Procurement Strategy in the Pharmaceutical Industry

Procurement Strategy in the Pharmaceutical Industry Procurement is an important function to ensure meets its organizational goals. While Procurement is a support function for the organization, it is nevertheless a core function and critical to enhancing programme/project delivery. Procurement is a part of the process of achieving development project outcomes. Therefore all procurement activities are framed in the context of programmes and projects. So the Procurement is a managerial discipline in this function need to acquire and enhance certain managerial skills, tools, and including procurement risk management, procurement strategies development and procurement planning. Therefore the main benefits approach of procurement risk assessment, procurement strategies development and procurement planning serve as a bridge to cover the gap between programme and operations. They are also critical to programme delivery. Benefits of this approach include Best value for money, timely procurement; avoid unnecessary and unjustifiable emergencies, better allocation of existing resources, sufficient time to fully explore alternative procurement approaches, possibility to aggregate demand. So in Procurement successful criteria is that Joint Planning between programme and procurement in the early stages, Good flow of communication, understanding of the procurement requirements, understanding of the market and associated risks, live process with structured revisions and feedback mechanisms. In perception of researcher the procurement planning programme is very essential for fulfilment requirement of production demand and achieving goals for marketing and save the risk and shortage of availability of quality products production and marketing respectively. So the procurement development should be improving gradually with the strategies. Construct Definition Procurement: responsible for acquiring the goods and services necessary for the company. Sometimes organized as: Procurement is the acquisition of goods and/or services at the best possible total cost of ownership, in the right quality and quantity, at the right time, in the right place and from the right source for the direct benefit or use of corporations, individuals, or even governments, generally via a contract, or it can be the same way selection for human resource. Simple procurement may involve nothing more than repeat purchasing. Complex procurement could involve finding long term partners or even co-destiny suppliers that might fundamentally commit one organization to another. Procurement can refer to buying, outsourcing, etc of any resources. (www.wikipedia.com) Procurement Strategy: determines the company needs and plans for acquiring the necessary raw materials and services for the company. Procurement strategy is a identification of need, defining of specification, defining contractual terms, sourcing the market, supplier appraisal, inviting quotes/tenders, analysing quotes/tenders, Negotiation where applicable, contract award/order placement, receive, evaluation of suppler, review of supplier performance, payment , vender rating two way feedback . (www.brentwood.com) Background Information In any organization, procurement strategies playing a vital role. Without procurement not only fulfils the requirement but also stop the production plan of any organization. So, the procurement structure is very important in any organization. So we study the pharmaceutical industry and its procedure of procurement. Different companies have different mode of procurement procedures. In this procurement procedure, the pharmaceutical companies receive the services or goods in raw shapes through supply chain system like import and local procurement system. Researcher is a Senior Procurement Officer in Star Laboratories (PVT) LTD. Lahore which is handling all Local Raw Materials, Packing Materials, Miscellaneous Items and any other special assignment of high management. Therefore we discuss the little introduction of Star Laboratories (PVT.) LTD. Star Laboratories was registered in Lahore in 1960 as a partnership concern being a very small unit. Star Laboratories (Pvt.) Ltd. having a very large unit with a covered area of 86061 stf having an authorized capital of Rs.30 million and paid up capital of Rs.20 million. Star Labs growth has been unprecedented. 1978 a Milestone when Star Labs was incorporated as a limited company emerged in the national streamline of growing pharmaceutical industry of the country and this achievement is still maintained in improving quality stability and reliability of veterinary and human products. Stars greatest asset is its human resource with present strength of more than 700 employees. Star believes that they have achieved this landmark with the loyalty honesty and hard work of their human resource. A new era started in 1970 when Star started and multiplying their veterinary products by a margin to multinational with the aim and target to provide our 80% population of rural area the veterinary products for livestock development at a low and reasonable price for the prosperity and ease of our poor country competing the multinational. Star is the market leader in Veterinary medicines producing almost complete range of veterinary products. A break through came in 1995 when Star was shifted to the new modem well equipped pharmaceutical plant at 23-Km, Multan road, Lahore with a refreshing aim of serving nationally and acting globally. Professionals from the field of pharmacy business administration carry out manufacturing at Star in accordance with the rule of Good Manufacturing Practices (CGMP) following international standards of quality management systems. From incoming raw and packing material, to in-process control till the finished goods, Quality Control Department intervenes at every stage to check the standard and the methodology of manufacturing. Stars reputation over a reasonable span of 44 years has opened new horizons for its veterinary products in global connection for exports to Saudi Arabia, Kuwait, Sri