Graduation Speech: The Beginning of Your Life :: Graduation Speech, Commencement Address

Parents, teachers, families and friends, welcome and thank you for joining us tonight at the County High School graduation ceremony for the Class of 2012! Graduation is a time to look fondly upon memories which have been made over the past three years. I am sure all of us have our own memories which we hold close to our hearts and make us grin when we think of them. Events which become very vivid in my mind are football and basketball games, dances, pep assemblies, at least the ones from our sophomore and junior years, and especially time spent with a group of friends just doing whatever. It hurts to think of all these memories and then realize this time period in our lives is coming to an end. From the lyrics of Dave Mathews, "So why would you care, to get out of this place, you and me and all our friends, such a happy human race ... As we all go our separate ways ... I will remember." Graduation is also time to look at what the future has in store for each of us. It is a very serious time, a time to take a look at what path our lives are going to take once the caps and gowns are taken off and we are thrust into a world which is not so well known to most of us. Will you be successful? Will you be unsuccessful? This success I am speaking of has nothing to do with monetary gains but is measured solely by happiness. Are you truly happy? Will you be five or ten years down the road? Begin planning for your future tonight, set goals. Figure out ways to achieve these goals and fulfill your dreams. If you do not like the path your life has taken thus far, if it does not make you happy, re-

Virtual Banks

Introduction Continuous innovation in technology has altered the way in which business is conducted in each industry. This is especially true for that of financial services or banking. The banking world has evolved tremendously since its inception with most recent trend being towards the development of an online platform. Most Institutions currently offer financial solutions via branches as well as over the Internet. The appeal of online activity has in turn led emergence of online only or â€Å"virtual† banks. Virtual Banks DefinedA virtual bank is one that exists online only in which nearly all financial transactions are conducted over the Internet. The differentiating factor for online banks is the absence of physical branches and ATMs. Also referred to as direct banks, these entities offer identical products and services to its compared to traditional â€Å"brick and mortar† institutions. This includes opening checking and high interest savings accounts with which b ill payments, transfers, deposits and withdrawals can be made. Client’s can access money via partner ATMs or attain cash back at point of sale at certain merchants.Deposits are made directly, by mailing a check, and partner ATMs. Moreover, investments, lending products and professional advice can be acquired through the respective website. Furthermore, most virtual banks are insured by the FDIC (Federal Depository Insurance Corporation). Brief History Banks began to move online with the commercialization of the Internet in the 1990s. Traditional brick and mortar banks were seeking ways to reduce costs simultaneously providing quality products and services. The solution was discovered by the development of an online system.Considering the success of the launch of online banking, institutions began to expand their online presence through website innovation and improvements as well as by diversifying their online product and services offerings. Following the establishment of an easily accessible and profitable online banking structure, virtual online only banks emerged. These entities were successful in overhead cost reduction having only to support the costs of a single online computer network rather than those of operating physical branches and ATMs. This enabled the provision of higher returns to their clients.The first fully functional direct bank insured by the FDIC was the Security First Network Bank, based in Atlanta, It began operations on October 18, 1995 and was eventually bought out despite having been the first to prove the viability of virtual banks. Competition The rise of online only banks has stimulated further competition within the financial industry. These institutions face heavy competition from traditional counterparts who excel in both online and personal customer service experience. Each provides respective benefits and drawbacks however; clients may choose to utilize both options and make transfers between the two.Major Players Ther e are several major players within the virtual banking segment of the financial services industry. INGDirect, is currently ranked first amongst competitors. HSBCDirect follows ranked second. Others include: Ally Bank, Banco Best, Discover Bank, First Direct etc. Use Amongst Canadians: Some Statistics Online banking is experiencing continuous and rapid growth. It has become the most popular means of conducting financial transactions. According to the Canadian Bankers Association, more than half of Canadians have used online banking within the last year.Its use is increasing amongst all age groups as the ease and convenience of these innovations is valued. ? 47 per cent of Canadians now use the Internet as their main means of banking, up from only eight per cent 12 years ago. ? 53 per cent of young Canadians between the ages of 18 and 34 say online is their main way of banking as do 45 per cent of those 55 or older. ? 