Assignment about ethics 5 Example | Topics and Well Written Essays - 750 words

About ethics 5 - Assignment Example The bank was unable to garner sufficient funds from its retail arm through deposits to show sufficient growth on the balance sheet. As a result, the Northern Rock started depending on easily available short-term wholesale market funds to boost its growth. Northern Rock started issuing and selling notes that offered the buyer the right on the capital of the loan portfolio. New loans were bundled and the prevalent accounts were sold through asset-supported securities (Liikanen, 2012). Nothing happened all of a sudden, as by 1995 the worth of capital with the bank had begun deteriorating sharply. In 2005, debt of lower value released in 2001 was equalled to equity. It reduced the margins over the debt value greatly. The bank was not getting better margins from traditional market but it could not control the tightly defined leverage from bursting to a factor of 90 and more (Liikanen, 2012). The Northern Rock announced insolvency on September 13, 2007, asking help from the Bank of England (BoE). Immediate effect of this declaration happened on the bank retail segment customers who had deposited money in various personal accounts. These account holders had lost faith in the capability of the bank to pay back their deposits and the very next day there were long lines of customers in all branches of the Northern Rock to withdraw their funds from the bank. ... Bankruptcy of Northern Rock was due to stepping back from their credit lines by the institutional short-term investors of the Northern Rock. Before the announcement of insolvency, withdrawing back of the short-term institutional investors was a grave issue for the bank before 14 September. The real set back to the bank was faced in the wholesale market when the news broke out that the Northern Rock was arranging money largely from the short-term wholesale funding, which it settled at the time of credit maturity (Liikanen, 2012). Inter-banking problem of Northern Rock and other financial organizations largely stemmed from the deficiency of trust among banks and the inter-banking market. Generally, inter-banking market is always brimming with funds across the world but liquidity just vanished from the market. Retail depositors’ rushing to the bank branches for withdrawing money happened at a time when crisis at the Northern Rock had occurred. Amazing thing was that during the di fficult time of cash shortage crisis, the retail segment of the bank business was shown as the major revenue stream of the Northern Rock. In the end with the huge downward plunge in the share price of Northern Rock from ?12.50 in January 2007 to below ?1 at close of the year 2007, the bank was taken over on 17 February 2008 (Liikanen, 2012). The crisis of the Northern Rock was managed with the financial aid given to it by the Bank of England. After nationalization, all its debts and losses were borne by the government. Certain clarity emerges behind the cause of crisis or failure of the Northern Rock, which is significant to mention to remove ambiguity over its failure. The Northern Rock banking business model failed not because of its borrowers, nor a long line of customers waiting

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

Humannities - Research Paper Example Furthermore, the unique dynamics of Islamization, poverty, and the effects that 20 years of incessant civil war on the only truly failed state in the world has had on the way in which Somalia and the issue of â€Å"piracy† has developed will be discussed within the lens of media representation of the issue. Merriam Webster’s dictionary broadly defines piracy as â€Å"an act of violence or robbery at sea†. Such a broad definition leaves little room for prevarication concerning whether or not the actions taken by groups of Somalis over the past decade or so can be understood as piracy or not. However, a more important test of determination is of course the question of how tactics, objectives, and operational mechanisms differ when one compares current Somali piracy with that of the earlier more traditional understandings of the word. What is unique with regards to Somali piracy is the fact that the actual material goods that the ships which are arrested by them are often of secondary or tertiary importance. Of primal importance is the money which can be extracted from shipping companies, governments, or interested loved-ones of the crew members of the ships which have been captured. This serves as a fundamental deviation from traditional piracy in that this is the ultimate goal which the Somali pirates pursue as opposed to a secondary or tertiary goal that traditional piracy was engaged with. For the traditional definition of piracy on the high seas, the requisition of the goods was of primary importance with the lives and health of the crew being much lower on the list of interests that the pirates dealt with. Ultimately, in the traditional understanding of piracy, the lives of those which were captured were worth little unless it was believed that an added amount of money could be extracted by ransoming them off to interested governments, families, or trade representatives (Murphy, 2011). This shift in the dynamic that piracy has taken with in the modern world is a unique hallmark of the Somali understanding of the term. Instead of seeking to acquire and sell tens of millions of dollars worth of ships and goods, the Somali pirates are almost exclusively disinterested in such an operation; instead concerned with seeking to ransom the ship, its contents, and the crew itself to interested parties the world over. The media’s interpretation of piracy in Somalia has been one that has traditionally missed the point. Although the actual day to day occurrences of piracy and associated deaths are recounted within world media, little to no attention is paid to the preceding determinants with regards to the underlying reason why piracy is currently taking place to such a high degree within Somalia. There are a number of reasons for this media misrepresentation; however, it is the belief of this author that a large degree for the hesitancy with which Western media has sought to discuss and analyze the underlying reasons for Somali piracy is the level of culpability that the West continues to feel with regards to the situation that exists within the county. As a function of the failed UN intervention in Somalia in