Germany Project Essay Example | Topics and Well Written Essays - 1250 words

Germany Project - Essay Example Stories like Binjamin Wilkomirski's Fragments are acknowledged with no confirmation. Truth be told, to scrutinize a survivor story is to hazard the instance of being called hostile to Semitic. Finkelstein has called attention to that the present society needs to be casualties. Regardless of whether a Jew, African American, Native American, gay, lady, or other minority gatherings, individuals need to have a place with a casualty gathering. While Finkelstein did escalated research, his utilization of symbolism and shocking words make this story somewhat less dependable. In the event that he would have adhered to simply the realities, Finkelstein may have shown signs of improvement. Finkelstein calls attention to that genuine history is being disregarded for a misrepresented celebrated record that misuses the genuine Jewish enduring in the 'Nazi holocaust'. At the point when first moving toward this book, numerous perusers may think Finkelstein is being against Semitic. Anyway Finkelste in raises some valid statements. His primary concern is the Nazi holocaust occurred. It is an authentic occasion. The Nazis perpetrated violations against mankind. Finkelstein recognizes that the Nazi holocaust wasn't right, yet he needs the world to identify will all endures not simply the Jews of the Nazi holocaust. His point is war and barbarities have occurred since the start of man and still happen. These abominations are repulsive; the Nazi holocaust isn't any less ghastly, however not more awful than some other monstrosity. By utilizing the Holocaust as reference point to energize individuals to the Jewish reason disrespects the people in question and survivors. He clarifies: The cases of Holocaust uniqueness are mentally desolate and ethically discreditable, yet they persevere. The inquiry is, Why? In any case, one of a kind enduring presents remarkable qualification. The extraordinary malice of the Holocaust, as per Jacob Neusner, separates Jews from others, yet additionall y gives Jews a guarantee upon those others. (Finkelstein 25) All human enduring ought to be felt for, not simply the enduring during the Nazi holocaust. This isn't to reduce or excuse the Nazi holocaust, just to place it in appropriate viewpoint. Finkelstein proposes after World War II nobody in America, or around the globe thought about the Nazi holocaust. A few antiquarians conjecture that Jews would not like to talk or offer about their loathsome experience. Finkelstein excuses this hypothesis. He accepts that nobody needed to know or consider it, particularly in America. Finkelstein clarifies: The standard clarification is that Jews were damaged by the Nazi holocaust and consequently subdued its memory. Truth be told, there is no proof to help this end. Most likely a few survivors didn't at that point or, besides, in later years need to talk about what had occurred. Numerous others, be that as it may, especially needed to talk and, when the event benefited itself, wouldn't quit talking. The issue was that Americans would not like to tune in. (Finkelstein 9) Even American Jews would not like to tune in. After the war everybody needed to disregard the monstrosities of World War II. The Allies had won. It was a period for triumph, not time to recollect what number of Jews had kicked the bucket. The Holocaust Industry started after the United States began backing Israel as a feature of US Foreign Policy. At the point when Israel battled the War of Independence America carefully upheld the Arabs because of the oil in the district. It didn't seem as though Israel would endure. Anyway after Israel won, yet multiplied their territory size, the US began

The Power Above essays

The Power Above articles In the steady quest for progressively proficient wellsprings of vitality, sun based force clearly shows a lot of guarantee. The sun will last longer than any people will, hence this is one of the main sustainable common assets of vitality that has been found. Sunlight based cells, or photovoltaics, convert light vitality into electrical vitality. Albeit the vast majority of the vitality isn't changed over to power, they run at a low enough cost that there mechanical productivity fundamentally gets unimportant. Photovoltaics offer probably the best open doors presently accessible in the vitality creation field, at any rate assuming the rainclouds hold back. The surprisingly high unwavering quality of photovoltaic cells assists with saving them a suitable choice for elective vitality sources, if not the most reasonable. These cells initially were made for space, where fix of hardware is very exorbitant, if even conceivable by any means. Photovoltaics can work however for a considerable length of time at once with practically no support at all. Truth be told, sun powered cells remain the regularly utilized force source in satellites for that very explanation. Obviously, the best part about daylight is something each American, and most likely every individual on the planet, prefers without a doubt. Daylight is free, and most definitely, boundless! Because of the low support and absence of moving parts on the photovoltaics, they are perfect for places where upkeep is expensive or just not doable in any capacity whatsoever. In this way, sun oriented force comes at an ostensible expense to the buyer and to organizations. With an unnatural weather change on the ascent, nature has become a significant worry of America, however of almost every nation on the planet. Petroleum derivative outflows have harmed the climate for a considerable length of time, making this nursery impact. Atomic force presents the consistent danger of atomic emergency. Definitely hardly any propelled nations would place all their capacity assets into another Chernobyl episode. ... <!

