A critical study of credit risk management in the First Bank of Dissertation - 2

A critical study of credit risk management in the First Bank of Nigeria PLC - Dissertation Example All types of transactions have risk factors attached to them. If considered as an isolated case, then the loss can be treated as standalone. However, if a portfolio is considered like financial instruments and loans, there is the diversification effect which means risks of individual transactions get diluted. This is because every individual transaction cannot become a bad debt, and it is also not possible that all financial instruments of a trading book will end up as losses caused by market movements. It is universally accepted that the â€Å"sum of individual risks is less than the risk of the sum.† There is also the concept of dependency, i.e. inter-related events which determines the effects of diversification. For instance, a loan can become a bad debt depending on some common factors like the economic condition of market. Therefore to compute the risk of portfolios, it is necessary that these common factors be monitored (Bessis, 2011, pp.25-26). Credit risk can be defin ed as the non-ability of a debtor or issuer of any financial instrument to make payment of the principal amount as per the terms and conditions of the credit agreement (Greuning & Bratanovic, 2009, p.161). The loss that occurs is related to the valuation of the financial instruments and their liquidity. The financial instruments can reduce at high rate if the default is totally unexpected. The resultant loss is the â€Å"difference between the pre- and post-default prices.† (Bessis, 2011, p.29) Banks are most vulnerable regarding credit risk issue since default or delay of payments can lead to cash flow problems or can cause liquidity of the bank. Although there are many aspects of finance, in the balance sheet of the bank 70 percent of it is related to credit risk management. Out of many factors that are responsible for a bank’s failure, credit risk is the most common factor. A bank’s credit risk is mostly determined by its loan portfolio, yet it is equally imp ortant to assess the creditworthiness of any debtor or issuer of financial instruments to understand the potential credit risk. Financial analysts and supervisory agencies of banks give much importance to credit policies designed by the Board of Directors, and how they are implemented by the managers. A credit policy needs to give a framework of the credit structure of bank, i.e. allocation of credit and management of credit portfolio. For instance, the policy should give information about how investments and financing assets are supervised, managed and reviewed. A credit policy need not be excessively conditional, so that proposals for consideration can be placed before the board even if those proposals do not strictly follow the guidelines of the policy. A bank’s credit policy should have enough flexibility to be able to adapt to the changing relations between the bank’s standing assets and the market fluctuations (Greuning & Bratanovic, 2009, pp.161-162). There are certain standard theories of a bank’s credit management and they are – 1) identification and assessment of potential credit risks, 2) credit policies that define the bank’s perspective of risk management, and 3) the parameters of the policies within which credit risk will be monitored. Generally there are three kinds of credit risk management policies. The first one has the objective of minimizing any potential risk and includes policies on â€Å"concentration and large exposures, diversification, lending to connected parties, and overexposure.† The second set of policies targets at classifying assets. These policies make it compulsory to do periodic monitoring of the â€Å"collectibility of the portfolio of credit instruments.† The third set of policies is designed in the manner to set

An enemy of the People by Arthur Miller Essay Example | Topics and Well Written Essays - 1000 words

An enemy of the People by Arthur Miller - Essay Example In his play entitled â€Å"An enemy of the People,† Henrik Ibsen uses the character of Dr. Stockmann to bring out the extent to which the society can compromise the desires and beliefs of an individual. Reading through the play, one gets to understand how hard it is for people who have compromised their principles to be confronted by someone who has not. The use of the styles of characterization, irony, and symbolism help the author to show the reader ways in which a person can be disliked by the very same society he is doing his best to help. Dr. Stockmann, the main character of the play is a popular practicing medical doctor as well as the medical officer of a small coastal town in Norway. He is the brother of the mayor, an authoritative figure in the town. In the play, Dr. Stockmann is the protagonist who struggles to do the right thing and stand against the social intolerances that he encounters in his day to day activities. As a health officer of the town, Dr. Stockmann d iscovers a problem with pollution that is causing illnesses to the town’s tourists. To this effect, he comes up with a solution to the pollution problem which he presents to the Mayor. However, he discovers that it would not be an easy task to get the attention of the authorities and the townspeople as it becomes clear to him that they only care about the financial gain of the baths and not the problems they present. He realizes that he is alone in his quest for being right and notes â€Å"†¦..† (Ibsen 1011). Dr. Stockmann experiences a lot of negativity from the very same people of the town he is trying to help. When he discovers the extent of pollution in the waters, he believes that people will be interested in finding a solution. However, the townspeople, even his friends term him an â€Å"enemy of the people† mainly because his suggestions take the prosperity associated with the benefits of the baths back. He even notes himself "I've decided. I am an Enemy of the People"(Ibsen 1028) when he finally accepts that most of the towns people will never support him. This brings out irony in the play. It is ironic because Dr. Stockmann had the best of intentions when he proposed limiting the damages of pollution by closing the baths. In any case, the people are their own enemy because their greed and desire for prosperity will in the end bring harm and destruction to the town. It is clear that people do not realize the shortsightedness of their stand against Dr. Stockmann’s opi nion of what is best for the town. Ibsen’s use of imagery as brought out by the character of Dr. Stockmann who points out images of pollution throughout the play. At the beginning, Dr. Stockman literally discovers the polluted baths which in this case, are getting polluted by literal filth from the tanneries. As the play progresses, images of dirty water are used as a symbolic representation of moral and societal corruption. According to Roshwald, there is the physical filth, as well as moral pollution, and one can see the biological poison as a representation of the moral corruption in the society (229). In a community, there are always selfish individuals who have compromised their principles and find it challenging when confronted by someone of integrity. The mayor is dishonest and callous, but his brother is an honest man and that is why as Roshwald notes, Dr. Stockman accuses his brother by saying â€Å"We are making our living by retailing filth and corruption!†