Lanka, Nigeria, Sudan, U.A.E, Ethiopia, Lebanon, Kenya, Yemen, Mauritius, Mauritania, Turkmenistan, Uzbekistan, Guyana and Somalia. Research Question or Problem Statement or Objectives Research Questions RQ1: How to decrease the issues, cost and save wastage of time of procurement structure? RQ2: How to improve in time delivery of quality Product and remove barriers structure and to develop standard by procurement strategies? RQ3: How to reduce the supply chain problems and enhancing the Source of suppliers for acquiring quality product with standard? Research Objectives To enhance the quality production of product, reduce the cost and improves the structure of procurement with strategic mode continuously. To mitigate shortage of quality goods or services and rejection. To compare past and present procedure and findings of other companies rule and development of procurement strategies. Scope and Limitations of Study Proposed study will be conducted in Star Laboratories (Pvt) Ltd with population of 700 employees a sample 120 employee for sales and marketing sector will be chooseed on the basis of convenient sampling. There could be following limitation of the study that can be observed during interviews and questionnaires sessions. Data will be collected only from procurement department and Production. Researcher role in Star Laboratories may subject to limitation. No body can receive the data form import department due to some limitations. Respondents are from procurement department because every body spend of their time in their work and may not give the information about work. In procurement department very difficult to manage rejected products cause wastage of time and delay in production. Researcher biasness is of most important nature for researcher the respondents State of mind equally important When researcher receives the data from many respondents may be not educated so that cause of difficulties If we receive the information from the procurement department the limitations imposed by account department so that information con not received. Chapter 2 Review of Related Literature Procurement is the process of acquiring goods, works and services covering both acquisitions from third parties and from in-house providers. The process spans the whole cycle from identification of needs, through to the end of a services contract or the end of the useful life of the asset. It involves options appraisal and the critical make or buy decision. This strategy provides the framework for the management of procurement activity within the Council to ensure it is taken forward in the most cost effective and efficient manner to deliver value for money. (www.harrogateboroughcouncil.com) Sustainable procurement is the process of integrating these environmental, social, and economic factors into purchasing decisions. This Strategy provides a blueprint to implement sustainable procurement at the City of Portland and Multnomah County. It will move local government beyond the current state of ad hoc, often contradictory, inconsistently applied policies. It will move local government toward purchasing decisions that promote the long-term interests of the community. (www.portlandonline.com) Procurement Strategies is the important in every organization because without purchasing goods respondents can not run the production. So, the Procurement procedure is playing an important role in the industry. In this function, managerial discipline is that need to acquire goods or services, enhance managerial skills, knowledge about procurement and tools. The process of procurement is that firstly requisition prepares on demand of the Stores, Productions and quality control department. After the requisition receiving the procurement department take quotation from the specific suppliers on demand but specific work caring on order making and inventory system. So the major function of procurement department making the planning, programming and developing the procedure by strategic manners. The aim of this theoretical study is to create a general framework for procurement strategy formulation and, in particular, present how to create and implement a procurement strategy. The framework suggested in this study will result from a study of various approaches discussed in the literature. The traditional perspective, as presented in the competitive strategy literature, finds the buyer-supplier relationship in terms of both parties competing with each other. The new approaches such as JIT, partnership sourcing and lean purchasing present quite a different perspective in terms of partnership. The central theme of this study is that, to be successful, the procurement management should use both approach. (Veli-Matti Virolainen, July 1999) As companies attempt to shed old habits and begin to view procurement as a strategic resource from which a competitive advantage can be gained, there is a great deal of corporate baggage that must be shed. More importantly, there is a new mindset that must be instilled both in procurement and across the firm. Strategic supply symbolizes the importance of enterprise wide thinking where functional units inside the firm and key suppliers from the firms supply chain all work in concert to bring value to the marketplace. This paper presents data from the US and the UK that helps us better understand and address issues that are key to managing across independent supply chain partners. We also address some of the barriers to implementing such a supply strategy. These barriers exist inside the firm as well as between the firms at its key suppliers. Whilst we acknowledge that progress is being made, however the data suggest that the journey is far from over. (Paul D Cousinsa and Robert Spekma nb, January 2003) As more evidence indicates that a corporation is very much defined by its purchases and benefited by its close partnership with the suppliers, the sourcing decision becomes increasingly important in the firms growth and profit. This paper synthesizes the available sourcing alternatives into four categories, namely multiple sourcing, single sourcing, single/dual