The Divine Command Theory Free Essays

A. Articulation or guarantee is an attestation that something is or isn't the situation; it is either obvious or B. Contention a contention is a gathering of explanations, one of which should be bolstered by the rest. We will compose a custom paper test on The Divine Command Theory or on the other hand any comparable subject just for you Request Now In a contention the supporting articulations are known as premises; the announcement being upheld is known as an end. C. Marker Words-are terms that frequently show up in contentions and sign that a reason or end might be close by. Contentions Good and Bad 1. Deductive contentions should give sensibly definitive help to their decisions. 2. Inductive contentions should offer just plausible help for their decisions. 3. Legitimate contentions a deductive contention that does in certainty offer coherently convincing help for its decision. 4. Invalid contention a deductive contention that doesn't offer legitimately convincing help for the end. 5. Solid contention an inductive contention that figures out how to really give likely help to the end. 6. Powerless contention an inductive contention that doesn't give plausible help to the end. 7. Sound contention legitimate contention with genuine premises.â 8. Apt contention solid argent with genuine premises. Moral Statements and Arguments A. Moral Statement-is an announcement insisting that an activity is correct or wrong or that an individual is positive or negative. B. Nonmoral Statements-is an explanation that doesn't insist that an activity is correct or wrong or that an individual is fortunate or unfortunate. Staying away from Bad Arguments 1. Making one wonder is the false notion of contending around that is attempting to utilize an announcement as both a reason in a contention and the finish of that contention. 2. Evasion allocates two unique implications to a similar term in a contention. 3. Bid to power the false notion of depending on the assessment of somebody thought to be a specialist who isn't. 4. Dangerous slant the false notion of utilizing questionable premises to contend that doing a specific activity will definitely prompt different activities that will bring about debacle, so you ought not do that first activity. 5. Flawed relationship is contending by a similarity that is powerless. 6. Offers to numbness false notion comprises of contending that the nonattendance of proof qualifies us for accept a case. 7. Misrepresentation distorting someone’s guarantee or contention so it very well may be all the more effortlessly disproved. 8. Advance to the individual is contending that a case ought to be dism issed exclusively on account of the attributes of the individual who makes it. 9. Rushed speculation the deception of reaching an inference about a whole gathering of individuals or things dependent on a small example of the gathering. Outline This part was about the various kinds of assessing moral contentions. The area that I thought was most fascinating was the segment when the creator began to discuss moral articulations and contentions. I concurred with what the creator needed to state when he said an ethical proclamation attesting that an activity is correct or wrong or that an individual is positive or negative. Like when an individual untruths they realize that they have accomplished something incorrectly without somebody letting them know. That is fundamentally what this entire section about. Step by step instructions to refer to The Divine Command Theory, Essay models

Short-Term Memory: The Second Stage in Memory Processing

Prologue to Psychology 101, Section 8 October 26, 2010 Short-Term Memory The momentary memory is the lead to our dependable recollects. Momentary memory is the second stage in the memory preparing (Huffman). The transient memory is the piece of the memory that briefly stores and procedures data from the tangible memory and holds it until it chooses if the data will be sent to the third stage or long haul memory (Huffman). The transient memory stores a blend of perceptual investigations data (Huffman).The momentary memory works in various approaches to build its little limit; it utilizes practice and piecing to have the option to recollect more things without a moment's delay (Huffman). Practice is the point at which an individual rehashes data again and again to keep up it new in the memory and lumping is gathering separate snippets of data into a solitary gathering (Huffman). The transient memory is otherwise called the â€Å"working memory† on the grounds that it’s co ntinually getting data from the tangible memory and sending to the drawn out memory (Huffman).I will talk about the distinction between momentary memory and long haul memory, the hypothesis of rot, and the working memory. Contrast The primary distinction between momentary memory and long haul memory is the limit that every one has. As indicated by Michael E. Martinez the two recollections cooperate an intellectual design or the mind’s essential structure. In the transient memory an individual can just think about a couple of thoughts one after another (Martinez). One of the qualities of the momentary memory is that is little contrast with the drawn out memory which has a bigger limit (Martinez).Information streams between the transient memory to the drawn out memory, contingent upon the course and various types of reasoning outcomes (Martinez). Transient memory is the course section to long haul memory or the holding format until the drawn out memory forms are finished (Lewis ). One model the Martinez gives is when data streams from transient memory into long haul memory it produces learning. At the point when data leaves streams from long haul memory back to transient memory is called acknowledgment or review, which happens at whatever point we consider a formerly known actuality, individual, or occasion (Martinez).Each memory has it’s owe constraints; the momentary memory has a little limit making it difficult to consider numerous things without a moment's delay, while the drawn out memory doesn't record experience totally and precisely (Martinez). Not at all like the drawn out memory the momentary memory has lumping, which permits the transient memory to hold increasingly more data. The limit doesn't change yet lump develops in multifaceted nature which permits the transient memory to deal with more information (Martinez). DecayDecay is a hypothesis that has a long history in representing overlooking (Berman, Jonides, and Lewis). This is said t o happen on the grounds that over the long haul, data in the memory disintegrates and is less accessible for recovery (Berman, Jonides, and Lewis). Berman, Jonides, and Lewis present distinctive test to analyze if rot is a reason for overlooking. One examination that they present is the great investigation of Peterson and Peterson (1959): â€Å"Consider the exemplary investigation of Peterson and Peterson (1959), initially thought to give solid proof to decay.In this test, members were given a letter trigram to store, trailed by a maintenance interim that differed from 3 to 18 s. During the maintenance interim, members were required to tally in reverse by threes to forestall practice of the update. Following the maintenance interim, members reviewed the thing in memory. Peterson and Peterson found that presentation declined as maintenance interims expanded, and the creators ascribed this decrease to expanding rot of the memory follow with expanding time.The attribution of this impa cts to rot system is, in any case, suspect. † The contentions that tallying in reverse couldn't be a wellspring of obstruction on the grounds that their auxiliary undertaking varied from the thing to be put away in memory (Berman, Jonides, and Lewis). However, the case is that checking task requires transient memory maintenance, which is the primary memory task (Berman, Jonides, and Lewis). Another issue in evaluating the job of rot on momentary memory is the ongoing inclination of practice materials that are to hold (Berman, Jonides, and Lewis).An model that Berman, Jonides, Lewis give is the point at which we look into a telephone number in the catalog and afterward stroll to the telephone, we practice the number in our mind until it is dialed. They are attempting to think of various procedures to forestall practice, to get a precise measure of whether rot affects memory (Berman, Jonides, and Lewis). Working Memory Theory based research has uncovered that working memory is a framework that permits an individual to keep up task objectives, update memory to satisfy ebb and flow needs, and to isolate memory to shape connections (Shelton, Matthews, Hill, and Gouvier).The working memory is additionally alluded to a broadly useful framework that is answerable for the dynamic errand or objective significant data while at the same time preparing other data (Unsworth, Spillers, and Brewer). The broadly useful framework incorporates: critical thinking, perusing, coordination and arranging, and the essential scholarly capacities, which prompts explore on the limit of the working memory (Unsworth, Spillers, and Brewer). â€Å"Beginning with Daneman and Carpenter (1980), most specialists have used complex working memory length undertakings in which to-be-recollected things are sprinkled with some preparing action. For nstance, in the perusing range task members endeavor to recollect words or letters while perusing and understanding sentences. These assignments can be appeared differently in relation to basic memory range undertakings in which TBR things are introduced with no extra handling activities.The complex range errands pleasantly catch the possibility that the of preparing and capacity are expected to completely comprehend the embodiment of working memory and tap its ability. Besides, these errands can be utilized to appraise an individual’s working memory limit and look at the relationship between's this limit and other significant subjective capacities (Unsworth, Spillers, and Brewer). The conceivable that the mind boggling range assignments don't record in general assets capacities yet rather that the preparing task dislodges things from the working memory (Unsworth, Spillers, and Brewer). Additionally as indicated by the assignment exchanging view, an individual may put a thing in the working memory, and a quick exchanging instrument is expected to invigorate the thing before it is lost because of rot (Unsworth, Spillers, and Brewer). The quicker the data can be finished and switch back to rotting portrayals, the better the general execution will be (Unsworth, Spillers, and Brewer).There is likewise a distinction in the measure of limit from individual to individual (Unsworth, Spillers, and Brewer). There are two segments that people may contrast on: first part is the need to effectively keep up data over the present moment and the second is the need to recover data that couldn't be effectively keep up because of countless approaching things (Unsworth, Spillers, and Brewer). The transient memory has it’s riddles because of the measure of data that one can keep and pass on.One thing is without a doubt is that without it we won't realize what data are pertinent for one to keep or rot. Presently one can comprehend the relationship and distinction between present moment and long haul memory, the hypothesis of rot, and why the momentary memory is the working memory.References Berman, M. , Jonides, J. , and Lewis, R. (2009). Looking for rot in verbal momentary memory. Diary of Experimental Psychology: Learning, Memory, and Cognition,35(2), 317-333. doi:10. 1037/a0014873. Recovered from Academic Search Premier database. Huffman, K. (2010). Memory,(9th ed. Brain science in real life. (242-275) Hoboken, NJ: John Wiley and Sons, Inc. Lewis, D. (1979). Psychobiology of dynamic and dormant memory. Mental Bulletin,â 86(5), 1054-1083. doi:10. 1037/0033-2909. 86. 5. 1054. Recovered from Academic Search Premier database. Martinez, M. (2010). Human Memory The Basics. Phi Delta Kappan,â 91(8), 62-65. Recovered from Academic Search Premier database. Shelton, J. , Elliott, E. , Matthews, R. , Hill, B. , and Gouvier, W. (2010). The connections of working memory, optional memory, and general liquid intelligence: Working memory is extraordinary. Diary of Experimental Psychology: Learning, Memory, and Cognition,â 36(3), 813-820. doi:10. 1037/a0019046. Recovered from Academic Search Premi er database. Unsworth, N. , Spillers, G. , and Brewer, G. (2010). The commitments of essential and auxiliary memory to working memory limit: An individual contrasts investigation of prompt free review. Diary of Experimental Psychology: Learning, Memory, and Cognition,â 36(1), 240-247. doi:10. 1037/a0017739. Recovered from Academic Search Premier database.

