The Advantages Of Online Banking

The Advantages Of Online Banking What is online banking? As we all know online banking is something that we can pay bills by mail and deposit checks at your bank branch. Online banking is becoming much more common. You can pay your bills online and access a record of your checking account transactions online. Online banking is a great feature, and most banks do offer it. Online banking makes everything you do with your finances a bit easier. You can access the information anywhere that you have access to the Internet. It makes your financial life much easier to manage. Online banking refers to systems that enable bank customers to access accounts and general information on bank products and services through a personal computer (PC) or other intelligent device such as PDA or hand phone which enable to connect to internet or WIFI (Wikipedia, 2009). Moreover, online banking isnt out of change your money habits. Instead, it uses todays computer technology to give you the option of bypassing the time-consuming, paper-based aspects of traditional banking in order to manage your finances more quickly and efficiently. The advent of the Internet and the popularity of personal computers presented both an opportunity and a challenge for the banking industry. Financial institutions have used powerful computer networks to automate millions of daily transactions; today, often the only paper record is the customers receipt at the point of sale. Now that its customers are connected to the Internet via personal computers, banks envision similar economic advantages by adapting those same internal electronic processes to home use. Online banking is a powerful value added tool to attract and retain new customers. Besides it also help to eliminate costly paper handling and teller interactions in an increasingly competitive banking environment. Literature Nowadays, a lot of entrepreneurs launch the internet payment system in worldwide and the inter banking and telephone banking system spread rapidly. This system give the advantages of being convenient, safe efficient and economical (Li, 2002). Now entrepreneurs provide online banking as add-on services to the existing b ranch acitivies whole mobile banking is in the initial stage of implementation (Sylvie Laforet and Xiaoyan Li). Safety was also reported to be a big obstacle for online payment (Wong et al., 2004). With the increasing popularity of the internet, more and more industries are seeking ways to utilize this popular medium in an effort to keep up with the changing technological preferences of their customers. These days you can do just about anything online from grocery shopping to making a free phone call to a friend in Tokyo through your PC. The possibilities of the internet are seemingly endless and the banking industry has decided that it will not be left behind. While most people have at least heard of online banking, the majority of them have probably not tried it yet. Maybe its because we find more comfort in working with real people and real paper when it comes to money matters rather than performing transactions in the seemingly impersonal universe of the World Wide Web. Whatever the case may be, there are both advantages and disadvantages to online banking as a safe way to quickly and efficiently manage your finances. Howcroft et al. (2002) revealed that younger consumer value the convenience or time saving potential of online and mobile banking more than older consumers. Young consumers also regarded the lack of face-to-face contact as less important thean older consumers. They also found among the reasons for consumers to be reluctant to use online services were concerns over security, lack of awareness of online services offered by banks and complex bank sites. The evolution of the bank Web presence is simple web presence (Staticpages with general information about the bank), off-line interactive site (Customized contact with the client; online communication through e-mail) and internet banking services (Online transactions). Sathye (1999) investigates internet banking adoption by Australian consumers and identifies security concerns and lack of awareness as the main obstacles to adoption. Cheng et al. (2006) found perceived web security to be significant determinant of customers acceptance of online banking. Customers tend to increase purchase only if they perceive that credit card number and other sensitive information is safe. Websites are essentially a type of information technology. Direct confrontation is an internet transaction platform. Shopping websites allow customers to choose products based on their own needs and provide businesses with transaction platform through interactive communications to fulfill the transaction (Grace T.R Lin and Chia-Chi Sun, 2009). Entrepreneurial businesses are recognized as more informationally opaque than large and more established firms, and the collection of private information is costly (Ang, 1991). Online banking allows entrepreneurs to lower the transaction costs, incurred by transportation for instance, and access physically distant multiple lenders with much lower searching costs (Liang Han, 2007). Although online banking service is long introduce is western countries and widely used. However, in Malaysia, online banking is not so popular and online being used by certain sector. This might because of technology, knowledge of internet and trust among the consumer and businessman. Types of business using online banking are Bank, E-commerce, Online Game, Public Sector, and Private sector. Bank The concept of online banking rise from the Global Finance Houses whose primary objective was to ensure that customers were tuned to their finances from any part of the world. In Malaysia, Online banking is being introduced during year 2000 (b.shanmugam, 2000). Malaysia had started to introduce online banking to it nation through Maybank. However, during that time, internet is not so popular used and the online banking service is gone through wireless application protocol (WAP). Many complaints are received during that time due to the transmission of data is very slow. However, it has being improved after the encouragement