SWOT Analyses Essay Example | Topics and Well Written Essays - 2000 words

SWOT Analyses - Essay Example The head offices of the company are located in the United States where the company began its operations in 1962. Sam Walton, the founder of the multinational opened the first store in Arkansas (Wal-Mart, 2013). The organization began operating globally in 1991 when it opened a store in Mexico, and since then, the firm has expanded its operations to twenty four more countries. The founder of the store Sam Walton established the retail outlet with an aim of helping consumers to save funds. This aim led the manager to lower the price that the company charged for all its products below that of competitors. The organization maintains this strategy until today, and this has been the major source of the high growth rates of the firm. The strategy of charging prices below the market level makes Wal-Mart unique in the retail industry. Wal-Mart Current Strategies The company still aims at providing low-priced commodities to consumers all over the world. Other strategies of the firm include giv ing back to the community. Wal-Mart appreciates the community that purchases its products by contributing funds to empower women, end hunger, create employment opportunities, and sustain the environment (Wal-Mart, 2013). The company also aims at serving customers more efficiently every day by installing electronic-commerce in its stores. The electronic-commerce is a system that employees use to serve customers faster than a manual system. The firm aims at ensuring the electronic system works efficiently so that it can retain its market share. Strategic Plan A strategic plan is an objective that an organization expects to achieve at the end of a certain period, usually more than one year (Abraham, 2012). Having determined the values of Wal-Mart, the firm may aim at increasing sales by twenty percent annually, in the next three years. The techniques that the organization may use to achieve this strategy would be opening new retail outlets and advertising products. Advertising increase s the awareness of the firm’s products to consumers. New retail outlets will enable the organization to reach more consumers. The efficient utilization of the techniques will lead to an increase in sales by twenty percent or more. A SWOT analysis will enable the firm to determine the factors to rely on more while struggling to achieve the twenty percent sales target. SWOT Analysis of the Organization Strengths High Market Share Wal-Mart operates ten thousand nine hundred stores in the world with fifty of the outlets located in the United States. The numerous stores indicate that the company serves a large market in the world. The organization utilizes the market share to bargain for low prices with suppliers. Suppliers also provide the firm with quantity discounts because Wal-Mart purchases products in large quantities (Faarup, 2012). The power of the firm to purchase low-priced goods enhances the firm to charge consumers the lowest cost in the market. This enables the organi zation

Shaping Special Education Essay Example for Free

Shaping Special Education Essay The history of American special education has taken a long, ever-evolving journey to get to the place it is today. Marilyn Friend (2008) discusses how in the early twentieth century students were still not accepted into public schools. Students who had physical or mental disabilities were placed into separate classes, made up entirely of students with disabilities. Throughout the first half of the twentieth century students with a wide range of disabilities were enrolled in special education classes. Over the past century, various court cases have defined how special education has changed. In 1954, the Brown v. Board of Education, gave way to questions about whether or not separating special education students from the general education population was appropriate or not. Some people believed that taking students out of the classroom gave them a label for their disability and therefore was discriminatory towards students, rather than helpful in providing services they needed to make them successful. (Friend, 2008, p. 47) Not only did educators become advocators for children’s with disabilities, so did parents. The Mills v. Board of Education (1972) sparked the determination of providing special education services for students. In response to various lawsuits against the Board of Education legislation created mandates to ensure the rights for students with disabilities. Structure of Special Education Parents continued to push for the rights of children, as well as congress. The Elementary and Secondary Education Act of 1965 were laws that provided funding to states to assist them in creating and improving programs and services for children with disabilities. The Education for All Handicapped children Act in 1974 was created to allow full educational opportunities for students with disabilities. In 1986, the federal special education law was changed to include services for infants and young children. (Friend, 2008, p. 49) In 1990, the Education for All Handicapped Children Act was changed to Individual with Disabilities Act (IDEA) and more disabilities were added. The most recent change was in 2004 when provisions were added to help resolve disputes between parents, as well as the requirement for student instruction to be taught using evidence-based practices. Federal law forced educators to change their view of special education students and how to best serve their needs in the school environment. Also in 2004, President Bush and Congress wanted IDEA to align with No Child Left Behind Act of 2001 so that schools would be held accountable for making sure students with disabilities achieve high standards (Friend, 2008, p. 68). Jill Hockenbury (2000) pointed out that special education is a key part of the public education system but that there are still challenges in special education today. Critical changes that are needed in special education include constructing a defensible philosophy of education, providing effective and intensive instruction, and improving the quality of teacher training. These changes are still being worked on today. The needs of children today are demanding that teachers provide effective instruction, that’s meaningful and allows the teacher to reach all levels of development in one classroom. Trends and Issues Quality teacher training is also one of the biggest challenges facing special education and relates directly to a key topic heard a lot about in special education, which is inclusion. Inclusion centers on the belief that students with a disability should be allowed to be a part of the general education classroom. However, inclusion is difficult because of the requirement of the general education teacher. The general education teacher should be able to meet the needs of the students in his or her classroom, which can be difficult depending on the students needs. However, inclusion states that students should be in the classroom full time, receiving instruction the same as non-disabled peers, and there should be no need for pull-out. In some cases, members of a child’s IEP team may not agree on the appropriate environment for a student. With increased opportunities for teachers to have training with research-based methods and strategies, this area should be able to improve in the future. Researchers have stated that inclusion is beneficial to both students with disabilities, and those without disabilities. A study done investigating perceptions of learning of nearly 5,000 kindergarten students through 12th grade revealed that students with disabilities wanted to learn the same material, use the same books, and enjoy the same homework and grading practices as typical peers. (Friend, 2008, as cited in Klinger and Vaughn 1999) Other trends in special education include universal design for learning and differentiation. Universal design for learning (UDL) is the instructional approach that students with disabilities should have access to the curriculum. Along with UDL is the use of differentiated instruction (or differentiation) to explore the concepts of UDL further. Differentiation means that within one environment, students with multiple needs will have their needs met through various ways. UDL and differentiation should be utilized by general education teachers to meet the needs of their special education student. (Friend, 2008, p. 77) These trends are all key concepts in the world of special education. They all impact the way special education teachers should teach to meet the needs of all their students. Pat Beckman (2001) reiterated this fact stating that â€Å"improved student learning requires teachers, schools, and districts to give up unproductive traditions and beliefs, replacing them with validated practices and a full understanding of the intent of the law. † IDEA requires teachers to use â€Å"programs, interventions, strategies, and activities† that are researched based. (Friend, 2008, p. 63) As the needs of students increase, the resources provided need to increase, which is the responsibility of those providing the education. Special education has come very far since placing disabled students in their own separate classroom, but it still has a long way to go. There is much to be said about meeting the needs of special education students and reaching those administrators, parents, and educators who still do not have a full understanding of inclusion. References Beckman, Pat (2001), Access to the general education curriculum for students with disabilities, Council for Exceptional Children, retrieved May 28, 2012 from http://www. cec. sped. org/AM/Template. cfm? Section=HomeTEMPLATE=/CM/ContentDisplay. cfmCONTENTID=5519 Friend, M.(2008). Special education: Contemporary perspectives for school professionals. Boston, MA: Allyn Bacon. Hockenbury, J. C. , Kauffman, J. M. , Hallahan, D. P. (2000). What is right about special education. Exceptionality, 8(1), 3-11. Obiakor, F. E. (2011). Maximizing access, equity, and inclusion in general and special education. Journal Of The International Association Of Special Education, 12(1), 10-16. U. S. Department of Education (2007) Thirty Years of Progress in Educating Children With Disabilities Through IDEA, retrieved May 28, 2012 from http://www2. ed. gov/policy/speced/leg/idea/history30. html.

