Banking Essay Example | Topics and Well Written Essays - 1250 words

Banking - Essay Example Although a preferred means of solving the inherent challenges in the current banking industry, the reality is that it has its own disadvantages, as discussed in this essay. According to economists, there are a number of benefits of banks consolidation. One of these advantages is increased efficiency in the banking sector. Consolidation eliminates geographical restrictions in the banking industry, exposing it to high levels of competition, driving out all inefficient banks from the industry. This is not the only way of ensuring efficiency in the banking sector; moving to larger banking organizations too increases their levels of efficiency due to economies of scale and scope of work. Since consolidation increased the diversification of the loan portfolios by banks, thus lowering the probability of a future banking crisis. Mergers and acquisitions in the banking industry are economical, providing banks with an opportunity to minimize their expenditures. In the event of a merger, there is closure of overlapping branches, laying off any unnecessary staff, and sale of unwanted capital goods, thus minimizing some of the operational expenditures while at the same time creating some of income for the bank. Merging also increases sales volumes of banks’ products, especially when done from a central branch. One of the major advantages of consolidation in the banking sector is market diversification, creating new geographical markets. With these new markets is an increase in business revenues. Bank mergers additionally create stronger market power, changing the pricing offered by the banks. Although argued as a means of beating the inherent operation problems in the industry, consolidation faces a myriad of drawbacks. Critics of this form of banking fear on the elimination of the smaller banks from the banking industry due to acquisitions. Not only do the investors lose in such instances; small businesses too lose their source of funding. Large business organizatio ns seek funding from large banks while small businesses seek for funding from the small banks. If large banks acquire the small banks in an effort to minimize competition, small businesses lose their source of funding. If this trend persists, the banking industry risks suffering from domination by a few banks. This makes the banking industry less competitive, reducing the quality of services provided to the customers. Some of the economists however argue that this does not have any significant effects on the industry, since there is freedom of entry into the market, and thus balances the equation of competition. Differences in the working cultures of the merging banks could lead to failure of these mergers. In their initial stages of merge, different businesses suffer from increased operational costs, for instance resultant from communication differences. Although experts argue on the efficiency of creating bank mergers, the reality is that when a merger takes place, managers face m ore vast and complicated organizations, exceeding their usual capacity. They may lack the essential expertise required in the field, reducing such bank’s efficiency. Some of the experts argue that the creation of stronger markets provides the banks with an opportunity to exploit their customers. Strong markets mean that there are reduced

Martin Luther King and Henry David Thoreau Essay

Martin Luther King and Henry David Thoreau - Essay Example Martin Luther considered conscience as an important aspect in distinguishing between just and unjust laws. Conscience enables a person to differentiate between laws that should be obeyed and laws that should be defied. Thoreau had similar views concerning conscience as the basis of determining just and unjust laws. Conscience is the notion of right and wrong according to the moral of a given society. The writer also argued that majority rule or democracy is not a basis of justice (Jacobus 12). According to Thoreau, majority rule is incomparable to human conscience in distinguishing between just and just laws. However, Thoreau considers that majority rule or democracy should be applied as a last resort. The majority rule should therefore be applied in places where other mechanisms such as human conscience cannot be applied. The positions taken by the two authors concerning just and unjust laws are similar. However, martin Luther bases his conscience on moral law or the notion of right and wrong according to the law of God. Although the two writers had different basis for differentiating between just and unjust laws, they had similar views on how a person should handle both the just and unjust laws. Just laws are beneficial both to the subject and the nation, obeying such laws is not only a legal duty but also a moral responsibility. Martin Luther considered laws that uplift human personality to be just laws while those that degrades human personality to be unjust laws. Thoreau also had similar views concerning just and unjust laws. According to the writer, just laws are beneficial to the people while unjust laws were of no benefit to the people. Unlike martin Luther, Thoreau’s arguments concerning human conscience, unjust and just laws were based on the insufficiency of democracy or the rule of the majority. Thoreau used the weakness in democratic