of using broadband by Malaysia government. By introducing online banking in bank, the major functions of online banking is using for transaction. It enables customers to transfer their money to their account or other peoples account. As a result, customers no longer have to bring big amount of money walking around the street. What they just need to do is just one c lick in front of home computer (bankrate.com, 2009), for example CIMB clicks and Maybank2u.com. Beside from that, customer also can use online banking for payment. As online banking is functioned 24hours every day, user can pay their bills any time anywhere as long as connected to internet (Gerard, Cunningham and Devlin, 2006) and the proper function of the bank website. By the way, customers also can check there account status through online banking and any transaction that had being done before. Because of these conveniences, customers no longer have to queue up at the counter to wait for their turn. A part from that, ATM (Baba Prasad, Patrick Harker, 2009) also considers as one of the online banking system where is enable customer to withdraw money, payment, transaction and account checking. E-commerce Beside from the Bank are using the online banking, e-commerce sector also using online banking for their transaction of payment. Nowadays, more and more online store are available in the in the internet such as and many young generation are preferring for online purchasing. Every payment or transactions of money are done through online banking idle through ATM machine or personals computer. Online Game, Public Sector, and Private sector Nowadays, online games also provide online banking service for their customers to top up the credits or purchasing item for their online games. From what can be seing, many online banking website consist of online games advertisement and there will be a column for customers to top up. Beside from that, public sector such as government and private sector such as supermarket or own business also connected with online banking whereby to save time and cost (Banco Bank, 2009). With this service, any corporations or government sector can transfer any of money to others easily and all the transaction will be transfer in data form. Method Online banking products and services can include wholesale products for corporate customers as well as retail and fiduciary products for consumers. Ultimately, the products and services obtained through online banking may mirror products and services offered through other bank delivery channels. Some examples of wholesale products and services include (National bank of America, 1997): Cash management. Wire transfer. Automated clearinghouse (ACH) transactions. Bill presentment and payment. Examples of retail and fiduciary products and services include: Balance inquiry. Funds transfer. Downloading transaction information. Bill presentment and payment. Loan applications. Investment activity. Other value-added services. National banks of America have experimented with various forms of online banking for many years. Some of the early experiments involved closed systems where the customers accessed banks through a dial-in or cable TV connection. These systems limited a banks potential customer base because they required out-of area customers to either incur long-distance charges on their phone bills or subscribe to a particular cable TV service to access the bank. With the widespread growth of the Internet, customers can use this technology anywhere in the world to access a banks network. The Internet, as an enabling technology, has made banking products and services available to more customers and eliminated geographic and proprietary systems barriers. With an expanded market, banks also may have opportunities to expand or change their product and service offerings. Besides, now the most services that the companies use are; easy account maintenance, online bill payment, online balance transfer, accou nt alerts, rewards for going paperless. Easy Account Maintenance Online banking makes it easy to keep track of your balance and the activity of your accounts. For those who have multiple accounts with the same bank, many online banking systems allow for you to see the balances of all of your accounts on a single screen. You can also easily go back and forth between your accounts and monitor their activity with little to no hassle. Online Bill Payment Probably the most widely used advantages of online banking is the ability to pay bills online. Most online banking systems feature this capability, allowing for you to enter in your account information for your billers, to pay them directly from your bank account. A lot of banks even allow for recurring payments to be set up for those bills that remain the same each month such as mortgage, rent, car, and personal loan payments. Depending on the relationship your bank has with the biller your payments can be automatically debited from your account or an electronic check may be drafted and mailed to the biller. Any ways you look at these are all advantages of online banking: save you time, save money on postage, and provide the opportunity to avoid late fees with careful planning. Online Balance Transfer At some point you may find that you have to make a purchase and do not have enough in your checking account to cover it. However, you may have the funds needed in another account such as a savings account. One of the advantages of online banking is the ability to transfer funds from one of your accounts to another. This online banking feature helps to prevent insufficient funds, return check, and overdraft fees on your account(s). A word of advice about transferring from your savings account, try to keep this type of online banking activity to a minimum. Federal regulations prohibit an excess of six transactions from occurring on a savings account within a billing cycle. Account Alerts Another one of the advantages of online banking is the availability of setting up account alerts. Some banks offer account alert set up, where an email or even text message can be sent to you based upon certain criteria you select. For example, if you have a recurring bill payment where an