An analysis of variations in style in comparison to Standard English Essay Example for Free

An analysis of variations in style in comparison to Standard English Essay 1. Introduction As in every language there are many different dialect in British English. It has always been and continues to be a language of dialects. Wherever one goes in England there are very obvious differences between the ways in which people speak in different places. This is often a big shock for people who have been learning Standard English which is the variety of English that is held to be correct in the sense that it shows none of the regional or other variations that are considered by some to be ungrammatical, or non-standard English. Non-English school-kids learn SE at school and expect to understand every English person once they enter the country. But the English they learn at school differs from the language which is being spoken in Britain. Of course, SE is used in the media and by public figures, and therefore it has prestige status and is regarded by many as the most desirable form of the language.1 But the English do not speak like that linguistic reality is different. Not only the words which are being used sometimes differ from Standard English even the grammatical structures vary at times. This work tries to present the differences between Standard English which is being taught at German schools and the dialects which are spoken in England. Altogether these factors might lead to confusing situations at times. German school-kids could hear words in England which they were told not to pronounce in that way when they were learning English at school. Hughes and Trudgill2 speak of two ways of dealing with the problem of native Britons not being able to speak their own language correctly. They point out that for learners it is not relevant weather their hear correct English or not. The problem which their are confronted with is to understand what they hear from the native speakers and which language-features they can adapt into their own speech. The second point they speak of is if that the notion of correctness is not really useful or appropriate in describing the language of native speakers.3 To find those differences I will analyse German English books from a Orientierungsstufe4, literature about dialects in Britain as well as private sources. I will try to analyse the gap between German school English an find possible solutions for that problem. 11 At the beginning of my approach I will be presenting a selection of different accents regarding their regional usage. In the following point I will analyse Standard English which is being taught in German schools and compare these results with the accents mentioned beforehand. After that I will summarize my approaches and try to find explanations as well as possible solutions. 2. The main dialects I want to start off with the presentation of the main dialects of the English language. For this I will adapt the Dialectology of Baugh5 who differentiates between Northern, West Midlands, East Midlands and Southern. In Old English they were divided into Northumbrian, Mercian, West Saxon and Kentish6. Of course there are far more divisions of accents but this would exceed the length of this piece of work. Additionally, I will conclude Cockney7 in my analysis. 2.1. Northern English This dialect is also knows as Geordie8. The Northeast area contains the urban centres of Newcastle, Sunderland, Middlesborough and neighboring areas. Trudgill9 defines some of the best-known characteristics of the modern Northeast pronunciation which include the following. According to him the accent, as we have seen, does not have the diphthongal pronunciations of the long a vowel in made, gate, face that are more typical of the south of England, and the same is true of long o as in boat, road, load. It can be defined as a certain kind of simplification. Instead of the Standard English Combination of two vowels in boat [bà ¯Ã‚ ¿Ã‚ ½ut] only one vowel is being used: [oo] The same phenomenon can be found within the pronunciation of words like made, which are not being pronounced [mà ¯Ã‚ ¿Ã‚ ½id] but simplified [mehd]. Trudgill also points out that words that have al in the spelling are pronounced with a vowel of the type ah, so that all is ahl and walk is wahk. A Geordie-joke makes this difference clear in a funny way: A non-Geordie doctor who asks his patient if he is able to walk makes the patient interprets as a query about work ans replies Wawk! I cannot even wahk yet! 11 The second part of the Northern area, the Lower North and Central North, covers, according to Trudgill, a large area stretching down from Carlisle to Sheffield and covering Cumbria, most of Yorkshire and parts of Lancashire. He points out that this dialect differs from the Northeast by not having ee in very. 10 Another remarkable factor he mentions is that he Central North also contains a sub-area in which an interesting type of consonantal change takes place in certain conditions. What happens is that the voiced consonants b, d, g, v, z and j change to their voiceless counterpart p, t, k, f, s, and ch if they occur immediately before any of these same voiceless consonants.11 The examples E wood goh (He would go) and E woot coom (He would come). They would pronounce the expression I dont know like I doont noo. Another point is that this dialect is quite similar to the accent Indians or Pakistanis have when they talk English. Many of these dialectal features also appear in their accent. These shared features could be analysed in future for the Asian community in Britain is increasing steadily is growing. Which words, expressions are being brought into English through them would be interesting to find out. 2.2. West Midlands The central town for this accent is Liverpool. for the accent is very distinctive for this area called Merseyside. It has been mainly influenced by Irish immigrants during the nineteenth century. Hughes/Trudgill12 describe the Liverpool accent defining several features of which I will be mentioning a few. 1. a) There is no contrast between pairs of words like put and putt, both being pronounced [put]. b) [à ¯Ã‚ ¿Ã‚ ½] occurs in words like dance, daft etc. [] c) Words like book and cook have the vowel [u:] 2. Unlike in other northern urban accents (but in common with Newcastle), the final vowels of words like city and seedy is [i:] 3. A relative infrequency of glottal stop occurs. 4. [h] is usually absent, but is sometimes present (him an her) 5. The suffix -ing is [in] 11 2.3. East Midlands Based on own experience I can say that one of the clearest markers for the East Midland accent can be defined as a kind of parallelism to German which also appear in the Liverpool accent at times. The word bus, for instance, is not being pronounced [bas] but [bus]. Here, the vowel [u] is being pronounced the same way as in German. The same phenomenon can be found in words like. Another marker for East Midland accent is the pronunciation of the vowel combination [oe] like in shoes, where it is being changed to [à ¯Ã‚ ¿Ã‚ ½] [shà ¯Ã‚ ¿Ã‚ ½z]. Speakers in this area may even have short e at the end of words like coffeh13. Trudgill mentions a diagnostic sentence for this area: Veri few cahs mayd it up the long ill.14 2.4. Southern English Some of these dialectal features of Southern English are similar to the welsh accent. Trudgill states that the Bristol speech is famous for the presence in this accent of a phenomenon called the Bristol I. He explains that in the Bristol area, words such as America, India, Diana, Gloria are pronounced with a final I. Undoubtedly, foreigners would be quite confused hearing words like Americal, Indial and Dianal. This feature might be a result of hypercorrection, according to Trudgill.15 In the South the glottal stop is very common as a pronunciation of t which can be found in words like better, water, bet and what. This feature can also be found in Cockney or Midland areas. Trudgill mentions the diagnostic feature of the South are the lack of y in few, which differentiates it from all other English regions except the Northeast, although today h is rapidly being lost.16 He also notes that it a typical factor for East Anglia is the lack of distinction between the vowels of here and there, so that peer sounds like pair, here like hair and deer like dare.17 2.5. Cockney Cockney can be counted as a very special dialect because it can only be found amongst people who live in and around the London area. Let alone the name for this accent is special because it does not refer directly to the region. 11 The term Cockney originally stems from the middles ages where it was applied to an effeminate person, simpleton or a particularly weak man from a town as opposed to a countryman who was regarded as tougher. In the 17th century the term changed and came to mean specifically a Londoner. The six most striking features of Cockney are18: 1. r is pronounced only when followed immediately by a vowel-sound. So, in the demonstration below, no r is pronounced in flowers. (Some New England accents and Southern U.S. accents have this same feature.) 2. h is usually omitted (home in the demonstration words); in self-conscious speech its articulated very strongly. 3. l is pronounced only when a vowel-sound follows (so no l is pronounced in hole, etc.). 4. Voiceless th is often, but not always, pronounced as f (breath, etc.). 5. Voiced th is likewise often but not always pronounced as v (breathe, etc.) This feature is also found in Southern U.S. lower social class speech. 6. The long vowels are all diphthongs, as one can hear from the demonstration words. Notice especially the difference between force etc. (spelled with r followed by a consonant, though the r is not pronounced) and poor etc. (spelled with r not followed by a consonant, though again the r is not pronounced). More examples for this would be: price [proià ¯Ã‚ ¿Ã‚ ½] mother [mawa] little [liou] with a glottal stop in the middle note [no] with a glottal stop at the end bowl [bao] Cockney has another speciality. It consists of a special vocabulary which is called Cockney rhyming slang. It has been evolving in the East End of London since the sixteenth century. It is thought to have originated from the seamen and soldiers who used the London docks, from the Gypsies who arrived in the fifteen hundreds, from the Irish residents and the Jewish faction and from all the other ethnic minorities which have made up the population of the city.19 11 It is said to have started as a way for costermongers20 to communicate without letting their customers know what they were saying. The slang usually consists of two words, e.g. butchers hook = look but sometimes only the first word is used in conversation. For example, someone might say I had a butchers at her barnet and her titfer meaning I had a look at her hair (barnet fair) and her hat (tit for tat). One has to know, though, when to use the whole phrase and when to abbreviate. Another example: Would you Adam and Eve it? I was on me Jack Jones when I saw me old china half inching a whistle from the market. Well, I aint no grass and hes borassic, so I kept me north and south shut. Translation: Would you believe it? I was on my own when I saw my old mate (friend) pinching (stealing) a suit from the market. Well, Im not a nark (informer) and hes skint (got no money, hard up) so I kept my mouth shut. In the Internet a whole dictionary can be found consisting of old and new Rhyming-Slang. The freshest contribution was the expression Becks and Posh for food. Food is also called nosh which rhymes with the nicknames of the famous David and Victoria Beckham, nationwide known as Becks and Posh21. This last example makes it clear that the rhyming slang does not have and economical reasons behind. It is more or less result of playing with words which the English are very fond of (for example in newspaper headlines). Additionally it is of course, the sense of togetherness, a kind of linguistic fellowship by defining a secret language as a code of London residents whereas this point, regarding the high population rate, refers more to small groups of people. 3. Standard English English-teaching in lower-saxony English has the status of a global language nearly everybody applying for a good job needs to prove his or her English skills. The competition is getting harder and harder. This is one of the factors leading to the current discussion whether to introduce English to schoolchildren at an even earlier age then 10. Some primary schools offer this already. Another interesting fact is that more and more schools offer bilingual teaching. The Ricarda-Huch-Schule in Braunschweig, for instance, offers several subjects being taught in English to make the children learn both, biology and English, at once. 11 Like this English finds its way into our life in more and more ways. But coming back to education a problem arises. Of course, children cannot learn every single accent being spoken in England, so that is why there are set forms for the learning process. They are identical to the language understood by the term of Standard English. Different then in Germany there cannot be found any accent-free regions in England. In comparison to that you can find unofficial figures which tell us that Hanover is most likely to be accent-free. Standard English, on the other hand, is more of an indicator for an upper social status, it can be seen as a class-dialect, owing its origin in the main not to geographical but to socio-economic causes. At the end it is quite a thin border between the English which is being taught at foreign schools and the English which is meant to represent poshness. Wakelin22 marks that a distinction must be made between Standard English, which is a dialect in use by educated speakers of English throughout the world, and Received Pronunciation, which is the accent of English usually associated with a higher social or academic background, with the BBC and the professions, and that most commonly taught to students learning English as a foreign language.23 So one has to clearly differentiate between Received Pronunciation (RP) and Standard English (SE). So, why is Standard English so different from the other accents then? Wakelin defines that Standard English is the sort of language used when communicating beyond the family, close friends and acquaintances, whereas dialect is nowadays often kept for intimate circles.24 So it can be seen as the most relevant English accent which can be understood everywhere and is compatible to every region in England. This type of English as being called normal English by Randolph Quirk25 is being taught children and adults all around the world. The following graphic tries to illustrate the violation which arises when both Standard English and regional accents clash. 