United States are to phase out fifty-seven percent of trade barriers immediately, ninety-four percent after ten years and one hundred percent after fifteen years. U.S. and Canadian investors are guaranteed national treatment with the right to seek binding arbitration in international tribunals, although the agreement excludes in this respect the Mexican energy and railway industries, U.S. airline and radio communications, and Canadian cultural industries. (Gilmore, 102-118) In the oil sector, PEMEX is to retain its monopoly over most of the industry, but non-Mexicans will be able to invest in petrochemicals, electricity generation, and coal mines; procurement contracts for PEMEX and Mexico's state electricity commission are also to be opened to foreigners; foreign banks and securities brokers are to have unrestricted access to Mexico by the end of the decade, although there are some restrictions on the sale of policies by U.S. insurers. (Andrea, 54-69) The agreement also provides for an elimination of most of Mexico's tariff barriers on telecommunications equipment. Basic voice services remain protected but foreign investors are to have access to value-added telephone services. As a response to the significant political opposition to the original agreement in the United States, there are two side agreements for environmental and labor standards. The former is especially weak, providing for each nation to apply its own environmental standards provided they are established on a scientific basis and with the stipulation that lowering of standards in order to attract foreign investment would be â€Å"inappropriate.† (Aggrawal, 363-372) The two commissions established to deal with environmental and labor matters have the power to impose fines and remove trade privileges as a last resort when environmental standards or legislation pertaining to health and labor safety, minimum wages, or child labor are deemed to have been violated. Such fines would be levied on the governments not the private sector violators. (Francesco, 90-97) Labor. In 2005, Perot contended that the job losses to the United States as a result of NAFTA would be as high as 5.9 million. As The Economist suggested at the time, such a result was not feasible. For there to be a shift of even 2 million-and this is not to suggest that such a loss would be insignificant-Mexico would need a bilateral trade surplus of $100 billion, equal to one-third of its gross domestic product (GDP) in 1973. Gary Hufbauer and Jeffrey Schott of the Washington Institute for International Economics estimated, on the contrary, that NAFTA would generate a net increase of 171,000 jobs in the United States and that combined U.S. and Mexican GDP would ultimately increase by $15 billion a year. Yet another study, this one by the Economic Policy Institute in Washington, predicted that the net loss of U.S. jobs to Mexico would be 490,000. (Andrea, 54-69) Such wildly diverse predictions and analyses, even if one discounts Perot's, suggest the inexact nature of economic forecasting as well as its ideological biases. Yet one also has to keep in mind that differences of 200,000 are not considered significant, since seasonally adjusted statistics employment numbers shift up and down by that magnitude on a month-to-month basis. There also seems to be a general consensus among economists, including the Chicago school, that open markets and deregulation lead to social and economic dislocation. The left and the right simply and fundamentally differ over what one does to correct that dislocation. (Peter, 44-56) Advocates of NAFTA countered critics on the issue of differential wage scales with the argument that firms would not relocate simply because Mexican wages are eight times lower than those for U.S. workers. If one considers that wages comprise only fifteen percent of production costs, that the cost of relocation, including potentially increased transportation costs, training of a new labor force and the lower level of productivity among Mexican workers, and fringe benefits including housing allowances and Christmas bonuses normally equal to one month's wages, the wage differential is significantly reduced as a factor determining capital location. As well, as productivity increases in Mexico, wages will also rise, which will also occur in the higher technology areas of employment, as for instance in the highly productive Ford plant in Hermosillo, Baja California. (Francesco, 90-97) Further, and perhaps most significantly, it could be argued that under the provisions of the maquiladora operations that had been in place for three decades, there had been more than ample opportunity to test the thesis that employment and investment would be diverted to Mexico. U.S. organized labor could identify only 96,000 pre-NAFTA jobs that had shifted to Mexico in the previous decade, and several of the firms involved-Smith Corona typewriters and Zenith televisions- would have either moved to Southeast Asia or gone out of business if they had not shifted operations to Mexico. In one of