hybrid or network sourcing, and global sourcing, and provides a comprehensive review of these purchasing methods based on extensive literature. Besides the discussion of the pros and cons, the paper focuses on the underlying factors that determine the preference and suitability of each sourcing option. In addition, with the note that numerous companies are switching to do business on a global basis, we attempt to use China as an example to examine global sourcing from the standpoints of both buyer and supplier. (Amy Zhaohui Zeng, 2000) Global procurement is not a simple or easy solution to a companys sourcing needs. With new markets and changing competitors challenging established business, global sourcing is now offering an opportunity for organizations to meet these challenges on a global basis. Discusses the varied interpretations and significance of global sourcing as an ingredient of success, emphasizing the link between world-class production/quality, marketing and procurement. From these discussions and empirical evidence, provides a matrix of management choices to facilitate the selection of worldwide sourcing strategies most appropriate to corporate goals. (Shan Rajagopal, Kenneth N. Bernard, 1994) Industrial procurement is arguably that part of strategy which should have a customer focus. The recent attention to such strategies in a variety of commercial and government contexts, has grown much faster than detailed understanding of how sourcing decisions are made and their implications for organisations. This paper provides an overview of empirical research into sourcing decisions made in organisations. (Michael Quayle, May 2000) Chapter 3 Methods and Procedures Research Methodology Researcher receives previous data which contains on Quantitative research and Qualitative. In my opinion which receive current data Quantitative (Survey based), Qualitative (Interviews), to explore the procurement strategies in selected Star Laboratories (Pvt.) Ltd The researcher will conduct the proposed study using a questionnaire for collection of a primary data. The secondary data will be collected from research articles, different web sites etc. Current Quantitative Research Survey Instrument Copy of the survey instrument is attached (see appendix). Sampling Techniques A non probability convenience sampling technique will be used for selection of the sample from the target population of Star Laboratories (Pvt.) Ltd Sample Size Respondent of my study will be about 120 Respondents. This study of procurement strategies based on managers, officers, production pharmacists, store incharges, marketing sales officers who are working in the Star Laboratories (Pvt.) Ltd. Data Collection Procurement strategies data will be collected through interview survey, telephonic conversation and the questionnaire. This data will be distributed by the researcher himself. Data will be collected from different people who based on procurement strategies and the respondents will be contacted personally. The respondents will work at different departments and convenience sampling method will be used in this study of procurement strategies. Chapter 4 Data Analysis and Representation Data Analysis Data will be analysed by using Microsoft Excel to apply specific formulas and find mean, standard deviation, variance etc. Chapter 5 Findings, Conclusions and Recommendations Details of findings recommendations and conclusions will be explained in this chapter. References (Availableunderhttp://wbro.oxfordjournals.org/cgi/content/abstract/13/2/249), page accessed February 18, 2010 (www.harrogateboroughcouncil.com), Procurement Strategy, Delivery of fast glass public services, 2009 2012 March/April 2009. (www.portlandonline.com), Document Prepared by the Sustainable Procurement Steering Committee March 20, 2002 (www.saworks.com), Procurement definitions: www.saworks.sa.gov.au/LinkClick.aspx page accessed February 8, 2010 Amy Zhaohui Zeng, A synthetic study of sourcing strategies, Industrial Management Data Systems, MCB UP Ltd, Year: 2000 Volume: 100 Page: 219 226 Gadde, L.-E., Hakansson, H. (1994), The changing role of purchasing: reconsidering three strategic issues, European Journal of Purchasing and Supply Management, Vol. 1 No.1, pp.27-35 Leenders, M. (1998), The problem with purchasing savings, Proceedings of 2nd Worldwide Symposium, London, pp.343. Lian, P.C.S., Laing, A.W. (2004), Public sector purchasing of health services: a comparison with private sector purchasing, Journal of Purchasing and Supply Management, Vol. 10 No.6, pp.247-56. Michael Quayle, A School of Business, Management and Technology, Procurement; Sourcing; Decisions, University College Suffolk (Ipswich) Rope Walk Ipswich, IP4 1LT UK, May 2000 Moran, J., Avergun, A. (1997), Creating lasting change, The TQM Magazine, Vol. 9 No.2, pp.146-51. Murray, J. (1999), Local government demands more from purchasing, European Journal of Purchasing and Supply Management, Vol. 5 No.1, pp.33-42. Paul D Cousinsa, Robert Spekmanb, B Darden Graduate Business School, University of Virginia, Strategic supply; Relationship management; Value; Performance measurement, Volume 9, January 2003, Pages 19-29 Shan Rajagopal, Kenneth N. Bernard, Global Procurement: Motivations and Strategy ,Marketing Intelligence Planning, MCB UP Ltd, Year: 1994 Volume: 12 Page: 4 17 Veli-Matti Virolainen, Lappeenranta University of Technology, Purchasing; Procurement; Procurement strategies; Buyer-supplier relationship, Volumes 56-57, 20 July 1999, Pages 677-688 www.Wiipedia.com. Procurement definition: en.wikipedia.org/wiki/Procurement, page accessed February 8, 2010 www.wiktionary.com Procurement definition: en. wiktionary.org/wiki/Procurement, page accessed February 8, 2010

Investment Banking

