Impact of the Sarbanes-Oxley Act (SOX)

Impact of the Sarbanes-Oxley Act (SOX) Sarbanes-Oxley Act In the aftermath of the post-boom financial scandals in the U.S., Congress revised significantly federal securities laws and ratified the Sarbanes-Oxley Act in 2002 (SOX). As noted by Coffee (2006, p. 16), the intent of the new legislation was to â€Å"protect the integrity of financial reporting by redesigning the network of institutions and intermediaries who served investors in order that the capital markets would not be systematically deceived again.† SOX imposes several changes to the governance and regulatory environment in the U.S. including, (1) heightened disclosure, (2) separation of analysts from underwriters, (3) requiring attorneys to report crimes or fraud without delay, and (4) requiring senior management to personally certify their corporations’ quarterly financial results. In addition, audit committees were given enhanced powers, with a new quasi-public self-regulatory system put in place. Some observers have concluded that the overall impact of SOX is beneficial as a consequence of improved transparency and disclosure, with heightened monitoring providing better control of agency costs. Indeed, a governance metrics international survey (GMI) claims that U.S. companies have gone up to the top of an international comparison of corporate governance standards, leave behind the U.K. The report suggests due to SOX and similar reforms, the performance of large U.S. increased by over 10%. However, opponents of SOX have argued that the costs of compliance are excessive. For example, a survey of corporate board members by Korn/Ferry International estimates that the costs of compliance average $5.1 million, while Parsons Consulting estimates that costs average $12.28 million for 70 British headquartered businesses. (Lorne N. Switze, 2007)The annual survey of Foley Lardner LLP suggests that the costs associated with SOX are particularly onerous for small and medium-sized companies, with smaller firms lacking the requisite compliance infrastructure. Adherence to Sarbanes-Oxley Section 404 (Management Assessment of Internal Controls) is deemed in their survey to be the most problematic, with estimated compliance costs ranging from $350,000 to $1 million to assess and document the scope, adequacy, and overall effectiveness of the internal control structure and procedures. According to the most recent Foley Lardner survey, since the enactment of SOX the average cost of comp liance for companies with under $1 billion in annual revenue has increased more than $1.8 million to approximately $2.9 million, representing a 174% overall increase. (Lorne N. Switze, 2007)The U.S. Government Accountability Office also has suggested that small businesses’ costs for implementing the disclosure requirements of SOX rules are disproportionately higher than large firms. Recently, the high costs of compliance have been alleged to the impetus for several international companies to delist from U.S. exchanges. The Sarbanes-Oxley Act is the single most significant piece of legislation embracing corporate governance since the U.S. securities laws of the 1930s. At the forefront of this legislation, is the intent to restore public confidence and interest at a time when there was an avalanche of corporate scandals. The cost and financial cost of implementing the act will, no doubt, be significant. Two-thirds of IT executives surveyed explain that future investment in financial technologies is targeted to comply with the Sarbanes-Oxley Act (Strempel, 2004). A recent study indicated the average cost of being publicly traded for a company with less than $1 billion in annual revenue shot up $1.6 million due to this act. There is ground swell of objections to the acts implementation. However, the effort to restore public confidence and interest is priceless. Of interest is that despite the swelling of complaints by companies concerning the burden imposed by the act, 56% of a recent survey explained that they do not track and report internally on the costs of Sarbanes-Oxley and other compliance programs (Sri Forum Limited, 2003). The act is an attempt to restore public confidence that corporations have squandered away. A responsibility of public research is to inform the public to the diverse issues that surface. The advantages and disadvantages need to be discussed at length. A significant impact of the Sarbanes-Oxley Act is to make the board of directors more inquisitive of various items that are presented to them for approval. (Joseph J. Riotto, 2007)Historically, items presented to board of directors might have been a simple â€Å"rubber stamp.