Essay Topics Can Be Used to Make an Effective Essay

Essay Topics Can Be Used to Make an Effective EssayThe power of essay topics is something that is often overlooked by many high school students and college students alike. This article will explain why. Most students do not know why essay topics are important, but they should. If you do not know why essay topics are important, you should read this article.Your essay will be read in a lot of different ways by the reader needs to know. Many people tend to leave the topic in the hands of the students. This is a mistake for a couple of reasons. First, the student could change the topic. Second, the student could leave the topic open-ended, meaning they left themselves room for interpretation.When you think about it, you must really want to give your reader the information needed in order to get them excited about what you have to say. These are the reasons why you must include an essay topic.The reason why essay topics are so important is because it gives the reader something to chew on and they will tend to remember what you said much better. The reason for this is the essay topic itself is something that they can use to make a decision about what they want to know. Once they know what they want to know, they will be able to remember it easily.Remember, it is the hard work that really matters. The problem is that many students do not apply the appropriate amount of hard work that is needed to make an essay effective. What you must remember is that the last thing that you want to do is waste time making an essay. If you go through the problem from beginning to end, it will be far easier to create an essay that will be able to be read.Of course, the other issue is that the student should understand what he or she is writing an essay. If the student thinks it is a general report, he or she will be very difficult to get. A student who thinks his or her essay is supposed to be just a general report, or a report about something a bit more general will have even greater difficulties. The main thing is to make sure that the student understands what he or she is doing is an essay.Essay topics need to be something that a student thinks about long and hard. If the student wants to put a lot of extra thought into the topic, it will be far easier to write an essay that the student will remember. Once the student has a good idea of what he or she is writing, it will be easy to work on the essay.Remember, this writing process is to be used to put together a basic piece of writing that will be read by many people. A student who is able to make something great out of this writing process will be able to remember it and read it over again. Good writing takes a lot of hard work, and in order to produce good writing, you must use the proper essay topics.

