The Strategies For Successful Motivation And Engagement

The Strategies for Successful Motivation and Engagement Looking at a third grade class, the teacher is showing the students how to find the area of a rectangle. The teacher constantly reminds the students that they have to learn about it because the state exams were going to test them. The students sigh and yawn, knowing that they would rather be doing anything but math. Disengaged and bored students can be seen in many classes but how the teacher reacts to those students is crucial. Teachers use different strategies to try and discover what works for their students as a whole, because they understand that alert and active minds are important for absorbing the information. Having engaged students is detrimental for their academic success, so understanding what makes them bored and how to solve it is important to understand. In order to be able to understand the methods to keeping students engaged: 1) there will be an examination of the best strategies that teachers can utilize to be able to capture the student s attention and be able to motivate through literature, 2) as well as an analysis of Brywood Elementary School’s teacher s methods to motivate and engage their students. It is imperative to explore these questions because it is important to learn about student motivation and engagement. As teachers, learning strategies for motivation is important in order to be able to captivate students and create well-rounded students. Looking at teacher strategies for motivationShow MoreRelatedMotivation Affects Many Different Areas For Students1075 Words   |  5 PagesMotivation affects many different areas for students in education. Areas include how the student feels about school, teacher relationships, testing performance, and time and effort spent on academics. Without motivation, academic engagement is almost impossible to achieve. However, research has shown that highly motivated students perform better academically, have a better self-esteem, and te nd to complete high school. As a student progresses through school, motivation tends to decline. AccordingRead MoreThe Positive Attributes Of Interactivity Essay926 Words   |  4 Pages The positive attributes of interactivity in online courses lend to increasing student engagement and when utilizing the right types of interactivity and levels, learners will improve retention (Korkmaz, 2013). Likewise, studies have shown greater retention leads to greater success of the course activities and overall greater student satisfaction in the course (Durak, Ataizi, 2016; Dziuban, Moskal, 2011). Expressing agreement, Afifi (2010) and Barrett (2013) found that utilizing the levelsRead MoreThe Effect of Motivation on Language Learning Essay990 Words   |  4 PagesThe concept of motivation has been the subject of many studies and is considered a crucial determinant of successful achievement in the field of language learning. A motivating learning environment has to support the edu cation process. It generates learning initially and later will guide the process of acquiring a target language (Cheng Dornyei, 2007). Teachers have long recognized that motivation is centered to problem-solving in education. Motivation is the key factor in getting students involvedRead MoreStudent Engagement Is An Ideal That Should Be Strived For The Classroom Environment1406 Words   |  6 PagesStudent engagement in learning is an ideal that should be strived for, by teachers in the classroom, as it provides reassurance of their effectiveness. A student’s engagement in learning can directly be linked to their motivational levels as motivation express the students desire to learn and progress in their educational studies. One might struggle to understand the best choice of strategies or concepts in order to facilitate engagement of learning in the classroom environment. Great diversity existsRead MoreAnalysis Of The Film The World s Classroom 1727 Words   |  7 Pagesa re Self-directed Learning and The Four Aspects of Engagement. Both of these concepts connect to multiple parts of the classroom including how Claire teaches and student’s ability to learn. While most studies focusing on self-directed learning have been studying adults, more studies are starting to be conducted that look at k-12. While this film was done in 2000, it is a perfect example of self-directed learning, and encouragement of engagement, focusing on young children. Through her various techniquesRead MoreThe Importance Of Teaching And Classroom Management1692 Words   |  7 Pagesobserving both theory and practical classes, I noticed a wide range of abilities in physical terms including skill and fitness, as well as cognitive abilities. On a number of occasions, I witnessed students lack of engagement with a task or activity, which would then in turn affect students’ motivation and ability to stay on track with the task leading to off task behavior. Sallis and M cKenzie (1991) argued that positive experiences in PE could influence children to adopt physically active adult lifestylesRead MoreMotivating Motivation And Classroom Climate984 Words   |  4 PagesMotivational factors. Motivation is a large element to complete any given daily task; however students with ADHD are impacted by their disorder, which causes academic and behavioral concerns. Nowacek and Mamlin (2007), discovered that educators offer a small number of modifications for students who exhibit ADHD. However, teachers understood the characteristics students with ADHD possessed (Nowacek Mamlin, 2007). Sapiro, Dupaul, and Bradley-Klug (1998), established when strategies, such as self-managementRead MoreCorrelation Between Safety Needs And Motivation789 Words   |  4 Pagespositive correlation with safety needs and motivation (Gilley Praeger, 2009). Strategy Implications: Modifications: Identify strategy options to positively address the possible implications for the psychological well-being of others. There are several strategies that can be used to positively address the possible implications for the psychological well-being of others. Employee engagement is an imperative strategy. It involves employee and managerial engagement, so the employees feel like the managementRead MoreFactors Affecting The Classroom Environment Essay1534 Words   |  7 Pageswhich contribute to poor engagement in classrooms, drawing from the work of Wallace (2014). Galbraith (1990) (see Sogurno, 2015) perceives motivation as a concept that helps us to understand human behaviour and performance and as an unstable construct that cannot be directly measured or validated through the physical or natural sciences. Viewing motivation within the Further Education (FE) sector McMillan and Forsyth (1991 pg.39) define motivation as â€Å"purposeful engagement in classroom tasks and studyRead MoreThe Importance Of Motivation For The Business World Employee Engagement1727 Words   |  7 PagesMotivation requires a driving force to complete goals and dreams, a wish is only a weak desire that one wishes something would magically happen such as winning the lottery. Only a strong passion can push one forward and drive their motivation to achieve the desire. Three important aspects of motivation are goals, inspiration and in the business world employee engagement. All of these aspects promote motivation whether it be a business or personal goal or a friend or coworker to inspire you or aide

Kola Nuts Free Essays

Kola-Nut: The Symbol of Hospitality (title) †¢It is a bitter brown seed containing caffeine †¢In the past, has been added to drinks to diminish hunger and fatigue †¢The offering of a Kola-Nut is very important in the igbo culture and is only offered to very important guests †¢This offering of the Kola-Nut has three steps that must be followed. The first step is the presentation of the kola-nuts. The next is the breaking of the kola-nut and the third is the distribution of the kola-nuts †¢Presentation of the kola-nut can only be done by privileged men †¢Kola-nut is passed around until it finally comes back to the guest †¢Elder will then hold up kola-nut and say a prayer †¢Then kola-nuts are eaten Onyemaechi, Uzoma. We will write a custom essay sample on Kola Nuts or any similar topic only for you Order Now â€Å"Igbo Culture and Socialization. † Igbo Culture. University of Michigan, 26 May 2012. Web. 29 Oct. 2012. http://www. kwenu. com/igbo/igbowebpages/Igbo. dir/Culture/culture_and_socialization. tml. Widjaja, Michael. â€Å"Kola Nut. † Igbo Culture and Igbo Language. N. p. , 4 Nov. 2011. Web. 29 Oct. 2012. http://www. igboguide. org/HT-chapter8. htm. â€Å"Kola Nut. † Energy. N. p. , 16 July 2011. Web. 29 Oct. 2012. http://www. tumblr. com/tagged/kola-nut. Igbo Foods * The Yam is a staple food for Igbo people and civilization * Yam was always abundant, helpful during lean times * The Iwaji or New Yam festival each year celebrates importance of vegetable in Igbo culture. Prayers offered up and thanks given to the gods and spirits of traditional folklore. * Yam made in many ways * Can be pealed and boiled or pulped into a doughy consistency to produce pounded yam * Also ate a lot of pumpkins and gari (cassava powder) dumplings * Regular Meals * Typically soup with meat or fish * Sided with yams, garri (tapioca), semovita, or jollof rice Hafner, Dorinda. A Taste of Africa . Berkeley, CA: Ten Speed Press, 1993. Imoisi, Janice. Cooking Nigerian Style: Delicious African Recipes . Houston, TX: Gayle Publishing. , 2000. Widjaja, Michael. â€Å"Food and Recipes. † Igbo Food and Recipes. Michael Widjaja, 2000. Web. 29 Oct. 2012. http://www. igboguide. org/HT-chapter3. htm. Agwu, Kene. â€Å"Yam and the Igbos. † BBC News. BBC, 8 Jan. 2008. Web. 30 Oct. 2012. http://www. bbc. co. uk/birmingham/content/articles/2008/08/01/yam_and_the_igbos_feature. shtml. â€Å"ANAM CITY Blog. † Yam Preservation A «. N. p. , n. d. Web. 30 Oct. 2012. http://anamcity. wordpress. com/tag/yam-preservation/. How to cite Kola Nuts, Essay examples