20 Different Types of Psychologists and What They Do

20 Different Types of Psychologists and What They Do January 21, 2020 Verywell / Mary McLain More in Student Resources Careers APA Style and Writing Study Guides and Tips What are the  different types of psychologists  and what exactly do they do in the variety of branches of psychology? When people hear the term psychologist, many immediately imagine a man or woman sitting in an office, scribbling notes while a client sits on a leather fainting couch. Sure, there are plenty of psychologists who engage in this type of  talk therapy, but people who work in the  field of psychology  also do a variety of other things. Did you know that there are psychologists who study how people work and interact with the tools in their environment? Or that some psychologists come up with ways to help slow global warming? Below is a list of some of the specialty areas  and related tasks they include. Aviation Psychologists These psychologists study the behavior of pilots and other flight crew members. Aviation psychologists also perform research on airline safety, develop new training equipment, and help select suitable employees. For example, an aviation psychologist might select or even develop psychological tests used to screen applicants for elite pilot positions. Because of the highly specialized and delicate nature of the job, it is essential to choose candidates who are healthy, stable, and capable of coping with intense pressure. Aviation psychologists utilize their knowledge of psychology to ensure that only the best people are chosen for these critical roles. Aviation psychologists might also work with other professionals including engineers and human factors psychologists to design different components of airplanes such as the cabins or flight decks. By taking human psychology into consideration during the design process, aviation psychologists can help ensure that these products are developed with perception, attention, memory, and other capabilities in mind. Biopsychologists These psychologists are also sometimes called biological psychologists or physiological psychologists. They study and perform research on the brain and behavior. By examining the neural bases of behavior, biopsychologists are able to understand different biological factors that might impact how people think, feel, and act. This type of psychologist might also investigate how brain disease and injury impact behavior. By better understanding of how people are affected by such injuries and diseases, researchers can also find new ways of preventing, treating, and managing serious brain illnesses and trauma. Clinical Psychologists Clinical psychologists  assess, diagnose and treat individuals suffering from psychological distress and mental illness. They also perform psychotherapy and develop treatment plans. Clinical psychologists often work in hospitals, mental health clinics, and private practice. They are trained in a variety of treatment techniques but may specialize in treating certain disorders or working with certain populations. For example, a clinical psychologist might specialize in an area such as substance abuse treatment, child mental health, adult mental health, or geriatric mental health. While clinical psychologists often work in medical settings, they  are not physicians and in most cases cannot prescribe medications. According to the American Psychologist Association, clinical psychologists make an average of $80,00 per year. Cognitive Psychologists Cognitive psychologists  investigate how people think, including topics such as decision-making and problem-solving. This type of psychologist is interested in how the brain processes, learns, stores, recognizes, and utilizes information. Cognitive psychologists may work in a variety of settings including universities, research centers, rehabilitation facilities, hospitals, government agencies, and in private practice. Professionals in this field often perform a range of duties such as conducting research and working with patients. As with other areas of psychology, cognitive psychologists often choose to specialize in a particular area such as memory, language development, attention, problem-solving, or learning disabilities. Community Psychologists This type of psychologist conducts research on community health issues. They also seek to educate  the community and develop prevention programs. These professionals are focused on helping lead positive changes at both the individual and community levels. You may find community psychologists working in a range of settings at universities, government agencies, community organizations, and private businesses as professors, consultants, policy advisors, program directors, and researchers. Research in this area tends to be very action-oriented and focuses on developing real-world solutions that can immediately be put into practice. Community psychologists work to address social problems, promote health and wellness, and enact policies that improve peoples lives. Comparative Psychologists Comparative psychologists study the behavior of different species, particularly how animal and human behavior differs. Why study animals? Because while there are obviously major differences, it is assumed that some things may hold true for all species. Therefore studying the behaviors and responses of animals such as rats and dogs can provide insights into human behaviors as well. Such observations have proven important throughout much of psychologys history. Thorndikes work with cats, Pavlovs work with dogs, and Skinners work with pigeons are just some of the examples of comparative psychology in which animal behavior can provide insights into human behavior. Experimental psychologists make an average of $92,000 per year, second only to organizational-institutional psychologists in terms of income. Consumer Psychologists Also known as marketing psychologists, consumer psychologists research  consumer behavior  and develop marketing strategies to promote businesses. This type of psychologist is involved in helping businesses better understand what makes consumers purchase products and services. They research how buyers respond to marketing messages, analyze decision-making strategies, and investigate the role that emotions play in purchasing choices. These professionals help businesses develop marketing messages, identify target audiences, develop products that appeal to specific consumers, and learn about how attitudes toward brands and product form and change. They  accomplish these tasks through the use of market research surveys, experiments, naturalistic observations, and consumer focus groups. Counseling Psychologists Counseling psychologists  provide psychotherapy to people suffering from psychological disturbances, behavioral problems, emotional difficulties, stress, and related issues. These professionals share many commonalities with clinical psychologists. Counseling psychologists make an average of $85,000 per year. As with clinical psychologists, they provide psychotherapy and can legally identify themselves as licensed psychologists. Cross-Cultural Psychologists Cross-cultural psychologists look at how people vary across cultures and how cultural affiliations influence behavior. They often explore how different aspects of behavior may be either universal or varied across different cultures. For example, cross-cultural psychologists might investigate how parenting styles differ between collectivist cultures versus individualist cultures as well as how these differences in upbringing influence adult behavior. Developmental Psychologists Developmental psychologists  research human development across the entire lifespan. Some focus on a specific period such as  early childhood, adolescence, adulthood, or old age. These professionals may perform tasks such as evaluating children who may have a developmental delay or disability, investigating issues associated with aging, and studying how language skills are acquired. Some developmental psychologists may focus on research and add to our understanding of developmental issues that can arise throughout life. Other professionals may perform applied work with clients who need assistance in coping with developmental issues. Educational Psychologists These psychologists study how people learn and the educational process. This might involve developing  instructional strategies and teaching techniques. Some educational psychologists study giftedness or learning disabilities. This type of psychologist looks at how social, cognitive, and emotional factors impact the learning process. Some professionals in this field specialize in identifying and dealing with potential problems that might interfere with how children learn. Others specialize in researching the learning process, while some might instead focus on designing instructional materials that maximize learning outcomes. Educational psychologists make an average of $75,000 per year, slightly less than the average ($77,030) for all psychology professions, according to the U.S. Bureau of Labor Statistics. Engineering Psychologists Engineering psychologists  are focused on discovering ways to enhance human abilities by improving machines, equipment, technology, and work environments. While some may focus on more basic research, this is most often a very applied field. Engineering psychologists work to solve real-world problems and develop solutions that can have practical applications in everyday life. Engineering psychologists may be tasked with developing technology that can be used in the healthcare industry to help patients recover faster. They also help design and refine products that people use each and every day including mobile phones and motor vehicles. Environmental Psychologists Environmental psychologists explore the relationship between people and their surroundings, including natural environments as well as created environments. This might involve working on conservation projects, helping to protect endangered species, and investigating ways to halt global warming. These professionals may work as researchers to study the impact that humans have on their environments. Some environmental psychologists also work in government to shape environmental policies. Forensic Psychologists Forensic psychologists  focus on the relationship between psychology and the law. This might involve acting as a consultant in criminal cases or civil disputes, performing child custody evaluations, and offering psychotherapy services to crime victims. Thanks to popular depictions in movies and television programs, interest in this field has grown tremendously in recent years. While these pop culture depictions often portray the forensic psychologist as a sleuth working to catch criminals, real forensic psychologists typically perform duties such as assessing juvenile and adult offenders for risk of recidivism, working with child witnesses, evaluating competency to stand trial, and offering professional testimony in court. Health Psychologists Health psychologists  are centered on how psychology, biology, social groups, and behavior influence wellness, illness, and overall health. They work with clients to help maximize well-being and improve both mental and physical health. Some professionals in this field perform clinical work where they assess and treat clients who are seeking assistance with a variety of health issues. This might involve providing psychotherapy, administering different psychological assessments, teaching people about different coping techniques, and educating clients about healthy behaviors. Industrial-Organizational Psychologists I-O psychologists  study workplace behavior such as how to select the best employees for particular jobs and how to increase worker productivity. An I-O psychologist might utilize his or her knowledge of psychological principles to design assessments to screen candidates for specific job roles. They may also be tasked with developing training programs for existing employees in order to increase knowledge, maximize efficiency, and minimize injury. I-O psychologists are also frequently asked to assess businesses on an organizational level and look for new ways to lower costs, improve efficiency, and increase employee satisfaction and retention. Industrial-organizational psychologists are the highest paid category of specialists, earning an average of $125,000 per year. Military Psychologists Military psychologists practice psychology in a military setting. This can include such things as treating soldiers who have a mental illness or emotional distress, researching different aspects of military life, and helping soldiers transition back to civilian life. Some military psychologists focus on performing psychotherapy within different branches of the military, while others apply their knowledge of the human mind and behavior toward recruiting, combating stress, training, decision-making, and leadership. Personality Psychologists Personality psychologists study the different aspects of personality and how individual traits influence an individuals life and behavior. Researchers in the field of personality psychology are interested in a wide range of topics that can have applications in everyday life. For example, they might study how personality forms and whether it can be changed. They might also investigate whether certain personality traits are tied to specific illnesses or disorders, how personality influences the decisions people make, and the many factors that contribute to the development of personality. School Psychologists School psychologists  help children cope with emotional, academic, social, and behavior problems in school settings. Professionals who work in this field of psychology play a vital role in the educational system, typically collaborating with parents, teachers, students, and other school staff to ensure that the learning environment is healthy, safe, supportive, and productive. Children who are struggling with some sort of issue, whether it is behavioral, emotional, or academic in nature, can work with a school psychologist to come up with an effective plan to deal with the difficulty.?? School psychologists provide direct intervention or behavioral management when needed, or may simply offer support and advice to students who need someone to talk to. Social Psychologists Social psychologists  study the behavior of groups including how people behave in social settings  and how groups influence individual behavior. A social psychologist might investigate a wide range of topics including attitudes, prejudice, communication, interpersonal relationships, aggression, and persuasion. For some professionals, this largely involves conducting basic research designed to add to our understanding of social behavior. In other cases, social psychologists utilize their skills and knowledge to influence human behavior in order to foster healthier and more productive groups. Social psychologists can expect to earn an average of $85,000 per year, particularly if employed in a public or governmental institution. A Word From Verywell As you can see from these brief descriptions, there are many types of psychology and psychologists  that focus on a wide variety of human behaviors. If you are considering a career in psychology, you will need to determine which psychology career option is the best fit for you. Which Psychology Career Is Right for You?

