FINANCE ETHOS 7
FinanceMarket and the Source of Ethos
Ina financial crisis, the global economy shifts into an immediate andcontinuous recession. As the world evolves, so does the financialsector in technological and other innovative fields. In the currenttime and future, the evolutions give the industry a chance to meetits objectives as maximizing profit and consumer utility. Ethosin business refers to the characteristic spirit that forms theculture in finance. In the financial discipline, scholars andprofessionals ought to practice some ethos as credibility,transparency, and professionalism. However, the present financialstatus is part of the determinants of financial ethos. In the reviewis an annotation of books that touch on the financial field seekingto unveil what gives workers ethos and how it does that. Theassessment will utilize an unbiased perspective on the authors’claims as well as the CRAAP analysis.CRAAP analysis encompasses a review of books according to theirCurrency, Relevance of the text, Authority, Accuracy and Purpose ofthe text.
Karsone,V.C. (2010). Finance and Banking Developments. Nova SciencePublishers, Inc.
Theauthor, Charles V. Karsone and publisher of the book are bothreliable sources of information in financial topics and other relatedtopics. According to the CRAAP analysis, the text is current sinceits year of publication is in the recent time. The content of thebook is quite relevant to the changes in the financial sectorespecially in terms of technology in the banking development. Theauthor commends the new and improved wire transfer and mobile bankingsystem. The author has a good command of knowledge in the businessand financial research, which gives the text authority and helps inmaking the text professionally accurate. In addition, the authorsupports his ideas with credible references. Karsone’s book servesits destined purpose as enlightening the audience and the targetmarket on developments to look out for in the financial scene.
Inthe book, Finance and Banking Developments, Karsone looks intoupcoming evolutions in the financial field using a detailed researchhe did. He poses his motive in the book as seeking new ways ofimproving the current situation in the finance and banking sector.The author comes up with some arithmetic market analyses that guidehim in making some assumptions the unexpected success of the new agetechnology in the financial and banking industry and thereverberation of the small-scale industry. He explains that thisresults from the rapid growth of the number of people and smallindustries tapping into the banks and financial institutions fortheir services. These are services as savings, investments, andloans. It improves the neural networking performance of the Small andMedium Enterprises (SME). The author states that the financialinstitutions motivate the SME sector with a drive to make profit.Profit maximization is a common interest in both the financialinstitutions and their market. Accordingly,profit orientation gives market players the ethos of goal orientationand ambition to achieve targets. Having a goal in the market servesas ethos since it is the basis that shapes up the character of marketparticipants and transactional value. Financial institutions andconsumers will work at their best to maximize their utility, which isprofit and satisfaction maximization, respectively.
Dougherty,M.J., Klase, K.A., Soo, G.S. (2000). “The relationships betweenpublic finance issues, financial management issues, and conditions offiscal stress in small and rural governments: The case of WestVirginia.” Journal of Public Budgeting, Accounting & FinancialManagement. 12 (4): 545-565.
Followinga CRAAP analysis, the text does not score a high currency value.However, its content is quite relative to financial research as theauthors look into the relationship between the SME and fiscal stressin the global market with a sample case study in West Virginia. Thethree authors, Dougherty, Klase and Soo hold a high ranking authorityfrom their other works including the text in the analysis. A briefanalysis of the title, The relationships between public financeissues, financial management issues, and conditions of fiscal stressin small and rural governments, shows that the book is accurate andserves its purpose in expounding the influential relationship betweenthe fiscal strain and the SME.
Theauthors relay detailed information on their findings in a small andrural governments in West Virginia. Fiscal stress in this case refersto the ability of the small and rural governments to raise additionalrevenue from its tax returns in relation to its other wealth. Theauthors studied the case using multiple variable components in thesample study that assist in coming up with a defining conclusion.First is the revenue capacity per person. Theoretically, this is theability of a single local to raise revenue. On the other hand, theauthors look into the amount the numeric amount that the localauthority collects from fees and taxes.According to the authors, financial participants in the market gaintheir ethos from their hard working nature. In this case, the localauthority strives to attain their additional revenue over the setbudget constraint from the federal government. They attain this bythe constant budget deficient financial years that they have to workin and still meet their responsibilities.
Dionne,G. (2009). “Structured Finance, Risk Management, and the RecentFinancial Crisis.” Ivey Business Journal Online.
ACRAAP analysis of the article by Georges Dionne classifies it ascurrent judging from its year of publication. The article if alsorelevant to the current global financial situation as the authorgives his perspective of the cause of the financial crisis. GeorgesDionne possesses authority in the financial field since he is thechair of the Canada Research in Risk Management and a Professor ofFinance in HEC Montreal. The article is highly accurate in discussionof the global financial situation while it serves its purpose ofestablishing the actual cause of the financial crisis.
Structuredfinance includes financial programs that seek to refinance anyeconomic activity above traditional financial instruments as bondsand equity. Financial analysts mainly use structured finance as themain cause of the financial crisis. However, Dionne carries outresearch on other causes of the situation and argues that thesituation is because of poor risk management, failure of the agenciesto carefully analyze the market and poor pricing standards. Theauthor examines the some risk-management issues in relation to astructured market. Some include incentive contracts under asymmetricinformation, evaluation of the product market by financial agencies,pricing factor of complex products and regulatory measures ofstructured finance. Theauthor shows that the players in the financial market in structuredregimes source their ethos from the tight regulations that they workwith in the market. Structured systems give them their fixed ethosbecause their trading system if not flexible. Their market resemblesthat of forward currency exchange markets.
Reynolds,J.N. & Newell, E. (2011). Ethics in investment banking.Basingstoke: Palgrave Macmillan.
Theauthors of the book, Ethics in investment banking, arguably have ahigh ranking in the CRAAP analysis. The book records a recent year ofpublication and the text is relevant to the current financial crisis.The authors of the book, Reynolds and Newell, have authoritativecommand in financial analysis following their previous works andeffort they put in compiling the work. The text content is accurateto the topic since it analyzes the relationship between ethicalmaintenance and financial success in investment banking. The textserves its purpose in exploring the implications of ethics in capitalmarkets and investment banking. It also a brilliant structure formanaging and maintaining ethics in the financial market.
Inthe book, the author emphasizes, by giving examples, that the onlyway to avoiding a recurrence of the financial crisis in the market isthrough maintaining transparent interactions in the market. Accordingto the authors, financial market ethics requires that the marketparticipators avoid forced situations. Its possibility comes in wheremarket forces are the only determinants to market change. In such acase, forces of demand and supply determine the equilibrium pointsthat stabilize free trade in the financial market. Theauthors highlight that market ethics defines the ethos of thefinancial market participants. Market participants derive their ethosfrom market regulations that define their conduct. Some of theseregulations include rules and the penalties if broken. The mainmotive in the financial market is to maximize profit. Therefore, themarket itself has to play by laws of market forces, which bind theparticipants’ conduct. It is from the market forces and regulationsthat the players in the market derive their ethos.
Justlike a game, the financial environment has participant who ought toplay by set rules. The market may enforce some but not all of therules. These rules determine the required financial ethos that themarket should run the market. However, in the current financialsituation, the crisis comes along due to a miss play of the rules anda display of negative ethos. According to the discussion, theauthor’s view, and a personal perspective, such crises areavoidable when market participants work with credible ethos. It willnot only maintain market existence, but also improve its situation,rapidly.