The father of science

The dad of sci-fi Essay Numerous scholars trust Melies to be the primary auteur of film. When assembling a film, Melies himself took care of a significant part of the errand. He was associated with employing the entertainers, clearly shooting the film, and furthermore creating and altering the movies. Melies even ensured he was a piece of their hand-shading and circulation to theaters. One of the most vital factors in considering Melies as the principal genuine auteur is his presentation of blur ins and blur outs for every scene. In making the whole film stream as one genuine story, Melies would blur in the middle of scenes, in this manner demonstrating how the scenes progress in a steady progression, and how characters and plotlines interweave inside one another. A Trip to the Moon is a splendid case of how Melies utilized blurs as an approach to speak with the crowd the progression of time, and the movement of the story. A fix of the group is blurred into a fix of the spaceship. We will compose a custom article on The dad of sci-fi explicitly for you for just $16.38 $13.9/page Request now After the spaceship and group are seen, a blur into the stay-lit sky and moon is appeared, passing on that the spaceship takes off from earth, and goes to the moon, in any event, slamming legitimately into it. These blurs and lap breaks up are the first of their sort, and unbelievably urgent to the advancement of film. For a film like A Trip to the Moon clearly it is difficult to shoot on the spot. And furthermore, it would become unimaginably costly to construct tremendous and emotional sets that attempt to pass on a sentiment of area on the moon. So rather than gigantic develops used to uncover area, Melies chose to utilize tremendous works of art as backgrounds for a portion of his progressively fantastical movies. Utilizing these works of art was undeniably progressively productive that building a whole develop for a short scene on film. What's more, not exclusively were the works of art enormous, yet Melies chose to give the artistic creations a kind of fantastic appearance. He preferred fiddling into the theoretical and paranormal. Large and excellent works of art are substantially more intriguing to take a gander at then a set that may attempt to be unbelievably practical. While some observe Melies carefully as the dad of imagination or sci-fi, I would go as far to state he could without much of a stretch be viewed as the dad of film. The way Melies developed whole stories by blurring all through scenes to propel the plot is a key creation that has carried film to where it is today. Melies made strides inside his vocation that effectively could have taken a very long time for the remainder of the world to get a handle on. The way that one of his significant innovations had emerged out of a typical camera jam tells that we gain from our slip-ups, and Georges Melies sure figured out how to benefit from his.

Horrifying Reality :: essays research papers

Savagery and passing are surrounding us in our general public today. Regardless of whether it is seen on the TV in the news, in a film, or read about in the paper, the graphicness of these occurrences is totally frightening. The discipline of such violations that we read about today are basically minute contrasted with the occasions that happened during the fifteenth century. In the sonnet â€Å"La Ballade des pendus† composed by Franã §ois Villon, the frightful portrayal of the pictures are a long way from standard, however fills it’s need splendidly.      In his sonnet Villon composes of men who were hung, as yet hanging out in a yard and depicts what befalls their bodies once they are dead. His assertion decision in this sonnet makes the truth of what happened in those days significantly more terrible and offensive. The disciplines given today are considerably less serious and when they are expounded on in a paper, the occurrence isn't portrayed very in the way that Franã §ois Villon decided to write in his sonnet.      I feel that if Villon had utilized an alternate technique for portraying the occasions, for example, being allegorical rather than straight-forward, the sonnet would not have a similar impact on its crowd. Despite the fact that when I previously read this sonnet I didn't care for it since I thought it was completely disturbing, subsequent to perusing it a few times I understood that with out the nauseating subtleties the sonnet would not be the equivalent. The words that he utilizes just stand up such that makes the peruser either love it or detest it, I feel that is the thing that makes this sonnet so fascinating. I accept that Franã §ois Villon worked superbly composing this sonnet and if today’s stories were similarly as realistic or conceivably somewhat not as much as that of Villon, it would be significantly all the more fascinating to peruse. Astonishing Reality :: papers inquire about papers Viciousness and passing are surrounding us in our general public today. Regardless of whether it is seen on the TV in the news, in a film, or read about in the paper, the enlightenment of these occurrences is completely frightening. The discipline of such wrongdoings that we read about today are just moment contrasted with the occasions that happened during the fifteenth century. In the sonnet â€Å"La Ballade des pendus† composed by Franã §ois Villon, the grim portrayal of the pictures are a long way from customary, however fills it’s need splendidly.      In his sonnet Villon composes of men who were hung, as yet hanging out in a yard and portrays what befalls their bodies once they are dead. His assertion decision in this sonnet makes the truth of what happened in those days considerably more horrendous and offensive. The disciplines given today are considerably less serious and when they are expounded on in a paper, the episode isn't depicted very in the way that Franã §ois Villon decided to write in his sonnet.      I feel that if Villon had utilized an alternate strategy for depicting the occasions, for example, being allegorical rather than straight-forward, the sonnet would not have a similar impact on its crowd. Despite the fact that when I originally read this sonnet I didn't care for it since I thought it was completely appalling, in the wake of perusing it a few times I understood that with out the disturbing subtleties the sonnet would not be the equivalent. The words that he utilizes essentially stand up such that makes the peruser either love it or disdain it, I feel that is the thing that makes this sonnet so fascinating. I accept that Franã §ois Villon worked admirably composing this sonnet and if today’s stories were similarly as realistic or conceivably somewhat not as much as that of Villon, it would be significantly all the more fascinating to peruse.

evilmac Comparing the Evil of Macbeth and Lady Macbeth Essay -- compa

What systems can strategy creators utilize to advance fruitful arrangement usage Policies, approach producers and association with history - Essay Example This procedure really includes the interpretation of the destinations of the approach into the framework. It has three essential components which incorporate making obligation or an office who might deal with this new duty. Furthermore, there should be operational principles and rules for the approach program and staff and assets should be facilitated with the goal that the plan of the arrangement is accomplished. Proposition articulation Policy usage is the following stage after selection of a strategy and they represent the deciding moment the arrangement. There will be no impact on society if the approach is rarely executed; anyway this is a mind boggling system that has numerous aspects and elements for progress. Arrangement execution Policies likewise have certain planned and unintended impacts. Expected impacts are those that mean to search out a positive profit by an approach and this could likewise be one of the manners in which that strategies really stay away from the negat ive impacts. That is the reason there is a norm and arrangement creators will consistently contrast their approach against the standard with see whether it is above or underneath the standard. A model could incorporate the approach the State of California executed which prompted the expansion being used of mixture vehicles. The Federal Law gave tax reductions worth $1500 just as extraordinary paths to mixture vehicles which prompted an expansion in the utilization of half and half vehicles and this prompted a beneficial outcome or an expected impact. The legislature made an impact by making a move which was the approach despite the fact that the alternative of ‘high-inhabitance vehicle lanes’ isn't accessible for new half and half vehicles. (Suleiman, 1984) Negative reactions that are not expected are called ‘unintended’ and they are normally on the grounds that strategy making frameworks are generally perplexing. They may set the expense rate so high or so low that this discourages cash from the economy. In this manner the arrangement usage fine brushes the approach activities with the goal that these unintended impacts are dealt with; anyway it is difficult to evacuate the whole negative impacts while execution. (Yates, 1977) Policy making as previously mentioned is where the administration really completes and executes a specific strategy that is received when it is required by the law or something else. The various offices that are liable for the individual approach regions meet up and are given the conventional obligation regarding executing the strategy and this is typically the phase when the bill is not, at this point a bill yet turns into a law. When the legislature has made an open approach, for example, a standard, law, order, resolution or any guideline, the arrangement must be executed and observed, regulated and afterward it ought to be constrained upon society so it achieves the change that strategy creators want it to. The office that is answerable for usage is enabled the ideal assets and to permit the new arrangement to be actualized easily, anyway this is normally not the situation. Be that as it may, for what reason is open approach executed in any case? Open arrangements are executed so that there is some adjustment in the populace with the goal that a specific open issue is settled or if nothing else enhanced at any rate. The difficult will keep on existing until the arrangement is done and once the strategy is actualized, it will be assessed to check whether the outcomes that were wanted are being acquired and further update and implantation can happen. Organizations of organization will do the greater part of crafted by the administration thus they affect the residents of the area and are engaged with approach implementa

Realism vs. Romanticism

Authenticity and sentimentalism have been composing styles that have been continuing for quite a long time. Authenticity grew from sentimentalism around the late 1800s when individuals became tired identifying with the sentimentalisms â€Å"fairy tale† nature. Individuals needed a phony character experiencing numerous things they did consistently. Edna and Hester speak to each of these. Hester speaks to sentimentalism while Edna speaks to authenticity. Both of the characters are ladies in later occasions that experience the hardships near their time. The Scarlet Letter is a sentimentalism novel composed by Nathaniel Hawthorne. Hester is a youngster in the seventeenth century that is continually encircled by her wrongdoing of infidelity. All through the novel, Hester turns out to be her very own greater amount individual as she thinks about her little girl Pearl on the edge of the forested areas. The arrangement of the novel is written in a sentimentalists way; formal and fitting for the setting. The author additionally communicates sprinkles of shading in the story to hold an inspirational standpoint or impact as the novel goes on. Images in the novel are naturalistic, for example, roses; the image of trust in change. Pearl is likewise an image; an image of offense and Hester’s explanation behind living. The setting of the novel is marginally discouraging, however develops into this enchanted like town as the novel goes on. Hester makes up for herself for her wrongdoing, the letter â€Å"A† in her bosom’s importance transforms into â€Å"Able†. The story uncovers increasingly mystery, however every one brings Hester consistently nearer to conclusion on her wrongdoing. There is a foe as there for the most part consistently is for sentimentalism novel, however it is generally never the real primary character that is the genuine rival. Chillingworth stalls on Dimmesdale, intellectually removing Dimmesdale separated to discover the dad until helped by Hester. The Awakening is composed by Kate Chopin. In the novel Edna is reasonably caught in her own universe of self uncertainty and feeling of accidental. The epic is written in a cutting edge setting, however the setting is entirely different. The clarification of the islands causes them to appear to be tasteless and unlikeable. There is communicated shading in the novel, yet appears to be dulled out by the despondency of the women that occupy the islands. There are numerous images, the majority of them comprising of the sea; which speaks to opportunity. Another, the parrot; is said to speak to Edna; caught. Edna is spoken to experiencing numerous normal conditions of her time, being worried with the worry to be the ideal house spouse. Her life spirals downwards as she loses herself and inevitably leaves her youngsters in care of her mom. She is given on numerous occasions to make up for herself yet just debases herself by surrendering to her own childish human attributes. Edna herself is the adversary as she battles with her otherworldly and physiological being for a superior life, yet in the long run looses. Edna in the long run surrenders and swims as out of sight the sea, suffocating herself; Thus, finishing the novel. Both authenticity and sentimentalism think about existence exercises and rouse numerous perusers. This American writing makes certain to be passed down from age to think back and ponder the conceivable outcomes throughout everyday life. The two classes definitely changed the writing, and craftsmanship developments.

