Money and banking Assignment Example | Topics and Well Written Essays - 1000 words

Money and banking - Assignment Example In this context, Commerce National Bank reports interest-sensitive assets of $870 million and interest-sensitive liabilities of $625 million during the coming month. This implies that Commerce National Bank is an asset sensitive one. Since Commercial National Bank is asset sensitive, if interest rates rise, the bank will definitely enjoy a net interest margin. The bank’s productivity on interest income and earning interest will raise its basis point for basis point in line with the market. If the rates fall, it will have its net interest margin compressed. Securitization Securitization of assets refers to the process of collecting various sorts of debts such as car loans, mortgages, or credit card debts and packaging them as bonds, collateralized mortgage obligations, or as pass-through securities. They are then sold to investors. This process can consist of any type of financial assets and it is aimed at reinforcing liquidity in the marketplace. It is also vital for smaller i nvestors to buy shares in a more complex pool. The most amenable assets used in the securitization process include equipment, trucks, automobiles, home equity loans, recreational vehicles, and credit cards. Alternatively, asset-backed deals especially for exotic assets may include: consumer loans, computer leases, time shares, trade receivables, and small commercial loans. Securitization offers numerous benefits to investors, purchasers, and financial institutions. It provides financial lending institutions with a technique to remove assets from their balance sheets, thus raising the pool of obtainable capital to be lent out. In addition, lending institutions are given a chance to utilize their assets to get funds, and most specifically, replacing the lower-yielding assets with higher-yielding ones. From the lending institutions and the regulator’s perspectives, there are some risks associated with the securitization process. This may involve such risks as banks using the bes t quality assets in the procedure, which implies that the remaining portfolio may be more dangerous averagely. This will lead to an increase in the lending institution’s capital requirements. Banks and other lending institutions choose to do this because investment activities balance the benefits that loans offer. In overall, investments demonstrate less credit risks as compared to loans, as well as permitting lending institutions to expand to various places that loans cannot allow. Investment securities also give extra liquid reserves wherever more money is required, help banks to reduce their contact with huge taxes, serve as a prevaricate against losses as a result of the evolving interest rates, and offer collateral as needed by the regulations. There are prepayment and interest rate risks associated with securitized assets. This happens when borrowers pay off or default particular loans in the securitized-asset pool prematurely. The reason behind this may be due to the f all of interest and the substitution of old loans at lower loan rates. Prepayment risk may noticeably lower the security values backed by such loans and alter their appropriate maturities. Further, the considerable drawbacks in these investments such as declining in their market values as the principal assets may lead to increase in default rates. Liquidity Total assets Sales of bank assets are projected to be $18 million Total

Self Evaluation and learning action plan Essay Example | Topics and Well Written Essays - 1250 words

Self Evaluation and learning action plan - Essay Example On the other hand, through providing handsome compensation plans modern organizations are trapping youngsters into a fallacy of job therefore, turning their talents into increasing profitability for their stakeholders. However, it is relieving to note, that job turnover is increasing throughout the world because of organizations’ growing tendency to commit psychological contract breach, which is actively contributing towards increasing entrepreneurial expeditions around the world (Jafri, 2011). This paper will be designed in such a way that it will assist me in attaining my objectives in life, through integrating knowledge of various concepts such as thinking practitioner, action planning and skill analysis. I consider myself as a creative individual, who can artistically perform business activity in any part of the world. However, my financial management skills are weak, but I am confidently attempting to overcome my professional deficiency in finance. I also believe in my teachers’ ability to help me during my struggle to become a competent financial analyst in the future. First, this document will focus on explaining thinking practitioner. This type of individual analyzes his or her each professional and personal action, in the light of successfulness. Along with this, he or she keeps on evaluating him or herself in order, to indentify personal strengths and weaknesses (Smith, 2011). Remember, the competitive advantage of a person lies with his or her strength, because it is simple to achieve excellence in the field, in which an individual is interested. However, in other areas an individual may have to work very hard, but may not be able to develop expertise. At the same time, it is important to seek out others’ opinion, but we do not have to impose it on ourselves because, people will always deem something impossible, which they cannot achieve (Vries, et al, 2006). On the other hand, it