Receiving Bonuses When Banks Have Been Bailed Out Finance Essay - Free Essay Example

Sample details Pages: 3 Words: 893 Downloads: 5 Date added: 2017/06/26 Category Finance Essay Type Narrative essay Did you like this example? As expected, the answer to this question cannot be framed in a simple Yes or No, because it is a complicated situation where the financial sector employees are gifted with huge bonuses to retain them and keep them motivated but it is highly debatable as to how feasible it is to continue doling out bonuses even when they are being bailed by the national governments during the recession. The Secretary of Financial Services UK, Lord Myners clearly indicated that there has been improper management of financial institutions during crisis which led to such widespread wreckage of financial system (Tanners, 2009). President Barack Obama called the bonus payments by the Wall Street firms as reprehensible while the US banks, financial firms and companies suffered from deep recession in US and other countries. Don’t waste time! Our writers will create an original "Receiving Bonuses When Banks Have Been Bailed Out Finance Essay" essay for you Create order He called it as the height of irresponsibility. A shocking example of related activity was the decision to purchase a corporate jet plane worth 50 million dollars by a big name- Citigroup Inc. while it was being rescued with help from Troubled Assets Relief Program (TARP) in US. This shows that the financial firms kept on paying bonuses despite of being aware that they themselves were in deep trouble. White House Secretary went on to say that this sort of shocking acts by firms will destabilize the financial system instead of bringing it up from shocks (Goldman and Runningen, 2009). There has been huge uproar in the US and UK financial systems with banks paying out bonuses while the public is losing its money. A recent example of such unappreciated activity is the Royal Bank of Scotland, RBSs proposal to pay  £1 billion worth bonuses after being able to prop up  £20 billion worth of public money. It appears to be a clear flouting of regulations that seem to be put in effect by th e governments. It seems to be almost ironic how the banks and financial executives kept paying themselves big packets of bonuses and when they ran into recession; they were completely unaware of how it all happened. But even more appalling is that the practice continues. No different is Lloyds Group which has been severed during recession; however that doesnt repel it from planning to pay several hundred million pounds of bonuses to its top executives (Brady and Randall, 2009). Somewhere it appears that this is advertently a matter of personal benefits. I will present some examples of large scale of salaries and bonus payments to top executives of UK banks who have been questioned regarding the bonus fiasco. Some of them are: Sir Fred Goodwin (Executive chief) of Royal Bank of Scotland earned around  £30 million over 9 years and has received a pension worth staggering  £8.37 million. Lawrence Fish (Non-executive chairman) at the Royal Bank of Scotland received  £6.6 m illion in salaries and  £1 million in pension. Peter Cummings (Former head of Corporate Lending- Halifax Bank of Scotland (HBOS)) earned  £2.6 million in 2007 including a bonus of  £1.8 million. John Varley (Chief Executive of Barclays Inc.) earned  £2.42 million in 2007 and a bonus of  £1.425 million. Bob Diamond (Former Chief Executive of Barclays Capital Investment Bank) earned a total of  £21.3 million in bonuses since 2005. Source: The Independent, UK The obvious result of such high bonus payments is the increase in risk taking by firms. The more the risk the higher are the probabilities of supernormal profits which ultimately means more bonuses for bankers and financial executives. This was obvious in case of aggressive expansion policies of Barclays and RBS and aggressive lending policies of Northern Rock in UK. The motive naturally, was to enhance profitability but with a view to raise bonuses for top shots (Pettinger, 2009). Had the motives of banks been less personal and more economic, we probably wouldnt witness a series of collapses, both of economies and faith of taxpayers. Such reckless behaviour of top officials from financial services sector has been widely reprimanded but they dont seem to take a lesson from it and continue on their bonus payment spree. If we try to look closer and in more detail, we will find that bonus, indeed has been a major factor in crisis. However there is more than meets the eye. Accord ing to Wright (2010), though the people in financial services chose the sector because of the intellectual stimulation it provides, they ended up being trapped in the bonus bubble as it sure doesnt hurt to earn more money after all. In the article- The inconvenient truth about bonuses Wright explains how bonuses show little correlation with the levels of performance. The fundamental problem here is to decide how much bonus is acceptable and when does it become too high. His analysis reveals that the remuneration levels are too high relative to the earnings of shareholders. To show it through an example, investment bank Credit Suisse earned an aggregate return of merely 4.4% while it paid its staff more than 8 times the left over profits (Wright, 2010). We need to understand that bonuses are no more a means to motivate or a form of incentive for rewarding performance of employees, high bonuses have become an integral aspect of remuneration in the financial services sector and the pra ctice must be controlled in order to facilitate the recovery processes and avoid another crisis in crisis. Are trade unions still relevant in the current organisational context? Identify the reasons for and against their continued existence, providing examples from personal experience and/or recent business events.