Investment Banking in 2008 Group Report 1. Failure Analysis: Identify the major factors that contributed to Bear Stearns’s failure? Who stood to benefit from its implosion? How did Bear Stearns’s collapse differ from the ‘Long Term Capital Management’ failure a decade earlier? What could Bear Stearns have done differently to avoid this fate? In the early 2000’s? And during the summer of 2007? And during the week of March 10, 2008? (1) Identify the major factors that contributed to Bear Stearns’s failure? Bear’s somewhat cutthroat and renegade culture of maverick may have contributed a lot to their failure.This culture somehow made it killed by the credit crisis, while other investment banks survived. But the direct factors resulted in Bear’s implosion were the failure of Ralph Cioffi’s High-Grade Structured Credit Strategies Fund and Enhanced Leverage High-Grade Structured Credit Strategies Fund, which invested in sophisti cated credit derivatives backed by mortgage securities. And these failures cost Bear more than 1. 6 billion dollars to prop up two hedge funds. And the failures of two hedge funds led to a continuous questioning about Bear’s financial stability.At the same time, Bear concentrated its business on CDOs, which means it had high exposure to this item. Thus when credit crisis happened, it is significantly impacted. And in early 2008, Moody’s downgraded 163 tranches of mortgage backed bonds issued by Bear. Almost everyone realized that Bear will face liquidity problem. But meanwhile, Bear highly relied on repo to finance itself. When lender lost confidence in Bear, it failed in finding another effective way to find cash. In sum, the reasons above contributed to the failure of Bear in 2008 crisis. (2) Who stood to benefit from its implosion?JP Morgan is the beneficiary from Bear’s bankruptcy. It gained a company which had $172. 61 worth less than 8 months ago with an i ncredible low price of $10 a share. (3) How did Bear Stearns’s collapse differ from the ‘Long Term Capital Management’ failure a decade earlier? The origin in LTCM’s failure was the high-leveraged structure. It obtained excessive debt for the investment of the bonds. Simultaneously, the market capacity was not sufficient to support LTCM’s large bloated size. As time had gone, market competition and capacity diminished its profitability.But with such a high leverage, LTCM had no other choice but to gain enough profit to move on. Therefore, they got a foot into some unfamiliar area. Meanwhile, as to the trading strategy, LTCM held a large quantity of asset with low liquidity. However, situation was different from what they had predicted. Big loss happened eventually, but LTCM could not sell asset for enough cash. It inevitably had to go bankruptcy. High leverage structure of Bear’s hedge fund also had great impact on its collapse. But the awful strategy of Bear’s management should blame most for its bankruptcy.If it was in a less turbulent environment, things might be different. Continual bad news about Bear from executives’ unmannered behavior to its first quarterly loss since foundation ruined the confidence of investors. And another difference in the failure of both was that Bear mainly died of market failure. When the whole market was fear of the loss of subprime asset, the large subprime assets holding companies such as Bear Stearns, could not avoid a fate of great loss and liquidity problem. (4) What could Bear Stearns have done differently to avoid this fate?In the early 2000’s? As an investment bank, Bear was just in pursuit of the return while underestimated the potential aftermath of being too risky. Most of its profit was composed of fixed income securities. Meanwhile, Bear should not let each hedge fund manager just specialize in a particular security to make volatility. It is obvious that Bear’s risk management had significant flaw. Furthermore, since the over-confident Bear was desperate for the incredible return, it was not attentive to such supernormal growth of the housing price.They should not just concentrate on CDOs without also devoting their asset in other business, as diversification is so important for a firm. But it may not happen, since Bear was not less greed than the surrounding. And during the summer of 2007? If Bear realized the market could not be defeated, they should have controlled Cioffi’s risky action of raising new hedge fund with a higher leverage. Conversely, they should liquidate the fund. If the liquidation was performed, they should not have lost such great amount in this worthless fund.And meanwhile it began to try to search for cash to finance itself. Except those worthless ‘toxic assets’, Bear still had some assets, which could provide it some cash flow. If Bear sold these assets earlier with determination, they might not sink in liquidity problem so deeply. And during the week of March 10, 2008? After Bear was downgraded by Moody, market had lost confidence in it. Almost everyone realized bear’s liquidity problem. When pointed out to have liquidity problems, Bear’s executives should realize the severity of the crisis rather than believing the worst was once again behind them.Even though they could not recover from the difficulty, prime actions could be taken, including exposing the reality to the market, reassuring the investors, making urgent strategies, applying for emergent aids from the Fed, and applying for temporary held in stock trading. 2. Liquidity Crisis and Business Model of Investment Banks: What is the role of Liquidity for banking and investing banking firms? Is perception of Liquidity more important for a banking/investment banking firm than manufacturing firms (such as Ford or Boeing)? Why?What could Bear Stearns have done to address its Liquidity concern s, which initiated the run on the bank? Looking back, what lessons can we infer from Bear Stearns’s failure regarding the business model of investment banks? Looking forward is the concept of ‘pure-play’ investment banks sustainable? (1) What’s the role of liquidity for banking and investing banking firms? Liquidity can reveal the untrue existence of cash (and cash equivalents), short-term investments, accounts receivable and accounts payable, etc. To which extent it lives up to the real condition.It measures whether the bank’s business is legal, reasonable and whether the financial status is promptly and properly reflected on the financial reports. Liquidity risk is also important. It values the repayment of debt and reminds the board of the corporation’s risk at any time. Managing liquidity is a daily process requiring bankers to monitor and project cash flows to ensure that adequate liquidity is maintained. The investment portfolio serves as the primary source of liquidity and represents a smaller portion of assets. Investment securities can be liquidated to satisfy deposit withdrawals and increased loan demand. 