Nursing as a Discipline - 1565 Words

Nursing as a Discipline: It’s Interrelationship with Philosophy, Science and Ethics Raymund Christopher R. dela Pena Saint Louis University The discipline of nursing is concerned with how nurses interact with people in relation to their health and within their total environment. Nursing at its core is caring for people within their health experience. The effective nurse is able to think critically, feel deeply, communicate clearly, interact meaningfully, assume responsibility, exhibit a thirst for knowledge and act morally. The discipline of nursing slowly evolved from the traditional role of women, apprenticeship, humanitarian aims, religious ideals, intuition, common sense, trial and error, theories, and research,†¦show more content†¦Spiegelberg (1982) believed that science had failed to be exact because it had not clearly described the essence of things before they were put into theoretical statement. Futhermore, Husserl (1932) writes that philosophy is fundamental to science and they have a reciprocal relationship. He views that philosophy and science as sharing a mutual relationship. Science provided the nursing profession breakthroughs on the different aspects of the nursing field. Philosophy enhanced the understanding of nurses on the application of this knowledge from science. I want to compare these two disciplines to a nurse who administers a pain reliever to a patient. The nurse’ ability to know the medication, route, dosage, adverse reactions and contraindications of the drug is of scientific knowledge. This can be very helpful to the nurse to administer the drug correctly. But the nurse should have intuition for her to recognize the patterns of response of the patient to that drug. This will help the nurse to detect or even predict a change in the patients’ condition, and that is philosophy. And if after administering the drug, the patient is still in pain, the value of ethics comes in to provide and insight to the nurse on what intervention has to be made and what choices are possible and why. Ethics is a moral component of nursing. It is a guide for nurses when moral dilemmas arise in situations of ambiguityShow MoreRelatedConcepts of the Discipline of Nursing Essay1552 Words   |  7 PagesConcepts Central to the Discipline of Nursing In order to critically examine the concepts central to the discipline of nursing it is important to clarify my understanding of what constitutes a discipline. Nursing literature has led me to understand that a discipline can be, in simple terms, thought of as a field of study with a unique perspective which gives rise to the nature and scope of inquiry of that field and therefore leads to a specialized body of knowledge (Parker, M Smith, M, 2010).Read MoreNursing Process Discipline and Independent Nursing Essay1574 Words   |  7 PagesNursing process discipline is a nursing theory developed by nursing theorist, Ida Jean Orlando. This theory, one of the first written about the nursing process, was written to help establish nursing as an independent function in providing health care for a patient. Through this independent nursing function, Orlando developed her theory on the concept of the nurse-patient interaction. During that interaction the nurse recognizes a patient behavior a s an â€Å"†¦ immediate need for help† (George, 2011Read MoreNursing Community And The Utilisation Of The Discipline1669 Words   |  7 Pagestowards patient care, in today’s health care setting. This essay will initially analyse evidence-based practice in the nursing community and the utilisation of the discipline. In the next part, the author will examine the attitudes of the nurses and challenges in applying the discipline as well as provide solutions where appropriate. Evidenced based practice is a vital element in nursing. It is a process that includes research and patient preferences to achieve a optimum results towards the care providedRead MoreCommunity Health Nursing : A Diverse Discipline1766 Words   |  8 PagesCommunity Intervention Paper Community health nursing is a diverse