Personality Theory Essay Topics - How to Write a Topic For Your Essay

Personality Theory Essay Topics - How to Write a Topic For Your EssayPersonality theory essay topics are easy to write and will help you get the top grades at school. By using the essay topics guide provided, you will be able to tell exactly how to write your essay topic. By following the steps in the personality theory essay topics guide, you will be able to tell exactly how to create a detailed topic of your essay.Personality theory essay topics may involve anything you want to include in the essay. The main part of the essay will revolve around your personality traits that you wish to talk about. You should think about what aspects of your personality make you stand out from other students. This will be the basis of the essay topic.A good idea for personality theory essay topics is to not go into detail on each and every part of your personality. Instead, concentrate on one aspect of your personality or trait. By doing this, you can write the best essay topic that others will find interesting to read.Writing about yourself will make you stand out from other individual students. If you write about your family, you might have to include your parents' personalities in the essay topic as well. Just try to keep your essay on a topic and you will be fine.When you use personality theory essay topics, you have to be careful not to take yourself too seriously. As much as possible, try to write an interesting essay. Be different from the rest of the students because it is only by being different that you will be noticed.Personality theory essay topics will help you with this. By following the guide, you will be able to create the best essay that will allow you to shine above the rest of the class.While writing personality theory essay topics, keep the topic in mind and also keep in mind the person of who you are writing about. By keeping these things in mind, you will be able to write a unique essay that is filled with your personality.

Creating a Diverse Workforce Essaypilot

1. The nature of group dynamics recruitment strategy Development of a recruitment strategy that can support the strategy of your different organizational goals. Encourage employment specialists, recruiters and hiring managers to improve hiring and recruiting outreach. To enhance the reputation of your company as an employer who values diversity, there is a need for volunteering time to those organizations that uphold the obligations of some of the populations underrepresented segments. 2. Registration of your organization with some of the local agencies The local agencies are to take over some of the services to those who seek jobs that the state-operated unemployment offices previously provided. Contact academic institutions such as trade schools and universities with your companys information and inform them of some of the jobs available they can prefer for their graduates. 3. Research for diversity in job posting sites These focused groups can reach the job seekers diverse population. Exercise caution during recruitment of the applicants solely based on whether these job seekers represent diversity. Qualification should be your priority during your recruitment efforts. 4. Create partnerships with local organizations and national institutions to promote the firms image This makes people view you as their choice employer. Participate in the organizations events and involve your employees in the same especially those who represent a different form of diversity. You should not limit diversity to religion, national origin, color, sex or race. Expand the concepts of your organization to involve multi-generational diversity that includes diversity in cultures and work styles. 5. Offer training to managers and employees Provision of basic training on equal opportunities of employment laws should be consistent and prudent as per required by the U.S commission for Equal Employment Opportunity.

The War During The Cold War Essay - 1408 Words

As the Second World War came to a close and American and Soviet forces marched into German territory, both states understood that shortly thereafter their common foe would be defeated and their relationship very well could deteriorate. Even prior to the United States’ entrance into the war, media companies and state officials themselves spoke out against the â€Å"evils† of communism, though that rhetoric was put on hold as the Soviet Union and America fought alongside one another against the Axis powers. As Rider points out, while â€Å"the U.S. propaganda apparatus was almost totally dismantled† at the war’s end, Truman still â€Å"wanted to ensure that ‘other peoples receive[d] a full and fair picture of American life,’† which became the basis for the substantial psychological war both the Soviets and Americans engaged in throughout the Cold War. While a considerable amount of attention in historical academia has been given to the p roxy wars, space race, and arms build-up both states took part in, parallel to said competitions were those at the Olympics. Rider did an excellent job of exploring the role of sports, athletes, and particularly the media in the propagandist battle both states waged, discussing the numerous individuals, various committees, and notable confrontations between the USSR and the USA in the realm of sports. Propaganda had long been a tool that governments and private institutions alike used to promote images, either to paint themselves in a positive light or toShow MoreRelatedCensorship And The Government During The Cold War2490 Words   |  10 Pagesof society from an event while a media panic is the reaction of society from a type of technology. This paper looks to examine the similarities and differences between surveillance in the government today and surveillance in the government during the Cold War. It will address the effects these events have or had on society while examining sp ecific media panics that played a role in society’s reactions to these historical events. By providing evidence to prove how these panics affect society, I willRead MoreThe Vietnam War During The Cold War928 Words   |  4 PagesIntro The Vietnam War, also known as the Second Indochina War, occurred from November 1, 1955 to April 30, 1975. The war was during the cold war era. This brutal 19 year war was fought mainly between North Vietnam, supported by the soviet union, and South Vietnam, supported by The United States of America. The U.S. government s goal of the war was to prevent South Vietnam to be labeled as a communist country. However, North Vietnam had their reasons for the war as well. Vietnam believed they shouldRead MoreThe Cold War During World War II930 Words   |  4 PagesThe Cold War was political hostility between the United States of America and the Soviet Union through threats, propaganda and series of warfare incidents that made these superpowers of the time suspicious of one another. With the sources of the reader I will explain who’s to be at fault for the Cold war, the United States or the Soviet Union. The term â€Å"Cold War† according to Heonik Kwon in his document origin s of the Cold War â€Å"†¦ refers to the prevailing condition of the world in the second halfRead MoreThe Cold War During World War II Essay1185 Words   |  5 PagesThe Cold War was not a military conflict, but was an ongoing political conflict involving both military and economic competition between two superpowers advancing rapidly wanting to be number one. The evolvement of the Cold War began during and after World War I, although the official beginning of the Cold War was in 1945, at the Yalta Conference after World War II. There were many causes of the Cold War, but can be summed up as a battle between capitalism and communism. Also, along with PresidentRead MoreThe Cold War During World War II Essay1298 Words   |  6 PagesThe Cold War was the name given to the non-aggressive conflict between The United States and Russia that began after World War II. However, there is disagreement over the exact dates of the Cold War. Nevertheless, it took place somewhere between th e end of World War II and the early 1989 (Wendt n.d). The Cold War brought about a number of crises in the decades that it lasted. These crises include: Vietnam, the Berlin Wall, and the Cuban Missile Crisis. The Cold War itself was the result of the UnitedRead MoreThe Cold War During World War II1397 Words   |  6 PagesWar is the result of hate and brutality that can affect people in a negative way. The Cold War relates to the war in the Butter Battle book as it demonstrates hate, which should not be taught to kids in children s books. Conflict and competition can lead to war. The Cold War was a 45 year long rivalry between the Western powers, led by the United States and the Soviet Union. The United States formed a military base to protect them from other threats such as the Soviets. The expansion of the SovietRead MoreSpying during the Cold War1002 Words   |  4 Pagesof one of the biggest espionage cases from World War II and the Cold War. This fascinating and complex couple were double agents, who worked for both the American and Russian governments. During the mid 20th century, it was not uncommon for American and British citizens to become enamored and sympathetic with communist ideals. However, only a few wanted them so badly that they turned against their own countries. Some of the most famous spies during this time included, the Rosenbergs, David GreenglassRead MoreThe Cold War During World War II854 Words   |  4 PagesThe Cold War was a major event in the U.S. and Soviet Union’s history. The m ain reason that these two countries entered into the Cold War after World War II was power. The USSR and United States had two very different perspectives on power coming out of World War II. This disagreement ultimately caused the Cold War. Russia’s perspective after World War II was influenced by Joseph Stalin. Stalin, the leader of the USSR at the time, was a merciless dictator. His main concern was maintaining power andRead MoreThe Cold War During World War II Essay1632 Words   |  7 PagesThe Cold War was a clash of culture, ideologies, and a standoff between the world s two greatest nuclear powers. The argument of the American side was based around Capitalism and a hunger for ever growing business while the Soviet Union’s was structured around Communism and it’s powerful theocracy that stated it must be spread to every country on the planet. As a result, there has been much debate about whether the U.S. initiated the Cold War through their usage of the atomic bomb in World War IIRead MoreThe Cold War During World War II970 Words   |  4 PagesThe Cold War was a period of 44 years of both military and political tension after World War II. There were many ideals and events that lead to the Co ld War. Nationalism, poor economic conditions, and a strong desire for democracy and human rights are the primary reasons that many believe the Cold War started. However, these are just a few of the reasons for the Cold War. Events such as the Yalta Conference, Truman Doctrine, Potsdam Conference, and the Marshall Plan also greatly influenced the start

Popular Food - Mandarin Chinese Vocabulary

Chinese food is one of the most popular types of cuisine worldwide. Its no wonder! Chinese food is tasty, healthy, and the wide variety means theres something for every taste. As with many cultural exports, the names of some Chinese dishes have changed by the time they arrived in other countries. So if you visit China or Taiwan, you may find that the names of dishes are unfamiliar. List of Popular Chinese Food Names If you visit a Mandarin-speaking country, this list of popular Chinese food dishes will help when it comes time to ordering food. The items have been roughly arranged by type of food. Click on the links in the Pinyin column to hear the audio. English Pinyin Characters boiled dumplings shu jio sticky buns mn tou steamed stuffed bun bo zi fried noodles cho min plain noodles yng chn min fried rice noodles cho m fn steamed white rice bi fn sushi shu s vegetarian platter s sh jn white radish patty lubo go spicy tofu m p dufu beef and rice niru fn egg omelet dn bng chicken leg and rice j tu fn Peking duck bi jing koy pork chop and rice pig fn fish cooked in soy sauce hng sho y fried rice with shrimp xi rn cho fn crab png xi egg and vegetable soup dnhutng seaweed soup z ci tng hot and sour soup sun l tng