electronic check is drafted and mailed, you could set up an alert to be sent to you advising when the bank has mailed out the payment. Other alerts include, weekly activity alerts, statement alerts, and low balance alerts. These alerts work to make monitoring your account easier. Rewards for Going Paperless All of the focus on going green these past few years, the last in the advantages of online banking list deals with rewards for going paperless. A lot of banks offer rewards in the form of rewards points or cash to help reduce the amount and cost of paper consumption. By opting to receive your bank statements online, increasing the use of online bill payment, and using your bank card more frequently your rewards could rack up significantly and youd be helping out the environment in the process. Improvement Online Banking Essential Security Measures Financial institutions and businesses are studying various approaches to the online banking security problem. The idea behind all the solutions is to include some extra layer beyond the user name and password that would act as a barrier to account access. The most popular approach that is used widely in corporate settings, involves physical objects that serve as keys. Most have focused on solutions using software, which might offer some improvement in security at much lesser cost. Bank of America began introducing a software-based program designed to prevent crooks from impersonating either a bank customer or the bank itself. Financial institutions and corporations engaging in any form of Internet banking should have effective and reliable methods to authenticate their customers. An effective authentication system is necessary for compliance with requirements to safeguard customer information, to prevent money laundering, to reduce fraud, to inhibit identity theft. The risks of doing business with unauthorized identified persons in an Internet banking environment can result in financial loss and reputation damage. There are a many different technologies and methodologies financial institutions can use to authenticate their customers. These methods include the use of customer passwords, personal identification numbers, digital certificates using a public key infrastructure, physical devices such as smart cards, or other types of authentication methods. Existing authentication methodologies involve three basic features: à ¢Ã¢â€š ¬Ã‚ ¢ Something the user knows (e.g., PIN, Password); à ¢Ã¢â€š ¬Ã‚ ¢ Something the user has (e.g., ATM card, smart card); and à ¢Ã¢â€š ¬Ã‚ ¢ Something the user is (e.g., biometric characteristic). Authentication methods that depend on more than one mechanism are more difficult to breach than single-feature methods. Accordingly, properly designed and implemented multi-feature authentication methods are more reliable and stronger to deter fraud. For example, the use of a login ID and password combination is a single-mechanism authentication (something the user knows) whereas, an ATM transaction requires a multi-feature authentication which is something that the user possesses (example: the ATM card) combined with something the user knows (example: PIN). Financial institutions offering Internet-based products and services should have reliable and secure methods to authenticate their customers. The level of authentication used by the financial institution should be at par level with the risks associated with those products and services that are offered. Risk assessments that indicate the use of single-feature authentication is inadequate, financial institutions should implement multi-feature authentication, layered security, or other controls to reduce or eliminate any risks. Another tip for banking online is to be very aware of Internet banking security. Identity theft is a real and growing problem today. As such, you need to be highly protective of your personal account information whenever doing transactions online. Make sure you never give personal information out over the Internet unless you are connected to a secure site. Also, store your access information in a secure place. Routinely check your computer for spy ware and viruses, protecting your identity this way as well. The important security feature you will want to make sure is in place with your online bank is encryption. Verify that the banking portal has high-end encryption software in place. If not, it might be advisable to choose a different banking option. You can verify this by looking for the graphic, which is usually located at the bottom right of the browser that signifies the encryption is in place. Last tip about Internet banking is to remember that some procedures are still affected by the business hours of the bank. Even if you transfer a balance at 8:00 PM, it may not show up on your account until the next business day. Plan your transactions accordingly if you are working on a tight budget. Use the Internet to shop for the best banking options. Check interest rates on loans and savings accounts online. The Internet can be a great tool in helping you secure the best possible banking services to meet your needs. The history of Internet banking has come a long way over the last six years, and it is only going to get better! Get connected to Internet banking today. Outcomes The Advantages of Online Banking. There is huge competition in online banking service in market and the new entrants into the services are providing huge benefits. First, online banking is convenient. It allows you to perform transactions, pay bills and check balances 24 hours a day, 7 days a week. The bank virtually never closes because it is as accessible as your PC or laptop computer. No matter where you are in the country or in the world, you can visit your online bank and handle money matters. You can even schedule to pay several payees ahead of time rather than keeping up with paper bills or trying to remember when to visit a payees web site to make an online payment. Your bank will automatically send the payments on your behalf in the amounts and on the dates you specify. For example, online bill payment is easier and less expensive than generating and mailing a paper check. Your bank may offer free bill pay services; if so, this