discipline that works to provide equitable health care to all residents of Canada. To achieve this goal, nurses, within this discipline, aid community members in identifying public health concerns, planning feasible interventions, implementing appropriate action or policy, and evaluating the intervention process (Community Health Nurses of Canada, 2016). As part of my Nursing 431 Community Nursing course, I was able to participate in a hydrationRead MoreConcepts Within Nursing And Advanced Nurse Practice Discipline1866 Words   |  8 Pagesâ€Å"The metaparadigm is part of the domain of the discipline† (Turkel, 2013, p.423). Person, health, environment, nursing, and research are concepts or domains within nursing and advanced nurse practice discipline. A further question originate the concept of teach, and how this concept can be part of each domain in the nursing metaparadigm. The concept of teach in the unitary caring paradigm is the integrality or continuing interaction of human and the environment. In the person domain, the conceptRead MoreThe Comfort Theory, By Catharine Kolcaba, The Tradition Of Nursing Discipline1893 Words   |  8 PagesAbstract In the Comfort Theory, proposed by Catharine Kolcaba, the tradition of nursing discipline - deriving theory from former disciplines is examined, and the notion of former healthcare disciplines deriving nursing theory has been recommended. A short literature review of plagiarized theory sets the position to examine the modification of the theory. She describes convenience as one of the mechanisms for the full rehabilitation of the patient, and the personal desire of the patient to recoveryRead MoreNursing Is A Distinct Discipline That Requires Specialized Knowledge On Human Response995 Words   |  4 PagesNursing is a distinct discipline that requires specialized knowledge on human response. Nurses must identify behaviors, emotions, norms, and preferences and use this information to reflect and alter their individual care for their patient. Understanding human response allows nurses to advocate, protect, and care for their patient. It also allows nurses to determine which route to g o when dealing with a patient. If they’ve encountered specific responses in the past they have a better understandingRead MoreNursing Has Evolved from Being an Occupation to Being a Profession and an Academic Discipline.1528 Words   |  7 PagesDuring the past decade nurse theorists and educationalists have been attempting to establish nursing as an academic discipline Nurse education is rapidly moving away from a single scientific or technical colleges of nursing into institutes of higher education. In this paper I had the privilege to discuss how Nursing has evolved from being an occupation to being a profession and an academic discipline. According to the Collins English Dictionary, An occupation isa persons regular work or profession;Read MoreAnalyzing The Attributes Of Different Methods Equips The Researcher1119 Words   |  5 Pagesattributes of different methods equips the researcher to select an appropriate approach to satisfy the aim of their inquiry. Rodgers (2005) and Risjord (2010) present two approaches to nursing knowledge development. This paper will compare and contrast Rodgers â€Å"problem-solving†(p. 177) method with Risjord’s â€Å"nursing standpoint† (p. 36). Rodgers provides a method that uses knowledge deficits in practice as the foundation for research. Risjord, on the other hand, acknowledges nurses’ lives and the perspectiveRead MoreNursing Knowledge Based On The Level Of Abstraction Essay1254 Words   |  6 PagesNursing knowledge is the result of incorporating what is known and understood through learning, research, experience, and theory. Knowledge depends on research and theory to provide a collective, str uctured, and current information. This information can be used to explore phenomena, answer questions, generate new theory, and solve problems. DNPs need to be familiar with the components and levels of abstraction in nursing knowledge. The way to comprehend this information is by using the structural