Mr. Smith Goes to Washington Essay - 830 Words

Mr. Smith Goes to Washington is a film about an average man’s journey and experience in Congress as Senator of Mississippi. 1, 2) This man is appointed by the state Governor, Governor Hopper, when one of the Senators from Mississippi unexpectedly dies. 3) Jefferson Smith is chosen as an alternative when the Governor, influenced by a politically corrupt man named Jim Taylor, and the public disagree on which man should be appointed He is also appointed because he can help to earn some of the young votes since Smith is young and runs the Boy Rangers 4) Joe Payne, the other Senator of Mississippi, and Smith begin to develop a good relationship as Smith has looked up to Payne for many years and as Payne and Smith’s father had a close†¦show more content†¦11) Taylor strong-arms Payne by threatening to soil Payne’s good name and to have him removed from office. [ 12) Taylor is a part of the state and owns a large part of Mississippi’s industries. 13) Smith puts up a noble fight against Payne and Taylor’s political machine by performing a day long filibuster that eventually forces Payne to tell the truth and announce his resignation. [did not directly answer #8] The film, â€Å"Mr. Smith Goes to Washington,† presents the Senate in a little different fashion than that of the Senate today in real life. The first obvious difference is that the Senate in the movie is still elected by the state legislature, basically the Governor, meaning that the setting of the film would have to be sometime before 1911 and the passage of the 17th amendment Senate] The difference is that today Senators are directly elected by the popular vote of the people. There are many similarities in the film between the Senate of old and the Senate in present day. This is probably because it takes a lot to change the institutions of the Constitution. First is that there are still 100 Senators, two from each state, that the rules are still mostly the same. [The process on how a bill becomes a law is still the same as far as presented in the movie. Committees still play a very important part in the Senate and the Steering Committee still chooses when legislation is br ought up on the calendar. Also, the movie made mention of theShow MoreRelatedMr. Smith Goes : Washington Analysis1180 Words   |  5 PagesMr. Smith Goes to Washington Analysis In Frank Capra’s Mr. Smith Goes to Washington, a modern David and Goliath story of a man taking on a system way more powerful than himself is evident in its themes of patriotism and standing up in the face of injustice. James Stewart’s portrayal of a naà ¯ve and patriotic junior senator serves as a vehicle with which Capra exposed a side of American politics that previously had been beyond the eyes of the everyman. With the help of incredible supporting actorsRead MoreEssay on Frank Capra’s Mr. Smith Goes to Washington617 Words   |  3 Pagesnbsp;nbsp;nbsp;nbsp;nbsp; Frank Capra’s â€Å"Mr. Smith Goes to Washington† In Frank Capra’s 1939 people’s fable â€Å"Mr. Smith goes to Washington â€Å"Jefferson Smith, a young, idealistic, and naà ¯ve hero from a Midwestern state is thrust into public notoriety through a chance course of events. His journey will compel him to contemplate the veracity of the political foundation which supports American democracy and confront the corruption which seeks to erode it. Smith, leader of the Boy Rangers, an organizationRead More Destry Rides Again, Mr Smith Goes to Washington, and the Fall of the Hollywood Studio System3533 Words   |  15 PagesDestry Rides Again, Mr Smith Goes to Washington, and the Fall of the Hollywood Studio System Thomas Schatz cites the 1950’s as the inevitable end of the Hollywood film studio system, with the signs appearing as early as the height of the second World War (472). However, the seeds of discontent and disintegration within the system were apparent as soon as the late 1930’s, exemplified in such films as Destry Rides Again (1939, George Marshall) and Mr. Smith Goes To Washington (1939, Frank Capra)Read More Mr. Smith Goes To Washington Essay701 Words   |  3 Pages â€Å"Mr. Smith Goes to Washington† Mr. Smith was too naive to survive as a senator during the time the movie â€Å"Mr. Smith Goes to Washington† took place. Mr. Smith’s naivetà © was most evident in his ambitious proposal to start a national boys camp. However, when false allegations regarding Mr. Smith’s motives for starting the camp surfaced, Smith was too idealistic to defend himself from the political machine that accused him of acting in self-interest. Making matters w orse, Senator Smith was a genuinelyRead More Mr. Smith Goes to Washington Essays902 Words   |  4 Pages Mr. Smith is portrayed as an honest man with strong opinions. He is the ideal politician in an ideal society. The film Mr. Smith Goes to Washington depicts a reassuring image that happens to be an image of the past (Wheeler). However, in todays legislature, people like Mr. Smith are rare due to the fact that a politicians primary goal is re-election. The good of the people may come as another intention of a politician, but it is always secondary to bringing home the pork. There should beRead MoreMr Smith Goes to Washington Movie Questions936 Words   |  4 PagesMr. Smith goes to Washington movie questions 1. This film is saying the American democracy can be easily corrupted. The film portrays that it takes strong, determined men with much integrity to stand up for what they know is right. 2. In today’s world there would be some mixed reactions to a senator like Jefferson Smith. Some people would disapprove of him because he is not the characteristic senator and has no political experience. They would think that he was young, and inexperienced,Read MoreCharacter Analysis Of Mr. Smith Goes To Washington995 Words   |  4 Pages Throughout the film Mr. Smith Goes to Washington the main character, Mr. Smith, shows his unfaltering patriotism and devotion toward being an honest man, promoting liberty and freedom. The politicians in the film seem to be the exact opposite of Mr. Smith because they forget that everything is about the people and doing what is right. Many politicians today share both the qualities of Mr. Smith as well as the other politicians, which could be improved. The story begins with a man named Sam FolleyRead MoreMovie Review of Mr. Smith Goes to Washington540 Words   |  2 Pagesï » ¿Mr. Smith Goes to Washington: Review Frank Capra, a renowned Hollywood director, directed Mr. Smith Goes to Washington, which was released in 1939. The film stars Jean Arthur and James (Jimmy) Stewart in the principal roles. James Stewart plays the title role of Mr. Smith as Jefferson Smith, a man chosen to take assume the role of senator after US Senator Sam Foley dies. Governor Hubert Happy Hopper selects Jefferson Smith to fill this role, pressure from his corrupt pseudo mob boss toRead MoreThe Grain of the Voice1312 Words   |  5 Pagesscreens. James Stewart: Mr Smith Goes to Washington (Frank Capra, 1939) In the early 1930s, many prominent stars with very recognizable voices surface in Hollywood, and one among these rising stars was James Stewart, whom was said to be made famous by Capra’s Mr Smith Goes to Washington. In Capra’s film, Stewart plays the character of Jefferson Smith, a kind-hearted and naà ¯ve young senator who finds himself trapped in the webs of dirty politics. As the story gradually unfolds, Smith finds his strengthRead MoreEssay about Film Review: Frank Capra’s Mr. Smith Goes to Washington1887 Words   |  8 Pages In Frank Capra’s Mr. Smith Goes to Washington, a naà ¯ve Jefferson Smith sets off for Washington D.C. as a United States Senator, where he learns that politics is not as transparent as it may seem. Released in 1939, one of the most successful years for film, Mr. Smith became a smash hit, easily becoming the second largest blockbuster of that year. However, 1939 was also the year World War II had started, and coupled with the war’s association with the Great Depression, the hit film was bound to

Faulks´ Birdsong Analysis - 839 Words

Within ‘Birdsong’ Faulks uses the character of Stephen as his voice, through which he propounds his horror and perplexity at what is unfolding during the War. Faulks also introduces the idea of a new reality which is experienced by the men in the trenches. Faulks chooses to explore curiosity as a coping mechanism within ‘Birdsong’ through the character of Stephen. Only curiosity is keeping Stephen alive as he states that he would ‘walk into enemy lines and let (himself) be killed’ if he didn’t possess that curiosity. Stephen tells Weir what he is ‘curious to see what’s going to happen’ suggesting that he wants to see how the War will end. Faulks presents Stephen as a character who has a detached curiosity concerning the War; in the same way that he is detached when discussing men’s dead bodies. Faulks’ decision to do this allows us to understand that many men did not like being in the War; they often did not carry on because they felt it was their duty to King and Country. Rather, they (like the character of Stephen) wanted to know ‘what it means’ and why they had to endure what they did. Stephen’s claim that he is ‘deeply curious to see how mu ch further it can be taken’ quashes false notations of pride in fighting, rather it expresses the horror at what they are being forced to do. Faulks, through Stephen, considers how the War could progress. The war section of ‘Birdsong’ is set half way through the War, meaning that it is still to get worse. Stephen speculates the menShow MoreRelated Love Presented in Poems by Wilfred Owen Essay2489 Words   |  10 PagesPresented in Poems by Wilfred Owen Explore how the theme of love is presented in Birdsong and a selection of poems by Wilfred Owen. Loving attitudes, though perhaps not as prominent as themes such as violence and pride, are intimately observed and explored in Sebastian Faulks Birdsong and in many of Wilfred Owens War poems. Each aspect of love, as seen through the eyes of this First World War soldier and Faulks characters, is as interesting as it is diverse, allowing an impervious insight