the sectors where Mexico enjoyed a clear comparative advantage over the United States-beet sugar production-Clinton acceded to pressures from U.S. interests to include a protective provision in NAFTA. (Gallagher, 43-51) In another sector-apparel manufacturing- where Mexico also enjoys considerable comparative advantage, it is anticipated that although there will certainly be short-term and possibly significant job losses to Mexico; in the long term, improved economic conditions in Mexico, rising wages, and increased consumer spending capacity will level the playing field between the two countries. The data on job losses and job creation tied to NAFTA are not very favorable to date. U.S. Department of Labor statistics suggest that the job loss in the United States has been slight. (Gilmore, 102-118) In the twenty months following the implementation of the agreement, 68,482 workers had applied for a special NAFTA program of federal retraining assistance while losing their jobs; 38,148 had been accepted under the plan, which requires proof that the job loss is trade-related although not necessarily specifically caused by NAFTA. Those applying for assistance represented some 457 firms located in forty-six states, including Allied Signal, Sara Lee, Smith Corona, Averred Battery, Zenith, and Proctor and Gamble, all of which had belonged to a pro-NAFTA lobby. (Andrea, 54-69) Department as well as American Federation of Labor-Congress of Industrial Organizations (AFL-CIO) officials agreed that in northern California in particular the impact seemed to have been especially light. Only one firm, Plantronics, a designer and manufacturer of telephone headsets, had by 1995 laid off 60 of 300 workers at its Santa Cruz plant and moved their positions to Mexico. The marginal NAFTA impact on industries such as Plantronics appears to be linked to the fact the region's high-tech; white-collar industries are less susceptible to low-wage Mexican competition than other industries elsewhere in the United States. Nonetheless, this perception of a failure of NAFTA to increase U.S. exports and export-related jobs led the anti-NAFTA consumer advocacy group Public Citizen to claim without hard evidence 300,000 NAFTA-related job losses. This argument received support from Congressional critics of NAFTA. (Francesco, 90-97) Ohio Democratic Representative Marcy Kaptur, for instance, joined with others to form a bipartisan House group with plans to introduce a NAFTA Benchmarks Bill to suspend NAFTA and set quantifiable limits on the trade deficit, job losses, and currency rates that would trigger an automatic suspension of the trade agreement. Certainly, Mexico has increased its exports to the United States as well as its proportional share of U.S. imports; but, this would have occurred without NAFTA with the Mexican peso devaluation in the same way that a low Canadian dollar continues to stimulate Canadian exports. Immigration. It may be inappropriate to attempt at this early stage to examine what has been happening with Mexican migration pressures on the U.S. border during the two years NAFTA has been in effect, since the crisis in the Mexican economy has greatly exacerbated the problem. Nonetheless, it is useful to examine, briefly, the patterns in this area. Pro-NAFTA groups were adamant that an improved Mexican economy was the only long-term solution to high levels of Mexican migration-legal or illegal-to the United States, and I see no basis to reject that analysis. The fact remains that in the relatively short period since NAFTA was implemented there has been no easing of pressure on border points in the southwest. Nonetheless, I would stress that it is impossible to attribute this situation to NAFTA per se, at the same time that in the short term at least NAFTA has not in itself significantly alleviated the migration problem. That is a long-term issue, driven by cultural, economic, and political considerations, which will only be corrected if a relative degree of equilibrium is achieved on both sides of the border. (Gallagher, 43-51) At present, that is not even a fantasy let alone a realistic economic goal, and even if the economic situation were corrected, such issues as family reunification with the large indigenous Mexican-American population in the southwestern United States will work to encourage ongoing migration into the area. Environmental Issues. Environmental protection was a critical factor in obtaining congressional approval of the agreement in the U.S. Congress; yet one must recognize that it was and remains a side issue beside the main objectives of NAFTA, which are trade and investment liberalization. Hence, it is rather misleading to attempt to measure the success or failure of NAFTA in terms of the successes or failures of that side agreement. Nonetheless, what I believe has happened over the past several years is that analysts have begun to take a far more holistic approach to the understanding of international trade questions, much in the same way that analysts in strategic studies have gone far