11 People with different mother tongues learn English as their first or as another foreign language. They all refer to the same Vocabulary, use the same grammar and expressions which have been set by the Standard English-norm. 3.1. Comparison to English accents The chapter of English Sounds prepares the learning schoolchildren with the explanation that English words are often being pronounced differently than they are written and defines some words by using the phonetical alphabet.26 I want to show the differences of Standard English and English accents by directly comparing several words to each other. Referring to the pronunciation I want to compare the word but which is being pronounced with a short [u] in South England and with a long [oo] in Northern England27 whereas schoolchildren learn to pronounce the word but with an [28? There is one area of England where the y sound has been lost as a result of a historical process. This can be found in words like beauty [booty], music [moosic] and few [foo]29 and is probably going to spread more with the years. 11 Whereas in foreign schools it is still being taught that music should be pronounced [mju:zik]30 and beautiful [bju:t?f?l]31. The pronunciation of milk also differs. Camden Market teaches the children to pronounce it [mà ¯Ã‚ ¿Ã‚ ½lk]32 but the pronunciation according to the modern dialectology says that in a large area of southeastern England this consonant has aquired a short oo-like vowel in fron of it, or, especially in London itself, has disappeared altogether, leaving only the oo behind.33 So in this case the word milk is being pronounced [mioolk] which is being defined as a quite a recent change but spreading rapidly through the country. Now shifting over to the less problematical field of lexical variations it can be said that there are several words with the same meaning but regionally fixed. Words like the Standard English term gymshoe are known as the general term but in England they have more expressions for that. In the southern region they are called plimsolls, in middle English they are called pumps and people living in and around Newcastle talk about sandshoes.34 The word ear has also has different regional variations. In the North they talk about lugs and around Nottinghamshire one can also hear them talking about tabs. The Eastern part of England also might use lug. Standard English, of course, only teaches ear. 4. Summary On the whole it there is a big gap to be found between the English which is being taught in schools and the English which is being spoken in England. My analysis makes it quite clear that several difficulties occur when a person who has been learning English for five years and thinks he is now prepared for the linguistic challenge in England. The reality is different, as my paper shows. There is nearly nobody who speaks accent-free English but on the other hand Standard English mixes into the accents more and more. The loss of pure dialects is being mourned about in the whole country. The dialects are no longer pure, if they ever were, but contain a large admixture of Standard English or pseudo-Standard forms, as Wakelin35 mentions. The main reason for this development might be the result of the following problem: 11 In England is that people often get discriminated because of their language. The dialect is a clear social marker these days. Many countries have problem with racism, but in England people sometimes get discriminated against if they sound different. For example: A Scouse accent refers to a very rough area and there are chances are that the speaker is a thief A Posh accent: If people talk like this then they are supposedly educated, and can be trusted. Others would think your a rich person, and that your stuck up and you went to a boarding school. A Brummie accent: If a person speaks like this, then chances are that people think he is stupid. A Geordie accent: For some reason, the geordie accent is more comforting to southerners in England out of all the northern accents. Even though a Geordie can live in just as much a rough area, than a scouser if not rougher. A Yorkshire accent: There is a saying about this dialect called Yorkshire born, yorkshire bread, thick in the arm and thick in the head? A Cornish accent: If somebody talks like this most people think they are a farmer. The significance of accents and their cultural and social associations is well represented in films and on television in Britain. The critically acclaimed 1964 file My fair Lady based on George Bernard Shaws 1912 play, Pygmalion is often referenced in linguistic discussions as a example of how social class and accent were, and are still, inextricably linked in Britain. Over the past years, numerous television series have also provided viewers with a glimpse of the lives and accents of the Cockney population of London. The Cockney English section talks more about the current, very popular long running television series EastEnders. This opposes my supposition that Standard English might not be the right form to teach people English or should only form the basis of the linguistic education. The fact that the dialects are slowly dying and Standard English is spreading all over the world questions this. Additionally, more and more immigrants from mainly the Asian region bring in a new Standard English which I have been mentioning in point 2.1. At the end, I would say that English language teaching should be more concerned about real life and the real speech avoiding throwing the young learners into a cold pool when they enter the country. 11 A possible solution for this could be to strengthen the bonds of international relations between schools. Pen-friendships and school-exchanges could provide the basis of a more reality-based teaching which would undoubtedly also have the effect of arousing the childrens enthusiasm of learning English. 5. Literature Baugh, A.C.: A History of the English Language, p. 235 Davis, Lawrence M.: English Dialectology. Alabama/USA: 1983, p. 8 Edelhoff, Christoph (Hrg.): Camden Market. Hannover: 1998, p. 146 Hughes, Arthur and Trudgill, Peter: English Accents and Dialects, London: 1996. p. 1 Trudgill, Peter: The dialects of England. Oxford: 1990, p. 51 Wakelin, Martyn F.: English Dialects. An Introduction. London: 1977, p. 5 Quirk, Randolph: The Use of English. London: 1962, p. 95 Internet: http://www.cockneyrhymingslang.co.uk/ http://www.derek.co.uk/cockney.htm http://www.geordie.org.uk/ http://www.phespirit.info/cockney/ http://www.usingenglish.com/glossary/standard-english.html 1http://www.usingenglish.com/glossary/standard-english.html 2Hughes, Arthur and Trudgill, Peter: English Accents and Dialects. London: 1996, p. 1 3s. a. 4Orientierungsstufe Westhagen/Wolfsburg 5Baugh, A.C.: A History of the English Language, p. 235 6Davis, Lawrence M.: English Dialectology. Alabama/USA: 1983, p. 8 7Most common accent in and around London 8http://www.geordie.org.uk/ 9Trudgill, Peter: The dialects of England. Oxford: 1990, p. 67 10Trudgill, Peter: The dialects of England. Oxford: 1990, p. 67 11see above 12Hughes, Arthur and Trudgill, Peter: English Accents and Dialects. New York (1996), p. 92 13Trudgill, Peter: The dialects of England. Oxford: 1990, p. 71 14see above, p. 72 15see above, p. 73 16see above, p. 72 17see above, p. 74 18http://www.derek.co.uk/cockney.htm 19http://www.phespirit.info/cockney/ 20= street and market sellers 21http://www.cockneyrhymingslang.co.uk/ 22Wakelin, Martyn F.: English Dialects. An Introduction. London: 1977 23Wakelin, Martyn F.: English Dialects. An Introduction. London: 1977, p. 5 24Wakelin, Martyn F.: English Dialects. An Introduction. London: 1977, p. 5 25Quirk, Randolph: The Use of English. London: 1962, p. 95 26Edelhoff, Christoph (Hrg.): Camden Market. Hannover: 1998, p. 146 27Trudgill, Peter: The dialects of England. Oxford: 1990, p. 51 28Edelhoff, Christoph (Hrg.): Camden Market. Hannover: 1998, p. 146 29Trudgill, Peter: The dialects of England. Oxford: 1990, p. 57 30Edelhoff, Christoph (Hrg.): Camden Market. Hannover: 1998, p. 179 31see above, p. 173 32see above, p. 178 33Trudgill, Peter: The dialects of England. Oxford: 1990, p. 60 34see above, p. 102 35Wakelin, Martyn F.: English Dialects. An Introduction. London: 1977, p. 5

The Unexamined Life Is Not Worth Living | Discuss

The Unexamined Life Is Not Worth Living | Discuss The unexamined life is not worth living (Socrates). The inquiry performed by those endowed with a rational element, consists of attaining an end towards which this inquiry directs itself towards. The life of inquiry is that experienced by human beings and not beasts; since beasts do not desire in a manner that seeks fulfillment outside of a bodily sense but rather live according to instincts and methods that allow for the preservation of their species. This examination or inquiry begins with the desire of attaining some effect produced by an object or perhaps the object itself; although the end in question may differ, the components that compel one to act in realization of the end are the same: action stems from desire which empowers a choice. A choice is a deliberate desire and is followed by a contemplation of the means that would direct the search towards its desired end. A commonly desired end by all of mankind is that of knowledge, acquaintance with facts, truths, or principles stemming from an investigation. One elicits knowledge from a source which is discovered through an investigation in which the vestibule for this inquiry as well as that which produces a result becomes the science. Science allows for the examination of truths and knowledge under a particular form, whether it be experiential or perhaps in an a priori manner. In philosophy as well as many other areas that involve inquiry and pursuit of such ends, the role of science makes possible the study of all that exists, because whatever we seek in existence has truth in that it exists. That which does not exist may still be desired and produced but does not become discernable by scientific methods and exploration. Rather, it occurs as a distortion of a truth that does in fact owe its existence to an efficient cause. In order to conduct a meaningful and complete inquiry by use of a scientific approach, the sources of truth must not be mistaken for those which may provide some good for a temporary fulfillment as such misstep results in a deviation from knowledge and renders an individual restless since they cannot discern the falsehood contained in such an object which seeks to mirror the image of something greater. This new knowledge acquired is pernicious in that it has been attained not through an investigation in respect to a proper science but rather it has occurred under its pretensions. One may readily ask oneself what is the difference between a true scientific endeavor and that which falls under pretensions? Both of these endeavors begin with the same root of aspiration in which one seeks to expand the realm of knowledge which is contained in the mind, but the pretension occurs when one seeks to gain knowledge in order to gain some sort of appraisal or another effect. Although appraisal i s a response that is merited after hard labor, ones pride may hinder the actual knowledge that can be gained from the object. Secondly, one who searches for the truths scientifically in a pretentious manner is not actively engaging in this search but assumes that nature holds the answers and therefore does not compel nature to answer the questions a man of interest would have. Man in this respect chooses to take the answer provided to him. This knowledge gained is superficial and those who speak of it speak without knowledge, they loquaciously speak about its content and perceive to understand its form but in fact have not united both for a complete understanding. Although all philosophers and other individuals agree that true knowledge exists, many disagree on its nature and how it can be attained. David Hume and many other empiricists believe that the source of any knowledge that a being may have comes about through his/her experience with objects of existence. These objects are perceived by human beings who create ideas after having had these objects impress themselves upon the facilities which make sensory experience and its translation possible. Other thinkers such as Immanuel Kant and Saint Augustine do not make such an emphasis on human experience but rather agree that humans posses forms of understanding with in themselves so that they may be able to acknowledge the existence everything outside of themselves. Experience does in fact relay information to beings about the earthly life but can any other sort of concept lying outside of this realm be known? Can it be made known through the use of human innovations or does it require a wisd om and spiritual intensity that only a select few posses? Mankind has been compelled by his own physical existence as well as that of the physical world that exists around him to ask questions concerning his own existence and of its cause. In this journey one may not gain certainty, since human beings have not come into direct contact with its efficient cause. Human beings have sought ways to improve technology and other materials so that valuable information about their object in question may be learned which may lead them to finding certainty. Through this desire and ability to create and conduct such an investigation, humans have learned to conduct and at times manipulate the laws of nature in order to gain more information about the world they live in. Through Saint Augustines Confessions, the reader witnesses his struggle against the worldly things that sought to bring him asunder, and his quest for truth and complete knowledge. This quest for knowledge although it began in the physical world, places its end in the heavenly realm, where God can be found. The source of the knowledge that Saint Augustine searches for would encompass methods of investigation that he has not been familiar with but ensures that his reason is purified and it does not intend to expand it, and would keep our reason free from errors (Kant 24). Saint Augustine drew knowledge about himself and the physical world by introspection, looking inward and reflecting about oneself in context with everything else. Although this may be