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Financial Crimes, Fraud, and Investigation
The banking sector is a critical part of a country’s economy. This is more so the case given that it is actively involved in the … as management of diverse financial assets and the coordination of financial activities for the various other economic sectors. Although at the core of banking is holding of financial assets, other key activities include, but they are not limited to, commercial and personal banking services, insurance, etc. In that regard, therefore, banks happen to be one of the most sensitive sectors in an economy. Bank managers have … that all the regulatory standards are observed. Further, they also have a responsibility to ensure that the interests of various stakeholders in the banking sector are secured. The key stakeholders, from the perspective of a bank institution are inclusive of the government and the various regulatory agencies, … within and without –……
References
Albrecht, W.S., Albrecht, C.C., Albrecht, C.O. & Zimbelman, M.F. (2008). Fraud Examination (3rd ed.). Mason, OH: Cengage Learning.
Dionne, B. (2020). Regions Bank Teller Accused of Stealing Customer Identities Faces Felony Charges. Retrieved https://www.wbrc.com/2020/01/30/regions-bank-teller-accused-stealing-customer-identities-facing-felony-charges/
Golden, T.W., Skalak, S.L. & Clayton, M.M. (2006). A Guide to Forensic Accounting Investigation. Hoboken, NJ: John Wiley & Sons.
Krancher, M., Riley, R. & Wells, T.J. (2010). Forensic Accounting and Fraud Examination. Hoboken, NJ: John Wiley & Sons.
Singleton, T.W., Singleton, A.J. & Bologna, R.J. (2006). Fraud Auditing and Forensic Accounting (3rd ed.). Hoboken, NJ: John Wiley & Sons.
Zagaris, B. (2010). International White Collar Crime: Cases and Materials. New York, NY: Cambridge University Press.
Study Document
...Investment banking Principles of Finance
Netflix’s income statement showcases a company with rapidly growing revenues. In FY17, the company earned revenues of $11.7 billion, and this grew to $15.8 billion in 2018 and $20.1 billion in FY19. The company was only marginally profitable in 2016, but its profits have grown to nearly $1.9 billion in FY19. Again, this is strong growth, and would be viewed quite positively by investors. Indeed, the company’s earnings per share have grown from $1.25 to $4.13 over the past three years, a strongly positive trend.
In some cases, rapid growth comes on the back of steep increases in infrastructure costs, but Netflix has also seen a sharp increase in profits, and this is reflected on the company’s balance sheet. Netflix has seen its cash position more than double in the past couple of years, and its stockholder equity has doubled, as a result of the sharp increase……
References
Netflix 2019 Annual Report: http://www.annualreports.com/HostedData/AnnualReports/PDF/NASDAQ_NFLX_2019.pdf
Netflix 2018 Annual Report: https://s22.q4cdn.com/959853165/files/doc_financials/annual_reports/2018/Form-10K_Q418_Filed.pdf
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… business dry up due to mandated quarantine orders. Small business owners and large corporations have filed for bankruptcy. All of this impacts the banking sector and Wells Fargo specifically because of its role in managing loan products, using interest rates to attract savers, and offering investment advice. “No single risk associated with the COVID-19 pandemic crisis can be managed in isolation,” as Beasley (2020) points out (p.2). This means … his hedge fund netted billions by speculating with derivatives a stock market crash.
Wells Fargo could hedge risk by buying derivatives on its investment, using a call/put (i.e., long/short) strategy with options. The company could buy or sell long-dated puts or calls depending on the investment it has in the underlying. The point would be to protect against an opposite move in the price of the underlying. Thus, if … expected alpha should also be identified and factored into……
References
Beasley, M. (2020). How to Leverage ERM Principles to Better Respond to COVID-19-Related Risks. ERM Professional Insights.