Analysis of Risk Management in Banking Activity

Analysis of Risk Management in Banking Activity The Case of Mauritian Banks Financial deregulation, globalization and liberalization have heightened considerable banking risks. Moreover, banks necessitate effective risk management strategies to promote banking welfare, protect outside agencies transacting with banks and to ensure stable banking operations. Risk managers need to focus on the diversity of risks and secure the interests of the overall banking sector. Risk Management is nowadays segregated where there is inconsistency in reporting, insufficient evaluation and low quality of management and becomes ineffective due to lack of pertinent information and improper analysis of the risk factors (Prabir Sen, 2009). Nonetheless, banks are unable to keep equilibrium in the situations of risks with huge losses and slight possibility of occurrence and risks of minimal losses with propensity of occurrence.   According to Talmimi and Hussein, Mazroezi and Mohammed (2007), risk management enables profits maximization and entails restrictions in risky activities. Risks can be averted by ordinary banking procedures, can be shifted to other institutions and can be managed actively in banks (Oldfield and Santemero, 1997). 1.1 Objectives of the Study The core objectives of the study are: To probe into the methodologies and aspects of the risk identification, assessment, monitoring, management and mitigation in Mauritian banks. To ascertain the effects of risk management on Mauritian banks. To determine to which extent risk management strategies like Basel II, derivatives, stress testing and Asset and Liability Management are applicable in Mauritian banks. To analyze the factors which improve Risk Management Practices in Mauritian banks and the perspectives about Banking Risk Management. To explore the reasons for managing risks in Mauritian banks. 1.2 Statement of the Problem There is an increasing awareness that the gradual intensification of banking risks impacts adversely on banking transactions which raises the concerns for risk management. The basis concern of this study is whether the Mauritian banks are using diverse risk management tactics and whether they are able to cope with the present and prospective challenges of risks and risk management requirements. 1.3 Significance and Contribution of the Study Bank managers can be conversant with divergent risk management techniques, their implications, effects and their relevance in banks through the practical aspects of risk management application. Bank managers can analyze the mechanisms resulting in the increasing level of risk exposures. Business administrators and management practitioners can use this study as guide to design efficient measures to mitigate risks in the process of developing marketing tactics. 1.4 Structure of the Project Chapter 2 elaborates on the literature review related to the risk management. Chapter 3 uncovers the general overview of Mauritian Banking Sector. Chapter 4 focuses on the detailed research methodology that has been used. Chapter 5 discusses the analysis and interpretation of the Mauritian banking risk management information. Chapter 6 probes on the recommendations to improve Risk Management practices in Mauritian banks. Chapter 7 concludes the whole findings of the project. PART 1- THEORETICAL ASPECTS 2.1 Introduction The advent of technology, globalization and the competition has encouraged banks in risk taking activities exposing banks to risks. Regulatory and supervisory institutions have emphasized the need for banks to enhance their risk management practices. Risks arise from the probabilities of the occurrence of losses and usually emerge from the internal and external banking transactions. 2.2 Banking Failures determinants The past decades have encountered numerous bank turbulences where high costs have been incurred on both local and overseas level (Gaytà ¡n and Johnson 2002, p.1), hindering the credit facilities, minimizing investment and consumption and generating bankruptcy cases (Demirguc-Kunt and Detragiache, 1998a, p.81). According to them, the expensive monetary policy was used to force the sound banks to sustain the failures of insolvent banks which dissuade risk management. Fluctuations in interest rates post abolition of Brettons Woods System, higher banking competition, the non existence of intermediation margins, unskillful lending and investment tactics (Hellwig 1995, p.724-726 ) , the diminishing role of the oligopoly rents as stated by Gehrig (1995 cited Hellwig 1995, p.726 ), the lower level of capital reserves in banks, companies high reliance on banks for external finance mentioned by Rajan and Zingales (1998 cited Randall S. Kroszner 2007),systemic shocks caused by credit risks, the inability to diversify loans, trade deterioration and decrease in asset prices caused bank failures argued by Gorton (1988 cited Demirguc-Kunt and Detragiache1998b, p.85). Moreover, regime changes like financial repression, liberalization and severe macroeconomic conditions encourage the entry of inexperienced players and preference for the acquisition of useless loans stated by Honohan (1997 cited Gaytan and Johnson 2002, p.4) have generated banking turbulences.   Non-performing loans increase where the asset returns are less than the returns to be paid on liabilities. Banks borrow in international currency and lend in local currency where the latter depreciates if the foreign exchange currency risk is shifted to local borrowers if they loaned in foreign currency. Banks buy insurance protection which encourages risk taking activities in the absence of prudential supervision and regulation. Bank managers engage in fraudulent actions by taking a portion of money for their personal use (Demirguc-Kunt and Detragiache 1998c, p.85-87). Diamond and Dybrig (1983 cited Demirguc and Detragiache 1988d, p.86) argued that banks portfolio assets can worsen and depositors believe that other depositors are removing their money. Obstfeld and Rogoff (1995 cited Demirguc and Detragiache 1988e, p.87) mentioned that an anticipated devaluation could occasion bank runs in local banks and these deposits are shifted overseas and render the domestic banks without l iquidity. 2.3 Banking risks alsamakis et al (1996 cited Young 2001, p.57) argued that risks can be classified as pure risks and speculative risks. Pure risks which embody market risks, credit risks, interest rate risks, liquidity risks, country risk and settlement risk are associated with the probability of occurrence of loss or no loss and can be curtailed by risk management strategies. However, speculative risks comprising of operational risks, technology risk, reputational risk, compliance risk, legal risk and insurance risks involve an opportunity for gain or loss which can be hedged. 2.3.1 Credit Risks These major risks occur in banks when the borrower defaults on his obligation to reimburse the principal amount and the interest charged of the loan. Credit risks consist of three types of risks like (Arunkumar and Kotreshwar 2005, p.9): Transaction risk emerges from the fluctuations in the credit type and capital depending on how the bank underwrites individual loan transactions. Intrinsic Risk is risk prevailing in some institutions and on granting credit to some firms. Concentration risk is the average of transaction and intrinsic risk within the portfolio and encourages granting of loans to one borrower or one firm. 2.3.2 Interest rate risks Koch (1995 cited Beets and Styger 2001, p.9) defined interest rate risk as the future changes in a banks net interest income and market value of equity due to changes in the market interest rates. Kropas (1998 cited Martirosianien) enumerated three types of interest rate risks like: Reappraisal risk stems from the diverse periods of assets and liabilities Profitableness curve risk entailselements affecting the reappraisal risk. Basic point risk concernsflawed association between the receivable and payable interest rate. Option risk is where the benefits of options can adversely affect the banks equity. 2.3.3 Liquidity risks Liquidity risks occur when the banks are unable to meet the demands of the depositors because of lack of funds and the illiquid assets resulting eventually in bank insolvency. Credit, strategic, interest rate and reputation risks build up liquidity risks (Gaulia and Maserinskieno 2006, p.49). 2 types of liquidity risks are (ADB Report 2008, p.9): Funding liquidity risk is the potentiality to obtain money via the sale of bank property and by borrowing. Trading Liquidity risk arises from making a constant entry in market activities and dealings. 2.3.4 Market risks These risks arise when the value of the financial products changes negatively and consist of currency risk, interest rate risk, equity or debt security price risk (Gaulia and Maserinskieno 2006, p.49). 2.3.5 Operational Risks Basel Committee (2004) which imposes a capital charge defined operational risks as the risk of direct or indirect losses resulting from inadequate or failed internal processes, people, and systems, or from external events. This definition includes legal risk, but excludes strategic and reputational risk. 2.3.6 Reputational Risks These risks emerge when the number of clients decreases as they hold negative perspectives about the quality of services offered by the banks. 2.3.7 Strategic risks Strategic risks arise when bad decisions and projects are undertaken to develop a special system in banks due to the lack of resources, technological tools and the expert staff. 2.3.8 Foreign Exchange Risks These risks come when the prices of the currency fluctuate when engaging in foreign activities. There are 3 types of foreign exchange currency risks. (Deloitte Treasury and Capital Markets 2006) Transaction risk entails the future of original cash flows like imports and exports. Translation risk is concerned with the disparities between foreign exchange encountered when again transforming a foreign exchange value into the functional currency of the company concerned. Translation risks are usually converted into transaction risks on a late basis as earnings are repatriated or assets and liabilities are realized. Economic risk arises when indirectly exposed to buying and selling of goods from someone who buys goods overseas. 2.3.9 Systemic risks The bank cannot collect money from an organization it is dealing owing to the political, economic and social conditions prevailing in the country where the organization is situated. Country risk includes political, economic risk and transfer risk (National Bank of Serbia). 2.3.10 Legal Risks Legal Risks are losses incurred when the bank is sanctioned by a court for the non-compliance with the lawful rules and regulations and on not fulfilling its obligations towards the other parties (National Bank of Serbia). 2.3.11 Financial Fraud There is mismanagement of money and fraudulent actions from the members of the banks who embezzle some deposited money and when there is lack of security controls. 2.4 Bank risk management methods Greenspan (2004 cited in Lam 2007, p.3) said that It would be a mistake to conclude..that the only way to succeed in banking is through ever-greater size and diversity. Indeed, better risk management may be the only truly necessary element of success in banking. 2.4.1 Risk Management in Banking Sector Flaker (2006, p.4-8) proposes three methods: 2.4.1.1 Risk Identification The board must set the risk profile of the bank and identify the risk-return tradeoff. The bank should understand and identify types of risks exposures, their sources and their effects on the overall banking stability. 2.4.1.2 Risk management and reduction Risk management and minimization embody the following: (1) Allow loans after considering their financial status of the borrowers. (2) Comparison of the expected risks with the actual ones to diminish the loan losses in a bigger portfolio. (3) Loan losses will decrease due to diverse borrowers in the lending transactions. (4) Actual risks can be compensated through the opposite movement of other risks in particular financial activities. (5) Insurance negotiations can be used to protect against diverse risks. 2.4.1.3 Risk Management System This flexible system encompasses the combined structure of identification, evaluation and risk mitigation techniques. The Board must set up a strong risk culture and an effective governance structure where the risk management system aligns with the existing structure of the bank. Risk management procedures are possible when retaining higher level of capital to cushion the risks. Furthermore, the risk management functions comprises of: (1) Delegation of responsibilities to each banking segment (2) Auditing system to deal with the internal control processes and proper execution of risk controls (Nikolis, 2009). (3) Ongoing reviews, reporting, updating and the control of risk management system must be executed to ensure that they tailor with the banking aims (4) Training courses gaining know-how about the design of the risk management system and risk models must be offered to avert banking failures. (5) Establish rules and regulations and take necessary actions to those who contravene with them regarding risk management practices. (6) Participation of the banks, regulatory and supervisory bodies where information is disseminated externally and internally in the banks (Kroszner, 2007). 2.4.2 Asset and Liability Management Asset and Liability Management entails the design of organizational and governance models which define the risk approaches subject to the banking operations (ADB 2008, p.10). 2.4.2.1 ALM operations are as follows (ADB 2008, p.10-12): ALM ensures a risk and return management process where the combination of expertise and risk appetite is needed. ALM unit manages bank risks either through a passive or aggressive approach thus increasing its value. ALM unit investigates upon the static and dynamic mismatch; sensitivity of net interest income; and, market value under multiple scenarios -including under high stress. The net interest income evaluates the sophisticated banks operating results. It does not project the effects of risk compared to the economic value which can identify banking risks but is inaccessible to most banks. 5. Funds Transfer Pricing eradicates the interest rate risks by securing a spread in loan and deposits by allocating a transfer rate that mirror the repricing and cash flows of the balance sheet. Liquidity risks can be managed like diversification of financing sources, correlate the liquidity risks with other risks and use stress testing analysis. 