perceived as quite boastful and an overly confident activity from human beings, this is not done in the same manner that Rene Descartes did. Conversely, Saint Augustine came to understand that he is limited and lacking in the being which is possessed in perfection, understood that he was created by Him and through his decree all things that exist were made possible. In coming to such an understanding of the Necess ary Unconditional who is the cause of the existence of all else, he admitted human ignorance and praised the enigmatic nature of God. God needed no proof in the manner that humans proved the existence of other material things but rather contained in Him a self evident truth that radiates to those who sense with the mind and not the eye which is deceptive and creates illusory images if they are perceived as the origin of knowledge. He who believes in good is moved to attribute other forms of existence to such a creator, and Saint Augustine believed that this was as much that human reason unaided by revelation can come to know about the existence of God. Although this may seem as though Saint Augustine has regressed in his possession or amount of items which he has sustained as objects of his knowledge, the education which he has received provided perversions of the love that should be directed towards the Creator rather than things such as rhetoric, arithmetic and such. The love that one has for knowledge is the same that one has for God since God is the source of truths and all that exists; however, pursuing things of the worldly realm is an empty pursuit for the things that exist do not contain him. The love expressed for these transient objects imitates that which is reserved for its expression with God and its limitless impression causes injurious effects to the one who seeks them: this love runs rampant without fulfillment and consumes man in an infectious manner leaving man to recover from the malady of misery that follows after. This friendship with the world is deceptive and perversely jealous in that it prevents man from seeing his proper end in relation to his Creator, it seduces the senses until one discovers the impurities contained in the physical world. The manner in which he previously sought to prove the existence of an entity that cannot be described in words, understood by our limited capacity, nor imagined with our senses, was a manner that pulled him further from the source of truth and closer to the sources of heretical beliefs and sects which believed greatly in human power of reason. Under Saint Augustines confessional memoir, he abandons all sorts of superficial knowledge in search of pure knowledge which leads one not astray but fills the emptiness experienced when one places faith in fleeting objects. This kind of intellectual and spiritual labor requires that the mind be prepared in order to find truth, the best way to do such is by way of introspection which contemplates using the rational element which we have been gifted with and not our sense which provide limited understanding. Three crucial elements in the study of metaphysics and theology as well have come together in Saint Augustines pursuit, the source of knowl edge, the existence of God, and the role of science. These crucial elements provide the best proof possible for the existence of God which cannot be provided through the use of human innovations like technology because the material cannot encompass or comprehend the immaterial which exists outside the constrictions of time and space. The best existence comes not from the ability to prove him through the use of words, but it requires that one agree with the law of cause and effect and acknowledge that the modes of investigation conducted by man is only befitting to things of the physical world. God does not need to be proven for he is. One must possess faith so that he may come to acknowledge and attribute all that exists to Him. He who is certain and stable does not need to be secured by conducting a scientific investigation but rather it is the shaky human existence which needs this security to prove its existence and its purpose. The sciences, which derive its nature yet again from the Principal Cause, are intended to come to an adequate understanding of the world that surrounds humans and is not to be taken out of that context for such an action is a misuse of a gift which is worthless if not attributed to its original creator and not to man who also owes his existence to God. Man participates in this uncondit ional knowledge not upon the recognition of the existence of the Supremely Perfect Being, but rather reason requires the aid of God himself which must make an impression upon the individual who engages his mind in this endeavor. The possibility of knowledge about God occurs not in this world but occurs after ones end has been fulfilled in the physical realm and it occurs through the doctrine of the Beatific Vision which is upheld by many devout believers and instructors of the faith. The best proof of the existence of God occurs through an intimate and personal experience and is also found in the words of Saint Augustine in his Confessions. This source of evidence in regards to Gods existence is relative and faces an obstacle to prove itself to those who doubt that the existence of things outside of us can be definitively proven. Although many appreciate and admire the zeal and devotion Saint such an entity which he referred to as God, it is not a sufficient way to prove Gods existence according to thinkers like Kant who believe that à ¢Ã¢â€š ¬Ã‚ ¦the required proof must show we have experience, and not merely imagination of outer things; and this it would seem, cannot be achieved save by proof that even our inner experienceà ¢Ã¢â€š ¬Ã‚ ¦.is possible only on the assumption of outer experience(Kant 245). Although Kant in the Critique of Pure Reason attempts to save metaphysics from the destructive powers of skeptics like David Hume, he does not find sufficient proof for the existence of God; rather through his scientific inquiry, he establishes the proper role of human reason in the phenomena which seeks to extend its boundaries towards the noumena. Things that exist in the noumena are perfect ideas and concepts which are contained in the forms of understanding so that a human being recognizes the concept of things such as duty from within, but God himself and what human beings has fabricated to describe the First Cause is not natural to the noumena. Therefore the existence of God per se is not so much grounded in that he is God but rather in the most perfect concepts and ideas. The existence of God cannot be proven in that manner of introspection according to Kant. Many believers and magistrates in the Christian faith believe that human beings come to know about God, although in a limited sense, through their participation in the eternal laws, which is called the natural law or conscience which is imprinted in them. Through this participation one comes to know about the moral laws and attributes the strict adherence to such laws being worthy of heavenly compensation. This belief also follows the principle of cause and effect but to Kant this is not sufficient and the contingence of a perfect unconditional on a conditional undermines the perfection and absolute quality that it possesses. In making such a connection, the existence of a so called God is undermined in that because he is only recognized through the moral law and in order for the existence of God to exist in a perfect manner it cannot have a dependence on anything else for that it is chief and final needing no additions or supplementation. Like Saint Augustine, Immanuel Kant believed that the content of the experience resulted in erroneous conceptions of certainty. Throughout the Critique of Pure Reason, Kant properly defines which subject matters fall under the category of a science, a study that is secure and in by no means pretentious, and examines the nature of knowledge which is comprised of three important components: understanding, judgment, and reason. Kants endeavor in the Critique of Pure Reason equaled that of Saint Augustine, he sought to prove that we can have certainty in some aspects but not in others. Although their endeavors were similar in their quest, the conclusions that would be formed about the basis of knowledge in respect to that of God, who exists in a supernatural realm, would differ so much so on the basis of the power accredited to reason by both of these great thinkers. Certainty can be found in the form of reason itself and not in the content of experience which is subject to changes and therefore fail to be reliable sources. The content of experience belongs to the phenomena whereas the concepts and ideas exist in the noumena. The forms of understanding can be analyzed, which we bring to each and every concept in order to come to certainty which produced by the mind in a logical sense and does not deal with the specific content of all experience. The mind analyzes concepts and ideas which form the basis for experiences. For example, the mind, without reference to experience can think of the law of cause and effect and then find examples which fit such laws. Since this has been done independent of experience, it is natural for the mind to think that every effect derives its occurrence from a cause which is the effect to yet another cause until one understands that a singular cause is responsible for this linear progression. In this respect, this is all that can be known about the First Cause by human beings because of the limitations that human reason comes across. Human beings have been given the power to explore within the phenomena and assert this claim: that the noumena does in fact exist but we cannot come closer to understanding in so much that it relates to the necessity of the things that exist in that realm. In this sense, the science which entails the study of God existence in the noumena as he is understood by Christians has yet to become secure because of the methods used, according to what Kant defines as a science in the Critique of Pure Reason. Although many are moved to believe that the Efficient Cause contains all the attributes described in the Bible and in the various monotheistic religions as well, humans are motivated to think of these qualities such as omnipotence, benevolence, and omniscience because they desire to do so. These desires to describe the Supreme Being in terms that describe the qualities of a human beings personality, character, and such arises from the need or want to identify and comprehend that which has been described as limitless yet fulfilling but both of these thinkers admit that human beings cannot come to such knowledge, either on their own or at all. Works Cited Page Kant, Immanuel. Critique of Pure Reason

Pakistan Commercial Banks Risk Management

Pakistan Commercial Banks Risk Management ABSTRACT The agreement on international banking regulations dealing with how the banks handle the risk, the Basel Accord mainly focuses on the credit risk; according the Basel accord the bank assets divided into five main categories according to how they are risky. The five main categories are as (1) is assets without risk means 0% risk weighted, second one is 10% risk weighted, 3rd is 20% weighted, 4th is 50% weighted and last one is 100% weighted. When the banks perform international transactions they are required according the Basel Accord to hold assets minimum 8% aggregated risk according the Basel 1. The Basel 1 was written in 1988 by the Basel committee on banking supervision. All Banks of G-10 countries have try to implement this accord since the early 1990s. Now a days it is considered largely outdated and Basel committee working on Basel 1 to changing process in the shape of Basel II. This is also called Basel I accord. The document Basel I Capital Accord mainly designs to evaluate the capital in relation with the credit risk, and also the risk that can be a cause of losses in which the risk will occur if the party fail or unable to fulfill the obligations. It is mainly focus on the risk increasing modeling research process that is improvement toward the risk increasing research mode; however, it is over simplified calculations, and also classifications that have been simultaneously called for its disappearance, but the improvement in the shape of the Basel II Capital Accord and also other further agreements that are the sign for the continuously refinement for the risk and capital in the banking sector. Nevertheless, the document Basel I accords, will remain the first international instrument that evaluate the importance of risk with the relationship to capital, and also will remain as a milestone in the banking sector like finance and banking history. This study is mainly related to the risk management practices being followed by the commercial Banks in Pakistan. The questionnaire is used as a main tool to collect primary data and check the extent to which the risk management practices are being carried upon by the commercial banks in Pakistan. The six important aspects of risk management process are categorized as one dependent and five explanatory variables. This study aims to investigate the awareness about risk management practices within the banking sector of Pakistan. This study is comprised of data collected through both, primary as well as secondary sources. The purpose of using primary source data is to check the extent to which different risk management practices have been followed by the commercial banks in Pakistan. Primary data is collected through the use of a questionnaire. The questionnaire comprises a number of statements under one macro statement. It includes Risk Management Practices (RMP) as the dependent varia ble, and different aspects of risk management as the independent or explanatory variables. Whereas, the objective to use secondary data is to link the risk weighted Capital Adequacy Ratio to the different financial indicators of the commercial banks that are used to measure their soundness. CHAPTER 2 LITERATURE REVIEW Risk management practices by the Commercial Banks Within the last few years, a number of studies have provided the discipline into the practice of risk management within the corporate and banking sector. An insight of related studies is as follows: Amran, et al. (2009), this article mention the possible availability of risk exposà © in the annual reports of the Malaysian companies. The study was aimed to empirically test the characteristics of the sampled companies. And also the