Administrative agencies Essay Example | Topics and Well Written Essays - 2000 words

Administrative agencies - Essay ExampleExamples of administrative agencies include Central Intelligence Agency, Environmental Protection Agency, Commodity Futures Trading Commission, Federal election Commission, Federal Trade Commission, Securities and Exchange Commission.The United States Securities and Exchange Commission (abbreviated SEC) is a national agency whose primary role or responsibility is to enforce the national securities laws and to regulate the securities industry, stock and options exchanges and other electronic securities markets in the U.S. It was created by section 4 of the Securities Exchange form of 1934, commonly referred to as the 1934 Act. . The SEC also implements the Securities Act of 1933, the Trust Indenture Act of 1939, the Investment Company Act of 1940, the Investment Advisers Act of 1940, the Sarbanes-Oxley Act of 2002 and other statues.Before the enactment of the SEC and other federal securities law, there existed the professed high Sky Laws, en dorsed and enforced at the state level. They controlled the offer and sale of securities to protect the public from being defrauded. The provision varied across states, though all involved a compulsory registration of offerings and gross revenue. Also, every US stockbroker and brokerage firm had to register.Despite their good intentions, Blue Sky Laws failed to achieve the enduringness and efficacy that was needed. For instance as early as 1915, the Investment Bankers Association encouraged its members to make securities across state lines through the mail, thus effectively ignoring Blue Sky Laws. Through the Pecora Commission, hearing on abuses on interstate frauds took place. It was after that that Congress passed the Securities Act of 1933. Contrary to the Blue Sky Laws, this act regulates interstate sales of securities at the federal level. The successive Securities Exchange Act of 1934 regulates the secondary market.The main function of

Social Disorganization Research Paper Example | Topics and Well Written Essays - 750 words

favorable Disorganization - Research Paper ExampleThe paper Social Disorganization examines how does social disorganization relate to organized crime and its organic evolution. The case of gang culture could remarkably deviate from the prevailing order within the society. at heart the gang culture, it could be evident that in one track or another, there is a presence of leadership that is either organized or unorganized. at that place might be order within this culture, but from the point of view of the society, there is a deviation from the actual law enforced by the people. It is in this case that one could link the case of gang culture with social disorganization. It is important to understand how does social disorganization relate to organized crime and its evolution. peerless substantial case that could explicate this point is gang culture. Gangs have substantive culture that within it there is a great presence of shared value and beliefs. What makes this shared values and beliefs became a success is the point in which gangs have remarkably hired new set of members and flourish due to unsuccessful prosecution effort and even worst, becoming legitimate business. All of these could remarkably start within highway gangs. The evolution is so tough, but the bottom line paves the way for organizing street gangs into something vibrant readily associated with business that could also interconnect with befoul officials, which eventually strengthens them further to compose established crime groups. Social disorganization could become established organized crime.... Eventually social disorganization meets the criteria of organized crime because just like the latter, it is completely against the prevailing values and set standard by the society through the prevailing law emancipated for the protection of everybodys freedom or right. Law-breaking behavior is generally present within the background of social disorganization and ultimately street gangs could e volve as groups that would have implicit in(p) association with corrupt officials leading to their social, economic and political power. Due to these fundamental reasons, there is not doubt that social disorganization such as in the case of gang culture eventually meets the criteria for organized crime. In fact, its evolution substantially completes the operation of these criteria. Corrupt political machine and social disorganization As already stated, a full-pledged or grown up group of street gangs eventually make it a point to consider undertaking maximum gain through establishing a business for the survival of the group and maximum benefits of severally member. However, along the way, social disorganization such as in the case of street gangs and their evolution would try to make it a point to maximize the achievement of relevant gains for the benefits of their groups. In reality, they have close tie or connection with corrupt officials (Lyman & Porter, 2007). In other words, the more there will be corrupt officials, social disorganization continues to prevail and even continue to move in an upward spiral. It is due to the fact that the presence of these corrupt political machines creates the competitive proceeds of social disorganization and