2.4.3 Stress testing Practices Stress testing is another risk management strategy where Stress testing is a generic term used to describe various techniques and procedures employed by financial institutions to estimate their potential vulnerability to exceptional but plausible event (Kalfaoglou 2007, p.1). It uses statistical data analysis to risk management techniques, interpret and control the unfavorable outcomes. JP Morgan Chase has integrated stress testing equipment to manage and analyze the sources of possible banking risks, implement tests on the value of its portfolio, analyze its risk profile and contemplate the effects while applying diverse scenarios. An effective risk management scheme, stress testing project and bank staff expertise are requisite to tackle the statistical and economical fundamentals of stress testing with a data measurement tool. Board of directors should monitor the inputs of stress testing system (Seminar on Stress Testing Best Practices Risk Management Implications for Egyptian Banks 2007, p.2-3). Furthermore, the 2 types of stress testing strategies in banks like: (1) Simple Sensitivity Test deals with the rapid fluctuations of the portfolio value due to a risk factor on a short term basis. (2) Scenario analysis is used by large complex banks and is associated with a realistic and econometrics approach towards shifts in portfolio value due to changes in many risk factors. 2.4.4 Basel II Basel II published in June 2004, promotes banking supervision and emphasizes the specified capital requirements to cushion against potential losses. Basel II uses qualitative and quantitative requirements to monitor risk management strategies, to ensure compliance with regulations and reinforce corporate governance structure. The risk based supervision has enabled the supervisors to concentrate on the origins of banking risks. 2.4.4.1 Pillars of Basel II Pillar 1 entails capital needed for credit risk, market risk and operational risk. Moreover, banks under this regime must have a capital adequacy of 8 %. The methods for the computation of the capital charge to measure operational and credit risks (Ma, 2003)are: Basic Indicator Approach The size and capital requirements of the operational risk are estimated as a fixed proportion of the banks net interest income and non-interest income, measured as the average over the last three years. The Standardized Approach –The activities of the banks are allocated risk ratios weights related proportionally to the quantity distributed to every category. The aggregate capital requirements are the addition of all the requirements for the categories. Advanced Measurement Approach Computation of credit and market risks and the capital requirements are founded on the banks internal system for the measurement and management of operational risk for large banks An Internal Rating Based System The BIS stated that capital requirements must be founded on a qualitative and quantitative analysis of credit risk and must be used for diverse bank units. Founded IRB approach indicates that large banks should calculate probability default related to a borrowers grade to demonstrate the capital requirement level. However, under advanced IRB approach, these banks with an internal capital allocation can furnish the loss given default and exposure at defaults which are processed. Pillar 2 A supervisor must ensure that the bank has the adequate capital requirements to deal with risks. Banks estimate the internal capital adequacy by adopting quantitative and qualitative techniques. On-site investigation and ongoing reviews probe in capital adequacy. Pillar 3- Market discipline framework provides with detailed information about the banks risk profile to evaluate and report capital adequacy where risk exposures can be analyzed through quantitative and qualitative approach regularly. The risk based capital ratios and qualitative information about the internal procedures are needed for capital adequacy purposes. 2.4.5 Derivatives olatility of financial market, the liberalization and deregulation in the 1980s and 1970s has founded derivative markets (Hehn no date a, p.100). Derivatives are financial tools (like futures, commodities futures, options, swaps, forwards) whose returns, values and performance are derived from the returns, values and performance of the underlying assets. Hedging is covering against potential risk through an opposite position in the derivative markets. Bank International Settlements (2004 cited Bernadette A. Minton et al 2008, p.2) noticed that the quantity for derivatives has leveled from $698 billion in 2001 to $ 57,894 billion in 2007. Proper derivatives trading can insure against market risks and interest rate risks without retaining additional capital requirements in the balance sheet (Kaudman no date a, p.85). The determinants of derivatives use are banking size, balance sheet constituents, aggregate risk exposures, profitability, performance and risk taking incentives. Jason and Taylor (1994 cited in Hundman b, p.86) argued that speculation used with derivatives to make profitable returns can engenders more interest rate risks. Moreover, Tsetsekos and Varangis (1997 cited Roopnarine and Watson 2005a, p.9) argued that financial derivatives promote increase in resource allocation and increase the productivity of investments projects. Jorion (1995 cited Roopnarine and Watson 2005b, p.9) argued that in price discovery, market participants are offered information on balance prices that mirror the present demand on the supplies which enable effective decision making and reveal the position of the cash prices. Besides, liquid funds are increased and transaction costs are reduced and the futures market reflects the large transactions at prevailing prices (Roopnarine and Watson 2005c, p.10).   However, derivatives have generated enormous failures in Barings Collapse, Merill Lynch and Procter Gambler (Hehn b, p.101). Bank staff must be trained and educated about derivatives use. Derivatives trading can be constrained with the liquidity problems and legal uncertainties that emerged from the market price movement which is argued by Bhaumik (1998 cited Roopnarine and Watson 2005d, p.11). Pricing of assets becomes difficult if there is insufficient information about the derivatives use. Principal agent problem is aggravated (Roopnarine and Watson 2005e, p.12). The derivatives market must be regulated properly to avert fraudulent actions and insolvency. Partnoy and Skeel (2006 cited Minton et al. 2008a, p.2) claimed that derivatives intensify systemic risks as banks do not control the lending activities. Hunter and Marshall (1999 cited Roopnarine and Watson 2005f, p.28) argued that derivative markets attract investors whose private information are assimilated in the observable p rices and diminish the bid ask spread. The underlying cash prices reduce the transaction costs and the demand for money thereby affecting the operations of the monetary policy. Bedendo and Bruno (2009a, p.2-4) argued that credit transfer tools like securitization, credit derivatives and loan sales reduce regulatory capital requirements, motivate lending and enhance the banking liquidity positions. Moreover, they remedy the issues of information asymmetries as stated by Greenbaum and Thakor (1987 cited in Bedendo and Bruno 2009b, p.2). Duffee and Zhou (2001 cited Minton et al. 2008b, p.11) mentioned that credit derivatives are used if the loan sales or securitization techniques become expensive due to moral hazard problem and can shift default risk where information advantage is insignificant and retain some portion of risks where information advantage is huge. Banks use credit transfer tools as they have little access to inter-bank funding, huge funding expenses, low capital and want loan transfer (Bedendo and Bruno 2009c, p.8-9). CRT tools encourage banks to use originate-to-distribute models via aggressive lending occasions (Bedendo and Bruno 2009d, p.10) . Pricing of CRT tools is preferred by large banks having higher skills. Some loans sales have loan characteristics like small size, asymmetric issues and standardization convenient for securitization (Bedendo and Bruno 2009e, p.11). PART 2- EMPIRICAL REVIEW There is a growing literature that examines the relationship of banking risks with other many economic and financial variables. Moreover, this section describes the diversity of banking literature where different types of risk management strategies were tested and criticized. Even the links between different types of risks were experimented using banking information and models derived from other authors empirical work. Peek and Rosengren (1996) found that the large users of derivatives for speculation purposes are the troubled organizations using derivative information of 25 active banks in the United States from 1990 to 1994 in the US dummy regression model.   Banks are unable to track the risky aspects of these derivatives and guide their risk profile because of insufficient derivative information which could jeopardize the overall banking system. The onsite targeted examinations can enable banks to window dress their derivatives. Regulatory rules and formal transactions must be imposed on the banks taking unfavorable speculation and to constrain the moral hazard problem related to the derivative transactions. The use of speculative derivatives constitutes a stringent criminal penalty for breaching the established rules and regulations. Cebenoyan and Strahan (2001) used data of the sale and purchase of bank loans and those loans sold or purchased without recourse from all domestic commercial banks in the US from 1987 to 1993 in a regression model. They found that banks that engage in loan sales market to manage credit risks retained minimum level of capital which can be modified. Moreover, these banks retained more risky loans since they managed credit risks and were exposed to an unsafe position despite they endured lower level of risks compared to the other banks who manage risks without the loan sales market. Banks that employed the risk management techniques are more inclined to engage in risk taking activities. In fact, banks that manage credit risks lend to more risky loans depicting that complex risk management practices enhanced the bank credit position rather than minimizing the risks. Gatev et al (2006) investigated upon the presence of liquidity risk from both sides of bank balance sheets using some aspects of the Kashyap, Rajan and Stein (2002) model (that liquidity risks originating from the two fundamental businesses of banking promotes a diversification benefit) to analyze the link between deposit taking and commitment lending for large, publicly traded banks using regression analysis. Pooling deposits and commitment lending insure against banking liquidity risks and deposits activities insure against liquidity risk from idle loan activities. Bank stock-return volatility increases with idle loan transactions which is insignificant for banks with huge amount of depository dealings. The deposit-lending risk management becomes more reinforced when there is low level of liquidity and when troubled market participants deposit money in banks. Shao and Yeager (2007) used information of large publicly traded U.S BHCs from 1997 to 2005 using regression models to find the link between credit derivatives and their risk, return and lending issues. Banks buy credit derivatives to hedge against risks, to increase their equity and to compensate for the risky loan losses. However, they sell credit derivatives exposing themselves to risks to gain a premium charge. Moreover, the credit derivatives users enjoyed minimal returns and increase risks which are compensated. Their findings implied that on a general basis, the impact of credit derivatives on risk relies on the risk management strategies. Holod and Kitsul (2008) used panel data of stock returns from 53 U.S BHCs from 1986 to 2007. They found that after 1996, poor capitalized banks engaged in active trading transactions are more exposed to systemic risks compared to well capitalized banks. Banks cannot always have enough capital to cushion the market risks and must sell their illiquid assets or invest in the financial markets to compensate for the lack of capital to adhere to the market-based capital requirements. Capital requirements in Basel II do not help to reduce banking risks totally but contribute towards increasing systematic risks. Topi (2008) used a model of Allen and Gale (2004) where banks offer deposit contracts to ex ante identical, risk averse depositors who face heterogenous liquidity shocks for Bank of Finland which shows that the liquidity can impact on the banks motivations to minimize the default losses. The bank runs encourage the banks to avert the credit losses after the sub-prime mortgage crisis. However, the bank runs without a signal of the credit risks will reduce the banks willingness to curb the incidence of credit losses. The central bank can mitigate the propensity of liquidity stress for solvent banks rather than insolvent banks. In addition, this research provides an area for further research where the policy interventions and financial market innovations can be integrated in the model to identify the impact on banks motivations. Achou and Tenguh (2008) used regression model for Qatar Central Bank by executing a time-series analysis of financial data from 2001-2005 to examine the correlation between profitability and loan losses. They showed that effective credit risk management improves the financial result of the bank with the aim to secure the banking property and to work in the welfare of the market participants. Besides, their study revealed that credit risk management infrastructures are used to minimize the credit losses. Banks with efficient credit risk management system have insignificant loan default ratios, good revenues, minimal non-performing loans and are able to tackle credit losses. Minton et al. (2008) investigated the use of credit derivatives using U.S BHCs (assets overtakes $ 1 billion) and non-missing data on credit derivatives use from 1999 to 2005. Few companies use credit derivatives for dealer activities rather than for hedging against default losses. Credit derivatives use is constrained because the liquidity of credit derivatives market is favorable for investment grade companies since they can use derivatives to insure against the default losses. Therefore, the illiquidity of credit derivatives market affects the non-investment grade companies as they need confidential information for loans where higher cost of hedging will dissuade banks to hedge. Nevertheless, the bank borrowers get loans at a cheap price and banks are more on a competitive stance with the capital markets to provide loan facilities if the credit derivatives can help bank to retain capital. Credit derivatives can only promote the financial health of banks if they generate lesser ban king risks. The sub-prime crisis prior to 2007 has shown that the dealer activities via the credit derivatives contain many risks and in 2008 generated systemic risks. This study provides an avenue to assess the risks posed by credit derivatives when engaging in dealers transactions dealers. Bedendo and Bruno (2009) differentiated between the application of loan sales, securitization and credit derivatives for a sample of US large domestic commercial banks (total assets greater than one billion USD) for June 2002-2008   They found that the most CRT users employ conservative tools and large international banking corporations utilize credit derivatives. They detected that highly capitalized banks with less risky portfolios purchase credit derivative protection to hedge against capital inadequacy.   