beyond their traditional weapon-counting approach to the discipline by taking into consideration a range of other factors that now are seen to threaten national security, including environmental degradation, poverty, and human migration. (Francesco, 90-97) Mexico's economic crisis has seriously undermined its capacity at the federal, state, and local levels to fund environmental clean-up and regulation of industries. Hence, although there has been notable new private investment in Mexican maquiladoras, there has been no significant investment in the infrastructure in the areas where those firms operate. There is little value in detailing here the level of environmental degradation that continues to characterize industrial Mexico. Such pollution is clearly not the direct result of NAFTA, but it is the result of a political and economic philosophy that attempts to separate trade matters from the quality of the environment in which we live and which places a premium on open markets, privatization, and deregulation. (Andrea, 54-69) There has admittedly been more attention to environment, labor standards, and culture in recent years than there was at the outset of the debate over the U.S.-Canada trade agreement, primarily because of the impact that labor and environmental groups have had on the political agenda in the United States; but it is questionable that the relatively weak institutions established to deal with environmental and labor issues will be radical in their approaches. In the longer term, all societies will pay a very high price indeed if those issues are not effectively addressed. Conclusion NAFTA has not simply failed to provide some of its promised benefits, but it has led instead to unemployment, environmental devastation, and serious health problems.   The few beneficiaries have been corporations who benefit from deregulation that reduces their costs and the free market that they largely control.   The North American Free Trade Agreement has proved a failure and at the very least must be revised in order to compensate for the damages that have occurred. As long as economic motives are behind any legislation, people and the environment will unfortunately always be expendable. To return to the main issue raised in this paper, the impact of NAFTA in its first two years the evidence remains preliminary. A combination of factors led to a dramatic increase in Mexican exports to the United States after NAFTA and a substantial shift in the favorable balance of trade away from the United States. As long as prices and the costs of production in Mexico remain low, proximity to the United States will likely serve to perpetuate that pattern. Mexican export opportunities will also provide continuing incentive for foreign investment in Mexican agriculture and manufacturing, as well as financial institutions. To date, the anticipated liberalization of investment in the extractive resource sector in Mexico has not been fully realized, especially in petroleum, and the continued significance and power of PEMEX in Mexican political culture suggests that any dramatic change in the petroleum investment environment is unlikely to come soon. At the same time, the decades of a highly protectionist Mexican economic policy are in the past, and there are no signs of a return to the import substitution model. In the United States, there is more volatility on the politics of trade and trade policy. Works Cited Aggrawal, R. and Kyaw, N.A. â€Å"Equity market integration in the NAFTA region: evidence from unit root and cointegration tests†, International Review of Financial Analysis 4, 2004: 363-372 Andrea Bjorklund et al. â€Å"Investment Disputes Under NAFTA (Ring-bound)† Kluwer Law International; Lslf edition, 2006: 54-69 Francesco Duina, â€Å"The Social Construction of Free Trade: The European Union, NAFTA, and Mercosur† Princeton University Press, 2005: 90-97 Gallagher, Kevin â€Å"Free Trade and the Environment: Mexico, NAFTA, and Beyond†. Stanford University Press, 2004: 43-51 Gilmore, C.G. and McManus, G.M. â€Å"The impact of NAFTA on the integration of the Canadian, Mexican, and U.S. equity markets†, Research in Global Strategic Management 10, 2004: 102-118 Peter Hakim â€Å"The Future of North American Integration: Beyond NAFTA†. University of British Columbia Press, 2005: 44-56

E-Banking: Trend, Status, Challenges and Policy Issues