Political Considerations and Managing Political Risk in an Ever Research Paper

Political Considerations and Managing Political Risk in an Ever Evolving Global Marketplace - Research Paper ExampleThis paper declares that the increased rate of globalization throughout the world has created a dynamic in which decision-makers within international business must consider able to factors as a means of proceed to expand the markets in which they hire and generate an even higher level of profitability. Ultimately, even a cursory level of business analysis reveals the fact that a company which does not focus itself on development and expansion will ultimately collapse and become nonviable. As a direct interpretation of this, it is needful for firms to be international in their scope and to continually attempt to broaden the overall level of consumers that they are able to engage with. As the paper stresses recognizing how to monitor political jeopardize while conducting international business is an essential element that managers should be able to comprehend and und erstand. Without this understanding managers will be at a disadvantage and will place themselves at risk and even in harms way if they are not careful. Political landscapes shape businesses that operate overseas. These landscapes must be navigated carefully and with ethics in mind. Strong core values will be essential to their success. An effective understanding of political risk can be effected through an appreciation of societal organization specifically the means by which the rules of law, or lack thereof, define the way in which a given region might be represented.

Long Term Relationships Assignment Example | Topics and Well Written Essays - 1500 words

Long Term Relationships - Assignment ExampleThis essay discusses that specifically talking about contract financing or monetizing, there are numerous methods for contract financing. Advance stipendments involve the payment of money to the contractor by the government before any services or goods have been received. By doing so, the government anticipates performance by the contractor under one or much contracts thereby liquidating them from payments. Since this method of payment is not performance oriented, it differs from other modes of payment that are performance-based. Advance payments are usually employed as a method to pay prime contractors so that they may pay subcontractors. Progress payments, as the name suggests, involves the payment of money as the work progresses and costs are incurred along the way. However, this progress does not include payments based on completion of certain compass points, partial deliveries, partial payments in case of contract termination, and performance oriented payments. efficacious and financial government institutions such as the Federal Reserve Bank may also guarantee loans to individuals so that contractors are financed in order to pay for the acquisition of goods and services. Such financing mainly comes from the private sector under the terms of the contract. Under particular statutes, progress payments for the completion of a certain stage are authorized which is used under agency procedures as a method of payment.

Self assignment Term Paper Example | Topics and Well Written Essays - 1500 words - 1

Self assignment - Term Paper Exampleresult, I like to dress up with new ways of closure chores, and this often calls for innovation, as such I would like to think of myself as an innovative several(prenominal). However, sometimes I tend to go overboard and end up making matter worse with my innovation this is because I can get distracted and in my attempt to use new ways ignore disused ones which may be better and more convenient. As I grew up, I was an avid reader of books and I often tried to practice some of the ideas I learnt in real life or to improve on them. For example, in junior high school, I along with 3 of my classmates won the annual intelligence prize for coming up with a homemade solar powered lamp and water heater made from locally available materials including old disused solar panels.This attributes can be explained by my IEI, emotional intelligence test which were rated ENTP, this means I am a creative resourceful and broad minded individual quick on his feet and I can think about a wide range of issues objectively. New ideas exited me and I do not shy remote from debating on any issue, since I have no inhibitions about offering my opinion accepting criticism or even giving some. In the IIC5 test, it emerged that I am a patient and strategic individual I can spend hours on end mulling on a problem until I come up with a solution, as a result, I believe in looking for easier ways of carrying out tasks, but I do not kink corners or ignore protocol in for the sake of quick results. This is because to me it was worth taking time and effort to get good final result than to outpouring over cutting corners only to come up with substandard answers. This is an approach I have tried and tested over the years more so in my studies where I prefer to strategize patiently and always have a contingency plan in case the original one does not work. disdain this, I sometimes procrastinate and self-deceive that I am being patient while in reality am j ust avoiding to tackle a problem head on especially when I feel

