i-manager's Journal on Management (JMGT)


Volume 3 Issue 3 December - February 2009

Article

The Financial Crisis and its Effect on the Financial Markets

Robert S. Goodman* , Donald L. Crooks**, Foued Ayari***
* Professor and Chair, Department of Business Administration, Wagner College, New York.
** Assistant Professor of Finance and Management, Wagner College.
*** Assistant Professor of Finance, Wagner College.
Robert S. Goodman, Donald L. Crooks and Foued Ayari (2009). The Financial Crisis and its Effect on the Financial Markets. i-manager’s Journal on Management, 3(3), 1-9. https://doi.org/10.26634/jmgt.3.3.236

Abstract

The world financial markets changed forever the morning of September 18, 2008, with  the bankruptcy of Lehman Brothers as almost US$700,000,000,000 (an ironic number) of outstanding debt instruments became lodged in regulatory cement. The flow of capital is the life blood of any and all financial transactions, without which the entire global machine comes to a screeching and irrevocable halt.  There may be intent and desire to make new capital commitments, as well as to close existing contracts, but without this flow financial inertia sets in. Was this an unavoidable black swan or a simple example of excessive greed fueled by exponential leverage and the lack of adequate internal and/or external oversight? This paper:  1. examines past financial disasters including the savings and loan debacle of the 1980’s and the hubristic experience of Long Term Capital Management in the late 1990’s 2.  discusses the causes and possible solutions to the current financial crisis in the US; 3. attempts to better understand the role of those with a vested interest including regulatory bodies; and 4. analyzes their effect on the financial markets.

Article

Securitization and the Subprime Mortgage Crisis of 2008

Chao-Hui Yeh*
I-shou University, R.O.C.
Chao-Hui Yeh (2009). Securitization and the Subprime Mortgage Crisis of 2008. i-manager’s Journal on Management, 3(3), 10-17. https://doi.org/10.26634/jmgt.3.3.237

Abstract

This article provides a review of the securitization instruments in the context of the subprime mortgage crisis of 2008. The decreasing housing prices in the U.S. caused the increasing mortgage defaults and the increasing mortgage defaults caused this subprime mortgage crisis and this crisis is exploded by securitization instruments (e.g., CDS) which are just too complex to see their risks. This article will provide a specific classification of securitization instruments and distinguishes between two main classes of securitization instruments. The first classes are mortgage-backed security (MBS), asset-backed security (ABS), asset-backed commercial paper (ABCP) and cash-flow collateralized debt obligation (CDO).The second category of securitization instruments includes credit default swap (CDS) and synthetic collateralized debt obligation (synthetic CDO). Finally, this article ends with a short discussion of the roles of the credit rating agency (CRA) in the financial crisis.

Article

HR Accounting – A Mammoth Myth?

Vadassery Gopakumar* , P.T. Raveendran**
* Dean of KMCT School of Business, Kozhikode.
** Professor and Head, Department of Management Studies, Kannur University Palayad, Thalassery.
Vadassery Gopakumar and P.T. Raveendran (2009). HR Accounting - A Mammoth Myth? i-manager’s Journal on Management, 3(3), 18-24. https://doi.org/10.26634/jmgt.3.3.238

Abstract

In knowledge driven economies, it is imperative that human beings be recognized as an integral part of the total worth of an organization. In order to estimate and project the worth of the human capital, Human Resource Accounting (HRM) which denotes the process of quantification and measurement of the Human Resource Capital in an organisation is employed.

Research Paper

Foreign Exchange Intervention and Its Implications for the Central Bank's Balance Sheet: Experience of Thailand

Jittima Tongurai*
JSPS Postdoctoral Research Fellow, Faculty of Economics, Oita University, Oita Japan.
Jittima Tongurai (2009). Foreign Exchange Intervention and Its Implications for the Central Bank's Balance Sheet: Experience of Thailand. i-manager’s Journal on Management, 3(3), 25-34. https://doi.org/10.26634/jmgt.3.3.239

Abstract

This empirical study examines the experience of a central bank of a developing country, Bank of Thailand, in operating foreign exchange intervention during the period of persistent appreciation of its currency in 2001-2007. Bank of Thailand has resorted to various tools, specifically foreign exchange intervention of outright spot transactions (buying US dollar/selling Thai baht) and sell/buy swaps (selling US dollar/buying baht spot and buying US dollar/selling baht forward), capital flow management, and sterilization operation to dampen rapid baht appreciation and stabilize its domestic economy. Prolonged foreign exchange intervention results in rapid increases in foreign exchange reserves and forward obligations of US dollar buying, especially during 2006-2007 when the size of intervention is unprecedented. This massive accumulation of foreign exchange reserves and net forward position could jeopardize the Bank of Thailand’s balance sheet as taking long position in depreciation-prone currency, the US dollar, may incur foreign exchange loss when baht appreciates substantially. In the world of increasing financial integration, mitigating exchange rate volatility at the same time of stabilizing domestic economy has become a great challenge to the monetary authorities of developing countries. The experience of Thailand provides a case study of how a small and open economy manages its exchange rates to contain the risks that come with global capital flows while maintaining internal stability.

Research Paper

The Organizational and Financial Performance of the E-Banking Adoption: Case of the Tunisian Banks

Kaouther Amri* , Abdel Ghaffar Ben Hamida**
* Auditor, PriceWaferHouseCoopers, Belgium.
** Professor, University of Laws and Economics & Politics Sciences, Tunisia.
Kaouther Amri and Abdel Ghaffar Ben Hamida (2009). The Organizational and Financial Performance of the E-banking Adoption: Case of the Tunisian Banks. i-manager’s Journal on Management, 3(3), 35-43. https://doi.org/10.26634/jmgt.3.3.240

Abstract

The e-banking post-adoption in the financial institutions is a very important phase that follows the one of the adoption. This recent phase for emerging countries like Tunisia permits us to clear the adoption effects on performance. A conceptual framework and an empirical study performed on 7 Tunisian banks indicate a significant relationship between the post-adoption and five measurements of the organizational performance measurements: the service quality improvement, the costs reduction, the new market acquirement, the new products offer, and performing of the relation with the customers.

Research Paper

Drivers Towards E-Business in the Steel Product Industry

Heli Helaakoski* , P. Iskanius**, Irina Peltomaa***, Tom Page****
*, *** VTT Electronics, Rantakatu 5, Roche, Finland.
** Department of Industrial Engineering and Management, Oulu, Finland.
**** Department of Design and Technology, Loughborough University Loughborough, Leics.
Heli Helaakoski, P. Iskanius, Irina Peltomaa and Tom Page (2009). Drivers Towards E-business in the Steel Product Industry. i-manager’s Journal on Management, 3(3), 44-52. https://doi.org/10.26634/jmgt.3.3.241

Abstract

This paper studies the importance of agility in today's business environment. We propose a new business model "a virtual enterprise" (VE) and since the success of VE depends of intensive information sharing we propose a supporting software solution for business network. The research work is conducted via case study in real life business network, which consist of several small and medium-sized enterprises (SME) and one focal company. The case study describes the design and implementation of agent-based inter-organisational system (IOS), which enables maximum effectiveness, efficiency and productivity of supply chain network.