The Proposal Book Review and Description - 881 Words

Experiencing something new is almost always a refreshing experience. Whether it be something along the lines of learning to ride a bike, discovering a hidden talent, or in my case, reading something besides a ponderous and at times depressing work of literature. Given that we are exposed to humor almost every day, it was a pleasant experience to encounter a story that relates to this component of everyday life. Anton Chekhov’s The Proposal is a comical play that is distinctive from others, given its circumstances, in the way the author has written his play, as well as how the reader can interpret what he is trying to convey. Chekhov’s play takes place in a room of a man’s farmhouse, and that is all the author provides for the reader†¦show more content†¦His neighbor’s last name is Chubukov, and that man’s daughter is Natasha. Throughout the entire play, Lomov is either arguing, making up, or arguing again with his soon to be fiancà © o r both her and her father. The man is known to be a hypochondriac, therefore he experiences the onset of heart murmurs and even passing out during his multiple disagreements with the father and daughter. This play is ironic in the sense that it causes more stress and dissonance between the characters than it does companionship and tranquility, which are aspects that are meant to be brought forth through marriage. In turn, I do believe that this play would be more enjoyable if performed on a stage rather than read from a book, for the actors’ emotions and words would be much more exaggerated and brought to life. Chekhov’s first profession was that of a physician, although he enjoyed writing at any moment he could. Even during his time of practicing medicine, he wrote some of his stories that are well known today. He later decided to become more engaged with writing literature, therefore he began to legitimately focus on forming his short stories as well as his play s. 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The Honest to Goodness Truth on Popular Essay Topics

The Honest to Goodness Truth on Popular Essay Topics Popular Essay Topics at a Glance Podcast for men and women working from home. Following are several types of essay topics for students that are categorized in many sections so you can easily chose the topic depending on your need and requirement. Picking a topic for the research project may be challenging undertaking for pupils. Expository essay is a sort of paper that's super common for all degrees of education. On our site you will discover a great deal more useful distinctive information that is certain to be helpful for junior and higher school kids from, like common home task essay about Hamlet, in addition to, for instance, application essays for college for future students. There are a fantastic number of essays which are believed to be most useful for college applicants. There are an incredible number of essays that are thought to be helpful for college applicants. What Everybody Dislikes About Popular Essay Topics and Why Good note taking takes practice and finding the ideal note taking method can be rather overwhelming. You ought to use precise facts and figures simply to support your opinion. When you are requested to pick a great topic for your argument, start with something you're familiarized with. There are lots of things to argue when it has to do with the law. Consequently, with the aid of structured ideas, you can catch the reader's interest. Very often it becomes tough to choose one particular topic either due to the many ideas in the student's head, or due to their complete absence. When you're show my homework on the internet to select a very good idea for your work, learn with something you're working with. Some students utilize the very first idea which arrives in their head and work on it, but the outcome isn't successful. Shock Literature isn't really Literature in the legitimate sense and ought not to be given serious consideration for a genre. Expository essay is a kind of assignment that demands demonstration of your research and reasoning skills on a specific topic. Generally, narrative essays are written in the person. Writing a great persuasive essay is not an easy job, however, it's achievable. When prior brainstorming is finished, you might begin drafting your essay. The thesis gives you a guideline on how best to go about with writing the essay. It is possible to likewise do the factors offered in the very first father of each of SAT Characterization Subjects. There are several steps that you should take as a way to write a superb essay. Be conscious of the size it must be and begin writing the narrative essay outline. As long because you can locate an interesting academic paper subject, you will most likely receive a fantastic grade. To compose an excellent argumentative essay the students first must investigate several sides of the argument, which enables them to make an educated stance. Life, Death, and Popular Essay Topics It can be really boring to look for worthy English essay topics on your own, therefore we think that it's time to provide you with a hand of assistance. Perhaps, you feel that now you must sit and create the ideal essay topics by yourself, which may take lots of time and energy. It is simple to locate a decent exploratory paper topic for college. It's possible to go for an intriguing topic from any area of science. If you must write your whole essay in 1 day, do your very best to give yourself breaks so you don't burn out. When you've got a completed outline, you'll have a step-by-step guide that it is possible to follow till you're done writing. The page number has to be right aligned in addition to each page. Additionally, you get 10 days of totally free revisions. When it has to do with writing an argumentative essay, the most significant issue to do is to select a topic and an argument that you could really get behind. You may also want to read the article aloud to somebody they think. The topic has to be interesting, the topic has to be essential and finally the topic has to be informative. Speaking about something you understand well makes it a lot easier and enjoyable!

Carrie Chapter Twenty-one Free Essays

Part Three Wreckage From the national AP ticker, Friday, June 5, 1979: CHAMBERLAIN, MAINE (AP) STATE OFFICIALS SAY THAT THE DEATH TOLL IN CHAMBERLAIN STANDS AT 409, WITH 49 STILL LISTED AS MISSING. INVESTIGATION CONCERNING CARIETTA WHITE AND THE SO-CALLED ‘TK’ PHENOMENA CONTINUES AMID PERSISTENT RUMOURS THAT AN AUTOPSY ON THE WHITE GIRL HAS UNCOVERED CERTAIN UNUSUAL FORMATIONS IN THE CEREBRUM AND CEREBELLUM OF THE BRAIN. THIS STATES GOVERNOR HAS APPOINTED A BLUE-RIBBON COMMITTEE TO STUDY THE ENTIRE TRAGEDY. We will write a custom essay sample on Carrie Chapter Twenty-one or any similar topic only for you Order Now ENDS. FINAL JUNE 5 030 N AP From The Lewiston Daily Sun, Sunday, September 7 (p. 3): The Legacy of TK Scorched Earth and Scorched Hearts CHAMBERLAIN – Prom Night is history now. Pundits have been saying for centuries that time heals all wounds, but the hurt of this small Western Maine town may be mortal. The residential streets are still there on the town’s East Side, guarded by graceful Oaks that have stood for two hundred years, the trim saltboxes and ranch styles on Morin Street and Brickyard Hill are still neat and undamaged. But this New England pastoral lies on the rim of a blackened and shattered hub, and many of the neat houses have FOR SALE signs on their front lawns. Those still occupied are marked by black wreaths on front doors. Bright-yellow Allied vans and orange U-Hauls of varying sizes are a common sight on Chamberlain’s streets these days. The town’s major industry, Chamberlain Mills and Weaving, still stands, untouched by the fire that raged over much of the town on those two days in May. But it has only been running one shift since July 4th, and according to mill president William A. Chamblis, further lay-offs are a strong possibility. ‘We have the orders,’ Chamblis said, ‘but you can’t run a mill without people to punch the time clock. We don’t have them. I’ve gotten notice from thirty-four men since August 15th. The only thing we can see to do now is close up the dye house and job our work out. We’d hate to let the men go, but this thing is getting down to a matter of financial survival.’ Roger Fearon has lived in Chamberlain for twenty-two years, and has been with the mill for eighteen of those years. He has risen during that time from a third-floor bagger making seventy-three cents an hour to dye-house foreman; yet he seems strangely unmoved by the possibility of losing his job. ‘I’d lose a damned good wage,’ Fearon said. ‘It’s not something you take lightly. The wife and I have talked it over. We could sell the house – it’s worth $20,000 easy – and although we probably won’t realize half of that, we’ll probably go ahead and put it up. Doesn’t matter. We don’t really want to five in Chamberlain any more. Call it what you want but Chamberlain has gone bad for us.’ Fearon is not alone. Henry Kelly, proprietor of a tobacco shop and soda fountain called the Kelly Fruit until Prom Night levelled it, has no plans to rebuild. ‘The kids are gone,’ he shrugs. ‘If I opened up again, there’d be too many ghosts in too many corners. I’m going to take the insurance money and retire to St Petersburg.’ A week after the tornado of ’54 had cut its path of death and destruction through Worcester, the air was filled with the sound of hammers, the smell of new timber, and a feeling of optimism and human resilience. There is none of that in Chamberlain this fall. The main road has been cleared of rubble and that is about the extent of it. The faces that you meet are full of dull hopelessness. Men drink beer without talking in Frank’s Bar on the corner of Sullivan Street, and women exchange tales of grief and loss in back yards. Chamberlain has been declared a disaster area, and money is available to help put the town back on its feet and begin rebuilding the business district. But the main business of Chamberlain in the last four months has been funerals. Four hundred and forty are now known dead, eighteen more still unaccounted for. And sixty-seven of the dead were Ewen High School Seniors on the verge of graduation. It is this, perhaps, more than anything else, that has taken the guts out of Chamberlain. They were buried on June 1 and 2 in three mass ceremonies. A memorial service was held on June 3 in the town square. It was the most moving ceremony that this reporter has ever witnessed. Attendance was in the thousands, and the entire assemblage was still as the school band, stripped from fifty-six to a bare forty, played the school song and taps. There was a sombre graduation ceremony the following week at neighbouring Motton Academy, but there were only fifty-two Seniors left to graduate. The valedictorian, Henry Stampel, broke into tears halfway through his speech and could not continue. There were no Graduation Night parties following the ceremony; the Seniors merely took their diplomas and went home. And still, as the summer progressed, the hearses continued to roll as more bodies were discovered. To some residents it seemed that each day the scab was ripped 69 again, so that the wound could bleed afresh. If you are one of the many curiosity-seekers who have been through Chamberlain in the last week, you have seen a town that may be suffering from terminal cancer of the spirit. A few people, looking lost, wander through the aisles of the AP. The Congregational Church on Carlin Street is gone, swept away by fire, but the brick Catholic Church still stands on Elm Street, and the trim Methodist Church on outer Main Street although singed by fire, is unhurt. Yet attendance has been poor. The old men still sit on the benches in Courthouse Square, but there is little interest in the checkerboards or even in conversation. The over-all impression is one of a town that is waiting to die. It is not enough, these days, to say that Chamberlain will never be the same. It may be closer to the truth to say that Chamberlain will simply never again be. Excerpt from a letter dated June ninth from principal Henry Grayle to Peter Philpott, Superintendent of Schools. †¦ and so I feel I can no longer continue in my present position, feeling, as I do, that such a tragedy might have been averted if I had only had more foresight. I would like you to accept my resignation effective