Vision Document for My Heath Record Project

Question: Discuss about the Vision Document for My Heath Record Project. Answer: Introduction The major aim of this study is to prepare a vision document by identifying as well as demonstrating the problems associated with the My Health Record system. Moreover, this vision document also focuses on describing the capabilities and benefits of this project. Besides that, after analyzing the project capabilities and benefits, this vision document has covered the problem statement by considering the issues, demonstrated the desired outcome statement, acceptance criteria along with stakeholder analysis. Problem Statement While utilizing the My Health Record system, it may be challenging or difficult for few people for understanding as well as interpreting the details present within the medical records. On the other hand, patients are encouraged strongly for utilizing this as the scope for opening a conversation with their healthcare provider for gaining a better understanding of the content within their health records (Hemsley et al., 2016). Moreover, these contents available in the system illustrate the details from several organizations and individuals and can also offers the opposing or alternative points of view. It should not be utilized for the medical treatment, diagnosis or medical advice as well (Woods et al., 2013). Furthermore, the reformation system can be critical for addressing the escalating costs of healthcare that can become unsustainable in the medium to long run. Desired Outcome Statement The desired outcome of this project is to execute an electronic summary system comprising all the key health information, which is aimed to continue a process of reforming efficiencies into the health care system, improve the patient care quality whilst minimizing numerous issues those were apparent from the lack of details those are shared about patients. Acceptance Criteria The acceptance criteria of this particular health record system mainly lies within the efficiency as well as effectiveness of this electronic summary system in preserving the key health information of individual by proving an impressive health care service. Most importantly, the individuals would have the access over this system. The health records allow individuals and their hospitals, doctors and other healthcare providers for sharing and viewing the health information of an individual for providing the best possible care. Stakeholder Analysis There are two major stakeholders associated with the project of executing My Health Record. The Healthcare service providers as well as the individuals who are availing the healthcare services through this system are the major two stakeholders of this system (Hemsley et al., 2017). The healthcare service providers are mainly the doctors, hospitals, Pharmaceutical organizations and other service providers. Project Capabilities This particular project has few significant capabilities which can create huge benefits for the major stakeholders of the My Health Record system. Therefore, this system is capable enough for being driven by the need for the Health Industry for continuing a process of reformation in terms of driving efficiencies into health care system as well as improving the patient care quality (Bush, Stahmer and Connelly 2016. This particular system would be capable enough of providing control to the individuals to go through their health records. Moreover, this system would also provide the scope to the healthcare providers to access the health records available within the patients account. Therefore, this easy access can provide the scope the hospitals, doctors as well as other healthcare service providers for viewing and sharing the health details or information of the individuals who are using the My Health Record system for providing the best possible healthcare service (Hanna et al., 2017). This system provides the clinical documents those support the continuity of healthcare and improvise the communications between the patients as well as healthcare providers. The My Health Record us being implemented within a wide range of healthcare settings in Australia such as the private and public organizations, community services as well as hospitals (Frank 2016). Most important, the My Health Record system is also capable of achieving safety share and managing information access by using the digital certificates that mainly conform to the Public Key Infrastructure standard endorsed by Australian Government. Project Benefits According to the capabilities of the My Health Record system, it can be ensured that the utilization of this system can result in several important benefits for the patients who are availing the healthcare services of this system. This system provides the clinical documents which support the healthcare continuity and improvise the communications conducted between patients as well as the healthcare providers (Li et al., 2014). Thus, this system supports the clinical workflow by permitting the significant patient details to be shared electronically between the healthcare providers. It is combined with the fundamental technologies of encryption, authentication and unique identification for providing a secure and safe method of exchanging the healthcare information (Bush, Stahmer and Connelly 2016). This system has made remarkable progress in enhancing and operating the important infrastructure and foundations necessary for enabling a truly national electronic health record system by wor king with the delivery partners of this health record system (Kidd 2016). The My Health Record system can provide the software vendors as well as the participants adopting the digital health a capability of demonstrating and considering the new abilities for testing new software and clinical processes and for conducting training by supporting the safe work practices (Druss et al., 2014). Conclusion After conducting the entire vision document for the project of My Health Record, it can be stated that this project has several advantages and capabilities along with the issues associated with this system. With the help of this system, prompt and the most efficient healthcare services can be provided to the patients. Therefore, the healthcare service organizations can be capable of proving the best care as the health records allow individuals and their hospitals, doctors and other healthcare providers for sharing and viewing the health information of an individual. Most importantly, the issues related with this system must be resolved in order to give the best healthcare services to the individuals who are availing the service of this system and thus the project would also be very successful after its execution. References Bush, R.A., Stahmer, A.C. and Connelly, C.D., 2016. Exploring perceptions and use of the electronic health record by parents of children with autism spectrum disorder: A qualitative study.Health informatics journal,22(3), pp.702-711. Druss, B.G., Ji, X., Glick, G. and von Esenwein, S.A., 2014. Randomized trial of an electronic personal health record for patients with serious mental illnesses.American Journal of Psychiatry,171(3), pp.360-368. Frank, O., 2016. My Health Record: repository or communication tool?.Public health research practice,26(2). Hanna, L., Gill, S.D., Newstead, L., Hawkins, M. and Osborne, R.H., 2017. Patient perspectives on a personally controlled electronic health record used in regional Australia: I can be like my own doctor.Health Information Management Journal,46(1), pp.42-48. Hemsley, B., Georgiou, A., Carter, R., Hill, S., Higgins, I., van Vliet, P. and Balandin, S., 2016. Use of the My Health Record by people with communication disability in Australia: A review to inform the design and direction of future research.Health Information Management Journal,45(3), pp.107-115. Hemsley, B., McCarthy, S., Adams, N., Georgiou, A., Hill, S. and Balandin, S., 2017. Legal, ethical, and rights issues in the adoption and use of the My Health Record by people with communication disability in Australia.Journal of Intellectual Developmental Disability, pp.1-9. Kidd, R., 2016. General practice: Maximising my health record.Australian Medicine,28(10), p.20. Li, H., Gupta, A., Zhang, J. and Sarathy, R., 2014. Examining the decision to use standalone personal health record systems as a trust-enabled fair social contract.Decision Support Systems,57, pp.376-386. Woods, S.S., Schwartz, E., Tuepker, A., Press, N.A., Nazi, K.M., Turvey, C.L. and Nichol, W.P., 2013. Patient experiences with full electronic access to health records and clinical notes through the My HealtheVet Personal Health Record Pilot: qualitative study.Journal of medical Internet research,15(3), p.e65.