Vaccination - Biology free essay sample

Vaccination A vaccination is the injection of a killed microbe into the body in order to stimulate the immune system against the microbe, thereby preventing the disease. Vaccines are manufactured from the dead or attenuated bacteria, inactivated viruses, purified polysaccharides from bacterial walls, toxoids, and even recombinant DNA produced through genetic engineering. This is to immunize against viral diseases. A healthy immune system is able to recognize the invading bacteria or virus and so produces antibodies to destroy or disable them. Only a small portion of the dead bacteria is generally required to stimulate the formation of antibodies against the whole bacteria. When an infection occurs the lymphocyte population responds. Both T-lymphocytes and B lymphocytes are formed by divisions of the stem cells in the bone marrow. The T-lymphocytes leave the bone marrow during development and differentiate in the thymus gland before circulating and storage in the lymph glands. T-lymphocytes carry out cell-mediated immunity, an immune response that doesn’t directly involve antibodies but does have a part in the activation of the B-lymphocytes. We will write a custom essay sample on Vaccination Biology or any similar topic specifically for you Do Not WasteYour Time HIRE WRITER Only 13.90 / page Certain T-lymphocytes are effective against pathogens within host cells. While the T-lymphocytes leave the bone marrow before completing maturation, the B-lymphocytes complete maturation before leave the bone marrow to circulate around the body and be stored in the lymph nodes. If an antigen is found, humoral immunity takes place. This is when B-lymphocytes proliferate into plasma cells that secrete antibodies into the blood stream. Both T-lymphocytes and B-lymphocytes have molecules on the outer surface of their plasma membrane, enabling them to recognize antigens. However, each lymphocyte has only one type of surface receptor and therefore can only recognize one type of antigen. As mentioned before, the lymphocyte population responds when an infection occurs by an increase in number and collection at the site of the invasion. When a specific antigen enters the body, B-lymphocytes recognize the particular antigen and bind to it. On binding with the B-lymphocyte, the antigen is taken into the cytoplasm by phagocytosis before being expressed on the B-lymphocyte’s plasma membrane. Phagocytic cells of the body, including macrophages, engulf the antigens they encounter. This occurs in the plasma and lymph. Once these antigens are taken up, the macrophage presents them externally by attaching the antigen to their MHC antigens. MHC are glycoproteins that identify cells and each individual’s MHC is genetically determined therefore a feature we inherit. Lymphocytes of our own immune system have antigen receptors that recognize our own MHC antigens and differentiate these from foreign antigens detected in the body. The process by which the antigen is presented by a macrophage through the use of MHC is known as antigen presentation. T-lymphocytes then come in contact with the macrophages and briefly bind to them, immediately activating the T-lymphocyte. Activated helper T-lymphocytes then bind to B-lymphocytes with the same antigen expressed on their plasma membrane and the activated T-lymphocyte sends a message to the B-lymphocyte to activate it. Activated B-lymphocytes immediately divide very rapidly by mitosis forming a clone of cells known as plasma cells, which are packed with rough endoplasmic reticulum. The plasma cells mass produce and export antibodies from the B-lymphocytes through exocytosis. An antibody is a special protein called immunoglobulin and is made of four polypeptide chains held together by disulphide bridges, forming a molecule in the shape on a Y. The arrangement of the amino acid residues in the polypeptides that form the fork region makes it totally unique to the other antibodies. It is this region that forms the highly specific binding site for the antigen. After these antibodies have tackled the antigens, they disappear from the blood and tissue fluid, along with the bulk of the specific B-lymphocytes and T-lymphocytes responsible for their formation. However, certain of these specifically activated B-lymphocytes and T-lymphocytes are retained in the body as memory cells. This is the basis of natural immunity. Benefits of Vaccinations * Dangerous diseases may be eradicated as was small pox in 1977. Vaccines prevent diseases that otherwise may result in unpleasant and sometimes life threatening conditions. Measles is a major cause of infant death in many less-developed countries as the vaccination is not available to them. * Long term disability from disease can be prevented such as disabilities in unborn children since the creation of rubella infections which are injected into pregnant women and can prevent deafness, blindness, brain damage, and heart diseas e. Dangers of Vaccinations In the worst cases which are extremely rare, vaccines can actually cause the disease they are designed to prevent. * Vaccines can cause occasional adverse reactions * Whooping cough vaccine may cause brain damage As the incidence of a disease begins to fall dramatically due to an immunization programme, rare side-effects of the vaccine appearing in a minority can become unacceptable to the public. This leads to a serious loss of confidence in what are actually favourable treatments.

What is Patriotism Essay Example For Students

What is Patriotism Essay What is Patriotism Essay Patriotism according to Merriam Webster is defined as devotion or love for ones country. I believe this definition does not capture the true essence of the meaning of patriotism. This definition would be outstanding, if there were no other conditions factored in this complex equation, but it seems that patriotism is a double edge sword. So often more a persons loves their country, the more they hate every one who is not of their country. In other words they tend to become close-minded toward other cultures. We will write a custom essay on What is Patriotism specifically for you for only $16.38 $13.9/page Order now A prime example is the tragic incident on September 11; it provoked patriotism worldwide. It was not only Americans rising out of the shadows to lend a helping hand to his brother, but other nations showing support. Patriotism also has an ugly side. Through the attack patriotism rose through out the extreme Muslim community supporting the terrorism attacks on the Untied states declaring that Americans deserved what had happen. Through patriotism many people had contempt for any American with Middle East heritage, no matter how strong their patriotism to the states was.. The only difference between on form of patriotism and the other is a matter of degree. So how do we determine what side of the sword it is? We cant, because patriotism is a point of view. The more extreme it is, the worst its gets and that when it become an us or them scenario. Being a proud American believing in the good of the society is one thing, but being willing to kill others to further the goals of my country is another. Not all patriotism that because a bloody is bad; many civil revolutions all over the world have sacrifice for the promotion of equality and the rights and continue to so to this day. This further muddies the waters; patriotism is not cut-anddry as Webster makes it. . What is Patriotism Essay Example For Students What is Patriotism Essay What is Patriotism Essay Patriotism according to Merriam Webster is defined as devotion or love for ones country. I believe this definition does not capture the true essence of the meaning of patriotism. This definition would be outstanding, if there were no other conditions factored in this complex equation, but it seems that patriotism is a double edge sword. So often more a persons loves their country, the more they hate every one who is not of their country. In other words they tend to become close-minded toward other cultures. We will write a custom essay on What is Patriotism specifically for you for only $16.38 $13.9/page Order now A prime example is the tragic incident on September 11; it provoked patriotism worldwide. It was not only Americans rising out of the shadows to lend a helping hand to his brother, but other nations showing support. Patriotism also has an ugly side. Through the attack patriotism rose through out the extreme Muslim community supporting the terrorism attacks on the Untied states declaring that Americans deserved what had happen. Through patriotism many people had contempt for any American with Middle East heritage, no matter how strong their patriotism to the states was.. The only difference between on form of patriotism and the other is a matter of degree. So how do we determine what side of the sword it is? We cant, because patriotism is a point of view. The more extreme it is, the worst its gets and that when it become an us or them scenario. Being a proud American believing in the good of the society is one thing, but being willing to kill others to further the goals of my country is another. Not all patriotism that because a bloody is bad; many civil revolutions all over the world have sacrifice for the promotion of equality and the rights and continue to so to this day. This further muddies the waters; patriotism is not cut-anddry as Webster makes it. Words / Pages : 315 / 24 .

The First Mass Shooter Professor Ramos Blog

The First Mass Shooter Mass shooting are become increasingly more common.   Common enough that it can be looked at as a monster in and of itself. It is a monster that always escapes and keeps coming back (Cohen,2012) to haunt us. Sure the shooter may get arrested or even killed but a new one always seems to appear and commit an identical act of violence. Every time we turn on the news we hear of another school shooting or lone gunman shooting up a nightclub and kill dozens of innocent people. It is a monster that brings with it crisis (Cohen, 2012). People now have a fear to go to public even, concerts, and festivals   because they think this monster will show up wreak havoc and chaos. This monster, mass shootings, first made its appearance in August 1, 1966 at the University of Texas by one man, Charles Joseph Whitman. On that day Charles Whitman ascended the universities clock tower and for 96 minutes rained down terror and death upon the students and people of Austin, Texas (Lavergne, 2007). Because of his act, Charles Whitman forever changed the world of law enforcement. Whitmans Killing spree did not start in the clock tower. It started the night before when He went to his mother house and stabbed   her to death with a hunting knife and then shot her in the back of the head. From there he went home where he found his wife laying in bed. He pulled back the cover and stabbed her several time   in the chest, hitting her heart. In the letter Charles wrote before going on his rampage he said that he planned on killing his mother and wife so that they would not have to live with the embarrassment of what he was about to do (lavergne, 1997). Armed with a M-1 carbine,   two hunting rifle, sawed off shotgun, and a couple of pistols he made his way to the clock tower (Wallenfeldt, 2018). Hiding the guns in a footlocker and dressing in coveralls to look like a maintenance man he ascended the clock tower in the elevator. When he got to the 28th floor he bludgeoned the receptionist to death and shot and killed to other two people in the tower.   Whitman laid out his arsenal of weapons round the observation deck and took up his position. At 11:50am Charles Whitman fired the first of 150 shots (Wallenfeldt, 2018). The first bullet pierced the abdomen of a pregnant woman and killed the unborn baby instantly. The next bullet kill the womans boyfriend (Wallenfeldt, 2018). From there he began killing and wound people indiscriminately. Because of his elevation Whitman had a shooting range of five city blocks. When people finally realized what was going on the hid and ran for cover in stores and behind cars. Most of the killing and wounding happened in the first 15 to 20 minutes of the shooting. Before the rampage would end Whitman would claim the live of 14 people, not including his mother and wife, and wounding another 31 people. Once word got out over the police radios about the shooting law enforcement started to gather in great numbers. Local law enforcement, off duty police, sheriffs, and even armed citizens showed up to help. However they were not prepared for what awaited them. For over an hour law enforcement and civilians fought with Whitman to no avail. They even sent in a plain with shar pshooters to fly around the tower to try and take out Whitman but were forced to retreat due to his barrage of bullets (Lavergne, 1997). Unable to get a clear shot at Whitman and unable to help the people lying wounded in the street everything seemed hopeless.   It wasn’t until a team of two officers, Ramiro Martinez and Houston McCoy, along with two other civilians were able to make it to the base of the tower and use the elevator to make it to the top and finally shoot and kill Whitman (Wallenfeldt, 2018). There are several theories as to what would compel Whitman to commit such an act of violence. Some people believe that it was his troubled upbring. Whitman had a strict and abusive father that demanded perfection out of his sons.   Everything was either â€Å"yes sir† or â€Å"no Sir† (Lavergne, 1997). If not it meant a beating. His father was also very abuse to his wife, â€Å"I did on many occasions beat my wife, but I loved her† (Lavergne, 1997). But being abused isn’t enough to cause someone to want to go on a mass killing spree. If every kid that was abused by their parents went on a killing spree there would no doubly be one almost every day. Other think it was his time in the Marines that may have added fuel to the child abused fire that was already inside him that pushed him over the edge, but   that doesn’t sound quite right either. While in the Marine Whitman excelled in combat training and was even give a sharpshooter badge, but he wa s an outstanding soldier (Lavergne, 1997). He was even give a scholarship from the military to go to school and become an engineer as part of on of their leadership programs. I believe what was the final straw was the tumor growing in his brain. When an autopsy was performed on Whitman they found a tumor the size of a pecan (Wallenfeldt, 2018). Brain tumors have been known to cause mood swings, changes in personality and temper (American Brain Tumor Association). Whitman even claim to struggle with bouts of unexplainable rage and anger (Lavergne, 1997) and even visited several university doctors (Wallenfeldt, 2018). In his farewell note he asked for an autopsy to be done no him to see if there might be something wrong with him (Lavergne, 1997). It was most likely the tumor that was the precipitating cause that brought him to kill. His abusive father was a necessary cause to make him join the Marine and the Marines was the   necessary cause that made him such an effective killer. Because of Whitmans military train and clever planning, law enforcement was force to change and evolve. Something like had never happened before. The concept of an â€Å"active shooter had not yet exist (Wallenfeldt, 2018) until then and a answer was need for this new problem. Enter SWAT, Special Weapons And Tactics. The Texas Tower incident, among others, is often cited as a key impetus for the development of these new specialized teams designed for effective response to the criminal use of military style weapons, hostage taking, and increasingly organized terrorist activities (tang, et al., 2007). Small teams of military trained officers started popping up in agencies all over the country. Today annual national SWAT conferences are held so that law enforcement agencies can share their tactical knowledge so that they might be better prepared for any situation they might encounter (Carmona, 2003), even the next Charles Whitman Serial Killer Annotated Bibliography. Carmona, Richard H. â€Å"The History and Evolution of Tactical Emergency Medical Support and Its Impact on Public Safety.† Topics in Emergency, vol. 25, no. 4, 2003, pp. 277–281. This journal article talks about how the Whitman shooting had sparked a change in EMS would have to operate during a hostile mass casualty situation. Because of what Whitman had done it changed how law enforcement and EMS worked. This is from a scholarly journal so i believe it to be reliable. Lavergne, Gary M. A Sniper in the Tower: the Charles Whitman Murders. Bantam, 1998. This is a book that goes into great detail about Whitmans life before the shootings and the shootings themselfs. I will use this as a reference when explaining what happened during the clock tower shooting. The book was show on google scholar and has a detailed source sighted page so i believe it to be reliable. Tang, Nelson, and Gabor D. Kelen. â€Å"Role of Tactical EMS in Support of Public Safety and the Public Health Response to a Hostile Mass Casualty Incident.† Disaster Medicine and Public Health Preparedness, vol. 1, no. S1, 2007, doi:10.1097/dmp.0b013e3181468790 This article talks about how the Texas shoot helped shaped the new guideline for how EMS and SWAT would operate during a mass shooting or mass casualty situation. This will be used to show the effect Whitmans killings made on first responders. This article was written by medical doctors and has a good source sighted page. Wallenfeldt, Jeff. â€Å"Texas Tower Shooting of 1966.† Encyclopà ¦dia Britannica, Encyclopà ¦dia Britannica, Inc., 25 July 2018, www.britannica.com/event/Texas-Tower-shooting-of-1966. This talks about Whitman, the shooting and the aftermath of the shootings. I plan on referencing this when talking about the shooting and how it affected law enforcement and EMS. Since it is from the Encyclopedia Britannica I believe it to be reliable. Cohen, Jeffrey Jerome. â€Å"Monster Culture (Seven Theses)(Extract).† Speaking of Monsters, 2012, pp. 15–18., doi:10.1057/9781137101495_2. This journal defines and breaks down what a monster really is and how to identify them. This will help me show how mass shootings have become a new form of monster. I believe this to be reliable because you said so, and your the one passing out the grades. Charles J. Whitman. 1963. Photo Whitmans Arsenal. 1966. Photo Whitmans Wife. 1 Aug. 1966. Photo Clock Tower View. 1966. Photo Clock Tower View 2. 1966. Photo SWAT. Photo

