Reasons Behind The Growth Of Eurocurrency Markets Finance Essay

Reasons Behind The Growth Of Eurocurrency Markets Finance Essay The Eurocurrency market Ñ onsists of banks, which Ñ alled Euro banks that aÑ Ãƒâ€˜Ã‚ ept deÑâ‚ ¬osits and make loans in foreign currencies. Eurocurrency is a deÑâ‚ ¬osit held in the bank outside the Ñ ountry in whose currency the deÑâ‚ ¬osit is dominated. The deÑâ‚ ¬osit can be Ñâ‚ ¬laced in a foreign bank or in the foreign branch of a domestiÑ  US bank. For à Ã‚ µxample, dollars deÑâ‚ ¬osited in a bank in Switzerland arà Ã‚ µ Eurodollars, yen deÑâ‚ ¬osited at a US bank are Euro yen, etc. The Eurocurrency market is dominated by US dollar or the Eurodollar. The deposit need to be held at a European bank or in Europe. Eurocurrency is used for lending and borrowing. The Eurocurrency market often provides a cheap and convenient form of liquidity for the financing of international trade and investment. The main borrowers and lenders are the commercial banks, large companies, and the central banks. By raising funds in Eurocurrencies it is possible to secure more favorable terms and rates of interest, and sometimes to avoid domestic regulations and taxation. The deposits and loans were initially on a short-term basis but increasing use is being made of medium-term loans, particularly through the raising of Eurobonds. This has to some extent replaced the syndicated loan market, in which banks lent money as a group in order to share the risk. The Eurocurrency market is dominated by US dollar or the Eurodollar. Occasionally, during the 1970s and 1980s, which were a weak dollar period, the Euro Swiss Franc and the Euro Deutsche Mark markets increased in importance. The Eurodollar market originated post Second World War in France and England thanks to the fear of Soviet Bloc countries that dollar deposits held in the US may be attached by US citizens with claims against communist governments. A Eurocurrency is a freely convertible currency deposited in a bank located in a country which is not the native country of the currency. Restrictions on convertibility take many forms limiting the amount that can be exchanged, the currencies into which exchange is possible, the uses for which foreign exchange can be obtained, or the range of holders who are allowed foreign exchange. The Eurocurrency market has grown rapidly mainly due to the existence of various US regulations that have raised costs and lowered returns on domestic banking transactions. In other words, the Eurocurrency market has become popular because of the absence of restrictions from the government which have led to attractive deposit rates for savers and attractive loan rates for borrowers. This means that banks can offer higher interest rates on Eurocurrency deposits than on deposits made in the home currency. Similarly, banks can also charge lower interest rates to Eurocurrency borrowers than to those who borrow the home currency. The spread between the Eurocurrency deposit and lending rates is less than the spread between the domestic deposit and lending rates giving Eurocurrency banks a competitive edge over domestic banks. The Eurocurrency market began to develop in the 1950s, when the Eastern Bloc countries were afraid the United States might seize their holdings of dollars. It means that instead of depositing their dollars in the United States, they deposited them in Europe. Additional dollar deposits came from Western European central banks and companies that exported to the United States. The other long-running disadvantage was a Regulation Q. This prohibited the payment of interest on demand deposits, as well as authorising the Federal Reserve to set a maximum interest rate payable on savings and time deposits in US banks. The level of interest rates in the money supply was raised through slowing down the growth of the money supply. However, while money market interest rates rose, the interest rates payable on time deposits, were held down by the ceiling. Investors moved their time deposits from the banking system, causing the banks to experience a shortage of funds. The banks then looked to the E urodollar market for funds, and in 1966, when money was tight, borrowing from European Branches of US banks by their head offices rose by $2.5 billion. Nevertheless, banks began to regard the market as a substitute source of dollars even when Regulation Q was not effective as in 1967. Funds raised through this method were then used to continue lending to customers in the US. Regulation Q stimulated the growth of the Eurodollar market in two ways: firstly, it reinforced the market`s ability to offer higher interest rates on deposits. Two other reasons why they could offer higher interest rates were that Euro banks operated on lower margins; and the effect of domestic reserve requirements. Secondly, the growth of the market was stimulated because of the demand for dollars from commercial banks in the US in order to go around domestic credit restraint policies. In 1957, the market surged again after changes in British laws. In the 1960s, the market grew once again when, after changes in US regulations discouraged US banks from lending to non-US residents, would be borrowers of dollars outside the United States turned to the Euromarkets a source of dollars. The next big increase in the Eurocurrency market came after the 1973-74 and 1979-80 oil price increases. OPEC (Organisation of the Petroleum Exporting Countries) members avoided potential confiscation of their dollars by depositing them in banks in London. The dramatic growth of flight capital to Swiss and other banks, encouraged by the development of