E-banking: Status, Trends, Challenges and Policy Implications 1. Introduction In addition to introduction (section I) and conclusion (section VI), the paper includes four sections. Section II addresses the definition and current situation of e-banking. Then, section III addresses the impact of e-banking on banking business. After that, section IV addresses the major application of e-banking. That is also the bottom line whether e-banking can be viable in a country. Section V addresses the new challenges e-banking has brought and policy implications from the perspectives of society, banks, and regulatory authority as well as government. . Status 2. 1. Definition †¢ The Internet includes all related web-enabling technologies and open telecommunication networks ranging from direct dial- up, the public World Wide Web, cable, and virtual private networks. (BIS-EBG, 2003) †¢ Internet banking (e-banking) is defined to include the provision of retail and small value banking product s and services through electronic channels as well as large value electronic payments and other wholesale banking services delivered electronically. (BIS-EBG, 2003) 1 2. 2. Fundamental characteristicsComparison between the current round financial innovation (e-banking) and past financial innovations The current innovation (ebanking) Content Delivery channel innovation-deliver banking business via internet. Impact Wider Past financial innovations Products and services, i. e. , delivery, swap Narrow 2. 3. Levels/Scope of e-banking business †¢ †¢ Basic information e-banking/web sites that just disseminate information on banking products and services offered to bank customers and the general public; Simple transactional e-banking /web sites that allow bank customers o submit applications for different services, make queries on their account balances, and submit instructions to the bank, but do no permit any account transfers; †¢ Advanced transactional e-banking/web sites that allow bank customers to electronically transfer funds to/from their accounts pay bills, and conduct other banking transaction online. †¢ Usually, e-banking refers to types II and III. 2. 4. Current development situations (in industrial countries) †¢ E-banking products and services are getting more and more advanced and increasing in variety.From providing information at the early stage to providing transactional activities. 2 †¢ †¢ Both volume and share in the total banking business are getting bigger and bigger very fast (Graph, Europe) E-banking customer base is getting bigger quickly. 2. 5. Status in developing countries Developing countries are in catching up in e-banking: †¢ †¢ †¢ †¢ †¢ †¢ The average e-banking penetration for developing countries by the end of 1999 was close to 5% (World Bank Survey, 2001). In Brazil, the number of e-banking users reached 8 million in 2000. In Mexico, the number of e-banking users reached 1. 5 million in 2000. In India, over 50 banks are offering online banking services. ICICI Bank’s e-banking is very impressing. E-banking in Korea, Thailand, Malaysia, and Singapore, Hong Kong and Taiwan (China) is thriving. In Ghana and some other African countries, smart cards based on Visa Horizon proximately technologies are getting started. 3. Prospects–Impact of E-banking on traditional banking 3. 1. The early conventional wisdom: †¢ †¢ Internet banking would destroy the traditional banking business model and promote the entry of newcomers from the outside of the banking industry.Developing countries could have the â€Å"opportunities to leapfrog† in the adoption of efinance on a large scale. 3. 2. In reality, e-banking develops fast, but not damaging as conventional wisdom projected. †¢ The notion of leapfrog has not worked in many developing countries due to various impediments. This can be verified by UNCTAD report. â€Å"Some positive si gns are 3 already visible, including a high level of acceptance of technology by customers and financial institutions†¦. H(h)owever, most projects have not yet been deployed on a large scale. † (UNCTAD 2002. It provides a comprehensive look at the status of efinance in developing countries.It covers arrange of areas related to e- finance including e-banking, e-payments, e-trades, and e-credit information). †¢ †¢ Even in industrial countries, e-banking is still a complementary tools to traditional banking. Lots of pure e-banking businesses have been forced out of market. Internet-only banks have been substantially less profitable. They generate lower business volumes and any savings generated by lower physical overheads appear to be offset by other types of non-interest expenditures, notably marketing to attract new customers. (De Young 2001). 3. 3.Prevailing vision †¢ The prevailing view today is that Internet banking can only succeed if it is thoroughly in tegrated within the existing banking infrastructure, which should combine â€Å"click† (e-banking) with â€Å"mortar† (physical branches) due to the importance of public trust in banks, the value of an established brand name, and the desire of customers to do something physically. †¢ According to this view, Internet is regarded simply as another distribution channel as a complement to physical braches, phone banking and ATM networks. The dominance of the so-called â€Å"click and mortar† model can be explained by its success on the ground.Two good examples are Wells Fargo in the US and Nordea in Scandinavia. 3. 4. Case-study–experience from the two most successful cases Two most successful examples: †¢ †¢ Wells Fargo (US), has actually the highest absolute number of online customers, more than 3 million out of its total 24 million customers in 2001. Nordea (Scandinavia), has 2. 