The Manner in Which Online Banking Has Evolved for HSBC Bank and the M Research Paper

Essays on The Manner in Which Online Banking Has Evolved for HSBC Bank and the Manner It Is Creating Problems for the Banks Research Paper The paper â€Å"The Manner in Which Online Banking Has Evolved for HSBC Bank and the Manner It Is Creating Problems for the Banks† is a   delightful version of a research paper on marketing. The growth in technological advancement has made people look towards more advanced ways in the banking system. The banking system, as a result, has evolved and provides complete internet solutions to the people. The study helps to highlight the manner in which internet banking has evolved for HSBC Bank.Understanding the requirements of the customers and developing services accordingly is the main objective of the baking system. The study presents the manner in which online banking is creating a problem for HSBC customers and ways that will help to improve online customer banking satisfaction.The rationale of the studyThe study on the problem due to online banking for HSBC bank is being conducted due to the following reasonsUnderstanding the manner in which online banking has revolutioniz ed the banking systemThe growing use of online banking despite scams and frauds being an inherent part of itObjectivesIt is important to identify the objectives of this study so that a clear direction is given to the study and the importance of the study magnifies. The objectives areTo find the current situation of online banking in HSBC BankTo identify the problems surrounding online banking in HSBC bankTo find out the customer expectations and what does online banking provides in realityTo find out ways in which the magnitude of the problem associated with online banking can be reducedAbout HSBC bankHSBC is one of the largest banks established in London. The bank has around 8000 offices in 87 countries all over the world (HSBC Website, 2011). The bank was started in 1865 and has grown to different countries. The offering by the bank has grown and the use of technological advancement has made it easy for HSBC bank to provide quality service.HSBC bank offers a variety of products an d services based on the customer requirements which have helped the banking institution ensure quality in service. HSBC bank has recently faced certain issues due to technological advancement which has created doubts in the mind of people and customer satisfaction has reduced due to it.The above graph shows the manner in which HSBC bank works and the different mechanisms it uses to provide customers varied services. The above chart shows that HSBC bank uses online banking as a medium to provide goods and services to the customers which result in additional pressure for HSBC bank due to the technological advancement and problems associated with it.Literature ReviewThe literature review which are past studies conducted in the same direction and highlights the issues and importance being laid on online banking. Some of the notable studies in this direction are as followsA study in this direction says that security is a major issue that surrounds online banking and customers are willing to switch to online ways but security needs to be looked after (Martin, 1998). Along with these banks should ensure that their website is cluttered with advertisement thereby making it difficult for the customer (Hamlet, 2000) to use online services to the fullest.This has been further substantiated by the fact that attitudinal factors have relevance to people using online services (Tan Teo, 2000) which gets further influenced by prior experience of using technology (Karjaluoto, 2002). The fear in the mind of customers using online facilities gets magnified due to information sharing and distrust (Rotchanakitumnuai Speece, 2004) which arises due to the usage of online facilities.