financial centres such as Luxembourg in which regulations ensured the protection of the anonymity of lenders. The growth in supply of funds to the market was the use by central banks of the market in order to increase returns on their holdings of international reserves. However if there had not also been a large demand from borrowers for Eur odollar, the market would not have grown so rapidly. The reasons for the large demand from the borrowers include a US government discouragement from 1963 of borrowing by foreign companies directly from the US market through the imposition of a tax that increased the cost of borrowing in the US for borrowing in most of the industrial nations. The fact that the euro banks were free of the reserve requirements imposed on domestic banks, allowed them to maintain a lower spread between borrowing and lending rates. Another important reason of a large demand is a US government limitations on the amount of capital that US transnational corporations could shift out of the US to invest abroad, forcing them to borrow outside the US and providing the market with a major group of very creditworthy borrowers. The domestic and the international markets have two major components: the inter-bank mechanism, and the channelling of funds from initial depositors to ultimate borrowers. However, in the Euro-markets, the former plays a far more important role, with respects to the latter, in which the markets introduced important innovations. The general efficiency of the inter-bank mechanism in allowing banks access to funds at very short notice, as well as allowing them to place funds in the market for very short periods to earn some interest, helps to reduce the transactions and information costs in the Eurocurrency markets. This also allows them to operate on smaller margins. Two innovations, which are associated with lending to non-banks, and which have facilitated the expansion of the Euro-currency markets, are roll-over credits and the syndicated loan system. The introduction of roll-over credits reduces the risk of interest rates moving against a bank when it tends to borrow short and long-term. It enables banks to offer higher interest rates on short-term deposits, whilst at the same time being able to commit these funds long-term, through reducing the risk of making losses if deposit rates should rise again. On the borrower`s side of the market, such roll over credits imply that interest rates at the time of borrowing are less important, because if they should fall over the course of the loan, the borrower should reap the benefits. The second innovation is that of syndication of loans. A syndicated credit is a loan in which a group of financial institutions makes funds available on common conditions to a borrower. It allows credits of larger sizes sometimes over $1 billion, to be put together, a factor that was especially important in the financing of national balance of payments deficits. In the lender`s point of view, it reduces the risks of international bank lending , through diversification of loans to political entities. It also provides more protection against selective defaults: unwillingness of a nation to repay its debts will be met with pressure from several countries, whose banks are involved. Negotiations were also feasible, because at the same time, there are few enough creditors involved. On the other hand, a possible danger of the process, which has become increasingly recognised, is that in the event of a default, the repercussions will be spread over a wide part of the Euro-currency system. This has raised questions regarding the stability of the international banking system. There are certain important consequences of the rise of the Eurocurrency markets. The first is the shift in the financial system from one depending on a state to manage the flow of international liquidity, to a system where liquidity is provided by private banks. The international financial systems were threatened with a lack of credit, there is now, excess international liquidity, and private bank lending provides this. In 1980, the US inter-bank loan market stood at $74 billion, this almost doubled to $170 billion by 1995. The international inter-bank lending market by contrast had grown to $5.8 trillion by June 1995.

A Comparative Analysis of Moses

The biblical Moses and the Moses described by Zora Neale Hurston in her book Moses, Man of the Mountain, are both based upon the Exodus story, found in the second book of the Bible.Although the stories are similar in many respects, both concerned with the bondage of a people and their cries for a deliverer, who is found in Moses, the biblical Moses is firmly rooted solely in the Hebraic tradition, following the lead of the patriarchs, Abraham, Issac, and Jacob.Hurston’s Moses, however, although still a Hebrew, has a more universal appeal. He speaks in black colloquialisms, creating an extended analogy that can be linked not to the ancient Hebrews, but also to the oppressed blacks in America, and to the modern Jews who were savagely persecuted by Hitler and Nazism.The Exodus story concerns a male son born to Hebrew slaves. The midwives disobey Pharaoh’s command to kill all male newborns. Moses is hidden only to be discovered by none other than Pharaoh’s own daught er, who then raises him as her own son, who later discovers his   true identity and leads the slaves to freedom.   