2) Is perception of Liquidity more important for a banking/investment banking firm than manufacturing firms (such as Ford or Boeing)? Why? Yes. The main sources of funding for commercial banks are deposit, interbank borrowings, commercial banks deposits, the international money market borrowings and the issuance of financial bonds, among which the short-term deposit accounts for the vast majority of the proportion. However, these funds are primarily used for commercial loans, discounting business, securities investment, etc. These higher profitability and long-term loans account for the absolute proportion in the composition of assets.This mismatch between assets and liabilities makes the liquidity of assets very important in banks’ operation. Since when sudden changes occurred in the market, a large n umber of customers will be forced to perform withdrawal, therefore the bank will be very difficult to realize its assets and to meet its liquidity needs. In some sense, it is similar for the investment banks. The difference is just that they do not raise money from retail depositors; most of the money is funded in the interbank market and is used to hold illiquid mortgage backed securities.Once banks were not able to provide funding for business, a banking contagion will occur and spread. A traditional manufacturing business is generally funded by equity or long-term debt and has steady cash flows from business operations. Even in the case of a collapse of such businesses, it would not have the same contagion effect as banks. (3) What could Bear Stearns have done to address its Liquidity concerns, which initiated the run on the bank? 1. The basis of the modern financial system is not physical assets, but people’s confidence in this system.Actually when the rumor of BSC runnin g out of cash was widely spread, BSC was forced to make a public announcement to ensure the public that their financial situation was solid and their liquidity was sufficient. Unfortunately, BSC did not take valid action or provide strong evidence such as strengthen its financial sheets or reducing leverage to convince investors. The board should pay more attention to the operation of the corporate rather than participate in a bridge tournament. 2. BSC could reduce leverage by selling their risky assets to generate cash during a period of financial stress.They should maintain enough reserves in the form of short-term instruments of the highest credit quality to meet the obligation. So an amount of funds should be invested only in instruments that have guaranteed liquidity, like treasury instruments. 3. Bear Stearns, three-quarters of whose revenue was still dependent on the market (see the source below), should adopt diversification strategy to find a real alternative to business an d improve its finance. The plans could be accelerate the development in other countries and diversified business, including equities, investment banking and asset management businesses.Source: http://finance. sina. com. cn/money/future/20080403/09024705325. shtml (4) What lessons can we infer from Bear Stearns’s failure regarding the business model of investment banks? Diversification of the investment is the foremost thing to consider for any matured investor. Investing heavily into one company, one industry, or having only one investment strategy is unadoptable. You are banking for speculation that one company or industry will always do well. But in fact, it is hardly possible to be in perfect condition at any time.You must make your investment portfolio diversified. Maybe an element of international stocks can be added into the portfolio. When the U. S. market is unprofitable, it still has the chance to get profits from Asia and Europe so as to keep the portfolio solid. So metimes high leverage can kill a firm. In March 2008, Bear owned tangible equity capital of about $11 billions versus total assets of $395 billions—a leverage ratio of 36. For several years, this reckless financing bring the company a profit margin of about one third and a return on equity of twenty percent.However, when the market endured a sharp downturn, Bear lose a lot of capital and willing creditors. During the ensuing months, the same story was to be played out at scores of other banks and non-banks. (5) Looking forward is the concept of ‘pure-play† investment banks sustainable? The performance of a pure-play investment bank can be highly influenced by the type of investing style which targets at it. For instance, if a pure-play bank's business is favored by growth investing, the company will do well during a bull market, where growth stocks tend to outperform the market.Conversely, a pure-play bank associated with growth investing will do poorly during bea r market, when a value investing strategy is historically more profitable. What’s more, the pure-play investment banks have relied heavily on short-term capital, especially repo transactions in which counterparties take collateral as security against the cash they lend. As public companies, pure-play banks faced pressure to deliver return on equity comparable to that of universal banks, even as those banks put competitive pressure on traditional advisory businesses such as M;A, underwriting, and sales and trading.In response, pure-play banks resorted to the two advantages they had over non-depository institutions: unlimited, unregulated leverage capacity, and increasing reliance on proprietary trading to deliver earnings. 