41 per cent of Canadians report that their use of online banking ha s increased, while only four per cent say it is on the decline. (According to the Canadian Bankers Association) Benefits vs.Drawbacks of Virtual Banks Online banking websites are widely used in today’s society. The way in which individuals conduct transactions is dependent on accessibility and time constraints. One must also consider desired return and the importance of lower interest rates. Customers must weigh the benefits and drawbacks of each option using these criteria when choosing between a traditional branch system and an online only bank. There are both advantages and disadvantages in respect to virtual banks Advantages There are several benefits to using an online only bank.These include convenience, higher returns, ease of use and environmental friendliness. A. Convenience Online only banks are convenient for those subject to time constraints such as working long hours, attending school and caring for a family. Most branches are limited to open hours of between 8 a m and 5 pm, and are closed on weekends. These conflict with the work and school hours of many people. For this reason, numerous individuals are unable conduct their required banking transactions at a branch. Moreover, branches may be difficult to reach for the elderly and physically impaired.Virtual banks solve these issues by being accessible and operable 24hours a day, 7 days a week. Further, with the development of smart phone applications, Virtual banks have become even more advantageous in terms of convenience and accessibility. With the creation of a bank application the customer can easily access his bank account balance with a touch on his phone. B. Higher Returns and Lower Transaction Fees Customers can benefit from competitive rates by bringing their business to virtual banks. Lower rates are offered on loans as well as higher returns on savings accounts and investments.Direct banks can afford to provide their customers with these advantages due to the reduction of overhea d costs caused by the elimination of branches and ATMs. These institutions spend significantly less on human resources and equipment than do traditional banks. In addition to competitive rates, virtual banks do not charge fees for financial transactions. A client may conduct an unlimited number of transfers, bill payments, deposits and withdrawals free of charge creating big savings for customers in turn. Compared to traditional banks, customers will pay less for more. C. Ease of UseThe ease of use of virtual banking products and services is another major benefit. This is facilitated by the clarity, design and value added features of the respective bank’s website. Opening an account can be easily done on the institutions’ website submitting all required documentation over the net. The steps for each desired transaction are included and help is provided upon request. Once familiar with the internet and website navigation, virtual banks are extremely easy to use. D. Envi ronmentally Friendly Finally, Online-only banks prove to be an eco friendly alternative to traditional institutions.Paper waste is almost entirely eliminated as all required documents are directly uploaded and submitted through the respective bank’s website. There is no longer the need for transportation lower fuel emitted by vehicles. Also, the elimination of branches and ATMs decrease requirements for technological equipment and thus lower energy consumption. Disadvantages Although the technological advancements of virtual banks have created much needed solutions for today’s banking industry, some of its benefits are offset by several drawbacks.These include; the lack of a personal experience, transaction problems, service issues, the learning curve and online security. A. Face-to-Face Banking Relationship Virtual banks eliminate the face-to-face relationship that is created in the traditional banking environment. Building a relationship with bank representatives suc h as account managers, loan officers or tellers facilitate the process in which customers fulfill banking needs and are important to many people. Bank representatives resolve issues such as changing terms in their banking agreements or reversing undeserved fees.As well, these representatives get to know their clients better, and are able to tailor the banking services to their unique needs and personal circumstances. B. Transaction problems Complex transactions or errors may require direct and timely assistance from bank representatives. A traditional bank can be called for support or a visit to the branch can quickly solve the issue at hand. Customers of virtual banks do not have the option of attaining timely aid, as this requires waiting on the phone for a representative in hopes of solving the issue at hand.C. Service Issues Another disadvantage stems from the lack of human resources amongst virtual banks. Regardless of accessibility, certain transactions may require signatures or stamps from a financial institution in order to be processed. These are transactions, which cannot be processed through a virtual bank. As well, traditional banks thrive on the provision of excellent customer service. This is a major factor in customer loyalty and retention as well the acquisition of new long-term client relationships.Virtual banks cannot compete on this matter as only standard services are provided to all clients equally over an impersonal online venue. D. Learning Curve Most of the individuals who visit a branch regularly will find the transition to virtual banks quite complex at first. This is due to the fact that virtual banking pages can be hard to navigate and might be complicated for those who are unfamiliar with the virtual bank page or the Internet in general. Consequently, time may be required for traditional bank users to adjust to this technologically advanced service.E. Online Security As a technological