Study On The Main Determinants Of Bank Failure Finance Essay - Free Essay Example

Sample details Pages: 4 Words: 1094 Downloads: 7 Date added: 2017/06/26 Category Finance Essay Type Analytical essay Did you like this example? During the last decade, banking industry has become highly competitive, resulting in many banks to use aggressive strategies in order to survive or maintain their respective share in the market. This tendency of these financial institutions to become more aggressive when confronted with competitive pressures has led many banks to fail. Banking industry has gone through significant changes and is continuing to undergo major structural alterations. This dynamic structure results in an uncertain environment for the industry. The recent financial crisis has raised a large number of concerns about the strength of the current banking system to provide stability to the financial markets. Banks taking too much risk are highly prone to fail. Banks may fail if equity is insufficient to provide a safe cushion to write down any non-performing loans. Before recent financial turmoil, banks were more concerned about their profitability. They attempted to maximize profits t o increase shareholders wealth by increasing their financial leverage. A large deposit base provided for high financial leverage for banks, while their equity cushion continued to diminish. Most banks were using a ratio of more than twenty times debt compared to their equity. Low level of equity provided a very small cushion for the banks in case of a financial turmoil. A bank with three percent equity could suffer a loss of all its shareholders wealth if it lost just a minor fraction of its loan assets. For example, bank with an equity base of 10 billion pounds and a loan base of as high as 300 billion pounds, would have lost all its equity with a decrease of 3.33 % in the value of its loan assets. Banks need to manage their liquidity risk with extreme caution. A bank that maintains to little liquid reserves can go bankrupt if it fails to meet its obligations on time. These obligations include payment on demand deposits and interest payments to depositors holding cash in thei r saving accounts. If the bank is holding too little cash, it can usually borrow money through inter-bank borrowing at the federal funds rate. However, at times of financial crisis the liquidity of the market could be low. In the recent financial crisis rumours about bank failures resulted in a run on banks. Depositors wanted to withdraw their money before a suspected bankruptcy. On a usual day banks only anticipate a certain maximum percentage of funds to be withdrawn and hence they maintain cash to meet regular operational needs. However, in case of a run on banks all depositors simultaneously appear at bank counters to withdraw their deposits. Such a panic situation can result in bankruptcy of any financially sound bank in a matter of hours. Liquidity risk requires active management, as too much liquidity can be as much of a problem as is too little liquidity. Banks operate in a highly competitive environment and they are always competing for deposits. Those banks that prov ide higher interest rates relative to competition are able to attract more deposits and thereby expand their operations. Those that provide low interest rates suffer the risk that depositors will withdraw their funds to banks, which pay a higher return. To provide a higher return a bank needs to make profitable loans to other parties. Extending loans for businesses and for consumers restrict the liquidity of the banks. Therefore, there is a trade-off involved and the management has to choose the optimum level between return and liquidity. An economic crisis results in high levels of unemployment and can cause the non-performing loans to increase significantly. Lack of diversification into various asset classes in financing loans can result in major bank failures. During the recent banking crisis, subprime lending was at its peak. A component that lacks diversification was the subprime mortgage lending. A large number of mortgagees were speculating on housing prices and did not ha ve sufficient means to pay the dues. Banks were lending on zero down payment options where the mortgage holder had a call option to exercise. If housing prices increase, the mortgagee can sell the house, pay the mortgage amount and make a profit without any investment. However, if housing prices go down the mortgagee only lost the payments made already, which acted as an option premium. As the housing market collapsed, the losses were to be borne by the banking industry. Mortgages are pooled together to form collateralized mortgage obligations. These securities make mortgages from illiquid investments into liquid securities that sell in the secondary market. The high interest rates paid on mortgages and the liquidity feature of the securities attracted investors to invest trillions. The high demand for mortgage-backed securities in turn resulted in too much capital availability to create excessive low quality mortgages. As economy staggered and unemployment increased a high rate of mortgage default created the subprime crisis resulting in many banks to fail. As competitive pressures, increase only banks with high level of efficiency can survive. Larger banks enjoy both economies of scale and economies of scope. In an economic downturn, small and medium banks cannot maintain their net interest margins and tend to respond weakly to competitive pressures. Therefore, in an attempt to survive banks initiate mergers and acquisitions. Through mergers, these banks aim to improve efficiencies and reduce costs in order to improve their net interest margins and survive the hard times. Mergers do not always attain their desired goals. Many times the managements do not get along well, at other times the estimated synergies of the merger tend to be overestimated. Also, valuation models could have been erroneous resulting in huge write down of goodwill assets in the years to come. This can also wipe away the equity of the bank and eventually cause a bank to fail. Banks seek to maintain an active match between their assets and liabilities. A large gap between assets and liabilities can result in adverse movements. If a bank has a positive gap, its assets are more interest rate sensitive than its liabilities. The goal of banks is to maintain minimum interest rate exposure and keep the gap at a minimum. At times bank management can get more ambitious and take bets on interest rate movements. In this case, an unexpected movement in interest rates can be disastrous for a bank. In conclusion, a bank can fail due to various reasons mostly because of poor risk management techniques. Banks could be lending aggressively and create a large pool of subprime assets or they could maintain too little liquidity to meet their obligations during a financial crisis. All these reasons together can cause a bank to fail. Don’t waste time! Our writers will create an original "Study On The Main Determinants Of Bank Failure Finance Essay" essay for you Create order