Southern Distinctiveness.James C. Cobbs Away Down South Essay

Southern Distinctiveness.James C. Cobbs Away Down South - Essay Example In this book, Cobb argues that the southerners did not achieve distinctive identity with respect to politics, culture, and religion. However, he points out that the history of the Southern is the only distinctive feature of the South. He asserts that the quest for southern distinctiveness should be abandoned since it is both intellectually stultifying and politically dangerous. Indeed, I agree with Cobb’s statement that the search for southern distinctiveness should be thwarted since most of the debates, about this topic, usually trigger dangerous political arguments. Cobb identifies that the quest for southern distinctiveness is not an issue that originated in Southern regions of America, but it is the northerners, during the revolutionary era through the Civil War period, who begun stressing on the distinctiveness of the south (Cobb 222). It is until sectional crises of 1950s, originating from the remonstration of the southern region between 1860 and 1865, that the white sou therners realized the need to create their own identity (Cobb 222). After southerners lost in Confederacy, they became obsessed with the results of Civil War and Reconstruction, which dominated their imagination of forming the New South. In the quest for southern identity, New South propagandists, by 1900, had won a contest for defining post-war southern identity. They also created a remarkably comprehensive version of defining post Civil War South identity (Cobb 226). The new identity embraced the causes of the loss including a modern industrial future for the southern in alias with the northern capital. However, the New South identity failed to recognize the plights of African American, and embraced a regime of white supremacy. It is within the context of white supremacy that people begun questioning the significance of New South identity. During the second Reconstruction after World War II, the southern region was initially perceived as a confident and militant Africa-American co mmunity (Cobb 231). However, during the second Reconstruction, many southern scholars turned their feelings about their region to shame and guilt. This led to their defeat in the Civil War; something Cobb believes was as a result of disagreements and conflicts in white identity. Ironically, instead of conceding the defeat, some of the southern governors, still had the confidence to boost that the loss was as a result of their own mistakes, but not as a result of the entire nation. While the northern America was struggling to achieve a global image, the south was struggling to become Americanized. Cobb further indicates that both the white and black Americans were struggling to claim the southern identity (Cobb 229). However, African Americans, born and bred in the southern, have embraced the New South identity in a different perspective from the white southerners. Their definition of the southern identity does not include anything that relates to Lost Cause or Confederacy, but rathe r with community, place, family and culture (Cobb 234). In this case, they are trying to reclaim the identity of a region that was initially owned by white Americans. This implies that the initial definition of New South identity, which was structured by white intellectuals, was not valid enough to prove the southern distinctiveness south because it failed to recognize their presence, as members of the community, yet they participated in the Civil War and Reconstruction process (Cobb 234). This also indicates that people have mixed reactions and definitions when it comes to southern distinctiveness. Therefore, the quest for southern identity should be abolished as it creates unnecessary conflicts and dangerous politics among authors and other

Business Continuity Plan Essay Example | Topics and Well Written Essays - 1750 words