society, security has become a primary concern to all Internet users across the globe. Issues ranging from fraud to identity theft decrease consumer confidence in the Internet driven services offered in today’s economy. Virtual banks are governed by the same laws and regulations implemented by the FDIC within the traditional banking sector. Online banking accounts can be subject to hackers, phishing or malware that may disrupt processes or allow the processing of unauthorized activities within these accounts.Traditional banks offer solutions such as scanned copies of cleared checks to its clients in order to prevent fraud. Virtual banks cannot offer substantial record keeping measures as such to identify and prevent such interferences. Implementation of Virtual Banks in Canadian Banking System Given the advantages that online banks provide, it is widely believed that most of retail banking operations will be done through electronic means in the near future. Does that necessarily cause established banks in Canada to look outdated and force them to go out of business?In our point of view, those banks will remain the major players in the future and the only change that we believe is going to take place is the adaptation of these banks to changes in technology and emergence trends. Let’s recall the introduction of access cards in the banking system. Though this introduction brought a large amount of advantages with it, it was still confronted with considerable resistance. Today, we are to some extent in the same position. The trend of virtual banks is inevitably coming, but it also brings disadvantages into play, as previously discussed.Since it takes time for people to get comfortable with new innovations, banks can establish a plan with short and long term goals to accommodate the changes in the industry. We believe the plan below will help modernize the big banks in Canada towards the trend of Direct Banking. †¢ Create a parallel direct bank for the sole purpose of virtual banking Our fi rst suggested step is the creation of a banking line that solely operates online similar typical virtual banks. Customers are expected to move their funds from conventional accounts to the online-only accounts because of their convenience and advantages.The cost of maintaining such virtual accounts is considerably lower; hence banks can offer competitive rates as a tangible incentive for customers to switch to direct banking. †¢ Increase the number of ATM machines Banks should make it more convenient for their customers to access and deposit cash without having to go to a teller. ATM machines should be more available to stakeholders; either through direct investment of the bank or through outsourcing to one of the established ATM Machine providers operating in Canada.This was the strategy of American Direct Banks to ameliorate their service and attract even more customers. After all convenience is a key aspect clients look for when it comes to their banking choice. †¢ Redu ce the number of branches In order to meet required profit margins, and given the incurred expenses caused by the additional benefits they will be offering (more competitive rates), banks are expected to cut their costs. Since operations will take place in a virtual environment, brick and mortar branches will become less necessary.Banks at that point can start merging their branches and close-down others. Downsizing of some locations could also be an option. For the above plan to be successful, it is essential to monitor the change in consumer preferences and implement each step accordingly. After establishing a plan, it is essential to study the feasibility of it given the circumstances. The literacy rate in Canada has been 99% in 2003 and is close to perfect score nowadays (Gordon, 2003). Moreover, In 2010, close to 80% of Canadian households had access to the Internet (Statistics Canada Web, 2011).The country possesses one of the most advanced communication networks in the world making direct banking technically easy to introduce and more importantly, logical. References Canadian Bankers Association. How Canadians Bank. November 9, 2012. http://www. cba. ca/en/media-room/50-backgrounders-on-banking-issues/125-technology-and-banking. Accessed November 18th, 2012 Canadian Internet Use Survey, May 25th, 2011. Statistics Canada Web. http://www. statcan. gc. ca/daily-quotidien/110525/dq110525b-eng. htm, accessed November 18th, 2012. Gordon, Elaine H. Gordon, Edward E. (2003). Literacy in America: historic journey and contemporary solutions. New York: Praeger. p. 255. ISBN  0-275-97864-8. Investopedia. The Pros and Cons of Internet Banks. April 14, 2011. http://www. investopedia. com/articles/pf/11/benefits-and-drawbacks-of-internet-banks. asp. Accessed November 18th, 2012 Weisbaum, Herb. Looking for Better Rates? Visit a Virtual Bank. July 29, 2009. http://www. msnbc. msn. com/id/32206206/ns/business-consumer_news/t/looking-better-rates-visit-virtual-bank/#. U KRTuxzok1A. Accessed November 18th, 2012

Raising Capital In Financial Markets And Institutions Finance Essay - Free Essay Example