Study On The Main Determinants Of Bank Failure Finance Essay - Free Essay Example

Sample details Pages: 4 Words: 1094 Downloads: 7 Date added: 2017/06/26 Category Finance Essay Type Analytical essay Did you like this example? During the last decade, banking industry has become highly competitive, resulting in many banks to use aggressive strategies in order to survive or maintain their respective share in the market. This tendency of these financial institutions to become more aggressive when confronted with competitive pressures has led many banks to fail. Banking industry has gone through significant changes and is continuing to undergo major structural alterations. This dynamic structure results in an uncertain environment for the industry. The recent financial crisis has raised a large number of concerns about the strength of the current banking system to provide stability to the financial markets. Banks taking too much risk are highly prone to fail. Banks may fail if equity is insufficient to provide a safe cushion to write down any non-performing loans. Before recent financial turmoil, banks were more concerned about their profitability. They attempted to maximize profits t o increase shareholders wealth by increasing their financial leverage. A large deposit base provided for high financial leverage for banks, while their equity cushion continued to diminish. Most banks were using a ratio of more than twenty times debt compared to their equity. Low level of equity provided a very small cushion for the banks in case of a financial turmoil. A bank with three percent equity could suffer a loss of all its shareholders wealth if it lost just a minor fraction of its loan assets. For example, bank with an equity base of 10 billion pounds and a loan base of as high as 300 billion pounds, would have lost all its equity with a decrease of 3.33 % in the value of its loan assets. Banks need to manage their liquidity risk with extreme caution. A bank that maintains to little liquid reserves can go bankrupt if it fails to meet its obligations on time. These obligations include payment on demand deposits and interest payments to depositors holding cash in thei r saving accounts. If the bank is holding too little cash, it can usually borrow money through inter-bank borrowing at the federal funds rate. However, at times of financial crisis the liquidity of the market could be low. In the recent financial crisis rumours about bank failures resulted in a run on banks. Depositors wanted to withdraw their money before a suspected bankruptcy. On a usual day banks only anticipate a certain maximum percentage of funds to be withdrawn and hence they maintain cash to meet regular operational needs. However, in case of a run on banks all depositors simultaneously appear at bank counters to withdraw their deposits. Such a panic situation can result in bankruptcy of any financially sound bank in a matter of hours. Liquidity risk requires active management, as too much liquidity can be as much of a problem as is too little liquidity. Banks operate in a highly competitive environment and they are always competing for deposits. Those banks that prov ide higher interest rates relative to competition are able to attract more deposits and thereby expand their operations. Those that provide low interest rates suffer the risk that depositors will withdraw their funds to banks, which pay a higher return. To provide a higher return a bank needs to make profitable loans to other parties. Extending loans for businesses and for consumers restrict the liquidity of the banks. Therefore, there is a trade-off involved and the management has to choose the optimum level between return and liquidity. An economic crisis results in high levels of unemployment and can cause the non-performing loans to increase significantly. Lack of diversification into various asset classes in financing loans can result in major bank failures. During the recent banking crisis, subprime lending was at its peak. A component that lacks diversification was the subprime mortgage lending. A large number of mortgagees were speculating on housing prices and did not ha ve sufficient means to pay the dues. Banks were lending on zero down payment options where the mortgage holder had a call option to exercise. If housing prices increase, the mortgagee can sell the house, pay the mortgage amount and make a profit without any investment. However, if housing prices go down the mortgagee only lost the payments made already, which acted as an option premium. As the housing market collapsed, the losses were to be borne by the banking industry. Mortgages are pooled together to form collateralized mortgage obligations. These securities make mortgages from illiquid investments into liquid securities that sell in the secondary market. The high interest rates paid on mortgages and the liquidity feature of the securities attracted investors to invest trillions. The high demand for mortgage-backed securities in turn resulted in too much capital availability to create excessive low quality mortgages. As economy staggered and unemployment increased a high rate of mortgage default created the subprime crisis resulting in many banks to fail. As competitive pressures, increase only banks with high level of efficiency can survive. Larger banks enjoy both economies of scale and economies of scope. In an economic downturn, small and medium banks cannot maintain their net interest margins and tend to respond weakly to competitive pressures. Therefore, in an attempt to survive banks initiate mergers and acquisitions. Through mergers, these banks aim to improve efficiencies and reduce costs in order to improve their net interest margins and survive the hard times. Mergers do not always attain their desired goals. Many times the managements do not get along well, at other times the estimated synergies of the merger tend to be overestimated. Also, valuation models could have been erroneous resulting in huge write down of goodwill assets in the years to come. This can also wipe away the equity of the bank and eventually cause a bank to fail. Banks seek to maintain an active match between their assets and liabilities. A large gap between assets and liabilities can result in adverse movements. If a bank has a positive gap, its assets are more interest rate sensitive than its liabilities. The goal of banks is to maintain minimum interest rate exposure and keep the gap at a minimum. At times bank management can get more ambitious and take bets on interest rate movements. In this case, an unexpected movement in interest rates can be disastrous for a bank. In conclusion, a bank can fail due to various reasons mostly because of poor risk management techniques. Banks could be lending aggressively and create a large pool of subprime assets or they could maintain too little liquidity to meet their obligations during a financial crisis. All these reasons together can cause a bank to fail. Don’t waste time! Our writers will create an original "Study On The Main Determinants Of Bank Failure Finance Essay" essay for you Create order

Study On The Main Determinants Of Bank Failure Finance Essay - Free Essay Example