level of risk faced by Malaysian companies with the disclosure made was also assessed and compared. The findings of the research revealed that the strategic risk came on the top, followed by the operations and empowerment risks being disclosed by the selected companies. The regression analysis proved significantly that size of the companies did matter. The stakeholder theory explains well this finding by stating that As company grows bigger, it will have a large pool of stakeholders, who would be interested in knowing the affairs of the company. The extent of risk disclosure was also found to be influenced by the nature of industry. As explored within this study, infrastructure and technology industries influenced the companies to have more risk inform ation disclosed. Hassan, A. (2009), made a study Risk Management Practices of Islamic Banks of Brunei Darussalam to assess the degree to which the Islamic banks in Brunei Darussalam implemented risk management practices and carried them out thoroughly by using different techniques to deal with various kinds of risks. The results of the study showed that, like the conventional banking system, Islamic banking was also subjected to a variety of risks due to the unique range of offered products in addition to conventional products. The results showed that there was a remarkable understanding of risk and risk management by the staff working in the Islamic Banks of Brunei Darussalam, which showed their ability to pave their way towards successful risk management. The major risks that were faced by Brunei banks that was the Foreign exchange risk as well as credit risk and also operating risk. For the analysis regression model was used to explain the results which shown that the Risk Identification, or Risk Assessment and Analysis were also the most uncontrollable variables and the Islamic banks in Brunei needed to give more attention to those variables to make their Risk Management Practices more effective by understanding the true application of Basel-II Accord to improve the efficiency of Islamic Bank’s risk management systems. Al-Tamimi (2008) studied the relationship among the readiness of implementing Basel II Accord and resources needed for its implementation in UAE banks. Results of the research revealed that the banks in UAE were aware of the benefits, impact and challenges associated in the implementation of Basel II Accord. However, the research did not confirm any positive relationship between UAE banks readiness for the implementation of Basel II and impact of the implementation. The relationship between readiness and anticipated cost of implementation was also not confirmed. No significant difference was found in the level of Basel II Accord’s preparation between the UAE national and foreign banks. It was concluded that there was a significant difference in the level of the UAE banks Basel II based on employees education level. The results supported the importance of education level needed for the implementation of Basel II Accord. Al-Tamimi and Al- Mazrooei (2007) provide the comprehensive study relating of Bank’s Risk Management of UAE National and Foreign Banks. The outcome of this research is to find out that there are three most important types of risks facing the UAE commercial banks that were foreign exchange risk, 2nd one followed by credit risk and 3rd one is operating risk. And the result also found that the bank of UAE were also efficiently handle the risk; but the variables like as the risk identification, risk assessment and also analysis proved that the banks are more efficient in risk management process. Finally, the outcome of the result showed that there was a huge difference if we compare the UAE National banks and foreign Banks in the practicing the risk assessment and risk analysis as well as risk monitoring and risk controlling process. Koziol and Lawrenz (2008) provided a study in which they assessed the risk of bank failures. They said that assessing the risk related to bank failures is the paramount concern of bank regulations. They argued that in order to assess the default risk of a bank, it is important considering its financing decisions as an endogenous dynamic process. The research study provided a continuous-time model, where banks chose the deposit volume in order to trade off the benefits of earning deposit premiums against the costs that would occur at future capital structure adjustments. Major findings suggested that the dynamic endogenous financing decision introduced an important self-regulation mechanism. Basel Core Principles and Bank Risk: Does Compliance Matter? The recent financial crisis has sparked widespread calls for reforms of regulation and supervision. The initial reaction to the crisis was one of disbelief: how could such extensive financial distress emerge in countries where the supervision of financial risk had been thought to be the best in the world? Indeed, the regulatory standards and protocols of the advanced countries at the center of the financial storm were being emulated worldwide through the progressive adoption of the international Basel capital standards and the Basel Core Principles for Effective Bank Supervision (BCPs). The crisis exposed significant weaknesses in the financial system regulatory and supervisory framework worldwide, and has spawned a growing debate about the role these weaknesses may have played in causing and propagating the crisis. As a result, reform of regulation and supervision is a top priority for policymakers, and many countries are working to upgrade their frameworks. But what should the reforms focus on? What constitutes good regulation and supervision? Which elements are most important for ensuring bank soundness? What should be the scope of regulation? To date, the best practices in supervision and regulation have been embodied by the BCPs. These principles were issued in 1997 by the Basel Committee on Bank Supervision, comprising representatives from bank supervisory agencies from advanced countries. Since then, most countries in the world have stated their intent to adopt and comply with the BCPs, making them a global standard for bank regulators. Importantly, since 1999, the IMF and the World Bank have conducted evaluations of countries’ compliance with these principles, mainly within their joint Financial Sector Assessment program (FSAP). The assessments are conducted according to a standardized methodology developed by the Basel Committee and therefore provide a unique source of information about the quality of supervision and regulation around the world. Hence the international community has made significant investments in developing these principles, encouraging their wide-spread adoption, and assessing progress with their compliance. In light of the recent crisis and the resulting skepticism about the effectiveness of existing approaches to regulation and supervision, it is natural to ask if compliance with the global standard of good regulation is associated with bank soundness. Specifically, they test whether better compliance with BCPs is associated with safer banks. They also look at whether compliance with different elements of the BCP framework is more closely associated with bank soundness to identify if there are specific areas which would help prioritize reform efforts to improve supervision. The paper extends their previous work (Demirgà ¼Ãƒ §-Kunt, Detragiache and Tressel, 2008: henceforth DDT), in which they showed that banks receive more favorable financial strength ratings from Moody’s in countries with better compliance with BCPs related to information provision, while compliance with other principles does not affect ratings significantly. The policy message from this study was that countries should give priority to strengthening regulation and regulation in the area of information provision (both to the market and to supervisors) relative to other areas covered by the core principles. Using rating information to proxy bank risk significantly limited the sample size in that study, making it necessary to exclude many smaller banks and many banks from lower income countries. Furthermore, after the recent crisis, the credibility of credit ratings as indicators of bank risk has also diminished, questioning the merit of using these ratings in the analysis. In this paper, they explore whether BCP compliance affects bank soundness, but instead of using ratings they capture bank soundness using the Z-score, which is the number of standard deviations by which bank returns have to fall to wipe out bank equity (Boyd and Runkle, 1993). Because they can construct Z-scores using just accounting information, and because assessment data for additional countries have also become available, they can extend the sample size considerably relative to our earlier study, to over 3,000 banks from 86 countries (compared to 200 banks from 37 countries analyzed in DDT). This is not just a simple increase in sample size: the sample of rated banks was not a representative sample, because rated banks tend to be larger, more internationally active, and more likely to adhere to international accounting standards. From a policy point of view, they would like to investigate the effect of BCP compliance on all types of banks operating in different country circumstan ces, rather than a select subgroup. In this study, the richer sample allows us to explore whether the relationship between BCPs and bank soundness varies across different types of banks. All in all, they do not find support for the hypothesis that better compliance with BCPs results in sounder banks as measured by Z-scores. This result holds after controlling for the macroeconomic environment, institutional quality, and bank characteristics. They also fail to find a significant relationship when they consider different samples, such a sample of rated banks only, a sample including only commercial banks, and samples including only the largest financial institutions. In an additional test, they calculate aggregate Z-scores at the country level to try to capture the stability of the system as a while rather than that of individual banks, but also this measure of soundness is not significantly related to overall BCP compliance. When they explore the relationship between soundness and compliance with specific groups of principles, which refer to separate areas of prudential supervision and regulation, they continue to find no evidence that good compliance is related to im proved soundness. If anything, they find that stronger compliance with principles related to the power of supervisors to license banks and regulate market structure are associated with riskier banks. While these results cast doubts on whether international efforts to improve financial regulation and supervision should continue to place a strong emphasis on BCPs, a number of caveats are in order. First, insignificant results may simply indicate that accounting-based measures, such as Zscores, do not adequately capture bank soundness, especially for small banks and in low income countries, where accounting standards tend to be poor. They may also reflect low quality in the assessment of BCP compliance, especially in countries where laws and regulations on the books may carry little weight. It might be also argued that assessments are not comparable across countries, despite the best efforts of expert supervisors and internal reviewing teams at the IMF and the World Bank to ensure a uniform methodology and uniform standards. If their negative results arise because compliance assessments do not reflect reality or are not comparable across countries, then at a minimum they should lead us to question the value of these assessments in ensuring that supervision measures up to global standards. Review of related literature of this paper is as follows: Defining good regulatory and supervisory practices is a difficult and complicated task. Barth, Caprio, and Levine (2001, 2004, and 2006) were the first to compile and analyze an extensive database on banking sector laws and regulations using various surveys of regulators around the world, and to study the relationship between alternative regulatory strategies and outcomes. This research finds that regulatory approaches that facilitate private sector monitoring of banks (such as disclosure of reliable, comprehensive and timely information) and strengthen incentives for greater market monitoring (for example by limiting deposit insurance) improve bank performance and stability. In contrast, boosting official supervisory oversight and disciplinary powers and tightening capital standards does not lead to banking sector development, nor does it improve bank efficiency, reduce corruption in lending, or lower banking system fragility. They interpret their findings as a challenge to the Basel Committee’s influential approach to bank regulation which heavily emphasizes ca pital and official supervision. An important limitation of this type of survey is that it mainly captures rules and regulations that are on the books rather than actual implementation. IMF and the World Bank financial sector assessments have often found implementation to be lacking, particularly in low income countries, so that cross-country comparisons of what is on the books may hide substantial variation in the quality of supervision and regulation. BCP assessments have the advantage of taking into account implementation. Of course, assessing how rules and regulations are implemented and enforced in practice is not an exact science, and individual assessments may be influenced by factors such as the assessors’ experience and the regulatory culture they are most familiar with. Nevertheless, although it is difficult to eliminate subjectivity completely, assessments are based on a standardized methodology and are carried out by experienced international assessors with broad c ountry experience. Cihak and Tieman (2008) analyze the quality of financial sector regulation and supervision using both Barth, Caprio and Levine’s survey data and BCP assessments. They find that regulation and supervision in high-income countries is generally of higher quality than in lower income countries. They also note that the correlation between survey data and BCP data tend to be low, always less than 50 percent and in many cases in the 20-30 percent range, suggesting that taking into account implementation may indeed make an important difference. A number of papers also use BCP assessments to study bank regulation and performance. Sundararajan, Marston, and Basu (2001) use a