Impact of Credit Risk Management on Profitability

Impact of Credit Risk Management on Profitability Credit Risk arises because there is a possibility of a risk that the counterparty defaults on the loans and bonds held by the institution (Cornett) The Ultimate advantages of Credit Risk Management are being accepted by Financial Institutions now and Risk Managers are focusing on different Risk Management Models in looking for different Business Opportunities (Heinemann). However in general Financial Institutions that make Loans or buy bonds with long maturities are more exposed than Financial Institutions that make loans or buy bonds with short maturities. This means for example that banks, thrifts and life insurance companies are more exposed to Credit Risk than are money market mutual funds, since Banks and life insurance companies tend to hold longer maturity assets in their Portfolios than mutual funds. (Cornett) Basel is an agreement that requires the imposition of risk-based capital ratios on banks in major industrialized countries. Considering the weaknesses of the simple capital-to-assets ratio, members of Bank for International Settlements (BIS) along with U.S decided to implement two new risk-based capital ratios for all commercial banks under their jurisdiction in 1988. The BIS phased in and fully implemented these risk based capital ratios on January 1, 1993, under what has been known as the Basel Accord (now called Basel I). Credit risks of assets are included into Capital adequacy ratio into Basel Agreement of 1993. This was followed with a revision in 1998 in which market risk was incorporated into risk-based capital in the form of an add-on to the 8 percent ratio for credit risk exposure. In 2001, the BIS issued a consultative document, It was proposed in the basel-II or the new basel system that the operational risk should be the part of Capital requirements with effect from 2007 and updated the credit risk assessments in 1993 agreement. This agreement was adopted in June, 2004. (Cornett) Basel-II or the new basel system consists of three pillars which are discussed below, these three pillars play a vital role in the safety and soundness of the entire financial system. PILLAR 1 CREDIT RISK: On Balance Sheet and Off Balance Sheet (Standardized vs. Internal Ratings Based approach) MARKET RISK: Standardized vs. Internal Ratings Based approach OPERATIONAL RISK: Basic Indicator vs. Standardized vs. Advance measurement approach) PILLAR II Regulatory supervisory review so as to complement and enforce minimum Capital Requirements calculated under Pillar 1 PILLAR III Requirements on rules for disclosure of Capital Structure, risk exposures, and Capital Adequacy so as to increase Financial Institutions transparency and Enhance Market/Investor Discipline. Like in every other Country in Pakistan also the State Bank of Pakistan issued a Road Map or Guidelines for Implementation of Basel-II in Pakistan and the deadline issued by State bank for the completion was December 2006. PROBLEM STATEMENT Capital Regulation, Supervision and Market Discipline are the foundation of Basel-II, and to improve the Risk Management Procedures for bringing stability in the financial System, the Banks and Financial Institutions were required to establish an adequate setup and report to SBP the name and other Particulars of the Person responsible for Implementation before 31st May 2005 We will study the impact of Basel II on the credit risk management by considering two parameters i.e. NPLR and CAR. By studying these ratios, we find out that how Basel II is useful in management and reduction of risk and finally determine the role of credit risk management in increasing the profits of banks. RESEARCH QUESTION As per the background discussed earlier, out task is to research: The impact of credit risk management on the profitability of commercial banks in Pakistan. PURPOSE Our research will find out the importance credit risk management in the profitability of commercial banks in Pakistan and how Basel II helps in reduction of credit risk and management by using some techniques and methods that will control the amount of non-performing loans. The purpose of the research is to explain the impact of credit risk management on profitability of commercial banks in Pakistan, that what is the role of BASEL-II in the management and reduction of credit risk by controlling the amount of non performing loans through methods, Processes and limits imposed in BASEL II. JUSTIFICATION Our research will explain the influence of credit risk management on the profitability of commercial banks. This research will be very helpful for the banking industry in Pakistan as it is directly related to the profitability of banks. It will provide them with the guidelines that how they could manage and minimize the credit as per the rules and regulations provided in Basel document. SCOPE Our research is significant and important in a way that it will determine the dependency of profitability on credit risk management and it will study Basel I and Basel II and determine their difference and whether the regulations in Basel II puts any betterment in managing the risk. LIMITATIONS OF THE STUDY We are conducting our research on the private commercial banks of Pakistan based on the conventional banking system. It will help us on concentrating and focusing only on one sector of banking industry and determine valid and authentic results. Public sector banks, Islamic banks, investment banks, micro-finance banks are included in the research. Basel II was put into account from December 2006 that is why we have included the data from financial statements of 2007 to 2009 as we have studying the relation between profitability and credit risk management after Basel II is implemented. The study is limited to two independent variables for measuring credit risk management that are NPLR and CAR, and one dependent variable for measuring profitability which is ROE, the reason for choosing the above mentioned variables will be discussed in the methodology. LITERATURE REVIEW ROE PROFITABILITY INDICATOR ROE (Return on Equity) refers to the ratio of Net Income to the Total equity capital. ROE indicates that how much the bank has earned with the investors capital. It measures that how well and efficiently a company uses its investors funds to generate profit. It is used as a comparative too between two companies or banks. Its the ratio of net income and share holders equity. But in the Case of Bank ROE can be increased if the Capital decreases, but as the Capital decreases, the bank is exposed to risk of insolvency, and thats the reason that regulators continuously monitor the minimum capital requirements for Banks. ROA(Return on Assets) indicates that how efficiently the management uses its assets to generate income. Its the ratio of net income and total assets. Both ROA and ROE are expressed in percentage. CREDIT RISK MANAGEMENT INDICATORS According to a research of Risk management practices followed by commercial banks in Pakistan. It was identified that the major risk faced by banks in Pakistan as well as internationally is the Credit Risk. Because the core banking business is all about creation of Credit, through which commercial banks generate their Profits. When it comes to Credit Risk, the most