as of July 1, if this is agreeable to you and your staff. . . Excerpt from a letter dated June eleventh from Rita Desjardin, instructor of Physical Education, to Principal Henry Grayle: †¦ am returning my contract to you at this time. I feet that I would kill myself before ever teaching again. Late at night I keep thinking: If I had only reached out to that girl, if only, if only †¦ Found painted on the lawn of the house tot where the White bungalow had been located: CARRIE WHITE IS BURNING FOR HER SINS JESUS NEVER FAILS From ‘Telekinesis: Analysis and Aftermath’ (Science Yearbook, 1981), by Dean D. L McGuffin: In conclusion, I would like to point out the grave risk authorities are taking by burying the Carrie White affair under the bureaucratic mat-and I am speaking specifically of the so-called White Commission. The desire among politicians to regard TK as a once-in-a-lifetime phenomenon seems very strong, and while this may be understandable it is not acceptable. The possibility of a recurrence, genetically speaking, is 99 per cent. Ifs time we planned now for what may be †¦ From Slang Terms Explained.. A Parents’ Guide, by John R. Coombs (New York: The Lighthouse Press, 1985), p. 73: to rip off a Carrie. To cause either violence or destruction; mayhem. confusion; (2) to commit arson (from Carrie White, 1963-1979) From The Shadow Exploded (p. 201): Elsewhere in this book mention is made of a page in one of Carrie White’s school notebooks where a line from a famous rock poet of the ’60s, Bob Dylan, was written repeatedly, as if in desperation. It might not be amiss to close this book with a few lines from another Bob Dylan song, lines that might serve as Carrie’s epitaph: I wish I could write you a melody so plain/ That would save you, dear lady, from going Insane/ That would ease you and cool you and cease the pain/Of your useless and pointless knowledge†¦ From My Name Is Susan Snell (p. 98): This little book is done now. I hope it sells well so I can go someplace where nobody knows me. I want to think things over, decide what I’m going to do between now and the time when my light is carried down that long tunnel into blackness †¦ From the conclusion of The State Investigatory Board of Maine in connection with the events of May 27-28 in Chamberlain, Maine: †¦ and so we must conclude that, while an autopsy performed on the subject indicates some cellular changes which may indicate the presence of some paranormal power, we find no reason to believe that a recurrence is possible or even likely †¦ Excerpt from a letter dated May 3, 1988, from Amelia Jenks, Royal Knob, Tennessee, to Sandra Jens, Maiken, Georgia: ? ­and your little neece is growin like a weed, awfull big for only 2. She has blue eyes like her daddy and my blond hair but that will porubly go dark. Still she is awfull pretty I think sometimes when she is asleep how she looks like our momma. The other day wile she was playin in the dirt beside the house I sneeked around and saw the funnyest thing. Annie was playin with her brothers marbles only they was mooving around all by themselfs. Annie was giggeling and laffing but I was a little skared. Some of them marbles was going right up down. It reminded me of gramma, do you remember when the law came up that time after Pete and there guns flew out of there hands and grammie just laffed and laffed. And she use to be able to make her rocker go even when she wasen in it. I gave me a reel bad turn to think on it. I shure hope she don’t get heartspels like grammie did, remember? Well I must go do a wash so give my best to Rich and take care to send us some pitchers when you can. Still our Annie is awfull pretty her eyes are as brite as buttons. I bet she’ll be a worldbeeter someday. All my love, Melia How to cite Carrie Chapter Twenty-one, Essay examples

Recession in India free essay sample

We have compiled the said report which helps in understanding what corrective steps were taken which helped the banks to emerge out of the turmoil. Financial Crisis The financial crisis of 2007 to the present is a crisis triggered by a liquidity shortfall in the United States banking system caused by the overvaluation of assets. It has resulted in the collapse of large financial institutions, the bailout of banks by national governments and downturns in stock markets around the world. In many areas, the housing market has also suffered, resulting in numerous evictions, foreclosures and prolonged vacancies. It is considered by many economists to be the worst financial crisis since the Great Depression of the 1930s. It contributed to the failure of key businesses, declines in consumer wealth estimated in the trillions of U. S. dollars, substantial financial commitments incurred by governments, and a significant decline in economic activity. Many causes have been suggested, with varying weight assigned by experts. We will write a custom essay sample on Recession in India or any similar topic specifically for you Do Not WasteYour Time HIRE WRITER Only 13.90 / page Both market-based and regulatory solutions have been implemented or are under consideration, while significant risks remain for the world economy over the 2010–2011 periods. The collapse of a global housing bubble, which peaked in the U. S. in 2006, caused the values of securities tied to real estate pricing to plummet thereafter, damaging financial institutions globally. Questions regarding bank solvency, declines in credit availability, and damaged investor confidence had an impact on global stock markets, where securities suffered large losses during late 2008 and early 2009. Economies worldwide slowed during this period as credit tightened and international trade declined. Critics argued that credit rating agencies and investors failed to accurately price the risk involved with mortgage-related financial products, and that governments did not adjust their regulatory practices to address 21st century financial markets. Governments and central banks responded with unprecedented fiscal stimulus, monetary policy expansion, and institutional bailouts. | Background and causes The immediate cause or trigger of the crisis was the bursting of the United States housing bubble which peaked in approximately 2005–2006. Already-rising default rates on subprime and adjustable rate mortgages (ARM) began to increase quickly thereafter. An increase in loan packaging, marketing and incentives such as easy initial terms and a long-term trend of rising housing prices had encouraged borrowers to assume difficult mortgages in the belief they would be able to quickly refinance at more favorable terms. However, once interest rates began to rise and housing prices started to drop moderately in 2006–2007 in many parts of the U. S. , refinancing became more difficult. Defaults and foreclosure activity increased dramatically as easy initial terms expired, home prices failed to go up as anticipated, and ARM interest rates reset higher. Share in GDP of U. S. financial sector since 1860 Low interest rates and large inflows of foreign funds created easy credit conditions for a number of years prior to the crisis, fueling a housing construction boom and encouraging debt-financed consumption. The combination of easy credit and money inflow contributed to the United States housing bubble. Loans of various types (e. g. mortgage, credit card, and auto) were easy to obtain and consumers assumed an unprecedented debt load. As part of the housing and credit booms, the number of financial agreements called mortgage-backed securities (MBS) and collateralized debt obligations (CDO), which derived their value from mortgage payments and housing prices, greatly increased. Such financial innovation enabled institutions and investors around the world to invest in the U. S. housing market. As housing prices declined, major global financial institutions that had borrowed and invested heavily in subprime MBS reported significant losses. Falling prices also resulted in homes worth less than the mortgage loan, providing a financial incentive to enter foreclosure. The ongoing foreclosure epidemic that began in late 2006 in the U. S. continues to drain wealth from consumers and erodes the financial strength of banking institutions. Defaults and losses on other loan types also increased significantly as the crisis expanded from the housing market to other parts of the economy. Total losses are estimated in the trillions of U. S. dollars globally. While the housing and credit bubbles built, a series of factors caused the financial system to both expand and become increasingly fragile, a process called financialization. Policymakers did not recognize the increasingly important role played by financial institutions such as investment banks and hedge funds, also known as the shadow banking system. Some experts believe these institutions had become as important as commercial (depository) banks in providing credit to the U. S. economy, but they were not subject to the same regulations. These institutions as well as certain regulated banks had also assumed significant debt burdens while providing the loans described above and did not have a financial cushion sufficient to absorb large loan defaults or MBS losses. These losses impacted the ability of financial institutions to lend, slowing economic activity. Concerns regarding the stability of key financial institutions drove central banks to provide funds to encourage lending and restore faith in the commercial paper markets, which are integral to funding business operations. Governments also bailed out key financial institutions and implemented economic stimulus programs, assuming significant additional financial commitments. The crises culminated on Sept. 15th 2008 with Lehman Brothers filing for bankruptcy. It has been reported that JP Morgan helped drive Lehman into bankruptcy and kicked off the credit crises by forcing it to give up billions in cash reserves on the afternoon of Friday September 13, 2008. Growth of the housing bubble Main article: United States housing bubble A graph showing the median and average sales prices of new homes sold in the United States between 1963 and 2008 (not adjusted for inflation) Between 1997 and 2006, the price of the typical American house increased by 124%. During the two decades ending in 2001, the national median home price ranged from 2. 9 to 3. 1 times median household income. This ratio rose to 4. 0 in 2004, and 4. 6 in 2006. This housing bubble resulted in quite a few homeowners refinancing their homes at lower interest rates, or financing consumer spending by taking out second mortgages secured by the price appreciation. In a Peabody Award winning program, NPR correspondents argued that a Giant Pool of Money (represented by $70 trillion in worldwide fixed income investments) sought higher yields than those offered by U. S. Treasury bonds early in the decade. Further, this pool of money had roughly doubled in size from 2000 to 2007, yet the supply of relatively safe, income generating investments had not grown as fast. Investment banks on Wall Street answered this demand with the MBS and CDO, which were assigned safe ratings by the credit rating agencies. In effect, Wall Street connected this pool of money to the mortgage market in the U. S. , with enormous fees accruing to those throughout the mortgage supply chain, from the mortgage broker selling the loans, to small banks that funded the brokers, to the giant investment banks behind them. By approximately 2003, the supply of mortgages originated at traditional lending standards had been exhausted. However, continued strong demand for MBS and CDO began to drive down lending standards, as long as mortgages could still be sold along the supply chain. Eventually, this speculative bubble proved unsustainable. The CDO in particular enabled financial institutions to obtain investor funds to finance subprime and other lending, extending or increasing the housing bubble and generating large fees. A CDO essentially places cash payments from multiple mortgages or other debt obligations into a single pool, from which the cash is allocated to specific securities in a priority sequence. Those securities obtaining cash first received investment-grade ratings from rating agencies. Lower priority securities received cash thereafter, with lower credit ratings but theoretically a higher rate of return on the amount invested. By September 2008, average U. S. housing prices had declined by over 20% from their mid-2006 peak. As prices declined, borrowers with adjustable-rate mortgages could not refinance to avoid the higher payments associated with rising interest rates and began to default. During 2007, lenders began foreclosure proceedings on nearly 1. 