Moreover, banks with riskier loan portfoli Analysis of Risk Management in Banking Activity Analysis of Risk Management in Banking Activity The Case of Mauritian Banks Financial deregulation, globalization and liberalization have heightened considerable banking risks. Moreover, banks necessitate effective risk management strategies to promote banking welfare, protect outside agencies transacting with banks and to ensure stable banking operations. Risk managers need to focus on the diversity of risks and secure the interests of the overall banking sector. Risk Management is nowadays segregated where there is inconsistency in reporting, insufficient evaluation and low quality of management and becomes ineffective due to lack of pertinent information and improper analysis of the risk factors (Prabir Sen, 2009). Nonetheless, banks are unable to keep equilibrium in the situations of risks with huge losses and slight possibility of occurrence and risks of minimal losses with propensity of occurrence.   According to Talmimi and Hussein, Mazroezi and Mohammed (2007), risk management enables profits maximization and entails restrictions in risky activities. Risks can be averted by ordinary banking procedures, can be shifted to other institutions and can be managed actively in banks (Oldfield and Santemero, 1997). 1.1 Objectives of the Study The core objectives of the study are: To probe into the methodologies and aspects of the risk identification, assessment, monitoring, management and mitigation in Mauritian banks. To ascertain the effects of risk management on Mauritian banks. To determine to which extent risk management strategies like Basel II, derivatives, stress testing and Asset and Liability Management are applicable in Mauritian banks. To analyze the factors which improve Risk Management Practices in Mauritian banks and the perspectives about Banking Risk Management. To explore the reasons for managing risks in Mauritian banks. 1.2 Statement of the Problem There is an increasing awareness that the gradual intensification of banking risks impacts adversely on banking transactions which raises the concerns for risk management. The basis concern of this study is whether the Mauritian banks are using diverse risk management tactics and whether they are able to cope with the present and prospective challenges of risks and risk management requirements. 1.3 Significance and Contribution of the Study Bank managers can be conversant with divergent risk management techniques, their implications, effects and their relevance in banks through the practical aspects of risk management application. Bank managers can analyze the mechanisms resulting in the increasing level of risk exposures. Business administrators and management practitioners can use this study as guide to design efficient measures to mitigate risks in the process of developing marketing tactics. 1.4 Structure of the Project Chapter 2 elaborates on the literature review related to the risk management. Chapter 3 uncovers the general overview of Mauritian Banking Sector. Chapter 4 focuses on the detailed research methodology that has been used. Chapter 5 discusses the analysis and interpretation of the Mauritian banking risk management information. Chapter 6 probes on the recommendations to improve Risk Management practices in Mauritian banks. Chapter 7 concludes the whole findings of the project. PART 1- THEORETICAL ASPECTS 2.1 Introduction The advent of technology, globalization and the competition has encouraged banks in risk taking activities exposing banks to risks. Regulatory and supervisory institutions have emphasized the need for banks to enhance their risk management practices. Risks arise from the probabilities of the occurrence of losses and usually emerge from the internal and external banking transactions. 2.2 Banking Failures determinants The past decades have encountered numerous bank turbulences where high costs have been incurred on both local and overseas level (Gaytà ¡n and Johnson 2002, p.1), hindering the credit facilities, minimizing investment and consumption and generating bankruptcy cases (Demirguc-Kunt and Detragiache, 1998a, p.81). According to them, the expensive monetary policy was used to force the sound banks to sustain the failures of insolvent banks which dissuade risk management. Fluctuations in interest rates post abolition of Brettons Woods System, higher banking competition, the non existence of intermediation margins, unskillful lending and investment tactics (Hellwig 1995, p.724-726 ) , the diminishing role of the oligopoly rents as stated by Gehrig (1995 cited Hellwig 1995, p.726 ), the lower level of capital reserves in banks, companies high reliance on banks for external finance mentioned by Rajan and Zingales (1998 cited Randall S. Kroszner 2007),systemic shocks caused by credit risks, the inability to diversify loans, trade deterioration and decrease in asset prices caused bank failures argued by Gorton (1988 cited Demirguc-Kunt and Detragiache1998b, p.85). Moreover, regime changes like financial repression, liberalization and severe macroeconomic conditions encourage the entry of inexperienced players and preference for the acquisition of useless loans stated by Honohan (1997 cited Gaytan and Johnson 2002, p.4) have generated banking turbulences.   Non-performing loans increase where the asset returns are less than the returns to be paid on liabilities. Banks borrow in international currency and lend in local currency where the latter depreciates if the foreign exchange currency risk is shifted to local borrowers if they loaned in foreign currency. Banks buy insurance protection which encourages risk taking activities in the absence of prudential supervision and regulation. Bank managers engage in fraudulent actions by taking a portion of money for their personal use (Demirguc-Kunt and Detragiache 1998c, p.85-87). Diamond and Dybrig (1983 cited Demirguc and Detragiache 1988d, p.86) argued that banks portfolio assets can worsen and depositors believe that other depositors are removing their money. Obstfeld and Rogoff (1995 cited Demirguc and Detragiache 1988e, p.87) mentioned that an anticipated devaluation could occasion bank runs in local banks and these deposits are shifted overseas and render the domestic banks without l iquidity. 2.3 Banking risks alsamakis et al (1996 cited Young 2001, p.57) argued that risks can be classified as pure risks and speculative risks. Pure risks which embody market risks, credit risks, interest rate risks, liquidity risks, country risk and settlement risk are associated with the probability of occurrence of loss or no loss and can be curtailed by risk management strategies. However, speculative risks comprising of operational risks, technology risk, reputational risk, compliance risk, legal risk and insurance risks involve an opportunity for gain or loss which can be hedged. 2.3.1 Credit Risks These major risks occur in banks when the borrower defaults on his obligation to reimburse the principal amount and the interest charged of the loan. Credit risks consist of three types of risks like (Arunkumar and Kotreshwar 2005, p.9): Transaction risk emerges from the fluctuations in the credit type and capital depending on how the bank underwrites individual loan transactions. Intrinsic Risk is risk prevailing in some institutions and on granting credit to some firms. Concentration risk is the average of transaction and intrinsic risk within the portfolio and encourages granting of loans to one borrower or one firm. 2.3.2 Interest rate risks Koch (1995 cited Beets and Styger 2001, p.9) defined interest rate risk as the future changes in a banks net interest income and market value of equity due to changes in the market interest rates. Kropas (1998 cited Martirosianien) enumerated three types of interest rate risks like: Reappraisal risk stems from the diverse periods of assets and liabilities Profitableness curve risk entailselements affecting the reappraisal risk. Basic point risk concernsflawed association between the receivable and payable interest rate. Option risk is where the benefits of options can adversely affect the banks equity. 2.3.3 Liquidity risks Liquidity risks occur when the banks are unable to meet the demands of the depositors because of lack of funds and the illiquid assets resulting eventually in bank insolvency. Credit, strategic, interest rate and reputation risks build up liquidity risks (Gaulia and Maserinskieno 2006, p.49). 2 types of liquidity risks are (ADB Report 2008, p.9): Funding liquidity risk is the potentiality to obtain money via the sale of bank property and by borrowing. Trading Liquidity risk arises from making a constant entry in market activities and dealings. 2.3.4 Market risks These risks arise when the value of the financial products changes negatively and consist of currency risk, interest rate risk, equity or debt security price risk (Gaulia and Maserinskieno 2006, p.49). 2.3.5 Operational Risks Basel Committee (2004) which imposes a capital charge defined operational risks as the risk of direct or indirect losses resulting from inadequate or failed internal processes, people, and systems, or from external events. This definition includes legal risk, but excludes strategic and reputational risk. 2.3.6 Reputational Risks These risks emerge when the number of clients decreases as they hold negative perspectives about the quality of services offered by the banks. 2.3.7 Strategic risks Strategic risks arise when bad decisions and projects are undertaken to develop a special system in banks due to the lack of resources, technological tools and the expert staff. 2.3.8 Foreign Exchange Risks These risks come when the prices of the currency fluctuate when engaging in foreign activities. There are 3 types of foreign exchange currency risks. (Deloitte Treasury and Capital Markets 2006) Transaction risk entails the future of original cash flows like imports and exports. Translation risk is concerned with the disparities between foreign exchange encountered when again transforming a foreign exchange value into the functional currency of the company concerned. Translation risks are usually converted into transaction risks on a late basis as earnings are repatriated or assets and liabilities are realized. Economic risk arises when indirectly exposed to buying and selling of goods from someone who buys goods overseas. 2.3.9 Systemic risks The bank cannot collect money from an organization it is dealing owing to the political, economic and social conditions prevailing in the country where the organization is situated. Country risk includes political, economic risk and transfer risk (National Bank of Serbia). 2.3.10 Legal Risks Legal Risks are losses incurred when the bank is sanctioned by a court for the non-compliance with the lawful rules and regulations and on not fulfilling its obligations towards the other parties (National Bank of Serbia). 2.3.11 Financial Fraud There is mismanagement of money and fraudulent actions from the members of the banks who embezzle some deposited money and when there is lack of security controls. 2.4 Bank risk management methods Greenspan (2004 cited in Lam 2007, p.3) said that It would be a mistake to conclude..that the only way to succeed in banking is through ever-greater size and diversity. Indeed, better risk management may be the only truly necessary element of success in banking. 2.4.1 Risk Management in Banking Sector Flaker (2006, p.4-8) proposes three methods: 2.4.1.1 Risk Identification The board must set the risk profile of the bank and identify the risk-return tradeoff. The bank should understand and identify types of risks exposures, their sources and their effects on the overall banking stability. 2.4.1.2 Risk management and reduction Risk management and minimization embody the following: (1) Allow loans after considering their financial status of the borrowers. (2) Comparison of the expected risks with the actual ones to diminish the loan losses in a bigger portfolio. (3) Loan losses will decrease due to diverse borrowers in the lending transactions. (4) Actual risks can be compensated through the opposite movement of other risks in particular financial activities. (5) Insurance negotiations can be used to protect against diverse risks. 2.4.1.3 Risk Management System This flexible system encompasses the combined structure of identification, evaluation and risk mitigation techniques. The Board must set up a strong risk culture and an effective governance structure where the risk management system aligns with the existing structure of the bank. Risk management procedures are possible when retaining higher level of capital to cushion the risks. Furthermore, the risk management functions comprises of: (1) Delegation of responsibilities to each banking segment (2) Auditing system to deal with the internal control processes and proper execution of risk controls (Nikolis, 2009). (3) Ongoing reviews, reporting, updating and the control of risk management system must be executed to ensure that they tailor with the banking aims (4) Training courses gaining know-how about the design of the risk management system and risk models must be offered to avert banking failures. (5) Establish rules and regulations and take necessary actions to those who contravene with them regarding risk management practices. (6) Participation of the banks, regulatory and supervisory bodies where information is disseminated externally and internally in the banks (Kroszner, 2007). 2.4.2 Asset and Liability Management Asset and Liability Management entails the design of organizational and governance models which define the risk approaches subject to the banking operations (ADB 2008, p.10). 2.4.2.1 ALM operations are as follows (ADB 2008, p.10-12): ALM ensures a risk and return management process where the combination of expertise and risk appetite is needed. ALM unit manages bank risks either through a passive or aggressive approach thus increasing its value. ALM unit investigates upon the static and dynamic mismatch; sensitivity of net interest income; and, market value under multiple scenarios -including under high stress. The net interest income evaluates the sophisticated banks operating results. It does not project the effects of risk compared to the economic value which can identify banking risks but is inaccessible to most banks. 5. Funds Transfer Pricing eradicates the interest rate risks by securing a spread in loan and deposits by allocating a transfer rate that mirror the repricing and cash flows of the balance sheet. Liquidity risks can be managed like diversification of financing sources, correlate the liquidity risks with other risks and use stress testing analysis. 