Recession in India free essay sample

Financial markets impact|   | Global effects|   | Effects of Recession on India|   | Effects on Banks|   | What corrective measures were taken? |   | Future Outlook|   | What Industry Experts Think? |   | Conclusion|   | Bibliography|   | ` INTRODUCTION The recent financial crisis has put a major impact on all commercial sectors of India. We have covered the reason and causes of the financial crisis which emerged from U. S and impacted the entire world. Though the effect on banking sector was similar but it was corrected with proper measures and circulars. We have compiled the said report which helps in understanding what corrective steps were taken which helped the banks to emerge out of the turmoil. Financial Crisis The financial crisis of 2007 to the present is a crisis triggered by a liquidity shortfall in the United States banking system caused by the overvaluation of assets. It has resulted in the collapse of large financial institutions, the bailout of banks by national governments and downturns in stock markets around the world. In many areas, the housing market has also suffered, resulting in numerous evictions, foreclosures and prolonged vacancies. It is considered by many economists to be the worst financial crisis since the Great Depression of the 1930s. It contributed to the failure of key businesses, declines in consumer wealth estimated in the trillions of U. S. dollars, substantial financial commitments incurred by governments, and a significant decline in economic activity. Many causes have been suggested, with varying weight assigned by experts. Both market-based and regulatory solutions have been implemented or are under consideration, while significant risks remain for the world economy over the 2010–2011 periods. The collapse of a global housing bubble, which peaked in the U. S. in 2006, caused the values of securities tied to real estate pricing to plummet thereafter, damaging financial institutions globally. Questions regarding bank solvency, declines in credit availability, and damaged investor confidence had an impact on global stock markets, where securities suffered large losses during late 2008 and early 2009. Economies worldwide slowed during this period as credit tightened and international trade declined. Critics argued that credit rating agencies and investors failed to accurately price the risk involved with mortgage-related financial products, and that governments did not adjust their regulatory practices to address 21st century financial markets. Governments and central banks responded with unprecedented fiscal stimulus, monetary policy expansion, and institutional bailouts. | Background and causes The immediate cause or trigger of the crisis was the bursting of the United States housing bubble which peaked in approximately 2005–2006. Already-rising default rates on subprime and adjustable rate mortgages (ARM) began to increase quickly thereafter. An increase in loan packaging, marketing and incentives such as easy initial terms and a long-term trend of rising housing prices had encouraged borrowers to assume difficult mortgages in the belief they would be able to quickly refinance at more favorable terms. However, once interest rates began to rise and housing prices started to drop moderately in 2006–2007 in many parts of the U. S. , refinancing became more difficult. Defaults and foreclosure activity increased dramatically as easy initial terms expired, home prices failed to go up as anticipated, and ARM interest rates reset higher. Share in GDP of U. S. financial sector since 1860 Low interest rates and large inflows of foreign funds created easy credit conditions for a number of years prior to the crisis, fueling a housing construction boom and encouraging debt-financed consumption. The combination of easy credit and money inflow contributed to the United States housing bubble. Loans of various types (e. g. mortgage, credit card, and auto) were easy to obtain and consumers assumed an unprecedented debt load. As part of the housing and credit booms, the number of financial agreements called mortgage-backed securities (MBS) and collateralized debt obligations (CDO), which derived their value from mortgage payments and housing prices, greatly increased. Such financial innovation enabled institutions and investors around the world to invest in the U. S. housing market. As housing prices declined, major global financial institutions that had borrowed and invested heavily in subprime MBS reported significant losses. Falling prices also resulted in homes worth less than the mortgage loan, providing a financial incentive to enter foreclosure. The ongoing foreclosure epidemic that began in late 2006 in the U. S. continues to drain wealth from consumers and erodes the financial strength of banking institutions. Defaults and losses on other loan types also increased significantly as the crisis expanded from the housing market to other parts of the economy. Total losses are estimated in the trillions of U. S. dollars globally. While the housing and credit bubbles built, a series of factors caused the financial system to both expand and become increasingly fragile, a process called financialization. Policymakers did not recognize the increasingly important role played by financial institutions such as investment banks and hedge funds, also known as the shadow banking system. Some experts believe these institutions had become as important as commercial (depository) banks in providing credit to the U. S. economy, but they were not subject to the same regulations. These institutions as well as certain regulated banks had also assumed significant debt burdens while providing the loans described above and did not have a financial cushion sufficient to absorb large loan defaults or MBS losses. These losses impacted the ability of financial institutions to lend, slowing economic activity. Concerns regarding the stability of key financial institutions drove central banks to provide funds to encourage lending and restore faith in the commercial paper markets, which are integral to funding business operations. Governments also bailed out key financial institutions and implemented economic stimulus programs, assuming significant additional financial commitments. The crises culminated on Sept. 15th 2008 with Lehman Brothers filing for bankruptcy. It has been reported that JP Morgan helped drive Lehman into bankruptcy and kicked off the credit crises by forcing it to give up billions in cash reserves on the afternoon of Friday September 13, 2008. Growth of the housing bubble Main article: United States housing bubble A graph showing the median and average sales prices of new homes sold in the United States between 1963 and 2008 (not adjusted for inflation) Between 1997 and 2006, the price of the typical American house increased by 124%. During the two decades ending in 2001, the national median home price ranged from 2. 9 to 3. 1 times median household income. This ratio rose to 4. 0 in 2004, and 4. 6 in 2006. This housing bubble resulted in quite a few homeowners refinancing their homes at lower interest rates, or financing consumer spending by taking out second mortgages secured by the price appreciation. In a Peabody Award winning program, NPR correspondents argued that a Giant Pool of Money (represented by $70 trillion in worldwide fixed income investments) sought higher yields than those offered by U. S. Treasury bonds early in the decade. Further, this pool of money had roughly doubled in size from 2000 to 2007, yet the supply of relatively safe, income generating investments had not grown as fast. Investment banks on Wall Street answered this demand with the MBS and CDO, which were assigned safe ratings by the credit rating agencies. In effect, Wall Street connected this pool of money to the mortgage market in the U. S. , with enormous fees accruing to those throughout the mortgage supply chain, from the mortgage broker selling the loans, to small banks that funded the brokers, to the giant investment banks behind them. By approximately 2003, the supply of mortgages originated at traditional lending standards had been exhausted. However, continued strong demand for MBS and CDO began to drive down lending standards, as long as mortgages could still be sold along the supply chain. Eventually, this speculative bubble proved unsustainable. The CDO in particular enabled financial institutions to obtain investor funds to finance subprime and other lending, extending or increasing the housing bubble and generating large fees. A CDO essentially places cash payments from multiple mortgages or other debt obligations into a single pool, from which the cash is allocated to specific securities in a priority sequence. Those securities obtaining cash first received investment-grade ratings from rating agencies. Lower priority securities received cash thereafter, with lower credit ratings but theoretically a higher rate of return on the amount invested. By September 2008, average U. S. housing prices had declined by over 20% from their mid-2006 peak. As prices declined, borrowers with adjustable-rate mortgages could not refinance to avoid the higher payments associated with rising interest rates and began to default. During 2007, lenders began foreclosure proceedings on nearly 1. 3 million properties, a 79% increase over 2006. This increased to 2. 3 million in 2008, an 81% increase vs. 2007. By August 2008, 9. 2% of all U. S. mortgages outstanding were either delinquent or in foreclosure. By September 2009, this had risen to 14. 4%. Easy credit conditions Lower interest rates encourage borrowing. From 2000 to 2003, the Federal Reserve lowered the federal funds rate target from 6. 5% to 1. 0%. [31] This was done to soften the effects of the collapse of the dot-com bubble and of the September 2001 terrorist attacks, and to combat the perceived risk of deflation. [32] U. S. current account or trade deficit Additional downward pressure on interest rates was created by the USAs high and rising current account (trade) deficit, which peaked along with the housing bubble in 2006. Ben Bernanke explained how trade deficits required the U. S. to borrow money from abroad, which bid up bond prices and lowered interest rates. Bernanke explained that between 1996 and 2004, the USA current account deficit increased by $650 billion, from 1. 5% to 5. 8% of GDP. Financing these deficits required the USA to borrow large sums from abroad, much of it from countries running trade surpluses, mainly the emerging economies in Asia and oil-exporting nations. The balance of payments identity requires that a country (such as the USA) running a current account deficit also have a capital account (investment) surplus of the same amount. Hence large and growing amounts of foreign funds (capital) flowed into the USA to finance its imports. This created demand for various types of financial assets, raising the prices of those assets while lowering interest rates. Foreign investors had these funds to lend, either because they had very high personal savings rates (as high as 40% in China), or because of high oil prices. Bernanke referred to this as a saving glut. A flood of funds (capital or liquidity) reached the USA financial markets. Foreign governments supplied funds by purchasing USA Treasury bonds and thus avoided much of the direct impact of the crisis. USA households, on the other hand, used funds borrowed from foreigners to finance consumption or to bid up the prices of housing and financial assets. Financial institutions invested foreign funds in mortgage-backed securities. The Fed then raised the Fed funds rate significantly between July 2004 and July 2006. This contributed to an increase in 1-year and 5-year adjustable-rate mortgage (ARM) rates, making ARM interest rate resets more expensive for homeowners. This may have also contributed to the deflating of the housing bubble, as asset prices generally move inversely to interest rates and it became riskier to speculate in housing. USA housing and financial assets dramatically declined in value after the housing bubble burst. Sub-prime lending U. S. subprime lending expanded dramatically 2004-2006 The term subprime refers to the credit quality of particular borrowers, who have weakened credit histories and a greater risk of loan default than prime borrowers. The value of U. S. subprime mortgages was estimated at $1. 3 trillion as of March 2007, with over 7. 5 million first-lien subprime mortgages outstanding. In addition to easy credit conditions, there is evidence that both government and competitive pressures contributed to an increase in the amount of subprime lending during the years preceding the crisis. Major U. S. investment banks and government sponsored enterprises like Fannie Mae played an important role in the expansion of higher-risk lending. Subprime mortgages remained below 10% of all mortgage originations until 2004, when they spiked to nearly 20% and remained there through the 2005-2006 peak of the United States housing bubble. A proximate event to this increase was the April 2004 decision by the U. S. Securities and Exchange Commission (SEC) to relax the net capital rule, which permitted the largest five investment banks to dramatically increase their financial leverage and aggressively expand their issuance of mortgage-backed securities. This applied additional competitive pressure to Fannie Mae and Freddie Mac, which further expanded their riskier lending. Subprime mortgage payment delinquency rates remained in the 10-15% range from 1998 to 2006, then began to increase rapidly, rising to 25% by early 2008. Fannie Mae, the nations biggest underwriter of home mortgages, has been under increasing pressure from the Clinton Administration to expand mortgage loans among low and moderate income people In moving, even tentatively, into this new area of lending, Fannie Mae is taking on significantly more risk, which may not pose any difficulties during flush economic times. But the government-subsidized corporation may run into trouble in an economic downturn, prompting a government rescue similar to that of the savings and loan industry in the 1980s. A 2000 United States Department of the Treasury study of lending trends for 305 cities from 1993 to 1998 showed that $467 billion of mortgage credit poured out of Community Reinvestment Act (CRA)-covered lenders into low and mid level income borrowers and neighborhoods. Nevertheless, only 25% of all sub-prime lending occurred at CRA-covered institutions, and a full 50% of sub-prime loans originated at institutions exempt from CRA. While the number of CRA sub-prime loans originated were less than non-CRA sub-prime loans originated, it is important to note that the CRA sub-prime loans were the more vulnerable during the downturn, to the detriment of both borrowers and lenders. For example, lending done under Community Reinvestment Act criteria, according to a quarterly report in October of 2008, constituted only 7 percent of the total mortgage lending by the Bank of America, but constituted 29 percent of its losses on mortgages. Economist Paul Krugman argued in January 2010 that the simultaneous growth of the residential and commercial real estate pricing bubbles undermines the case made by those who argue that Fannie Mae, Freddie Mac, CRA or predatory lending were primary causes of the crisis. In other words, bubbles in both markets developed even though only the residential market was affected by these potential causes. Predatory lending Predatory lending refers to the practice of unscrupulous lenders, to ente r into unsafe or unsound secured loans for inappropriate purposes. A classic bait-and-switch method was used by Countrywide, advertising low interest rates for home refinancing. Such loans were written into extensively detailed contracts, and swapped for more expensive loan products on the day of closing. Whereas the advertisement might state that 1% or 1. 