An Analysis of the Prohibition in the Great Gatsby, a Novel by F. Scott Fitzgerald

An Analysis of the Prohibition in the Great Gatsby, a Novel by F. Scott Fitzgerald Prohibition in the Great Gatsby symbolizes the resistance of the American people. F. Scott Fitzgerald gives the readers an inside look to the 1920’s. The Great Gatsby is brimming with the resistance of the alcohol bans set in place by the U.S. government. The Prohibition was set into action on January 16, 1920. No one could no longer in the U.S. manufacture, import, export, or sale alcoholic beverages(The Roaring 20s). The government was pressured into the new amendment because of many movements such as the Women’s Christian Temperance Union. The WCTU was largely concerned with the protection of the family. The union saw drinking by men a threat to wives and children. Drinking was also saw as sinful by many Protestant churches(Women Leaders of Temperance). It was groups and movements like these that undoubtedly wanted to prohibit alcohol. Although it seemed like a good concept it was tough for many to accept and even harder to execute. After the Prohibition Act came the Volstead Act ensued. This outlawed even beverages containing as little as 0.5% alcohol. Included in this was beer and wine. Many Americans thought that only hard liquor would be banned, the addition of drinks like beer and wine caused many to abandon the Prohibition Act (Prohibition). Early America wasn’t the dryest of countries. Everyone drank alcohol in some shape and form no matter the age (The Bootlegging Business). Many Americans opposed the Prohibition Act, so they found the means to get what they wanted. Underground establishments soon became a large business and a great opportunity to make some money. The most popular name for these establishments were speakeasies. The name came about because you would have to â€Å"speak easy† or quietly about it in public or around police (The Roaring 20s. While in a speakeasy patrons drank the hard liquor out of tea cups so that if a raid were to happen, they would be safe. Illegal drinking became the hit of the season. Soon gangster-owned speakeasies replaced neighborhood saloons and by 1925 they were about ten thousand speakeasies in New York (The Riverwalk Jazz). Hard liquor was very hard to buy, now that it was illegal it became very expensive. Those who could not afford it simply made their own often in bathtubs. Bathtub gin as it was called, was not always safe and was responsible for causing blindness and even death. People who had no idea what they were doing were often the ones making it. Drinking bathtub gin put drinkers at risk of consuming unsafe concentrations of wood or denatured alcohol (Prohibition). Gangsters realised that their was big money behind selling hard liquor. Not even an hour after the Prohibition Act was set in place six armed men had been found trying to rob train in Chicago of medicinal whiskey (How Prohibition Backfired). One gangster bought a group of pharmacists in the Midwest so that he was able to legally obtain alcohol and then hijack his trucks and take the alcohol for illegal uses. Alcohol used for industrial reasons was turned onto moonshine easily by bootleggers.In many large cities it wasn’t unusual for hardware stores to sell copper still and other ingredients to make alcohol (Prohibition and Why It Failed). The biggest gangster of them all was Al Capone. He made a name for himself by running a multi- million dollar operation. He smuggled illegal alcohol into Chicago. He was also known for being incredibly violent with his rival gangs (The Roaring 20s). In two years, Capone was earning around sixty million a year from alcohol sales alone. Capone was able to bribe the police and important politicians of Chicago, overall it cost him seventy five million dollars to keep them in line but he considered it a good investment. The mayor of Chicago in 1927 was one of Capone’s men, Big Bill Thompson (Prohibition and the Gangsters). Prohibition was never enforceable. Moderate drinking for Americans just simply wasn’t viewed as sinful (Prohibition). The Prohibition proved to be worthless and only lowed the regard for the government and law. In 1933, the eighteenth amendment was repealed, although many states kept the idea (The Roaring 20s). Many scholars have concluded that the Prohibition did more damage rather than help the communities. The greatest failure of the Prohibition was that it led to growth in organised crime. It also failed because ordinary citizens were willing to break the law. Corruption was rife among the police as well as those who were charged with enforcing the Prohibition(Prohibition and Why It Failed). Gatsby was known to have these crazy parties where people got drunk. Meaning he was able to get his hands on alcohol illegally. â€Å"He and this Wolfsheim bought up a lot of side- street drug stores here and in Chicago and sold grain alcohol over the counter†. Gatsby did something very similar to an gangster in new York that bought the pharmacies. Gatsby then used the alcohol at his gigantic parties (The Great Gatsby). Symbolized in the Great Gatsby was the Prohibition. Gatsby had large parties were many people would get wildly drunk. Fitzgerald gave his readers an inside look into his life. The roaring 20s. The Great Gatsby is filled with resistance from many American people that once supported the Prohibition Act.

Public Law Outline Example | Topics and Well Written Essays - 2750 words

Public Law - Outline Example The reason is that there are more risks leading to full implications from the unqualified interpretations that pass unnoticed through democratic processes. The absence of mutual language in expressing necessary implication makes the courts have a presumption that the general words have the intent of subjecting meaning to basic rights among individuals. The detention power without seeking trial is one of the legislation that breaches the human rights as granted. Further, rule of law pursues the different forms of equality within legal legislation against the equitable subjection among classes of ordinary law from land administration by ordinary law courts. Irrespective of the lack of well-established definitions, the judiciary and administration are directed by the rule of law. There are elements that are appreciated to be sufficient in the provision of judicial dicta as they show the rule of law as a core definition of the judiciary. The repeated invocation by judges in explaining th e extent of the judicial review jurisdiction is enshrined in respective constitutional documents. The view of the public regarding the application of the rule of law to judicial review matters. Further, the concept also applies to the public interest and the means of legal processes as identified. For instance, the agencies of government have a legitimate claim of majority conception for public interest during the Judiciary prioritizes the identification of endurance and values to protecting all citizens, including minorities.