3 million online customers, representing over 20% of its total customer base. It has the highest share of online customers. 4 They share the following common elements: †¢ †¢ †¢ †¢ †¢ Both are leaders in their traditional markets and thus can capitalize on a sizable customer base.Furthermore, their customer base is technologically sophisticated. California and Scandinavia have extremely high rates of Internet use. Both are technologically advanced and started early in Internet deployment. Wells Fargo started e-banking business as early as in 1989. Both have tightly integrated Internet in their operations and their existing infrastructure. Both have large number of SME customer base. 3. 5. Prospects Bottom line: the ability to mainstream SME and individuals into E-banking. 4. Trend: The major application of e-banking—SME finance E-banking is used more and more for improving access to finance.Financial constraints for SMEs have never been effectively solved and have been thought inevitable. This section will cover t he advantages of e-banking on this aspect. 4. 1. Obstacles to SME’s access to finance 4. 1. 1. from banks’ perspective †¢ †¢ †¢ High costs and low profitability of SME loans because of the small loan size. High risks of SME loans due to lack of business track record, credit history, and transparent information. Evaluating SME risk is â€Å"too labor- intensive† to be profitable. 5 †¢ Many banks lack strategies and skills to tackle impediments associated with SME finance.In many developing countries, the staff of banks lack necessary skills to appropriately assess credit risks of SMEs 4. 1. 2. from SME’s perspective †¢ Inappropriate products and services, which are rigidly supply-driven instead of demand-driven. Commercial bank products are usually designed to meet the needs of large corporations; few products and service are specifically tailored to the needs of SMEs. SME sector is usually underserved. †¢ †¢ †¢ High interest rates. SMEs usually require much smaller loans than large enterprises. banks, therefore, usually charge high margins to cover the costs. Cumbersome procedures.Over insistence on collaterals and guarantees. SMEs usually have low- level of fixed assets and relatively high- level of working capital. Therefore, when lending to an SME, a bank needs to assess the SME’s economic viability and future cash flows instead of collaterals. However, in many developing countries, banks are still in the very early stage of mastering sound lending policies and good credit practices. Their lending appears to simply rely on collateral rather than cash- flow projections. banks’ lack of capacity of non-collateral credit assessment has caused them unable to provide lending services to SMEs. Inflexible credit criteria—one size fits all. 4. 2. New Technology, New Hope for SME Finance 4. 2. 1. From bank’s side, new technology (e-banking) makes SME finance economically p ossible (i) lower operational costs of banks †¢ †¢ †¢ Automated process Accelerated credit decisions Lowered minimum loan size to be profitable (ii) potentially lower margins 6 †¢ †¢ †¢ †¢ †¢ †¢ Lower cost of entry Expanded financing reach Increased transparency (iii) expand reach through self-service Lower transaction cost Make some corporate services economically feasible for SMEs Make anytime access to accounts and loan information possible . 2. 2. From SMEs’ perspective E-banking business makes access to finance from banks attractive. SMEs have benefited from the development of E- finance and gradually stepped out of the informal sector. In particular, E- finance offers the following attractive benefits for SMEs: †¢ †¢ †¢ †¢ †¢ Ease of use Lower costs of financing Convenience Time savings Operational efficiency 4. 2. 3. From the government’s perspective New technologies have provided the incentiv es/benefits for the government to improve SME finance by †¢ †¢ †¢ †¢ Increasing employment. Contributing to poverty reduction. Contributing to economic development.Reducing the informal sector and cash economy1 . 1 Lack of SME’s access to FIs is one of the major reasons why there are usually big informal economic sector (cash economy) in many developing countries. Improved SME access to formal financial institutions is expected to reduce the informal economic sector. 7 5. Challenges and policy implications 5. 1. Cross-border e-banking activities and its policy implications 5. 1. 1. definition †¢ Definition: Cross-border e-banking is defined as the provision of transactional on- line banking products or service by a bank in one country to residents of another country. BIS, 2003) †¢ †¢ A note on the definition: A bank delivering its e-banking activities via its physical branches/ subsidiaries in a host country does count into cross-border e-ba nking. A further note: banks can use the new delivery channel (e-banking) reach customers in another country without as much reliance on physical presence and the significant investment that it entails (example). 5. 1. 