saves the expense of ordering checks and buying stamps. Checks will be generated and mailed by your bank at your authorization. Plus, the checks will have the vendor names directly on your bank statements, next to the amount of the check and check number. This is not true for traditional checks. Meanwhile, online banking is also opposed by traditional bankers because a huge percentage of profit is taken away by the portal providers and the bankers are left to play as brokers who bring two parties together. But there are many online services provided by online banking that eased the customers and the banks. The transactions provided by online banking are cheap as compared to branch service and phone transactions. It is easy to set up a bank and the customers get wide range of banking options online. Online banking services include the provisions for ATMs and anytime anywhere anyhow banking that is also called Martini Banking. The automated service of online banking helps customers to easily set up an account and withdraw money at any time. The customers can get a mini bank statements and balance inquiry through ATMs that are widely available even in remote locations. The online banking service reduces traveling cost of the customer and anytime requirement of money is fulfille d. Many billings can be done from home; office through online banking and shopping can be done without carrying heavy cash in pocket. Banks are benefited from online banking as the overhead operation cost gets reduced and repetitive paper tasks can is prevented. The automated systems have better efficiency and control on a job and a proper documentation of all transactions can be availed anytime by the banks. Thirdly, online banking is fast, efficient and effective. Through the internet, transactions are typically performed and executed at a faster rate than ATMs. In addition, online banks give you the ability to handle several bank accounts such as checking, savings, CDs, and IRAs from one site. The majority of banking sites are also compatible with programs like Quicken and Microsoft Money, so as to allow for more effective management of assets. Moreover, if you need to verify your bank account balance, just signing to your banks online services. No more waiting for the bank statement or calling the bank to get your balance. To get an accurate balance, take the banks balance as shown online, subtract any outstanding checks, and add any outstanding deposits. On the other hand, easily download the transactions like banking and credit card transactions. Download banking transactions directly into our financial software as often as we like. If use the ATM card often, this is a must, because it keeps your bank balance current in financial software. So that wont have to worry about keeping all those debit card receipts. Besides that, it doesnt waste time entering credit card charges by hand download them! This is probably one of the biggest advantages of online banking, since entering credit card transactions manually can be very time consuming. It is ubiquity, because if youre out of state or even out of the country when a money problem arises, you can log on instantly to your online bank and take care of business every day. Lastly, online investment can be profitable if conducted with a bit of caution. Familiarity with a complement as well as procession of online investment is essential. Investing tiny amounts primarily helps to revoke a risk factor. Once we have been assured enough, a amounts can be progressively increased. Online investment should be finished after consummate research. Online investigate can be finished in a remoteness of your home. Other resources, similar to newspapers as well as monetary magazines additionally suggest benefit in tracking investment opportunities. The report accessible online is customarily correct as well as reliable, to confirm upon a volume of investment. The websites have been continually updated as well as a accessible report might have been posted only hours ago. Some conjectural monetary websites suggest quotes which have been merely mines old. Online report upon investment is accessible twenty-four hours a day as well as 365 days a year. While internet banki ng makes it easier for you to manage your money, it might make it easier to forget to check how much you have so you can budget. Online banking is a lot like using a credit card; the easy access makes it easier to spend without thinking about why you are spending. You can set up e-mail alerts to let you know how when your account dips below a certain number, but nothing beats looking at it yourself and keeping your checkbook balanced. Also, when you get a credit-card statement in the mail and open it on a monthly basis, you are instantly reminded to check if any strange charges appear on your account. Its easier to forget to keep track of such information online, and youll need to have good money management habits. Disadvantages Internet banking services provide a number of benefits to businesses sector. But while it also has its disadvantages, businesses who are wishing to join the trend need to know its disadvantages as well. Despite the growing popularity of internet banking, it cannot be denied that some people still remain doubtful doing transactions online especially where money is concerned. Although most of the banks already improve their security services in order to reduce people or businesses doubtful about doing online banking, but there are still a lot of disadvantages about this. Below will be a certain disadvantages for businesses sector. The most disadvantage of online banking in business sector will be a requirement for staff in financial department with skill that deal to the computer and browser. As a staff in financial department has a responsible in task such as accessing account information and bank statements, pay bills that related with business, transfer money from one account to another account or apply for a checking, credit or other types of account or apply for loans or even download forms. All of these tasks may require a particular skill from them to maintenance the interest for businesses. Some of the staff may lack of training and