How would Frederickson recalculates the definition of 'self-evident Essay

How would Frederickson recalculates the definition of 'self-evident truths' - Essay Example Based on his research, he recalculates self-evident truths in race topics based on the four models of ethnic relations: hierarchy, assimilation, pluralism, and separatism and found out that among the models cultural pluralism is the appropriate one. Hierarchy Thomas Jefferson believes that it is a self-evident truth that all men are created equal, that they are endowed by their creator with certain unalienable rights. This is an opposition to Fredrickson’s reinvented definition of these self-evident rights. Historical findings postulated that even during the period of Renaissance and Reformation, Europeans already distinguished human race into superior and inferior classifications (Fredrickson, White Supremacy 8). Even Aristotle himself explained that certain groups of people are bound to be â€Å"natural slaves† as in the conquest of the Spaniards to Indian territories (Fredrickson, White Supremacy 9). Aside from Indians, Asians were also viewed as unfit to be part of the civilized society of the U.S. wherein there is a grant of equal rights and protection (Fredrickson, The Black Image 634). ... However, that is not the case in many instances when a dictator became an icon for annihilation and wiped away thousands of people because of radical ideologies. That happened during the Nazis when Jews were wiped out at the time of Adolf Hitler. Therefore, Fredrickson viewed self-evident truths based on real scenarios, wherein there is hierarchical structure: a classification of powerful and weak races. Assimilation Assimilation of the minority group to the dominant group was a characteristic of Fredrickson’s racial concepts. This concept enables the alteration of the minority’s culture to that of the majority. In essence, it is called â€Å"cultural genocide† because it aims to influence or eradicate Native Americans’ way of life (Fredrickson, The Black Image 636) while completely abandoning their own that is observed by the dominant culture as barbaric and uncivilized. Jefferson believes that people have unalienable rights: the right to life, liberty, h appiness, among other things. Yet, in Fredrickson’s views, certain submissive races are bound to assimilate with the majority, simply because they are weak and have no territorial power over a country such as the United States. Liberty is hard to achieve, evident during the period of slavery, up until the discrimination towards African-Americans in modern times. In the history of the African-American civilization, slavery as a form of gradual assimilation, proves to be oppressive and futile because it took from them their own race and ideology. Establishment of Black community was one way of establishing a â€Å"singularity of national formation† (Glaude 79). Pluralism Cultural pluralism means that a culture has its own distinct identity, and that allowing it to exist with other cultures is

Culturally Competent Nursing in an Ever Changing Diverse World Essay Example for Free

Culturally Competent Nursing in an Ever Changing Diverse World Essay In nursing and healthcare the issue of culture is more pronounced than anywhere else. This is because many people various ethnic, religious, racial and cultural backgrounds come forth to hospitals and healthcare centres in search of health solutions. Due to these cultural disparities, patients often fail to receive quality services because of practices that are lacking in cultural competence. Cultural competence in nursing and healthcare refers to the efficiency with which a healthcare provider is able to offer quality service in a cross-cultural setting thus enhancing the system’s or institution’s capacity to function in effective manners (Dolhun, E. P. et al 2003). Culture influences an individual’s values, perceptions, beliefs and opinions. It influences how patients respond to healthcare givers and the medication prescribed to them. Therefore it is very important that nurses and other medical practitioners seek to improve their awareness towards the issues raised by cultural diversity in order to improve on service delivery. This paper examines ways in which a nurse can be more culturally competent. It also examines the opportunities in the work place and nursing school that requires culturally focused health practices. Additionally the paper discusses the issues of self-assessment and client assessment that is geared towards the delivery of culturally competent health solutions. Importance of Culture to Nursing. The US is comprised of the most culturally diverse population. A big percentage of the world’s ethnic, religious and cultural groups are represented in this population. This has created a most unique opportunity as well as challenge to many organizations in the service delivery sector. This is because people from all cultures get ill at one point in time and they have to seek treatment. Nurses are thus presented with patients from very diverse cultural backgrounds. Culture influences how different people will respond to the different ways of health service delivery, interventions and treatment (Dolhun, E. P et al. 2003). It is therefore important for nurses to move towards achieving cultural competence in order to effectively deal with the challenges that come with the cultural reality. Because of the demographic situation in America service providers are under pressure to provide more culturally correct services. The nursing profession cannot be left behind and therefore the need to comply with the changing needs is overwhelming. Language limitations are also another issue of concern in attaining cultural competence. Ethical Factor One ethical principle that guides nurses in their endeavour to provide culturally appropriate care is the appreciating that everyone regardless of their cultural persuasion is entitled to receive quality health care. Cultural differences can influence the caregiver’s prejudices and bias towards a patient (Galanti G. A. 1997). In a similar way a patient can misconstrue the caregiver’s actions and words. This can serve to lower the quality of care given to this particular patient. Professional ethics require that there be no form of discrimination in the provision of health care but in a situation where there is prejudice on either party, then the quality of care is compromised. Similarly what is considered ethical may have serious consequences when viewed from a cultural context. A fitting example is when the doctor feels obliged to divulge some information to a patient or a certain member of the family, because in some cultures it is believed that giving certain information to a sick person is unacceptable, the doctors ‘ethical’ actions may be viewed in very bad light Nurse’s responsibility Nurses are usually supposed to care for the general well being of a patient, they ought to be able to understand and empathize with the patient in order to cater for their physical and emotional needs. On an individual level, a nurse has a responsibility to learn the practices that are in accordance to cultural competence. It is important that nurses should have an attitude that goes further than just learning acceptable cultural behaviours. Nurses must be motivated by compassion to the patients and driven by moral responsibility (Tervalon M. Murray-Garcia J. 1998). This allows them to display a genuine concern and is thus motivated to internalize harmonious attitudes towards achieving cultural competence. In a hospital setting a nurse is required to be able to anticipate the issues that may arise due to cultural disparities and lack of proficiency in certain languages. They are also to understand the others’ points of view as well as appreciating the strengths and weaknesses of these points of view. In addition to this, respecting the cultural differences is key to the ability to provide culturally appropriate care. Since the issues raised by cultural diversity are multi-faceted in nature, they require a holistic approach that calls for a total overhaul in the nurses’ ways of thinking. There is no one culture that is the standard of what is good or bad and therefore an open mind is important as nurses move towards delivering health care that exemplifies cultural competence. Achieving this kind of competence is only possible if one comes to self-awareness and recognizes their own values, beliefs, opinions, prejudices and biases (Dolhun, E. P. 2003). From here, they can be able to understand how they respond to different points of view from other. Inorder to come to self-awareness one needs to examine their own cultural and environmental backgrounds. An underlying ethnocentricity is part most people where one is protective and to an extent defensive when it comes to cultural differences (Switzer, G. E et al 1998). However in the nursing practice each nurse should be flexible and work towards developing skills of responding to varied cultural settings and situations. Nursing Schools Similarly in nursing schools one is required to meet most of the aforementioned standards. In addition to that communication skills are developed in school. Learning to communicate effectively in a cultural context entails being open-minded, respectful and shunning any form of prejudice or bias (Robins, L. et al 1998). It is a great opportunity to learn form and about other cultures. Other communication skills that are essential are listening skills that enable one to establish a rapport with the others. Language skills also play an important role in communication and as such each student nurse has a responsibility to learn other languages. Ofcourse it is not possible to learn all the languages there are but one can do their best and that is what is required of them. In the same way nurses should have skills that would enable them to assess the patient in a cultural context. This would entail finding out as much detail on the patient as possible. It would help to understand their ethnic background, socio-economic class, religion, age group and other social entities that they identify with. Learning about their experiences could also aid in establishing biases. Impact of culture on health care In the year 2010 more than 45% of all patients in the US will come from minority cultures. This is due to immigration that is the greatest contributor to the cultural diversity (Tervalon M. Murray-Garcia J. 1998). The health sector has realized the reality of these facts and medical practitioners are now given incentives to encourage them to take up learning on cultural diversity. This is changing the entire medical profession. Many initiatives have been put in place in order to bridge health differences that exist between minority groups and the white Americans. The existence of cultural difference may impact negatively on the care given. Cultural factor do affect the response to the different methods of treatment and diagnosis. Some ideas are perceived differently in different cultures and in some extreme cases family members can react in ways that may seem bizarre in the western world. Conclusion The issue of culture is increasingly attaining great importance with the ever-changing cultural mixture. The provision of healthcare is now taking cognizance of the effects of culture on the delivery of these vital services. It has been realized that cultural differences have been an impact on the quality of care given. Nurses and other medical practitioner are now under increased pressure to attain cultural competence in order to achieve high standards of quality. This paper opines the achievement of an all round cultural competence is a long journey. It will take a collective as well as an individual effort to achieve. Nurses have a personal responsibility to seek to understand the cultural factor. Additionally each one of them needs to appreciate their moral duty to seek self-awareness inorder to understand their own behaviour in response to other people with a differing opinion. Respect and a non-judgemental attitude are important if one is to overcome the ethnocentricity that is part of every human being. This awareness cultivates interest and inquiry. Once this point has been reached cultural differences will be viewed as learning opportunities that will spur personal growth. Reference Dolhun, E. P. Munoz, C. and Grumbach, K. (2003). Cross-cultural education in U. S. medical schools: Development of an assessment tool. Academic Medicine. Galanti G. A. (1997). Caring for Patients from Different Cultures: Case studies from American hospitals. 2nd ed. University of Philadelphia Press. Philadelphia, PA. Riddick S. (1998). Improving access for limited English-speaking consumers: A review of strategies in health care settings. J Health Care Poor Underserved. Supp vol 9: Robins, L. S. Alexander, G. L. , Wolf, F. M. , Fantone, J. C. , Davis, W. K. (1998). Development and evaluation of an instrument to assess medical students cultural attitudes. Journal of the American Medical Women’s Association, Switzer, G. E. Scholle, S. H. , Johnson, B. A. , Kelleher, K. J. (1998). The Client Cultural Competence Inventory: An instrument for assessing cultural competence in behavioral managed care organizations. Journal of Child and Family Studies, Tervalon M. Murray-Garcia J. (1998). Cultural humility versus cultural competence: A critical distinction in defining physician training outcomes in multicultural education. J Health Care Poor Underserved.

You are Beautiful :: Middle East Culture Feminism Essays

Standing up for oneself is always a challenge, no matter who you are. In some Arab societies certain traditions and customs seem built to keep women on a lower level than men. The truth, as demonstrated by many books written by Arab women, is that every society has outdated customs, or rules, and those rules are what tend to keep oppressed people in check. If it’s not a gender issue then it is a race issue. If it’s not a race issue then it becomes political or intellectual. Sadly, there have always been rules that oppress one group or another, but time are changing and with them people change. The women in two Arab novels, written by Arab women, express their personal experiences in Arab society. Though the novels are fiction they are based on the real life experiences of the authors and can be taken as facts of what events transpired during the lives of the authors. The changes demonstrated by the main characters in Fatima Mernissi’s Dreams of Trespass and Ahdaf Soueif’s In the Eye of the Sun exhibit the Arab woman’s ability to become an independent and psychologically powerful member of society. Mernissi’s Fatima grows up in a harem which would seem to imply a lack of independence, however the women surrounding her act as liberal educators, teaching her never to settle for less than she deserves. Soueif’s Asya on the other hand develops into a woman while being raised in an upper class household, with liberal ideas on only certain subjects. The two women evolve, throughout the course of each novel, into stronger and more independent entities, both physically and psychologically. Fatima Mernissi preserves the feeling of an autobiography by keeping the main character named after herself. For the sake of clarity when referring to the author I will use only her last name. Mernissi’s novel begins with Fatima as a child. Throughout the novel she grows to the age of nine, but that is where the story ends. The first few years of Fatima’s life seem to have been the most crucial in determining what kind of person she was destined to become. Fatima’s experiences in her childhood are dramatic and influence her enough that her life changes drastically. Early in the novel Mernissi states, â€Å"when you hurt a woman you are violating Allah’s sacred frontier† (3). This statement helps to set the tone for the novel.