important aspect are the financing decisions followed by the commercial banks, because ultimately it ends into Credit risk. The State bank has also introduced some tough regulations when financing individual as well as SMEs and Corporate Customers, such as obtaining the BBFS(Borrowers basic fact sheet) and other restrictions as mentioned in the Prudential Regulations. Now what indicates that Credit Risk is increasing for the Banks is the NPLR(Non Performing Loans Ratio) which indicates that the financing generated by the banks are not recovering and as such the Non performing Loans are increasing which ultimately leads to Credit Risk. (Nasr, 2009) CAPITAL TO ASSETS RATIO It measures the Ratio of a Banks Book value of core Capital to the Assets book value. The Lower this Ratio, the more highly leveraged the bank is. Primary or core Capital Banks common Equity (book value) and perpetual preferred stock plus minority interests in consolidated subsidiaries (Cornett). RISK IN BANKS As Banks perform different financial services to their Clients they face many types of risk. There are number of assets in a banks Portfolio which are subject to different types of risks, such as default or Credit Risk. As Banks expand their services, they are exposed to foreign exchange risk. When the Assets and Liabilities in the Balance Sheet of Banks mismatch, they are further exposed to a risk known as Interest Rate Risk. If financial institutions actively trade these assets they are further exposed to Market Risk or asset price risk. Increasingly FIs hold contingent assets and liabilities off the balance sheet which represents off balance sheet risk, Moreover some all Financial Institution and Banks are exposed to some degree of Liability or withdrawal which exposes them to Liquidity risk. Finally the Risk that the Bank may not have enough Capital reserves to offset a sudden loss incurred as a result of one or more of the risks they face creates insolvency risk for the Banks. ( HOUSTON, 2008) CREDIT RISK MANAGEMENT Capital Adequacy Ratio (CAR) is used by Regulators of Banking System to assess the Banks financial Position especially the Capital to Assets Ratio as it does not falls below the required level so the bank is stable enough against the losses. State Bank of Pakistan the Regulator of Commercial Banks in Pakistan Monitor the Capital Adequacy Ratio of Commercial Banks to Provide Protection to the Depositors. A minimum Capital Ratio affects the leverage of Commercial Bank since highly leverage commercial Banks are more towards the chance of Credit and Interest rate risk and ultimately falling into Bankruptcy There are major 2 types of Capital for Banks. Tier-I Capital is closely linked to banks book value of equity, reflecting the contribution of a banks owners. Tier two is a broad array of secondary capital resources, which includes the loan reserves upto 1.25 % of risk adjusted assets plus various debt instruments. BENEFITS OF CAPITAL ADEQUACY RATIO In the initial Phase capital adequacy ratio does not take into account different risk Profiles of different class of Money market instruments, since some assets are highly risky and some debt instruments are almost risk free, such as Government bonds, where as the some instruments such as loans granted to Individual by a commercial bank can result in a default which accounts for Risk. So the advantage of Capital adequacy is as it takes into account risk profiles of all investment. (Schweser, 2008) BANKING REGULATIONS IN PAKISTAN The banks in Pakistan works under the BANKING COMPANIES ORDINANCE, 1962 (L VII OF 1962) and THE BANKING COMPANIES RULES 1963 made under the ordinance. (As amended up to 30th June, 2007) (State Bank of Pakistan, 2007)) METHODOLOGY RESEARCH APPROACH While doing the research, we are focusing on our research task and not to go beyond our specified boundary. Thus, were using deductive approach. We are also referring previous researches and theories related to our field of interest because we are studying a general phenomena i.e. relationship between profitability and credit risk management in conventional banking system of Pakistan. We are using quantitative method of study. We analyze the data with the help of regression model and the annual reports of the selected banks. The regression output makes us answer our research question. RESEARCH RESIGN We are conducting the research based on two factors i.e. profitability of banks and credit risk management thats why the design of research is co-relational. Our research will explain the relationship between the two and how credit risk management affects the profitability of banks in Pakistan. RESEARCH STRATEGY We are identifying the impact of credit risk management on profitability and For it, we have adopted the strategy of taking help from the previous records, studies and researches in this field and the statistics and data required for performing the test is obtained from the annual reports of the respective banks available on their websites. SAMPLING The population for the research consists of 20 private commercial banks out of the 54 banks operating in Pakistan. All the 20 chosen banks are working under conventional banking system as we are only focusing on conventional banks and all other banks such as Islamic banks, investment banks, micro-finance banks and public sector banks are not included in our research. The reason for this is to appropriately focus on one sector. On the basis of random sampling, 15 commercial banks are selected: Habib bank Ltd, MCB Bank ltd, Allied Bank Ltd, United Bank Ltd, Standard Chartered, Bank Alfalah, Faysal Bank Ltd, Bank Al-Habib, NIB Bank ltd, My Bank, RBS, Atlas bank, Arif habib Bank, Habib Metropoliton bank, JS Bank and Askari Bank ltd. In this research we are establishing the relation between profitability and credit risk management after implementation of BASEL II in Dec2006, therefore data is obtained from annual reports of 2007 to 2009. There are total 30 observations for each of the var iable used in this research. DATA COLLECTION Data and statistics for the tests are obtained from annual reports of 2007 to 2009. Well consider credit risk management disclosure, financial statements and notes to financial statements within the annual reports of the sample banks. RESEARCH INSTRUMENTS No research instrument is required in our research because the data used to conduct tests is secondary obtained from the annual reports of the banks from 2007 to 2009. DATA ANALYSIS Multiple regression analysis is used in our research i.e. the relationship of one dependent variable to multiple independent variables. The regression outputs are obtained by using SPSS APPLIED REGRESSION MODEL Dependent variable ROE and independent variables NPLR and CAR are considered in our study and all of them are numeric type. Therefore, multiple linear regression model is applied. DEPENDENT VARIABLE In many of the previous researches, ROE is used for the profitability of banks, Therefore, we have also used it as the indicator of profitability in the regression analysis.. According to Foong Kee K. (2008) indicated that the efficiency of banks can be measured by using the ROE which illustrates to what extent banks use reinvested income to generate future profits. INDEPENDENT VARIABLE NPLR and CAR are the indicators of credit risk