2. Two scenarios †¢ †¢ The in-out scenario—In-country institutions providing banking services to customers outside the home country.The out- in scenario—institutions based outside the home country providing banking services to parties within the home country. 5. 1. 3. Raised many challenges and questions for banking regulatory authorities (both home and host) †¢ Who should take the supervision responsibility? Borderless nature of e-banking increase the potential for jurisdictional ambiguities with respect to the supervisory responsibilities of different national authorities. Such situations could lead to insufficient supervision of cross-border e-banking activities. †¢ †¢ Does it need to be licensed?Banks that engage in cross-bor der e-banking may face increased legal risk. Specifically, unless banks conduct adequate due diligence they run the risk of potential non-compliance with different national laws and regulations, including 8 applicable consumer protection laws, record-keeping and reporting requirements, privacy rules, AML rules. †¢ Non-banks may offer with greater facility bank- like services without any type of supervisory approval or oversight due to definitional ambiguities that may exist wit regard to what constitutes a bank (or banking services). †¢ †¢ †¢ Which country’s law applies to cross-border e-banking activities.Role and responsibilities of the home country banking supervisor and local supervisor. Supervisors need to recognize that the Internet allows for the provision of e-banking services that can span geographic borders and potentially call into question existing jurisdictional authorization requirements and the regulatory processes; †¢ Supervisors need to recognize the implications of taking a restrictive approach toward currently regulated banks without an even-handed treatment of foreign organizations that may conduct identical or nearly identical activities via the Internet in the local jurisdiction. Supervisors should ensure that banks appropriately manage the legal uncertainty during the period while the legal infrastructure for cross-border e-banking remains under construction. 5. 1. 4. Its policy implications †¢ Policy goal: The objective of both the host and home supervisors should be to avoid or minimize legal risks stemming from jurisdictional ambiguities, and to ensure that e-banking activities are adequately supervised with clearly defined supervisory responsibilities. †¢Basic principle: Focus attention on the need for effective home country supervision of cross-border e-banking activities on a consolidated basis as well as continued international cooperation between home and local banking supervisors regardi ng such activities given the possible absence of a physical banking presence in local jurisdiction. Such as focus is essential to promote safe and sound cross-border e- 9 banking without creating undue regulatory burden or impediments to banks’ use of the internet delivery channel to meet customer needs. Complementary principle : Home supervisors should provide host supervisors with clear information on how they oversee a bank’s e-banking activities on a consolidated level. Host supervisor would generally rely on the home supervisor to effectively carry out its supervisory program. Where there are concerns about the effectiveness of a home supervisor’s oversight program, the host would approach the home supervisor on a bilateral basis. The host supervisor will need to consider what actions may be appropriate to protect local residents and their banking system. Cooperation among national supervisors . Rapid pace of development of e-banking and the associated risk s will require supervisory agility, resources and, in the crossborder context, cooperation between home and host supervisors. 5. 2. From the society’s perspective 5. 2. 1. Challenges 1. Theft of personal identity 2. Privacy issues 3. Who take the responsibility in case of fraud 5. 2. 2. Policy implications 1. Essential are efforts to define the privacy framework and to use technology to solve contract enforcement problems. . 3. From bank’s perspectives 5. 3. 1. Risk management challenges †¢ Adaptation to Technology issues: The speed of change relating to technological and customer service innovation in e-banking is unprecedented. This intensifies challenges to the management to ensure that adequate strategic assessment, risk 10 analysis and securities reviews are conducted prior to implementing new e-banking applications. †¢ Outsourcing issue: E-banking increase banks’ ependence on information technology, thereby increasing the technical complexity of many operational and security issues and furthering a trend towards more partnerships, alliances and outsourcing arrangements with third parties, many of whom are unregulated. †¢ †¢ Increased legal and reputational risks E-security issue: The internet is ubiquitous and global by nature. It is an open network accessible from anywhere in the world by unknown parties, with routing of messages through unknown locations and via fast evolving wireless devices.Therefore, it raises significant challenges on security controls, customer authentication techniques, data protection, audit trail procedures, and customer privacy standards.  § While companies have been keen to embrace the potential offered by these technologies, few understand the inherent vulnerability and risks associated with e- finance. Since 1999, Brazil has seen a 418% increase in electronic security incidents; Korea has seen a 932% increase and Japan has seen over 1000% increase in malicious electronic security i ncidents (Tom Glaessner et al, 2003).  § Over 57% of all hack attacks in 2002 were initiated against the financial sector (Tom Glaessner et al, 2003). Identity Theft has exploded and incidents are expected to reach almost 2 million per year by 2005 wit a cost of almost US$10 billion. †¢ Outsourcing issue: E-banking increase banks’ dependence on information technology, thereby increasing the technical complexity of many operational and security issues and furthering a trend towards more partnerships, alliances and outsourcing arrangements with third parties, many of whom are unregulated. †¢ Increased legal and reputational risks 11 5. 3. 2. Policy implications/recommendations . Establish a comprehensive security control process. †¢ †¢ †¢ †¢ Authentication of e-banking customers Appropriate measures to ensure segregation of duties Establishment of clear audit trails for e-banking transactions Non-repudiation and accountability for e-banking trans actions 2. Centralized-back office to free staff time in sales and services areas and to consolidate process consistently across the organization. 3. Develop automated credit authorization system by developing appropriate credit scoring system and cash- flow scoring system to reduce operating costs, improve asset quality, and increase client profitability.One of the major benefits of credit scoring system is that lenders can make credit decisions without necessarily obtaining financial statement, credit reports, or other time-consuming and hard-to-get information. In particular, the financial statements of SMEs are often not complete and difficult to get. Banks can more closely align their specific credit policies and marketing strategies with the analytics, making the decision process more costefficient. (I. e. , Fair, Isaac has developed a credit scoring system specialized in SME finance—SBSS 5. (small business scoring services), which has been increasingly used by many ban ks as their SME credit decision making model. ) 4. Comprehensive due diligence and management oversight process for outsourcing relationships and other third-party dependencies. 5. Integrate cross-border e-banking risks into the bank’s overall risk management framework. 6. Legal and reputational risk management †¢ †¢ †¢ †¢ †¢ Appropriate disclosures for e-banking services Privacy of customer information Capacity, business continuity and contingency planning to ensure availability of e-banking systems and services Incident response planning.Segregation of duties 12 †¢ Due diligence on risk assessment 5. 4. From the authorities’ perspective (banking supervisor, central bank, related government depts. ) 5. 4. 1. Challenges from e-banking 1. Oversight of outsourcing and partnership arrangements, and the oversight of security and data integrity and controls and safeguards, especially when the supporting operations are located in another jurisdi ction . 2.The ability to adopt global technology to the local requirements: A adequate level of infrastructure and human capacity building are required before developing countries can adopt the global technology for their local requirements. 3. The ability to create the necessary level of regulatory and institutional frameworks: The lack of regulatory frameworks, trust, security and privacy standards, high trade barriers, customer and investor protections impede progress in many developing countries to implement e- finance projects. 4. E-security challenges 5. 4. 2.Policy implications/recommendations 1. †¢ †¢ †¢ †¢ Improve system infrastructure environment for e-banking business Strengthen payment system (including RTGS, bulk/low value payment system). Improve the settlement system (e. g. , for credit cards and other forms of electronic transactions). Build-up transaction reporting/reconciliation services. Establish credit information registry and disseminating s ystem. Credit information registries, commonly known as credit bureaus in many countries, can reduce the extent of asymmetric information by making a borrower’s credit history available to 3 potential lenders. Lenders armed with this data can avoid making loans to high risk customers, with poor repayment histories, defaults, or bankruptcies. Once a lender makes a loan, the borrower knows that their performance will be reported to the credit bureau. The information contained in a credit registry becomes part of the borrower’s â€Å"reputation collateral†; late payments or defaults reduce the value of this â€Å"collateral† providing an additional incentive for timely repayment. At the same time, by reducing the information monopoly that banks have over their existing borrowers,