Case Study of the Exploitation of Financial Regulation by Deutsche Bank

Case Study of the Exploitation of Financial Regulation by Deutsche Bank Creative accounting is used to make a company seem to be performing well than it actually is. This scheme is applied especially where accounting figures do not look attractive or appealing to the investors, current and potential. This creativity is perpetuated by the senior management through support of directors making it difficult to detect where there are no proper fraud investigations are done. In the case of Deutsche Bank, its former executives are accused of obstructing regulators from looking into loss cover up in an investment dubbed Alexandria. The deals were a major cover up as alleged during a financial crisis that sae Monte Paschi in great troubles. The investigation carried out brought into attention massive losses that Monte Paschi had been misrepresented between 2008 and 2012. My agreement to this is based on the following: â€Å"The fraud first came to light in January 2013, when Bloomberg News reported that Monte Paschi used the transaction with Deutsche Bank, dubbed Santorini, to mask losses from an earlier derivative contract. The world’s oldest bank restated its accounts and has since been forced to tap investors to replenish capital amid a slump in its shares. It’s now attempting to convince investors to buy billions of bad loans before a fresh stock sale.† It is possible that the findings by the regulator are accurate since they are able to bring out a proper investigation on the matter presented to it. The bank was even required to account for differences in its carrying value on the stake at San Paulo bank and the amount they paid for the shares to have a stake there. The use of revaluation reserve to increase par value was not the right thing to do to absorb losses. This is because revaluation reserve per se is not counting towards Tier one capital. This was just a scheme to maintain its core capital as required by the regulator in the industry. Santorini Investment was also a bad move meant to serve a special purpose, to do an equity swap. The bank controlled a huge stake in this business where it had majority shares for controlling its Interest-Santorini was majority owned (51%) by Deutsche Bank – Monte Paschi controlled 49%. They used some amount that were proceeds in the sale of San Paolo to Deutsche in financing Monte Paschi’s shares in Santorini investment. Monte Paschi was taking shelter in reducing exposure of its share from constant price fluctuations. â€Å"Typically, in such a deal, there is either a floating rate or a fixed rate of interest paid over the life of the swap to the entity to which the shares were sold (in this case Deutsche) based on the notional amount of the shares traded (so 785 million euros here). When the swap matures, the original seller of the shares (Monte Paschi here) will receive the difference between the price of the shares when the swap was originated and the price of the shares at maturity. Obviously, if the shares rise over time the original seller makes a profit on the swap (minus any interest payments made along the way). Of course the stock could go up or down over the life of the transaction so there is a very real possibility that the original seller of the shares will have to make a payment at maturity in addition to the interest payments made along the way. Note also that if the stock drops over the course of the deal, the original seller may be forced to post collateral to the buyer of the shares.† It is therefore was a scheme that should have been controlled before it got too late to save the shareholder

Decision making Essay Example | Topics and Well Written Essays - 750 words

Decision making - Essay Example But my co-worker has other ideas and he has strongly protested against hiring the Hispanic woman interviewed by us. I would like to persuade my co-worker to recruit that woman and for that purpose I need to find out the possible reasons and solutions for my co-worker’s protest. The first reason for my co worker’s protest may be because of his belief that only young blood will be capable of bringing new ideas to the organization. He might have thought that experienced people will never take any risk in their profession and they were not keen in testing new ideas. But is should be remembered that practice makes a person perfect and the experience of Hispanic woman could not be avoided purely on the basis of the above belief. Fresh candidates can bring new idea, but at the same time they may not have the backup of experience which will definitely a disadvantage. The second reason for my co-worker’s protest, which I assume is about the Hispanic origin of the woman we interviewed. My friend might have thought that an American will be a better option in the marketing manager post because of the authority and contexting power compared to a Hispanic person. The above argument also seems to be meaningless since the woman we interviewed has already proved her abilities and her 20 year service is definitely an indication of her abilities and success in this profession. My co-worker’s arguments against the woman we interviewed may raise serious legal and ethical problems for our company. The American law provides equality in employment opportunities to all irrespective of their gender or origin. In other words, it is not possible to deny the employment to the woman by citing her gender and origin. We must remember that, at present a person of black origin is the president of America and if a black person can become the

Oppression in the Twentieth Century Essay Example | Topics and Well Written Essays - 1250 words

Oppression in the Twentieth Century - Essay Example Much of the definition of oppression is attributed to its nineteenth-century roots. Particularly, the works of Georg Wilhelm Friedrich Hegel, Karl Marx, and John Stuart Mill were pivotal in outlining the systematic nature of oppression, which has tremendous influence in its modern forms. On the one hand, the works and philosophies of Gandhi, de Beauvoir, Malcolm X, among others, have added dimensions to oppression, updating its conception to contemporary twentieth century. Imperialism and colonization dominated the discourse on oppression especially during the early part of the 20th century. From Africa, Asia to Latin America, there was a wave of liberation movements that demonstrated various experiences of oppression and the attempts to be free from it. One of these experiences is the emergence of conflicts such as World War II wherein colonies were expected to provide warm bodies to fight in the frontlines as well as supply the raw materials and augment the war chest of their masters. The wartime sacrifices underscore a form of oppression that has permeated since the previous century and has spilled over to the 20th. Then, individual experiences amidst the dawn of modernity and the increased contact of people from various part of the globe gave rise to the growth of nationalism. This aspect is highlighted in the case of Gandhi. He is one of the most vocal advocates of decolonization in Asia. Gandhi’s crusade for India’s independence fro m Britain was inspired by personal maltreatment as he was building his career in Africa as a lawyer. As a non-white person, he experienced being thrown out of first-class train car, barred from certain hotel rooms and beaten for no reason but his color. Gandhi’s philosophy behind the liberation movement he launched underscored a kind of oppression India experienced in its relationship with Britain.