The Credit Rating Agencies, Their Role in the Financial Crisis?

End of Studies Thesis What is the role of the credit rating agencies, which part did they play in the recent Financial Crisis and how can their efficiency be improved? Thesis Supervisor – David Menival Emmeline Beauchamp – Cycle Franco- US – March 2013 Acknowledgments I would first like to thank RMS and especially the CESEM to have taught me a lot, helped me to grow and open up and gave me this incredible opportunity of studying two years in the United States. None of this phenomenal experience would have been possible without them.I would also like to thank Northeastern University for allowing me to discover a new culture and a different educating system. It also had a tremendous role in my future accomplishment and professional career. In addition, I would like to thank all the professors I had during these four years of studying, whether it is at CESEM or at Northeastern University. They made this journey even more profitable and enjoyable. I would also like t o thank David Menival, my thesis supervisor, who accepted to work with me on this project.Finally, I would like to thank my parents for always supporting my choices and being next to me when I needed them. They have been my guides and models in life and have always encouraged me to be better and push myself. Table of Content Introduction4 I. Credit Rating Agencies: Role and methods5 1) History5 2) Role and methods7 3) The Issuer-Payer model 9 II. The Credit Rating Agencies and the Financial Crisis: is the thermometer responsible for the fever? 12 1) Background of the financial Crisis12 2) Credit Rating Agency are not fully responsible†¦ 14 ) †¦But they could have done better17 III. What is next? 20 1) Lessons learned from the crisis 20 2) Regularization of the existing Credit Rating system 21 3) A new rating system23 4) Creation of new Credit Rating Agency24 Conclusion26 Exhibits27 Bibliography32 Introduction A credit rating agency is a company whose role is to evaluate th e default risk of a borrower, whether it is a private or public company or a State. Since 1909, when Moody’s emitted its first rating, the role of the Credit Rating Agencies has considerably evolved and the methods used have improved.Even though their ratings do not constitute buying or selling recommendations, they rapidly gained an almost â€Å"biblical authority†. Since the 1980’s, the credit rating agencies have, indeed, become a reference for investors that want to determine the creditworthiness of an entity. Their ratings influence investors’ behaviors and they are indirectly involved in the future of a State or company. After several economic meltdowns and the recent financial crisis, the three big Credit Rating Agencies have been the center of attention.Is their methodology appropriate to evaluate the creditworthiness of an entity? Does the issuer-payer model insure the best transparence? Their role and implications in the crisis have been meticul ously examined and their functioning system has been questioned. Although their role in the crisis in undeniable, are the only responsible of the crisis? The system was defaulting and the predictions of the credit rating agencies turned out to be wrong. Which modifications should we bring to the system to make it more transparent and efficient?These are the questions we will try to answer throughout this thesis. I. Credit ratings agencies: role and methods Credit Ratings agencies, entity still little known outside the financial communities two years ago, found themselves at the center of attention with the subprime crisis. If everyone more or less gets, now, familiar with what a credit rating agency is, people usually do not know what are the origins of this business, its rationale and its financing model. 1) HistoryThe influence of the three main credit rating agencies (Moody’s, Standard & Poor’s and Fitch Ratings) was build step by step since their inception, in the early 1900’s. Historically, the ratings issued by the agencies did not have more value than the ones given by analysts or economic experts. They acquired this particular status when legislators and regulators attributed them a bigger place in their systems. The development of railroads companies marked the origin of these â€Å"Big Three†. These railroad companies were indeed fluctuating and needed nvestments to set up their infrastructures. As investors were concerned and questioned their capacity to reimburse their debts, Henry Varnum Poor published, in 1860, some financial information regarding the creditworthiness of those companies in order to help investors make their decision. Later on, in 1900, John Moody would also start publishing economic data on these companies and finally, in 1909, J. Moody gave his first ratings about railroad companies in â€Å"Moody's Analyses of Railroad Investments† by attributing a letter to each of them; the credit rating was born.This system was progressively adopted by others credit rating agencies such as Fitch Publishing Company, founded in 1913 by John Knowles Fitch, which would later be known as Fitch Ratings. Finally, Less than thirty years later, the credit rating agency Standard & Poor’s is created after the merger of the Standard’s Statistic Bureau and the Poor’s Publishing Company. The development of the ratings is stimulated by several factors. First, its goal is to offer a service for investors by providing useful information that will help them in their decision-making process.In addition, the relative large size of the American territory discourage investors to search for information, they would rather pay for it than waste time looking for it. Moreover, the repercussions of the 1929 financial crisis and the consequences of the World War II, giving supremacy to the Economy of the United States, also favored the expansion of the concept of rating. In 1970, after the ba nkruptcy of Penn Central Railroad, the first doubts regarding the independence of the credit rating agencies appeared. This was the first time that the reliability and seriousness of the ratings were questioned.In order to reestablish the value of the ratings, the SEC (Securities Exchange Commission) created, in 1975, the â€Å"Nationally Recognized Statistical Rating Organization† (NRSRO) designation. The goal was to standardize and formalize the ratings regarding brokerage firms and banks with their capital ratios. At that time, seven agencies obtained the NRSRO designation. In 1990, after several new mergers, the number of NRSRO was only of three: Moody’s investor service, Standard and Poor’s and Fitch Ratings. In 2003, the Canadian agency Dominion Bond Ratings service Ltd also ained the status of NRSRO, followed by A. M Best Company in 2005. In June 2003, after the disorders caused by the bankruptcy of the company Enron, the regulation of the credit rating a gencies and their NRSRO status needed to be examined. Multiple reports on the role played by the agencies in this case were published. Even though investors lost faith in them, they all agreed that they should keep the NRSRO status. In 2006, after years of critics toward the credit rating agencies, the functioning rules of the NRSROs were modified and the Credit Rating Agency Reform Act was promulgated.The objective was to regulate the internal decision process of the credit rating agencies while forbidding the SEC to control the rating system of NRSROs. Right after, in 2007, three more companies were added to the list of NRSROs: Japan Credit Rating Ltd, Rating & Investment Information Inc. and Egan-Jones Rating Company. Since April 2011, the list of agencies that received the NRSRO status counts ten names (See Exhibit 1, page 27). Finally, in July 2010, the Dodd–Frank Wall Street Reform and Consumer Protection Act reinforced the control over the ratings’ practices.Thi s included a reduction of the conflicts of interest regarding the ratings of structured products and decreased dependence on ratings. It also allowed investors to sue a credit rating agency in case of fake or reckless rating. For decades, the three main agencies, Moody’s, Standard and Poor’s and Fitch Ratings, have been controlling the market, as high barriers to enter exist. The major ones are the importance of the reputation and the investors’ confidence in their ratings. Since their creation, these agencies have distinguished themselves with a particular role and specific methods. ) Role and Methods The Credit Rating Agencies evaluate the creditworthiness of debtors. Ratings can concern a company as well as a particular emission or securitization or any financial debt. They are usually solicited by the debt issuer but can also be attributed, if non-requested, after collecting public information. Credit Rating Agencies enjoyed a good reputation and an essentia l role in the financing of economies. Over time, regulators, for practical reasons, tried more and more to impose the use of the notation in the investors’ financing.This long-term trend follows upon the systematic financing by the market, whether it is in a simple formulation taking the shape of debenture or assimilated loans or new products where the risk of defect is difficult to comprehend because it is diffuse in complex financing methods such as the securitizations. Credit Rating Agencies have the role of processing the information for financial markets. They synthesize the information for market needs and the investors seemed to excessively grant their confidence to this information.Investors pay close attention to any modifications in ratings or to any entities placed â€Å"under observation†. The ratings issued by the credit rating agencies have a trustworthy value. Since investors usually do not take the time to look for information regarding a company or a S tate, they based their investment choices upon the rating given by the credit rating agencies. Therefore, the role of the credit rating agencies is essential. Basically, these agencies summarize all information available about a company or State and turn it into a rating that will then influence the future of an entity.However, it is necessary to underline that the ratings given are not buying or selling recommendations, they are only an evaluation of the creditworthiness of an entity, at a defined time, and statically calculated. Next to this informative participation, credit rating agencies contribute to the management of portfolios by giving advice to the investors via the medium-term orientations emitted with the rating. If a company tries to finance itself, the received grading will be determining for the conditions of the operation.Whether it is by financing through banks or by issuing bonds on the market, the more the grade will be raised, the more the company will be able to find cheap funds at low interest rates. On the other hand, a bad grade will imply higher interest rates and difficulties to find financing. The difference of levels between both interest rates will constitute the risk premium. This problem becomes particularly important for companies or States located within the â€Å"speculative† category. Major institutional investors do not want, indeed, to take the risk and, therefore, do not invest on these kinds of values. However, the rating is ot fixed and fluctuates throughout the life of the bonds. A decrease of the rating can lower the price of the bond. Likewise, a raise of the rating can be associated to an increased price of the bond. In order to correctly determine the default risk, Credit Rating Agencies use diverse quantitative and qualitative criteria that they translate into a grade. Credit Rating Agencies distinguish two types of ratings: short and long-term; the traditional rating that applies to loans emitted on the mar ket and the reference rating that measures the risk of counterparty for the investor represented by this issuer.When evaluating the financial risk, credit rating agencies first take into consideration purely financial numbers such as the profitability, the return on investment, the level of cash flows and debt, the financial flexibility and the liquidity. More and more, the agencies integrate non-quantitative elements such as the governance, the social responsibility of the company and its strategy. It is also necessary to highlight the fact that the rating is usually associated with medium-term orientation, allowing to better estimate the future trend regarding the quality of the issuer.In some cases, a borrower can be placed â€Å"under observation†. The main steps in a company’s life (mergers, acquisitions, big investments†¦) are indeed, likely to influence and modify their structure. Credit rating agencies, subject to preserving the confidentiality of the rece ived information and avoiding cases of insider trading, can have insider information on the financial state and the future prospects of the analyzed issuer, while reducing the cost of collection and data processing. They distinguish themselves from financial analysts, who, in principle, only have access to the public information.Even if they can benefit from insider information on behalf of issuers, they are dependent on the information provided by these issuers. Each Credit Rating Agency possesses its own rating system. In broad outline, grades are established from A to D with intermediary levels. Thus, the best grade is AAA, then AA and A for Standard and Poor’s or Aa, A, etc. for Moody’s. In addition, we can also find intermediate ratings; a â€Å"+† or a â€Å"-â€Å" but also a â€Å"1† or a â€Å"2† can indeed be added to the grade (e. g. AA+, A-, Aa2, etc. ).This allows a better and more precise classification of borrowers. These different ratings can be divided in two groups: the first category, â€Å"High Grade† includes all ratings between AAA and BBB and the second category, also known as â€Å"speculative†, for inferior grades. (See Exhibit 2, page 28) The biggest advantage of this system is to provide information at low costs for potential investors. Thanks to an easily understandable grade, but incorporating a vast amount of information, investors can quickly have an idea of the creditworthiness of a borrower.The ratings issued by these agencies are a more and more useful tool in the decision-making process of investors looking for relevant information. Current regulation obliges them to certify published information. As we have previously seen with the United States or Greece, the market strongly reacts and sometimes irrationally to any modification of a rating or to a simple announcement of a hypothetical revision. Credit Rating agencies have a real influence on markets. The impact of their dec ision on issuers and investors is decisive.On the contrary, an excessive reaction was completely predictable in front of their incapacity to forecast the financial crises of these last decades. 