† Now, board of directors need to be aware of the ramifications of their approval. Recently, the percentage of chief executive officers who were forced out by their boards rose significantly. In fact, on average, directors are now spending 50% more time each month than before on their responsibilities (Prentice, 2005). In short, it raises the visibility of procedures for corporate accountability. There is mounting speculation that the act has decelerated corp orate mergers and acquisitions. One rationale is that the due diligence process for acquisitions could conceivably be lengthened because of the directors taking their responsibility more seriously. In addition, an effective compliance program can mitigate the amount of a criminal fine imposed under the acts guidelines; improve processes to eliminate criminal opportunities; establish requirement for corporate adherence to the act; and promote good corporate citizenship. As far as the state and local government sector is concerned, it might be in their best interests to further investigate and be proactive. Balancing the needs and expectations in this area is ideally done before it becomes a strict requirement. Compliance to the act is costing firms significant amounts of time, professional fees, and other resources (Beasley and Hermanson, 2004). Congress determined that the public interest is best protected by, not less regulation, but more regulation of corporate policy and governance. From the governments viewpoint, success is not measured solely by the bottom line, but by the optimization of public interest. A centralized corporate governance approach has been emphasized. The act has endorsed the Commission to promulgate such rules and regulations, as may be necessary or suitable in the public interest or for the safety of investors, and in furtherance of this act. The passage of time might be the true test of the effectiveness of the act. Corpor ate fraud is essentially the product of the morality and ethics of management. (Joseph J. Riotto, 2007) To Conclude, One of the criticisms of SOX is that it overly burdens small-cap firms. The net benefits of SOX in the form of increased accountability of managers to act in shareholders’ interest outweigh the costs of increased disclosure and compliance. On the whole, the SOX support the substitutability of governance mechanisms for small-cap firms. Some sub-optimal deployment of the endogenous governance mechanisms is observed. Firm leverage is inversely related to performance. Laws are implemented so that they are followed; however, there will always be those that look to circumvent the law. In short, the act is recognized as a dynamic document in the sense that additional rules can be implemented for the betterment of the public interest. References Beasley and Dana R. Hermanson, Effective Compliance Programs in the Aftermath of Corporate Megascandals. Insights: the Corporate and Securities Laws Advisor, Englewood Cliffs NY 18 (5) (2004), pp. 12–18. Coffee, 2006 J. Coffee, Gatekeepers: the professions and corporate governance, Oxford University Press, New York (2006). Joseph J. Riotto, Understanding the Sarbanes-Oxley Act next term—A valued added approach for public interest, Critical Perspectives on Accounting, September 2007 Lorne N. Switze, Corporate governance, Sarbanes-Oxley, and small-cap firm performance, The Quarterly Review of Economics and Finance, Volume 47, Issue 5, December 2007, Pages 651-666 Prentice, 2005 R. Prentice, Student guide to the Sarbanes-Oxley Act, Thomson Publishing (2005). SriForum Limited, 2003 Sri Forum Limited. â€Å"Sarbanes-Oxley almost integrated into corporate governance strategy† NY. July 2003. Strempel, 2004 D. Strempel, Companies pay price for Sarbanes-Oxley, Fairfield County Bus J 43 (June 24) (2004), p. 11.

Nutrition- 3 Day Diet Analysis

Three Day Diet Analysis According to the food pyramid, my diet is horrible considering what I have consumed in these 3 days. It shows that I need to start eating more, and better quality foods. My sugar intake is too high and should be reconsidered. Possibly I could swap out processed sugars for natural sugars; such as in fruit. It is obvious from the records I have provided that I do not take in as much (if any) fruit that one should be consuming on a daily basis. Thus, not only am I depriving myself of vitamins, I am also depriving myself of the fiber needed in order for my digestive system and metabolism to work as necessary.I will have to incorporate more whole grains with fruit and vegetables to act as roughage, as going to the bathroom proves difficult for me- most likely this is why. I