Sample details Pages: 10 Words: 2896 Downloads: 10 Date added: 2017/06/26 Category Finance Essay Type Cause and effect essay Did you like this example? In the most general manner, one can describe financial markets as any marketplace that is associated with the participation of buyers and sellers in trading with financial instruments like equities, bonds, derivatives and other currencies. It is characteristic of financial markets to have a transparent pricing system. Even all forms of trading, costs and fees are based on certain regulations. Don’t waste time! Our writers will create an original "Raising Capital In Financial Markets And Institutions Finance Essay" essay for you Create order There are market forces that are related to determining the prices of all the securities that are used for trade. It is also very selective in nature to trade in financial markets. Only those participants who satisfy certain fixed criteria are allowed to do so. Such criteria could be in the form of amount of money that the participant holds, the geographic location of the investors and the amount of knowledge that the participants have of the market. These markets can be found all around the world. Some of the very famous financial markets are NYSE (New York Stock Exchange) and LSE (London Stock Exchange). The markets trade of the order of trillions of dollars every day. There are periods in every financial market where the prices rise to above the historical norms. In such periods heavy trading is done and here the demands for securities also increase incessantly. There are also periods where downturns occur. Under these situations, the prices go below a certain intrinsic value. Thi s value is based on certain factors like the low level of demands or some other factors of macroeconomic nature like tax rates, national production and also level of employment. Under all these situations, information is expected to be transparent hence resulting into a financial marketplace having a high degree of efficiency. (Financial Market, 2010) Raising Capital in Financial Markets In order to make a clear understanding of what financial markets are all about, it is also essential to know their use and the areas where the companies need to invest capital. It would be difficult for the borrowers to get money lent without the existence of financial markets. Here, the use of banks also comes into the picture. This is done in the form of loans and also in the form of mortgages. For the other, more complex transactions this process of borrowing and lending is done through the agents. One of the most well known examples of a financial market is stock exchange market. Here, every company is given the provision to raise money by virtue of issuing shares and also other shares which already exist, can be bought or sold as the case might be. Here there are four different types of users. They have been mentioned as follows: Lenders This is the category that has enough money so as to start with the liquidity process. This category of people gives money under the condition that it would get back the principal amount with a certain interest or charge at the decided time. Individuals and Doubles There are also lenders who lend money without knowing that they are doing so. This can be done in the following different ways: Putting money in a savings bank account Making contribution to a pension plan Giving premiums to get insured Investment in Government bonds Investment in shares of company Companies Companies also have a major role to play in financial markets. They generally tend to be borrowers of capital. During those times, when it is felt that the companies have a surplus amount of cash which is not needed for a particular small period of time, they distribute the same in shirt term markets called as money markets. In the list of companies that play a role in the financial markets, there are some companies that have really high cash flows. Such companies are considered to be lenders rather than borrowers. They can use buyback schemes to return cash to lenders. Under alternate circumstances, they can also seek to make more money by lending cash. Borrowers The nest category is that of borrowers. Under conditions of house purchase, there are many individuals who borrow money in the form of bankers loans or in the form of long term mortgages. There are also companies who borrow money so that it could be of aid in their cash flows whether in the short run or in the long run. This can also be done for a complete modernization or for future expansion plans of the company. There are Governments who borrow money when the tax revenues collected are more than what they have to spend. This difference makes them borrow. This borrowing is also done on behalf of certain industries that are nationalised, certain municipalities and some local authorities as well. This is done in the form of bonds. There are municipalities which themselves borrow to raise money in their own name or in that of a certain Government. Also, there are a number of number of public corporations which include a number of nationalised industries. This can also include postal services, railway companies and also some utility companies to name a few. Some borrowers also take money locally or through Forex (Foreign Exchange). (Assistance with capital market transactions, 2011) Derivative Products After the 1970s, financial markets saw a substantial rise in the derivatives section. It has to be understood that in form of trade in financial markets, which could be in the form of stock prices, bond prices, currency rates or dividend rates; there are always ups and down which have a capability to creating risks. Under the situations, derivatives are used to control risks or for a particular period they can also exploit risk. This is done under the concept of financial economics. The advantage of using derivatives is that it can generate certain unusual profits from the use of instruments in financial markets. A contract would have to be made in order to use such products. These contracts are mainly of three types: Future contracts, forward contracts ad also option contracts. (Derivative products, 2010) Types of Financial Markets Financial markets can be divided into various types. They have been mentioned as follows: Capital Markets: These financial markets are composed of Stock markets and bond markets. While stock markets are