experience to complete all of this tasks. Thus, it will influence the daily work in businesses cannot be progress with more smoothly. Besides that, the increasing number of fraudulent bank websites that created by hacker also can be a disadvantage or risk for online banking in businesses. A fraud banking sites will bring a lot of impact for businesses because it causes the staff in financial department confuse with the fraudulent websites. The purpose of hacker to create fraudulent banking websites was believe to aim to trick businesses disclose their sensitive information. If businesses login into this kind of websites, then the disclosure financial statement or information might be happen. Additionally, it may possible also influence the staff in financial department cannot fully complete variety of task because access the fraudulent banking websites. Thus, it will bring an impact for the overall operation in businesses. Not only for this, fraudulent bank websites that created by hacker will try to send a fake email to some businesses in order to get their confidential information. Hacker will try to verify related company confidential information through guide them enter into fraud links. When businesses not realize that is fake email and access into the fraud links, it might possible disclose their particular account information or password. Hackers can break into nearly any computer system. Any online bank site you consider should have statements on the type of security they use. You should also e-mail the bank or head to the bank branch to find out exactly what would happen if there were a security breach and press the point or go to another bank if the answer is vague. In general, you should think of your money as being as safe online as it would be in a vault, but it is your responsibility to find out just how secure the bank is, if they keep their security systems up-to-date. Finally, you shou ld also make sure that you use security software on your personal computer to reduce the chance that anyone can get your personal data. Furthermore, another disadvantage for online banking that is computer and browser from particular businesses will affect by viruses and worms that hide in the fraudulent website and email. When businesses received some suspicious email and open it or access some fraud some links, a Trojan program named Trojan horse program will install our computer immediately and secretly. This kind of program was hidden in computer and we might not realize it since the program already installed in our computer. When businesses do not realize that and access the fraudulent websites or read the suspicious email, the function of the program will been active and try to capture businesses account and password. Through by this, the hacker can access the account and capture any information about the account. The main issue for most people is that of trust. They may wonder if their transaction went through successfully or if they clicked on the correct button. The best way to overcome this uneasiness is to make a habit of printing the transaction receipt. Keep this receipt until your bank statement or online account view confirms that you have successfully executed the transaction. Online banking sites can also take a while to start up and can be difficult to learn at first. Some banks require customers to provide some form of photo identification in addition to signing a form at one of their branches. Spouses may also have to sign a power of attorney if you both plan to access and handle your accounts together online. In addition to all of this, it may take a while to learn how to use your banking site. Most if not all banks will offer an online banking tutorial. Some even offer live customer support for online banking via chat, email, or phone. Clearly, online banking has both advantages and disadvantages. It simplifies life for some people and for them it is frankly a better way to bank. For others it may be a little more complex and downright intimidating. In light of these two perceptions, more and more banks are offering online banking as a viable option for their customers. Lastly, one of the biggest disadvantages is the absence of a physical location. Being able to make deposits to a physical bank account assures peace of mind; you dont have to wonder if your check is lost in the mail or when its going to be credited to your account. Conclusion Banking is one of the most important parts of our society and economy. Banks provide the basic lending capital for all of the transactions of our economy. Without them we would indeed be in a bad spot. Even with them sometimes we are in it really bad-such as now with the financial crisis, which is really a bank crisis. Without a bank how would you borrow money to purchase a car or a home? By collectively pooling our money in a lending institution we can make life so much easier for everyone around us. This is particularly the case when we dont have a great deal of capital ourselves. Very few of us actually have the money to spend on large purchases. Because banks are so important you need to know about a great new option many of them offer. In our highly technological world there are some great conveniences resulting from the internet. The internet allows us to share large amounts of information with great speed. We can look up all sorts of interesting information, send each other em ails, and write fascinating blogs. Another thing we can do is to look at important banking information and make important transactions. We buy and sell all sorts of things on the internet. Did you know that you can also do much of your banking online? You can check your balance and you can transfer all sorts of money around from checking and savings. There are all sorts of options that online banking will offer you, but you need to know some things about it first. As a conclusion, online banking is very useful to every layer of people in this community. It is more convenient and easy to use. Beside from that, by using online banking, it save a lot of time and cost among each other and people no longer have to queue up in a long line at a counters to wait for their turn for personal or business purpose.