was astonished by how many carbohydrates I take in too. Eating a lot of carbs can add to the blockage/ movement in the bowels so I need to consider decreasing the TYPE of carbohydrates that I ea t, cutting out white and processed breads and grains, replacing them for whole grains and wheat products. The only milk I intake is with my coffee and tea.Although I have four hot beverages a day with around 2 tablespoons of dairy, I am aware that this is no-where near the recommended 2 cups a day. On a good note however, I do not drink many sugary drinks at all- if any. Coffee, tea and water are my staple liquids therefore the sugar that I eat equals out to the sugars that I don’t drink. Drinking 2-3 glasses of water per day are less than the 6-8 glasses recommended however I do make a conscious effort to drink more on the days that I work out. I do not take in enough calories, as I burn on average 800calories and eat on any given day from 1200-1800.The meat and beans intake was at 3. 5 oz which I do not eat meat much so this is not a surprise it’s suppose to be 6oz intake. With the Vegetables this is an easy one I love any kind of vegetable and was short these 3 days I had 1 cups intake when it says I should do 3 cups. Fruit intake was 0 cup when it says 2 cups recommended. Grains intake was 3. 5oz recommendation is 7oz. All in all I would say I need to work on something’s but I am proud to say I will be working on changing my lifestyle. I have made a conscious effort to start a meal plan in conjunction with a 60 day workout called insanity.I have done this before and the results have been outstanding. I was at the peak of physical condition as well as health. With eating correctly my mind was clear and vivid. My memory was better and I had no feelings of sluggishness or feisty behavior. Joining this meal plan will help me jump-start my metabolism by keeping me on a strict guideline on times to eat (since this seems to be a problem with me), portions- since I don’t eat enough and balanced diet as it has proven as of now I am eating more protien and carbohydrates than anything else.Some of the ways I can work on these things is mak e sure I eat more in all the areas of the pyramid, with the grains I will eat more pastas, whole grain breads, crackers and just anything that has grain in it. Also more vegetables, this is easy because I do love them but need to go shopping more. I definitely have to make a more conscious effort to eat more fruit as they seem to be the last thing I want to pick up for some reason. Oranges, Grapefruit, apples, kiwis etc is good for me and I plan to eat them more.Milk will be hard since I am not a huge fan. I have an issue with eating WHITE liquid ingredients I. e milk, sour cream, mayonnaise, alfredo sauce. This doesn’t bother me much as most white things seem to be pure fat, usually. Oils, I do consume a lot of natural oils such as in avocados, olive oil and some nuts. Another thing I need to eat more of and that I LOVE, are legumes. They provide nutrients, fiber and hunger control all while being delicious. I do take a superfood supplement called Spirulina.If there is a sin gle food in this world that I feel people should take every-day, it is this product. What is spiraling: Spirulina is a blue-green algae that is being developed as the â€Å"food of the future† because of its amazing ability to synthesize high-quality concentrated food more efficiently than any other algae. Most notably, Spirulina is 65 to 71 percent complete protein, with all essential amino acids in perfect balance. In comparison, beef is only 22 percent protein.Spirulina has a photosynthetic conversion rate of 8 to 10 percent, compared to only 3 percent in such land-growing plants as soybeans. Nutritional Properties of Spirulina: Contains high concentrations of 18 Vitamins and Minerals Rich in Chlorophyll Contains ALL essential amino acids 65% of Spirulina is Protein Rich in gamma-linoleic acid (GLA) – an anti-inflammatory Omega 6 Fatty Acid 100x the Vitamin A of Carrots 50x the Iron of Spinach 10x the Beta Carotene of Carrots 7x the Calcium of Milk 6x the Protein of Eggs x More Iron Than Beef Rich in Phytonutrients and antioxidants Over-all, I feel that this three day meal plan was extremely beneficial as it got me to become re-conscious of the food that I am putting in my body. For someone that is so conscious of exercise, I am surprised at the way I have let myself slip, food wise. I am taking step towards fixing this immediately and feel that I should continue doing a food log at least every three months, not only as a motivation technique but as a means of continuing a certain lifestyle.