Legal Considerations in the Business Environment Essay Example for Free

Legal Considerations in the Business Environment Essay sequence there are many policeful f fleckors to consider as XYZ Construction (XYZ) transforms from a private to a publicly owned familiarity and expands operations glob whollyy, this paper will focus on the transaction and labour party laws, along with legal considerations that influence company operations. It is important to obligate in mind that XYZ uses a mix of manning methodologies throughout the company a just time staff as the core of the company, while maximizing the use of contracted labor in the execution of projects. betrothal Law purpose law is a broad category of law that encompasses all areas regarding employee/employer relationships except for the negotiation process and corporal tradeing, which is covered by the narrower focused category of labor law. Employment laws consist of thousands of federal and state statutes, regulations, and judicial finishs that are designed to govern the rights and duti es of employers and giveers. The US Department of prod (USDOL) reports that there are 180 federal laws solo managed by 28 different agencies within the department. (United States Department of dig up USDOL, 2014) Employment laws are focused on providing a safe and fair work butt for employees and employers, alike, and have their origins in the constitution.They were founded based on public outcry against oppressive expends during the industrial revolution. The first laws founded in the 1920s were focused on fair wages, payment for injuries, a sample work week, and on eliminating child labor. In the 1960s and 70s, statutes focused on anti-discrimination and unsafe work environments. Current issues involve employee wellness care, cope with pay for men and women and the current debate on raising the federal minimum wage. on that point were besides several issues addressed by the US lordly Court of great importance to employment law including workplace discrimination and ret aliation (Brill et al, 2013). The predominance of employment law disputes fall into two categories wage and time of day violations and discrimination in the workplace.Federal law provides for baseline rules regarding wage and hour standards, to include a minimum wage of $7.25 per hour and 40 hours as the standard work week. Many states have passed laws that establish a higher(prenominal) minimum wage, which is within their constitutional right. In these situations, XYZ is compelled to pay the higher minimum wage of that state. There is an emerging childbed across the United States to raise the federal minimum wage to $9.50 per hour. In somecases, this will place the federal wage higher than some states, meaning XYZ would have to pay the federal wage as it would trump the state legislation. It is circumspect for XYZ to negotiate appropriate compensation on multiyear contracts as this new legislation works through the process.The standard work week, on the new(prenominal) hand, is prevalent across the United States and any worker that exceeds this threshold is entitle to overtime pay compensation. These rules exist to control the work environment for employees and mandates that time and a half be paid on every hour transcend 40 within a given work week. The law also stipulates that XYZ will chief(prenominal)tain basic payroll records and post notices to the workers regarding changes in the work environment. As XYZ experiences delays within projects, the pressure to push the work crews to make up these delays grows. While working overtime to meet customer requirements and project timelines are acceptable, supervisory programs must assure adherence to the various employment laws not doing so could lead to cheating(prenominal) labor practice disputes and costly legal battles (Brill et al, 2013).Another area that is a introduction of employment law disputes is discrimination in the workplace. Prohibiting discrimination based on ethnicity, religious beliefs, gender, age, or disability was established with the Civil Rights phone number of 1964 and refined with ensuant legislation throughout the years. The imperious Court handed dump two significant decisions in 2013 that clarify evidentiary standards for discrimination claims, both are viewed as beneficial to the employer. First, the courts ruled that retaliation with discrimination as a motivating factor was not sufficient. The plaintiff must prove that discrimination was the basis for the retaliation, making the burden of proof much greater (Brill et al, 2013).Second, the courts clarified the definition of a supervisor under Title VII of the Civil Rights Act. They ruled that the title of supervisor is limited to those who have authority to abridge a tangible employment action, meaning a significant change in employment status, such as hiring, firing, failing to promote, reassignment with significantly different responsibilities, or a decision causing a significant change in bene fits. (Brill et al, 2013, p.4). Having the authority to direct daily work was not sufficient to link the supervisor to the company in regard to damages or actions tied to a law suit or dispute.However, the company is still liable for discriminatory actions of non-supervisory employees,especially if it was notified and failed to take action to stop the behavior. This is significant considering that the majority of XYZs work force is contracted labor. As such it is imperative that XYZ maintain