Sample details Pages: 4 Words: 1094 Downloads: 7 Date added: 2017/06/26 Category Finance Essay Type Analytical essay Did you like this example? During the last decade, banking industry has become highly competitive, resulting in many banks to use aggressive strategies in order to survive or maintain their respective share in the market. This tendency of these financial institutions to become more aggressive when confronted with competitive pressures has led many banks to fail. Banking industry has gone through significant changes and is continuing to undergo major structural alterations. This dynamic structure results in an uncertain environment for the industry. The recent financial crisis has raised a large number of concerns about the strength of the current banking system to provide stability to the financial markets. Banks taking too much risk are highly prone to fail. Banks may fail if equity is insufficient to provide a safe cushion to write down any non-performing loans. Before recent financial turmoil, banks were more concerned about their profitability. They attempted to maximize profits t o increase shareholders wealth by increasing their financial leverage. A large deposit base provided for high financial leverage for banks, while their equity cushion continued to diminish. Most banks were using a ratio of more than twenty times debt compared to their equity. Low level of equity provided a very small cushion for the banks in case of a financial turmoil. A bank with three percent equity could suffer a loss of all its shareholders wealth if it lost just a minor fraction of its loan assets. For example, bank with an equity base of 10 billion pounds and a loan base of as high as 300 billion pounds, would have lost all its equity with a decrease of 3.33 % in the value of its loan assets. Banks need to manage their liquidity risk with extreme caution. A bank that maintains to little liquid reserves can go bankrupt if it fails to meet its obligations on time. These obligations include payment on demand deposits and interest payments to depositors holding cash in thei r saving accounts. If the bank is holding too little cash, it can usually borrow money through inter-bank borrowing at the federal funds rate. However, at times of financial crisis the liquidity of the market could be low. In the recent financial crisis rumours about bank failures resulted in a run on banks. Depositors wanted to withdraw their money before a suspected bankruptcy. On a usual day banks only anticipate a certain maximum percentage of funds to be withdrawn and hence they maintain cash to meet regular operational needs. However, in case of a run on banks all depositors simultaneously appear at bank counters to withdraw their deposits. Such a panic situation can result in bankruptcy of any financially sound bank in a matter of hours. Liquidity risk requires active management, as too much liquidity can be as much of a problem as is too little liquidity. Banks operate in a highly competitive environment and they are always competing for deposits. Those banks that prov ide higher interest rates relative to competition are able to attract more deposits and thereby expand their operations. Those that provide low interest rates suffer the risk that depositors will withdraw their funds to banks, which pay a higher return. To provide a higher return a bank needs to make profitable loans to other parties. Extending loans for businesses and for consumers restrict the liquidity of the banks. Therefore, there is a trade-off involved and the management has to choose the optimum level between return and liquidity. An economic crisis results in high levels of unemployment and can cause the non-performing loans to increase significantly. Lack of diversification into various asset classes in financing loans can result in major bank failures. During the recent banking crisis, subprime lending was at its peak. A component that lacks diversification was the subprime mortgage lending. A large number of mortgagees were speculating on housing prices and did not ha ve sufficient means to pay the dues. Banks were lending on zero down payment options where the mortgage holder had a call option to exercise. If housing prices increase, the mortgagee can sell the house, pay the mortgage amount and make a profit without any investment. However, if housing prices go down the mortgagee only lost the payments made already, which acted as an option premium. As the housing market collapsed, the losses were to be borne by the banking industry. Mortgages are pooled together to form collateralized mortgage obligations. These securities make mortgages from illiquid investments into liquid securities that sell in the secondary market. The high interest rates paid on mortgages and the liquidity feature of the securities attracted investors to invest trillions. The high demand for mortgage-backed securities in turn resulted in too much capital availability to create excessive low quality mortgages. As economy staggered and unemployment increased a high rate of mortgage default created the subprime crisis resulting in many banks to fail. As competitive pressures, increase only banks with high level of efficiency can survive. Larger banks enjoy both economies of scale and economies of scope. In an economic downturn, small and medium banks cannot maintain their net interest margins and tend to respond weakly to competitive pressures. Therefore, in an attempt to survive banks initiate mergers and acquisitions. Through mergers, these banks aim to improve efficiencies and reduce costs in order to improve their net interest margins and survive the hard times. Mergers do not always attain their desired goals. Many times the managements do not get along well, at other times the estimated synergies of the merger tend to be overestimated. Also, valuation models could have been erroneous resulting in huge write down of goodwill assets in the years to come. This can also wipe away the equity of the bank and eventually cause a bank to fail. Banks seek to maintain an active match between their assets and liabilities. A large gap between assets and liabilities can result in adverse movements. If a bank has a positive gap, its assets are more interest rate sensitive than its liabilities. The goal of banks is to maintain minimum interest rate exposure and keep the gap at a minimum. At times bank management can get more ambitious and take bets on interest rate movements. In this case, an unexpected movement in interest rates can be disastrous for a bank. In conclusion, a bank can fail due to various reasons mostly because of poor risk management techniques. Banks could be lending aggressively and create a large pool of subprime assets or they could maintain too little liquidity to meet their obligations during a financial crisis. All these reasons together can cause a bank to fail. Don’t waste time! Our writers will create an original "Study On The Main Determinants Of Bank Failure Finance Essay" essay for you Create order