Business Continuity Plan - Essay Example In particular, each of the systems must be evaluated and placed in one of the two categories of risk, as described below: The systems must be based on an assessment of the loss and how it will hit the various departments using it and how it will be in costs of that loss and to recover the data. See the IT Departmental Team Plan on more in depth information on the risks and how best to assess them at senior management level. Stated by MIT (1995). It consists of senior managers from each main department that useing the applications identified above; their role is to ensure the personnel can function during a critical outage, in particular that there is a recovery plan to cover Critical and Emergency states. To this end there must be an alternative system in place, which is up and running at all times. To be in charge of the BTC is the Director of Security who will have the final decision making controls for the team. To report to the Business Continuity Team (BTC), within two hours once access is allowed to the company premises, any application that has been compromised during the outage or attack, then give any advice to the BTC about the best way forward if there is a problem with hardware or for users. Hardware procedures are in the "Maintenance Handbook" maintained by the Facilities department and cover as many eventualities as can be covered. It will be the first set of procedures covered especially if there is a difference in the stated objectives between the BTC and the handbook. IT and facilities are then responsible for putting the recovery into motion. Stated by MIT (1995). Technical equipment such as servers and routers must be locked in cabinets in a locked technical room. Ensure their are ports disabled if not required and working ports are have encrypted passwords strong enough not to be broken. Access is by staff with proper security clearance given by the Security Directors office only. Any contractor

Free trade agreements' negative effects on U.S economic Assignment - 1

Free trade agreements' negative effects on U.S economic - Assignment Example This forms the need to write this report. NAFTA is an example of trading bloc in USA, which came into effect in January 1 1994. It is the largest trading bloc in the world and for this reason; we have used it as a basis of our argument. We have also used other trade deficits to back up our arguments. A free trade area is a form of integration in the countries represented. The countries enter to either a bilateral trade agreement or multilateral trade agreement. We shall define the meaning of the two different types of trade and give an example on each. USA has entered into a number of agreements with different countries for reasons such as: boosting trade, gaining a wider market for its finished and unfinished products among others. Trade barriers such as customs duty and tariffs have been removed facilitating free movement of goods and services in the countries (Davidson 1990). Agreements such as NAFTA agreement that was precendented by United States – Canada trade agreement has had both positive and negative effects in the growth of economy of the country. In the next pages we shall look both at the positive impacts of trade agreements made by USA and dwell more on the negative impacts of the trade. We shall use the NAFTA agreement as the basis of our arguments and othe r trade deficits to backup these arguments. Also illustrations will be used to show the situation in the ground. Business free trade agreements are treaties made between two people or countries to remove barriers of trade between them. These barriers may include tariffs and taxes. These free trade agreements between countries also allow people to move freely with minimum or no restrictions in member countries. The business free trade agreements help in liberalization of international movement of goods and services across countries. Countries that have business free trade agreements sign a

Managing Communication in Business Essay Example | Topics and Well Written Essays - 1000 words

Managing Communication in Business - Essay Example Every member of an effective group should have the required professional skills for a job, which is assigned to him (Rhee 2007). For a group related to business working, the group members of the group should have skills such as understanding of the work environment, business demands and the job needs. Every group member should be aware of the business setting, job specifications and should be target oriented (Devine, et. al 1999). Effective group also forms when people related to the group have interpersonal skills (Silver and Bufiano 1996). Every group member should identify the skills of other members and should be aware about his/her own working that can be supported by other members of the group (Knouse and Dansby 1999). In an effective group, the group members prove themselves as a support for other members and each member is aware of the skills of other person. Balanced diversity and time frame are other characteristics that the group members should have to make the group effective. Each member of the group should be able to offer diverse ideas in case of need (Devine, et. al 1999). For performing any activity, diverse ideas play an effective role. The group members that have diverse skills are much more suitable to form an effective group. Time frame is a very crucial factor and all the group members should take care of the time allocated for a task to make the group effective. Every member of the group is assigned a different role and every group member should perform the role that is assigned to him/her (Pescosolido 2003). Roles are of many kinds such as initiator, contributor, information seeker and giver, coordinator, orienteer, energizer and many others. The performance of each member affects the over all group performance so it is essential for all the group members to complete their assigned roles within allocated time (Knouse and Dansby 1999). Group size is a very important factor. The size