3 million properties, a 79% increase over 2006. This increased to 2. 3 million in 2008, an 81% increase vs. 2007. By August 2008, 9. 2% of all U. S. mortgages outstanding were either delinquent or in foreclosure. By September 2009, this had risen to 14. 4%. Easy credit conditions Lower interest rates encourage borrowing. From 2000 to 2003, the Federal Reserve lowered the federal funds rate target from 6. 5% to 1. 0%. [31] This was done to soften the effects of the collapse of the dot-com bubble and of the September 2001 terrorist attacks, and to combat the perceived risk of deflation. [32] U. S. current account or trade deficit Additional downward pressure on interest rates was created by the USAs high and rising current account (trade) deficit, which peaked along with the housing bubble in 2006. Ben Bernanke explained how trade deficits required the U. S. to borrow money from abroad, which bid up bond prices and lowered interest rates. Bernanke explained that between 1996 and 2004, the USA current account deficit increased by $650 billion, from 1. 5% to 5. 8% of GDP. Financing these deficits required the USA to borrow large sums from abroad, much of it from countries running trade surpluses, mainly the emerging economies in Asia and oil-exporting nations. The balance of payments identity requires that a country (such as the USA) running a current account deficit also have a capital account (investment) surplus of the same amount. Hence large and growing amounts of foreign funds (capital) flowed into the USA to finance its imports. This created demand for various types of financial assets, raising the prices of those assets while lowering interest rates. Foreign investors had these funds to lend, either because they had very high personal savings rates (as high as 40% in China), or because of high oil prices. Bernanke referred to this as a saving glut. A flood of funds (capital or liquidity) reached the USA financial markets. Foreign governments supplied funds by purchasing USA Treasury bonds and thus avoided much of the direct impact of the crisis. USA households, on the other hand, used funds borrowed from foreigners to finance consumption or to bid up the prices of housing and financial assets. Financial institutions invested foreign funds in mortgage-backed securities. The Fed then raised the Fed funds rate significantly between July 2004 and July 2006. This contributed to an increase in 1-year and 5-year adjustable-rate mortgage (ARM) rates, making ARM interest rate resets more expensive for homeowners. This may have also contributed to the deflating of the housing bubble, as asset prices generally move inversely to interest rates and it became riskier to speculate in housing. USA housing and financial assets dramatically declined in value after the housing bubble burst. Sub-prime lending U. S. subprime lending expanded dramatically 2004-2006 The term subprime refers to the credit quality of particular borrowers, who have weakened credit histories and a greater risk of loan default than prime borrowers. The value of U. S. subprime mortgages was estimated at $1. 3 trillion as of March 2007, with over 7. 5 million first-lien subprime mortgages outstanding. In addition to easy credit conditions, there is evidence that both government and competitive pressures contributed to an increase in the amount of subprime lending during the years preceding the crisis. Major U. S. investment banks and government sponsored enterprises like Fannie Mae played an important role in the expansion of higher-risk lending. Subprime mortgages remained below 10% of all mortgage originations until 2004, when they spiked to nearly 20% and remained there through the 2005-2006 peak of the United States housing bubble. A proximate event to this increase was the April 2004 decision by the U. S. Securities and Exchange Commission (SEC) to relax the net capital rule, which permitted the largest five investment banks to dramatically increase their financial leverage and aggressively expand their issuance of mortgage-backed securities. This applied additional competitive pressure to Fannie Mae and Freddie Mac, which further expanded their riskier lending. Subprime mortgage payment delinquency rates remained in the 10-15% range from 1998 to 2006, then began to increase rapidly, rising to 25% by early 2008. Fannie Mae, the nations biggest underwriter of home mortgages, has been under increasing pressure from the Clinton Administration to expand mortgage loans among low and moderate income people In moving, even tentatively, into this new area of lending, Fannie Mae is taking on significantly more risk, which may not pose any difficulties during flush economic times. But the government-subsidized corporation may run into trouble in an economic downturn, prompting a government rescue similar to that of the savings and loan industry in the 1980s. A 2000 United States Department of the Treasury study of lending trends for 305 cities from 1993 to 1998 showed that $467 billion of mortgage credit poured out of Community Reinvestment Act (CRA)-covered lenders into low and mid level income borrowers and neighborhoods. Nevertheless, only 25% of all sub-prime lending occurred at CRA-covered institutions, and a full 50% of sub-prime loans originated at institutions exempt from CRA. While the number of CRA sub-prime loans originated were less than non-CRA sub-prime loans originated, it is important to note that the CRA sub-prime loans were the more vulnerable during the downturn, to the detriment of both borrowers and lenders. For example, lending done under Community Reinvestment Act criteria, according to a quarterly report in October of 2008, constituted only 7 percent of the total mortgage lending by the Bank of America, but constituted 29 percent of its losses on mortgages. Economist Paul Krugman argued in January 2010 that the simultaneous growth of the residential and commercial real estate pricing bubbles undermines the case made by those who argue that Fannie Mae, Freddie Mac, CRA or predatory lending were primary causes of the crisis. In other words, bubbles in both markets developed even though only the residential market was affected by these potential causes. Predatory lending Predatory lending refers to the practice of unscrupulous lenders, to ente r into unsafe or unsound secured loans for inappropriate purposes. A classic bait-and-switch method was used by Countrywide, advertising low interest rates for home refinancing. Such loans were written into extensively detailed contracts, and swapped for more expensive loan products on the day of closing. Whereas the advertisement might state that 1% or 1. 5% interest would be charged, the consumer would be put into an adjustable rate mortgage (ARM) in which the interest charged would be greater than the amount of interest paid. This created negative amortization, which the credit consumer might not notice until long after the loan transaction had been consummated. Countrywide, sued by California Attorney General Jerry Brown for Unfair Business Practices and False Advertising was making high cost mortgages to homeowners with weak credit, adjustable rate mortgages (ARMs) that allowed homeowners to make interest-only payments. . When housing prices decreased, homeowners in ARMs then had little incentive to pay their monthly payments, since their home equity had disappeared. This caused Countrywides financial condition to deteriorate, ultimately resulting in a decision by the Office of Thrift Supervision to seize the lender. Former employees from Ameriquest, which was United Statess leading wholesale lender,[60] described a system in which they were pushed to falsify mortgage documents and then sell the mortgages to Wall Street banks eager to make fast profits. [60] There is growing evidence that such mortgage frauds may be a cause of the crisis. [60] Deregulation Further information: Government policies and the subprime mortgage crisis Critics have argued that the regulatory framework did not keep pace with financial innovation, such as the increasing importance of the shadow banking system, derivatives and off-balance sheet financing. In other cases, laws were changed or enforcement weakened in parts of the financial system. Key examples include: * Jimmy Carters Depository Institutions Deregulation and Monetary Control Act of 1980 (DIDMCA) phased out a number of restrictions on banks financial practices, broadened their lending powers, and raised the deposit insurance limit from $40,000 to $100,000 (raising the problem of moral hazard). Banks rushed into real estate lending, speculative lending, and other ventures just as the economy soured. * In October 1982, U. S. President Ronald Reagan signed into Law the Garn–St. Germain Depository Institutions Act, which provided for adjustable-rate mortgage loans, began the process of banking deregulation, and contributed to the savings and loan crisis of the late 1980s/early 1990s. * In November 1999, U. S. President Bill Clinton signed into Law the Gramm-Leach-Bliley Act, which repealed part of the Glass-Steagall Act of 1933. This repeal has been criticized for reducing the separation between commercial banks (which traditionally had a conservative culture) and investment banks (which had a more risk-taking culture). In 2004, the U. S. Securities and Exchange Commission relaxed the net capital rule, which enabled investment banks to substantially increase the level of debt they were taking on, fueling the growth in mortgage-backed securities supporting subprime mortgages. The SEC has conceded that self-regulation of investment banks contributed to the crisis. * Financial institutions in the shadow banking system are not subject to the same regulation as d epository banks, allowing them to assume additional debt obligations relative to their financial cushion or capital base. This was the case despite the Long-Term Capital Management debacle in 1998, where a highly-leveraged shadow institution failed with systemic implications. * Regulators and accounting standard-setters allowed depository banks such as Citigroup to move significant amounts of assets and liabilities off-balance sheet into complex legal entities called structured investment vehicles, masking the weakness of the capital base of the firm or degree of leverage or risk taken. One news agency estimated that the top four U. S. banks will have to return between $500 billion and $1 trillion to their balance sheets during 2009. This increased uncertainty during the crisis regarding the financial position of the major banks. Off-balance sheet entities were also used by Enron as part of the scandal that brought down that company in 2001. * As early as 1997, Federal Reserve Chairman Alan Greenspan fought to keep the derivatives market unregulated. With the advice of the Presidents Working Group on Financial Markets, the U. S. Congress and President allowed the self-regulation of the over-the-counter derivatives market when they enacted the Commodity Futures Modernization Act of 2000. Derivatives such as credit default swaps (CDS) can be used to hedge or speculate against particular credit risks. The volume of CDS outstanding increased 100-fold from 1998 to 2008, with estimates of the debt covered by CDS contracts, as of November 2008, ranging from US$33 to $47 trillion. Total over-the-counter (OTC) derivative notional value rose to $683 trillion by June 2008. Warren Buffett famously referred to derivatives as financial weapons of mass destruction in early 2003. Increased debt burden or over-leveraging Leverage ratios of investment banks increased significantly 2003-2007 U. S. households and financial institutions became increasingly indebted or overleveraged during the years preceding the crisis. This increased their vulnerability to the collapse of the housing bubble and worsened the ensuing economic downturn. Key statistics include: * Free cash used by consumers from home equity extraction doubled from $627 billion in 2001 to $1,428 billion in 2005 as the housing bubble built, a total of nearly $5 trillion dollars over the period, contributing to economic growth worldwide. U. S. home mortgage debt relative to GDP increased from an average of 46% during the 1990s to 73% during 2008, reaching $10. 