3) The issuer-payer model For more than half a century, investors that paid to obtain financial information about loan issuers financed the credit rating agencies. Thus, companies, local communities, States were given a rating, without asking for one or without their consents, but to answer to requests from bankers or investors that were holding these funds.Naturally, these â€Å"non-requested† ratings were only based on public information concerning such or such company. The Credit Rating Agencies sold their publications to bankers and capital holders who were looking for potential adequate investments. In addition to selling these â€Å"manuals†, the credit rating agencies could also offer others services to investors (weekly information about financial results of rated compan ies, actualization of the ratings, recommendations and advices of purchase and/or sell).However, the agencies will lose some profits as some investors managed to have the information and the manuals without paying for them. As from the beginning of the 1970s, Credit Rating Agencies started to charge their services to the issuers of bonded debt. This is the issuer-payer model. These issuers of debt (Companies or communities looking for investment) began to more and more directly solicit the agencies in order to obtain a rating. They believed that this rating would reassure investors during a slowdown of economic growth.Thus, from now on, it is more often the issuers of debts that will request a rating from the credit rating agencies to get an evaluation from them that would allow them to access to credit. This approach contributed widely to consolidate the place of the Credit Rating agencies and â€Å"to legitimize† their intervention. In fact, this translates well a swing of the balance of power between those who look for funds to invest in industrial projects and those who hold funds, while waiting for the best yield at the slightest risk.In a world highly regulated by finance, where pensioners and holders of capital are in a strong position, and where industrial and direct investors are in a position of requestors, it is now, more often, issuers who wish to borrow and will ask to be noted, that will pay the credit rating agencies for their services. This shift from an investor-payer model to an issuer-payer model compromised the independence of the credit rating agencies. In fact, in 2011, only 10% of the revenue of the agencies came from funds’ holders who wanted to know more about the validity, the risk and the potential profitability of an investment.From now on, the ones looking for capital are the ones financing 90% the credit rating agencies. The â€Å"issuer-payer† model strongly modifies the situation of the credit rating agencie s. In this situation, the rating agency is used, and paid, by the market player who wishes to be noted to then be able to hope to obtain capital on â€Å"financial markets†. The question of the independence of the agency in its rating process is then very directly put: the rating agency will be inclined to note well a company which pays her to then try to obtain capital in good conditions on behalf of miscellaneous â€Å"investors†.However, the market has faith in this independence since a credit rating agency has to protect its reputation, and thus an agency could not take the risk of over evaluating one of its customers by fear of losing its credibility and thus all business. Credit Rating Agencies seem, indeed, more and more subjected to conflicts of interests, which decrease their reliability. The issuers pay the agencies to be noted, while credit rating agencies need the revenues from these same issuers. Besides, more and more often, the credit rating agencies mix two activities: consulting and rating.Therefore, in addition to evaluating a company, an agency also advises on current operations. A study for the SEC in 2008 revealed that some analysts from certain agencies participated in meetings between investors and issuers in which commission and rating were fixed. These conflict of interest generated criticisms and accusations against credit rating agencies and especially during the recent financial crisis. As the credit rating agencies were essential and indispensable to any players on the market that wanted either to invest or to find capital, they were at the heart of the upheaval.II. The Credit Rating Agencies and the Financial Crisis: is the thermometer responsible for the fever? In order to determine the responsibility that the credit rating agencies have in the financial crisis of 2008, it is necessary to understand how the crisis happened, which events punctuated it and what has been the behavior of the rating agencies throughout t he crisis. 1) Background of the Financial Crisis Everything started when the American housing market suddenly collapsed after a steady rise in the 2000 years.To finance their consumption and acquisition of a house, American households did not hesitate to get into very high debts. The market was booming so there was a trust in the ability to get its money back with a substantial profit. As counterparty, they pawn their properties. This was a guaranty for banks to be paid because if the borrower could not reimburse what he owed, his property would be sold to honor his debt. When the phenomenon grows and affects a large number of households, the sale of their property causes the collapse of the value of the property.The downturn of the housing market was reinforced by the subprime system. Since 2002, the American Federal Reserve, which encouraged easy credit to boost the economy, allowed millions of households to become homeowners thanks to premium loans called subprime, with variable interest rates that can reach 18% after three years. These interest rates are fixed according to the value of the property; the greater the value, the lower the rate and vice versa. That is what happened when the housing market collapsed in the United States in the beginning of 2007.Households, lacking of ways to reimburse their debts to lenders, have caused the bankruptcy of several credit institutions that could not repay themselves since even when taking on the property, this one has a lower value than initially. Finally, banks were also touched by this phenomenon. They have indeed been numerous to invest in these lending institutions. Nevertheless, today, invested funds are gone. In order to compensate these losses on the housing market, banks were forced to sell their shares, leading to a decrease of their values on the financial markets.The crisis quickly expanded in Europe, where major European banks such as Dexia in France and Benelux or IKB in Germany lost a fair part of th eir investments. Besides, the bankruptcy of several European banks led to a confidence crisis on European financial markets. Banks have doubts about each other’s contamination by the subprime crisis and therefore, to be cautious, refused to lend money. Since international banks are linked to each other through financial agreements, the crisis rapidly extended, to reach Asia during the summer 2007.Only one solution seemed conceivable for banking institutions to face this lack of liquidity: sell their shares and bonds. This fast and quick intervention caused a sharp drop in stock value and all the European stock markets were affected (See Exhibits 3 and 4, page 29-30). In order to appease the crisis on the markets but also to bail out banks, the American Federal Reserve (FED) and the Central European Bank (CEB) decided to inject liquidity in the monetary system, hoping to gain back the confidence of investors to help stabilize the situation.On 9 August 2007, the CEB acted first by making available 94. 8 billion euros to banks, followed shortly by the FED which injected $24 billion to appease the spirits of investors. However, markets initially misinterpreted the message, considering their involvement as a sign of weakness. The next day, the CEB injected again 61 billion euros and the FED, $35 billion, but the markets felt down again. Finally, on August 13, 2007, the same action was repeated and the monetary market as well as stock markets around the world kept their heads above water.While it seemed like the financial crisis was faded away at the end of 2007, a second wave of crisis appeared from the banking sector at the beginning of 2008. This was due to the creation of new products such as residential mortgage-backed securities (RMBS), Asset-backed Securities (ABS). In fact, credit risk, such as subprime mortgages, were pooled and backed by other assets, more or less risky, in Collateralized Debt Obligations (CDO) (See Exhibit 5, pages 31). These clust ers of scattered debts were then sold on the stock exchange by the issuer, like shares of a company could be given up.This results in the transfer of the risk of non-payment from issuers of mortgages to financial institutions: in particular banks, major consumers of CDO. In order to invest on the CDO market, some financial organisms went even further and created Structured Investment Vehicles (SIV) that did not have to respect the usual rules of prudence of the banking system. This amplified the risks taken and losses impacted on the performance of the bank. Other new products were also created such as Credit Default Swap (CDS), an insurance contract between two entities against a risk faced by one of two entities, such as the non-payment of a debt.The price of the CDS reflects the confidence in a particular issuer of a debt and is the basis for determining the value of the product of the debt. The crisis took a new dimension on September 15, 2008 with the bankruptcy of Lehman Broth ers and AIG (narrowly saved by the Fed), as well as several American and European banks (HBOS in United Kingdom, Fortis in Europe, Dexia in France and Belgium, etc. ). This international and financial crisis still has repercussions on today’s stock markets and the end of the tunnel seems far away. The question raised here is the role played by the Credit Rating agencies in the crisis.Are they the only ones to blame for everything that happened? Are the actions intended by the rating agencies responsible for the crisis? 