Energy and States of Matter Essay Example for Free

Energy and States of Matter Essay Everything changes, that is a fact. We can find changes, even in simple things that we use. Have you ever asked why does an ice cube turn back onto water when you let it stand outside the freezer? Or do you know why an ice cream melts? We knew about the three basic phases of matter – solid, liquid and gas. From our basic chemistry, we taught about the change of state or phase of matter wherein soli becomes liquid and liquid turns to gas and vice versa. The question is, why do they change phase? To really understand those phenomena, we should look onto the two different graphical illustrations of the changes of states of a substance, cooling curve and heating curve and thereby understand what is really happening on the molecular structure of a substance. Heat is very crucial in these changes on the form of certain substances. This is the energy transformed between two objects brought about by the difference on both temperatures. It means, when you let an ice cube in a plate, after a day, you will find it gone already. The heat causes the ice to melt and eventually turn it into gas and disperse it onto the air. Two types of energy involved are the Kinetic Energy (KE), the motion energy which is dependent on the mass and velocity of an object and the Potential Energy (PE), the resting energy or energy due to position and composition. Heat affects KE and said to be directly proportional to each other. As you increase the heat, the temperature increases resulting to an increase on KE. Heat, Temperature, KE and PE are the main factors why do changes on state of matter occur. Changes are due to evaporation (liquid to gas), freezing (liquid to solid), condensation (gas to liquid), melting (solid to liquid), sublimation (solid to gas) and deposition (gas to solid). All of these processes are result of the changes on the amount of heat added or removed from a certain substance, thereby increasing or decreasing the temperature thru time. Cooling Curve Cooling curve is a graphical representation of the changes of states of substances as heat is uniformly removed from it. At t0 – t1 heat is removed from the gaseous state. The average KE of the gas particles decreases as the temperature drops until it is reached at t1 where gas starts to liquefy. The temperature at which gas and liquid coexist is called liquefaction or condensation point of the substance, which is just equivalent to boiling point of the heating curve. At this time, the average PE remains constant because there is no change yet on the composition of the gas. At t ¬1 – t2 (liquefaction point) there is no change on the average KE of the particles and temperature stays at constant level. Heat is still being removed causing the decrease on Average PE. Since there is decreasing amount of heat, there is a failure to overcome forces of attraction between particles of the liquid forming gas. The gas particles are compressed and converted into liquid wherein stored PE is released. At this time, the amount of gas decreases while the amount of liquid increases, until reaching t2 where all the gases have been converted to liquid. At t2 – t3, the average KE of the liquid particles decreases and the temperature reaches low level until t3 where the liquid starts to solidify. Freezing or crystallization of substances occurs at the temperature where liquid and solid coexist. At this point, liquid is no longer a liquid but already turned onto solid state. The molecules of the liquid have been compressed as result of continuous removal of heat from the substance. This time, the average PE continues to decrease because of the amount of heat being removed. Freezing point is just equivalent to melting point in the heating curve. At t3 – t4, there is no change on the average KE and the temperature of the substance stays constant. Heat is still being removed causing a decrease on average PE of the substance. This time, the amount of liquid decreases and the amount of solid increases until reaching t4 when sufficient heat has been removed thus converting all the liquid into solid. The particles of the substance are oriented properly to form the crystalline lattice at the freezing point. Sometimes, it happens that the heat is continuously removed from the substance without crystallization. At this point, the temperature drops below its freezing point and errors in orienting the particles occur. This phenomenon is learned as Supercooling. We can reduce supercooling by introduction of a seed crystal for the crystallization to occur and thereby initiating the proper structure. Heating Curve Heating curve is just the opposite of cooling curve. The curve illustrates changes of states of a substance with uniform addition of heat to it. At t0 – t1 heat is added to the solid causing the increase on average KE of its particles. The particles are agitated making them disoriented and result into a slightly less ordered solid state. Temperature rises and at t1, solid starts to melt. T1 is termed as melting point of the substance on which solid and liquid coexist. At t1 – t2, there is no change on the average KE and the temperature stays constant. Since KE doesn’t change, average PE must increase as heat is continuously added. Now, forces of attraction between particles have been overcome because of high amount of heat. The amount of heat is being stored as potential energy. At this time, amount of solid decreases while the amount of liquid increases. Eventually at t2, sufficient heat has been added to convert the entire solid to liquid. At t2 ¬ – t3 the average KE and temperature increases. When the increasing temperature reaches t3, the liquid starts to evaporate. At this temperature (t2), liquid and gas coexist and is termed as boiling point of the substance. At t3 – t4, there is no change in the average KE and temperature remains constant. The force of attraction between liquid particles has been overcome due to addition of more heat. The amount of heat added is still being stored in form of PE. PE increases and the amount of liquid decreases while the amount of gas increases. At t4, sufficient heat has been added to convert all the liquid to gas. As oppose to supercooling, superheating also occurs where liquid is heated to a temperature above its boiling point without evaporation.