5 trillion. * USA household debt as a percentage of annual disposable personal income was 127% at the end of 2007, versus 77% in 1990. * In 1981, U. S. rivate debt was 123% of GDP; by the third quarter of 2008, it was 290%. * From 2004-07, the top five U. S. investment banks each significantly increased their financial leverage (see diagram), which increased their vulnerability to a financial shock. These five institutions reported over $4. 1 trillion in debt for fiscal year 2007, about 30% of USA nominal GDP for 2007. Lehman Brothers was liquidated, Bear Stearns and Merrill Lynch were sold at fir e-sale prices, and Goldman Sachs and Morgan Stanley became commercial banks, subjecting themselves to more stringent regulation. With the exception of Lehman, these companies required or received government support. * Fannie Mae and Freddie Mac, two U. S. Government sponsored enterprises, owned or guaranteed nearly $5 trillion in mortgage obligations at the time they were placed into conservatorship by the U. S. government in September 2008. These seven entities were highly leveraged and had $9 trillion in debt or guarantee obligations, an enormous concentration of risk; yet they were not subject to the same regulation as depository banks. Boom and collapse of the shadow banking system In a June 2008 speech, President and CEO of the New York Federal Reserve Bank Timothy Geithner  Ã¢â‚¬â€ who in 2009 became Secretary of the United States Treasury  Ã¢â‚¬â€ placed significant blame for the freezing of credit markets on a run on the entities in the parallel banking system, also called the shadow banking system. These entities became critical to the credit markets underpinning the financial system, but were not subject to the same regulatory controls. Further, these entities were vulnerable because of maturity mismatch, meaning that they borrowed short-term in liquid markets to purchase long-term, illiquid and risky assets. This meant that disruptions in credit markets would make them subject to rapid deleveraging, selling their long-term assets at depressed prices. He described the significance of these entities: In early 2007, asset-backed commercial paper conduits, in structured investment vehicles, in auction-rate preferred securities, tender option bonds and variable rate demand notes, had a combined asset size of roughly $2. trillion. Assets financed overnight in triparty repo grew to $2. 5 trillion. Assets held in hedge funds grew to roughly $1. 8 trillion. The combined balance sheets of the then five major investment banks totaled $4 trillion. In comparison, the total assets of the top five bank holding companies in the United States at that point were just over $6 trillion, and total assets of the entire banking system we re about $10 trillion. The combined effect of these factors was a financial system vulnerable to self-reinforcing asset price and credit cycles. Paul Krugman, laureate of the Nobel Prize in Economics, described the run on the shadow banking system as the core of what happened to cause the crisis. He referred to this lack of controls as malign neglect and argued that regulation should have been imposed on all banking-like activity. Financial markets impacts Impacts on financial institutions 2007 bank run on Northern Rock, a UK bank The International Monetary Fund estimated that large U. S. and European banks lost more than $1 trillion on toxic assets and from bad loans from January 2007 to September 2009. These losses are expected to top $2. 8 trillion from 2007-10. U. S. banks losses were forecast to hit $1 trillion and European bank losses will reach $1. 6 trillion. The IMF estimated that U. S. banks were about 60 percent through their losses, but British and eurozone banks only 40 percent. One of the first victims was Northern Rock, a medium-sized British bank. The highly leveraged nature of its business led the bank to request security from the Bank of England. This in turn led to investor panic and a bank run in mid-September 2007. Calls by Liberal Democrat Shadow Chancellor Vince Cable to nationalise the institution were initially ignored; in February 2008, however, the British government (having failed to find a private sector buyer) relented, and the bank was taken into public hands. Northern Rocks problems proved to be an early indication of the troubles that would soon befall other banks and financial institutions. Initially the companies affected were those directly involved in home construction and mortgage lending such as Northern Rock and Countrywide Financial, as they could no longer obtain financing through the credit markets. Over 100 mortgage lenders went bankrupt during 2007 and 2008. Concerns that investment bank Bear Stearns would collapse in March 2008 resulted in its fire-sale to JP Morgan Chase. The crisis hit its peak in September and October 2008. Several major institutions either failed, were acquired under duress, or were subject to government takeover. These included Lehman Brothers, Merrill Lynch, Fannie Mae, Freddie Mac, Washington Mutual, Wachovia, and AIG. Credit markets and the shadow banking system TED spread and components during 2008 During September 2008, the crisis hit its most critical stage. There was the equivalent of a bank run on the money market mutual funds, which frequently invest in commercial paper issued by corporations to fund their operations and payrolls. Withdrawals from money markets were $144. 5 billion during one week, versus $7. 1 billion the week prior. This interrupted the ability of corporations to rollover (replace) their short-term debt. The U. S. government responded by extending insurance for money market accounts analogous to bank deposit insurance via a temporary guarantee and with Federal Reserve programs to purchase commercial paper. The TED spread, an indicator of perceived credit risk in the general economy, spiked up in July 2007, remained volatile for a year, then spiked even higher in September 2008, reaching a record 4. 65% on October 10, 2008. In a dramatic meeting on September 18, 2008, Treasury Secretary Henry Paulson and Fed Chairman Ben Bernanke met with key legislators to propose a $700 billion emergency bailout. Bernanke reportedly told them: If we dont do this, we may not have an economy on Monday. The Emergency Economic Stabilization Act, which implemented the Troubled Asset Relief Program (TARP), was signed into law on October 3, 2008. Economist Paul Krugman and U. S. Treasury Secretary Timothy Geithner explain the credit crisis via the implosion of the shadow banking system, which had grown to nearly equal the importance of the traditional commercial banking sector as described above. Without the ability to obtain investor funds in exchange for most types of mortgage-backed securities or asset-backed commercial paper, investment banks and other entities in the shadow banking system could not provide funds to mortgage firms and other corporations. This meant that nearly one-third of the U. S. lending mechanism was frozen and continued to be frozen into June 2009. According to the Brookings Institution, the traditional banking system does not have the capital to close this gap as of June 2009: It would take a number of years of strong profits to generate sufficient capital to support that additional lending volume. The authors also indicate that some forms of securitization are likely to vanish forever, having been an artifact of excessively loose credit conditions. While traditional banks have raised their lending standards, it was the collapse of the shadow banking system that is the primary cause of the reduction in funds available for borrowing. Global effects A number of commentators have suggested that if the liquidity crisis continues, there could be an extended recession or worse. The continuing development of the crisis has prompted in some quarters fears of a global economic collapse although there are now many cauti ously optimistic forecasters in addition to some prominent sources who remain negative. The financial crisis is likely to yield the biggest banking shakeout since the savings-and-loan meltdown. Investment bank UBS stated on October 6 that 2008 would see a clear global recession, with recovery unlikely for at least two years. Three days later UBS economists announced that the beginning of the end of the crisis had begun, with the world starting to make the necessary actions to fix the crisis: capital injection by governments; injection made systemically; interest rate cuts to help borrowers. The United Kingdom had started systemic injection, and the worlds central banks were now cutting interest rates. UBS emphasized the United States needed to implement systemic injection. UBS further emphasized that this fixes only the financial crisis, but that in economic terms the worst is still to come. UBS quantified their expected recession durations on October 16: the Eurozones would last two quarters, the United States would last three quarters, and the United Kingdoms would last four quarters. The economic crisis in Iceland involved all three of the countrys major banks. Relative to the size of its economy, Iceland’s banking collapse is the largest suffered by any country in economic history. At the end of October UBS revised its outlook downwards: the forthcoming recession would be the worst since the Reagan recession of 1981 and 1982 with negative 2009 growth for the U. S. , Eurozone, UK; very limited recovery in 2010; but not as bad as the Great Depression. The Brookings Institution reported in June 2009 that U. S. consumption accounted for more than a third of the growth in global consumption between 2000 and 2007. The US economy has been spending too much and borrowing too much for years and the rest of the world depended on the U. S. consumer as a source of global demand. With a recession in the U. S. and the increased savings rate of U. S. consumers, declines in growth elsewhere have been dramatic. For the first quarter of 2009, the annualized rate of decline in GDP was 14. 4% in Germany, 15. 2% in Japan, 7. 4% in the UK, 18% in Latvia, 9. 8% in the Euro area and 21. 5% for Mexico. Some developing countries that had seen strong economic growth saw significant slowd owns. For example, growth forecasts in Cambodia show a fall from more than 10% in 2007 to close to zero in 2009, and Kenya may achieve only 3-4% growth in 2009, down from 7% in 2007. According to the research by the Overseas Development Institute, reductions in growth can be attributed to falls in trade, commodity prices, investment and remittances sent from migrant workers (which reached a record $251 billion in 2007, but have fallen in many countries since). The has stark implications and has led to a dramatic rise in the number of households living below the poverty line, be it 300,000 in Bangladesh or 230,000 in Ghana. By March 2009, the Arab world had lost $3 trillion due to the crisis. In April 2009, unemployment in the Arab world is said to be a time bomb. In May 2009, the United Nations reported a drop in foreign investment in Middle-Eastern economies due to a slower rise in demand for oil. In June 2009, the World Bank predicted a tough year for Arab states. In September 2009, Arab banks reported losses of nearly $4 billion since the onset of the global financial crisis. U. S. economic effects Real gross domestic product — the output of goods and services produced by labor and property located in the United States — decreased at an annual rate of approximately 6 percent in the fourth quarter of 2008 and first quarter of 2009, versus activity in the year-ago periods. The U. S. unemployment rate increased to 10. 1% by October 2009, the highest rate since 1983 and roughly twice the pre-crisis rate. The average hours per work week declined to 33, the lowest level since the government began collecting the data in 1964. Effects of Recession on India There is, at least in some quarters, dismay that India has been hit by the crisis. This dismay stems from two arguments. The Indian banking system has had no direct exposure to the sub-prime mortgage assets or to the failed institutions. It has very limited off-balance sheet activities or securitized assets. In fact, our banks continue to remain safe and healthy. So, the enigma is how can India be caught up in a crisis when it has nothing much to do with any of the maladies that are at the core of the crisis. The second reason for dismay is that Indias recent growth has been driven predominantly by domestic consumption and domestic investment. External demand, as measured by merchandize exports, accounts for less than 15 per cent of our GDP. The question then is, even if there is a global downturn, why should India be affected when its dependence on external demand is so limited? The answer to the above frequently-asked questions lies in globalization. First, Indias integration into the world economy over the last decade has been remarkably rapid. Integration into the world implies more than just exports. Going by the common measure of globalization, Indias two-way trade (merchandize exports plus imports), as a proportion of GDP, grew from 21. 