3. Systemic Banking Crisis and Regulation: What is a â€Å"systemic banking crisis†? What is ‘banking contagion†? What was the rationale for the creation of ‘fire-wall’ of separation between investment banking and commercial b anking in USA that was institutionalized by the Banking Act of 1933? Why did the regulators weaken and phase out that ‘fire-wall of separation’ in 1990s?Identify the major Deregulatory Acts and its role in the meltdown of the investment banking industry? In your opinion, based on lessons from past global banking crisis, what steps should regulators institute now to address similar future problems? (1) What is a â€Å"systemic banking crisis†? Systemic banking crisis refers to the crisis detrimental to the whole financial system. It is the fatal chaos that several disastrous crises occur simultaneously, such as monetary crisis, banking system crisis, foreign-debt crisis, etc.The crisis expands from one financial market to another. For example, from the stock market to the real estate market or foreign-trade market, etc. (2) What is ‘banking contagion†? Banking contagion refers to a scenario where the banks, which initially affected by some crisis sprea d to the other banks even the other countries whose economy is previously healthy. In this scenario, the expansion could be very quick and disastrous. The international spread might cause the whole banking system to be paralyzed and need another several more years for recovery. 3) What was the rationale for the creation of ‘fire-wall’ of separation between investment banking and commercial banking in USA that was institutionalized by the Banking Act of 1933? There are 3 major factors. 1. Risk of losses (safety and soundness). Banks that engaged in underwriting and holding corporate securities and municipal revenue bonds presented significant risk of loss to depositors and the federal government that had to come to their rescue; they were also more subject to failure with a resulting loss of public confidence in the banking system and greater risk of financial system collapse. . Conflicts of interest and other abuses. Banks that offer investment banking services and mutu al funds were subject to conflicts of interest and other abuses, thereby resulting in the harm to their customers, including borrowers, depositors, and correspondent banks. 3. Improper banking activities. Even if there were no actual abuses, securities-related activities are contrary to the way banking ought to be conducted.The Act prohibited the combination of a depository institution, such as that, commercial banks (those that accept deposits) were prohibited from engaging in most investment banking activities, including underwriting and selling securities, and from affiliating with investment banks and other companies â€Å"engaged principally† in the trading of securities. Likewise, investment banks were barred from accepting deposits. (4) Why did the regulators weaken and phase out that ‘fire-wall of separation’ in 1990s? Inspired by a desire to make U. S. nvestment banks competitive with foreign deposit-taking investment banks such as UBS, Deutsche Bank, an d Credit Suisse First Boston, a Republican Congress and President Clinton passed the Gramm-Leach-Bliley Financial Services Modernization Act in 1999, permitting insurance companies, investment banks, and commercial banks to compete on equal footing across products and markets. (5) Identify the major Deregulatory Acts and its role in the meltdown of the investment banking industry? 1999–Glass-Steagall Act Fell The repeal of the Glass-Steagall Act in 1999 had larger ramifications than any other steps in deregulation.Repealing this act made it possible for investment banks to be savings and loan banks and to receive to the same government protections as savings and loan banks. An investment bank could make investments with people's savings, sometimes irresponsibly, and those investments now were guaranteed by the federal government. 1988–Securitization In 1988, securitization, or repackaging assets as a financial instrument to sell to investors, became legal. Banks were a llowed to sell their mortgages to SPVs. Mortgages were no longer being made to hold but to sell, and lending requirements became substantially more lenient.This created a combination of bad loans and banks without the funds to back them up. 2004–SEC In 2004, the SEC abolished the â€Å"net capital† rule, which restricted the amount of debt their brokerage units could take on-demonstrated this growing appetite for leverage. This led investment banks to leverage themselves at a financially irresponsible 30 to 1 percent, meaning that for every $1 they had on hand they had $30 in debt. When some of these investments collapsed, the banks did not have the ready capital to maintain their companies. Ultimately, increased leverage and proprietary trading ravaged the nvestment banking industry, leading to the collapse, merge, or restructure of all 5 major pure-play banks on Wall Street. This time, the SEC took the unprecedented step of temporarily banning short sales of financia l institution stocks. The ban caused massive losses in hedge fund portfolios and dissuaded them from making additional investments, denying would-be issuers access to needed capital. Moreover, the SEC placed a ban on so-called ‘naked’ shorting, which reduced the total amount of short interest that could accumulate in a stock. 6) In your opinion, based on lessons from past global banking crisis, what steps should regulators institute now to address similar future problems? 1. The regulations should be placed on the fundamental part of economy. For example, when there seems to have bubbles in one field, the Fed should not ignore. It should adjust the policy towards the industry to change the unbalanced situation. 2. To fortify the risk awareness continuously in traders’ mind, especially those who control the wealth of millions of people. Their behaviors might have huge influence to the market and the profitability of the firms. 3.The Fed should research for adjustm ent for investors from the market of different systems to ensure that obstacles will not exist in multinational trades. Meanwhile, policies of staying resistant to exterior crisis should be prepared in case of the explosion of crisis. 