Derysh, I. (2020). Watchdog questions why Wells Fargo reported giving only one large PPP loan to a Black-owned business. Retrieved from https://www.salon.com/2020/07/22/watchdog-questions-why-wells-fargo-reported-giving-only-one-large-ppp-loan-to-a-black-owned-business/
English, C. (2020). Wells Fargo Forced to Cut Its Dividend After Fed Stress Test. Here’s What Other Banks Did. Retrieved from https://www.barrons.com/articles/wells-fargo-forced-to-cut-its-dividend-after-fed-stress-test-51593467664
Hall, J. (2007). Internal Auditing and ERM: Fitting in and Adding Value. Retrieved from https://global.theiia.org/about/about-the-iia/Public Documents/Sawyer_Award_2007.pdf
Kaplan, R. & Mikes, A. (2012). Managing risks: A new framework. Harvard Business Review, 3.
Lewis, M. (2010). The Big Short. NY: W. W. Norton.
Lundqvist, S. (2014). Abandoning Silos for Integration: Implementing Enterprise Risk Management and Risk Governance. Lund University.
Morgenson, G. (2020). More Wells Fargo customers say the bank decided to pause their mortgage payments without asking. Retrieved from https://www.nbcnews.com/business/personal-finance/more-wells-fargo-customers-say-bank-decided-pause-their-mortgage-n1234610
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… perfectly well what happens: it loses value substantially. Thus, to maintain the value of one’s wealth it is important to think about alternative investment that keep track with the rate of inflation—assets such as precious metals or real estate. There are also risk assets, such as equities. … with the rate of inflation—assets such as precious metals or real estate. There are also risk assets, such as equities. Even still no investment is risk free and bubbles blown today in markets can pop tomorrow. This happened in the gold market a few years ago. The … may lose value of time—but other assets can lose value quickly and all at once in market downturns.
For this reason, diversifying one’s investment are necessary. As Northwood and Rhine (2018) point out, “having access to mainstream financial services can help” people learn what their options are … what their options are (p.……
References
Cook, L. A., & Sadeghein, R. (2018). Effects of perceived scarcity on financial decision making. Journal of Public Policy & Marketing, 37(1), 68-87.
Northwood, J. M., & Rhine, S. L. (2018). Use of bank and nonbank financial services: Financial decision making by immigrants and native born. Journal of Consumer Affairs, 52(2), 317-348.
Valaskova, K., Bartosova, V., & Kubala, P. (2019). Behavioural Aspects of the Financial Decision-Making. Organizacija, 52(1).
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… over-leveraged a serious crisis could occur in the market. The downside to keeping interest rates low is that it encourages risky borrowing and investment in risk assets like equities. If people cannot earn a decent return on investment by putting their money in savings, they will put their money into equities, which will cause a bubble in stocks—like what can be ……
References
Hall, M. (2019). How do interest rates affect the stock market? Retrieved from https://www.investopedia.com/investing/how-interest-rates-affect-stock-market/
Study Document
...Investment banking Introduction
Public policy is government decisions and actions designed to deal with problems and issues affecting the public (Madimutsa, 2008). The U.S. government policy areas include monetary policy, immigration, intellectual property, national defense, and welfare. This paper will review the impact of monetary policy on the U.S. economy.
Monetary Policy
Monetary policy is classified as the procedure by which the Federal Reserve uses monetary policy tools to regulate the money supply, exchange rate, and interest rates (the price of money) to stabilize the economy (Labonte, 2020). The interest rate is classified as the cost of borrowing and the reward for saving. The money supply can be defined as the total sum of money that is available in the economy. The exchange rate is the cost of the domestic currency concerning other currencies. The Fed uses various monetary tools, but over the years, they have relied on open market operations and……
References
Federal Reserve. (2020, March 15). Federal open market committee. Retrieved March 30, 2020, from https://www.federalreserve.gov/monetarypolicy/fomccalendars.htm
Labonte, M. (2020). Monetary policy and the Federal Reserve: Current policy and conditions (RL30354). Retrieved from Congressional Research Service website: https://fas.org/sgp/crs/misc/RL30354.pdf
Madimutsa, C. (2008). The Policy Formulation Process. Retrieved from https://www.researchgate.net/publication/336927323_The_Policy_Formulation_Proce ss
McGraw-Hill Education. (n.d.). The role of government. Retrieved from https://www.jasonsclassroom.com/social-studies/cc-basics/chapter-5/lesson-5.3/
Suman, S. (2015, October 26). Monetary policy: Objectives, advantages, and disadvantages. Retrieved from https://www.economicsdiscussion.net/monetary-policy/advantages/monetary-policy-objectives-advantages-and-disadvantages/12768
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… is based on the argument that too much money is being spent in the Middle East and there is no return on this investment. Thus, his decision is rational and based on value maximization theory.