2 per cent in 1997-98, the year of the Asian crisis, to 34. 7 per cent in 2007-08. Second, Indias financial integration with the world has been as deep as Indias trade globalization, if not deeper. If we take an expanded measure of globalization, that is the ratio of total external transactions (gross current account flows plus gross capital flows) to GDP, this ratio has more than doubled from 46. 8 per cent in 1997-98 to 117. 4 per cent in 2007-08. Importantly, the Indian corporate sectors access to external funding has markedly increased in the last five years. Some numbers will help illustrate the point. In the five-year period 2003-08, the share of investment in Indias GDP rose by 11 percentage points. Corporate savings financed roughly half of this, but a significant portion of the balance financing came from external sources. While funds were available domestically, they were expensive relative to foreign funding. On the other hand, in a global market awash with liquidity and on the promise of Indias growth potential, foreign investors were willing to take risks and provide funds at a lower cost. Last year (2007/08), for example, India received capital inflows amounting to over 9 per cent of GDP as against a current account deficit in the balance of payments of just 1. 5 per cent of GDP. These capital flows, in excess of the current account deficit, evidence the importance of external financing and the depth of Indias financial integration. So, the reason India has been hit by the crisis, despite mitigating factors, is clearly Indias rapid and growing integration into the global economy. The contagion of the crisis has spread to India through all the channels – the financial channel, the real channel, and importantly, as happens in all financial crises, the confidence channel. Indias financial markets equity markets, money markets, forex markets and credit markets had all come under pressure from a number of directions. First, as a consequence of the global liquidity squeeze, Indian banks and corporates found their overseas financing drying up, forcing corporates to shift their credit demand to the domestic banking sector. Also, in their frantic search for substitute financing, corporates withdrew their investments from domestic money market mutual funds putting redemption pressure on the mutual funds and down the line on non-banking financial companies (NBFCs) where the MFs had invested a significant portion of their funds. This substitution of overseas financing by domestic financing brought both money markets and credit markets under pressure. Second, the forex market came under pressure because of reversal of capital flows as part of the global deleveraging process. Simultaneously, corporates were converting the funds raised locally into foreign currency to meet their external obligations. Both these factors put downward pressure on the rupee. Third, the Reserve Banks intervention in the forex market to manage the volatility in the rupee further added to liquidity tightening. The transmission of the global cues to the domestic economy has been quite straight forward – through the slump in demand for exports. The United States, European Union and the Middle East, which account for three quarters of Indias goods and services trade are in a synchronized down turn. Service export growth is also likely to slow in the near term as the recession deepens and financial services firms – traditionally large users of outsourcing services – are restructured. Remittances from migrant workers too are likely to slow as the Middle East adjusts to lower crude prices and advanced economies go into a recession. Beyond the financial and real channels of transmission as above, the crisis also spread through the confidence channel. In sharp contrast to global financial markets, which went into a seizure on account of a crisis of confidence, Indian financial markets continued to function in an orderly manner. Nevertheless, the tightened global liquidity situation in the period immediately following the Lehman failure in mid-September 2008, coming as it did on top of a turn in the credit cycle, increased the risk aversion of the financial system and made banks cautious about lending. The purport of the above explanation is to show how, despite not being part of the financial sector problem, India has been affected by the crisis through the pernicious feedback loops between external shocks and domestic vulnerabilities by way of the financial, real and confidence channels. Effect on Banks The actual effect of recession was only realised in February 2008 in Banking Industry. Before this there were lot of questions and queries regarding whether the U. S. recession will have any impact on India or Indian banking sector. In Feb 2008, the markets suddenly crashed the actual picture came in front. The effects which came across the banking sector are as follow * Credit Card and loan settlements. As soon as the impact of recession was realized by the banking sector, the Indian banking system came into the mode of consolidation. Each and every bank started reviewing their NPA’s and the amount of lending they have done which is yet to be recovered. Bank concentrated more on retail loans and Credit Card payments. The first priority for bank was to recover such amount which was unpaid from their customers. The banks hired external agencies for calling up clients and requesting them to settle their respective dues. This in turn created a panic in the customers mind. The banks in order to recover their dues and make the process fast provided attractive offers to its customers. For e. g. By settling the entire amount by cash there were discounts which were given amounting to about 5% of the entire due amount. * Call money market. In the initial stages of recession there was lot of demand for short term cash amongst the bank as the bank needed to fulfil the requirement of CRR and SLR. The money which was lended by the bank were taking time to recover and therefore there was a sudden requirement of short term money. The interest rate which were use to be at 5-6% grow up to 14-15% for a time period of 11-15 days. These requirements by few banks were enchased fully by other banks which were low on lending. The banks like ING Vysya bank, Yes Bank, IDBI Bank were amongst the few who were lending through call money market to other banks. * Fixed Deposit Rates Before recession hit the market FD rates were at a sky high level. Lot of private sector banks as well as public sector banks were offering interest rates in long term period upto 11-12%. When the recession kicked in the money demand for long term had almost finished. This was because of the reason that banks were in the mode of consolidation and did not want to lend further till the time most of the money was recovered. The bank deposit rates came down to a level of 6-7% as there was ample liquidity in the banking sector because of funds being not given ahead as loans. * Private banks became unpopular. During recession looking at the bankruptcy of foreign banks there was panic in the mind of investors even in india. There were lot of question that were raised whether the private sector banks who take exposure in foreign securities are safe in investing or not. During this period only there was a news which came for ICICI Bank. ICICI Bank had taken direct exposures in securities which issued by Lehman Brothers and Merill Lynch. In fact even few of public sector banks had taken similar exposures but since public sector banks were backed up by the government, there was a comfort factor amongst the investors. If we look at what happened with ICICI Bank, the liquidity was ample and it was just a few percentage of exposure that has gone as bad debt but other private marked players like HDFC Bank and Kotak Mahindra Bank encashed on these opportunities and placed their canopies next to each and every branch and ATM of ICICI Bank. There was a lot of panic which was created within the investors and they wanted to park their funds in a safer bank. Many of them shifted to nationalized banks and others were diverted to other private banks. This not only hampered the image of ICICI Bank but also created a bad image of Indian Private Banks. They were much difficulties which were faced by these banks to get additional deposits from investors and even retain theri clients who were shifting toward nationalised banks. * Diversifying and churning of funds. While the recession was impacting the country and the banking system there were informations that were given to the investors that the government insures on Rs. 1 lakh for any particular individual. This was misinterpreted by lot of investors in what they believed was with respect to one particular bank. With these being public diversification started. Each investor to safeguard his/her money started opening many accounts in different banks and keeping the funds equal in all. There was a lot of churning which happened from private sector banks to public sector banks as there were lot of uncertainity about funds being saved in a private sector bank. Investor created portfolios in different nationalised banks because of which private sector banks faced decline in their interest earnings as well as corpus and faced losses. After a while this myth was broken by RBI governor that the government only ensures Rs. lakh in totality no matter how many banks an investor has. * Lending Choked. The banks private sector as well as public sector were uncertain with what more negative impact were forthcoming. This resulted in, banks not at all lending to retail and corporate which were related to infrastructure or real estate. The cycle of churning of funds had suddenly stopped. Many projects which were about to start or were half way completed we re forced to put their projects on hold as no additional funds were being provided. This created commotion in real estate market which resulted in decline of prices. Even on retail side many of the housing loans were rejected which propelled the negativity more. Even for Large Cap companies the banks were demanding additional securities in cash apart from normal tangible assets. Even for processing loans for investors who had excellent credit history, the banks put ahead lot of extra conditions and terms. This further created panic and investors postponed their financial goals and loans were not applied for. After a while many loan divisions of banks were shut down and the employees were shifted to other departments were asked to leave. This even further increased the liquidity with banks. * Banks Investment Primary earning for any bank is through lending. Loans were not being processed and since the banks were uncertain of what more negative impact will come the banks were desperately looking out for other avenues to make money. The most safest option available with banks was to invest in G-Secs (Government of India Securities). Many banks started heavily into govt. Securities and bonds. These securities were traded quite highly at that period. Other sources including were through reverse repo and short term lending to different banks. During this time period much more focus was given to income from wealth management as markets has been corrected and banks insisted on educating the investors to park their funds in the equity market. Though the banks were heavily investing in G-Secs and other bonds it was not enough for their survival. Sooner or later the banks had to lend where they make the maximum profit. * Unemployment During the time of recession many jobs were lost in all the sectors. The similar effect was seen in banking but it was not in totality but few departments specific. The maximum hits were taken by two divisions which suffered most during the recession time. The first being the Wealth management division of banks. Though the feeling