THE BANKING SECTOR IN THE BULGARIAN ECONOMY - Free Essay Example

Sample details Pages: 10 Words: 3021 Downloads: 7 Date added: 2017/06/26 Category Economics Essay Type Research paper Did you like this example? Banking is by far the most important sector in Bulgarias financial system which works on the principle of universal banking, being authorized to carry out a wide range of financial activities with both individuals and institutions (September 2003, By Directorate General for Economic and Financial Affairs). However, until the early 1990s, like in other central and eastern European countries, to a large extent, in banks as institutions that intermediate, the lending and the borrowing process did not exist. Bulgarian National Bank (BNB) The beginning of banking in Bulgaria is associated with the establishment of Bulgarian National Bank (BNB) on January, 25, 1879. BNB is one of the oldest central banks in the world and it has seen many changes over its 131 years of operation, it had its ups and downs. Among the most significant were the sovietisation of the banking system in late 1947, the return to a two tier banking system in 1991, the privatization of the banks over the rest of the 1990s, the banking crisis of 1996-97 and the introduction of currency board arrangements on July 1, 1997. The economic life in Bulgaria was deeply affected by each of these periods. Bulgarias goal for a market economy and democracy following the collapse of the Soviet Union started slowly, especially with the banking crisis of 1996/7 and the related hyperinflation. The introduction of currency board arrangements in mid 1997 helped a lot the BNBs contribution to Bulgarias economic growth (BNB, Annual report, 1999). According to the Law for establishment of BNB (at the beginning of 1885), it was a governmental bank with fixed capital 10 000 000 golden Levs and had operations traditional for the central bank, such as: emission of coins and bank-notes, preserving of money resources, crediting of the state and cash servicing of the governmental budget. At the same time BNB was permitted to realize banking (by the same law) deposit and credit deals typical for a commercial bank. The first Bulgarian coins were cut in 1881 and four years later the first Bulgarian banknotes were put into currency (BNB, Annual report, 1999). There was a significance increase in the independence of BNB with the last two laws for in 1906 and 1926 and it became a real central bank of the banks with issuing and regulatory functions. With the development of the BNB, the number of commercial banks increased as well. In 1945, the banking system in Bulgaria already consisted of: BNB 107 branch offices, Bulgarian agricultural and cooperati ve bank -119 branch offices, Bank Bulgarian credit 32 branch offices, foreign banks 33 branch offices, General union of popular banks with 250 popular banks (Stoyanov, S., 2008). Don’t waste time! Our writers will create an original "THE BANKING SECTOR IN THE BULGARIAN ECONOMY" essay for you Create order Centrally-planned economy (communist era) In 1947 was the beginning of the era of centrally-planned economy in Bulgaria. During the communist era the domestic banking sector was under monopolistic policy. The commercial banking was liquidated and there was only one state bank-BNB- with a network of branches. In this period the Bulgarian National Bank was performing both central bank functions and commercial operations under the control of the government. Before 1981 there were only two other banks: Foreign Trade Bank (at present Bulbank) was responsible for international transactions and the State Saving Bank for holding all the deposits of the Bulgarian population (Cherneva, T.,2009). After 1981 started the first reforms in the Bulgarian banking sector, Mineralbank was established to provide credits to small and medium-size enterprises which were newly created. However, the establishment of seven new banks in 1989 had more serious impact on the development of the banking sector in Bulgaria. The key aim of these banks was to offer credits in different branches. The fall of communism (two-tier banking system) Following the political changes in 1989 (the fall of communism), the real banking sector reform in the country started and the banking system was replaced by two-tier system with the central bank in one tier and commercial, state-owned, banks in the other, most of them established from the previous branches of the BNB. In parallel, many private banks entered the market (Yonkova, A., Alexandrova, S. and Bogdanov, L.,1999). After 1989, another very important step in financial reform was the bank privatization, which main aim was to create modern commercial organizations that would provide credits to different entities and support the development of the financial sector. Banks which had previously specialized in selected sectors were transformed into universal banks providing financial services to all sectors of the economy. Following the political changed of 1989, two years later the commercial and central banking sectors in the national economy were restored according to the new laws, the first one is the Law for BNB (1991) and the second one is Law for Banks and Credit Activity (1992). According to the first law BNB received the status of central bank with significant autonomy. The second Law established the principle of universal banking; it clearly defined the legal forms of banks and specified banking activities and licensing conditions (Yonkova, A., Alexandrova, S. and Bogdanov, L., 1999). In early 1991, apart from the three main banking institutions (BNB, Foreign Trade Bank and the State Saving Bank), there were also 69 commercial banks. Commercial banks received the right to acquire up to 10% of the stock of nonfinancial enterprises. The Basel criterion of 8% had to be matched by the capital adequacy ratio of a bank. The banks received in 1992 one more year in order to adjust to the capital adequacy requirement. Since they could not achieve this deadline, it was extended to March 1995 and then 2001. A number of important prudential regulations specif ying the legal framework were adopted in early 1993, but enforcement was weak (Barisitz, S., 2001). Since it was not efficient to have large number of state-owned commercial banks, the government introduced the Banking Consolidation Company (BCC) in 1992 in order to support the establishment of larger operating units through mergers. As a consequence, the total number of banks decreased from 81 in 1992 to 42 in 1995. Also, foreign banks were not entering the market because they were discouraged from policies. The first foreign bank was established in 1993 while by the end of 1997, BNB licensed 61 banks and the total number became 70 (Vinceletter, 2001). Bad loans After the fall of communist regime, the worsening of the banking portfolios turned into a serious problem for the financial system in Bulgaria. At the end of 1990, the non-performing loans amounted to BGL 21.3 billion and accounted for more than 50 percent of the commercial banks outstanding loans. Their volume was over 34 percent of the nations GDP at the time (Ravitz 1992, 33). Another big issue with the nonperforming loans was that their denomination was generally in hard currency, which meant that their value remained high even in the situation of high inflation. In 1993 the parliament adopted the Law on the Settlement of Nonperforming Credits. In accordance with this Law, the Bulgarian government issued ZUNK (stands for the Bulgarian acronym of the Law) bonds trying to solve the problem with bad loans. Their initial aim was to dry up the large sources of budget deficit. The ZUNKs were 25-year government securities, issued to cover non-performing credits accumulated by enter prises prior to 1990. Government budget was directly influenced by the exchange of enterprise loans for government securities. It created an obligation to pay interest on the bonds. However, the ZUNKs paid only part of the base interest rate. This was a clear attempt to finance part of the government debt at less than market interest rates (Nenova et al. 1997: 24). The commercial banks, which owned the ZUNKs, started to experience losses and liquidity problems. The attempt with the ZUNK bonds to solve the problem with bad loan in Bulgaria was not successful. One of the key reasons could be the difference between the return and maturity of these bonds and the banks liabilities, and the governments initiative to cover this difference. On the other hand, the issue of bad debt was problematical because of the lack of bankruptcy legislation outside the financial sector (OECD 1997: 90-102). In addition, the ZUNK bonds were inadequate as privatization instruments due to the unfavorab le institutional environment in Bulgaria. This includes an underdeveloped bond market, slow real sector privatization and an extremely thin stock exchange. The blend of these factors formed an obstacle to the market recognition of the ZUNK bonds. At the same time, there were many banks that faced liquidity problems when the privatization started, which were temporary eased through massive central bank refinancing. The foreign exchange market was also affected because of the continuous supply of money. The confidence in the national currency was diminished and led to the devaluation of the lev/USD exchange rate to 3200 in February, 1996. During this time also the inflation rate raised to over 1000% (Tsikripis et al., 2005). As a result of the weak private sector, bad banking management, the over-supply on the banking market, credit risk concentration, negative structure of credit portfolios and increasing share of nonperforming credits, decapitalization of the banking system and t he following loss of confidence in the banking system, etc., the Bulgarian banking sector suffered transactional irregularities and a series of failures that ended in a severe banking catastrophe and a chaos in the banking system (Yonkova, A., Alexandrova, S. and Bogdanov, L., 1999). Banking crisis 1996-1997 In 1996 the Bulgarian banking sector entered into an economic and financial crisis. The impact on the financial sector and the real sector as a whole as well as its monetary effects, proved that the Bulgarian banking crisis is one of the largest and most serious domestic financial crises of transition economies (up to this time), if not the most serious. (Barisitz, S., 2001). It looked impossible to be resolved for many years. The Bulgarian currency (Lev) depreciated, inflation rate sharply increased and one third of the banking sector went bankrupt. After the collapse of the communist block in 1989/90 Bulgaria suffered serious adjustment shocks, a fall in GDP and increasing prices. The other former communist block countries, which were the main trading partners, were themselves involved in severe domestic crises and thus unable to support each other (see Figure 1). Furthermore, it was not possible for the Bulgarias opening economy to compete