2.4.3 Stress testing Practices Stress testing is another risk management strategy where Stress testing is a generic term used to describe various techniques and procedures employed by financial institutions to estimate their potential vulnerability to exceptional but plausible event (Kalfaoglou 2007, p.1). It uses statistical data analysis to risk management techniques, interpret and control the unfavorable outcomes. JP Morgan Chase has integrated stress testing equipment to manage and analyze the sources of possible banking risks, implement tests on the value of its portfolio, analyze its risk profile and contemplate the effects while applying diverse scenarios. An effective risk management scheme, stress testing project and bank staff expertise are requisite to tackle the statistical and economical fundamentals of stress testing with a data measurement tool. Board of directors should monitor the inputs of stress testing system (Seminar on Stress Testing Best Practices Risk Management Implications for Egyptian Banks 2007, p.2-3). Furthermore, the 2 types of stress testing strategies in banks like: (1) Simple Sensitivity Test deals with the rapid fluctuations of the portfolio value due to a risk factor on a short term basis. (2) Scenario analysis is used by large complex banks and is associated with a realistic and econometrics approach towards shifts in portfolio value due to changes in many risk factors. 2.4.4 Basel II Basel II published in June 2004, promotes banking supervision and emphasizes the specified capital requirements to cushion against potential losses. Basel II uses qualitative and quantitative requirements to monitor risk management strategies, to ensure compliance with regulations and reinforce corporate governance structure. The risk based supervision has enabled the supervisors to concentrate on the origins of banking risks. 2.4.4.1 Pillars of Basel II Pillar 1 entails capital needed for credit risk, market risk and operational risk. Moreover, banks under this regime must have a capital adequacy of 8 %. The methods for the computation of the capital charge to measure operational and credit risks (Ma, 2003)are: Basic Indicator Approach The size and capital requirements of the operational risk are estimated as a fixed proportion of the banks net interest income and non-interest income, measured as the average over the last three years. The Standardized Approach –The activities of the banks are allocated risk ratios weights related proportionally to the quantity distributed to every category. The aggregate capital requirements are the addition of all the requirements for the categories. Advanced Measurement Approach Computation of credit and market risks and the capital requirements are founded on the banks internal system for the measurement and management of operational risk for large banks An Internal Rating Based System The BIS stated that capital requirements must be founded on a qualitative and quantitative analysis of credit risk and must be used for diverse bank units. Founded IRB approach indicates that large banks should calculate probability default related to a borrowers grade to demonstrate the capital requirement level. However, under advanced IRB approach, these banks with an internal capital allocation can furnish the loss given default and exposure at defaults which are processed. Pillar 2 A supervisor must ensure that the bank has the adequate capital requirements to deal with risks. Banks estimate the internal capital adequacy by adopting quantitative and qualitative techniques. On-site investigation and ongoing reviews probe in capital adequacy. Pillar 3- Market discipline framework provides with detailed information about the banks risk profile to evaluate and report capital adequacy where risk exposures can be analyzed through quantitative and qualitative approach regularly. The risk based capital ratios and qualitative information about the internal procedures are needed for capital adequacy purposes. 2.4.5 Derivatives olatility of financial market, the liberalization and deregulation in the 1980s and 1970s has founded derivative markets (Hehn no date a, p.100). Derivatives are financial tools (like futures, commodities futures, options, swaps, forwards) whose returns, values and performance are derived from the returns, values and performance of the underlying assets. Hedging is covering against potential risk through an opposite position in the derivative markets. Bank International Settlements (2004 cited Bernadette A. Minton et al 2008, p.2) noticed that the quantity for derivatives has leveled from $698 billion in 2001 to $ 57,894 billion in 2007. Proper derivatives trading can insure against market risks and interest rate risks without retaining additional capital requirements in the balance sheet (Kaudman no date a, p.85). The determinants of derivatives use are banking size, balance sheet constituents, aggregate risk exposures, profitability, performance and risk taking incentives. Jason and Taylor (1994 cited in Hundman b, p.86) argued that speculation used with derivatives to make profitable returns can engenders more interest rate risks. Moreover, Tsetsekos and Varangis (1997 cited Roopnarine and Watson 2005a, p.9) argued that financial derivatives promote increase in resource allocation and increase the productivity of investments projects. Jorion (1995 cited Roopnarine and Watson 2005b, p.9) argued that in price discovery, market participants are offered information on balance prices that mirror the present demand on the supplies which enable effective decision making and reveal the position of the cash prices. Besides, liquid funds are increased and transaction costs are reduced and the futures market reflects the large transactions at prevailing prices (Roopnarine and Watson 2005c, p.10).   However, derivatives have generated enormous failures in Barings Collapse, Merill Lynch and Procter Gambler (Hehn b, p.101). Bank staff must be trained and educated about derivatives use. Derivatives trading can be constrained with the liquidity problems and legal uncertainties that emerged from the market price movement which is argued by Bhaumik (1998 cited Roopnarine and Watson 2005d, p.11). Pricing of assets becomes difficult if there is insufficient information about the derivatives use. Principal agent problem is aggravated (Roopnarine and Watson 2005e, p.12). The derivatives market must be regulated properly to avert fraudulent actions and insolvency. Partnoy and Skeel (2006 cited Minton et al. 2008a, p.2) claimed that derivatives intensify systemic risks as banks do not control the lending activities. Hunter and Marshall (1999 cited Roopnarine and Watson 2005f, p.28) argued that derivative markets attract investors whose private information are assimilated in the observable p rices and diminish the bid ask spread. The underlying cash prices reduce the transaction costs and the demand for money thereby affecting the operations of the monetary policy. Bedendo and Bruno (2009a, p.2-4) argued that credit transfer tools like securitization, credit derivatives and loan sales reduce regulatory capital requirements, motivate lending and enhance the banking liquidity positions. Moreover, they remedy the issues of information asymmetries as stated by Greenbaum and Thakor (1987 cited in Bedendo and Bruno 2009b, p.2). Duffee and Zhou (2001 cited Minton et al. 2008b, p.11) mentioned that credit derivatives are used if the loan sales or securitization techniques become expensive due to moral hazard problem and can shift default risk where information advantage is insignificant and retain some portion of risks where information advantage is huge. Banks use credit transfer tools as they have little access to inter-bank funding, huge funding expenses, low capital and want loan transfer (Bedendo and Bruno 2009c, p.8-9). CRT tools encourage banks to use originate-to-distribute models via aggressive lending occasions (Bedendo and Bruno 2009d, p.10) . Pricing of CRT tools is preferred by large banks having higher skills. Some loans sales have loan characteristics like small size, asymmetric issues and standardization convenient for securitization (Bedendo and Bruno 2009e, p.11). PART 2- EMPIRICAL REVIEW There is a growing literature that examines the relationship of banking risks with other many economic and financial variables. Moreover, this section describes the diversity of banking literature where different types of risk management strategies were tested and criticized. Even the links between different types of risks were experimented using banking information and models derived from other authors empirical work. Peek and Rosengren (1996) found that the large users of derivatives for speculation purposes are the troubled organizations using derivative information of 25 active banks in the United States from 1990 to 1994 in the US dummy regression model.   Banks are unable to track the risky aspects of these derivatives and guide their risk profile because of insufficient derivative information which could jeopardize the overall banking system. The onsite targeted examinations can enable banks to window dress their derivatives. Regulatory rules and formal transactions must be imposed on the banks taking unfavorable speculation and to constrain the moral hazard problem related to the derivative transactions. The use of speculative derivatives constitutes a stringent criminal penalty for breaching the established rules and regulations. Cebenoyan and Strahan (2001) used data of the sale and purchase of bank loans and those loans sold or purchased without recourse from all domestic commercial banks in the US from 1987 to 1993 in a regression model. They found that banks that engage in loan sales market to manage credit risks retained minimum level of capital which can be modified. Moreover, these banks retained more risky loans since they managed credit risks and were exposed to an unsafe position despite they endured lower level of risks compared to the other banks who manage risks without the loan sales market. Banks that employed the risk management techniques are more inclined to engage in risk taking activities. In fact, banks that manage credit risks lend to more risky loans depicting that complex risk management practices enhanced the bank credit position rather than minimizing the risks. Gatev et al (2006) investigated upon the presence of liquidity risk from both sides of bank balance sheets using some aspects of the Kashyap, Rajan and Stein (2002) model (that liquidity risks originating from the two fundamental businesses of banking promotes a diversification benefit) to analyze the link between deposit taking and commitment lending for large, publicly traded banks using regression analysis. Pooling deposits and commitment lending insure against banking liquidity risks and deposits activities insure against liquidity risk from idle loan activities. Bank stock-return volatility increases with idle loan transactions which is insignificant for banks with huge amount of depository dealings. The deposit-lending risk management becomes more reinforced when there is low level of liquidity and when troubled market participants deposit money in banks. Shao and Yeager (2007) used information of large publicly traded U.S BHCs from 1997 to 2005 using regression models to find the link between credit derivatives and their risk, return and lending issues. Banks buy credit derivatives to hedge against risks, to increase their equity and to compensate for the risky loan losses. However, they sell credit derivatives exposing themselves to risks to gain a premium charge. Moreover, the credit derivatives users enjoyed minimal returns and increase risks which are compensated. Their findings implied that on a general basis, the impact of credit derivatives on risk relies on the risk management strategies. Holod and Kitsul (2008) used panel data of stock returns from 53 U.S BHCs from 1986 to 2007. They found that after 1996, poor capitalized banks engaged in active trading transactions are more exposed to systemic risks compared to well capitalized banks. Banks cannot always have enough capital to cushion the market risks and must sell their illiquid assets or invest in the financial markets to compensate for the lack of capital to adhere to the market-based capital requirements. Capital requirements in Basel II do not help to reduce banking risks totally but contribute towards increasing systematic risks. Topi (2008) used a model of Allen and Gale (2004) where banks offer deposit contracts to ex ante identical, risk averse depositors who face heterogenous liquidity shocks for Bank of Finland which shows that the liquidity can impact on the banks motivations to minimize the default losses. The bank runs encourage the banks to avert the credit losses after the sub-prime mortgage crisis. However, the bank runs without a signal of the credit risks will reduce the banks willingness to curb the incidence of credit losses. The central bank can mitigate the propensity of liquidity stress for solvent banks rather than insolvent banks. In addition, this research provides an area for further research where the policy interventions and financial market innovations can be integrated in the model to identify the impact on banks motivations. Achou and Tenguh (2008) used regression model for Qatar Central Bank by executing a time-series analysis of financial data from 2001-2005 to examine the correlation between profitability and loan losses. They showed that effective credit risk management improves the financial result of the bank with the aim to secure the banking property and to work in the welfare of the market participants. Besides, their study revealed that credit risk management infrastructures are used to minimize the credit losses. Banks with efficient credit risk management system have insignificant loan default ratios, good revenues, minimal non-performing loans and are able to tackle credit losses. Minton et al. (2008) investigated the use of credit derivatives using U.S BHCs (assets overtakes $ 1 billion) and non-missing data on credit derivatives use from 1999 to 2005. Few companies use credit derivatives for dealer activities rather than for hedging against default losses. Credit derivatives use is constrained because the liquidity of credit derivatives market is favorable for investment grade companies since they can use derivatives to insure against the default losses. Therefore, the illiquidity of credit derivatives market affects the non-investment grade companies as they need confidential information for loans where higher cost of hedging will dissuade banks to hedge. Nevertheless, the bank borrowers get loans at a cheap price and banks are more on a competitive stance with the capital markets to provide loan facilities if the credit derivatives can help bank to retain capital. Credit derivatives can only promote the financial health of banks if they generate lesser ban king risks. The sub-prime crisis prior to 2007 has shown that the dealer activities via the credit derivatives contain many risks and in 2008 generated systemic risks. This study provides an avenue to assess the risks posed by credit derivatives when engaging in dealers transactions dealers. Bedendo and Bruno (2009) differentiated between the application of loan sales, securitization and credit derivatives for a sample of US large domestic commercial banks (total assets greater than one billion USD) for June 2002-2008   They found that the most CRT users employ conservative tools and large international banking corporations utilize credit derivatives. They detected that highly capitalized banks with less risky portfolios purchase credit derivative protection to hedge against capital inadequacy.   Moreover, banks with riskier loan portfoli