viable and proactive policies focused on preventing workplace discrimination and include a review of these policies prior to initiating any employment agreement. get the picture LawConducting business in a union environment provides for another layer of complexity to company operations. XYZs leaders must be awake(predicate) of and understand the basics of labor law and the collective agreements negotiated with the unions representing the workforce. Failure to operate within the parameters of t he agreement will result in an unfair labor practice dispute, which affects the sugar margins of the shareholders. Labor law, also governed by federal law, state law and judicial decisions, provides statutes that mediate the relationship between workers, employers, unions, and the establishment with the goal of equalizing the bargaining situation between employers and employee (Legal Information Institute LII, 2014). Collective labor laws focus on the rights of employees to unionize, collectively bargain, arbitrate, and strike, while individual labor law focuses on employment contracts between employers and employees (Caraway, 2009).Collective bargaining consists of negotiations between an employer and a group of employees, typically represented by a union, to determine the conditions of employment and results in a collective agreement. The main body of law governing collective bargaining is the National Labor Relations Act (NLRA), which was passed in 1935 (Executive Concepts, 20 11). It explicitly grants employees the right to collectively bargain and join trade unions. The National Labor Relations Board (NLRB) is the entity that hears disputes between employers and employees that falls under the purview of the NLRA. The General Council, established by the NLRA, in pendently investigates and prosecutes cases against violators of the act before the NLRB (LII, 2014).Another aspect of labor law is the act of arbitration, a method of dispute resolution, which is commonly used as an alternative to litigation. A deuce-ace party arbiter is designated and has binding decision authority for the dispute. While the Federal Arbitration Act (FAA) is not applicable to employment contracts, the Uniform Arbitration Act of 1956 wasadopted by 49 states making arbitration enforceable under state and federal law (LII, 2014). There were two key decisions rendered by the Supreme Court that extend to labor law, specifically arbitration clauses and class action waivers in contra cts (Brill et al, 2013). The Court held that the FAA directive to arbitrate and the arbitration clauses written into employment contracts take precedence over federal requirements to prosecute disputes through the courts. Additionally, this decision strengthens the ability to enforce class waivers written into contracts.While this appears detrimental to employers, the Court balanced this decision with language further defining the rules surrounding class waivers. The court ruled that a class dispute (one brought by more than one plaintiff) can be settled if the primary plaintiff reaches settlement (Brill et al, 2013). In essence, if an XYZ employee files a dispute that is then applied to a class of employees, but a settlement is reached with the initial plaintiff, then the class action is terminated. Effectively, the Supreme Court ruling strengthens the companys position in regard to employment contracts and protects the company from overzealous claims. As such, arbitration agreemen ts written into XYZ employment contracts should be carefully worded in order to take full advantage of the Courts decision. Laws specific to the construction sedulousnessSeveral Department of Labor agencies administer programs that are specifically related to the construction industry. Specifically, the Occupational Safety and Health Agency (OSHA), the Wage and Hour Division, and the posture of Federal Contract Compliance all have specified areas of emphasis that regulate XYZs primary line of business. OSHA administers all the occupational safety and health standards for the industry. Given the risk to employees across XYZs work sites, OSHA regulations are critical to maintain and pose a significant element of cost to the company. While it is prudent to conduct cost-benefit analysis on enacting safety and health policies, sacrificing employee welfare for the bottom line is a dangerous endeavor and can result in unfair labor practices or criminal charges in the extreme.As XYZ compe tes and wins government construction contracts, there are several statutes that dictate certain conditions for doing business with the federal government that are administered by the USDOL Wage and HourDivision and the Office of Federal Contract Compliance. The Davis-Bacon Act requires that companies pay the prevailing wages and benefits of the region. Wage rates and other labor standards for employees are set by the McNamara-O-Hara Service Contract Act. The Walsh-Healey world Contracts Act requires materials and supply contractors to pay minimum wages and meet other labor standards.Executive Order 11246 requires equal employment opportunity by all construction contractor firms. Lastly, the Copeland Acts anti-kickback section precludes any persuasion of an employee to make any part of their required compensation (USDOL, 2014). These dictated standards all affect the cost of projects and, if not accounted for in the bid and estimation process, will detrimentally impact the profit margins of the company as federal construction