Legal Forms of Business Paper Free Essays

Legal Forms of Business Paper Law/531 June 3rd, 2011 University of Phoenix Legal Forms of Business Paper Selecting the best form of operating a business depends on the type of business the owner wants to run. The owners have to pick the structure that best meets their needs. â€Å"The selection depends on many factors, including the ease and cost of formation, the capital requirements of the business, the flexibility of management decisions, government restrictions, personal liability, tax considerations, and the like† (Henry Cheeseman, 210, p. We will write a custom essay sample on Legal Forms of Business Paper or any similar topic only for you Order Now 529) Moreover, choosing the right form to run a business will also determine how the business is organized, how the cash flow is, and how the business is taxed. â€Å"The most common forms of business organization are: sole proprietorship, general partnership, limited partnership, limited liability partnerships, limited liability company, and corporation† (Henry Cheeseman, 210, p. 529). According to the situation given, the best form is limited partnership. Limited partnership refers to the types of owners the business will have, general (managers) and limited partners (investors). In this sense, Monica, and Susan will be the managers of the businesses because they both will operate the business with their skills, Susan with her computer graphics skills and Monica with her marketing skills. Whereas Vic will be the investor providing some capital to run the business, she will not be part of management; Vic will act as a passive investor. In limited partnership, managers have unlimited liability and the investors have liability to up the amount of their capital contributions. General partners will control everyday activities in the business. Monica and Susan will be responsible of the business debts as well. Despite, limited partnership is more complex than general partnership; this is the best form to meet Vic’s, Monica’s and Susan’s needs. Vic will have limited personal liability for business debts as long as she will not participate in management. Monica and Susan will have the possibility of raising money without involving outside investors once they can incorporate enough money to run the business by themselves. Sole proprietorship was precluded because the business will be run by Monica and Susan because they have the necessary skills to be successful entrepreneurs. In this scenario, Vic will provide capital and will take a passive role in managing the business, she sill obtain profits because of her involvement in the business. For not facing some problems among them, they will have to reach an agreement generally written to state how shares will be handled; this is common called a limited partnership agreement. â€Å"This agreement sets forth the rights and duties of the general and limited partners; the terms and conditions regarding the operations, termination, and dissolution of the partnership; and so on† (Henry Cheeseman, 210, p. 547). The limited partnership agreement will set forth the transactions that managers and investors can approve. This document also states the how earnings and losses will be distributed among the partners. Limited partners have also the right of being informed by general managers about the business performance and the business financial status. If Susan or Monica wants to admit a new partner, the new candidate to operate the business can be included if Vic approves this, unless the agreement document states otherwise. Limited partnership is easy to set up, and to appeal investors as limited partners. This agreement is good to set arrangements for general partners to use their skills, and to decision-making regarding the business. Limited partners can drop the business without the need for the limited partner to be dissolved. The business form of corporation was not selected because of the process of forming a corporation takes time and money, compared with the rest business forms. Corporations are often audited by the government and have to deal with more paperwork to comply with the regulations of the states in which the business will run. Also, in corporations dividends paid o shareholders are not deductible from the business income; it may turn out taxing this income twice. Corporation is a business form more expensive to create than sole proprietorship or partnership. There is more paperwork in corporation than other forms of business. Corporation carries several tax disadvantages, and pays taxes on its own income. Whereas limited liability partnership was not chosen because of the disadvantages it offers for this kind of business that Vic, Susan, and Monica want to run. Limited liability partnership is more expensive to create and to maintain than sole proprietorship and partnership. In this form of business if one partner leaves, the business is dissolved. Limited partnership is a good method for Vic, Susan, and Monica to use the limited partnership as a form of business because of the advantages it presents for their good. Through this business form, they can share the profits with a minimum of effort. This form is also easy to attract investors. Monica and Susan can raise additional capital because of the liability of limited partners. There is also less paperwork, and it is easier to manage than corporation. Selecting the best form of business is a strategic decision that entrepreneurs face. This is an important decision because of the implications it brings to the business, regarding its ongoing legal and tax consequences. The best form of business will depend on the business goals and many other factors with big impact on the business performance. Choosing the legal form is crucial to determine the organization and performance of any kind of business. Entrepreneurs must measure the pros and cons before undertaking any businesses. Word count: 901 Reference Cheeseman, H. (2010). Business Law (7th ed. ). Colorado, DE: Prentice Hall. How to cite Legal Forms of Business Paper, Papers