management and they chosen as the independent variables because credit risk management affects the profitability of banks. NPLR, in particular, indicates how banks manage their credit risk because it defines the proportion of NPL amount in relation to TL amount. NPL amount is provided in the Notes to financial statements under Loans section. And the total loan amount is provided in the balance sheet of the banks in their annual reports. TL amount, the denominator of the ratio, has been gathered by adding two types of loans: loans to institutions and loans to the public. Thus, calculation of the NPLR has been accomplished in following way: NPLR = (NPL amount) Ã · (TL amount) CAR, CAR is regulatory capital requirement (Tier 1 + Tier 2) as the percentage of Risk weighted asset. The bank has to maintain a specific percentage of CAR to manage their Credit risk according to requirement of State bank of Pakistan. The minimum requirement for Banks on consolidated as well as standalone basis has been increased to 10%. RELIABILITY AND VALIDITY While doing the research two concepts must be taken into account i.e. reliability and validity. Reliability refers that the data is consistent and whatever be the conditions, it would be remain same. But its not necessary that every reliable and consistent data is valid. If we have any systematic error in the instrument then every time it would be encountered in the measurement, thus the observations would be reliable but not valid. In our research, we have taken the data from the annual reports of banks available at their websites. These are the official reports made by the rigorous efforts by the management of banks and authenticated by the higher management; therefore the facts and figures in it would be valid as well as reliable and will help us in getting true results. CONCLUSION The aim of the study is to determine the impact of credit risk management on profitability. It is important to note that sample size represents 75% of the total population i.e. private commercial banks. That covers the major portion of the population, giving more accurate results. The results obtained from the regression model show that there is an affect of credit risk management on profitability on reasonable level with 41.8% possibility of NPLR and CAR in predicting the variance in ROE. So, the credit risk management strategy defines profitability level to an important extent. Especially, NPL amount appears to be adding the most weight to that than CAR. CAR is having negative impact on ROE, but on the other hand the significance value of CAR is 0.171which is greater than the p-value i.e. 0.05, which means that the value of coefficient for CAR is zero, making the affect of CAR on ROE nil. Only NPLR is significantly affecting the value of ROE. In the end it is to be recommended that bank should focus on maintaining and controlling amount of non performing loans to ultimately getting higher ROE, which ensures the better profitability.

Post-War Germany Comparison and Problems

Post-war Germany comparison and problems of economic development Through the previous essay describes, we knew Germany from baifeidaixing status after the war to later return to the powerful countries of the world. Need a lot of qualified support, in which the Government plays a crucial role. This is why defeated Germany to rise again, and the victory of the United Kingdom had lost its dominance. The fate of two kinds of economic One of the most significant features in the history of Western Europe after the war in West Germany and the United Kingdom of great contrasts on economic development.Germany a generation in their own fate had experienced twice in the life of the vanquished: the cities were destroyed and currency failure, male labour force is either killed or being held in prisoner of war camps, transport and service infrastructure had been completely destroyed. While the United Kingdom was only a clear victory in the second world war in Europe. Aside from being subjected to bombing and personnel injury, a United Kingdom structures throughout the country such as roads, railways, docks, industrial and mining enterprises have survived in the war in its entirety.However, by the early 1960 ‘s, the Federal Germany began to flourish, as Europe's economic power, and the United Kingdom have delayed development of economic growth is lagging far behind other countries in Western Europe. According to the 1960 ‘s economic growth statistics, Germany's economic growth rate was 9%, and United Kingdom for 2. 6%, with the exception of Ireland outside the United Kingdom became the slow development of the developed countries. In 1958, the West German economy is more than the United Kingdom.In the eyes of many observers, United Kingdom is becoming Europe's patients. The fate of the two distinct and with ironic, today it seems very educative. 1950 ‘s Germany an â€Å"economic miracle† the background lies in its 1930 revival plan. The Nazis had inves ted a large amount of financial and material resources in communication, arms, vehicles, optics, chemical industry and non-ferrous metals and light engines were originally part of a war economy, but 20 years later took effect. Economist Ludwig Wilhelm Erhard's â€Å"social market economy† theory as Germany as provided strong support, in fact, political and business young talent of the post-war West Germany emerged initially were Nazi officials. Germany business critical infrastructure is not damaged in the war. The early 1950, manufacturing companies, banks, insurance companies, wholesalers and recovery operations, providing products and services to foreign markets. Even Germany mark rising failed to hinder Germany economic development that he reduce the import cost of raw materials, but there is no limit on foreign Germany product demand, Germany is a high value, technologically advanced goods.They win depends on quality, rather than price. What's more, in the first decades after World War I, they had little competition: Sweden, and French and the Netherlands who wants to buy some engines product or tool who, in addition to from Germany purchases, had no choice. Power of suppliers higher than buyers' power. By introducing an industry can learn about circumstances. In 1960, the Germany automobile manufacturing because of quality and reliable engine has won international prestige.Stuttgart's Mercedes-Benz and BMW in Munich near-monopoly on the premium-car market, first at home, then continuously overseas. The Bonn Government to openly support the industry, providing early support preferential loans to them, and to encourage cooperation between banks and enterprises, to Germany companies provide cash investments . Volkswagen as early as 1945 completes the infrastructure. And like many other industries in West Germany after the war, Volkswagen benefited from a free market economy, it has not suffered a loss of competition. Volkswagen in 1939 before access to a steady stream of resources.It worked for the Nazi, war and military occupation service, because when the coalition Government from relocating a public company, its production capacity has been established before the war, so no further investments can be put into production after the war. United Kingdom also has the national lead industries, Morris, Austin independent