Financial stability and resilience of the banking industry are the Essay

Financial stability and resilience of the banking industry are the main current concerns of national and international regulator - Essay Example However, when the economies were overheated and an economic boom was witnessed, many governments and monetary authorities lost sight of the fact that unbridled banking would ultimately cause the downfall of the financial system. Consequently, the fact that many of the financial instruments created were short-sighted in nature and dubious in character was lost among the policy makers and political leaders. Such a situation arose out of the fact that many of their activities were uncontrolled in nature. The global financial meltdown of 2007-2009 the impact of which is felt even today among the global economies brought a shock among them which made such leaders and policy makers to wake up from the slumber and meet the harsh reality that global financial system needs a through overhaul and if appropriate and timely measures were not taken the threat to the global prosperity during 21st century would turn out to be a monster which would become entirely uncontrollable. There was a sudden urgency to enact prudential regulations. However, the continued worsening of the world economies reeling under pressures of weakening manufacturing activities, growing unemployment and uncertainties have brought into focus a set of arguments that such prudential regulations should be slowed down. ... y him for such an argument is that, firstly, â€Å"the financial stability is about resilience†, secondly, â€Å"preserving financial stability involves a wide range of policy areas† and thirdly, â€Å"a globalised financial system requires global rules†, fourthly â€Å" global financial regulators should stay focused on the end result they want to achieve, namely, a system characterised by less leverage, better liquidity management, sounder incentives, less moral hazard, stronger oversight and more transparency†2. Towards realizing the above, he has set an agenda which includes reforms and regulations on the bank capital, liquidity, financial products (e.g. OTC derivates,) and among other things micro and macro prudential regulations. Each one of the points averred by him is analyzed below. 2.1. Resilience Caruana equates resilience with financial stability and believes that this is something which the world economies should prepare well in advance in ter ms of capital, liquidity, infrastructure etc to safeguard themselves from the shocks, external/internal so that there is no repetition of the nasty situation witnessed during the 2007-09 global financial meltdowns. The same view has been advanced by some other scholars. According to Sheehan3, Financial regulations have two sides attached to them, viz, micro and macro prudential regulations. Micro prudential regulations seek to focus themselves towards protecting the interests of smaller savers and borrowers from grey practices of financial institutions while the macro ones engages themselves in the creation and implementation of rules that goes towards promoting the stability of global financial systems and reduction of systemic risks. Whether it is micro or macro, each country creates its own financial regulators and

Business Memo (AVID) Essay Example | Topics and Well Written Essays - 750 words

Business Memo (AVID) - Essay Example This report analyzes the strategic position of the company, the external environment and the financial performance of company based on its financial statements during the years 1999 and 2000. The first big strategic decision the company made was in 1993 when the firm launched its initial public offering (IPO) to become a publicly traded company and raised $53 million. His capital was utilized to spur the firm’s future growth. The three markets Avid serves are: Media composer was the initial product helped the company become such a popular firm in the industry. As the company matured it realized it needed help from other firms in order to developed new products. They entered into a series of strategic alliance with different companies. Avid System became a mid-size company. In this industry they were at a competitive disadvantage with larger firms such as Sony which had unlimited resources. Avid as a pioneer in the industry pushed for open standards for the participants in the digital industry. The company with the help of 150 other firms in the industry created the Open Media Framework standard. The creation of an open standard indirectly hurt the company because lost its edge of having a unique product in the industry. Avid in the early 1990’s utilized a Mac platform for its software. The company noticed that Apple was not doing to well in the computer industry and it felt continuing operating under a Mac platform was risky. In 1997 the company entered into a strategic alliance with Intel in order to convert its software into Windows based platform. The company gave up 6.75% of its common stock in exchange for Intel’s expertise. In 1993 the company entered into an alliance with Lucas film in order to develop special effects products. The firm entered into a partnership in 1994 with Tsushnki Company to develop the world first full motion digital camera. A huge transaction for the company was the