contracts are executed. Legal ConsiderationsAs XYZ begins the global expansion, it is important to realize that US labor laws are not binding in other countries in regard to foreign workers the host country laws are in play (Executive Concepts, 2011, p.938). However, Congress expressly encompassing three US labor laws to expatriates working abroad for US firms. The Americans with Disabilities Act (ADA), the Age Discrimination in Employment Act (ADEA), and Title VII all extend extraterritorially (Nie, 2012). While XYZs staff is well versed in US employment and labor law, foreign labor law is country dependent and it is prudent to conduct targeted research on the specific countrys legal environment considered for expansion. The International Labor Organization (ILO) has drafted 182 conventions and 190 recommendations in their effort to standardize labor practices globally.Enforcement of these efforts is a country responsibility, and as s uch, there are still large gaps in adoption and application of the various standards (Executive Concepts, 2011). While it is enticing to reduce expenses by sacrificing some of the more costly US labor law practices while abroad, this practice could damage the companys superlative reputation negatively affecting all future business ventures. As countries in Asia make the transition to democratic states, the door has been opened for improvements in collective and individual labor law, resulting in the creation of unions and the strengthening of workers rights.However, unions in developing counties depend upon governmentsupport and, as such, are politically focused charge the gap between internationally acceptable collective labor practices and reality relatively large (Caraway, 2009). Across Asia, individual labor rights are in a better position. There is a direct correlation between the wealth of a country and the enforced rights of its workers (Caraway, 2009). The most notable imp act of this situation is the prevailing wage in each country and the impact on XYZs financial position on projects. Using the field support offices at the forth locations to gather this information is crucial to accurate project estimation and contract bidding. As the company transitions from privately owned to publicly held, there are considerations to keep in mind. First, corporate governance will adjust to account for a larger base of stockholders.There is risk that the focus of the company will also shift to a more stockholder centric view, discounting the requirements of the stakeholders (the employees) (Ecchia et al, 2012). This has the potential to lead to the creation of unfair labor practices as priority shifts from maintaining collective agreements to maintaining larger profit margins for the stockholders. Second, shareholders with large equities could pressure the company to offload portions of the workforce or reduce the employees benefits in order to improve profitabil ity (Ecchia et al, 2012).As the union leadership monitors corporate business practices, this could lead to a revolt in the workforce and create an environment ripe for a strike thereby shutting down operations until resolved. Any financial gains made by the reduction would be lost to stagnated operations, and as such should be managed carefully. ConclusionConducting business in the twenty-first Century is comparable to traversing the proverbial minefield. Legal missteps can cause insurmountable fines and legal fees as a company struggles to maintain good business practices. cause employment and labor law is paramount to maintaining a strong and viable company through transformation and expansion that produces profits for its shareholders.ReferencesBanks, K. (2011). Trade, Labor and International organization An Inquiry into the Potential Effectiveness of the New International Labor Law. BerkeleyJournal Of Employment Labor Law, 32(1), 45-142. Business Source Complete, Accession Nu mber 67233021Barnum, Darold T. (1971) From Private to Public Relations in Urban Transit. Industrial Labor Relations Review. 25(1), 95-115. Business Source Complete, Accession Number 4459252.Brill, Edward A., Fant, Laura M., and Baddish, Noa M. (2013) U.S. Supreme Court Wrap-Up Hot Topics in Labor and Employment Law. Employee Relations Law Journal. 39(3), 3-8. Business Source Complete, Accession Number 91640070Caraway, Tara L. (2009). Labor Rights in eastern hemisphere Asia Progress or Regress?. Journal of East Asian Studies, 9(2), 153-186. ProQuest Research Library, Accession Number 43381256Ecchia, Giulio, Gelter, Martin, and Pasotti, Piero. (2012) Corporate Governance, Corporate and Employment Law, and the Costs of Expropriation. Review of Law Economics. 8(2), 457-486. DOI 10.1515/1555-5879.1357Katten, Betsy. (2013) U.S. Supreme Court to Address Labor and Employment Matters in 2013-2014 Term. Employee Relations Law Journal. 39(3), 48-51. Business Source Complete, Accession Numbe r 91640075Legal Information Institute. Cornell University Law School. Retrieved from http//www.law.cornell.edu/wex/employmentNie, Carrie. (2012). Extraterritorial Application of U.S. Employment Laws Clearing the Murky Conflicting Foreign Laws Defense. International Lawyer, 46(4), 1027-1043, OmniFile, Accession Number 90233860Northcentral University (2011). SKS 7000-Executive Concepts in Business Strategy. Custom edition. Retrieved from http//online.vitalsource.com//books/United States Department of Labor. (2014) Retrieved from http//www.dol.gov/opa/aboutdol/lawsprog.htm

