Quantitative Easing Essay Example | Topics and Well Written Essays - 1500 words

Quantitative Easing - Essay Example Quantitative easing has policies that when well implemented can result to reduction of systematic risks and improve market confidence. Consequently, it can contribute to higher inflation than desired in case policy makers overestimate the amount of easing required (Gibbons, 2011:224). This essay will seek to explain the extent in which the practice of quantitative easing threatens the independence of policymakers. Quantitative easing is another bank bailout. Money created in form of promissory notes or bonds and is available to only those banks that have received the quantitative easing (Biefang-FrisanchoMariscal, and Howells, 2011:98). When the rate of interests is high, there is an alternative method of influencing the price of money circulating in the economy. This alternate solution is quantitative easing whose aim is to lower the rates of interests affecting companies and households where the central bank takes the most important step, QE, by generating new money for use in an e conomy. Therefore, quantitative easing, dubbed printing money, assumes the definition of unconventional monetary policy acquired by the central banks in view of stimulating the economy at times when the conventional monetary policy fails. ... 2012). These unconventional measures had principle element in the United Kingdom whereby, their policy was to purchase assets with finances from the central bank, in short, quantitative easing (Howells and Hussein, 1997:378). Between March 2009 and January 2010, there were more than 200 billion Euros purchases of assets. Overwhelmingly, this amount comprised of government securities that ended up representing 14 percent of the annual Gross Domestic Product (Howells, 2010:314). The motivation and implementation of these central banks’ asset purchase had significant economical impacts and according to the Bank of England, quantitative easing made considerable uncertainty regarding magnitudes of the UK’s financial market (Douglas, 2011). Recently, the growth of broad money slowed dramatically within the economy of the United Kingdom since when recession commenced. Indicators of the recession were in part things like reduced borrowing by households and companies. Presumably , the Bank of England had to practice quantitative easing on behalf of Monetary Policy Committee in order to offset the UK’s economy from this weakness (Joyce, 2010). This practice boosted huge sums of money holdings into the economy. However, it threatened the independence of the policymakers since there is documented evidence from the monetary data depicted that the asset purchase program led to an increase in prices of assets (Biefang-FrisanchoMariscal, and Howells 2011:102). In addition, it ultimately contributed to increase in nominal demand in the UK’s economy making other evidence from other financial markets corroborative (Ellis, 2009:31). In 2009, the Monetary Policy Committee made a stern decision of making the economy of the United Kingdom an elaborate market with

Leader Traits, Power, and Corruption Essay Example | Topics and Well Written Essays - 1250 words

Leader Traits, Power, and Corruption - Essay Example What happened at Enron as well as at WorldCom not only questioned the role of corporate governance and ethics within organizations but it also put on test the very qualities of the leadership because in all those episodes of corporate failures, leadership was the main culprit. Leaders in those organizations wielded powers entrusted to them in ways which may not be considered as ethical in any sense. Leadership is a very complex process and requires different approaches to deal with different situations as they arise. One of the basic characteristics of leadership is the fact that it succeed in wielding power which others may find hard to exercise. The sources and means of various powers entrusted to leadership are various however what is critical is the facts that by exercising such powers leaders aim to achieve something which others cannot achieve. The gradual shift from bureaucracy to more flexible and so called radix organizations, the role of leadership has further become complicated and somewhat more fluid and demanding in nature. (Schneider, 2002). Since leadership is often defined as the use of "noncoercive influence" in order to accomplish different tasks (Jago, 1982) therefore in fluid organizations with much emphasis on delegation, exercising powers is considered as a delicate art. This paper will present an analysis of the different powers leaders within organizations use as well as exploring how these powers can be exercised to avoid operational, administrative as well as ethical problems faced by the organizations. Leadership Sources of Power There are different sources of powers which a leader can exercise within an organization to achieve the desired objectives and strategic aims. Since, leadership is a process where non-coercive influence is used therefore it is often assumed that while exercising such powers, leaders always do it in the best interest of the organization. Following are the different sources of power for leaders: Expert Power The source of this power is the expertise of the leader. If leader is expert in his or her field of business than the wielding of this power allow a leader to exercise certain degree of influence. This power is therefore based on an individual leader's competence and expertise in certain areas of work i.e. Bill Gates being the CEO as well as Chief Software Architect of Microsoft. Legitimate Power The source of this power is individual's position within an organization. By having a certain position, status, leaders derive this power to achieve leader-follower behavior because others follow them due to their legitimate power within an organization. Reward Power The source of this power is the leader's ability to reward any behavior. Due to this, most of the employees within an organization tend to follow their leaders and obey them because leaders exercise the power of rewarding them. This power is also one of the most important in the sense that it may allow collusion of employees/managers with the leaders to engage into unethical business practices. Coercive Power Since leaders due to their position within the organization control both rewards as well as punishments therefore the source of coercive power is when the leader control the punishment i.e. he or she has the power and ability to fire, fine, punish etc any employee. Coercive power