2) The credit Rating Agencies are not fully responsible†¦ Ever since the crisis, the credit rating agencies have been easy targets to blame for what happened in 2007 and the years after. Effectively they did not anticipate the downturn of the market, they continued to attribute good rating to banking institutions already hurt by the crisis with an increasing book of bad loans or bad papers that banks will have to deleverage.Many criticisms have been emitte d about toward them. However, it is important to point out that they are not the ones and only responsible for what happened. They did not have power over a lot of factors that went wrong, and for that they cannot be the only to take the fault in the financial crisis. The thermometer could not be responsible for the fever. First of all, they are not responsible for the bankers or mortgage brokers who gave loans unwisely. These institutions lacked of common sense and thinking when offering credits.Banks and managers perfectly knew that unemployed borrowers would never be able to reimburse their mortgages. They have, indeed, disproportionately opened the gates of credit by taking for guarantee, when they did take some, the increase of real estate prices or their trust in the growth of the economy. They thought that they could make benefits if the debtor did not pay, as they believed that they could force the sale of the house for a higher price. However, real estate prices always end up going down and the economy is fluctuating.In an attempt to reduce the risk of these new kinds of loans, banks used securitization; they transformed these loans and resold them on the stock market. Therefore, mortgages securitizers are also to blame. Some companies such as Washington Mutual, Morgan Stanley or Bank of America were mortgages originators as well as mortgage securitizers, other like Goldman Sachs, Lehman Brothers and Bears Stearns bought mortgages directly to subprime lenders and pooled them together to resell them to investors. However, as soon as a debtor was not able to pay back his mortgages, the security became toxic and had no more value.Nevertheless, this was not the last step. Some banks would buy and bundled mortgage backed-securities into collateralized debt obligations, composed of different levels of risk. The creators of these new financial products are also responsible for the crisis. They bet against these risky CDOs by using credit default swap. (See e xhibit 5) Government Sponsored Enterprises (GSEs) could also be blame for what happened. They indeed, control the mortgage market. When a bank or a mortgage broker wanted to take off his books a loan, it could sell it to a GSE, which led to a higher number of mortgages.Fannie Mae and Freddie Mac are the two major GSEs. Alone, they own or guarantee half of the current mortgages. With their â€Å"government status†, investors can buy those bonds while asking for a low interest rate in return, as federal government bonds have the safest credit rating in the world. As long as debtors paid back their mortgages, Fannie Mae and Freddie Mac would be able to pay their creditors too. However, as these loans where often given out, even to people we knew could not reimburse, GSEs had to assume the risk. Therefore, we could also say that investors could be blamed for the role they played.They bought and invest in financial products they did not know about. They should have conducted resea rches about what they were purchasing and should have known these were subprime and meant a higher risk of non-payment. However, we have to see the bigger picture. At that time, banks received pressure from higher instances to encourage homeownership and so, to grant loans to the poorest population. The government wanted households with a less comfortable life to be able to buy their own house. The pressure that was put on the banks â€Å"forced† them to give mortgages to debtors that would ikely not pay back. This being said, borrowers are also responsible for contracting loans that they pertinently knew they could not afford. Moreover, the credit rating agencies are also not responsible for the debt of the countries. They have often been accused to do be the reason for the deficit of some countries such as Greece. Nevertheless, Greece has always had a huge deficit. They never had a break-even budget in 150 years, and governments from left to right parties systematically lai d about the finance of the country.In addition, the national sport is not the Greco/Roman wrestling or the Marathon but how to avoid paying taxes; nothing in which the rating agencies were involved. Furthermore, regulators could have also done a better job to prevent the crisis. In the United States, several regulators exist and each of them has a specific area of expertise. The regulation of the banking sector is shared between the Federal Reserve (Fed), the Office of the Comptroller of the Currency (OCC), the Federal Deposit Insurance Corporation (which guarantees the deposits of bank customers) and the Office of the Thrift Supervision (OTS).There is also The Securities and Exchange Commission (SEC) that is responsible for the supervision of stock exchanges. The Financial Industry Regulatory Authority provides the regulation of brokerage activities. Finally, the Commodity Futures Trading Commission (CFTC) insures the regulation of futures and options markets. This various regulato rs could have acted to appease the situation. The SEC could have, indeed, regulate lending practices at banks and force them to keep more capital reserves in case of losses.The Federal Reserve could have contained the housing bubble by setting safer mortgages lending standards, which it failed to do and especially when Alan Greenspan who was the head of the FED, refused to improve the examination of the subprime mortgage market. Finally, according to the Financial Crisis Inquiry Report, executives in the main investment banks did not hold enough capital to be fully protected against losses. Some companies, such as Lehman brothers or Citigroup would just hide bad investments off their books.It is mainly a problem related to the liquidity crisis that led to the bankruptcy of Lehman Brothers. Lehman Brothers, indeed, financed itself on the short-term and lend on the long-term. When the source of the financing dried up (banks did not trust each others by fear of not being paid off), Leh man found himself stuck and was enabled to face its commitments. If the credit rating agencies were not responsible for the mortgage originators or securitizers, the creation of the CDO, the regulators or the executives of the investment banks, they surely played a tremendous role in the crisis ) †¦But they could have done better The credit rating agencies are responsible for a lot in the financial crisis. Several aspects of their business as well as the actions they have done have been pointed out as the main cause of the crisis. First of all, the pertinence of their business model was questioned, among others the oligopolistic situation of the market and the conflict of interest created by the issuer-payer model. The â€Å"Big Three† (Standard & Poor’s, Moody’s and Fitch Ratings) generate 95% of the $6 billion market that the rating business represents.These three agencies dominate the market and adopt similar methodologies and practices. The business mod el of the rating agencies establishes itself on the independence and the credibility granted by the financial markets and the authorities of supervision. That is why, in the absence of statutory reforms and / or of the desertion of numerous customers, the leadership of the â€Å"Big Three† will be maintained, protected by strong barriers of entry (reforms difficult to set up and loyalty of issuers often connected to the heaviness of the rating process).Besides, the oligopolistic situation is strengthened by a consolidation, on the initiative and thus for the benefit of the â€Å"Big Three†. So, Fitch acquired in June 2000 the fourth American rating agency, Duff and Phelps, and in December 2000 Thomson BankWatch. At the beginning of 2006, Fimalac gave up 20 % of Fitch Group (who, herself, holds Fitch Ratings, Fitch Training and Algorithmics, this last company having been acquired in 2005) to Hearst Corporation. Likewise, the French subsidiary of Standard & Poor’s acquired ADEF (Agency of Financial Evaluation).Another reason why the credit rating agencies played an important role in the financial crisis is because of the conflicts of interest they were facing with the issuers. If some say that these conflicts of interest were of minor importance since there are always conflicts of interest in relationships, in that case, it had serious consequences on the global economy, as they are one of the causes of the subprime crisis in 2008. It is, indeed, the issuer that pays the rating agency so that this one estimates its capacity to pay off its debt.It is thus relevant to wonder about the partiality and the objectivity of the rating agencies which find themselves â€Å"at the same time judge and judged† and which can be inclined to note well its customers to keep their market share. Besides, the transparency that the rating agencies show in their methodologies and during their changes of ratings is unreliable as far as these sudden reversal s seemed to have destabilized the markets. The three major credit rating agencies also contribute to worsen the financial crisis by their practices. They were, indeed, a key factor in the financial meltdown.They attributed a rating to every products offered on the stock market. Even mortgage-related securities received a good grade, which made it easier to market and sell them. As we have seen previously, the ratings that they gave had an almost â€Å"biblical authority†, so investors trusted the rating agencies to be fair and to give relevant grade to each product and did not conduct further investigation regarding their investment. Credit Rating Agencies were necessary to the mortgage-backed securities market; each actor in the process needed them: The issuers, to approve the structure of their deal – The banks, to determine what capital to hold – The investors, to know what to buy Since 1970, when the credit rating agencies got the status of NRSRO, the SEC de cided to base the capital requirements for banks on the grades given by the rating agencies. This is also included into the banking capital regulations as the recourse rule, which allows banks to hold less capital for higher-rated securities. The SEC also prevented money market funds to buy securities that did not receive ratings from at least two NRSROs.Without these good ratings, banks would not have been able to place these financial products so easily onto financial markets, and the investors would have never bought them. Theirs ratings helped the market to go up rapidly and their downgrades between 2007 and 2008 wreaked havoc across markets and firms. These ratings, especially the ones for the mortgage-backed securities, appeared to have been very optimistic. But what we could observe, throughout the crisis, is the gregarious reflex of the credit rating agencies.They usually agreed on the ratings and when one of them downgraded a security, a company or even a State, the others would usually follow and did the same thing. As we have seen, the Credit Rating Agencies have indeed played an important role in the financial crisis. However, they are not the only one to blame. Thus, we can say that the thermometer is not responsible for the crisis but it could have given a better temperature of the situation. III. What is next? As we discussed, the credit rating agencies have been criticized a lot during the crisis and some flaws of them have been pointed out.In order to improve their efficiency, it is important to understand what we have learned from the crisis and then propose a better regulation or an alternative to the Big Three. 1) Lessons learned from the Financial Crisis The first lesson learned from the crisis is the impact of the globalization of financial markets. This has linked countries together in a greater extent than they were before. That is why, in today’s economy, any crisis that hits a main country or group of countries will have reperc ussion on all other countries. The financial crisis of 2008, started in the United States with the subprime bubble.Then it grew bigger and affected the rest of the world almost immediately compared to the 1929 crisis which also had worldwide impact but more gradually. We have to keep into consideration this new factor and realize that globalization plays an important role in the current worldwide economy. In addition, a country and its financial system need to be better prepared to face the crisis, in order to limit economic and financial damages. This means having a sound and well-regulated environment, keeping its inflation rate low, its exchange rate flexible, and its debt position sustainable.By doing that, a country would limit its vulnerability in front of any financial crisis. Moreover, the country should use fiscal and monetary policies to be able react quickly in case of external shocks. Another lesson learned is the question of the financial supervision. The global crisis is a crisis of confidence, which must impose rules on investment in the financial market, such as CDS (Credit Default Swaps) and short-selling of securities, clearing of OTC derivatives to reduce risks, CSD (Central settlement and Depository) regulation to protect investors and also Hedge Funds transparency.In macroeconomics, monitoring means imposing laws and rules on a structure with what is called the invisible hand. In our case, the invisible hand is the World Bank and the International Monetary Fund and the States, which have full power to intervene and better regulate transactions in the financial markets. This crisis also revealed some weaknesses regarding risk planning. Research based on various methods, including country case studies, confirmed that the more the planning is important, the more the quality of the financial services of a country is raised and more the financial intermediation is efficient.The planning of the risks led a certain number of countries to revise t heir financial structures to adapt itself to the global economic transformations. Finally, we can say that every good thing comes to an end, positive times do not last forever and the end is most likely going to be painful. In today’s financial system and global economy, we cannot avoid financial crisis, we can just hope that enough efforts will be done to improve our financial system and to limit the impacts of future crisis on our economy.If we focus on Credit Rating Agencies, to have a sound environment, it is worth considering a better regularization of our existing Credit Rating system, a new and improved rating system or the promotion of totally new credit rating agencies. 