car makers, such as a merger of the British Motor Corporation, British Motor Corporation and subsequently integrated into the Leyland Motor Corporation, specializing in United Kingdom Leyland cars. By the year 1980, Leyland Motor Company franchised United Kingdom featured automobile products.And Germany manufacturer, United Kingdom auto makers are increasingly concerned with overseas markets. However the outcome is completely different. After the second world war, successive United Kingdom Government have urged car companies try to sell vehicles overseas in order to attract foreign exchange earnings to offset the h uge war debt owed by the State. (Tony Judt writes in the Postwar:A History of Europe Since 1945, the Government's export target is at the end of the 1940 ‘s, United Kingdom production of automobile exports to 75% per cent of the total production).Some companies in order to quickly increase production and even wilful neglect of quality management. Initially, United Kingdom cars of poor quality and did not have a negative impact. United Kingdom company has monopolized the market: United Kingdom orders in domestic and European markets far exceeds the supply. Manufacturers on the production of the European continent is not United Kingdom rivals: 1949 United Kingdom production total production for the bus than in other European countries (Robert ,1995) However, with the passage of time, United Kingdom car industry the low quality and reputation for poor service.Other States car lot listing types to choose from, European people do not buy United Kingdom cars any more . When the Brit ish decided to upgrade the auto industry, and production lines to improve modernized equipment, United Kingdom, car companies could not like Germany companies as cash investments and loans from the banks. They cannot look to get help from the Government for assistance. However, in London, under political pressure, in order to obey the decision of the local government and to reassure the local politicians and trade union organizations, they have to build in undeveloped rural areas distribution centre .In 1968, the United Kingdom of the Leyland Motor Corporation was under 60 different plants. United Kingdom Government policy make manufacturers very negative. After the war, Government in accordance with the manufacturer's market share before the war to them very small amount of iron and steel, the past mode of economic development in many industries to be frozen. Security of supply is not in place, a false high demand and political pressure. Eventually led to the United Kingdom car ind ustry go bankrupt.By the year 1970, Europe and Japan automotive manufacturers began occupation of the British market, and on the quality and price beat the United Kingdom. The 70 ‘s oil crisis, United Kingdom joined the European Community, and the United Kingdom finally protected market disappeared because of a reversal of colonial, which eventually destroyed the United Kingdom independent of the automotive industry. United Kingdom independent auto industry decline and ultimate demise, largely on behalf of United Kingdom general course of economic development.United Kingdom economy aren't so bad at the outset: Roger in The British economy since 1945:engaging with in the debate pointed out that the 1951 United Kingdom is Europe's major manufacturing centers, total production was Germany and France and twice times. United Kingdom achieving full employment, and economic development has been slower than other countries, but also in the growth phase. United Kingdom's payments crisi s, mainly from 6 years to fight Germany and Japan accumulate huge debts owed by, in addition, to support effective defense system after the war and the substantial expenditure.In 1955 defense spending as a share of national income of 8. 2%, Germany spending less than United Kingdom half. (Roger,2000) . In the 1950 sterling was overvalued, United Kingdom it would be difficult to sell enough overseas products, to make up for Sterling against the dollar's long-term deficit. As an island nation, United Kingdom is totally dependent on imported food and plenty of raw materials, in the history of United Kingdom relies entirely on the Commonwealth took over control of privileged markets to make up for this disadvantage.Two forces of conflict Through the comparison of the above we can see that in the special period of government intervention in the economy, Germany has achieved a successful social market economy path, but the process was not smooth sailing. Basic Law of the Federal Republic of Germany came into effect on May 24, 1949, section 2,3,9,12,14 provides:Must have its boundaries the State in managing the economy. Thus, negating the centralized economic management system.Mission mainly in the framework of the provisions of the country's economic order and checks and balances and manage conflict that is raised at the community level. States should not intervene directly in labour conflicts, but must develop a legal framework for labour relations into a certain amount of redistribution through the tax and social policy implementation. (Overy,2003). Due to the inclusion of social and market two elements, that is, the balance between economic and social development, therefore, inevitable in the process of economic development, there were two rival of heterogeneous elements.When this counter is functioning as a complementary relationship, economic takeoff, and when excessive when there is a confrontation between the two complementary, economy will enter a period of struggling in the doldrums. Politically, the two forces dominated by the Christian Democratic Union (CDU) and the Social Democratic Party (SPD), the two major political parties reflect. Therefore, the actual relationship between these two heterogeneous elements to a large extent associated with the Government party structure.Back to post-war Germany economic course, followed before and after can be divided into three stages: the CDU's ruling period of economic development;The social construction of social democratic party in power;Competing with each other in economic downturn. I. Construction of market-oriented economy Postwar Germany, devastated. Economic reconstruction is a priority. Before the advent of the first Government, as the supreme body management â€Å"Frankfurt Economist† (Frankfurter Wirtschaftsrat) made it clear that the direction of economic development is: sharp weakening of government intervention, strongly stimulating market vitality.The 1949 election, in favour of market mechanism and economic regulation of the CDU was pushed on the first stage of the Government, Ludwig Erhard became Economics Minister. Thus, Germany within the framework of the social market economy has embarked on a road of economic rehabilitation of maximize the free market energy. General policy: cancel rationing imposed by the occupation authorities after the war, reducing economic regulation, the maximum possible to liberalize markets. Management of absolute respect for the law of Economics, strongly resisted non-economic factors adverse intervention in the economy.Initially, by currency reform cleared after all economic ties with the Nazi era, liberalize prices lead to higher prices are the direct problems. The Government has not taken any administrative