Traditional Banking Essay Example for Free

Traditional fixing EssayThe article The compensate of traditionalistic bounding implications for fiscal stability and regulatory form _or_ system of government by Franklin R. Edwards and Frederic S. Mishkin presents a actually detailed and well researched exploration of the current movement of banks away from traditional banking. The authors describe their objectives as including an examination of the reasons behind the turn away of traditional banking, and an identification of the effectuate that these would pretend on the stability and regulation of banks. The article meets these goals well, as it begins by demonstrating the complexity of the current banking piazza and how/why balance sheets reflect information that go far beyond mere lending. The non-traditional methods of banking as well as the financial institutions that have evolved and crowded the banking market be also explored in detail. last, the authors expound on the ways that banks might improve their sta tus in the financial market and maintain stable regulatory policies within such a highly belligerent and unstable environment. Therefore, while in some areas the explanations were a bit awkward, overall the authors manage to unite the causes, effects, and possible remedies of the current problems being faced by banks, and this is through in a manner that demonstrates a deep understanding of the situation.The introductory pages of the article do give a very detailed picture of why the authors found it necessary to explore the decline of traditional banking. Traditional banking, they explain, dealt mainly with the issuing of long term loans financed by short-term deposits (Edwards Miskhin, 27). They provide evidence in the form of graphs and statistics, showing both the size of the decline in earnings from such traditional (financial) borrowing, as well as the share of non-financial borrowing minded(p) banks and their competitors.The fact that both commercial and thrift banks non-f inancial borrowing declined by an average of 7% over a thirty-five year period demonstrates that significant decline has indeed taken place in their share of that market. The authors also give concrete evidence concerning the decline in these institutions returns on such necessitateings as assets and equity. Finally the authors demonstrate the trend in banks share in the market concerned with non-interest income. This increasing trend represents precisely the move away from tradition they have identified. The rate of these facts and charts was effective as a method of vindicating the authors decision to explore reasons for the decline in traditional banking.Edwards and Mishkin go on to explore such areas as the decline in banks advantage as far as liabilities are concerned. This is demonstrated in terms of declining cost advantages, which as shown to have become a cosmos when early(a) institutions found a way to capitalize on the banks financial privileges. They explained the f act that ceilings and other restrictions (at one time favorable to the banks) had been placed upon their ability to cover interest on certain types of deposits (such as checkable deposits).These regulations restricted their ability to be competitive at a crucial time in the market and and so opened the doors for other lending institutions (exempt from such restrictions) to attract customers by offering higher interest. This serves as a cogent explanation of why banks have declined in this traditional area. Yet, the authors represent the complexity of the market by exploring a few other reasons why such decline has taken place.The existence of the new news report market (securities) has also been cited as a reason that adds to the complexity of the problem that banks right off face (Edwards Miskhin, 31). The previously mentioned decline in banks lending to commercial entities is now explained by the fact that these businesses have been given the option of borrowing directly from the public through the issuance of securities.The authors also cite the rise of plebeian cash and junk bonds on the money market as having an indirect effect on the market position of banks. They frame, The growth of assets in money market mutual funds to more than $500 billion created a ready market for commercial paper because money market mutual funds must hold liquid, high-quality, short-term assets (31). This serves the explanatory purposes of the authors by demonstrating the sheer size and number of the selections to banks that exist on the financial market.The authors, Edwards and Mishkin, also explore some of the reasons why such alternative institutions have become such a threat to banks. Besides their ability to offer attractive alternatives to customers, these financial institutions have also demonstrated an ability to practiced their assets. They explain these institutions methods of originating loans and then creating more loans from these. They write Advances in information and data processing technology have enabled non-bank competitors to originate loans, transform these into marketable securities, and sell them to curb more funding with which to make more loans (Edwards Miskhin, 32). The rise of financially capable technology has made easy these maneuvers by such non-bank facilities, and this has led to the current position of decline in banks traditional activities.The authors of the article also demonstrate the route that banks have had to take in effectuate to combat the effects of being coerce to share their market. They use graphs