Currency Devaluation and Its Effects on the Economy

| Currency devaluation and its effects on the economy | Focus on the Argentine economy | Agustina DalFabbro, Michele Mottola, Giuseppe Merlino, Saskia Diehl 26. 05. 2012 | Inhalt 1. Introduction2 2. Convertibility and its problems in the 1999/2001 period2 1. 1Previous Devaluation Process in Argentina2 2. First moments of devaluation3 2. 1 Fixed exchange rate vs. floating exchange rate regimes3 2. 2 Two types of exchange rates and free floating currency5 2. 2 Free floating currency6 3. Effects of Devaluation process on6 3. 1 Trade Balance6 3. 2 Productive capacity6 3. 3 Salaries6 . 4 National Accounts6 4. Conclusion6 5. Literature7 1. Introduction Stable currency exchange rate regimes are a key component to stable economic growth (http://www. policyarchive. org/handle/10207/bitstreams/1311. pdf) 2. Convertibility and its problems in the 1999/2001 period 1. 1 Previous Devaluation Process in Argentina Three main large devaluation episodes prior to the monetary reform of 1991 can be iden tified in the graph: 1975-1976 (the so called â€Å"Rodrigazo†), 1982-1984 (the â€Å"Post Malvinas War† monetary collapse) and 1989-1990 (the â€Å"Hyperinflation†). (http://www. cavallo. om. ar/wp-content/uploads/2012/05/Devaluation-and-Inflation-. pdf) 2. First moments of devaluation Basically you can distinguish three half-year periods centered on the political and financial collapse at the end of 2001 namely: Precollapse (to September, 2001); Collapse (October 2001 to March 2002); and Depression (from April 2002). This section will focus on the end of the Collapse and the beginning and ongoing Depression. As earlier mentioned Argentina applied a currency board at the beginning of the 90’s which pegged the peso to the dollar and formed a fixed exchange rate.After the Crisis of Argentina had begun they had to decide how they can diminish the effect of the emerging depression. In December 2001 Argentina officially defaulted and in February 2002, the val ue of the pesos was almost half of the dollar, Eduardo Duhalde became president. He had to manage a country which was in a really bad condition. Different economists favored different strategies to stabilize the economy. Some favored a â€Å"pesification followed by a free-floating regime† and others â€Å"devaluation and subsequent dollarization†.Both of those possibilities are heavily discussed between the leading economists worldwide. After the financial crises in the 1990’s they suggested for developing countries to choose a corner solution and all intermediate exchange rate regimes were dismissed in order to be too risky. But in 2003, after the crisis of Argentina had reached its peak, the bi-polar view might be a good solution as well. The next section will be examine what Argentina did try to escape the crisis, after they had already implemented a currency board (fixed exchange rate), which eventually, with a lot of accompanying factors, evoked the crisis .They actually started floating their currency and implemented several other measures to save their economy. If this mixture of policies was successful will be analyzed in the following. 2. 1 Fixed exchange rate vs. floating exchange rate regimes For a better understanding what the next section is talking about, a brief introduction about the different exchange rate possibilities and their advantages and disadvantages will be implemented. A fixed exchange rate regime can be created in three different ways. The first two are either a Soft Peg or a Hard Peg of the currency.Hard Pegs are for example currency boards or currency Unions (Eurozone) and mean a complete fix to the currency of a foreign country (e. g. the currency board of Argentina pegged the Peso to the Dollar). Soft Pegs are the less strict version and link to other currencies is less direct. The third possibility is a fixed exchange rate peg to several countries. The main focus of this paper lies on the currency board as it was the case in Argentina. The main economic advantage of a hard peg (currency board) is, that it comes to a better trade between the countries that are part of the arrangement.Since the volatility of floating rates causes costs for exports and imports. It also encourages international capital flows which can profit the welfare of a country. Especially in case of developing countries these capital flows can be very large. One big Problem of the exchange rate regimes is the loss of monetary and fiscal possibilities to stabilize the economy as well as Limitation of the ability to pursue domestic goals. There is a slight difference between a hard peg and a fixed exchange rate, since the fix exchange rate can be with several countries whereas the hard peg only pegs it currency to one foreign country.They have more or less the same ad- and disadvantages, but with a fixed exchange rate, which is pegged to more than one country, the pursuit of domestic goals is easier, since the country does not depend on one foreign economy. One major weakness of the fixed exchange rate is, that when devaluation becomes necessary through fundamental changes in economy. Even the announcement of devaluation creates the danger of a crisis and eventually ends in a crisis, like the case of Argentina shows. It is also likely that a currency crisis after devaluation can end up in a banking crisis, since fixed exchange rates give incentives to take on debt. see below for further information) Floating exchange rates can be found for example in the arrangement of the U. S. with their major trading partners. It means that the value of the exchange rate will be freely determined in the market, depending on demand and supply. The main economic advantages of floating exchange rates are that they leave the monetary and fiscal authorities free to pursue internal goals. They can concentrate to generate full employment, stable growth, and price