Central Bank Essays


Monetary and Fiscal Policy

theoretically a buffer that the bank cannot lend out, for safety reasons. The central bank seldom changes the reserve requirements, but if it does, that either frees up money for the bank to lend (spurring economic growth) or causes the bank to call in loans (cooling the economy). Fiscal policy is entirely different from monetary policy, but it can also influence the overall health of the economy. Fiscal policy is the money that government spends. In some ways, it does not matter much what the government spends on, but rather how much is spends. Governments spend money on a… Continue Reading...

2015 Corporate Governance Executive Summary

growing financial organization that we are these days. This report is important particularly since the requirement from the central bank of Kuwait has mandated that it be done and noncompliance will result in high penalties. The Board has recognized a management construction with evidently clear roles, reporting lines and duties. The Bank's organization screens the presentation of the Bank and each of its companies and acquaintances on a continuing base and reports this presentation to the Panel. The checking of presentation is carried out through a steady valuation of performance tendencies in contradiction of budget, and previous eras and aristocrat… Continue Reading...

My Career and How to Advance It

of the Board of Directors at Ahli United Bank Kuwait (AUBK) along with high-level administrators at the central bank of Kuwait and Capital Market Authority. I contributed to the AUBK 2015 annual report and have overseen development of the bank's Corporate Governance and Investor Relations reports published on its website. My main weakness resides in effectively managing my time. With so many tasks confronting me, prioritizing has sometimes been difficult. Meeting deadlines, as a result, has proven problematic. Procrastination is also a weakness. Opportunities exist in my aim to complete the MBA program, which will open several doors to… Continue Reading...

Quantitative Easing

was used to stimulate the economy following the "Great Recession." At the start of the financial crisis, the European central bank did not decrease its rates. However, when the Lehman Brothers' institution collapsed, the ECB cut its key interest rates to historic low levels. In the period between October 2008 and May 2009, the rate was reduced to 1%. In particular, the positive impact of this monetary policy was that it boosted economic activity by stimulating the banks and financial institutions to lend and also for the increase in spending by consumers (Fahr et al., 2011; Labonte, 2016). How… Continue Reading...

Greek Debt Crisis

The nation of Greece is currently in debt to its creditors to the amount of 321 billion Euros -- "approximately 180% of its annual economic output" -- effectively making the nation a debt-colony (Rankin). As of 2015, the IMF had pledged nearly 50 billion Euros to Greece (and had leant the nation more than 30 billion up to that point -- with the rest contingent upon Greece making payments that were already due). By May 2016, Greece's creditors -- known in the media as the Troika (European Commission, the ECB, and the IMF) -- were meeting to discuss the issue… Continue Reading...

Negative Interest Rates Analysis

their money. Moreover, central banks penalize commercial banks for depositing their funds with them. For example, The ECB (European central bank), some smaller European banks, and Bank of Japan have introduced the negative interest rate policy where banks, as well as other financial institutions, will have to pay charges for allowing central banks to keep their money. However, there are genuine reasons for introducing this policy. The objective of this policy paper is to investigate the reasons for introducing the negative interest rates and the risks associated with the policy. Reasons for Introducing Negative Interest Rates Since 2014, the… Continue Reading...

Why 2017 May Be a Good Time to Buy Gold

well as the global economy (Collum discusses China's Yuan devaluation and credit problem, Japan's central bank asset-purchasing program, and the problems facing the EU), the picture painted by Collum is stark indeed. Thus, he foresees a severe market correction -- though he does not say when it will happen. He is content knowing that it will happen because it cannot not happen: the wheels are coming off and it is enough to be prepared for impact. Collum's advice is to store what wealth one wishes to preserve buy purchasing precious metals (gold and silver). If one wishes to re-enter… Continue Reading...

Federal Reserve and Interest Rates

Fed Policy Change The most recent Fed policy change was the decision to raise rates by 25 basis points. It is expected that the Fed will raise rates three more times (probably by the same amount) in 2018 and there are roughly 60% odds that the Fed will raise one more time this year (perhaps in December). However, I do not expect this trend to continue, because the debt of the nation is so great that it is simply unserviceable. If rates are raised, the interest owed on the debt will increase and that means more money going just to… Continue Reading...

Which Is Better Paper or Electronic Currency?

it to citizens. The fact that our government has given up this right to the central bank, from which it borrows money at interest signals that the true government of our nation is the central bank, since it possesses the authority formerly held by kings. Extending from that fact is the idea that the “notes” we are issued from the bank have value—but the paper money (fiat, as it is called because the banks print it at will and loan it to our government) has done nothing but lose its value over the past century. One can easily look… Continue Reading...