and data effectively to demonstrate the sharp climb in what had traditionally been considered risky types of loans. These graphs depict a rise in bank issuance of real estate loans, and further details the authors provide demonstrate that banks have had to stoop to lending to less credit-worthy borrowers in order to increase their financial viability in these tough times (Edwards Mishkin, 27 33).They also depict the methods chosen by banks to increase their activities that take place off the balance sheet. Banks have expand into the market for financial derivatives, in which they serve as off-exchange or over the counter (over-the-counter) derivatives dealers (34). In order to increase the authority of the article, the writers then provide in several charts concrete evidence of the different kinds of derivative deals in which actual banks have recently participated or mediated. Further evidence concerning the proportion of income banks have derived from these off-balance minutes serve to depict the extent to which they have effaced or replaced traditional banking.Edwards and Mishkins exploration of the nature of the risk faced by these banks in involving themselves in OTC activities demonstrates the extent to which these institutions have been forced by a declining traditional market to engage in alternate financial activities. Since their derivative activities have mainly been in the area of swapping interest rates, the risk involved in this can be seen to be highthough tempered by the fact that they do not involve payment of principal amounts (Edwards Miskhin, 38). Furthermore, the authors detailed explanation of swaps and the risks they carry aid the overall understanding of the type of risks banks have been forced to take in order to retain their profits. This leads to a better understanding of the extent to which traditional banking has been transformed.Finally, the authors Edwards and Mishkin go on to outline the regulations that have been put in place and the implications that they are apt(predicate) to have for bank policies. The need for regulation is expressed in the evidence they produce from the GAO (U.S. Government Accounting Office). It explains that the discounts and insurance provided by Federal Reserve Bank accords to banks a take aim of security that might induce them to take higher risks that they would (or should) otherwise have tak en.Regulations have therefore been made that allow only banks with nigh(a) management and high capital to engage in some of the riskier types of non-traditional banking activities. Such activities include securities underwriting and trading, and dealing in the derivatives market. The inclusion of these explanations in the article demonstrates the thoroughness of the authors in identifying other reasons (beyond mere competition) why some banks have been or may be forced out of the financial business.The details of policy implications for banks given by the authors are shown to include regulations that strengthen banks ability to compete. These measures have also been shown to include the seeking of methods that prevent the fall of capital below certain levels (Edwards Mishkin, 40). In presenting the pros and cons of these ideas, the authors demonstrate and go away a thorough understanding of the intricacies of banking and further communicate the complexities of the business. The w riters, through their efforts, also demonstrate the gravity of the situation that banks now face in their need to write policy giving them the ability to expand beyond their traditional financial market.Despite the overall clarity and detail of the ideas presented in support of the authors claims, a level of awkwardness does enter into a few paragraphs of this article. The awkwardness within this article mainly exists in the introductory pages, where Edwards and Mishkin enumerate (rather than explore) the reasons for and the extent of the decline in traditional banking. The confusing nature of the financial situation being faced by banks is translated to the work, as the writers continually meet their given reasons with qualifications to the effect that demonstrate the inadequacy of from each one explanation.They, for example, identify their measure of banks profitability over a period of time as crude and explain that other measures do not adjust for the expenses associated with g enerating noninterest income (Edwards Miskhin, 29-30). hotshot gets the feeling that the writers might have taken the trouble to do the extra calculations in order to provide a more comprehensive view of the situation. However, they do provide much more detailed explorations in the ensuing paragraphs.This article by Edwards and Mushkin presents a very interesting and informative view of the current situation facing banks in todays financial market. The traditional role usually occupied by banks as lenders has been undermined by the influx of non-traditional lending institutions. These institutions have taken the opportunity to provide lower-interest loans and higher-interest deposits to customers, thereby forcing banks to flee to riskier methods of gaining revenue. Policies that regulate banks behavior have become necessary as a result of this trend toward riskier business, and this has sparked ideas concerning policy making and the risks and benefits they would impart to all stak eholders.Work CitedEdwards, Franklin R and Frederic S. Mishkin. The decline of traditional banking implications for financial stability and regulatory policy. FRBNY Economic Policy Review. July (1995) 27-45.