with the more advanced western econo mies. 40 years of central price control and centrally planned economy deeply distorted the price system (Ivanov, A., 2003). Figure 1, Source: IMF The deficits started to increase significantly, being shifted from firms to banks through bad debts and eventually to the government budget through bailouts or monetization. The result from this is in April 1996 when the Bulgarian currency started falling and finally collapsed in February 1997. The depreciation in 1996 is approximately six-fold, with the currency sinking from some 70 Leva per US dollar in January to almost 500 Leva per US dollar by the end of the year. Furthermore, at the beginning of 1997 the depreciation accelerates further. In February 1997, it reaches the exceptional levels of about 3000 Leva per US dollar, while foreign exchange reserves dried out (see Chart 1) (Vincelette, G., 2001). At the height of the crisis in February 1997, the Lev felt to over 3,000 leva per 1 U.S. dollar (from 71 at end-1995), and mon thly inflation exceeded 240%. The interbank market ground to a halt. Annual inflation jumped to 579% in 1997, with GDP declining another 7.0% that year and unemployment reaching 13.7%. The average minimum wage of employees in the state sector reached the unprecedented level of just 4 U.S. dollars per month (Barisitz, S., 2001). This crisis has led to very serious social, psychological, and cultural changes among the population. In 1997, for example, school curricula shrunk visibly, generally within primary schools. Theaters, philharmonic orchestras, and museums were closed down. At the beginning of the reforms in 1990 there are a large number of state-owned banks specialized in providing funds to particular branches and areas. This is one of the preconditions of the banking crisis. Most of them took over large amount of non-performing credits extended to the enterprises during the period of socialism. About half of the loans given to nonfinancial institutions were written off due to the influence of the government on lending to strategically important public enterprises. The banks credit portfolio is weakened even further because of inefficient framework, which would concern collecting credits from not truthful borrowers. As a consequence of an ineffective legal procedure against liquidation and the recapitalization of the banking sector only four banks reported profit at the end of 1995 (Roussenova, 2005). The instable state of the banks and the capital market weakened the confidence in the banking system among depositors and investors, provoking a withdrawal of deposits from the banks. The effect was a lack of investment opportunities and economic decline. The impact of the banking system is profound; a result is the closure of eighteen banks in the period between May 1996 and April 1997 and putting them under special supervision by the BNB. In May 1996, in the Banking Law were made changes and this is the first time since the creation of the reform when legal procedures for bank bankruptcy were introduced. In 1996, 14 banks which concentrated 24 % of total assets in the banking system were put under conservatorship. There were 27 private banks existing by the time, the 4 biggest ones were put under special supervision (Yonkova, A., Alexandrova, S. and Bogdanov, L., 1999). At the beginning of 1997, some of the banks that survived are private and small and they still needed to solve some problems related to their solvency. The Central Bank increased the minimum reserve requirements, raised the interest rates and traded US dollars to defend the lev exchange rate. The new requirement for the minimal level of banking founding capital of 10 bln BGL (5.4 mln USD) was one of the biggest problems that the small and private banks had to overcome with a deadline by the end of June 1998. Foreign investors were the only solution to dial with this problem. In 1997 the Banking and Credit Act and the Basle Accords were replaced by the new Banking Act, BNB issued Regulation N 8 dealing with capital adequacy and minimal founding capital requirements. All banks in Bulgaria are obliged to have 8 % capital adequacy ratio at the end 1997, 10% capital adequacy ratio at the end of 1998 and 12% at the end of 1999 (Yonkova, A., Alexandrova, S. and Bogdanov, L., 1999). The combination of mainly difficult initial conditions of a transition economy, the bad governments interfere, no bankruptcy legislation, weak supervision and enormous external debt repayments were just some of the reasons which lead to the banking crisis in 1996-1997. The only solution was a new radical economic program. In July 1997, the Currency Board Arrangement was introduced, firstly tying the Lev to the Deutschmark and since 1999 to the euro. Also, there were implemented a number of essential laws that imposed financial regulation on banks and companies (Barisitz, S., 2001). Currency Board July 1997 The basic definition of a currency board is that it combines three elements: a fixed exchange rate between a countrys currency and an anchor currency, automatic convertibility, and a long-term commitment to the system, often made explicit in the central bank law. The main reason for countries to consider a currency board is to demonstrate that they are pursuing an anti-inflationary policy. It is the hardest form of a pegged exchange rate regime and is appropriate for countries with an unstable weak monetary history (Gulde, A., 1999). Currency board arrangements are different in each