4. Federal Bailout and Public Policy: Why did the Federal Reserve bail-out Bear Stearns? Why was Lehman Brothers allowed to collapse while Bear Stearns was not? Is the Fed orchestrated sale of Merrill Lynch to Bank of America the optimal solution for addressing the crisis? Could Morgan Stanley and Goldman Sachs have survived with out becoming bank holding companies?In your view, what public policy role should the Federal Reserve play in maintaining sustainability in global banking and stability securities markets? Why was there such a public out-cry against the bailout of Wall Street investment banks? Based on this recent performance how would you rate the Federal Reserve’s response to the financial crisis? (1) Why did the Federal Reserve bail-o ut Bear Stearns? If Bear went bankruptcy, it would affect other firms in Wall Street as well, since Bear was a market leader in prime brokerage and clearing who provided trading and back-end services to many other Wall Street financial institutions.Most customer asset would get frozen in the event of bankruptcy, and many hedge funds had collateral in the firm. Because of Bear’s holding of 13 trillion credit default swaps, the collapse of Bear would influence many other companies, which means too big to fail at that time. However, the Fed didn’t forecast that this kind of matter will happen again. The Fed Reserve bailed out Bear Sterns just to avert crisis and dissuade further irresponsible risk-seeking. The bailout benefited Wall Street at the expense of Main Street and the low share price was to discourage banks from taking on similar risk. 2) Why was Lehman Brothers allowed to collapse while Bear Stearns was not? The decision to let Lehman Brothers fail was largely m ade by then-Treasury Secretary Henry Paulson and the British Financial Services Authority. The public outcry over the taxpayer assumption of $29 billion in potential Bear losses made repeating such a move politically untenable. Therefore, the Fed refused to back Lehman’s liabilities and backstop losses from Lehman’s toxic mortgage holdings. Moreover, Barclay’s quitted the acquisition, worrying that it could not be satisfied with the timely shareholder approval, which directly led to the collapse of Lehman.The Fed also wanted to set it as an example, to let other company to know that not every time the government will come out to bail out the company, so they will have deliberate consideration repeatedly before making all kinds of risky investments. (3) Is the Fed orchestrated sale of Merrill Lynch to Bank of America the optimal solution for addressing the crisis? No. This transaction doubled the investment banking size of Bank of America. Furthermore, it exposed Bank of America to mortgage-backed securities, which had negative impact on the long-term credit rating of the bank.This transaction could not prevent the occurrence of another such case like Merrill Lynch’s, and this behavior could not bring unforgettable lesson to other banks. (4) Could Morgan Stanley and Goldman Sachs have survived without becoming bank holding companies? No. According to the research, Goldman Sachs was a major beneficiary of the government’s bailout of the financial services industry, not only through AIG but also through its ability to fall under the regulatory umbrella as a bank holding company, which made it eligible for debt guarantees and other government backstops.Every financial services company on the earth wanted to become a bank and line up for the handouts coming from Washington such as American Express, GE Capital, and GMAC. Even Willem Buiter, a former central banker, wanted to become a bank. Goldman was in a more precarious position than bank holding companies because of the vulnerabilities of being a broker-dealer. Nouriel Roubini warned repeatedly before Lehman’s collapse that the large full services broker-dealer model was broken. (5) In your view, what public policy role should the Federal Reserve play in maintaining sustainability in global banking and stability securities markets?From the lesson of subprime housing crisis, we think the Federal Reserve should control the capital, but without influencing the supply and demand. Since this crisis was created by those bad loans, the government’s control would limit people to invest on housing market, and somehow be better for people who are really in need of a place to stay. Furthermore, we have several pieces of advice to the Fed, besides in housing matters: a) Regulate the gross domestic and international banking environment. b) Reinforce the supervision over the risk control of investment banks. ) Restrict the expansion of any potential crisis once any symbol occurs. d) Do best to avoid the asymmetric information in the market. e) Ensure a fair and open environment for trading. (6) Why was there such a public out-cry against the bailout of Wall Street investment banks? People’s being against to government’s bailout the Wall Street had 2 main reasons. First, people believed Wall Street got this mess by themselves and they should be the one to clean it up, rather than that the government used tax payer money to save the Wall Street.They thought this was not fair, because this kind of action would increase the US government’s debt, and tax payer would have to pay more tax in the future to cover this debt. This debt may take a long time to be recovered. Second, when the government did get involved in the Wall Street crisis, the free market would not exist anymore, and next time if any firm had problem, they would ask the government to save them, which would totally be against the American economic policy , and belief. 7) Based on this recent performance how would you rate the Federal Reserve’s response to the financial crisis? Based on the recent performance, we think they had done what they had to do, but we think they should let the economic fail, based on the free market of American. They should let the invisible hand control the market, and the market should flow freely by itself. It will come back up, however long it takes. Now the government is using the tax payer’s money to cover Wall Street crisis, which actually is not fair.