5% interest would be charged, the consumer would be put into an adjustable rate mortgage (ARM) in which the interest charged would be greater than the amount of interest paid. This created negative amortization, which the credit consumer might not notice until long after the loan transaction had been consummated. Countrywide, sued by California Attorney General Jerry Brown for Unfair Business Practices and False Advertising was making high cost mortgages to homeowners with weak credit, adjustable rate mortgages (ARMs) that allowed homeowners to make interest-only payments. . When housing prices decreased, homeowners in ARMs then had little incentive to pay their monthly payments, since their home equity had disappeared. This caused Countrywides financial condition to deteriorate, ultimately resulting in a decision by the Office of Thrift Supervision to seize the lender. Former employees from Ameriquest, which was United Statess leading wholesale lender,[60] described a system in which they were pushed to falsify mortgage documents and then sell the mortgages to Wall Street banks eager to make fast profits. [60] There is growing evidence that such mortgage frauds may be a cause of the crisis. [60] Deregulation Further information: Government policies and the subprime mortgage crisis Critics have argued that the regulatory framework did not keep pace with financial innovation, such as the increasing importance of the shadow banking system, derivatives and off-balance sheet financing. In other cases, laws were changed or enforcement weakened in parts of the financial system. Key examples include: * Jimmy Carters Depository Institutions Deregulation and Monetary Control Act of 1980 (DIDMCA) phased out a number of restrictions on banks financial practices, broadened their lending powers, and raised the deposit insurance limit from $40,000 to $100,000 (raising the problem of moral hazard). Banks rushed into real estate lending, speculative lending, and other ventures just as the economy soured. * In October 1982, U. S. President Ronald Reagan signed into Law the Garn–St. Germain Depository Institutions Act, which provided for adjustable-rate mortgage loans, began the process of banking deregulation, and contributed to the savings and loan crisis of the late 1980s/early 1990s. * In November 1999, U. S. President Bill Clinton signed into Law the Gramm-Leach-Bliley Act, which repealed part of the Glass-Steagall Act of 1933. This repeal has been criticized for reducing the separation between commercial banks (which traditionally had a conservative culture) and investment banks (which had a more risk-taking culture). In 2004, the U. S. Securities and Exchange Commission relaxed the net capital rule, which enabled investment banks to substantially increase the level of debt they were taking on, fueling the growth in mortgage-backed securities supporting subprime mortgages. The SEC has conceded that self-regulation of investment banks contributed to the crisis. * Financial institutions in the shadow banking system are not subject to the same regulation as d epository banks, allowing them to assume additional debt obligations relative to their financial cushion or capital base. This was the case despite the Long-Term Capital Management debacle in 1998, where a highly-leveraged shadow institution failed with systemic implications. * Regulators and accounting standard-setters allowed depository banks such as Citigroup to move significant amounts of assets and liabilities off-balance sheet into complex legal entities called structured investment vehicles, masking the weakness of the capital base of the firm or degree of leverage or risk taken. One news agency estimated that the top four U. S. banks will have to return between $500 billion and $1 trillion to their balance sheets during 2009. This increased uncertainty during the crisis regarding the financial position of the major banks. Off-balance sheet entities were also used by Enron as part of the scandal that brought down that company in 2001. * As early as 1997, Federal Reserve Chairman Alan Greenspan fought to keep the derivatives market unregulated. With the advice of the Presidents Working Group on Financial Markets, the U. S. Congress and President allowed the self-regulation of the over-the-counter derivatives market when they enacted the Commodity Futures Modernization Act of 2000. Derivatives such as credit default swaps (CDS) can be used to hedge or speculate against particular credit risks. The volume of CDS outstanding increased 100-fold from 1998 to 2008, with estimates of the debt covered by CDS contracts, as of November 2008, ranging from US$33 to $47 trillion. Total over-the-counter (OTC) derivative notional value rose to $683 trillion by June 2008. Warren Buffett famously referred to derivatives as financial weapons of mass destruction in early 2003. Increased debt burden or over-leveraging Leverage ratios of investment banks increased significantly 2003-2007 U. S. households and financial institutions became increasingly indebted or overleveraged during the years preceding the crisis. This increased their vulnerability to the collapse of the housing bubble and worsened the ensuing economic downturn. Key statistics include: * Free cash used by consumers from home equity extraction doubled from $627 billion in 2001 to $1,428 billion in 2005 as the housing bubble built, a total of nearly $5 trillion dollars over the period, contributing to economic growth worldwide. U. S. home mortgage debt relative to GDP increased from an average of 46% during the 1990s to 73% during 2008, reaching $10. 5 trillion. * USA household debt as a percentage of annual disposable personal income was 127% at the end of 2007, versus 77% in 1990. * In 1981, U. S. rivate debt was 123% of GDP; by the third quarter of 2008, it was 290%. * From 2004-07, the top five U. S. investment banks each significantly increased their financial leverage (see diagram), which increased their vulnerability to a financial shock. These five institutions reported over $4. 1 trillion in debt for fiscal year 2007, about 30% of USA nominal GDP for 2007. Lehman Brothers was liquidated, Bear Stearns and Merrill Lynch were sold at fir e-sale prices, and Goldman Sachs and Morgan Stanley became commercial banks, subjecting themselves to more stringent regulation. With the exception of Lehman, these companies required or received government support. * Fannie Mae and Freddie Mac, two U. S. Government sponsored enterprises, owned or guaranteed nearly $5 trillion in mortgage obligations at the time they were placed into conservatorship by the U. S. government in September 2008. These seven entities were highly leveraged and had $9 trillion in debt or guarantee obligations, an enormous concentration of risk; yet they were not subject to the same regulation as depository banks. Boom and collapse of the shadow banking system In a June 2008 speech, President and CEO of the New York Federal Reserve Bank Timothy Geithner  Ã¢â‚¬â€ who in 2009 became Secretary of the United States Treasury  Ã¢â‚¬â€ placed significant blame for the freezing of credit markets on a run on the entities in the parallel banking system, also called the shadow banking system. These entities became critical to the credit markets underpinning the financial system, but were not subject to the same regulatory controls. Further, these entities were vulnerable because of maturity mismatch, meaning that they borrowed short-term in liquid markets to purchase long-term, illiquid and risky assets. This meant that disruptions in credit markets would make them subject to rapid deleveraging, selling their long-term assets at depressed prices. He described the significance of these entities: In early 2007, asset-backed commercial paper conduits, in structured investment vehicles, in auction-rate preferred securities, tender option bonds and variable rate demand notes, had a combined asset size of roughly $2. trillion. Assets financed overnight in triparty repo grew to $2. 5 trillion. Assets held in hedge funds grew to roughly $1. 8 trillion. The combined balance sheets of the then five major investment banks totaled $4 trillion. In comparison, the total assets of the top five bank holding companies in the United States at that point were just over $6 trillion, and total assets of the entire banking system we re about $10 trillion. The combined effect of these factors was a financial system vulnerable to self-reinforcing asset price and credit cycles. Paul Krugman, laureate of the Nobel Prize in Economics, described the run on the shadow banking system as the core of what happened to cause the crisis. He referred to this lack of controls as malign neglect and argued that regulation should have been imposed on all banking-like activity. Financial markets impacts Impacts on financial institutions 2007 bank run on Northern Rock, a UK bank The International Monetary Fund estimated that large U. S. and European banks lost more than $1 trillion on toxic assets and from bad loans from January 2007 to September 2009. These losses are expected to top $2. 8 trillion from 2007-10. U. S. banks losses were forecast to hit $1 trillion and European bank losses will reach $1. 6 trillion. The IMF estimated that U. S. banks were about 60 percent through their losses, but British and eurozone banks only 40 percent. One of the first victims was Northern Rock, a medium-sized British bank. The highly leveraged nature of its business led the bank to request security from the Bank of England. This in turn led to investor panic and a bank run in mid-September 2007. Calls by Liberal Democrat Shadow Chancellor Vince Cable to nationalise the institution were initially ignored; in February 2008, however, the British government (having failed to find a private sector buyer) relented, and the bank was taken into public hands. Northern Rocks problems proved to be an early indication of the troubles that would soon befall other banks and financial institutions. Initially the companies affected were those directly involved in home construction and mortgage lending such as Northern Rock and Countrywide Financial, as they could no longer obtain financing through the credit markets. Over 100 mortgage lenders went bankrupt during 2007 and 2008. Concerns that investment bank Bear Stearns would collapse in March 2008 resulted in its fire-sale to JP Morgan Chase. The crisis hit its peak in September and October 2008. Several major institutions either failed, were acquired under duress, or were subject to government takeover. These included Lehman Brothers, Merrill Lynch, Fannie Mae, Freddie Mac, Washington Mutual, Wachovia, and AIG. Credit markets and the shadow banking system TED spread and components during 2008 During September 2008, the crisis hit its most critical stage. There was the equivalent of a bank run on the money market mutual funds, which frequently invest in commercial paper issued by corporations to fund their operations and payrolls. Withdrawals from money markets were $144. 5 billion during one week, versus $7. 1 billion the week prior. This interrupted the ability of corporations to rollover (replace) their short-term debt. The U. S. government responded by extending insurance for money market accounts analogous to bank deposit insurance via a temporary guarantee and with Federal Reserve programs to purchase commercial paper. The TED spread, an indicator of perceived credit risk in the general economy, spiked up in July 2007, remained volatile for a year, then spiked even higher in September 2008, reaching a record 4. 65% on October 10, 2008. In a dramatic meeting on September 18, 2008, Treasury Secretary Henry Paulson and Fed Chairman Ben Bernanke met with key legislators to propose a $700 billion emergency bailout. Bernanke reportedly told them: If we dont do this, we may not have an economy on Monday. The Emergency Economic Stabilization Act, which implemented the Troubled Asset Relief Program (TARP), was signed into law on October 3, 2008. Economist Paul Krugman and U. S. Treasury Secretary Timothy Geithner explain the credit crisis via the implosion of the shadow banking system, which had grown to nearly equal the importance of the traditional commercial banking sector as described above. Without the ability to obtain investor funds in exchange for most types of mortgage-backed securities or asset-backed commercial paper, investment banks and other entities in the shadow banking system could not provide funds to mortgage firms and other corporations. This meant that nearly one-third of the U. S. lending mechanism was frozen and continued to be frozen into June 2009. According to the Brookings Institution, the traditional banking system does not have the capital to close this gap as of June 2009: It would take a number of years of strong profits to generate sufficient capital to support that additional lending volume. The authors also indicate that some forms of securitization are likely to vanish forever, having been an artifact of excessively loose credit conditions. While traditional banks have raised their lending standards, it was the collapse of the shadow banking system that is the primary cause of the reduction in funds available for borrowing. Global effects A number of commentators have suggested that if the liquidity crisis continues, there could be an extended recession or worse. The continuing development of the crisis has prompted in some quarters fears of a global economic collapse although there are now many cauti ously optimistic forecasters in addition to some prominent sources who remain negative. The financial crisis is likely to yield the biggest banking shakeout since the savings-and-loan meltdown. Investment bank UBS stated on October 6 that 2008 would see a clear global recession, with recovery unlikely for at least two years. Three days later UBS economists announced that the beginning of the end of the crisis had begun, with the world starting to make the necessary actions to fix the crisis: capital injection by governments; injection made systemically; interest rate cuts to help borrowers. The United Kingdom had started systemic injection, and the worlds central banks were now cutting interest rates. UBS emphasized the United States needed to implement systemic injection. UBS further emphasized that this fixes only the financial crisis, but that in economic terms the worst is still to come. UBS quantified their expected recession durations on October 16: the Eurozones would last two quarters, the United States would last three quarters, and the United Kingdoms would last four quarters. The economic crisis in Iceland involved all three of the countrys major banks. Relative to the size of its economy, Iceland’s banking collapse is the largest suffered by any country in economic history. At the end of October UBS revised its outlook downwards: the forthcoming recession would be the worst since the Reagan recession of 1981 and 1982 with negative 2009 growth for the U. S. , Eurozone, UK; very limited recovery in 2010; but not as bad as the Great Depression. The Brookings Institution reported in June 2009 that U. S. consumption accounted for more than a third of the growth in global consumption between 2000 and 2007. The US economy has been spending too much and borrowing too much for years and the rest of the world depended on the U. S. consumer as a source of global demand. With a recession in the U. S. and the increased savings rate of U. S. consumers, declines in growth elsewhere have been dramatic. For the first quarter of 2009, the annualized rate of decline in GDP was 14. 