Approaches to banking regulation Essay Example | Topics and Well Written Essays - 1250 words

Approaches to banking regulation - Essay Example As the search for the best supervision and regulation approaches continues, it is essential for the involved countries to conduct thorough assignments on the fundamental principles to employ in order to attain financial system stability and growth (Barth et. al. 2004, p.208). This paper looks into two banking regulation approaches, which are the ring-fencing and total separation strategies. Approaches to banking regulation Ring-fencing Ring-fencing is a strategy that structurally distinguishes retail banking activities from wholesale and investment bank activities. Ring-fencing mainly focuses on ensuring that provision of services is not interfered with in case of a bank’s failure. Secondly, ring-fencing aims at making it easier and less costly in resolving banks. Thirdly, this approach controls incentives for excessive risk-taking. Apart from the three main objectives of ring-fencing, this approach offers several benefits such as insulating vital UK retail bank services from global financial crises, it allows for an easier monitoring of banks under ring-fencing and in a much transparent way. The other possible benefit is the ability to promote competitiveness because UK retail banking can be made safer (Bertsch 2012, p.2). The ring-fencing approach offers a number of advantages compared to the total separation approach of bank regulation. To begin with, ring-fencing has the potential to preserve diversification benefits because it allows for an efficient use of capital, and probably lower funding costs. The second advantage is that the ring-fencing strategy preserves a higher degree of operational synergies. Thirdly, ring-fencing approach offers the advantage of having reduced legal obstacles in comparison to full separation. In addition, ring-fencing approach can be implemented with the existing European Union framework, which includes foreign banks within UK subsidiary (Independent Commission on Banking 2011, p.35). In 2011, the independent commission on banking recommended retail ring-fencing of UK banks over total separation. The main aim was to isolate banking activities in areas where continuous provision of services is of the essence to the economy and customers at large. Settling on ring-fenci ng approach would create a scenario of mutual advantageous interaction between various bank operations, which produces a higher effect than when the operations are carried individually (Independent Commission on Banking 2011, p39). Ring-fencing bank regulatory approach offers a number of restrictions to ring-fenced banks. The first restriction is that banks are not permitted to render services that are not offered to customers within the EEA. The other restriction prohibits such banks from offering services that lead to an exposure to a non-ring-fenced banking institution or non-banking financial organization. Moreover, ring-fenced banks are not allowed to offer services that would lead to trading book asset such as investing in stock, and corporate debt securities. Apart from these restrictions, under this regulatory approach, they are restricted from offering services that would influence the necessity to hold regulatory capital against counter-party credit risk or market risk. Th ese risks include the purchase or origination of derivatives. Finally, ring-fenced banks are prohibited from offering services that relate to the secondary market activity (Singh 2007, p.178). In ring-fencing

Early Childhood Essay Example | Topics and Well Written Essays - 750 words

Early Childhood - Essay Example According to Montessori, â€Å"the development of articulate speech occurs between the ages two and five --- the age of perception in which the attention of the child is spontaneously directed to external objects and the memory is particularly attentive† (Montessori, Chapter 18, 2004). Montessori said that there are four stages in the language development which are the auditory or listening, oral, manual and interpretive (reading). She also introduced the concept of sensitive periods which are critical for a child’s development. The sensitive period is that period in a child’s development whereby he is unconsciously aware that a certain skill is to be learned at that period. It is the time when a person has the best opportunity to learn something. Examples of the sensitive periods in a child’s environment are the sensitivity to movement, sensitivity to order, sensitivity to language and sensitivity to sensory impressions. Sensitivity to movement occurs at ages two to four. This is the time when the child moves around in order to learn about his environment. Practical life exercises are used in Montessori schools during this sensitive period. Practical life exercises is one of the four areas of the Montessori prepared environment. This area resembles the work at home such as washing the dishes or sweeping the floor. The teacher introduces the name of the activity while the movement is being performed. Social grace and courtesy activities are introduced such as the use of â€Å"May I† or â€Å"Can I†. Language skills are further developed from these practical life activities. Sensitivity to order also occurs at the same time as the sensitivity to movement. Sensitivity relates to spatial, social, sensory and temporal. Children at this age become more aware of the order in time and space. According to Montessori at this stage, order becomes the child’s foundation to make sense of his environment. Another important se nsitive period is that of the sensitivity to language which is one of the longest-lasting sensitive periods which starts at age three to six. After this period the rate of absorption for new words will never be the same again. The child becomes attracted to human sounds which drive him to speak his native language. After age six, the sensitive period for language weakens and the child then moves on to grammar work as he improves his reading skills. The sensitivity to sensory impression is another period in a child’s development. This is when the child becomes interested in his environment and wants to learn more about it. This need is answered by Montessori’s sensorial training where the senses are being developed and refined. An important method used in teaching language in Montessori schools is the Three Period Lesson which is a teaching technique used to give formal vocabulary lessons. Language is given after experience of that which is to be named. The three period s support the three stages of learning. The First Period (Naming) is an introduction of the names to be learned by presenting names that are nouns using color tablets. The colour tablets which were used in the sensorial training of the child are also used in this activity. The first step is to lay the primary colors in a row in front of the child. One color is isolated and the teacher says the name of the color after which the child is encouraged to say the same. The same procedure is repeated for the other colors. The Second Period (Recognition) is the practice of