Human Cloning Essay -- Ethical Issues, Cloning

Human Cloning Human Cloning comes with two dangerous processes, reproductive cloning (the creating of a new organism) and the therapeutic cloning (the creation of a new tissues or â€Å"other biological products†) which affects the ethics of human society. Scientists perceive cloning benefits all men and women, while religious leaders stress the idea of cloning to be an unethical process. Although human cloning serves as an aid to the children and parents with conflicts, cloning is completely unacceptable to convey human life as a product. Humans reproductively and therapeutically give the idea of people becoming a product rather than a living being. Siedler emphasizes that â€Å"reproductive cloning could also represent an enormous step in direction of transforming human procreation into human manufacture† (Siedler 91-92). In other words, reproductive cloning will create a world full of dolls that will remove every trace of living beings. Though it is hard to believe the world becoming a doll house for each family or community, it has come to a conclusion that the ability of cloning and â€Å"creating children† is questioning every person, â€Å"what does it mean to be a human?† (Yount 114). If it was not bad enough for this world to describe some of the people to be looked upon as nothing but a thing, cloning pushes the idea to a whole new level. â€Å"By opening the door to many things such as manipulation,† Yount states, as she desperately explains the fear in cloning, â€Å"of wanting to be someone else, it can treat them as objects instead of person,† (Yount 114). To even add the intensity of what cloning could do, therapeutic cloning delivers a new definition to fear. According to the ... ...). Parents suffer the mental issue of the child recieving â€Å"medium-term consequences including premature aging, immune system failures, and sudden unexpected deaths,† (Siedler 87-88). Therapeutic cloning sounds safe and ethical, â€Å"but it is no different from those that could be used in attempts to create cloned children† so why risk the process? (â€Å"Cloning† 94). Therapeutic and Reproductive cloning is used in a beneficial way in different circumstances, but the disadvantages overpowers the beneficial usage with the risk of corrupting the world and more. Reproductive cloning forms human manufacturing as well as a child to a parent who are unable to bear one, and therapeutic cloning give animals a repaired heart muscle, as well as the corruption of religion and social ideas in this world. Cloning comes with consequences and more are to come, so is it worth to clone?

The Story of Odysseus

Odysseus, a hopeless player or a faithful husband? In my opinion, I believe that Odysseus is a hopeless player. Although he was trying to return to Ithaca so that he could be reunited with his beautiful wife Penelope, on his journey he was not always faithful. First off I would describe Odysseus as a desperate type of guy because he tries to charm every girl he lays eyes upon, he will go for anything he can find. On one of his adventures he received a bath from four lovely ladies. Odysseus just meets these women and he starts flirting with them.That is absolutely appalling and quite disturbing. Also that’s not all this selfish player did. Secondly, Odysseus cheated on Penelope more than once! That’s so rude, and inconsiderate! He cheated with Calypso at least once and with Circe multiple times! Crew members Elpenor, Achaemenides, and Mnestheus said that they had a feeling Odysseus was cheating because he always left the sleeping area at night, and would return in the mo rning. Making it seem like he never even cared about Penelope. Was it really a plan to get back to home or just meet a bunch of women on the way?Lastly I think Odysseus is a hypocrite because he gets mad at the suitors for having sex with the maids even though he did the same thing with Calypso and Circe. It doesn’t make sense to me how you can be mad at someone for something then you go to the same thing? In my statement saying Odysseus is a â€Å"hopeless player† him being a hypocrite basically described the first part, hopeless. Every now and then I think that Odysseus needs to check himself. Overall Odysseus, not a good guy, he flirts, he cheats, and he’s a hypocrite. In other words he’s a hopeless player.