responsible for issue of common stock which can enable subsequent trading, bond markets are responsible for financing through issuing bonds and enable subsequent trading. Commodity Markets: This market is used for the trading of commodities which are more of a physical nature. Money Markets: This market as discussed above is used to provide financing and investment in the form of short term debts. Derivatives Market: This market provides instruments that are essential for management of financial risks. This has also been explained in the previous section. Futures Market: This market is related with providing standardized forward contracts which have a pre-defined trading date in the future. On many occasions, this has been referred as forward market. Insurance Mark et: This market is essential for the redistribution of a number of risks. This financial market also has a vital significance in the current corporate world. As a result a number of financial institutions are starting to trade in such markets. Foreign Exchange Market: This market is required for trading of foreign exchange. Also, talking more in detail about a capital market, it is composed of both primary and secondary market. All those securities which are newly formed are either bought or sold in primary market. As far as secondary market is concerned, here the investors are given an opportunity to sell securities that have been held for long or even to buy existing securities. Also, in a primary market, transactions basically take place between investors and public while in secondary markets, it takes place between investors only. (9 types of financial markets for capital raising, 2008) Analysis of Financial Markets From the time, this term has been coined, a lot of study has also been undertaken to study how prices vary from time to time. Of these various studies, the Dow Theory given by Charles Dow is of extreme significance. This is also called the technical analysis method to predict future changes in markets. This theory has deduced that the market trends indicate the future, for the short term if not for a long term. But, this theory has also been disputed on many occasions. Here, next change is not correlated to the last change. Also, it is important to study the scale of change in price over a unit of time. This is termed as volatility. It does not follow a Gaussian distribution but rather a Levy stable distribution. Here, the scale of change depends on the length of time unit to a power that is slightly greater than ÂÂ ½. Here, there are more chances of large changes either up or down as compared to what it would be by using the Gaussian distribution which has an estimated value of standard deviation. Today, one also needs to put interest in the proper analysis of international market effects. A global financial network can be a boon or a bane. So, one should make proper analysis of financial markets before making any decision. Financial Institutions Definition In the most general terms, a financial institution is that which is responsible for collecting funds. These funds are collected from the public and they are put in the form of financial assets. Assets could be various types. They are deposits, loans and also bonds. The major aim of a financial institution is the conversion of public money in these mentioned financial assets rather than in tangible property. Also, one very important aspect of a financial institution which is also worth noting is that it provides a number of financial services to the clients and its members. On many occasions, financial institutions also act as financial intermediaries. As this is a highly risky affair, most of the financial institutions are regulated by the Government. (Financial Institutions, 2010) Types of Financial Institutions There are broadly three types of financial institutions. These have been mentioned as under: The first of these are deposit-taking institutions which are responsible for accepting and managing deposits and also in making loans. They are of the type of banks, building societies, credit unions, trust companies and also mortgage loan companies. All these financial institutions have different functions. Distribution of such functions in these bodies makes it easier for the customers to make use of the functionalities that financial institutions have. In recent times, there has been a large degree of improvement in this respect. All financial markets that have been mentioned, take help of the deposit-taking institutions in order to run. Even money markets which have started to take effect nowadays run on the basis of the contributions of the deposit-taking institutions. The second category is that of the insurance companies and pension funds. Talking about the former first, one mu st have realized the consistent consciousness in the people of the society with respect to insurance. With technology developing, it has not only made the world look short but it has actually made the lives of people short. There are a number of reasons for which the people look for insurance. The need to security has increased more than ever. Under the conditions, a number of insurance companies have turned up these days. Many of the banks have also started their new division of financial institutions in the form of insurance companies. This is an example of the fact that companies have begun to see scope in the market and many new form of investing and financing options are coming up these days such as in the form if insurance companies. The other financial institution that has been mentioned here is pension funds. With the world, developing at a much accelerated rate, the provision of employment has also increased to a substantially large degree. As a result of this, many