Apples Stock Movement 2017

Apple Inc. Stock In 2017, AAPL has performed quite well. It started the year off at $115 and today is selling for $170. 2017 has been a great year for stocks, with the election of President Trump seeming to have a lot to do with the rise in equities across the board, as the market has expected the President to introduce tax cuts that would be good for businesses like Apple. I was attracted specifically to Apple because I am an Apple user, enjoy the products, have many friends who enjoy the products and think it is a great brand… Continue Reading...

Macroeconomic Indicators

recent years, and the end of unconventional monetary policy, interest rates are set to continue to rise as the central bank reduces its balance sheet. With bond yields already going up and volatility at all-time lows, questions remain about how the market will react to this normalization process. One thing is for certain, however: the recent rise of prices across several asset classes has coincided with the years of QE beginning in 2008. Home prices have soared, bond prices have soared, equity prices have soared, college tuition has soared, and even precious metals have soared (along with cryptocurrencies in… Continue Reading...

Apple

also risen steadily: Source: FRED (2018b) This should not be surprising as the Fed’s policy (and every other central bank’s policy around the world) has been to “quantitatively ease” the market shock that emanated from the Global Economic Crisis of 2008 by way of printing trillions of new dollars and propping up the bond market with them. The spillover effect of bond purchases into the stock market has been well documented (Zhang, Zhang, Wang & Zhang, 2013; Yavas & Rezayat, 2016), but the real story is the rising inflation in various asset classes as a result of QE (Heller, 2017): stocks,… Continue Reading...

Oil Crises Term in West Africa

objectives. Monetary policy encompasses all the actions and measures taken by the central bank and the government, which have an impact on the cost, amount and accessibility of money and credit within the economy. In particular, monetary policy operates on two fundamental economic variables including the level of interest rates and the aggregate supply of money in circulation. Numerous developing nations in West Africa position a great deal of focus on monetary policy to expediate an arranged and methodical process on economic development (Mudida, 2003). Monetary policies have major implications on economies in West Africa during periods of oil… Continue Reading...

Apple Expansion into Myanmar

Myanmar; the expansion will be sales only, just like in every other country for Apple. central bank The Burmese central bank plays the typical role of a central bank. It is responsible for ensuring the monetary stability of the country, and for regulating the banking industry. The central bank has been in place since independence. It governs the country\'s financial and securities markets as well (Yukate, 2014). There are two major roles that would be of interest to Apple. The first is the governance of monetary policy. To date, the central bank has done a fairly good job in recent… Continue Reading...

American Dream and Wealth Gap

big cause of this growing wealth gap. By getting the Fed out of the marketplace and keeping the central bank from printing money, devaluing the currency, suppressing interest rates, and taxing the middle class, America could actually become again a place where the American Dream can be pursued by one and all. Instead, today, the Dream is for none but the wealthy. This class is essentially protected by the Fed. The executives are paid with stock options that pay out handsomely because of asset bubbles blown through central bank intervention when the markets should be crashing as a result… Continue Reading...

Bitcoin Essay

tied to any currency like the United States dollar. It is not tied to gold. There is no central bank that can artificially regulate how much money is being printed or how a currency is valued. Imports and exports, inflation rates, interest rates, and real estate markets mean nothing to cryptocurrencies. Bitcoin might function as a currency, but it is a lot more than that. The basic elements of bitcoin are the mining process and the block chain concept. Bitcoin Mining Bitcoins are “mined” by people who participate in the process using special hardware and software, and also a… Continue Reading...

Brexit

remaining a major one, but also the movement of people within the member states, and the European central bank, which provides central bank function for the countries within the Eurozone. Impacts of Brexit on the Global Economy Globally, Brexit will weaken both the EU and the UK, as both will have lower bargaining power in trade negotiations. Together they were stronger. Both still have the ability to sign trade deals. In that sense, the UK will probably be hurt a bit more, as it is smaller, but most countries would want deals with both regardless, because of the sizes… Continue Reading...

Should We Get a Basic Income

like the Federal Reserve, the Bank of England (BOE), the European central bank (ECB), and so on, all of which have printed up trillions in their own currencies to prop up markets since the Great Economic Crisis of 2008. What this means is that since the Great Economic Crisis, which has defined the past decade in terms of how monetary policy is conducted, the great central banks—the Fed, the ECB, the BOE—have engaged in a strategic policy of quantitative easing (QE), designed to send “trillions of euros [dollars, and pounds] into the financial system” (Van Lerven, 2016, p. 237).… Continue Reading...