4% in Germany, 15. 2% in Japan, 7. 4% in the UK, 18% in Latvia, 9. 8% in the Euro area and 21. 5% for Mexico. Some developing countries that had seen strong economic growth saw significant slowd owns. For example, growth forecasts in Cambodia show a fall from more than 10% in 2007 to close to zero in 2009, and Kenya may achieve only 3-4% growth in 2009, down from 7% in 2007. According to the research by the Overseas Development Institute, reductions in growth can be attributed to falls in trade, commodity prices, investment and remittances sent from migrant workers (which reached a record $251 billion in 2007, but have fallen in many countries since). The has stark implications and has led to a dramatic rise in the number of households living below the poverty line, be it 300,000 in Bangladesh or 230,000 in Ghana. By March 2009, the Arab world had lost $3 trillion due to the crisis. In April 2009, unemployment in the Arab world is said to be a time bomb. In May 2009, the United Nations reported a drop in foreign investment in Middle-Eastern economies due to a slower rise in demand for oil. In June 2009, the World Bank predicted a tough year for Arab states. In September 2009, Arab banks reported losses of nearly $4 billion since the onset of the global financial crisis. U. S. economic effects Real gross domestic product — the output of goods and services produced by labor and property located in the United States — decreased at an annual rate of approximately 6 percent in the fourth quarter of 2008 and first quarter of 2009, versus activity in the year-ago periods. The U. S. unemployment rate increased to 10. 1% by October 2009, the highest rate since 1983 and roughly twice the pre-crisis rate. The average hours per work week declined to 33, the lowest level since the government began collecting the data in 1964. Effects of Recession on India There is, at least in some quarters, dismay that India has been hit by the crisis. This dismay stems from two arguments. The Indian banking system has had no direct exposure to the sub-prime mortgage assets or to the failed institutions. It has very limited off-balance sheet activities or securitized assets. In fact, our banks continue to remain safe and healthy. So, the enigma is how can India be caught up in a crisis when it has nothing much to do with any of the maladies that are at the core of the crisis. The second reason for dismay is that Indias recent growth has been driven predominantly by domestic consumption and domestic investment. External demand, as measured by merchandize exports, accounts for less than 15 per cent of our GDP. The question then is, even if there is a global downturn, why should India be affected when its dependence on external demand is so limited? The answer to the above frequently-asked questions lies in globalization. First, Indias integration into the world economy over the last decade has been remarkably rapid. Integration into the world implies more than just exports. Going by the common measure of globalization, Indias two-way trade (merchandize exports plus imports), as a proportion of GDP, grew from 21. 2 per cent in 1997-98, the year of the Asian crisis, to 34. 7 per cent in 2007-08. Second, Indias financial integration with the world has been as deep as Indias trade globalization, if not deeper. If we take an expanded measure of globalization, that is the ratio of total external transactions (gross current account flows plus gross capital flows) to GDP, this ratio has more than doubled from 46. 8 per cent in 1997-98 to 117. 4 per cent in 2007-08. Importantly, the Indian corporate sectors access to external funding has markedly increased in the last five years. Some numbers will help illustrate the point. In the five-year period 2003-08, the share of investment in Indias GDP rose by 11 percentage points. Corporate savings financed roughly half of this, but a significant portion of the balance financing came from external sources. While funds were available domestically, they were expensive relative to foreign funding. On the other hand, in a global market awash with liquidity and on the promise of Indias growth potential, foreign investors were willing to take risks and provide funds at a lower cost. Last year (2007/08), for example, India received capital inflows amounting to over 9 per cent of GDP as against a current account deficit in the balance of payments of just 1. 5 per cent of GDP. These capital flows, in excess of the current account deficit, evidence the importance of external financing and the depth of Indias financial integration. So, the reason India has been hit by the crisis, despite mitigating factors, is clearly Indias rapid and growing integration into the global economy. The contagion of the crisis has spread to India through all the channels – the financial channel, the real channel, and importantly, as happens in all financial crises, the confidence channel. Indias financial markets equity markets, money markets, forex markets and credit markets had all come under pressure from a number of directions. First, as a consequence of the global liquidity squeeze, Indian banks and corporates found their overseas financing drying up, forcing corporates to shift their credit demand to the domestic banking sector. Also, in their frantic search for substitute financing, corporates withdrew their investments from domestic money market mutual funds putting redemption pressure on the mutual funds and down the line on non-banking financial companies (NBFCs) where the MFs had invested a significant portion of their funds. This substitution of overseas financing by domestic financing brought both money markets and credit markets under pressure. Second, the forex market came under pressure because of reversal of capital flows as part of the global deleveraging process. Simultaneously, corporates were converting the funds raised locally into foreign currency to meet their external obligations. Both these factors put downward pressure on the rupee. Third, the Reserve Banks intervention in the forex market to manage the volatility in the rupee further added to liquidity tightening. The transmission of the global cues to the domestic economy has been quite straight forward – through the slump in demand for exports. The United States, European Union and the Middle East, which account for three quarters of Indias goods and services trade are in a synchronized down turn. Service export growth is also likely to slow in the near term as the recession deepens and financial services firms – traditionally large users of outsourcing services – are restructured. Remittances from migrant workers too are likely to slow as the Middle East adjusts to lower crude prices and advanced economies go into a recession. Beyond the financial and real channels of transmission as above, the crisis also spread through the confidence channel. In sharp contrast to global financial markets, which went into a seizure on account of a crisis of confidence, Indian financial markets continued to function in an orderly manner. Nevertheless, the tightened global liquidity situation in the period immediately following the Lehman failure in mid-September 2008, coming as it did on top of a turn in the credit cycle, increased the risk aversion of the financial system and made banks cautious about lending. The purport of the above explanation is to show how, despite not being part of the financial sector problem, India has been affected by the crisis through the pernicious feedback loops between external shocks and domestic vulnerabilities by way of the financial, real and confidence channels. Effect on Banks The actual effect of recession was only realised in February 2008 in Banking Industry. Before this there were lot of questions and queries regarding whether the U. S. recession will have any impact on India or Indian banking sector. In Feb 2008, the markets suddenly crashed the actual picture came in front. The effects which came across the banking sector are as follow * Credit Card and loan settlements. As soon as the impact of recession was realized by the banking sector, the Indian banking system came into the mode of consolidation. Each and every bank started reviewing their NPA’s and the amount of lending they have done which is yet to be recovered. Bank concentrated more on retail loans and Credit Card payments. The first priority for bank was to recover such amount which was unpaid from their customers. The banks hired external agencies for calling up clients and requesting them to settle their respective dues. This in turn created a panic in the customers mind. The banks in order to recover their dues and make the process fast provided attractive offers to its customers. For e. g. By settling the entire amount by cash there were discounts which were given amounting to about 5% of the entire due amount. * Call money market. In the initial stages of recession there was lot of demand for short term cash amongst the bank as the bank needed to fulfil the requirement of CRR and SLR. The money which was lended by the bank were taking time to recover and therefore there was a sudden requirement of short term money. The interest rate which were use to be at 5-6% grow up to 14-15% for a time period of 11-15 days. These requirements by few banks were enchased fully by other banks which were low on lending. The banks like ING Vysya bank, Yes Bank, IDBI Bank were amongst the few who were lending through call money market to other banks. * Fixed Deposit Rates Before recession hit the market FD rates were at a sky high level. Lot of private sector banks as well as public sector banks were offering interest rates in long term period upto 11-12%. When the recession kicked in the money demand for long term had almost finished. This was because of the reason that banks were in the mode of consolidation and did not want to lend further till the time most of the money was recovered. The bank deposit rates came down to a level of 6-7% as there was ample liquidity in the banking sector because of funds being not given ahead as loans. * Private banks became unpopular. During recession looking at the bankruptcy of foreign banks there was panic in the mind of investors even in india. There were lot of question that were raised whether the private sector banks who take exposure in foreign securities are safe in investing or not. During this period only there was a news which came for ICICI Bank. ICICI Bank had taken direct exposures in securities which issued by Lehman Brothers and Merill Lynch. In fact even few of public sector banks had taken similar exposures but since public sector banks were backed up by the government, there was a comfort factor amongst the investors. If we look at what happened with ICICI Bank, the liquidity was ample and it was just a few percentage of exposure that has gone as bad debt but other private marked players like HDFC Bank and Kotak Mahindra Bank encashed on these opportunities and placed their canopies next to each and every branch and ATM of ICICI Bank. There was a lot of panic which was created within the investors and they wanted to park their funds in a safer bank. Many of them shifted to nationalized banks and others were diverted to other private banks. This not only hampered the image of ICICI Bank but also created a bad image of Indian Private Banks. They were much difficulties which were faced by these banks to get additional deposits from investors and even retain theri clients who were shifting toward nationalised banks. * Diversifying and churning of funds. While the recession was impacting the country and the banking system there were informations that were given to the investors that the government insures on Rs. 1 lakh for any particular individual. This was misinterpreted by lot of investors in what they believed was with respect to one particular bank. With these being public diversification started. Each investor to safeguard his/her money started opening many accounts in different banks and keeping the funds equal in all. There was a lot of churning which happened from private sector banks to public sector banks as there were lot of uncertainity about funds being saved in a private sector bank. Investor created portfolios in different nationalised banks because of which private sector banks faced decline in their interest earnings as well as corpus and faced losses. After a while this myth was broken by RBI governor that the government only ensures Rs. lakh in totality no matter how many banks an investor has. * Lending Choked. The banks private sector as well as public sector were uncertain with what more negative impact were forthcoming. This resulted in, banks not at all lending to retail and corporate which were related to infrastructure or real estate. The cycle of churning