fresh c andidates are getting options to take part in the functioning of companies. Now, this has led to retirement as well both in the public and in the private sector. Though, there is no such generalized agreement in private companies for pension funds. But in case of public companies, this has developed into a financial institution. This has become more important to those stock markets where the number of institutional investors is large. Though the provision for the same is not very high in case of private institutions, one significant pension fund is TAPILTAT, which is the fund for mutual assistance of the Employees of Ioniki Bank and Other bank. It functions as a multi-employer auxiliary pension fund. This has its operations in Greece. A number of private institutions in UAE have been inspired by the ideologies of this plan and it is expected that in times to come, it would expand its reach. The third category is that of brokers, underwriters and investment funds. In this context, as the name suggests, a broker is that party which makes arrangements to have transactions between buyers and sellers. In return, it also gets commission at the execution of the deal between them. There are also brokers who act as sellers or buyers as a result of which they become the principal party to the deals. Also, there are distinguishing agents who act on behalf of the principals as defined here. In reference with financial institutions, a broker could be of the following types: Commodity Broker Customs Broker Insurance Broker Investment Broker Joint Venture Broker Mortgage Broker Options Broker Stock Broker Serviced office Broker As far as underwriting is concerned, many financial institutions such as banks, insurance companies and investment houses assess the ability of a customer to receive their financial product which could be in the form of insurance, mortgage or credit. Here, there are a number of financial underwriters who do accept some risk adverse ventures in exchange of a premium. Because of the green flag shown by the underwriters, such deals are also considered. Then, it becomes the responsibility of the underwriters to take care of the transaction. Also, there are three types of underwriting in this context. They are securities underwriting, bank underwriting and also insurance underwriting. In all these cases, the underwriters evaluate the risks that are associated with the same and bases on their evaluation, they draw conclusions on whether they can allow transactions. The final segment in this category is that of investment funds. This is more widely known in the form of collective investment schemes. Here, one can invest money alongside other investors so that one could have the advantage of working as a group. The advantages of this form of financial services include- hiring investment managers to improve the prospects of a better return, benefit from cost sharing (economies of scale) and there would be more diversity which would further reduce risks. The entire institution in this respect is broadly composed of: A fund manager A fund administrator A board of directors The Shareholders A marketing company for promotion (Private equity, 2010) Corporate Valuation In case of financial institutions, it is advised to use Equity Multiples rather than Enterprise Multiples. The reason is that the relative metrics used for the same are Price or Equity Price or Book Value. Valuing a financial institutions balance sheet is different from that of a non-financial institution. This can be seen as to consider the way an industrial firm handles its assets and the loans that it requires to finance that asset. In case of financial institutions, the line is blurred. These institutions must hold certain deposits in form of liabilities so that they could fuel the issuance of loans required to manage the assets. Here, three different models can be used for corporate valuation. They have been mentioned as follows: Dividend Discount Model: This model uses Earnings per share (EPS) or also Dividend per share (DPS). Discounted Cash Flow (DCF) Model: Here, there is a basic requirement of a Free Cash Flow for Equity (FCFE). This is that amount of money which go es back to the shareholders. Now, one can calculate the Free Cash Flow to the Firm (FCFF) as: EBIT* (1-Tax rate) Capital Expenditures + (Depreciation Amortization) (Net increase in working capital). Also, FCFF- Debt + Cash = FCFE. Cost of equity is calculated by using the Capital Asset Pricing Model rather than the Weighted Average Cost of Capital. This is another reason for which one uses equity multiples rather than enterprise multiples which is used for calculation of the cost of equity. Excess Return Model: In using this model, one could calculate the total valuation as the sum of capital invested in the firm and the present value of dollar returns expected in the future. Regulation As far as financial institutions are concerned, they are generally operated in a highly regulated environment because they form a critical part of the economies of a company. The structure of the regulation is certainly different in every company but in most cases it does include prudential regulation and consumer protection along with market stability. There are some companies which go for a single body that takes care of regulating the financial institutions where are there are others which have separate agencies for the same. Some of the major regulating bodies of financial institutions have been mentioned as under: Federal Financial Institutions Examination Council Office of the Comptroller Currency Federal Deposit Insurance Corporation National Credit Union Administration Federal Reserve Office of the Thrift Supervision (Regulations of Financial Institutions, 2008)