Monitor a Safe Workplace Essay

|Unit BSBOHS407A |Qualification | |Monitor a Safe Workplace |Certificate IV in Frontline Management | | | |Learner | |Start Date | | |Assessor | |Due Date | | | | |Task |Description |Who |What |Duration | |( 1 |Complete your workbook |Student |Workbook |10 hours | | | | |Text book | | |( 2 |Journal entry (one per week) |Student |Diary |20 mins | |( 3 |Scenario and Questions |Student |Questionnaire |1.5 hours | |( 4 |Underpinning Knowledge Questions |Student |Questionnaire |1.5 hours | |( 5 |Workplace Project |Student |Computer |6 hours (report) | | | | |Work Team |+ time on the job | |( 6 |Supervisor’s Checklist |Supervisor |Checklist |15 mins | | | | |Workplace Project: | | | | | |Create an OHS file for the information you collect while working through this unit. Consider your own organisation, or one that you have researched. | |Include the following: | |description of your organisation; | |organisational chart of your workplace with list of names, positions and responsibilities; | |floor plan of your workplace with emergency exits labeled; | |your organisation’s OHS policy and procedures; | |organisational chart and job descriptions; | |information from relevant state or territory’s OHS au thorities; | |information from national OHS authorities; | |Risk Assessment forms and instructions/procedure | |copies of your organisation’s records and reports relating to OHS; and | |information from employees and health and safety representatives. | | | |Categorise the information and write a contents page for the folder/file. | | | |Conduct two (2) Risk Assessments on potential workplace hazards using the organisation’s procedures; attach the documentation. | | | | | |Contact your assessor if you require further information. | | | | | | | |_______________________________________ | |Student Signature | |DECLARATION: The attached information is all my own work | | | Certificate IV in Frontline Management BSBOHS407A: Monitor a Safe Workplace Candidate’s Name: ___________________________________________________ | |C |NYC | |FEEDBACK FROM MANAGER/SUPERVISOR | | | | | | | |Please consider how the candidate GENERALLY performs. | | | |Does your feedback confirm that the candidate can: | | | |Provide information to the workgroup about OH&S policies and procedures |( |( | |Implement and monitor participative arrangements for the management of OH&S |( |( | |Implement and monitor an organisation’s procedures for providing OH&S training |( |( | |Implement and monitor procedures for identifying hazards and assessing risks |( |( | |Implement and monitor the organisation’s procedures for controlling risks |( |( | |Implement and monitor the organisation’s procedures for maintaining OH&S for the team |( |( | | | |How does the candidate monitor safety in the workplace? | | | | | | | | | | | |COMMENTS FROM SUPERVISOR REGARDING CANDIDATE’S PERFORMANCE AGAINST THESE COMPETENCIES | | | | | | | |Supervisor’s Name and Signature: | | | |Email: | | | |Qualifications: | | | |Date: | Important: The candidate cannot be deemed competent until this checklist is returned. Please contact the assessor to discuss issues relating to this assessment, Corelink 02 9779 9800. Certificate IV in Frontline Management BSBOHS407A: Monitor a Safe Workplace Candidate’s Name: __________________________________ | | | |ASSESSOR’S OBSERVATIONS |Satisfactory | | | | | |Yes No | |Participates in group activities and group discussion in the learning & development environment, OR, responded to |( |( | |assessor’s questions in the required time frame and to the required standard. | | | |Completed workbook activities to appropriate standard |( |( | |Recorded legitimate details of workplace issues in his/her journal and offered these issues and other discussion |( |( | |generating evidence to the workshop group | | | |Discussed and demonstrated an ability to work through issues raised on a one-to-one basis with the assessor (where |( |( | |the assessor coached the candidate through the issue) | | | |Demonstrated underpinning knowledge of the performance criteria for this unit |( |( | |Performance in the learning & development environment was at a standard that reflected the candidate’s knowledge and |( |( | |understanding of this unit | | | |Ability to recognise opportunities to transfer learnings from group activities and discussions into the workplace |( |( | |Knowledge of how the elements and performance criteria of this unit integrate with and relate to the candidate’s |( |( | |organisation’s actual strategy | | | |ALL evidence submitted for assessment was appropriate for the level at which the candidate is being assessed |( |( | |Used effective people skills to relate to and communicate with others whilst in the learning & development |( |( | |environment | | | | | |COMMENTS FROM ASSESSOR REGARDING CANDIDATE’S PERFORMANCE | | | | | | | | | | | | | |Assessor Name and Signature: Date: | Important: The candidate cannot be deemed competent until this checklist is returned. ———————– 1. Notes to Learner: †¢ ALL evidence should be checked off and attached to this document prior to submission for assessment. It is important you supply enough evidence so you can demonstrate that you are capable of performing at the appropriate standard in the workplace. Without the required evidence, you cannot be assessed as COMPETENT IN THE WORKPLACE by your assessor. †¢ The supervisor/third party checklist is to be completed by your supervisor. If you do not have a supervisor (for example, if you are a business owner), contact your assessor to arrange for a suitable third party to complete the checklist. †¢ Whether you are participating in FLM facilitated-learning workshops or learning self-paced, the assessor will complete a checklist to record evidence of your participation in group discussion, group activities or one-on-one interviews and emails. This will record an assessment of your underpinning knowledge and ability to transfer the learnings from the discussion and activities back to the workplace. †¢ Please contact your assessor if you require any assistance whilst preparing or collecting this evidence. †¢ If you do not have the instructions about how to keep a Journal, please contact your assessor. †¢ If you do not understand anything fully, contact your assessor. †¢ Go to Corelink’s website if you need tips on studying via distance learning. QUESTIONNAIRE Certificate IV in Frontline Management BSBOHS407A: Monitor a Safe Workplace SCENARIO Complete your answers using a word processor. The answers do not need to be lengthy (bullet points will do). The company you work for was recently purchased by another, much larger company. Although the employees have been assured that no retrenchments would occur they are still skeptical about what the future holds for them. The new managers appear to be quite open with staff about their vision for the company and have introduced major changes to its work practices to help them achieve their objectives. Workers are required to move to a new safety system. There has never been a formal system in place before. You have been put in charge of the project. Describe how you would go about the following: a. Information Sessions on OHS Legislation b. Method of explaining industry regulations to staff c. Draft of a suitable OHS Policy d. Explanation of how accessible this policy should be to employees e. Procedure for electing OHS representatives and committee f. Explanation of how meetings will be conducted g. Consultation methods you will use, and as assessment of that consultation with employees regarding the identification of workplace hazards h. Training requirements i. A checklist relating to hazards in your work area j. Draft of an Incident Reporting Procedure UNDERPINNING KNOWLEDGE QUESTIONNAIRE Certificate IV in Frontline Management BSBOHS407A: Monitor a Safe Workplace Complete your answers using a word processor. The answers do not need to be lengthy (bullet points will do). 1. Discuss the responsibilities that OH&S legislation places on employees and managers 2. Describe the legal responsibilities of safety representatives and committees 3. What is meant by an employer’s OH&S ‘Duty of Care’? 4. What should OH&S audits evaluate? 5. What OH&S records should be maintained? 6. Why do we have OH&S policies and procedures? 7. ———————– Corelink PTY LTDAssessment Tool  ©Corelink Pty LtdAssessment Tool

Free Essays on VOIP

(VoIP) INTRODUCTION: In the eyes of most, all packets are created equal. One of the most active areas of telecommunications today is in the area of Voice over Internet Protocol (VoIP). The logic behind this trend makes perfect sense. If we have invested heavily in an Internet Protocol (IP) network, why can't we make full use of it? This is a question posed by many managers and Information Technology (IT) professionals in a wide range of businesses. Many businesses would prefer to have one network in and out of their business for reasons ranging from cost effectiveness to manageability. IP telephony offers a promise of consolidation. This will allow an enterprise to converge its traditional phone system and newer data network for greater efficiency. Arieh Dranger, president of neXTel Systems LLC says, "I don't think it's a question of whether we need VoIP, but when it will come together, because it represents a natural progress of integrating data- period. The IP protocol is probably the most efficient at combining a universal communications network." Basically, IP telephony is taking the telecom world by storm. It has evolved from a little known and used application in 1995 to an application that is poised for global adoption. But as with all technology, there is a price to be paid, and several entities vying for a piece of the pie. WHAT IS VoIP and HOW DOES IT WORK? To put it simply, VoIP means Voice over Internet Protocol. It's a technology that allows network managers to route phone call over the network they use for data transmission. A voice travels over a corporate Intranet or the Internet instead of the public telephone system. Special gateways installed at both the sending and receiving end of a communications channel converts voice to IP packets and back again to voice. This process must take place in a time frame of less than 100 milliseconds to sustain the Quality of Service (QoS) that users are acc... Free Essays on Voip Free Essays on Voip (VoIP) INTRODUCTION: In the eyes of most, all packets are created equal. One of the most active areas of telecommunications today is in the area of Voice over Internet Protocol (VoIP). The logic behind this trend makes perfect sense. If we have invested heavily in an Internet Protocol (IP) network, why can't we make full use of it? This is a question posed by many managers and Information Technology (IT) professionals in a wide range of businesses. Many businesses would prefer to have one network in and out of their business for reasons ranging from cost effectiveness to manageability. IP telephony offers a promise of consolidation. This will allow an enterprise to converge its traditional phone system and newer data network for greater efficiency. Arieh Dranger, president of neXTel Systems LLC says, "I don't think it's a question of whether we need VoIP, but when it will come together, because it represents a natural progress of integrating data- period. The IP protocol is probably the most efficient at combining a universal communications network." Basically, IP telephony is taking the telecom world by storm. It has evolved from a little known and used application in 1995 to an application that is poised for global adoption. But as with all technology, there is a price to be paid, and several entities vying for a piece of the pie. WHAT IS VoIP and HOW DOES IT WORK? To put it simply, VoIP means Voice over Internet Protocol. It's a technology that allows network managers to route phone call over the network they use for data transmission. A voice travels over a corporate Intranet or the Internet instead of the public telephone system. Special gateways installed at both the sending and receiving end of a communications channel converts voice to IP packets and back again to voice. This process must take place in a time frame of less than 100 milliseconds to sustain the Quality of Service (QoS) that users are acc... Free Essays on VOIP INTRODUCTION VOIP means voice over Internet Protocol. A term used in IP telephony to manage the delivery of voice information using the Internet Protocol. It is used to send voice information in digital form in packets rather than using the telephone network. VOIP uses a real-time protocol to help ensure timely and prompt delivery. It also has the potential to change communication and to speed up the delivery of advanced services to all Americans. ADVANTAGES A major advantage of VOIP and Internet telephony is that it avoids the tolls charged by ordinary telephone services. Other advantages include, integration of voice and data, simplification, network efficiency, cost reduction, and many more. The comparison between data and voice network is very similar and the Internet is a huge part for both. The industry trends work over telephone services also. However, the benefits of using IP as a generic platform for both data and real-time application are compelling enough to resolve all issues. MAJOR SYSTEMS A major system component would be the gateways. They are devices that control the communication between the telephone signals and the IP endpoints. It is also an information services that delivers voice communications and joins voice coverage with other data applications and devices. The gateways perform six functions, search function, connection function, digitizing function, demodulation functions, compression function, and decompression and remodulation functions. When the gateway is still performing steps it also receives packets that is where gatekeepers take place. The gatekeeper performs address translation, admissions control, bandwidth management and zone management. An IP telephone is another system component. These devices replace the old telephones by providing enhanced services that are best used for VOIP. QUALITY The voice quality is very important to VOIP technology. There are certain factors tha...

