Commercial and Investment Banking Essay Example | Topics and Well Written Essays - 2500 words

Commercial and Investment Banking - Essay Example Lending relationships, particularly those that are long-term associations make it simpler for small sized organizations to have access to outside funds. Owing to the risky nature of the small firms, it becomes very difficult for them to borrow funds if they lack lending relationships with banks. However, such kind of organizations predictably attempts to get access to further diversified sources of funds, after they have formed long-term lending associations with banks. Thus, it can be stated that the organization’s preceding lending association with a bank enables it to gain admission to the public securities market. Furthermore, the association of the organization with a bank persists to play a crucial role even when the organization is capable of issuing public securities. Nonetheless, when an organization diversifies its sources of funds, it has to face certain consequential drawbacks. The funding diversification restricts the bank’s readiness to assist the organiza tion when it faces financial distress. This restriction in the bank’s flexibility is true even when the organization had taken up only diminutive values of public debt. In spite of everything, it can be conclusively stated that a good lending relationship with a bank augments the probability of fruitful negotiation when an organization encounters financial difficulties (Berlin, 1996). Answer 2 a) Kwan (2004) defines a large bank merger as the amalgamation of the operations of two banks, which are huge in size and the merger provides a large geographic scope to the subsequently merged institute. In the recent years, the large bank mergers have been an indication of the process for creating an extensive nationwide banking franchise. b) The regulatory modifications in the 1990’s have created immense opportunities for the banks to pursue the overseas economies. The banks have benefitted in terms of economies of scale as well as scope. Mergers have enabled the banks to prov ide the number of products and services and as a result, the unit price of production has reduced. Additionally, the expansion had created a circumstance where the shared expenses of providing two corresponding services are not more than the joint expenses of providing the two services separately. c) It is believed that mergers can increase the bank’s capability to diversify risk. Prior studies have implied that geographic spreading out would offer diversification advantages to a banking organization. This can be accomplished in the form decreased portfolio risk on the asset side, in addition to a decline in the funding risk on the liability side. Banks are likely to attain these benefits as it spreads funding actions over a wider geographic region. Furthermore, studies have also indicated that product extension could result in diversification benefits. The benefits would be more distinguished amid the banking as well as the securities activities, while it would be less promi nent in the activities between banking and insurance (Kwan & Laderman, 1999).

Answer the questions Term Paper Example | Topics and Well Written Essays - 1000 words

Answer the questions - Term Paper Example The liberals then were seeking for the expansive role played by the political class. People that shared common interests were seeking for liberal freedoms. During the 18th century, many people were undermining the political arrangements in Europe, in addition to Britain having a gradual expansion on individual rights. The people believed that Governments should serve their citizens, while limiting their powers to natural rights of its citizens and the morality of the law such as the right to acquire property (Mehta, 29). Mehta believes that. in the late 19th century however, liberalism shifted its focus of protecting citizens from governments to using the governments to achieve a meaningful life. The government became a chance to positively shape the human life and society he lives in, only if it was properly used and controlled by the political leadership and other people. Liberals realized that if powerful government institutions were controlled and regulated by people’s instruments. In this case, therefore, true liberation is inevitable. The vast economic growth of many organizations enhanced capitalism, making people believes that Governments would play a major role in helping the citizens to benefit. The liberals now focused on forming labor unions to protect employees’ rights (47). Nationalism is an ideology that believes that a person’s loyalty and devotion to the government is more important than his interest or other groups’ interest. As such, individuals are more inclined towards helping the government to achieve its goals in the expense of individual’s goals. Before the development of nationalism, individuals developed loyalty towards specific leaders and cities. It was evident through the French and American Revolution. After the American and French revolution, nationalism became very crucial and it influenced the World War 1 and 11. Nationalism has helped serve the national interest of a state, which protects the interests of