Causes And Consequences Of Lung Cancer Essay - 2203 Words

Lung cancer has increased within the past decade; one of the biggest reasons is that more and more people smoke now than they have in the past. Smoking causes damage not only in the lungs, but also in the body, lips, or inside the mouth. Even though smoking does harm your body there are some good things that come from smoking. Such as it can lower the risk of obesity, and knee replacement surgery. There is different types of lung cancer one for smoking and the other, nonsmoking. Although people are smoking, not only are adults getting lung cancer, but kids and teens are getting it too. Lung cancer is the deadliest of all cancers and yet it is also the most preventable. One reason why lung cancer has rapidly increased is because of the use of cigarettes. Apart from those who smoke , there is a greater and or equal risk of people developing lung cancer who do not smoke. Forty-five to seventy-five years old is usually the age a person could get lung cancer. The countries with a history of tobacco smoking between eighty to ninety percent of all causes are caused by smoking. Ages eighteen to twenty-four attempted to quit smoking cigarette and succeeded in 2010. Not only those who smoke can get lung cancer or have some type of disease, people who don’t smoke have the same chance or higher getting lung cancer or a disease. This known as second hand smoke, it is when the smoke is coming from the smoker s mouth, or from the cigarette. This means that the whole world isShow MoreRelatedCauses And Consequences Of Lung Cancer1781 Words   |  8 PagesLung Cancer? Blood Cancer? Bronchitis? COPD? All these familiar and terrifying words have one root in common- Smoking. 9 out of 10 smokers’ first smoke is at the age of 18 and 99% try it by the age of 26(Centre for Disease Control and Prevention). Each day about 4000 youths tries cigarettes for the first time (Haugen,2004). 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Personal Letter Writing Definition

A personal letter is  a type of letter (or informal composition) that usually concerns personal matters (rather than professional concerns) and is sent from one individual to another. Its longer than a dashed-off note or invitation and is often handwritten and sent through the mail. A personal letter takes longer to write than the few abrupt sentences you bang out without proofreading before you click on send; it takes longer to read than the blink-and-delete blitz that helps you purge your inbox; and  it digs deeper than the brief handwritten note that you drop in the mail, write authors  Margaret Shepherd with Sharon Hogan, who are passionate about the diminishing art form in The Art of the Personal Letter: A Guide to Connecting Through the Written Word. They go on to explain:   A letter deals with issues that deserve more than a minute of attention. It aims to strengthen a relationship, not just react to a situation. A letter isnt limited to a specific  message  like Can you come over? or Thank you for the birthday check. Rather, it can take both the writer and the reader on an excursion that sets off from a home base of mutual trust: I know youll be interested in what I think or Id like to hear your ideas on this. Whether it comes into your life onscreen or through the mail slot, the well-thought-out personal letter is irresistible to read aloud, mull over, respond to, read again, and save.Good letter writing feels much like a good conversation, and it has the same power to nourish a relationship. History of Letter Writing Until just a few decades ago, personal letters (alongside diaries and autobiographies) had been the common form of written personal communication since the 18th century. It really took off then because of mass-produced paper becoming widely available, a large rise in literacy rates, the  advent of systematic message delivery, and the establishment  of the postal system. However, the earliest letters date back to 500 BCE and the ancient Persians. Letter Writing and Literature One of the first prose collections to be called a novel,  Samuel Richardsons Pamela,  from 1740, was actually in the format of personal letters, and that tome isnt the only fiction book thats taken that format in the centuries hence. The confluence of letters and books doesnt stop there, of course. In nonfiction, families compile old letters into books for future generations, and famous historical people have had their letters assembled into nonfiction works for posterity, either as a matter of record or for historical value. Take,  for example, collections of love letters between presidents and their wives, such as the 1,000 letters saved between Abigail and John Adams.  Ã‚   Some of the greatest writers have had their personal letters published as major works, often regarded as discussions of literature, notes author Donald M. Hassler in the book, Encyclopedia of the Essay. An early example would be the letters of John Keats, which were originally personal, but which now appear in collections of essays on literary theory. Thus the ancient form continues to have an intriguing ambiguity of purpose and a vigorous potentiality in relation to the  essay  form. Letter Writing Today But various electronic communication innovations over the past several decades, such as email and texting, have contributed to a decline in the practice of personal letter writing. Its more uncommon to see handwritten correspondence in the mailbox than common. Instead of having pen pals, people communicate with others around the country and world through social media outlets.   Even though blogging communicates in longer scripts than short-form tweets or quickie status updates, blog posts still are more impersonal than letters sent to a specific friend or relative; theres likely an expectation of more privacy, more for your eyes only when something comes concealed and wrapped up with just one persons name on it, more like a gift than a broadcast over the airwaves to the known world.   Today, personal letter writing is a declining art, writes Robert W. Bly in Websters New World Letter Writing Handbook. Warm letters have always had a powerful ability to build goodwill. And in an age of computers and e-mail, the old-fashioned personal letter stands out even more. Sources Bly, Robert W. Websters New World Letter Writing Handbook. Wiley, 2004. Chevalier, Tracy, editor. Letter by Donald M. Hassler. Encyclopedia of the Essay, Fitzroy Dearborn Publishers, 1997. Richardson, Samuel, Pamela or Virtue Rewarded. London: Messrs Rivington Osborn, 1740. Shepherd, Margaret with Sharon Hogan. The Art of the Personal Letter: A Guide to Connecting Through the Written Word. Broadway Books, 2008.