of funds had suddenly stopped. Many projects which were about to start or were half way completed we re forced to put their projects on hold as no additional funds were being provided. This created commotion in real estate market which resulted in decline of prices. Even on retail side many of the housing loans were rejected which propelled the negativity more. Even for Large Cap companies the banks were demanding additional securities in cash apart from normal tangible assets. Even for processing loans for investors who had excellent credit history, the banks put ahead lot of extra conditions and terms. This further created panic and investors postponed their financial goals and loans were not applied for. After a while many loan divisions of banks were shut down and the employees were shifted to other departments were asked to leave. This even further increased the liquidity with banks. * Banks Investment Primary earning for any bank is through lending. Loans were not being processed and since the banks were uncertain of what more negative impact will come the banks were desperately looking out for other avenues to make money. The most safest option available with banks was to invest in G-Secs (Government of India Securities). Many banks started heavily into govt. Securities and bonds. These securities were traded quite highly at that period. Other sources including were through reverse repo and short term lending to different banks. During this time period much more focus was given to income from wealth management as markets has been corrected and banks insisted on educating the investors to park their funds in the equity market. Though the banks were heavily investing in G-Secs and other bonds it was not enough for their survival. Sooner or later the banks had to lend where they make the maximum profit. * Unemployment During the time of recession many jobs were lost in all the sectors. The similar effect was seen in banking but it was not in totality but few departments specific. The maximum hits were taken by two divisions which suffered most during the recession time. The first being the Wealth management division of banks. Though the feeling was correct that the markets have come down and valuations are excellent, it was very difficult convincing the investors. This resulted in many job losses in wealth management department of all the banks as revenue was expected which was not possible to generate. The next division which suffered was the loan division. The lay off’s happened more as the departments closed down and were not functional at all. Most of the bank had outsourced the servicing part as it was cheaper compared to keeping the existing team operational. Close to 1100 jobs were lost in the matter of 3 months in the entire banking sector. There were lot of apprehensions in the mind of new jonnies and soon working for a retail bank became unpopular. * Nationalised Banks popularity During all these events the only player in banking who were waiting to claw back the market shares were the nationalised bank. There was enough panic in retail investor’s regarding their funds being safe and sound, which the nationalised banks encashed fully. Maximum number of promotional activities and advertisement were given by them in the news paper and new channels. Even the investors responded to them equally and more than willingly because the backing up of the government was more than enough to provide a relief factor. Even in terms of employment, soon the nationalised banks became very popular and the people who were asked to leave from private banks where looking out for safe options to enter again. They were not willing to take any more risk. With this the bank got best of the aggressive talent in cheap prices. What corrective measures were taken? Decrease in CRR and repo rates. RBI again cuts repo rates CRR to inject additional liquidity of Rs 20,000 crore January 2, 2009: On a review of current global and domestic macroeconomic situation, the Reserve Bank has decided to take the following further measures: Repo Rate To reduce the repo rate under the liquidity adjustment facility (LAF) by 100 basis points from 6. 5 per cent t o 5. 5 per cent with immediate effect. Reverse Repo Rate To reduce the reverse repo rate under the LAF by 100 basis points from 5. 0 per cent to 4. 0 per cent with immediate effect. Cash Reserve Ratio To reduce the cash reserve ratio (CRR) of scheduled banks by 50 basis points from 5. 5 per cent to 5. 0 per cent from the fortnight beginning January 17, 2009. The reduction in the CRR will inject additional liquidity of around Rs. 20,000 crore to the financial system. It is expected that the reduction in the policy interest rates and the CRR will further enable banks to provide credit for productive purposes at appropriate interest rates. The Reserve Bank on its part would continue to maintain a comfortable liquidity position in the system. Background to announcement of present monetary stimulus by RBI: The global financial situation continues to be uncertain. Since the official recognition of recession in the US, the UK, the Euro area and Japan, the downside risks to the global economy have increased. Concomitantly, the policy initiatives in the advanced economies are geared towards managing the recession and defusing potentially deflationary trends. The US has reduced the Federal Funds Rate to 0 0. 25 per cent. Several other advanced and emerging economies such as Japan, Canada, Republic of Korea, Hong Kong and China too have reduced their policy rates. India’s financial sector has remained resilient even in the face of global financial turmoil that is so deep and pervasive. Our financial markets continue to function in an orderly manner. India’s growth trajectory has, however, been impacted both by the financial crisis and the follow-on global economic downturn. This impact has turned out to be deeper and wider than earlier anticipated. Concurrently, because of global developments coupled with supply and demand management measures at home, inflation is on the decline. Reflecting these developments, the Reserve Bank has adjusted its policy stance from demand management to arresting the moderation in growth. In particular, the aim of these measures was to augment domestic and forex liquidity and to ensure that credit continues to flow to productive sectors of the economy. Notably, since mid-September 2008, the Reserve Bank has reduced the repo rate under the liquidity adjustment facility (LAF) from 9. 0 per cent to 6. 5 per cent, reduced the reverse repo rate under the LAF from 6. 0 per cent to 5. 0 per cent and the cash reserve ratio from 9. 0 per cent to 5. per cent How it helped? With these measures of RBI there was ample liquidity which was created in the market which forced the bank to lend out to companies as the funds in the banks were lying ideal and making no money for the bank. This actually started the lending process of the banks. * Role of fiscal stimulus package by government. There is a relationship between budget deficits and the hea lth of the economy, but is certainly not a perfect one. There can be massive budget deficits when the economy is doing quite well the past few years of the United States being a prime example. That being said, government budgets tend to go from surplus to deficit (or existing deficits become larger) as the economy goes sour. This typically happens as follows: 1. The economy goes into recession, costing many workers their jobs, and at the same time causing corporate profits to decline. This causes less income tax revenue to flow to the government, along with less corporate income tax revenue. Occasionally the flow of income to the government will still grow, but at a slower rate than inflation, meaning that flow of tax revenue has fallen in real terms. 2. Because many workers have lost their jobs, there is increased use of government programs, such as unemployment insurance. Government spending rises as more individuals are calling on government services to help them out through tough times. 3. To help push the economy out of recession and to help those who have lost their jobs, governments often create new social programs during times of recession and depression. FDRs New Deal of the 1930s is a prime example of this. Government spending then rises, not just because of increased use of existing programs, but through the creation of new programs. Because of factors one, the government receives less money from taxpayers, while factors two and three, the government spends more money. Money starts flowing out of the government faster than it comes in, causing the governments budget to go into deficit. * How it helped? With the government spending more the government securities started declining in performance. As more and more securities were being issued the interest rate on securities started rising which has a direct impact on the gsec return. This again closed one more avenue of investment for banks as they were investing heavily into them instead of lending it out to corporate. This in all diverted the funds of the bank to the needful and thus started the lending process again. Future outlook In India there is evidence of economic activity slowing down. Real GDP growth has moderated in the first half of 2008 / 09. The services sector too, which has been our prime growth engine for the last five years, is slowing, mainly in construction, transport and communication, trade, hotels and restaurants sub-sectors. For the first time in seven years, exports have declined in absolute terms for three months in a row during October-December 2008. Recent data indicate that the demand for bank credit is slackening despite comfortable liquidity in the system. Higher input costs and dampened demand have dented corporate margins while the uncertainty surrounding the crisis has affected business confidence. The index of industrial production has shown negative growth for two recent months and investment demand is decelerating. All these factors suggest that growth moderation may be steeper and more extended than earlier projected. There are also several structural factors that have come to India’s aid. First, notwithstanding the everity and multiplicity of the adverse shocks, India’s financial markets have shown admirable resilience. This is in large part because India’s banking system remains sound, healthy, well capitalized and prudently regulated. Second, our comfortable reserve position provides confidence to overseas investors. Third, since a large majority of Indians do not participate in equity and asset markets, the negative impact of the wealth loss effect that is plaguing the advanced economies should be quite muted. Consequently, consumption demand should hold up well. Fourth, because of India’s mandated priority sector lending, institutional credit for agriculture will be unaffected by the credit squeeze. The farm loan waiver package implemented by the government should further insulate the agriculture sector from the crisis. Finally, over the years, India has built an extensive network of social safety-net programmes, including the flagship rural employment guarantee programme, which should protect the poor and the returning migrant workers from the extreme impact of the global crisis. RBI’s policy stance Going forward, the Reserve Bank’s policy stance will continue to be to maintain comfortable rupee and forex liquidity positions. There are indications that pressures on mutual funds have eased and that NBFCs too are making the necessary adjustments to balance their assets and liabilities. Despite the contraction in export demand, we will be able to manage our balance of payments. It is the Reserve Bank’s expectation that commercial banks will take the signal from the policy rates reduction to adjust their deposit and lending rates in order to keep credit flowing to productive sectors. In particular, the special refinance windows opened by the Reserve Bank for the MSME (micro, small and medium enterprises) sector, housing sector and export sector should see credit flowing to these sectors. Also the SPV set up for extending assistance to NBFCs should enable NBFC lending to pick up steam once again. The government’s fiscal stimulus should be able to supplement these efforts from both supply and demand sides. What Industry experts think? Mentioned below is what the senior experts in banking think of how the banking sector survived the crisis. 1). Mr. Anil Kumar Gupta (Vice President) Wealth management division- North and east region ING VYSYA BANK LTD. â€Å"The banking sector is very strong in India. Especially with the help of a governing body like RBI monitoring all the banks in Indian. † â€Å" I would say that step’s that were taken by the RBI in terms of rate cuts made so much liquidity in banking system that they were compelled to lend out to corporate. The recession gets more dangerous if the spending cycle by the people of the country or the lending cycles by the banks are put on a hold. † 2). Mr. Manavjeet Awasty (Senior Vice President) CITI BANK LTD- North â€Å"The ratio’s that the banks need to maintain because of RBI like CRR and SLR are the life savers for any banking firm. During financial crisis the condition of bankruptcy comes only when liquidity is crunched. The ratio’s which are maintained makes sure that enough liquidity is available in the system. † When the turnaround comes Over the last five years, India clocked an unprecedented 9% growth, driven largely by domestic consumption and investment even as the share of net exports has been rising. This was no accident or happenstance. True, the benign global environment, easy liquidity and low interest rates helped, but at the heart of India’s growth were a growing entrepreneurial spirit, rise in productivity and increasing savings. These fundamental strengths continue to be in place. Nevertheless, the global crisis will dent India’s growth trajectory as investments and exports slow. Clearly, there is a period of painful adjustment ahead of us. However, once the global economy begins to recover, India’s turn around will be sharper and swifter, backed by our strong fundamentals and the untapped growth potential. Meanwhile, the challenge for the government and the RBI is to manage the adjustment with as little pain as possible. Conclusion To conclude, we would say that the Indian banking sector is very strong in terms of its maintaining the said regulations and to follow the rule implied by its governing body which is RBI. The necessary steps were taken during the financial crisis which helped the banking sector to emerge out of the crisis without any major disturbance. The banks have already made the lending rules stringent enough to hold any possible outflow of money which will turn into a bad debt.