Should the argument developed in the Rothman article cause us to reject ……
Works Cited
Rothman, Joshua. “The Art of Decision Making.” The New Yorker, 2019.
https://www.newyorker.com/magazine/2019/01/21/the-art-of-decision-making
Study Document
Introduction
The banking business sector is enormously impacted by the perceptive and imperceptive factors in an intensely competitive environment. In recent times, this competition has stiffened … operations, banks ought to take effective measures in order to diminish risk by pinpointing the prospective causes based on real-world circumstances. Imperatively, the banking sector is deemed to be a significant source of financing for several companies and entrepreneurs. In the past decade, there have been dramatic … of financing for several companies and entrepreneurs. In the past decade, there have been dramatic changes concerning the management of risk in the banking industry. Progressively more financial institutions and managers have augmented the focus on the significance of risk management. In delineation, risk management encompasses the … to meet its obligations in line with the consented terms and conditions. In general, credit risk is linked to conventional lending activities of banking institutions and it……
References
Bhattarai, Y. R. (2016). Effect of credit risk on the performance of Nepalese commercial banks. NRB Economic Review, 28(1), 41-64.
Das, A. and Ghosh, S. (2007). Determinants of Credit Risk in Indian State-owned Banks: An Empirical Investigation. Economic Issues, 12(2): 48-66.
Derelio?lu, G., & Gürgen, F. (2011). Knowledge discovery using neural approach for SME’s credit risk analysis problem in Turkey. Expert Systems with Applications, 38(8), 9313-9318
Garr, D. K. (2013). Determinants of credit risk in the banking industry of Ghana. Developing Country Studies, 3(11), 64-77.
Gizaw, M., Kebede, M., & Selvaraj, S. (2015). The impact of credit risk on profitability performance of commercial banks in Ethiopia. African Journal of Business Management, 9(2), 59-66.
Johnson, B., & Christensen, L. (2008). Educational research: Quantitative, qualitative, and mixed approaches. New York: Sage.
Kithinji, A. M. (2010). Credit risk management and profitability of commercial banks in Kenya. (Doctoral dissertation, University of Nairobi).
Limam, I. (2001). Measuring technical efficiency of Kuwaiti banks. Kuwait: Arab Planning Institute.
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… has certain factors and ways of performance, it gives room for agency theory to impact its decision. It impacts the profitability, return on investment, operating expense, shareholder value and other financial performance through influencing the key decision making that goes around these factors. Wells Fargo have a … both have different interest. Secondly, the decision making of new frameworks and eradicating the agency costs again impacts the profitability and return of investment. Not just this, it also impacts the ownership as in some cases, the ownership is diluted when there the employees are given the … the Risk Tolerance
Agency problem impacts the decision regarding how much risk has to be endured and what strategies to adopt. Since, in banking sector the goals and interests of the agent and principle are asymmetrical, it is highly probable that the agent would want to not ……
References
Demsetz, R. S. (1997). Agency Problems and Risk Taking at Banks.
Heath, J. (n.d.). Uses and Abuses of Agency Theory. Business Ethics Quarterly.
Kuypers, A. (2011). How is dealt with the agency problem and what is the role of the board of directors in it?
Lumen. (n.d.). Agency and Conflicts of Interests. Lumen. Retrieved from https://courses.lumenlearning.com/boundless-finance/chapter/agency-and-conflicts-of-interest/
Murray, I. (2016, September ). Wells Fargo and the Principle Agent Problem. Competitive Enterprise Institute.
Palia, D. (2007). “Agency Theory in Banking: An Empirical Analysis of Moral Hazard and the Agency Costs of Equity. Banks and Banks System.
Pennsylvania, W. U. (2017, August 08). Wells Fargo: What It Will Take to Clean Up the Mess. Wharton University of Pensylvannia.
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