The provision of money transmission services Assignment

The provision of money transmission services Assignment Words: 593

It also involves the provision of money transmission services, with extensive branch and ATM networks and a clearing system or the settlement of Nan-cash retail payments. This assignment will analyses the environment of the banking industry, with relation to various high street banks, credit unions and building societies within Ireland Will use the PEST framework to analyses the macro environment of the banking industry within Ireland. This is an analysis of various important factors to an industry which includes political, economic, social and technological.

Will analyses the competitive environment of the banking industry through ‘Porter’s Five Forces’. It is a tool to really understand how strong you are competitively at present and here you want to be. Main sources of information will be derived from the World Wide Web. *Macro-*Environment Political Factors: {text:bookmark- start} {text:bookmark-start} {text:bookmark-start} Bank regulation ‘badly needs reform’, says Brian Aeolian minister for finance. Text:bookmark-end} {text:bookmark-end} {text:bookmark-end} {text:bookmark-start} {text:bookmark- start} {text:bookmark-start} At present there is a severe problem with the banking industry in Ireland as a matter of fact on a global scale. Because of lenient financial regulations over the last 10 years in regards to the distribution f credit, banks, building societies and credit unions are in disarray. People cannot pay back there loans and banks in turn have to write off many debts. Text:bookmark-end} {text:bookmark-end} {text:bookmark-end} {text:bookmark- start} {text:bookmark-start} {text:bookmark-start} Friends First economist Jim Power: ‘big hole in the tax take for 2009’ {text:bookmark-end} {text:bookmark- end} {text:bookmark-end} {text:bookmark-start} {text:bookmark-start} {text:bookmark-start} Last year the two big banks BIB and Bank of Ireland were liable for 439 million Euro in corporation tax.

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However, with the downturn in the banking sector seriously impacting on both in the latter half of last year, it is expected that neither will be in a position to turn a profit this year nor consequently will not be liable for corporation tax. {text:bookmark- end} {text:bookmark-end} {text:bookmark-end} Economic Factors: Previous regulations within the distribution of credit by financial institutions have created large foreign liabilities to these institutions. Proof. John FitzGerald says borrowing by households was funded directly through mortgages from the domestic financial system.

In turn, the financial system was not able to raise adequate funds domestically and, instead, the net foreign liabilities of the banking system rose rapidly in the period to 2007. This very rapid rise in the banking system’s net foreign liability, shown in Figure B, would not have been possible if Ireland had not been a member of MME. If the borrowing by the banking system had been in a foreign currency the dramatic increase in foreign currency risk would have been passed on to domestic borrowers as higher interest rates and this, in turn, would have choked off the boom in the housing market. The mom would probably have been choked off prematurely around the turn of the century. ) Because the government sector will fund its borrowing through sales of bonds abroad this will cover the balance of payments deficit. In fact the government’s deficit will tend to pump some liquidity into the economy. With the personal sector no longer a net borrower the banking system will find itself not having to borrow abroad (net) to fund household sector activities in 2009. The European Central Bank (CB) has signaled that it may back a bailout of distressed countries like Ireland, should a situation become inevitable.

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