intervention, but by economic means, namely by monetary tightening and reducing tax rates to stimulate investment and productivity, such as keeping enterprises ‘ working capital, worker overtime zero inc ome tax. As soon as production increases, increased incomes for the people. With the formation of the market mechanism, the emergence of competition, companies are more and more rational, unemployed workers in large numbers there.Faced with this situation, the Government did not change its policies, mandatory intervention, but the use of economic instruments. While in May 1949, by State help to enable Bank discount rate from 5% to 4% per cent,to further stimulate domestic investment;The other hand for the international market (mainly the United Kingdom and France) price increases, on September 19 active devaluation of the Deutsche 20% in order to boost exports. (James, 1998). Soon, production should rise further, unemployment pressure has been effectively alleviated.As the June 1950 the Korean peninsula crisis occurs, a hoard purchase occurred in West Germany, prices rose, also accompanied by an increase in imports. At the same time, unemployment rates begin to rise. In this case, t he forces of planned economies began requiring synchronization in response to price increases to pay. This was at the request of demagoguery, but economy Minister Ludwig Wilhelm Erhard did not waver but continued to adhere to the principles of a market economy. In his view, the market economy can be achieved through improved productivity and wages.Corresponding to this, he immediately withdraw liquidity, raise the minimum reserve amount, limit the discount, the discount rate from 4% per cent to 6%, and mortgage rate from 5% per cent to 7%per cent. Soon, in 1951, the second quarter, a turnaround occurs, exports began to outpace imports. Improvement in the relationship between supply and demand rise in prices has been contained. The unemployment rate began to decrease again. (James, 1998). Economic and political success of CDU and easily won the general election of 1953. Since then, Federal Germany economy enters a period of rapid development, and lasted until 1958.In the meantime, an other force of society could only be achieved with the acoustic echo. Economic policies so widely recognized, on the one hand due to the economic imperative of the age of;Also while stimulating the economy, because the Government did not take the British and American models or free economy model of the Weimar period, but consider the social adjustment and social construction in a timely manner, and effectively and this regulation into economic construction construction operation auxiliary rather than obstacles.According to Hans-Joachim Braun , in his book â€Å"The German economy in the twentieth century†, between 1949-1957 and West Germany issued a series of community-building law, such as 1949 ‘s â€Å"Social Security Balance Act† and â€Å"Emergency Assistance Act†, in 1952, introduced a â€Å"War Loss Balance Act† and â€Å"minimum working conditions found that law† in 1957 and introduced a social security law to the pensions. It can be s aid that, at this time, no country on Earth like the Federal Germany enacted so many of the social balance and regulation laws.These laws balance social conflicts, peace including internal labour conflicts, thus, for the protective effect of sustained economic development. Erhard was not random came to the practice of the social market economy, but has a clear rationale, is economist Walfer Eucken thought. Eucken advocated the establishment of a free competition and pointing to balanced economic policy. Thus, countries ‘ task is to establish an effective market-based. In his view, economic and social issues do not come from between socialism and capitalism, but only from the analysis of the economic order.Therefore, and contrary to Adam Smith, he does not â€Å"competition† as unchanging natural laws, but simply believes that â€Å"competition† must be protected as a human freedom. He was also against collective power against private power. It is based on the â⠂¬Å"neo-liberal† economic thought, in 1957 the West German Government had established antitrust laws, except transport, mining and metallurgy, banking, insurance, agriculture, and limit the emergence of private monopolies.Because of market mechanisms has been effectively activated, balanced also played a supporting role, and post-war reconstruction full release of enthusiasm. 1959-1966, the West German economy enters a period of high growth, even economic overheating. At this point, the voices of the community there have been improvements in social policy, asking the Government to increase social equilibrium. Erhard also did not yield, because he believes that it is not necessary, not only exceeded the means of, but would also drag down the entire economy.He knew that when West German society has differentiated into the various interest groups, and these groups have set out their respective positions to get more benefits from the society or the State, national politics if sati sfied by these different interest groups, it would be caught in some kind of multivariate dependence mechanisms. In this way, States would lose their capacity for action and fall prey to interest groups. Moreover, he knew, on community-building measures cannot be reversed, once the excessive leave the State the economy is in crisis. So, he does not meet another force in the community of the greater ocial redistribution requirements but to build â€Å"an ordered society†:A community ceased to be contrary to the purpose of class and organizations with each other, but put aside all differences of opinion on the country-cooperation community at root, that is, a building based on community organizations and interests working together. In such a society are included in the social market economy, his cooperative did not have a strong compulsion, but from their own forces, from their will, from each other is inseparable from each other is becoming increasingly clearer awareness and u nderstanding. James, 1998) Due to his perseverance and the neo-liberal economic protection at that time, West German economic growth in a continuously high growth in a few years. However, high growth comes immediately after the overheating of imbalance, in late 1966 eventually led to the economic downturn, there is a West German economic recession for the first time in the history of 1966-1967 economic growth rate was-0. 