La Belle Dame Sans Merci by Keats and When We Two Parted by Byron Essay Example

La Belle Dame Sans Merci by Keats and When We Two Parted by Byron Essay Example La Belle Dame Sans Merci by Keats and When We Two Parted by Byron Paper La Belle Dame Sans Merci by Keats and When We Two Parted by Byron Paper Essay Topic: Poetry I intend to compare, When We Two Parted, a romantic poem by Lord Byron and La Belle Dame Sans Merci, also a romantic theme but a ballad by John Keats. In When We Two Parted the poem tells of a loving relationship which has ended, when one of the partners feelings for the other waned. It expresses the emotions of resentment, betrayal, sorrow and anguish which are those sentiments which are often felt by the one in the relationship who has been left. It is personal to the poet and written to his lost love. The poem by John Keats La Belle Dame Sans Merci has a similar message because it tells of a breakdown in a relationship; it is written as a ballad. It is a romantic story set in times past. It tells of the heartless reactions of a lady to her love-lorn knight. It is an allegory, perhaps written by the poet after he had been let down by his true love. In both poems a story is told in stages, represented in each stanza. Love is expressed in each poem by a feeling of pain and despair at its loss. The authors use expressive language to portray their pain and anguish, in La Belle Dame Sans Merci Keats work didnt really focus on religion or ethnic issues, he wrote mainly about sensations and the richness of life. The style of poetry that Byron uses in When We Two Parted suggests that he also preferred to write in a similar way; this is what makes the two poems suitable for comparison. The two poems are structured completely differently. When We Two Parted is made up of four eight line stanzas and alternate lines rhyme. The rhyme is enhanced by a rhythm which is made by the constant use of five syllables in each line. The use of this form, allows the reader to become immediately drawn to the intention of his poem. It has a rather stilted feeling about it, giving the impression that Lord Byron was so full of passionate hate when he wrote When We Two Parted that it did not flow from his pen easily. The poet uses colons, semi-colons, dashes and full stops to emphasise the depth of his feelings: Colder thy kiss; Sorrow to this! This gives the impression that Byron was angry and miserable when he wrote the poem but that he also wanted to express these feelings as shortly as possible. He ends the poem with a question which he answers: How should I greet thee? With silence and tears. This not only echoes the opening two lines of the poem it also strengthens his feeling of eternal despair at the loss of his love. La Belle Dame Sans Merci is made up of twelve four line stanzas in which only the second and fourth lines rhyme. We can see in La Belle Dame Sans Merci that the author wrote the poem in the style of a ballad, this is because this type of poem is a story. Keats probably saw his poem as an epic that could be remembered and retold by generation after generation, as a story of heart break and love. It is written as a romantic tale of love that has ended, almost like a play, and each verse represents a scene in the play. The regular use of commas and full stops allows the poem to flow from one idea to the next. One similarity between the two poems is the use of repetition to emphasise the poets feelings and to return the reader to the initial reason for the poem being written: Though the sedge has witherd from the lake, And no birds sing. In When We Two Parted Lord Byron uses language that expresses a feeling of physical as well as emotional sickness. The dew of the morning Sunk chill on my brow This gives the impression that Byrons emotional state is making him feel cold, clammy and feverish. Byron adds to this feeling with the constant use of words related to coldness; shudder, colder thy kiss. This links with the emotional and physical illness that Keats narrator is going through, from loss of love, in stanza three; I see a lily on thy brow With anguish moist and fever dew, And on thy cheeks a fading rose Fast withered too. We can see in the quote above, a sense that love is dying along with the rosiness in his lovers cheeks which are fading, signalling that as love is fading so is her stunning beauty. Byron emphasises the idea that love has died using such phrases as: To sever for years. This means that their love has been cut up and will never be whole again: Thy vows are all broken. means that the relationship has reached such a state that all the promises they made to each other have been broken and: A knell to mine ear suggests that a bell of death is tolling to tell of the passing of their love. There is also a mood of regret in such lines as: Truly that hour foretold Sorrow to this. Why wert thou so dear? In silence I grieve Overall Byron gives a sense of disillusionment and betrayal. This is reflected in La Belle Dame Sans Merci but the ways in which these feelings are portrayed are entirely different. Keats tells of the emotions connected with the loss of love, through a dream-like ballad of times long past. The main characters are a chivalrous knight and a passer-by, who questions the knight about his sadness. Keats uses romantic, almost archaic language that is reminiscent of Shakespeare. I met a lady in the mead, The squirrels granary is full And the harvest done. Hath thee in thrall. These quotes give a definite time frame. With the type of language used by Keats, we can see that the ballad was written at a time when the romantic poetry was extremely popular and poetic style was often influenced by the master of such poems; Shakespeare. The author has written the ballad in sections; we can identify a beginning, a middle and an end; the beginning is shown in the first four stanzas with the introduction of a: lady in the meads it then moves smoothly into the middle part of the ballad when the two lovers are having fun and enjoying each others company. The author is giving his lover romantic presents: I made a garland for her head and the end tells of the break-up, the word death signals the death of a relationship. Parts of the ballad are in dream sequence: and there she lulled me I saw their starved lips Here, you get the feeling that reality has struck him hard, this is where he realises that he has been abandoned and that how dreadful he feels now this has happened. The ballad is aiming to give the message that love hurts and that you never know that its over until you wake up and get hit by the knowledge. Mood and tone are key elements of any poem and are definitely present in both of my poems; Byron creates mood and tone by using dull and depressing vocabulary that reflects the poems theme; tearsbrokenchill on my browsorrowcold These give a sense of pain and loss in each line, each with a word of heart ache, which lets the reader know of Byrons deep heartache and distress. Repetition is also another way in which byron has portrayed the mood. He uses the word cold twice, directly after each other, which implicates his cold and broken heart. It sets the tone as being depressing and lonely. This feeling of coldness appears several times throughout the poem, with words such as, chill and shudder. These words help to set the mood by constantly referring to the bleakness of winter, and how to Byron, the loss of his love is like a winter. There is a shift in Byrons When we two parted between the second and third stanza. The first two stanzas depict his own feeling of their parting, and he describes how he felt at the time, and is almost like a flashback of that fatal moment. The last two stanzas are almost like a reality check, and another influence is brought into the poem: they. This shifts the tone of the poem from being reflective to being a more questioning tone. It is also portrayed through literary technique. Alliteration is a key aspect, and Byron uses this at several points throughout the poem: They knew not I knew thee Who knew thee too well: Long, long shall I rue thee Too deeply to tell. The repetition of the th sound enhances the loss of this love, and creates a sound that fits the mood. In La Belle Dame Sans Merci there are a lot of commas and semi-colons throughout the poem: what can ail thee, knight at arms, death pale were they all; they cried La Belle Dame Sans Merci These give the poem a short sharp quality which lets the reader be aware of the type of pain that is affecting the poet. As in When We Two Parted the tone is partially set by the repetition of phrases and words in the stanzas: sedge witherd from the lake, This is repeated in the last line, along with: and no birds sing these open and close the poem, this is very effective for the tone and also the mood of the poem, as the narrator, who is talking to a knight at-arms, is at the beginning of the poem the narrator is alone and lonely and looking for a love, and at the end when he realises that his new-found lover is actually quite floozy and has left many men; I saw pale kings, and princes too, Pale warriors, death-pale were they all; Who crydLa belle Dame sans Merci Hath thee in thrall! This is to show that the mystical woman doesnt only treat the narrator like this, she treats everybody like this, even kings, and princes too,. In addition to When We Two Parted and La Belle Dame Sans Merci I have comed through three other poems, they are, Porphyrias Lover, Never Seek To Tell Thy Love and The Despairing Lover. These poems are all from the era of my main poems and all compliment the theme of loss loss of love. In Never Seek To Tell Thy Love the structure is unique, it is very short, in line length and poem length, it is a group of three quatrains and has a regular syllabic pattern, these things make it short and snappy and give the poem a feeling of sharp pain as it is in very small blistering sections. In Never Seek To Tell Thy Love it is similar to La Belle Dame Sans Merci because of the way the narrator is left by hiss lover and is distraught because of his loss: Soon as she was gone from me A traveller came by Silently, invisibly O, was no deny. This is from Never Seek To Tell Thy Love it is the same as when the poet in La Belle Dame Sans Merci expresses his loss in the way: I saw pale kings and princes too, Pale warriors, death-pale were they all; They cried-La Belle Dame sans Merci Hath thee in thrall! This links to Never Seek To Tell Thy Love because of the way they find out about their lover adultery, it is obviously a big shock. It is apparent that their lovers were maybe a bit loose, I can say this because the way they find out that their love has left them. Porphyrias Lover is linked to When We Two Parted by the tone used to portry their pain. The tone used is very cold and bitter: cold, colder thy kiss These types of words give the poems real pain, it almost gives the effect of physical sickness, this is told byt the authors with great anguish as they use many words like this to give across their throbbing heart soreness. In conclusion I think that the poets bring their themes to life well, by using all the things mentioned structure which is important to set the mood and tone, language which is important to set the mood, tone and gives the speed of the poem. Also the view of love is expressed by all the poets well as being unrequited as it is not really returned in the same way as it is being bestowed on the poets love.