2) Regularization of our existing Credit rating system After the dysfunction of our system translated for instance into the collapse of Lehman Brothers, the disappearance of famous institutions such as Bear Sterns or Merrill Lynch, G7 members stressed the financial industry to improve its functioning mode and enhance the regulation.Several critics have indeed been directed to the credit rating agencies regarding the methodologies used by those agencies (including the growing place of the so-called political factors), the lack of transparency of their decisions, the rudimentary explanation accompanying the changes in notation, the moments selected to realize their announcements of ratings and finally, the potential conflicts of interest. All these aspects need to be taken into consideration when aiming to regulate the rating agencies. Various reform proposals have been recommended.Among them, you find some proposing the suppression of the government’s influence over this industry, or even the creation of a completely government-sponsored rating entity. However, the final goal is the accuracy of the credit rating. The first main step toward a better regulation happened in 2006, when a new section to the Securities Exchange Act has been added. The objective was to â€Å"imp rove rating quality for the protection of investors and in the public interest by fostering accountability, transparency, and competition in the credit rating industry† (ANNUAL SEC REPORT, supra note 22, at 16).The market is an oligopoly; the Big Three set the tone for the rest of the industry. Encouraging competition should give more choices to investors, at a lower cost and with better quality ratings. Several rules were added along the way, especially in 2009, when the SEC’s new rule addressed conflicts of interest, fostered competition and required detailed disclosure. For example, a NRSRO could not anymore issue a rating in which it had advised the bank or the issuer for the structure of the product.Another change emerged from the Dodd-Frank Act, in 2010, where a whole chapter has been dedicated to the rating agencies: â€Å"improvements to the regulation of the Credit Rating Agencies†. The Dodd-Frank Act qualified the agencies as â€Å"gatekeepers† f or the debt market and that is why they needed â€Å"public oversight and accountability†. This meant reducing the investors’ reliance on ratings by limiting references to NRSRO ratings from rules, increasing the liability exposure, maintaining and informing on the structure of the ratings, as well as filing control reports yearly.However, both of these new reforms showed weaknesses, particularly in addressing the conflicts interest coming from the issuer-payer model, or the oligopoly. As mentioned before, several proposals would appear more efficient to answer these problems. The first proposal would be the elimination of the NRSRO status, which would remove any regulatory reliance on the ratings. This would also drive prices down as there would be an increasing competition, but it would also improve the rating quality and the innovation.Nevertheless, this proposal would lead to a total revision of the entire bank regulatory system and could also increase the pressure to satisfy issuers. The second proposal was to create a totally government-sponsored rating industry. This would make the rating a public good, eliminating any conflicts of interest due to the issuer-payer model. Although appealing because it resolves one of the main critics emitted during the financial crisis, it does not say who is going to pay for the subsidization.Finally, another more recent proposal called â€Å"disclose or disgorge† asks for the agencies to disclose the quality of the ratings they give, which means disclose to the public when a rating is â€Å"low quality† or disgorge benefits made with the rating. However, charging penalties would increase the barriers of entry on this market and discourage potential NRSROs. The rating business faces two major problems, the oligopolistic situation of the market that is being maintained by an increased regulation that secures the Big Three, and the issuer-payer model that fosters the conflicts of interest.Even though several reform proposals have been suggested, none appears to be totally conceivable. 3) A new rating system We have seen that a lot of reform proposals exist in order to enhance and increase regulation of the rating system. These proposals, indeed, reveal that some aspects of this business need to be improved. Eventually, a new rating system is worth considering. First of all, we have realized already touch based, throughout this analysis that the business model of the credit rating agencies needs to be modified, especially the issuer-payer model.The fact that the issuer is the one that pay the agencies for their ratings creates a conflict of interest that has to go away to insure an accurate and objective rating. In order to solve this issue, a new model is necessary. A possible idea to get there would be to make, not the issuer, but the investors (the ones that want to know the rating of a company or an entity) to finance the credit rating agencies. It is indeed them that need to know the rating of an entity, so it would be fair for them to pay in order to know what they are investing in.This would solved the problems related to the conflict of interest as rating agencies will not be tempted to give a good grade just to satisfy the client and avoid loosing profits. This was actually the model that existed before 1970, when the issuer-payer model was established. The shift to a model investor-payer would constitute a deep change for the whole rating industry but would eliminate the conflicts of interest. Another change that would be conceivable would be to set up a â€Å"rating planning†. The credit rating agencies should emit their grading at a known rhythm.Therefore, companies or States would know when they would be rated. For example, every January 1st, they could give their ratings for all entities. This would avoid sudden downgrades as we saw during the crisis, where rating agencies lowered the rating of a company right before it went bank rupt. Furthermore, to improve the accuracy of the ratings, a distinction between the rating of a company and a State should be made. In fact, Credit rating agencies do not evaluate the same thing when rating a country or a firm.That is why different ratings should be given according to the nature of the entity. Finally, this new rating system should have a better transparency of ratings. As this has often been reproach to the agencies, it is clear that we need to improve it. In order to get more transparency in the ratings, the credit rating agencies should be forced to make public some criteria that contributed to the rating process. In addition, when an entity is downgraded, there is ever a clear explanation.An explicit and standard comment should go along with the new ratings to explain the cause of the downgrade or upgrade. All these improvements should be made to obtain a more transparent and accurate rating. These changes could lead to more efficient and regular ratings where conflicts of interest would be inexistent and where the distinction between entities would improve the relevance of the ratings. 4) Creation of a new credit rating agency Finally, another solution that arises would be the creation of a new rating agency.This proposition is particularly discussed in Europe. The arguments called in favor of the creation of a European rating agency are multiple. It would be a question, first of all, of introducing more competition into a sector that is today dominated by three major actors. Standard and Poor's, Moody’s and Fitch Ratings are indeed sharing more than 90 % of the market, a situation which confers to the members of this â€Å"Big Three† a tremendous capacity of influence. To create a new rating agency would be a way of having a bigger diversity of points of view.The trust that would be granted by the investors to a new European agency would depend however on its capacity to avoid the criticism sent to â€Å"Big Three† in terms of independence and conflict of interest. It would also be necessary to specify the status of the new agency: a public or a private organization? A public rating agency could face the mistrust of the investors, who could doubt its independence towards public authorities and States, which it would have the mission to evaluate. On the other hand, a private agency would look like a non-profit foundation.The rating agency would be financed by the investors who would use its notations, and not by the entities emitting the financial products, which would allow guaranteeing its independence. Nevertheless, the future prospects of such a structure remain uncertain: to what extent would it be able to impose itself in front of â€Å"Big Three†, in a sector where the experience and the reputation of the institution play a determining role? In addition, a history of ratings would be necessary to evaluate the evolution of an entity and a strict method is mandatory for accurate rat ing.A new rating agency would not be able to have all of these factors before several years. To conclude, it is not easy to find the best solution to improve the current rating methods. Different regulations have been tried, all presenting good points but also flaws. However, what we need to enhance is clear: better transparency, a more accurate rating and a suppression of the conflicts of interest. Conclusion The role of the credit rating agencies in today’s economy is crucial. They evaluate the creditworthiness of an entity, influencing investors and interest rates.However, during the crisis, their role has been criticized. Several factors can explain their controversial position. The oligopolistic situation of the market, their supposedly trustworthy evaluations given by their NRSRO status, as well as the conflicts of interest coming from their issuer-payer model are the main causes of the critics emitted toward them. Recently, the American justice even pressed charges aga inst the rating agencies for their role in the crisis and asked for five billion dollars. Nevertheless, even if the credit rating agencies are the ideal responsible, they are not the only ones to blame.Now that the crisis revealed the different flaws of their system, we can only improve them going forward. Several regulations have already been approved and others are still under consideration. Other ideas to enhance the rating system include a new financing model, by perhaps considering going back to the investor-payer model, a better transparency of their rating, by showing the criteria used for their ratings, and a distinction between a company or a security and a State, which are two completely different entities.Lastly, we can wonder if the Credit Rating agencies still have as much influence as they used to. For instance, when downgrading both the United States and France, the repercussions were minors even nonexistent. The lost of their triple A did not bring the interest rates up as it should have, since today the interest rates are historically low in both these countries. Exhibits Exhibit 1 – Credit Rating Agencies with the NRSRO designation Exhibits Exhibit 2 – Rating systems of the Big Three Source: â€Å"Credit rating – Wikipedia, the free encyclopedia.   Wikipedia, the free encyclopedia. N. p. , 7 Mar. 2013. Web. 13 Mar. 2013. ;http://en. wikipedia. org/wiki/Credit_rating;. Exhibits Exhibit 3 – Important facts about the crisis Exhibits Exhibit 4 – Evolution of market indexes from August 9 to 16, 2007 Index| Evolution| Dax (Germany)| -4,42%| Dow Jones (USA)| -5,95%| Nasdaq (USA)| -6,16%| FTSE 100 (United Kingdom)| –  8,37 %| CAC 40 (France)| -8,42%| Nikkei (Japan)| -10,3%| Exhibits Exhibit 5 – Residential Mortgage-backed securities These tranches were often purchased by CDOs These tranches were often purchased by CDOsSource: The financial crisis inquiry report: final report of the National Commis sion on the Causes of the Financial and Economic Crisis in the United States. Official government ed. Washington, DC: Financial Crisis Inquiry Commission :, 2011. Print Bibliography * Dupuy, Claude . â€Å"La crise financiere 2007-2008 – Les raisons du desordre mondial – C†¦. † francetv education – la plateforme des parents, eleves et enseignants. N. p. , n. d. 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