Moses’ life is divided into forty year segments: forty years in Egypt; forty years on the back side of a mountain; and forty years wandering in the wilderness.In Hurston’s version, more is made about race. The story discusses the idea of a â€Å"people† and their origins to a greater extent. Hurston slants the argument toward the idea of racial origins and perhaps origin more generally as the start of many of the evils of the world. She not only wants to create doubts about Moses’ pure origins, but also about the very concept that was prevalent during 1939 when her book was written: that of racial purity.As an anthropology researcher she understood racial divisions as idealized abstractions, even though they had concrete functions in the real world. Hurston explored race as a cultural creation rather than a biological fact. Her novel assu mes an even greater meaning as Germany, led by Hitler’s theory of eugenics-founded on the idea of racial improvement through selective breeding- started the world war in 1939.In the United States the eugenics movement was related to racist campaigns against European undesirables and blacks. Eugenics was thought to be necessary to produce a great race. Hitler’s goal was a Master race who guarded the purity of their own blood. By keeping race â€Å"pure,† exterminating Jews and Slavs were deemed   essential to that undertaking.(Hurston, introduction xii-xiv).The spectre of Nazism looms over the beginning of Hurston’s novel   as it starts  Ã‚  Ã‚  Ã‚  Ã‚   with the act of marking Hebrew male newborns for extinction. Parents, desperate for places to hide their children, become frantic that the police might get tipped off and come execute their child. In fact, Moses’ father is so fearful that he aims to kill the baby himself so that the police won ’t have that chance. Yet despite their terror, Moses’ mother is determined that he lives and hides him. In all this hoopla of extermination, the irony is   that there is plenty of   Hebrew blood in Pharaoh’s family already.â€Å"That is why he wants to kill us off. He is scared someone will come along and tell who his real folks are. The grandmother of Pharaoh was a Hebrew.† ( Hurston, 14).Besides his murder of male infants, Pharaoh is cruel in other ways. He denies citizenship to the Hebrews, relegating them to slavery. Yet in still another act of irony, Pharaoh ends up with a Hebrew grandson in Moses.As he grows older, Moses fights for inclusion of the Hebrews in the Egyptian army. But the Egyptians oppose him, remarking:â€Å"They are not citizens of Egypt, but enemy prisoners, and as such it would bbe rash to put arms into their hands again. Who knows when they might rise up and turn the tables?†

Pro-Illegal Immigration Paper - 916 Words

Vanessa Labrada 11/16/11 FYS 138 Professor Lodge The Melting Pot The debate of illegal immigration in the United States is one that is plagued with many details, and one that sparks a huge amount of controversy among politicians and citizens alike. While it is an issue that many argue about, few people are actually knowledgeable about the subject and have facts to back up their opinions. According the Center for Immigration Studies, the â€Å"unauthorized resident immigrant population is defined by all foreign-born non-citizens who are not legal residents† (CIS). This definition incudes people who emigrate from countries all over the world; it is not exclusive to those who come from Mexico and surrounding Central and Southern American†¦show more content†¦This forces American citizens to pay more taxes in order to fund these programs. America is already suffering through one of the worst economic crises since the Great Depression. It cannot afford to support illegal immigrants and their families in addition to its citizens. However, these cons are outweighed by the benefits that immigration from outside countries can bring to the United States. While it would be ideal for immigration to become legal, there are simply not enough resources and funding to make every illegal immigrant a citizen of this country. The fact of the matter is that immigrants come here looking for a better chance at life, and a better paying job to support their families. The risk their lives in coming here, and are treated as less than humans when they take up strenuous jobs. Those undesirable jobs are available for a reason; most Americans would not enjoy being a housemaid, a fruit picker out in the hot sun, a gardener, etc. Furthermore, undocumented immigrants do indeed contribute to the American economy. 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Oedipus Fate from the Gods and His Choices Essay - 654 Words

Many times in life, people think they can determine their own destiny, but, as the Greeks believe, people cannot change fate the gods set. Though people cannot change their fate, they can take responsibility for what fate has brought them. In the story Oedipus, by Sophocles, a young king named Oedipus discovers his dreadful fate. With this fate, he must take responsibility and accept the harsh realities of what’s to come. Oedipus is a very hubris character with good intentions, but because he is too confident, he suffers. In the story, the city of Thebes is in great turmoil due to the death of the previous king, Laius. With the thought of helping his people, Oedipus opens an investigation of King Laius’s murder, and to solve the mystery,†¦show more content†¦Oedipus must act as a true and loyal king contrary to what his ignorance and predetermined fate has brought him. In the beginning of the story, Oedipus is very taken back by the situation. He will not acc ept the truth of his fate and accuses Tiresias of lying to him so Oedipus’s bother- in- law, Creon, could take the throne. Oedipus is extremely dumbfounded by this news because he had no knowledge of killing his father or marrying his mother, but what he learns later is that who