Agriculture and Rural Labour Markets †Free Samples to Students

Question: Discuss about the Agriculture and Rural Labour Markets. Answer: Introduction Economics as a discipline, has undergone immense dynamics and integrations over the years with the conceptual framework and theoretical assertions modifying according to the dynamics seen in the global economy and in the behaviour of the different economic agents, producers and consumers mainly (Hall and Lieberman 2012). The economic principles and conceptual frameworks play crucial roles in explaining the different problems of concern which crop up in different parts of the global economic scenario and the same also help in finding plausible solutions or way outs to combat those problems (Baumol and Blinder 2015). Keeping the above discussion into consideration, the concerned report tries to identify the chief economic issues cropping up in one of the most influential and globally dominant economies, that is the economy of the United States of America referring to the article published in The Economist, on July 27th, 2017. The article titled, If America is overrun by low-skilled migrants. The market for lemons, tries to highlight some serious issues of economic threat, which the agriculture sector as a whole and primarily the lemon producing sector of the country has been facing in the contemporary period (The Economist, 2018). The concerned article, sights the situations of the lemon producing companies of the USA, especially the Limoneira, the largest company in the country in this industry. The company, in the earlier periods used to have enough workers for their lemon and avocado fields, the primary reason behind the same being that the company, supported by the previous government policies and infrastructures, used to provide enough incentives to their workers in terms of competitive wages and other perks like comfortable and highly subsidized housings (housings being provided at 55% below the rates which usually prevail in the markets of California), other facilities like credit union, parks and family spaces (Guan et al. 2015). However, in the recent periods, the company, along with other fruits and vegetable producers in the country have been facing a severe crunch in the number of workers for their agricultural fields. This in turn has resulted in tremendous negative implications on the agricultura l sector of the country and on the economy of the country as a whole (Gonzalez 2015). On one hand, due to the lack of agricultural labours, the fields remain unploughed or the vegetables and fruits rot to a massive extent due to the absence of the labours to pick them up. On the other hand, due to the lack of supply in the vegetables and fruits, which are necessary commodities, the country has resorted to import more and more of them from other parts of the world, thereby hurting the balance of payment of the country (Tocco, Davidova and Bailey 2012). The main reason behind this lack of workers in the agricultural sector, as per the article has been pay scales for the workers in the recent times, which has also been clubbed by the reduction in the number of low skilled immigrants from different countries like that of Mexico and others, entering the country (Peri 2012). The reason behind this lack of entrance of these immigrants can be attributed to the recent increase in the border security and the recent government policies to reduce the number of immigrants in the country as a whole management. The main issues which the article has highlighted in this context, are the issues of demand and supply imbalances, the issues of payments and also the issue of immigration of low skilled workers by increasing the agricultural visas. The farmers have however, started responding to these problems, mostly in two ways- either by increasing the wages of the existing labour force, thereby motivating more labour to join their workforce, or by increasingly bringing in cheap labours from other developing countries with the help of increased agricultural visas, as can be seen from the hike in the number of agricultural visas given by the country in the last few years (Sexton 2012). Economic Interpretation The issues highlighted in this article can be interpreted and analysed in the light of the existing economic concepts and theoretical framework. The primary problem which has been cited by the concerned article regarding the agricultural sector in the country is the recent fall in the labour force, especially the low skilled ones (Pindyck and Rubinfeld 2014). In the previous years, the agricultural sector used to have enough low skilled workers, most of them being immigrants, migrating from other economically and politically disturbed countries looking for economic stability, a job and a place to stay with their families. These being provided by the farmers, the same were able to retain the workers. However, with increase in the border security of the country, to stop illegal immigrants especially, from other neighbouring countries, the number of low skilled immigrant labour has decreased to some extent, which thereby leaves the farmers with the only option to hire from the exiting labour force of the country. However, the existing labour force, consisting mainly of the residents of the country, may not be very eager to work at the current wage rates, thereby reducing the number of labours working on the agricultural fields of the farmers (Friedman 2017). This situation can be explained with the help of the following figure: As can be seen from the above figure, due to the fall in the immigrants coming from