sample of 25 countries to examine the relationship between an overall index of BCP compliance and two indicators of bank soundness: nonperforming loans (NPLs) and loan spreads. They find BCP compliance not to be a significant determinant of these measures of soundness. Podpiera (2004) extends the set of countries and finds that better BCP compliance lowers NPLs. Das et al. (2005) relates bank soundness to a broader concept of regulatory governance, which encompasses compliance with the BCPs as well as compliance with standards and codes for monetary and financial policies. Better regulatory governance is found to be associated with sounder banks, particularly in countries with better institutions. In this paper, as already discussed they rely on the Z-score to measure bank soundness. While the Z-score has its limitations, they believe it is an improvement over measures used in previous studies, namely NPLs, loan spreads, interest margins, and capital adequacy. Because different countries have different reporting rules, NPLs are notoriously difficult to compare across countries. On the other hand, loan spreads or interest margins and capitalization are affected by a variety of forces other than fragility, such as market structure, differences in risk-free interest rates and operating costs, and varying capital regulation. Thus, cross-country comparability is a serious issue. In contrast with ratings, Z-scores do not rely on the subjective judgment of rating agencies’ analysts. Results from the baseline regression, relating bank soundness measured by the Z-score to the degree of compliance with the BCPs. In the sample including all countries, the Zscore is higher, indicating a sounder bank, for banks with lower operating costs in countries with higher GDP per capita. Also, non-commercial banks tend to have higher Z-scores, while the other control variables are not significant. The coefficient of the BCP compliance index is positive but not significant. If they exclude Japanese banks, which account for over 20 percent of the sample, the fit of the model improves markedly (the R-squared increases from 10 percent to 19 percent) and the coefficients of many regressors change substantially.12 This suggests that the variables explaining the Z-score of Japanese banks may be somewhat different than for the rest of the sample, perhaps because of the lingering effects of Japan’s prolonged banking crisis on bank balance sheets. For example, in the sample excluding Japan inflation and the rule of law index are significant (with the expected coefficients), while GDP per capita is not (though the coefficient remains positive). Also, banks with a higher ratio of net loans to assets have higher Z-scores, perhaps because Basel regulation mandating minimum levels of risk-adjustment capital forces these banks to hold more equity. Also, in the sample excluding Japan larger banks have lower Z-scores, likely because they tend to hold less capital than smaller banks. Despite these differences, the coefficient of the BCP compliance index remains insignificantly different from zero also in the sample without Japanese banks. The same is true when they add to the regression additional macro controls, such as exchange rate appreciation, private credit, or the sovereign rating. In the regressions, they explore how the relationship between BCP compliance and bank soundness changes if they alter the sample composition to include various categories of financial institutions to explore whether BCP compliance may affect soundness for alternative types of banks. All these results refer to the sample excluding Japan, so that th e overrepresentation of Japanese banks does not distort the results. The first exercise is to examine the widest sample possible, i.e. one that includes investment banks/securities houses, medium and long-term credit banks, nonbank credit institutions, and specialized government credit institutions. These are institutions that in most countries are unlikely to fall under the perimeter of bank regulation and supervision, so they have excluded them from the baseline sample. When they include them, the sample size grows by 25 percent, but the main regression results are unchanged. In particular, bank soundness is not significantly affected by compliance with the BCPs. If they restrict the sample to commercial banks only, thereby losing about 300 banks compared to the baseline sample, once again they find that regression results remain very close to the baseline. When they focus only on banks rated by Moody’s, as in our earlier work, the sample shrinks considerably (to just over 300 banks), and the coefficient of the BCP compliance index becomes positive and significant, albeit only at the 10 percent confidence level. Thus, BCP compliance seems to have some positive effect on the soundness of this specific group of banks. To explore this issue further, they ask whether this result is driven by the fact that rated banks are larger banks. To do so, they consider two alternative samples: the first includes the largest 10 percent of banks within each country and the second includes the largest 20 percent of banks in the entire sample. In both cases, the BCP compliance index has an insignificant coefficient, as in the baseline sample. The BCP compliance index is the weighted sum of compliance scores for several individual chapters of the Core Principles. Could it be that, even though overall compliance does not seem to matter for bank soundness, some aspects of the Core Principles might be relevant? In fact, it may be possible that the overall index is not significant because of offsetting effects of its different components. In fact, in our previous study of Moody’s ratings, they found that, although overall compliance did not seem to matter, higher financial strength ratings were associated with better compliance with principles related to information provision to supervisors. They address this question by re-running the baseline regressions breaking down the compliance index into seven components, based on the standard grouping of principles used by the Basel Committee. An important caveat is that compliance scores are fairly strongly correlated, which may make it difficult to disentangle the effect of one set of principles from the others. They replicate the regression for different samples of banks to investigate the robustness of the results. There is only one component of the compliance index that has a fairly robust relationship with bank Z-scores, and that is compliance with Chapter 2 of the BCP, i.e. principles having to do with supervisors’ powers to regulate bank licensing and structure. Interestingly, this component of the index is negatively correlated with bank soundness, so that banks in countries were regulators have better defined powers to give out licenses and regulate bank activities tend to be riskier. This result holds in all th e samples except those including only the largest banks. This finding supports the contention that supervisory systems that tend to empower supervisors do not work well (Barth, Caprio, and Levine, 2001, 2004, 2006). So far, they have considered individual bank risk. In principle, bank supervision and regulation should be primarily concerned with systemic risk, rather than individual bank risk, although in practice it is not always easy to make this distinction. Could it be that BCP compliance, while not relevant to individual bank soundness, is important to ensure the stability of system as a whole? To address this question, it would be ideal to test whether BCP compliance reduces the probability of a financial crisis. However, since crises are rare events, this type of test requires a panel of data; since they have BCP compliance assessments only at a point in time, they are restricted to cross-sectional data. Nonetheless, to explore this question they compute a rough measure of systemic soundness as the aggregate equivalent of the individual bank Z-score. More specifically, they aggregate profits and equity of all the banks in the country (for which they have data), they compute the standard d eviation of aggregate profits, and then they compute an aggregate Z-score. This measure tells us by how many standard deviations banking system profits must fall to exhaust all the capital in the banking system. They then regress this measure on the BCP compliance score and a number of macroeconomic control variables. Their measure of systemic soundness is correlated with the macro variables as one might expect: higher growth, low inflation, low inflation volatility, appreciation of the currency, favorable sovereign ratings are all significantly associated with higher values of the aggregate Z-score. Once again, though, the BCP compliance index does not seem to be a significant determinant of banking system soundness. Though it is positive, the coefficient of the BCP index is small and not statistically significant in any specification. Remarks While the causes and consequences of the recent financial crisis will continue to be debated for years to come, there is emerging consensus that the crisis has revealed significant weaknesses in the regulatory and supervisory system. Resulting calls for reform have led to numerous proposals and policymakers in many countries are hard at work to upgrade their regulatory frameworks. This paper seeks to inform the on-going reform process by providing an analysis of how existing regulations and their application are associated with bank soundness. Specifically, they study whether compliance with Basel Core Principles for effective banking supervision (BCPs) is associated with lower bank risk, as measured Z-scores. They find no evidence of a robust statistical relationship linking better compliance with BCPs and improved bank soundness. The analysis of aggregate Z-scores to capture systemic stability issues yields similarly insignificant results. If anything, they find that compliance wit h a specific group of principles, those giving supervisors powers to regulate bank licensing and structure is associated with riskier banks, potentially suggesting that such powers may be misused in practice. While our results may reflect the difficulty of capturing bank risk using accounting measures, or the inability of assessors to carry out evaluations that are comparable across countries, nevertheless they raise questions about the relevance of the Basel Core Principles, the current emphasis on these principles as key to effective supervision, and the wisdom of carrying out costly periodic compliance reviews of BCP implementation in the IMF/World Bank Financial Sector Assessment Programs. Pakistan Commercial Banks Risk Management Pakistan Commercial Banks Risk Management ABSTRACT The agreement on international banking regulations dealing with how the banks handle the risk, the Basel Accord mainly focuses on the credit risk; according the Basel accord the bank assets divided into five main categories according to how they are risky. The five main categories are as (1) is assets without risk means 0% risk weighted, second one is 10% risk weighted, 3rd is 20% weighted, 4th is 50% weighted and last one is 100% weighted. When the banks perform international transactions they are required according the Basel Accord to hold assets minimum 8% aggregated risk according the Basel 1. The Basel 1 was written in 1988 by the Basel committee on banking supervision. All Banks of G-10 countries have try to implement this accord since the early 1990s. Now a days it is considered largely outdated and Basel committee working on Basel 1 to changing process in the shape of Basel II. This is also called Basel I accord. The document Basel I Capital Accord mainly designs to evaluate the capital in relation with the credit risk, and also the risk that can be a cause of losses in which the risk will occur if the party fail or unable to fulfill the obligations. It is mainly focus on the risk increasing modeling research process that is improvement toward the risk increasing research mode; however, it is over simplified calculations, and also classifications that have been simultaneously called for its disappearance, but the improvement in the shape of the Basel II Capital Accord and also other further agreements that are the sign for the continuously refinement for the risk and capital in the banking sector. Nevertheless, the document Basel I accords, will remain the first international instrument that evaluate the importance of risk with the relationship to capital, and also will remain as a milestone in the banking sector like finance and banking history. This study is mainly related to the risk management practices being followed by the commercial Banks in Pakistan. The questionnaire is used as a main tool to collect primary data and check the extent to which the risk management practices are being carried upon by the commercial banks in Pakistan. The six important aspects of risk management process are categorized as one dependent and five explanatory variables. This study aims to investigate the awareness about risk management practices within the banking sector of Pakistan. This study is comprised of data collected through both, primary as well as secondary sources. The purpose of using primary source data is to check the extent to which different risk management practices have been followed by the commercial banks in Pakistan. Primary data is collected through the use of a questionnaire. The questionnaire comprises a number of statements under one macro statement. It includes Risk Management Practices (RMP) as the dependent varia ble, and different aspects of risk management as the independent or explanatory variables. Whereas, the objective to use secondary data is to link the risk weighted Capital Adequacy Ratio to the different financial indicators of the commercial banks that are used to measure their soundness. CHAPTER 2 LITERATURE REVIEW Risk management practices by the Commercial Banks Within the last few years, a number of studies have provided the discipline into the practice of risk management within the corporate and banking sector. An insight of related studies is as follows: Amran, et al. (2009), this article mention the possible availability of risk exposà © in the annual reports of the Malaysian companies. The study was aimed to empirically test the characteristics of the sampled companies. And also the level of risk faced by Malaysian companies with the disclosure made was also assessed and compared. The findings of the research revealed that the strategic risk came on the