he thought were his parents were not his real parents. When he finally realizes that he did in fact marry his own mother and kill his father, he accepts it and punishes himself in order to uphold his promise to his people. By this point there is no way Oedipus can escape his fate. Tiresias says to Oedipus, â€Å"No man in the world can make the gods do more than the gods will† (811). Since he did kill his father, the previous king, Oedipus has to be shunned by all of Thebes. Because there is no way of changing his fate, he accepts his responsibilities by giving himself the punishment he assigned to the murderer of Laius. Although Oedipus’s fate was already determined, he is not just a m ere puppet of the gods, meaning he can control his own life. Before full knowledge of his unintentional incest, he tries to flee town in order to avoid marrying his mother. By doing this he is taking mattersShow MoreRelatedFate in Oedipus the King Essay1065 Words   |  5 Pagesat least in â€Å"Oedipus the King† in which the protagonist, Oedipus calls forth his doom unwillingly. Fate is defined as something that unavoidably befalls a person. The author of â€Å"Oedipus the King,† Sophocles, writes a tragic fate that Oedipus was born to experience. Fate is what is meant to happen and cannot be avoided or unchanged. Furthermore, events that lead to other events could be the result for one to meet their fate. 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Destined to marry his mother and murder his father, Oedipus was guided by fate. When Oedipus learns of his fate he immediately tries to prevent it, as did his mother and father. This prophecy, as warned by the Oracle ofRead MoreInfluenced by Humans but Beyond Human Control: Fate in Oedipus767 Words   |  4 PagesFate; something that unavoidably befalls upon a person, fate is influenced by one’s own actions, but is ultimately dictated by events beyond human control. In this play Sophocles demonstrates the power of fate t hrough certain situations that occur throughout the play which are uncontrollable. The gods preordained Oedipus’ future, with all its intricacies and landmarks which lead Oedipus on his quest to find his identity and the truth. However, the path Oedipus â€Å"chooses† is simply a reaction to theRead MoreFate vs Free Will1663 Words   |  7 PagesOedipus The King: Fate Vs. Free Will The ancient Greek writer, Sophocles suggests that while there are factors beyond mankind’s control that we have the power to make choices that affect our destiny. In his play, Oedipus the King, Sophocles makes it quite clear that although everyone is born with a fate, you have the ability to alter its direction and toll. The main character of the play, Oedipus, is based on the way Sophocles portrays the equilibrium between fate and freewill, and shows theRead MoreFate vs Free Will in Sophocles ´ Oedipus Rex and Shakespeare ´s Macbeth1487 Words   |  6 PagesFate and free will are two topics that are often questionable because they go hand in hand. Fate is a belief that a certain event is said to happen, then that persons choice and free will lead them to what has been predicted as inevitable. Knowing whether something is fate’s fault or the fault of the person who’s going to enact the said action, is one question that has never been fully answered. In Soph ocles Oedipus Rex and Shakespeares Macbeth, fate is determined by their own choices and freeRead MoreComparing Oedipus and Job Essay1021 Words   |  5 PagesGreek gods. Sophocles finds a perfect example of this celebration of fate, in the tragedy Oedipus the King. Conversely, the Story of Job uses the dramatic tension of a wager between God and Satan on the sincerity of Jobs devotion to God. Where Oedipus life, regardless of personal choice, is bound up by fated situations and their fated outcomes, Jobs story is one of choice in the midst of supernaturally imposed difficulties. While both strive to teach resignation to the will of God, theyRead MoreFate And Free Will In Oedipus Rex1577 Words   |  7 Pagesrelationship between fate and free will was a common topic explored in ancient Greek plays. Oedipus Rex written by Sophocles survived through the years with such universal questions provoked by the plot. Fate and free will were driving forces woven throughout the play and c onsiderably difficult to distinguish for both characters and the audience. Fate was considered an all powerful force by the individuals in the play. Oedipus challenged the power of fate in favor of his free will seen through his rash decisionsRead MoreOedipus The King By Sophocles1598 Words   |  7 PagesThe events in Oedipus the King, written by Sophocles, suggesting a connection between man s free will towards perfection in life or fate which the ancient Greeks believed that Gods had given to them. Man was free to choose and was ultimately held responsible for his own actions. Both the concepts of fate and free will are a poignant factor and they play an indispensable role in the Oedipus destruction. Oedipus was a victim of fate when he was predicted from birth to someday marry his mother and toRead MoreOedipus The King And Antigone948 Words   |  4 Pagesa certain fate but if destinies are fixed they cannot be altered. Sophocles supports the notion that free will eludes us i n works such as Oedipus the King and Antigone. Oedipus, Creon, Antigone, and Tiresias are characters in these epics whose lives represented the battle of truth and wisdom. Oedipus attempted to escape the prophecy in which he killed his own father and married his mother. He hastily discovered his past while trying to cure his city, and his efforts to change his fate fail when the