Financial intermediation Essay Example | Topics and Well Written Essays - 3000 words - 1

Financial intermediation - Essay Example It was based on the efficiency hypothesis model and was distinguished from the imminent failure model. After analyzing 33 mergers during the 1867-1935 period, the author found that the consolidation and integration (which result as consequences of mergers and acquisitions) reduce systemic risk. An important variable in this finding is the identification of the role of diversification in the dilution and management of risks. The study also proposed the empirical validity of concentration-stability hypothesis as a framework for explaining the stability of Canadian banks. It was found that strong concentration of banks, which came as an offshoot of mergers and acquisitions, was a strong predictor of stability. What is good about the paper The paper is significant for several reasons. It contains important insights on the developmental evolution of the Canadian banking sector. The author has also proposed and explained insights that could enrich the extant literature on the positive impa ct of mergers and acquisitions (M&As). The successful use and evaluation of hypotheses and the systematic assessment approaches included can provide helpful insights to researchers interested in the same or in related research topics. These constitute the reasons why it is worthy of publication. This section will explain this in detail. An important insight postulated by the study is the explanation why the Canadian banking system outperformed the United States banking system during the Great Depression (p.6). The author was able to provide important evidences, most particularly, the argument that Canada avoided the crisis by maintaining a banking system typified by risk diversification through branching (p.6). This aspect in the study contributes an insight to the body of literature in regard to the incidence of bank failures, vulnerabilities and risks that could be avoided. The emerging principle is that mergers have cushioned the Canadian banking system from the Great Depression by diluting the risks. Here, a theoretical evidence was presented: the cases of the cross-province acquisitions from 1900-1931led to risk diversification because the bulk of business for each bank in a consolidated financial institution is based on its home province, hence, the risk for the entire organization is allocated according to its branches, operating in their respective locations. Furthermore, the study also explained the differences between mergers and acquisitions than simply branching out. If the bank is concerned with risks or is interested with diluting it, branching would be an option because it also meant the diversification of operation across Canada. However, it was explained how M&As have different degree of risk exposure than branching, effectively classifying one from the other. If one does think about it, mergers and acquisitions diversify through integration and accumulation of resources whereas branching diversifies by expanding and spending resources. In the former, there is an inward flow of resources where the latter sees an outflow. This is the reason why in the study's comparative analysis, it was found that "out of the 10 chartered banks that remained in business in 1935, six had been involved in acquisitions," and that "only one out of the 26 failed banks was involved in bank consolidation" (p.9). The study used Fisher's exact test to evaluate the relationship it revealed that bank consolidations did not result or

The Sandman by E.T.A. Hoffmann Essay Example | Topics and Well Written Essays - 750 words

The Sandman by E.T.A. Hoffmann - Essay Example The point of argument in this short story is that: can a child’s imagination be so strong that he may be able to carry his imagination throughout his life, especially if it has affected him in his childhood profoundly? This point is important to the design of the story because it relates to child psychology, since the story talks about a child’s weird imaginations and perception of bizarre ideas that continue to affect him throughout his life. Parents and caregivers should be very careful when they tell terrifying stories to their children, as young brains are very receptive of imaginations, pictures, and concepts. We mention some quotes of the story here, and elaborate them so as to determine how they relate to our main point of argument. The reader of the story reads: But if, like a bold painter, you had first sketched in a few audacious strokes the outline of the picture you had in your own soul, you would then easily have been able to deepen and intensify the colors one after the other, until the varied throng of living figures carried your friends away and they, like you, saw themselves in the midst of the scene that had proceeded out of your own soul (Hoffmann, para.54). This quote means how a human being is able to draw a picture out of his imagination, and is able to give life and meaning to it, so much so that the conception continues to hover over his mind for the rest of his life, continuing to affect him and his friends and family around him. All human beings are like painters of their imaginary conceptions. A child is a special painter, because he strongly conceives every idea told to him in his vulnerable years. It is only his luck and maturity that comes with age that pulls him out his frantic imaginations. Nathaniel has not been that lucky. He was not able to come out of his horror which was induced into him when he was a child. He continued to be terrified of eyes and the sandman coming to take them, so much so that he lost his li fe. This quote shows its real meaning when we see Nathaniel relating the concept of the sandman to his father’s friend, Coppola, and thinking it is him when his father dies during an experiment. Later on as an adult, his life again gets disturbed when he meets Coppelius, who comes in to sell spectacles, making Nathaniel relate him to the dead Coppola, making him think that Coppola has come back in the shape of Coppelius, to take his eyes. Hence, we see that a child is able to relate horrifying imaginations to real people and events, and this disturbance of mind continues till adulthood, proving our point of argument. The strength of a child’s imagination gets further confirmed when we read (Hoffmann, para. 56) that, â€Å"Perhaps, like a good portrait-painter, I may succeed in catching the outline in this way, so that you will realize it is a likeness even without knowing the original, and feel as if you had often seen the person with your own corporeal eyes.† T his shows how a child is able to paint a picture out of his imagination, and how he can make it real with his thoughts and conceptions. Why Nathaniel’s horror about eyes relives when he sees Olimpia’s eyes falling out of her head as Coppelius and Spalanzani fight over her, and why he becomes frantic, is because his frenzied imagination that he carried through childhood makes him all the more hysterical about his imagination of eyes and the sandman coming back to take them. This again confirms that a child’s imaginations are very strong and sturdy, not letting go of the