top, followed by the operations and empowerment risks being disclosed by the selected companies. The regression analysis proved significantly that size of the companies did matter. The stakeholder theory explains well this finding by stating that As company grows bigger, it will have a large pool of stakeholders, who would be interested in knowing the affairs of the company. The extent of risk disclosure was also found to be influenced by the nature of industry. As explored within this study, infrastructure and technology industries influenced the companies to have more risk inform ation disclosed. Hassan, A. (2009), made a study Risk Management Practices of Islamic Banks of Brunei Darussalam to assess the degree to which the Islamic banks in Brunei Darussalam implemented risk management practices and carried them out thoroughly by using different techniques to deal with various kinds of risks. The results of the study showed that, like the conventional banking system, Islamic banking was also subjected to a variety of risks due to the unique range of offered products in addition to conventional products. The results showed that there was a remarkable understanding of risk and risk management by the staff working in the Islamic Banks of Brunei Darussalam, which showed their ability to pave their way towards successful risk management. The major risks that were faced by Brunei banks that was the Foreign exchange risk as well as credit risk and also operating risk. For the analysis regression model was used to explain the results which shown that the Risk Identification, or Risk Assessment and Analysis were also the most uncontrollable variables and the Islamic banks in Brunei needed to give more attention to those variables to make their Risk Management Practices more effective by understanding the true application of Basel-II Accord to improve the efficiency of Islamic Bank’s risk management systems. Al-Tamimi (2008) studied the relationship among the readiness of implementing Basel II Accord and resources needed for its implementation in UAE banks. Results of the research revealed that the banks in UAE were aware of the benefits, impact and challenges associated in the implementation of Basel II Accord. However, the research did not confirm any positive relationship between UAE banks readiness for the implementation of Basel II and impact of the implementation. The relationship between readiness and anticipated cost of implementation was also not confirmed. No significant difference was found in the level of Basel II Accord’s preparation between the UAE national and foreign banks. It was concluded that there was a significant difference in the level of the UAE banks Basel II based on employees education level. The results supported the importance of education level needed for the implementation of Basel II Accord. Al-Tamimi and Al- Mazrooei (2007) provide the comprehensive study relating of Bank’s Risk Management of UAE National and Foreign Banks. The outcome of this research is to find out that there are three most important types of risks facing the UAE commercial banks that were foreign exchange risk, 2nd one followed by credit risk and 3rd one is operating risk. And the result also found that the bank of UAE were also efficiently handle the risk; but the variables like as the risk identification, risk assessment and also analysis proved that the banks are more efficient in risk management process. Finally, the outcome of the result showed that there was a huge difference if we compare the UAE National banks and foreign Banks in the practicing the risk assessment and risk analysis as well as risk monitoring and risk controlling process. Koziol and Lawrenz (2008) provided a study in which they assessed the risk of bank failures. They said that assessing the risk related to bank failures is the paramount concern of bank regulations. They argued that in order to assess the default risk of a bank, it is important considering its financing decisions as an endogenous dynamic process. The research study provided a continuous-time model, where banks chose the deposit volume in order to trade off the benefits of earning deposit premiums against the costs that would occur at future capital structure adjustments. Major findings suggested that the dynamic endogenous financing decision introduced an important self-regulation mechanism. Basel Core Principles and Bank Risk: Does Compliance Matter? The recent financial crisis has sparked widespread calls for reforms of regulation and supervision. The initial reaction to the crisis was one of disbelief: how could such extensive financial distress emerge in countries where the supervision of financial risk had been thought to be the best in the world? Indeed, the regulatory standards and protocols of the advanced countries at the center of the financial storm were being emulated worldwide through the progressive adoption of the international Basel capital standards and the Basel Core Principles for Effective Bank Supervision (BCPs). The crisis exposed significant weaknesses in the financial system regulatory and supervisory framework worldwide, and has spawned a growing debate about the role these weaknesses may have played in causing and propagating the crisis. As a result, reform of regulation and supervision is a top priority for policymakers, and many countries are working to upgrade their frameworks. But what should the reforms focus on? What constitutes good regulation and supervision? Which elements are most important for ensuring bank soundness? What should be the scope of regulation? To date, the best practices in supervision and regulation have been embodied by the BCPs. These principles were issued in 1997 by the Basel Committee on Bank Supervision, comprising representatives from bank supervisory agencies from advanced countries. Since then, most countries in the world have stated their intent to adopt and comply with the BCPs, making them a global standard for bank regulators. Importantly, since 1999, the IMF and the World Bank have conducted evaluations of countries’ compliance with these principles, mainly within their joint Financial Sector Assessment program (FSAP). The assessments are conducted according to a standardized methodology developed by the Basel Committee and therefore provide a unique source of information about the quality of supervision and regulation around the world. Hence the international community has made significant investments in developing these principles, encouraging their wide-spread adoption, and assessing progress with their compliance. In light of the recent crisis and the resulting skepticism about the effectiveness of existing approaches to regulation and supervision, it is natural to ask if compliance with the global standard of good regulation is associated with bank soundness. Specifically, they test whether better compliance with BCPs is associated with safer banks. They also look at whether compliance with different elements of the BCP framework is more closely associated with bank soundness to identify if there are specific areas which would help prioritize reform efforts to improve supervision. The paper extends their previous work (Demirgà ¼Ãƒ §-Kunt, Detragiache and Tressel, 2008: henceforth DDT), in which they showed that banks receive more favorable financial strength ratings from Moody’s in countries with better compliance with BCPs related to information provision, while compliance with other principles does not affect ratings significantly. The policy message from this study was that countries should give priority to strengthening regulation and regulation in the area of information provision (both to the market and to supervisors) relative to other areas covered by the core principles. Using rating information to proxy bank risk significantly limited the sample size in that study, making it necessary to exclude many smaller banks and many banks from lower income countries. Furthermore, after the recent crisis, the credibility of credit ratings as indicators of bank risk has also diminished, questioning the merit of using these ratings in the analysis. In this paper, they explore whether BCP compliance affects bank soundness, but instead of using ratings they capture bank soundness using the Z-score, which is the number of standard deviations by which bank returns have to fall to wipe out bank equity (Boyd and Runkle, 1993). Because they can construct Z-scores using just accounting information, and because assessment data for additional countries have also become available, they can extend the sample size considerably relative to our earlier study, to over 3,000 banks from 86 countries (compared to 200 banks from 37 countries analyzed in DDT). This is not just a simple increase in sample size: the sample of rated banks was not a representative sample, because rated banks tend to be larger, more internationally active, and more likely to adhere to international accounting standards. From a policy point of view, they would like to investigate the effect of BCP compliance on all types of banks operating in different country circumstan ces, rather than a select subgroup. In this study, the richer sample allows us to explore whether the relationship between BCPs and bank soundness varies across different types of banks. All in all, they do not find support for the hypothesis that better compliance with BCPs results in sounder banks as measured by Z-scores. This result holds after controlling for the macroeconomic environment, institutional quality, and bank characteristics. They also fail to find a significant relationship when they consider different samples, such a sample of rated banks only, a sample including only commercial banks, and samples including only the largest financial institutions. In an additional test, they calculate aggregate Z-scores at the country level to try to capture the stability of the system as a while rather than that of individual banks, but also this measure of soundness is not significantly related to overall BCP compliance. When they explore the relationship between soundness and compliance with specific groups of principles, which refer to separate areas of prudential supervision and regulation, they continue to find no evidence that good compliance is related to im proved soundness. If anything, they find that stronger compliance with principles related to the power of supervisors to license banks and regulate market structure are associated with riskier banks. While these results cast doubts on whether international efforts to improve financial regulation and supervision should continue to place a strong emphasis on BCPs, a number of caveats are in order. First, insignificant results may simply indicate that accounting-based measures, such as Zscores, do not adequately capture bank soundness, especially for small banks and in low income countries, where accounting standards tend to be poor. They may also reflect low quality in the assessment of BCP compliance, especially in countries where laws and regulations on the books may carry little weight. It might be also argued that assessments are not comparable across countries, despite the best efforts of expert supervisors and internal reviewing teams at the IMF and the World Bank to ensure a uniform methodology and uniform standards. If their negative results arise because compliance assessments do not reflect reality or are not comparable across countries, then at a minimum they should lead us to question the value of these assessments in ensuring that supervision measures up to global standards. Review of related literature of this paper is as follows: Defining good regulatory and supervisory practices is a difficult and complicated task. Barth, Caprio, and Levine (2001, 2004, and 2006) were the first to compile and analyze an extensive database on banking sector laws and regulations using various surveys of regulators around the world, and to study the relationship between alternative regulatory strategies and outcomes. This research finds that regulatory approaches that facilitate private sector monitoring of banks (such as disclosure of reliable, comprehensive and timely information) and strengthen incentives for greater market monitoring (for example by limiting deposit insurance) improve bank performance and stability. In contrast, boosting official supervisory oversight and disciplinary powers and tightening capital standards does not lead to banking sector development, nor does it improve bank efficiency, reduce corruption in lending, or lower banking system fragility. They interpret their findings as a challenge to the Basel Committee’s influential approach to bank regulation which heavily emphasizes ca pital and official supervision. An important limitation of this type of survey is that it mainly captures rules and regulations that are on the books rather than actual implementation. IMF and the World Bank financial sector assessments have often found implementation to be lacking, particularly in low income countries, so that cross-country comparisons of what is on the books may hide substantial variation in the quality of supervision and regulation. BCP assessments have the advantage of taking into account implementation. Of course, assessing how rules and regulations are implemented and enforced in practice is not an exact science, and individual assessments may be influenced by factors such as the assessors’ experience and the regulatory culture they are most familiar with. Nevertheless, although it is difficult to eliminate subjectivity completely, assessments are based on a standardized methodology and are carried out by experienced international assessors with broad c ountry experience. Cihak and Tieman (2008) analyze the quality of financial sector regulation and supervision using both Barth, Caprio and Levine’s survey data and BCP assessments. They find that regulation and supervision in high-income countries is generally of higher quality than in lower income countries. They also note that the correlation between survey data and BCP data tend to be low, always less than 50 percent and in many cases in the 20-30 percent range, suggesting that taking into account implementation may indeed make an important difference. A number of papers also use BCP assessments to study bank regulation and performance. Sundararajan, Marston, and Basu (2001) use a sample of 25 countries to examine the relationship between an overall index of BCP compliance and two indicators of bank soundness: nonperforming loans (NPLs) and loan spreads. They