2%. In the 1965 election, SDP vote up votes than the CDU of growth rates.At this point, Erhard with the most total votes remained in coalition with the Liberal Democratic Party largely the outcome of economic policy disagreements have emerged, resulting in rupture of the ruling coalition, Erhard to step down. 1966 Kurt Georg Kiesinger CDU Prime Minister after the failure of coalition talks with the Liberal Democratic Party, and the social democratic party form a new Government, but also by the social democratic party who served as economy Minister. Since then, the W est German economic progressive efforts to increase social construction of the beginning of a new era.II . Regulation-led period of social construction The new Government soon introduced the so-called economic stabilization policies, main content is strengthening national regulation, such as the accumulation of reserves in order to overcome the cyclical economic growth;Establishment of mechanisms for consultations between employers, to exert influence on wage;Establishment of economic forecasting and planning system;Enhanced global perspective of macroeconomic regulation and control, and so on.At the same time also raised the slogan of full employment. This desire for criticism's goal just when almost no one objected, but also enjoy the support of a number of authoritative economic theorists,a market economy is not a purely economic order, but a social, moral and ethical element to set up the system. Prior to economic reconstruction, strengthen the market economy, and now, well, it makes perfect sense to take into account social policy construction.Economic growth Advisory Council was established by the Government, and at the same time established federal and State mechanisms, both employers and employees sharing information. However, due to the overestimation of the capacity of economic forecast, while the lack of an effective means of control, and while it is difficult to agree on consultations among the parties, the original targets not only to achieve, and increased government spending.In 1967 although the recession be overcome by two government economic stimulus program, and genuine economic improvement since then, in 1969, economic growth rate even reached 8. 2%. But these are not the result of the Government's economic policies, and people thought it was a result of increased government regulation, which enable the country to gain the role to maintain social welfare, many up to the question on the State of the market;In one hand, and the social democrat ic party in the people's advancement.The 1969 elections, when all major parties decline in almost all of the votes, only the social democratic party's tally has improved significantly. Apparently, there was an increasing number of voters tend to national social equilibrium. The Social Democratic Party and the Liberal Democratic Party form a new Government, the social democratic party who Willv Brandt as Prime Minister, by the social democratic party who served as Economics Minister also, Karl Schiller, followed by Helmut Schmidt.After the formation of the new Government was fully pursued a policy of State, whereby the State stepped in to control the national economy and social life: on the one hand, in stimulating the economy and to overcome the unemployment rate started to ignore market means on the issue, will mainly focus on the national finance;The other hand, are pushing relies primarily on community-building process of State financial benefits. End of 1972, the West German soc ial policy had reached unprecedented heights.This makes the State finances a huge deficit for the first time. Lucky is that started in the late 1960 ‘s, West Germany enterprise, productivity has been increased significantly, making statistical figures show overall growth of the national economy. Thus, the community generally have a feeling, the Social Democratic Party Government's national policies focus on people's living standards and welfare, concerned about the growth of the national economy through hard intervention, that there is nothing wrong.Such results on the one hand allows to continue the ruling social democratic party along with the established policy of the Government to move on;We will also respect economic laws, market-oriented mechanisms of voice is not up, many acute economic problems do not have enough attention, such as productivity while improving the overall economic growth, presents promote consumption issues, and led to the production of consumption in a new situation.At that time the Government was not trying to deal with, but, as always, will focus on the macro-control and promoting the welfare of the process. 1973 oil crisis inflation have gotten even up to 7%, to the collapse of the Bretton Woods international monetary system of fixed exchange rates for content, followed by the worldwide economic crisis has also affected the West Germany. In 1975, the West German economy fell to its lowest point: all sectors of the economy crisis, an unprecedented slowdown in economic growth, the unemployment rate reached a record high, the 1974-1975 recession.Even under such adverse economic circumstances, the Government is also trying to implement macro-economic control and community-building, only between 1970-1975, West Germany State welfare spending has doubled . Which makes the budget deficit rising at an alarming rate. So the poor economic situation and irrational acts of States when the community was aware of the error of excessive val ue State regulation and welfare. The 1976 election results made it clear that former excessive importance to macro-control and social policy has begun on the construction of public discontent.Thus, the Government began to change economic policy, no macro-economic control, but to enable the market mechanism to make an adjustment, Germany Mark's fixed exchange rate with the US dollar has been cancelled opportunities, linked with productivity growth and stable price level over the medium term the currency merchant policies In this way, by controlling the money supply causes lack of marks on the market, and thus marks compared to the appreciation of the dollar more than 1 time, then rapid import growth.Strong marks and imports accelerated first oil crisis impact on West Germany obviously failed to other Western countries, especially inflation significantly smaller than other countries, which makes rapid upgrading of West Germany's position in the world. Facing export difficulties arisin g therefrom, the State did not conduct a mandatory intervention, but to use market mechanisms to bring West German industrial structure transformation themselves, enhance the market competitiveness of products, such as those of traditional labour-intensive industries such as coal, textile, shipbuilding, iron and steel industry gradually atrophy.This structural transformation will allow the industry to release a lot of unemployed persons of the community, but the Government in view of the inherent law of economic development, or stick to the policies. Therefore, West Germany began in 1976 and continued economic growth. Although in 1979 and there is a second world-wide oil crisis, but the stronger mark makes the impact on Western Germany is significantly less than other Western countries, which increases the international status of West Germany continued to improve, the European financial system, Germany's Federal Bank in a leadership position.Precisely because of the success of this session of the Government's economic policy, the 1980 election, LDP votes most improved significantly compared with the other political parties, SPD is only slightly elevated. This clearly shows that new economic policies to save the fate of the Liberal Democratic party coalition Government, as long as the economy is not affected, people wanted the national focus for community-building. In fact, late 60 ‘s benefits to the construction of the second half of the 70 and never stopped, just slowed.The late 70 and early 80 ‘s, as economic growth and trade union involvement in the enterprise for a rise in a row, both corporate and personal income growth. However, due