In this country banks are being urged to lend, especially to small Essay

In this country banks are being urged to lend, especially to small businesses (vide Project Merlin) and for mortgages, but also - Essay Example Loans to small and medium size business ventures form the bulk of the credit facilities offered by banks at any one time and therefore have a critical responsibility in ascertaining the stability of an economic framework. Private developers equally get credit facilities in terms of mortgages and this has been in the rise with the advent of a booming real estate business across the globe. Bothe local and international investors have continuously sought the intervention of banks through monetary assistance through credit facilities which have been termed a critical stimulant to an economy reviving from effects of financial crises or intending to build on internal reserves in finances. In the UK, in the aftermath of the global financial crises, the banks are being encouraged to adopt the lending strategy especially to small business and for mortgages. Moreover, they are required to step up regulatory and precautionary measures in building up capital reserves in order to aid in the smoot h operations within the economy. However, an outright dilemma sets in regarding the balance between the safe lending and the ways to build up the capital reserves as required. The government of the United Kingdom plays the role of regulation and creates an enabling environment for the banks and small business enterprises that are the target in the credit facilities. On the other hand, the banking sector within the country has a central role in formulating and adopting favorable policies, which will serve to regulate the credit facilities, advanced while at the same time monitoring the growth of financial capital stocks in the banking sector. Drawing lessons from the 2007 to 2008 financial crises, Gambacorta and Marques-Ibanez draws the conclusion that stability in financial intermediaries plays a critical role in ensuring that there is a smooth transmission of credit facilities between the banks (lenders) and the borrowers (the likes of small and medium size businesses). The strengt h of bank lending channels plays an important role in provision of credit facilities in that bank-specific characteristics are central in credit provision. However, structural adjustments and changes during the period of crises resulted to favorable outcomes in restoration of sanity within the economy. During the crises, the loan supply suffered restriction greatly from weaker capital positions from banks as well as overdependence on non-interests loans and market funding. This therefore points to the risks that are prevalent to banks over funding liquidities. The conclusion from the lessons learnt support the need of establishing regulatory and monitoring mechanisms on those factors that work in favor of or against monetary transmission more so during periods of crises. The central bank has a specific role that of supervisory role to the other banks and keeping a proper statistical data base of all the banks for monetary regulation and advisory roles (Gambacorta and Marques-Ibanez, 2011, p.1-28). In order to address the rising concerns, there are various tools that can be applied within the banking sector, which would include imposition of monetary policies, deregulation as well as financial innovation. However, monetary policies are argued not to be very neutral from the perspective of financial stability. Financial

Car Industry Assignment Example | Topics and Well Written Essays - 3000 words

Car Industry - Assignment Example Financing is another new dimension to the whole situation as car companies are trying to make a profit on financing by offering lower financial rates than financial institutions. Most giant automobile companies have expanded into providing financial services to car buyers. Leasing has benefited both consumer and manufacturer. With leasing option consumers find cars more affordable and thus they increase the overall demand for cars. However, if leasing is not done at the right value of the vehicles at the end of the lease then it could eventually be a loss for the company. Technological & Environmental Concerns: Technological changes and advances have also become a key factor in the industry. Advances in aerodynamics, brake assistance, adaptive speed control and global navigation and satellite tracking system etc require a proactive approach by the industry with regard to technology. Increasing awareness of environmental issues has also forced the industry to look into cars with alternative fuel options. Fuel Efficiency has also become a key selling element in the industry. Hybrid cars can be considered a step in this direction with the use of smaller, more-powerful and easily recharged lithium ion batteries for hybrid cars. Such batteries would be able to help in reducing the oil consumption and thus helping in reducing the oil demand. Ethanol, Fuel Cells and Hydrogen Power cars are therefore coming to the limelight putting a lot of emphasis on environment. Ecommerce: Internet like every business has also affected the car business as consumers can make informed decisions before making an automobile purchase. There sites available that support deliver competing bids for cars, insurance and financing in a way that lowers costs and improves satisfaction among consumers. Not only Internet revolution has helped customers but e-commerce has helped manufacturers in managing their supply chains and controlling their inventories. Capacity Issues: The industry has also been facing problems of capacity. Plant capacity throughout the world has resulted in an industry that is capable of making more cars for fewer customers meaning that supply exceeds the demand for cars. This sustenance of capacity by creating parallel demand for cars is a challenge for the industry. Dealerships: Dealership of cars is another area which has seen major changes over the years. Now, nationwide holding companies have got their hands on the best dealers in major markets. Even national chains have acquired the used car business. These changes now affect the way car manufacturers see the delivery of their end products. Situation of Car Parts Firms: Suppliers have of car parts have an important role to play in the industry. Dash boards, seats, tires, etc. are provided by Original Equipment Manufacturers. Many car parts manufacturing firms in UK are losing ground to cheaper rivals in Eastern Europe and the Far East. Some firms could even get closed, without the upgrade in their setup. There are companies in the region which are investing in their future by getting new equipment to help keep going in the face of growing foreign competition for example, some firms got ability to mould larger plastic car parts with its new machinery. The competition from Eastern Europe and the Far East is very disturbing for the manufacturing industry. A new