find BCP compliance not to be a significant determinant of these measures of soundness. Podpiera (2004) extends the set of countries and finds that better BCP compliance lowers NPLs. Das et al. (2005) relates bank soundness to a broader concept of regulatory governance, which encompasses compliance with the BCPs as well as compliance with standards and codes for monetary and financial policies. Better regulatory governance is found to be associated with sounder banks, particularly in countries with better institutions. In this paper, as already discussed they rely on the Z-score to measure bank soundness. While the Z-score has its limitations, they believe it is an improvement over measures used in previous studies, namely NPLs, loan spreads, interest margins, and capital adequacy. Because different countries have different reporting rules, NPLs are notoriously difficult to compare across countries. On the other hand, loan spreads or interest margins and capitalization are affected by a variety of forces other than fragility, such as market structure, differences in risk-free interest rates and operating costs, and varying capital regulation. Thus, cross-country comparability is a serious issue. In contrast with ratings, Z-scores do not rely on the subjective judgment of rating agencies’ analysts. Results from the baseline regression, relating bank soundness measured by the Z-score to the degree of compliance with the BCPs. In the sample including all countries, the Zscore is higher, indicating a sounder bank, for banks with lower operating costs in countries with higher GDP per capita. Also, non-commercial banks tend to have higher Z-scores, while the other control variables are not significant. The coefficient of the BCP compliance index is positive but not significant. If they exclude Japanese banks, which account for over 20 percent of the sample, the fit of the model improves markedly (the R-squared increases from 10 percent to 19 percent) and the coefficients of many regressors change substantially.12 This suggests that the variables explaining the Z-score of Japanese banks may be somewhat different than for the rest of the sample, perhaps because of the lingering effects of Japan’s prolonged banking crisis on bank balance sheets. For example, in the sample excluding Japan inflation and the rule of law index are significant (with the expected coefficients), while GDP per capita is not (though the coefficient remains positive). Also, banks with a higher ratio of net loans to assets have higher Z-scores, perhaps because Basel regulation mandating minimum levels of risk-adjustment capital forces these banks to hold more equity. Also, in the sample excluding Japan larger banks have lower Z-scores, likely because they tend to hold less capital than smaller banks. Despite these differences, the coefficient of the BCP compliance index remains insignificantly different from zero also in the sample without Japanese banks. The same is true when they add to the regression additional macro controls, such as exchange rate appreciation, private credit, or the sovereign rating. In the regressions, they explore how the relationship between BCP compliance and bank soundness changes if they alter the sample composition to include various categories of financial institutions to explore whether BCP compliance may affect soundness for alternative types of banks. All these results refer to the sample excluding Japan, so that th e overrepresentation of Japanese banks does not distort the results. The first exercise is to examine the widest sample possible, i.e. one that includes investment banks/securities houses, medium and long-term credit banks, nonbank credit institutions, and specialized government credit institutions. These are institutions that in most countries are unlikely to fall under the perimeter of bank regulation and supervision, so they have excluded them from the baseline sample. When they include them, the sample size grows by 25 percent, but the main regression results are unchanged. In particular, bank soundness is not significantly affected by compliance with the BCPs. If they restrict the sample to commercial banks only, thereby losing about 300 banks compared to the baseline sample, once again they find that regression results remain very close to the baseline. When they focus only on banks rated by Moody’s, as in our earlier work, the sample shrinks considerably (to just over 300 banks), and the coefficient of the BCP compliance index becomes positive and significant, albeit only at the 10 percent confidence level. Thus, BCP compliance seems to have some positive effect on the soundness of this specific group of banks. To explore this issue further, they ask whether this result is driven by the fact that rated banks are larger banks. To do so, they consider two alternative samples: the first includes the largest 10 percent of banks within each country and the second includes the largest 20 percent of banks in the entire sample. In both cases, the BCP compliance index has an insignificant coefficient, as in the baseline sample. The BCP compliance index is the weighted sum of compliance scores for several individual chapters of the Core Principles. Could it be that, even though overall compliance does not seem to matter for bank soundness, some aspects of the Core Principles might be relevant? In fact, it may be possible that the overall index is not significant because of offsetting effects of its different components. In fact, in our previous study of Moody’s ratings, they found that, although overall compliance did not seem to matter, higher financial strength ratings were associated with better compliance with principles related to information provision to supervisors. They address this question by re-running the baseline regressions breaking down the compliance index into seven components, based on the standard grouping of principles used by the Basel Committee. An important caveat is that compliance scores are fairly strongly correlated, which may make it difficult to disentangle the effect of one set of principles from the others. They replicate the regression for different samples of banks to investigate the robustness of the results. There is only one component of the compliance index that has a fairly robust relationship with bank Z-scores, and that is compliance with Chapter 2 of the BCP, i.e. principles having to do with supervisors’ powers to regulate bank licensing and structure. Interestingly, this component of the index is negatively correlated with bank soundness, so that banks in countries were regulators have better defined powers to give out licenses and regulate bank activities tend to be riskier. This result holds in all th e samples except those including only the largest banks. This finding supports the contention that supervisory systems that tend to empower supervisors do not work well (Barth, Caprio, and Levine, 2001, 2004, 2006). So far, they have considered individual bank risk. In principle, bank supervision and regulation should be primarily concerned with systemic risk, rather than individual bank risk, although in practice it is not always easy to make this distinction. Could it be that BCP compliance, while not relevant to individual bank soundness, is important to ensure the stability of system as a whole? To address this question, it would be ideal to test whether BCP compliance reduces the probability of a financial crisis. However, since crises are rare events, this type of test requires a panel of data; since they have BCP compliance assessments only at a point in time, they are restricted to cross-sectional data. Nonetheless, to explore this question they compute a rough measure of systemic soundness as the aggregate equivalent of the individual bank Z-score. More specifically, they aggregate profits and equity of all the banks in the country (for which they have data), they compute the standard d eviation of aggregate profits, and then they compute an aggregate Z-score. This measure tells us by how many standard deviations banking system profits must fall to exhaust all the capital in the banking system. They then regress this measure on the BCP compliance score and a number of macroeconomic control variables. Their measure of systemic soundness is correlated with the macro variables as one might expect: higher growth, low inflation, low inflation volatility, appreciation of the currency, favorable sovereign ratings are all significantly associated with higher values of the aggregate Z-score. Once again, though, the BCP compliance index does not seem to be a significant determinant of banking system soundness. Though it is positive, the coefficient of the BCP index is small and not statistically significant in any specification. Remarks While the causes and consequences of the recent financial crisis will continue to be debated for years to come, there is emerging consensus that the crisis has revealed significant weaknesses in the regulatory and supervisory system. Resulting calls for reform have led to numerous proposals and policymakers in many countries are hard at work to upgrade their regulatory frameworks. This paper seeks to inform the on-going reform process by providing an analysis of how existing regulations and their application are associated with bank soundness. Specifically, they study whether compliance with Basel Core Principles for effective banking supervision (BCPs) is associated with lower bank risk, as measured Z-scores. They find no evidence of a robust statistical relationship linking better compliance with BCPs and improved bank soundness. The analysis of aggregate Z-scores to capture systemic stability issues yields similarly insignificant results. If anything, they find that compliance wit h a specific group of principles, those giving supervisors powers to regulate bank licensing and structure is associated with riskier banks, potentially suggesting that such powers may be misused in practice. While our results may reflect the difficulty of capturing bank risk using accounting measures, or the inability of assessors to carry out evaluations that are comparable across countries, nevertheless they raise questions about the relevance of the Basel Core Principles, the current emphasis on these principles as key to effective supervision, and the wisdom of carrying out costly periodic compliance reviews of BCP implementation in the IMF/World Bank Financial Sector Assessment Programs.

GentleHands by M.E. Kerr :: essays research papers

What would you do if your Grandfather were accused of being a sadist in WWII? That’s exactly what happened to Buddy Boyle. Gentlehands by M.E. Kerr is about Buddy Boyle, a lower class man who lives year-round in Seaville, and Skye Pennington, a rich girl who only spends her summer there. Skye and Buddy fall in love. On one of their dates, Buddy decides that they should go to his grandfather’s house. Near the end of the summer, Buddy’s grandfather is accused of torturing people during WWII. Buddy and Skye’s love leads into many events in this book. One of the events that Buddy and Skye’s love causes, is Buddy getting in trouble with his parents. At dinner one night, Buddy keeps tell his family about how wonderful Skye’s house is. His father gets annoyed and asks him to step outside for a talk. Once outside, Buddy’s dad starts to beat him. â€Å"What is was a punch to my neck, so hard I fell down from the weight of it.† Although he knows what will happen when he goes out with Skye, he still goes out. Another event that their love leads to is Buddy getting to know his grandfather. On one of their first dates he wants to go somewhere special, so he chose to go to his grandfather’s house. After that day, he becomes close to his grandfather. He starts to live with his grandfather. If Buddy never met Skye, he probably wouldn’t have became close to his grandfather. Despite the relationship between Buddy and his Skye, Buddy’s little brother was suffering. Buddy promised Streaker, his brother that he would go to the bay with him. Instead, he told him that he would turn the sprinkler on for him. â€Å"Then I stuck two dimes in his piggy bank because I felt like a real rat.

Grinding to a Halt :: American Government Politics Elections Essays

Grinding to a Halt What's the U.S. all about? When asked that question almost everyone I know would reply: "Well, the U.S. represents democracy, capitalism, freedom, etc." The first thing I noticed is that everyone seems to mention democracy first. If you quiz a random American on this, that's probably what they'll think of too. It's also a point of view that might be the source of resentment for many Americans who are unhappy with our government right now. Why would that be? Because the U.S. is actually not a pure democracy, as I'm sure you already knew, but a republic. This means the government is set up in such a way that the people as a whole elect their leaders, those who they think would best represent them, and then those leaders handle the big issues, such as foreign policy, legislation, or legal interpretation. In principle this is a good system, since it would be virtually impossible for everyone in the U.S. to vote on every issue facing our nation. With this vision our forefathers cre ated a strong governmental system, one they hoped would withstand the tests of time. And it has. Until now. Many Americans feel the modern American government is bloated, deceptive and overly convoluted beast that isn't living up to its founding principles. This has become quite apparent in the 2000 Presidential election in which a process that should last little more than a day, the counting of ballots, has lasted more than two weeks. The foremost problem that this election demonstrates very clearly is a lack of any real political direction. Neither candidate, or party for that matter, can presently demonstrate substantial division on major subjects. While the parties generally tend one way or the other on issues, there are no longer strong and fast party-wide philosophies that one can count on. When our Government was first created there were major divisions between the parties of the time. Even up until around WWII both parties had strong separate characters that helped voters in choosing the right person to represent them. Over the last fifty years, however, the parties have started to grow together, neither side feeling safe as the representation of a political or philosophical extreme. Now this move towards mediocrity has finally culminated in one of the closest races for the presidency in U.