country (Balià ±o and others, 1997). The important characteristics of a currency board that need to be decided at the beginning of the planning process include the peg currency, the exchange rate, the organizational structure, and the operating principles and instruments. In 1997, following the advice of IMF, the Bulgarian government turned the Bulgarian National Bank into a Currency Board. The deci sion was taken when the new government took place in spring of 1997. The main role of the Currency Board was to restore confidence and help stabilize the economy by eliminating unnecessary spending and avoiding further hyperinflation after several years of significant currency depreciation. BNB implemented laws that imposed financial regulations and reduced the period of loans to commercial banks in order to recover the banking sector and mainly to reduce the inflation rate. In addition, it was observed monetary stability. Also, BNB considerably decreased the exchange risk, thus reducing the insecurity and foreign trade transaction costs. However, not everything was decided smoothly. There was a debate about the choice of anchor currency. The dilemma was between U.S. dollar and deutsche mark. U.S. dollar was supported because of its common use in informal transactions and as a store of value, whereas the deutsche mark was considered as more stable with the countrys trade organiza tion and beneficial to greater integration with the European Community. At the end it has been decided in favor of the deutsche mark (Gulde, A., 1999). Applying of a monetary policy (adjustment of the interest rate to the exchange rate) is not permitted in the existence of currency board. The government had to control the wages and prices to avoid external shocks and to stabilize its economy. However, it decreases the possibility of reacting to external shocks such as the weak foreign demand and the strong dollar which restricted the economic growth of the country. Under the currency board, Bulgaria decreased annual inflation to 13 % by mid-1998 and to 1 % by the end of 1998. Foreign exchange reserves have marked an increase from less than US$800 million in 1996 to US$ 3, 300 million in (see table below). The BNB basic interest rate during the top of the Bulgarias economic crisis had been more than 200 %, by the end of 1998 it fell to 5.2 %. Retail interest rates moved close t o German levels as soon as the currency board was introduced (Gulde, A., 1999). Bulgarias experience highlights the power of a credible, rule-based system to rapidly change perception and economic behavior. However, there are three lessons that need to be emphasized. First, a currency board requires more preparation than other stabilization programs, and preparation of a different kind. Because the changes can be time-consuming, a currency board may not be possible in countries that have not met the requirements. Second, because of the legal changes required to implement a currency board, broad parliamentary support is needed. It was possible for Bulgaria to get support for its currency board because near-hyperinflation had made obvious the need for radical solutions. Third, a currency board is but one aspect of a stabilization program. Even though if it is well designed, it will help to reduce macroeconomic imbalances, its long-term survival depends equally on the implementation of appropriate supporting procedures (Gulde, A., 1999).

Analysing Movies that Have to Do with Marxism, Panopticism...

Cultural Studies, as the name implies, is a broad and far reaching discipline which takes into account many fields of study, ideas and theories. Popular culture, a branch of cultural studies; looks into the transformation of culture as it is continuously molded through the devices of language, symbols and theories. In todays world, however, globalization has become a major concern as cultures from around the world are becoming meshed together resulting a new world order (or disorder as implied by Barker). The concerns of globalization involve capitalist influence, a rapidly growing dependence on technology, and the possibility of the world entering into a cyber-capitalist era. The ideas of importance in this essay are as follows:†¦show more content†¦The complications, however, in a profit driven society, is the fierce competition for resources and consumer investment, this could be seen as the boys bike is stolen and purchased by another boy. The class struggle between the have and the have nots is inevitable in Capitalism as some have it better than others depending on if one owns a business or is selling their labor for survival; the boy who had been working for his bike and the boy who purchased the bike is akin to the struggle between Proletariat and Bourgeoisie. The class struggle between the two boys continue until they realize that there will be no end in sight to the conflict until there is an agreement, in which they share resources (the bike) which is symbolic of how Marx predicted that Capitalism would be superseded by Socialism, as this quote from Baker implies: â€Å"However, the mechanisms of capitalism also give rise to perennial crises and will ultimately lead, or so Marx argued, to its being superseded by socialism (Baker 13).† As the two boys are beaten at the end of the movie by a group of other boys, mainly at the fault of the wealthier boy, it is symbolic of the end of Capitalism and into Socialism where the people a s a whole own property as opposed to property being private. There