Contemporary Issues in Financial Services Essay - 1

Contemporary Issues in Financial Services - Essay Example Financial intermediaries bring together borrowers and lenders in financial markets by interacting with savers and borrowers simultaneously and by producing a set of services facilitating the transformation of liabilities into assets like transforming deposits into loans. Though financial markets can also bring together lenders and borrowers directly, still the existence of financial intermediaries is of utmost importance. This is because the direct lending approach between savers and borrowers has proved inefficient as this process can be directly traced to the barter system where there is always a need for double coincidence of wants. This function of transformation is termed as intermediation. Through this process, financial intermediaries facilitate savers and borrowers to have indirect lending and borrowing. Financial intermediaries can be banks, building societies, financial advisor or broker, insurance companies, life insurance companies, mutual fund and pension fund. Firstly, national bank serves as a financial intermediary by accepting deposits and placing in various securities and mortgage loans. By doing this, individual investors are linked by banks with financial markets and demanders of credit. The intermediaries actually act as a middleman between firm raising funds and investors (Rampini & Viswanathan, 2012, pp.1-2). Requirement of financial intermediary Though financial markets can also bring together lenders and borrowers directly, still the existence of financial intermediaries is of utmost importance. This is because the direct lending approach between savers and borrowers has proved inefficient as this process can be directly traced to the barter system where there is always a need for double coincidence of wants. People with savings will want to lend the amount available with them for a particular time period. For this, one will have to find a person who needs approximately the same amount of fund for the same time period. Searching of such a person is a difficult task. Again, direct lending necessitates a negotiable contract. Transactions of repayments of principle and interest are required to account for. Direct lenders will have limited ability to diversify and minimum exposure to default risk by lending small amounts to many borrowers but the transaction costs would be relatively higher. Here financial intermediaries reduce the transaction costs and minimize risks. Thus, it improves the economic efficiency. Generally, the financial intermediaries perform the following functions: i. It facilitates transactions. ii. It creates a portfolio. iii. It spreads risks over time. iv. It eases household liquidity constraints. v. It reduces the problem of asymmetric information. In addition to intermediation, sometimes brokerage function also takes place by financial institutions in bringing together buyers and sellers to complete financial transactions. Stockbrokers specialize in brokerage to perform such task. Types of fina ncial intermediaries Fee based or advisory financial intermediaries These financial intermediaries charge a fee for rendering advisory financial services. Their services include: i. Issue management ii. Underwriting iii. Portfolio management iv. Corporate counselling v. Stock broking vi. Credit syndication vii. Mergers and acquisitions viii. Debenture trusteeship ix. Capital restructuring Asset based financial intermediaries The specific requirements of customers are met by these financial intermediaries. They provide the required asset or finance for rent or interest respectively. The income is earned by them from

Job study report Essay Example | Topics and Well Written Essays - 500 words

Job study report - Essay Example This report focuses on oil drilling companies and the work of a mechanical engineer, the extraction of oil requires the presence of a mechanical engineer in order to facilitate the maintenance of the various machinery uses in the process. Many of the companies involved in the process of oil drilling need to have not only mechanical engineers but also civil engineers, exploration engineers and petroleum engineers. The main work in the oil drilling process includes installing and maintenance of machinery,1 therefore the main tasks in this oil company is to install machinery with the assistance from other engineers and also the maintenance of this machines. Being reliable and responsible - this involves taking responsibility for ones share of work and also for any mistake one commits. This means that a person should carefully attend to his or her share of work that has been assigned. Constructive and supportive attitude- workers should have a supportive attitude and also they should be interested in learning, they should treat their co workers and superiors with respect and understanding. Apart from the above mentioned personal qualities there is need to have good communication skills and this aids in enhancing communication within the organisation, there is also the need for one to be academically qualified from a recognised institution because the minimum requirements by most organisation is a bachelors