The Federal Reserve and the Gold Standard

being held accountable to U.S. voters, who if there was no central bank to intervene with its fiat dollars would undoubtedly be more aware of what money really is. My question is: Why does the government think it needs to “borrow” money from the Fed in order to fund its programs? The government has the right to coin its own currency, backed by its own authority. It shouldn’t have to borrow anything from its central bank. So long as it is actually exchanging the money for real labor, then the system will work fine. This is the system that… Continue Reading...

Bangladeshi Economy in the Post Partition Era

below average. The Bank Companies Act was amended for strengthening central bank autonomy, besides reducing commercial state-owned banks’ special treatment (2018 Index of Economic Freedom, 2018). The Bangladeshi healthcare sector displays scant concern for patient privacy (Guhathakurta & van Schendel, 2013). Privacy demands in the nation are also certainly weaker as compared to ‘Western’ nations. The nation’s impoverished population has no issues with sharing a ward (sometimes even a large hall housing almost a hundred beds) with other patients. Also, it is nearly impossible for the impoverished to afford such privacy. Still, admission to a common ward leaves patients… Continue Reading...

The Problems Of Funding Basic Income Programs

money was utilized by societies prior to the introduction of the central bank with its fiat money printing presses, which produce bank notes out of thin air which are then loaned to the government at interest. In other words, money is created, the supply of money is increased, and the value of money is decreased every time more of it is printed. The main purpose of exploring the role of fiat money in the contemporary monetary system is to show why printing or adding to the supply of money devalues the currency and only leads to higher inflation, thus… Continue Reading...

Money Economics and the Banking System

productive periods driven by either innovation or population growth, and falling when these factors are lower. The central bank can create inflation outside of the cyclicality that is driven by economic activity, in the sense that the central bank can spur inflation by creating cheap money, which then leads to an overheated economy, a certain portion of economic activity that really only occurred because of the central bank policy. There are several factors that can lead to inflation. In general, economic activity creates demand for money, and this leads to inflation. Low unemployment in particular is linked to wage… Continue Reading...

Blockchain

that a store of value and unit of exchange could be created without the intermediary of a central bank. The value of this currency would be determined by the forces of supply and demand, based strictly on its users, without the influence of interest rates and other monetary policy tools that are used by central banks to influence the value of their currencies. The way to resolve the issue of trust that naturally arises from a lack of a central bank, or any underlying asset, is the concept of the distributed ledger. The value of Bitcoin could not be… Continue Reading...

What Is Causing Inflation

average worker to keep up with the inflationary practices of the central bank of the U.S. This would not cause the prices of everything to rise, as some fear—because really there would be no new money introduced into the system, so inflation should not be an issue just because business profits are more equitably distributed among the company’s workers. The real cause for inflation stems for policies like quantitative easing (QE), which introduced trillions of new dollars into the world. That is why the prices of things have gone up—along with the federal government’s insistence on subsidizing every sector… Continue Reading...

The Communist Manifesto Summary

credit needs to be centralized in the hands of the state through establishment of a central bank with state capital and an exclusive monopoly. Transport and communication should also be centralized in the hands of the state. All the instruments of production and factories needs to be extended, al waste land needs to be cultivated and soil to be improved in line with the common plan. The manifesto further proposes that there needs, to be equal liability for all to work, and an establishment of the industrial and agricultural army. There also needs to be combination of the manufacturing… Continue Reading...

Why Noise Traders Do Not Move Markets

Analysis of “Investor Sentiment, Beta, and the Cost of Equity Capital” In the study by Antoniou, Doukas and Subrahmanyam (2015), the researchers look at CAPM, beta, noise traders, periods of optimism and periods of pessimism to test a number of hypotheses: first, that optimistic times lure noise traders into buying high beta stocks, which causes high beta stocks to be overpriced; Noise traders are defined as “young, single males, who lose the most from investing, and are the most susceptible to overconfidence” (Antoniou et al., 2015, p. 352). This definition is not explicitly given but is rather stated in terms… Continue Reading...