stability. Exchange rate adjustment often works as an automatic stabilizer to promote those goals.One main disadvantage of floating exchange rates is, that the exchange rate volatility and uncertainty, concerning costs on trade and investments, may discourage international investment. If foreign investment is a main source, as it is the case for most developing countries, floating exchange rate may impose real costs, not only for the exporters but also for the whole society. Whether a country should choose a fixed or a floating exchange rate depends on the dependency of the country on their neighbors and therefore their sensibility to external shocks.If it is very dependent on their neighbors and especially their neighbors’ economy the country is better of with a fixed exchange rate. But if the country is economically independent, a floating exchange rate would be the better choice in order to favor macroeconomic stability. 2. 2 Two types of exchange rates and free floating currency As the era of the currency board of Argentina was described earlier, the following focuses on the measures taken after the default of Argentina. The government chose a mixture of the two strategies mentioned before.Duhalde implemented his measures in a â€Å"schizophrenic† way. They started to devaluate the Peso from the originally 1 Peso to 1 Dollar rate to a 1. 4 pesos to 1 dollar rate (January 6 2002). On January 9th the government â€Å"pesified† dollar assets and liabilities, by converting the dollar to pesos at a 1 to 1 rate. This led to a â€Å"massive destruction of property rights† and a lot of utilities and companies ended up in bankruptcy. On February 9th they floated the peso by using the asymmetric pesification. This meant that dollar deposits were converted to pesos at the rate of 1 to 1. and dollar loans converted to pesos one to one. This imposed a large loss on the banking system and favored debtors owing dollar debts. A wide range of dollar denominated debt would be converted into pesos a t the old parity of one peso to one dollar. The holders of dollar deposits in the bank could convert those at a much more favorable exchange rate 1. 4 pesos to one dollar. It followed a great loss on the balance sheet of the Banks, who could only remain one peso for one dollar in debt owed by borrowers but owed 1. 4 peso for each dollar to the debtors.The asymmetric pesification amounted a total loss of $ 10- 15 Million Dollar compared to their equity of $ 17 million they had at the end of 2001. The government finally realized that it could not risk a total collapse of the banking system and offered to help the banks. They granted $ 9 million in the form of government bonds in order of compensation. This compensation covered most of the losses in nominal accounting but since the market value of the bonds was far below par not in real terms. 2. 2 Free floating currency http://www. nber. org/papers/w9808. pdf? new_window=1 in many emerging market economies, exports, imports, and ntern ational capital flows are a relatively large share of the economy, so large swings in the exchange rate can cause very substantial swings in the real economy. (p6) Under these circumstances, the monetary authority is likely to display â€Å"fear of floating† (Calvo and Reinhart, 2002), defined as a reluctance to allow totally free fluctuations in the nominal or real exchange rate, which Mussa (1986) showed are very closely linked. To â€Å"pesofy† all savings and debts Currency apparently has destroyed more the trust into the financial sector than the hyperinflation in 1989 did, although it was created to generate more trust.Argentina suffered from diverse devaluations of other currencies and then they devaluated their own currencies. Which effects did that have on other economies and their own? This question will be answered in the following section. 3. Effects of Devaluation process on 3. 1 Trade Balance 3. 2 Productive capacity 3. 3 Salaries 3. 4 National Accounts 4 . Conclusion 5. Literature Cline, William R. , 2003. â€Å"Restoring Economic Growth in Argentina†, Band 3158 von Policy research working papers , World Bank Publications 2003, 111 pages Labonte Marc, 2004. â€Å"Fixed Exchange Rates, Floating Exchange Rates, and Currency Boards: What Have We Learned? , Analyst in Macroeconomics Government and Finance Division, CRS Report for Congress, 24 pages Schuler, Kurt, 2002. â€Å" Ignorance and Influence: U. S. Economists on Argentina’s Depression of 1998-2002â€Å", Econ Journal Watch, Volume 2, Number 2, August 2005, pp. 234-278 ——————————————– [ 1 ]. http://www. nber. org/feldstein/argentina. pdf, p 10 [ 2 ]. Clarin. www. clarin. com. December 2001, available at http://www. servicios. clarin. com/notas/jsp/clarin/v8/edicant/edicantArchivo. jsp? dia=&mes=12&anio=2001&edAntTipo=edanter_diario&x=13&y=10, [ 3 ]. W. R. Clin e p. 47 [ 4 ].Labonte et al, 2004, p. 7 [ 5 ]. Labonte et al, 2004, p. 5- 18 [ 6 ]. Labonte et al, 2004, p. 3-5 [ 7 ]. Corrales, 2002, p. 38 [ 8 ]. Or â€Å"pesofication†, means conversion to pesos [ 9 ]. Corrales 2002, p. 39 [ 10 ]. http://www. tradingeconomics. com/argentina/currency [ 11 ]. Schuler 2003 (http://www. hacer. org/pdf/Tirania. pdf) p. 30 [ 12 ]. http://books. google. com. ar/books? id=HbEJy8KwYxcC&pg=PA53&lpg=PA53&dq=asymmetric+pesification&source=bl&ots=WWVnkeKfcW&sig=MEpQ9lphc-QTV68m-ctUWT2bAPk&hl=de&sa=X&ei=W6jCT5ekDZKk8QTnr-DACw&redir_esc=y#v=onepage&q=asymmetric%20pesification&f=false p. 45

Intercultural Communication: Globalization Essay