to the appreciation of the mark and the national framework for intervention persists, investments did not appear accordingly, some enterprises take advantage of the strong mark and cheap labor in foreign countries this should be invested in domestic market began to be moved abroad.This directly lead to the economi c recession that began in 1980, inflation and unemployment rate rising rapidly. At that time, the West German economy has experienced continuous recession that began in 1980, and recessions than 1974-1975 that bad. At the 1983 general election, notable decline in number of votes of the Social Democratic Party and the Liberal Democratic Party, Social Democratic Party Government to step down, West German economic history on the social welfare of the end of the construction period. (James, 1998)III. Difficult period. When headed by Helmut Kohl's CDU in power, immediately offered to go back to era of Erhard's road to a social market economy, but also admits this is not entirely dependent on market mechanisms. Clear specific policies to reduce government spending and to stimulate investment as a core. On October 1, 1983 starts austerity plans, such as reducing the amount of childcare support, was in hospital and nursing homes are no longer exclusively by the State a full payment, individ uals must be part of the burden.These initiatives reduced national social expenditure only reduces new issuance of government bonds, but not to have total accumulated national debt reduction, because the national welfare systems have been set up, it has been used and tasted States contemplated social welfare benefits. Therefore, reducing State spending, refers only to reduce the amount of newly issued Government bonds, rather than simply to reduce the national debt as a whole.In order to improve the financial situation of the country, Kohl Government also initiated the privatization of State-owned enterprises, such as postal services, telecommunications, energy, and later raised the sales tax. These harmonize national fiscal revenue has significantly improved. But after building up huge social welfare, financial situation did not show substantial improvement. Thus, in stimulating investment in the Kohl Government would attempt to relieve pressure on enterprises through tax reform, b ut, under pressure from bad financial situation in the country could not take too much action.Fortunate is that international economic situation improved after the Kohl Government came into power, in particular the United States and Japan, which makes the already high level of internationalization of West Germany economy through foreign trade rises pick up right away. With the devaluation of the dollar, beginning in 1985, the rapid growth in imports, prices began to drop, growth in domestic demand. From 1983 to 1990, West Germany's overall economic growth rate from five began to grow to the end of the 80 ‘s 2% and per cent in 1990.However, the improved little from the internal market, because profits faster than investment growth during this period. Second half of the 80, investment has also accelerated growth, but unemployment does not appear synchronized better. It is clear that the growth largely from domestic enterprises to invest overseas. Kohl on the economic policy of t he Government is in a difficult phase, and for high unemployment and no growth in domestic investment economic growth when frustrated, East German voluntary dissolution, and federal Germany merged.The German reunification is undoubtedly a great blessing for the German nation, but temporary prosperity to Flash briefly. To achieve the transformation, reconstruction of infrastructure and social safety nets in the eastern part, including common revitalization project in the East, and the consolidated fund, all levels of Government transfer payments between the 1990 and the medium-term to the East has over trillion-mark, weighed on Western economies.To raise funds and curb inflation, the Germany Government had to be more than more than 10 times in a row to raise key interest rates. Trouble has been brewing for quite some time. Germany economic weakening, mainly because of the welfare system and a series of structural reasons. Excessive protection of the social welfare system has pushed u p the cost of production, and formed a â€Å"higher welfare – higher taxes under the low growth – high liability – high cost – low growth – low investment,† a vicious cycle. From the early 1970 ‘s to the late 1990 ‘s, Germany 5. times more than double the increase in welfare expenditure per capita, down to become a drag on economic growth;1970, 1980, too protect sunset industries in the industrial structure and the information technology industry research and development keep lagging, its lack of wealth growth force leading leading industry;The lack of flexibility of the system of corporate governance and incentive mechanism, led by profits, the lack of micro-economic vitality;Excessive fire protection and high unemployment security benefits labour market rigidities and unemployment reduction.Faced with rising unemployment, helpless Government of Helmut Kohl in 1998, replaced by a Government of the Social Democratic Party was Ger hard Fritz Kurt Schroder, Schroder economic policy compatible with the two party ideas: on the one hand through tax breaks to stimulate investment and consumer demand, dynamic economy.The other hand, in the field of social security, and former advocate of personal responsibility at the same time, try to keep the original treatment, does not increase social security contributions in favour of eco-taxes to fill the gap and promote environmental protection. Now Germany as the third largest economy in the world today, the second-largest exporter, its per capita GDP of more than 27,000 euros.Germany agriculture production value less than 1%, share services near two-thirds, is a highly developed industrial structure to serve the community, its industrial machinery manufacturing, automotive, electronics and chemical industry led;Its national economy by relying heavily on exports, and export share of world total exports of nearly 10%, 70% about trade is concentrated in Europe and the United States, Japan and other developed countries, long-term surplus in balance of payments, inflation rate, unemployment rate at around 9%.Looking at the Germany of economic development after the war, at some point, despite the many problems, but judging from the overall economic and social development, was ranked the highest in the world, experience and lessons have left us a valuable asset. Reference [1] Braun, Hans-J. The German economy in the twentieth century. London : Routledge 1990 [2] Berghahn, V. Modern Germany: society, economy and politics in the twentieth century. Cambridge : Cambridge University Press 1982. 3] Brian,H . Seeking a role: the United Kingdom, 1951-1970 . Oxford : Clarendon 2009 [4] Overy, R; Ogilvie, S. Germany: a new social and economic history, Vol. 3, Since 1800. London : Arnold 2003 [5] Roger ,M. The British economy since 1945: engaging with the debate . Basingstoke : Macmillan 2000 [6] Robert,J;Bennett,G;Horst,Z. Local economic development in Britain and G ermany. London : Anglo-German Foundation 1990. [7] Tony ,J. Postwar: A History of Europe Since 1945 . London : Pimlico 2007 .