was correct that the markets have come down and valuations are excellent, it was very difficult convincing the investors. This resulted in many job losses in wealth management department of all the banks as revenue was expected which was not possible to generate. The next division which suffered was the loan division. The lay off’s happened more as the departments closed down and were not functional at all. Most of the bank had outsourced the servicing part as it was cheaper compared to keeping the existing team operational. Close to 1100 jobs were lost in the matter of 3 months in the entire banking sector. There were lot of apprehensions in the mind of new jonnies and soon working for a retail bank became unpopular. * Nationalised Banks popularity During all these events the only player in banking who were waiting to claw back the market shares were the nationalised bank. There was enough panic in retail investor’s regarding their funds being safe and sound, which the nationalised banks encashed fully. Maximum number of promotional activities and advertisement were given by them in the news paper and new channels. Even the investors responded to them equally and more than willingly because the backing up of the government was more than enough to provide a relief factor. Even in terms of employment, soon the nationalised banks became very popular and the people who were asked to leave from private banks where looking out for safe options to enter again. They were not willing to take any more risk. With this the bank got best of the aggressive talent in cheap prices. What corrective measures were taken? Decrease in CRR and repo rates. RBI again cuts repo rates CRR to inject additional liquidity of Rs 20,000 crore January 2, 2009: On a review of current global and domestic macroeconomic situation, the Reserve Bank has decided to take the following further measures: Repo Rate To reduce the repo rate under the liquidity adjustment facility (LAF) by 100 basis points from 6. 5 per cent t o 5. 5 per cent with immediate effect. Reverse Repo Rate To reduce the reverse repo rate under the LAF by 100 basis points from 5. 0 per cent to 4. 0 per cent with immediate effect. Cash Reserve Ratio To reduce the cash reserve ratio (CRR) of scheduled banks by 50 basis points from 5. 5 per cent to 5. 0 per cent from the fortnight beginning January 17, 2009. The reduction in the CRR will inject additional liquidity of around Rs. 20,000 crore to the financial system. It is expected that the reduction in the policy interest rates and the CRR will further enable banks to provide credit for productive purposes at appropriate interest rates. The Reserve Bank on its part would continue to maintain a comfortable liquidity position in the system. Background to announcement of present monetary stimulus by RBI: The global financial situation continues to be uncertain. Since the official recognition of recession in the US, the UK, the Euro area and Japan, the downside risks to the global economy have increased. Concomitantly, the policy initiatives in the advanced economies are geared towards managing the recession and defusing potentially deflationary trends. The US has reduced the Federal Funds Rate to 0 0. 25 per cent. Several other advanced and emerging economies such as Japan, Canada, Republic of Korea, Hong Kong and China too have reduced their policy rates. India’s financial sector has remained resilient even in the face of global financial turmoil that is so deep and pervasive. Our financial markets continue to function in an orderly manner. India’s growth trajectory has, however, been impacted both by the financial crisis and the follow-on global economic downturn. This impact has turned out to be deeper and wider than earlier anticipated. Concurrently, because of global developments coupled with supply and demand management measures at home, inflation is on the decline. Reflecting these developments, the Reserve Bank has adjusted its policy stance from demand management to arresting the moderation in growth. In particular, the aim of these measures was to augment domestic and forex liquidity and to ensure that credit continues to flow to productive sectors of the economy. Notably, since mid-September 2008, the Reserve Bank has reduced the repo rate under the liquidity adjustment facility (LAF) from 9. 0 per cent to 6. 5 per cent, reduced the reverse repo rate under the LAF from 6. 0 per cent to 5. 0 per cent and the cash reserve ratio from 9. 0 per cent to 5. per cent How it helped? With these measures of RBI there was ample liquidity which was created in the market which forced the bank to lend out to companies as the funds in the banks were lying ideal and making no money for the bank. This actually started the lending process of the banks. * Role of fiscal stimulus package by government. There is a relationship between budget deficits and the hea lth of the economy, but is certainly not a perfect one. There can be massive budget deficits when the economy is doing quite well the past few years of the United States being a prime example. That being said, government budgets tend to go from surplus to deficit (or existing deficits become larger) as the economy goes sour. This typically happens as follows: 1. The economy goes into recession, costing many workers their jobs, and at the same time causing corporate profits to decline. This causes less income tax revenue to flow to the government, along with less corporate income tax revenue. Occasionally the flow of income to the government will still grow, but at a slower rate than inflation, meaning that flow of tax revenue has fallen in real terms. 2. Because many workers have lost their jobs, there is increased use of government programs, such as unemployment insurance. Government spending rises as more individuals are calling on government services to help them out through tough times. 3. To help push the economy out of recession and to help those who have lost their jobs, governments often create new social programs during times of recession and depression. FDRs New Deal of the 1930s is a prime example of this. Government spending then rises, not just because of increased use of existing programs, but through the creation of new programs. Because of factors one, the government receives less money from taxpayers, while factors two and three, the government spends more money. Money starts flowing out of the government faster than it comes in, causing the governments budget to go into deficit. * How it helped? With the government spending more the government securities started declining in performance. As more and more securities were being issued the interest rate on securities started rising which has a direct impact on the gsec return. This again closed one more avenue of investment for banks as they were investing heavily into them instead of lending it out to corporate. This in all diverted the funds of the bank to the needful and thus started the lending process again. Future outlook In India there is evidence of economic activity slowing down. Real GDP growth has moderated in the first half of 2008 / 09. The services sector too, which has been our prime growth engine for the last five years, is slowing, mainly in construction, transport and communication, trade, hotels and restaurants sub-sectors. For the first time in seven years, exports have declined in absolute terms for three months in a row during October-December 2008. Recent data indicate that the demand for bank credit is slackening despite comfortable liquidity in the system. Higher input costs and dampened demand have dented corporate margins while the uncertainty surrounding the crisis has affected business confidence. The index of industrial production has shown negative growth for two recent months and investment demand is decelerating. All these factors suggest that growth moderation may be steeper and more extended than earlier projected. There are also several structural factors that have come to India’s aid. First, notwithstanding the everity and multiplicity of the adverse shocks, India’s financial markets have shown admirable resilience. This is in large part because India’s banking system remains sound, healthy, well capitalized and prudently regulated. Second, our comfortable reserve position provides confidence to overseas investors. Third, since a large majority of Indians do not participate in equity and asset markets, the negative impact of the wealth loss effect that is plaguing the advanced economies should be quite muted. Consequently, consumption demand should hold up well. Fourth, because of India’s mandated priority sector lending, institutional credit for agriculture will be unaffected by the credit squeeze. The farm loan waiver package implemented by the government should further insulate the agriculture sector from the crisis. Finally, over the years, India has built an extensive network of social safety-net programmes, including the flagship rural employment guarantee programme, which should protect the poor and the returning migrant workers from the extreme impact of the global crisis. RBI’s policy stance Going forward, the Reserve Bank’s policy stance will continue to be to maintain comfortable rupee and forex liquidity positions. There are indications that pressures on mutual funds have eased and that NBFCs too are making the necessary adjustments to balance their assets and liabilities. Despite the contraction in export demand, we will be able to manage our balance of payments. It is the Reserve Bank’s expectation that commercial banks will take the signal from the policy rates reduction to adjust their deposit and lending rates in order to keep credit flowing to productive sectors. In particular, the special refinance windows opened by the Reserve Bank for the MSME (micro, small and medium enterprises) sector, housing sector and export sector should see credit flowing to these sectors. Also the SPV set up for extending assistance to NBFCs should enable NBFC lending to pick up steam once again. The government’s fiscal stimulus should be able to supplement these efforts from both supply and demand sides. What Industry experts think? Mentioned below is what the senior experts in banking think of how the banking sector survived the crisis. 1). Mr. Anil Kumar Gupta (Vice President) Wealth management division- North and east region ING VYSYA BANK LTD. â€Å"The banking sector is very strong in India. Especially with the help of a governing body like RBI monitoring all the banks in Indian. † â€Å" I would say that step’s that were taken by the RBI in terms of rate cuts made so much liquidity in banking system that they were compelled to lend out to corporate. The recession gets more dangerous if the spending cycle by the people of the country or the lending cycles by the banks are put on a hold. † 2). Mr. Manavjeet Awasty (Senior Vice President) CITI BANK LTD- North â€Å"The ratio’s that the banks need to maintain because of RBI like CRR and SLR are the life savers for any banking firm. During financial crisis the condition of bankruptcy comes only when liquidity is crunched. The ratio’s which are maintained makes sure that enough liquidity is available in the system. † When the turnaround comes Over the last five years, India clocked an unprecedented 9% growth, driven largely by domestic consumption and investment even as the share of net exports has been rising. This was no accident or happenstance. True, the benign global environment, easy liquidity and low interest rates helped, but at the heart of India’s growth were a growing entrepreneurial spirit, rise in productivity and increasing savings. These fundamental strengths continue to be in place. Nevertheless, the global crisis will dent India’s growth trajectory as investments and exports slow. Clearly, there is a period of painful adjustment ahead of us. However, once the global economy begins to recover, India’s turn around will be sharper and swifter, backed by our strong fundamentals and the untapped growth potential. Meanwhile, the challenge for the government and the RBI is to manage the adjustment with as little pain as possible. Conclusion To conclude, we would say that the Indian banking sector is very strong in terms of its maintaining the said regulations and to follow the rule implied by its governing body which is RBI. The necessary steps were taken during the financial crisis which helped the banking sector to emerge out of the crisis without any major disturbance.