Influences and Characteristics of Entrepreneurial Behavior Essay

Management skill and strong team building abilities are often perceived as essential leadership attributes[3] for successful entrepreneurs. Robert B. Reich considers leadership, management ability, and team-building as essential qualities of an entrepreneur. This concept has its origins in the work of Richard Cantillon in his Essai sur la Nature du Commerce en (1755) and Jean-Baptiste Say[4] in his Treatise on Political Economy. Psychological studies show that the psychological propensities for male and female entrepreneurs are more similar than different. A growing body of work shows that entrepreneurial behavior is dependent on social and economic factors. For example, countries with healthy and diversified labor markets or stronger safety nets show a more favorable ratio of opportunity-driven rather than necessity-driven women entrepreneurs. Empirical studies suggest that male entrepreneurs possess strong negotiating skills and consensus-forming abilities. Research studies that explore the characteristics and personality traits of, and influences on, the entrepreneur have come to differing conclusions. Most, however, agree on certain consistent entrepreneurial traits and environmental influences. Although certain entrepreneurial traits are required, entrepreneurial behaviours are also dynamic and influenced by environmental factors. Shane and Venkataraman (2000) argue that the entrepreneur is solely concerned with opportunity recognition and exploitation, although the opportunity that is recognised depends on the type of entrepreneur; while Ucbasaran et al. (2001) argue there are many different types contingent upon environmental and personal circumstances. Jesper Sà ¸rensen has argued that some of the most significant influences on an individual’s decision to become an entrepreneur are workplace peers and the social composition of the workplace. In researching the likelihood of becoming an entrepreneur based upon working with former entrepreneurs, Sà ¸rensen discovered a correlation between working with former entrepreneurs and how often these individuals become entrepreneurs themselves, compared to those who did not work with entrepreneurs.[5] The social composition of the workplace can influence entrepreneurism in workplace peers by proving a possibility for success, causing a â€Å"He can do it, why can’t I?† attitude. As Sà ¸rensen stated, â€Å"When you meet others who have gone out on their own, it doesn’t seem that crazy.† [5] Perception of entrepreneurs The ability of entrepreneurs to innovate is thought to relate to innate traits such as extroversion and a proclivity for risk-taking. According to Schumpeter, the capabilities of innovating, introducing new technologies, increasing efficiency and productivity, or generating new products or services, are characteristic qualities of entrepreneurs. Entrepreneurs are catalysts for economic change, and researchers argue that entrepreneurs are highly creative individuals with a tendency to imagine new solutions by finding opportunities for profit or reward.[6] Largely due to the influence of Schumpeter’s heroic conceptions of entrepreneurs, it is widely maintained that entrepreneurs are unusual individuals. In line with this view, there is an emerging research tradition investigating the genetic factors that are perceived to make entrepreneurs so distinctive (Nicolaou and Shane, 2009). However, there are also critical perspectives that attribute these research attitudes to oversimplified methodological and/or philosophical assumptions (Gartner, 2001). For example, it has been argued that entrepreneurs are not that distinctive, but that it is in essence unrealistic preconceptions about â€Å"non-entrepreneurs† that maintain laudatory portraits of â€Å"entrepreneurs† (Ramoglou, 2011). Classification of entrepreneurs A. Based on functional characteristics 1. Innovative entrepreneur: Such entrepreneurs introduce new goods or new methods of production or discover new markets or reorganize the enterprise. 1. EX: new product, new ways of product, new markets and reorganise the enterprise. 2. Imitative or adoptive entrepreneur: Such entrepreneurs don’t innovate,they copy technology or technique of others. 1. EX: Chinese mobiles. 3. Fabian entrepreneur: Such entrepreneur display grates situation and scepticism in experimenting with any change in their enterprise. They change only when there is a serious threat to the very existence of the enterprise. 4. Drone entrepreneurs: Such entrepreneurs are characterised by a diehard conservatism and may even be prepared to suffer the losses. 1. EX: Acc. To MC Kinsey in 2015, 110-130 million people will be unemployed out of which 90-100 million people will be Fresher. [edit]B. Based on development angle 1. Prime mover: This entrepreneur sets in motion a powerful sequence of development expansion and diversification of business. 1. EX: Ambani 2. Manager: such an entrepreneur doesn’t initiate expansion and its content in just staying in business. 3. Minor innovator: This entrepreneur contributes to economic progress by finding better use for existing resources. 1. EX: minimum wastage maximum production. 4. Satellite: This entrepreneur assumes a suppliers role and slowly move towards a productive enterprise. 5. Local trading: such entrepreneur limits his enterprise to the local market. C. Based on entrepreneurs business 1. Manufacturing 2. Wholesaling 3. Retailing 4. Service Based on personality traits 1. The improver: They have unwavering to run these businesses with high integrity and ethics. 2. The advisor: â€Å"Customer is right and we must do everything to please him† because company is built by advisors and advisors become customer focused. 3. The superstar: All depends upon the charisma and on the high energy of the superstar CEO. 1. EX: Richard Branson (400 co’s/Virgin coin), Larry Page (Google), Lt. Steve Jobs (Apple), Ratan Tata (Tata sons). 4. The artists: Are highly creative type, very conscious about business. If feedback is constructive i.e. positive than also lets go with negative self-image. 1. EX: Aamir Khan, Michael Dell (Dell), MC Cormich (EMI). 5. The visionary: Too focused on dreams with little focused on reality. 1. EX: Jack Welch (GE), Bill Gates (Microsoft), Kishore Biyani (Future Group), Warren Buffet (Berkshire Hathaway), Sam Walton (Wall Mart). 6. The analyst: More focused on fixing problems in a systematic way. 1. EX: Gordon Hore (Intel), Rana Kapur (Yes Bank), Gautam Adani (Adani Groups) 7. The fireball: A business owned and operated by a fireball is full of life, energy and optimism. They have â€Å"A get it done attitude in a playful manner†. 1. EX: Malcolm Forbes – Forbes magazine 8. The hero: Have an incredible will and ability to lead the world and your business through challenges. 9. The healer: They provide nurturing harmony to their business, they have uncanny abilities to survive and persists inner calm. 1. EX: Dr. Bindeshwar Pathak (Sulabh International), Kumar Manglam Birla (Son of L.M Birla). 1. The Opportunistic: take advantage of opportunities as they occur. 1. EX: Mark Zuckerberg Theory-based Typologies Recent advances in entrepreneur researcher indicate that the differences in entrepreneurs and the heterogeneity in their behaviors and actions can be traced back to their the founder’s identity. For instance, Fauchart and Gruber (2011) have recently utilized social identity theory to illustrate that entrepreneurs can be distinguished in three main types: Darwinians, Communitarians and Missionaries. These types of founders not only diverge in fundamental ways in terms of their self-views and their social motivations in entrepreneurship, but also engage fairly differently in new firm creation.

Multicultural Analysis of Bud, not Buddy

I feel that the book, Bud not Buddy is successful overall when evaluating or analyzing it against different criteria for successful multicultural books and materials. Bud, not Buddy is set in the 1930’s at the height of the Great Depression and with this book, the author Christopher Paul Curtis, skillfully weaves in Bud’s experiences with poverty, racism, and the experience of being an African-American foster child during the Great Depression.The author, Christopher Paul Curtis, writes from the perspective of a cultural insider’s mind-set and point of view when writing this book and giving the reader an accurate, yet interesting portrayal of what can happen to any child in similar circumstances during the Depression. In this novel, the storyline focuses on a ten-year-old African-American boy named â€Å"Bud. † Although there are no illustrations in this book, the text of the book does occasionally give the reader glimpses into the fact that Bud is an Afric an-American boy. However, the reader for the most part deducts the culture of Bud through the use of indirect things in the story.Some of those indirect things include the focus on the jazz band musicians conversations, the â€Å"stranger† who picks Bud up and lectures him for being alone and Black in that area at night, Bud passing by a group of people before arriving at the cardboard jungle and referring to them as â€Å"the white people with the coughing baby† (Curtis, 1999). There were no over-generalizations or simplifications of the African-American culture used in this book. The author did not use any language I felt was condenscending to the culture represented.If I had not seen the cover of the book, there were only a few sentences and subtle indications sprinkled throughout the book that indicates the young Bud was an African-American child. I feel part of the reason the book and the characters were successful without being stereotypical is, as the author ind icates in the Afterword of the book, some of the characters were loosely based on real individuals in the author’s life. Real individuals are not stereotypes so I think the reader can see this. The character Bud, was presented multi-dimensionally, so much so that his personality overshadowed his cultural group.I think this in itself is one measure of a successful multi-cultural children’s fiction book with characters of any cultural background. There were no images presented by the author that could lead to stereotyping the character and nothing to indicate the writer was attempting to meet the expectations of an audience who had pre-conceived notions of this culture. The cultural details that were within the story were naturally integrated. For example, when referring to the jazz band, the author doesn’t throw it in the reader’s face what the members look like.His words convey enough that one understands the culture of each member without any stereotypic al features being used to identify them. In asking myself does the book present cultural details authentically, I would say yes. I could see authentic culture being represented in most of the language in the story, in discussion of the instruments and the players in the jazz band, in the details of the individuals who ended up being Bud’s caretakers, and even in the food in The Sweat Pea Restaurant included cultural details that added a 3-dimensional-like feel to the novel.I did not see any invalid information for the culture addressed in the book or invalid information in general. I have to take in consideration the time period this book is supposedly taking place in as far as determining whether the language is used authentically. I have to admit, possibly because I am in the 21st century, I oftentimes got the picture of a rural white farm boy in that Bud constantly and consistently uses the words â€Å"shucks† and â€Å"doggone† and similar vocabulary to this .I realize some of the language is limited since Bud, not Buddy is a children’s book but I wasn’t always impressed with some of the vocabulary that was used and was not used. In my opinion, this would probably be one of the weaker areas in my analysis of the book. Good multicultural books should allow the reader(s) to experience the culture that the book is addressing. I did feel that while reading the book and in the use of some of the cultural details, I was experiencing the culture.I also felt the cultural elements oftentimes gave the book more color in that it lifted some of the text off the page in a sense. Along with this, just my personal feelings of course, I sometimes felt the author in avoiding being stereotypical in any sense, tiptoed around some areas that could have enriched the story. However, I do respect how fine the line can be between doing a multicultural story justice and avoiding some words and areas while presenting a quality multicultural story. When I think about it, even in the resolution of the problem in this story, it is a positive representation of the culture.The family and friends of the child take the child in, provide Bud a safe environment and the affection he wasn’t receiving before re-uniting with the family and friends within his own culture. That is a quality I didn’t even see initially until I put further thought into this multicultural analysis. This only strengthens the success of Bud, not Buddy’s portrayal of multicultural issues. I could strongly state that the book, Bud, not Buddy would enhance any elementary classroom library, learning resource center, or media center room.I feel the book would be a positive addition to any library collection while encouraging students to read literature that portrays diverse, yet balanced views of all cultures. The book, Bud, not Buddy would be a welcome addition in any collection of books, making the collection a more balanced and inclusive colle ction of multi-cultural books that in turn help to make cultural diversity the foundation of learning and growing. Reference Curtis, C. P. (1999). Bud, not Buddy. New York: Delacorte Press.