Bucknell University Acceptance Rate, SAT/ACT Scores, GPA

Bucknell University is a private liberal arts college with an acceptance rate of 33%. Located in Lewisburg, Pennsylvania, Bucknell has the feel of a small liberal arts college with the course offerings of a comprehensive university. The engineering program is worth a close look, and the universitys strengths in the liberal arts and sciences have earned it a chapter of the prestigious  Phi Beta Kappa Honor Society. In athletics, the Bucknell University Bisons compete in the NCAA Division I  Patriot League. Popular sports include soccer, field hockey, football, and track and field. Considering applying to Bucknell University? Here are the admissions statistics you should know, including average SAT/ACT scores and GPAs of admitted students. Acceptance Rate During the 2017-18 admissions cycle, Bucknell University had an acceptance rate of 33%. This means that for every 100 students who applied, 33 students were admitted, making Bucknells admissions process competitive. Admissions Statistics (2017-18) Number of Applicants 10,144 Percent Admitted 33% Percent Admitted Who Enrolled (Yield) 29% SAT Scores and Requirements Beginning with the 2019/2020 application cycle, Bucknell will be test optional for most students. During the 2017-18 admissions cycle, 67% of admitted students submitted SAT scores. SAT Range (Admitted Students) Section 25th Percentile 75th Percentile ERW 620 690 Math 630 730 ERW=Evidence-Based Reading and Writing This admissions data tells us that most of Bucknells admitted students fall within the top 20% nationally on the SAT. For the evidence-based reading and writing section, 50% of students admitted to Bucknell scored between 620 and 690, while 25% scored below 620 and 25% scored above 690. On the math section, 50% of admitted students scored between 630 and 730, while 25% scored below 630 and 25% scored above 730. Applicants with a composite SAT score of 1420 or higher will have particularly competitive chances at Bucknell. Requirements Bucknell does not require the SAT writing section. Note that Bucknell participates in the scorechoice program, which means that the admissions office will consider your highest score from each individual section across all SAT test dates. SAT Subject tests are not required, but will be considered if provided. ACT Scores and Requirements Beginning with the 2019/2020 application cycle, Bucknell will be test optional for most students. During the 2017-18 admissions cycle, 43% of admitted students submitted ACT scores. ACT Range (Admitted Students) Section 25th Percentile 75th Percentile English 29 34 Math 27 31 Composite 28 32 This admissions data tells us that most of Bucknells admitted students fall within the top 11% nationally on the ACT. The middle 50% of students admitted to Bucknell received a composite ACT score between 28 and 32, while 25% scored above 32 and 25% scored below 28. Requirements Note that Bucknell does not superscore ACT results; your highest composite ACT score will be considered. Bucknell does not require the ACT writing section. GPA In 2018, the average high school GPA of Bucknells incoming freshmen class was 3.5. This information suggests that most successful applicants to Bucknell have primarily A and B grades Self-Reported GPA/SAT/ACT Graph Bucknell University Applicants Self-Reported GPA/SAT/ACT Graph. Data courtesy of Cappex. The admissions data in the graph is self-reported by applicants to Bucknell University. GPAs are unweighted. Find out how you compare to accepted students, see the real-time graph, and calculate your chances of getting in  with a free Cappex account. Admissions Chances Bucknell University has a competitive admissions pool with a low acceptance rate and high average SAT/ACT scores. However, Bucknell has a  holistic admissions  process involving other factors beyond your grades and test scores. A strong application essay and glowing letters of recommendation can strengthen your application, as can participation in meaningful extracurricular activities and a rigorous course schedule. Bucknell also requires several  supplemental essays. Applicants should make sure to use these essays to convey your unique qualities and interests. Students with particularly compelling stories or achievements can still receive serious consideration even if their grades and test scores are outside of Bucknells average range. Students applying to Bucknell must apply to one of three colleges: The College of Arts Sciences, the College of Engineering, or the Freeman College of Management. All applicants must have two years of a single foreign language and at least two and a half years of college preparatory math. In the scattergram above, the blue and green dots represent accepted students. You can see that the majority of successful applicants had high school grades in the A range, combined SAT scores of 1250 or higher (ERWM), and ACT composite scores of 27 or better. If You Like Bucknell University, You May Also Like These Schools: Colgate UniversityBoston CollegeJohns Hopkins UniversityUniversity of RichmondPrinceton UniversityDuke UniversityDartmouth CollegeTufts UniversityPennsylvania State UniversityUniversity of VirginiaDrexel University All admissions data has been sourced from the National Center for Education Statistics and Bucknell University Undergraduate Admissions Office.

The Boston Tea Party Political and Mercantile Protest - Free Essay Example

Sample details Pages: 2 Words: 635 Downloads: 2 Date added: 2019/08/16 Category History Essay Level High school Tags: Boston Tea Party Essay Did you like this example? There were several different events that I considered discussing during the studied time frame, but the major historical event that most intrigued me the most is the Boston Tea Party. The Boston Tea Party was a political and mercantile protest led by the Sons of Liberty in Boston, Massachusetts on December 16, 1773. The Boston Tea Party was a result of the Tea Act that was put into place by the British Government. Don’t waste time! Our writers will create an original "The Boston Tea Party: Political and Mercantile Protest" essay for you Create order The Tea Act was granted by the British to help reduce their national debt therefore, placing a tax on the tea in Boston. As a show of protest against the British Parliaments new tax on their tea, the citizens in Boston dumped crates of tea in the harbor of Boston. Their chant of No taxation without representation became famous and influenced politics moving forward. The Boston Tea Party happened as a result of Taxation without Representation, yet there are many more complex causes that led up to this Tea Party protest. However, when looking at the history of our great United States of America and the world of protesting that we live in today, this act is what makes this such a significant event and signifies one of the first massive rebellions and the beginning of several fundamental rights that our current democracy allows. The American Colonist believed that Britain was unfairly taxing them for their tea. One main reason they are taxing American Colonists is to help fund the French and Indian War. The colonist had never accepted the increased taxation or liked the constitution and the Tea Act rekindled their opposition to British government. Their resistance resulted in the Boston Tea Party on December 16, 1773, in which the colonists dressed as Native Americans, boarded East Indian Company ships and dumped all the tea on the ships overboard i n the harbor. Furthermore, the belief that the Government was creating a monopoly on tea created a sense of both anger and fear amongst those living in The States. The American Colonist argued that a monopoly created with tea would allow for other businesses and their products to also be monopolized and would hurt the economy in which competitive pricing was beginning to be established It takes just a few simple acts by government to create stir amongst groups that are considered the rebels prior to war. The Boston Tea Party, written by Samantha Gibson, explained how Samual Adams joined voices with the Sons of Liberty to begin the crucial steps towards the beginning of the Revolutionary War against England and eventually the creation of the United States of America. The British then became very furious at the actions of the colonists and felt a need to impose discipline for their rebellion. The act of discipline enforced by the British Government is written and explained by the authors of History.com, which became known as a key part of the Intolerable Acts. The American Colonist then became, highly upset about the punishment that the British enforced upon the colonists. How and why does this become so important? It seems very clear to me as I continued the research of the the event and the current state of uncertainty in our very own country. War does not look to be in our near future, but it is clear that the ability of a few to come together over a cause can create protest for their rights and has rooted itself in our country over the years, and is protected rights through the constitution. Over the last several months and years, it seems that the right to protest and express ones views has increased and thus supports the statement made by John Adams in his diary dated December 17, 1773 in which he states that The people should never rise, without doing something to be remembered/something notable and striking.