The Gold Coin's Meaning

the 20th century, when so much was set to change. In under two decades, the central bank would be created—the Federal Reserve—which would flush easy credit into the system and spark the Roaring Twenties that would end with a bust in 1929 and lead to the abandonment of the gold standard in 1933 under Roosevelt. The half eagle would suddenly have far more valued then than it had forty years prior—particularly as it was now in demand by Uncle Sam: Americans were required to hand in their gold or face prosecution. Since then, gold has only skyrocketed in price as… Continue Reading...

Leadership and the Issue Of Ethics

disrupted when the Federal Reserve acting as the world’s central bank essentially began buying up the mortgage backed securities that no one wanted and began buying U.S. Treasuries to the tune of trillions of dollars worth in order to calm the markets and get the financial system rolling again. The Fed expanded its balance sheet exponentially and blew asset bubbles across all classes—equities, precious metals, housing, credit, etc. (Huston & Spencer, 2018). It was, in other words, the end of the free market: ever since, it has been nothing but a command economy with the only thing traders worrying… Continue Reading...

What Is the Economy

economic crisis. The Federal Reserve engaged in unconventional monetary policy known as quantitative easing, which saw the central bank creating trillions of dollars out of thin air so as to buy up the mortgage backed securities and treasuries that no one wanted. The Fed stepped in as the buyer of last resort, and all the money it printed went into the economy, propping up the stock market and sending it to all time highs, leading to inflation across various asset classes (from gold to equities to real estate), higher rents, higher food prices, and so on (Heller, 2017). As… Continue Reading...

Tesla and the Global Market

Global Company Report: Tesla, Inc. Introduction: Summary of the Business and Its Industry Tesla, Inc. was launched in 2003 in California as a niche market luxury carmaker that specialized in electric vehicles (EV). The Tesla Roadster was its first product. The Roadster was a high-end EV and not a mass market car. Today, Tesla offers the much more affordable Tesla Model 3, which is a mass-market EV designed for the common man. Its other products include the Tesla Model S and the Tesla Model X. Tesla sells its cars in North America, Europe and in Asia. It has recently obtained… Continue Reading...

Macropoland

policy are: open market operations and controlling the funds rate. Open market operations would allow the central bank to buy treasuries. The central bank would be increasing the money supply by purchasing government debt, and by purchasing government debt it would help to create demand for the debt and thereby keep yields low, which would allow the government to keep borrowing and spending on projects to help stimulate the economy or boos infrastructure or do whatever was required. The central bank could also lower the funds rate, which would allow interest rates to come down across the board, incentivize… Continue Reading...

History Of Populist Movement in America

1. Describe the historical roots of populism The populist movement began in the more rural regions of the United States, during the late 19th century. The movement evolved due to the changing demographics in the nation, and a sense of disenfranchisement and disempowerment among rural residents—particularly those in Midwestern and Western states. Touted as a grassroots movement of the people, populism used rhetoric that slammed political power being centralized in Washington. 2. Farmers essentially started the populist political movement as a means of gaining political and economic power. With industrialists encroaching on the economy, and brokers controlling the prices of… Continue Reading...

The Great Gatsby and Jazz

The Jazz Age and Gatsby F. Scott Fitzgerald’s The Great Gatsby is the great novel of the Lawless Decade—the Roaring Twenties or the Jazz Age, as it was otherwise known. It was a time of easy credit and flowing cash. It was a time of Prohibition, when alcohol had been outlawed and people looking for a good time had to go underground to the speakeasies, where they drank their liquor in hiding. To be human meant to be a criminal, and thus everyone who wanted to have a drink became a scofflaw. The 1920s was the decade of the scofflaw,… Continue Reading...

Impact Of Brexit on Financial Firms

as it has been pointed out in the article, “the  ECB (European central bank) is insisting that banks set up more than mere “empty shells”, in which business is booked with EU27 clients while the real business—and risk—stays in London, outside its purview.” Economic This is an amalgamation of all the factors that affect the profitability of firms and their viability in the long-term. The profitability of financial firms, particularly banks, is likely to experience a roller coaster of sorts going forward. This is particularly the case if the uncertainty over the future of the country’s economy persists and BOE is… Continue Reading...

Fracking

Fracking and Ethics Introduction While “fracking”—the term applied to the practice of hydraulic fracturing of rock to gain access to the oil or gas underground—has been hailed as a revolutionary way for the oil industry to draw oil from previously hard to reach places, there are a variety of ethical issues surrounding the practice (Evensen & Stedman, 2018). Stakeholders in the issue of fracking go beyond those in the oil/gas industry, however. They include people in communities, whose water supply has been contaminated as a result of fracking. They include people whose lives have been changed by fracking due to… Continue Reading...