Mexico, specifically, the labour supply has decreased considerably and the existing labour are not seen to be willing to work in the previous wage levels (Marked here by P*). This in turn has resulted in decreasing the production as well as supply of the fruits and vegetables in the country. However, fruits and vegetables being such commodities which are necessarily found in the daily consumption baskets of almost all the residents of the country, belonging from all socio-economic strata, the price elasticity of the same is expected to be low (Rader 2014). This implies, that the consumers will not be able to give up massively on these commodities even if the price increased considerably, as can be seen from the following: As is evident from the above figure, due to the fall in the supply, the price is expected to increase, however, the demand being considerably inelastic, the fall in the demand for fruits and vegetables is expected to be lower than the increase in the price of the same due to lack of labour. Policy and Strategy Implications The government, keeping this into consideration, has increased their imports of fresh fruits and vegetables massively in the last few years, in order to prevent their residents sufferings, in the aspect of being deprived of necessary consumption commodities. This in turn, has resulted in the loss of economic welfare of the government in the form of draining out of valuable foreign exchange reserves (Greene 2013). The domestic farmers have also been negatively affected by these imports as their capacities remain unutilized with the foreign producers capturing greater share of the markets. The policy of the government of the country, in this aspect, however, should have been more targeted to increase the production and supply of the concerned commodities in the economy itself. This on one hand is expected to reduce the amount of imports, thereby increasing the balance of payment of the country and on another hand is expected to help the domestic producers in the concerned industry to increase their productivity, profitability and sustainability management. Most of the producers in this context, have started attracting labour by increasing their wages. This, as highlighted by the concerned article, has been taken as a labour attracting strategy in many parts of the country. Overall the hourly wage of the workers has increased from $8 (2000) to as high as $12, with the rates in California hiking even more ($7 to $13). Particularly in Limoneira, the average hourly wage in the current period is seen to be as high as $19 (Taylor, Charlton and Ynez-Naude 2012). This cost is undertaken by the farmers to save their farms from bigger losses of rotten fruits and vegetable supply and of the unploughed agricultural field. On the other hand, many farmers have started to hire workers from different countries in the form of foreign and temporary guest-workers under the H-2A Visa programme of the country. This programme has facilitated the entry of thousands of workers, especially low skilled ones from the developing countries on a temporary basis, th eir visas being often funded by the farmers themselves (Meissner et al. 2013). Problems of the strategies taken The strategy of bringing in more migrant workers, legally under the H-2A visa programme of the country, though seems to be profitable for the farmers and the consumers in the economy for the short run, it however goes directly against the policy of retaining the works for the citizens of the country only, which was taken by the government of the country to decrease the number of job drains to foreign nationals. This contradiction of the government policy, as has been done by the farmers, can lead to the loss of potential jobs of many Americans, thereby reducing their economic welfare in the long run. However, given the fact that the country is presently reeling under the pressure of lack of supply of agricultural labour, thereby reducing agricultural supplies and hurting the economy as a whole, the strategies taken by the farmers seem to be the only solution to the problem. References Baumol, W.J. and Blinder, A.S., 2015.Microeconomics: Principles and policy. Cengage Learning. Friedman, L.S., 2017.The microeconomics of public policy analysis. Princeton University Press. Gonzalez, G.G., 2015.Guest workers or colonized labor?: Mexican labor migration to the United States. Routledge. Greene, C., 2013. Growth patterns in the US organic industry.Amber Waves, p.1D. Guan, Z., Wu, F., Roka, F. and Whidden, A., 2015. Agricultural labor and immigration reform.Choices,30(4), pp.1-9. Hall, R.E. and Lieberman, M., 2012.Microeconomics: Principles and applications. Cengage Learning. Meissner, D.M., Kerwin, D.M., Chishti, M. and Bergeron, C., 2013.Immigration enforcement in the United States: The rise of a formidable machinery. Washington, DC: Migration Policy Institute. Peri, G., 2012. The effect of immigration on productivity: Evidence from US states.Review of Economics and Statistics,94(1), pp.348-358. Pindyck, R.S. and Rubinfeld, D.L., 2014. Microeconomics. Rader, T., 2014.Theory of microeconomics. Academic Press. Sexton, R.J., 2012. Market power, misconceptions, and modern agricultural markets.American Journal of Agricultural Economics,95(2), pp.209-219. Taylor, J.E., Charlton, D. and Ynez-Naude, A., 2012. The end of farm labor abundance.Applied Economic Perspectives and Policy,34(4), pp.587-598. The Economist. (2018).If America is overrun by low-skilled migrants.... [online] Available at: https://www.economist.com/news/united-states/21725608-then-why-are-fruit-and-vegetables-rotting-fields-waiting-be-picked-if-america [Accessed 23 Mar. 2018]. Tocco, B., Davidova, S. and Bailey, A., 2012.Key issues in agricultural labour markets: A review of major studies and project reports on agriculture and rural labour markets(No. 122847).