Globalization has had an effect in all aspect of our lives. However, these effects have not all been positive and it becomes important to consider both sides of the coin while trying to understand the phenomenon that is globalization. Globalization is a movement that seeks to establish more global integration especially in matters pertaining to trade and governance to increase prosperity and reduce conflicts. In this regard there was a strengthening of international institutions especially the UN and the signing of various treaties that abolishes tariffs and protectionist measures. This makes trade between countries easier and makes it possible to make capital and labor mobile across countries. Therefore, globalization also affects culture due to increased interaction of foreigners and the growth of the communication sector including the internet. Most of these effects have been positive allowing societies to benefit from each other. Nonetheless, other negative impacts have been exported leading to an erosion of indigenous cultures and a spread of vices like pornography and human trafficking. The most important aspect of globalization is the ability of companies to outsource their businesses to areas that have cheaper labor. This makes productivity cheaper since countries can set up factories in countries whereby labor is in plenty and wages are low. Furthermore, these countries have weaker laws and regulations making business easier and further reducing the cost of production. This translates to increased profits for shareholders and allows companies to survive stiff competition and bad economical times. Moreover, these benefit these developing countries to grow and provide a livelihood to the citizens of these countries. In addition, these countries provides new markets for companies who wants to sustain their growth in profitability and this has seen companies like Wal-mart to venture into markets like China (Martin & Nakayama, 2007). It also allows for work specialization since manufacturers can make various components of their products in different companies a classic example being computer manufacturer. These firms manufacture the various components of a computer in different countries and are finally assembled in one country. However, business outsourcing also has its disadvantages but the positive outweigh the negative. Since colonial times, the erosion of culture in several countries across the globe has continued. Colonization saw European countries impose their social, economical and religious cultures upon the native inhabitants. However, colonization came to an end but neo colonialism continues due to globalization occasioned by growth of the communication sector and increased interaction of people of different nationalities. Television has allowed people all over the world to view program most of which are made in the West. This together with secular music from western society has had a significant impact on other cultures. Most of these influences have been negative with many disregarding their cultures and blindly following the actions depicted on this popular media. Some countries like India has seen many youths engage in immoral behavior like premarital sex, cohabitation of unmarried youth and drug abuse, a trend associated with western values (Sundaram, 2007). This has increased the prevalence of Aids and crime due to the effects of drugs and immorality.

Code Of Ethics And Ethics - 1073 Words

Fongos Computer Solution (FCS) Code of Ethics A code of ethics is a business document outlining professional standards expected of all company employees and representatives. Although it may address internal conduct, it primarily centers on what is expected of workers when engaged in customer-centric activities. It creates standards by which business representatives are held accountable. In the business arena, it is significant to implement standards and procedures that management and workers are expected to follow. These standards and procedures are referred to as a business code of ethics and conduct. The business code of ethics and conduct for exact professions, such as IT fields. Internal Focus A code of ethics addresses some†¦show more content†¦Trust A code of ethics helps myself to take the code of ethics seriously and gain the trust of employees. Any business owner know that people will be protected in any situation. As long as everyone works and behaves in an ethical manner, production can run more smoothly, whether that be production of a tangible product or production of the services and ideals of an altruistic non-profit. Responsibility Responsibility is one of the main code of ethics for myself. When individuals take responsibility for their actions, all people benefits. Responsibility is accountability, honesty, and holding myself accountable promotes these good attitude traits in others who see them. This supports to create a cohesive and productive work force, which has numerous of its own benefits, not the least of which is longer employee retention. It is significant to continue to work for a company that follows and promotes rules that defend and benefit everyone equally. Acceptable Use Policies (AUPs) A company policy consists of rules and guidelines for employees to follow. There might be several policies, such as acceptable use policies (AUPs) for computer use and information security, corporate governance policies and customer support policies. Without effective enforcement, a company could be vulnerable to security breaches, loss of customers and possibly legal action. The human resourcesShow MoreRelatedCode Of Ethics : Code Ethics1334 Words   |  6 PagesRunning head: CODE OF ETHICS 1 CODE OF ETHICS 5 Code of Ethics Hieu Le Columbia Southern University Code of ethics is the most essential aspect of the society that organizations and individuals need to fulfill and apply this aspect in their workplaces and families in order to achieveRead MoreCode Of Ethics And Ethics912 Words   |  4 Pagesessential for the organization to have a strong code of ethics to ensure all employees understand the ethical expectations of the organization. The code acts as a guide for employees to ensure they apply ethical decision making in the workplace. 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