Posts Tagged ‘Financial Institutions’

The Government Spain needed to allay the distrust of markets in the Spanish banking sector, has decided to increase to 8% core capital (equity plus reserves) to be kept on their balance sheet entities, compared to 6% today.The Government’s financial vice president, Elena Salgado, said yesterday afternoon the new measures. “This is to restore market confidence and eliminate any doubts about the solidity of our bank.”

One of the most controversial decisions of the announced is that the Bank Restructuring Fund (FROB) may enter the capital of those institutions that do not meet the new criteria established credit. The financial vice president made an estimate of capital needs that have domestic financial institutions to meet the new standards. He estimates that the sector will need more than 20,000 million to reach 8% of core capital ratio. In September 2010, the average core capital ratio was 8.5%.

The big banks play very well with the new criteria for creditworthiness. Santander and BBVA 8.5% 8.2%, respectively. People, after the merger with Crédit Mutual, slashing 9.4%. In contrast, medium banks have more difficulties. Sabadell is at 7.8%, while Bankinter only 6.5% (6.76% at end-2010).

Another of the peculiarities of the new regulation, to be adopted by royal decree during the month of February, is that it imposes additional capital requirements to those more traditional boxes. According to Economy Minister explained, those non-listed financial groups (banks and credit unions) have no significant private investor and who have a dependency on wholesale funding markets over 20%, must have a ratio fall of core capital to be “in any case” more than 8%. Although Salgado declined to detail how much it would raise the bar for these entities, some sources suggest it could reach 10%.

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Once have convinced ourselves that we need a business credit, and we have secured in the first instance that we are able to repay the loan, it is time to evaluate and compare different banks or financial institutions that we can provide The credit required, and different financial products they offer.

In addition to the amount and the requirements or conditions that we can apply the factors or criteria should take into account when deciding on the best financial offer are:

The cost of borrowing

Before taking into account the interest rate offered by banks or financial institutions, which in reality we must take into account is the total cost of financing (known as total financial cost, or cost effective), which consists of the rate interest, plus other costs normally included in the loan, such as costs of issuance or maintenance.

The total cost of financing is the true rate to be paid on a loan, and is the most important criterion should take into account when comparing different financing options available on the market.

The loan term

The period is the period of time gives the bank or financial institution to repay the loan and pay interest. In evaluating the different financial offers that exist, we must consider that the period is granted us according to our ability to pay. A shorter term, usually lower interest rate but higher fees to pay. And longer term, usually higher interest rate, but lower fees to pay, and therefore the possibility of acquiring a larger loan.

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Financial institutions can make their ad campaign follows a series of criteria developed by the Spanish bank without authorization. Authorize the commercial development of products of the enterprise, but after the enactment of the new circular, which contains the institution to follow a set of principles developed by the Bank of Spain to the development of their campaigns, thus canceling the previous system of prior authorization.

The criteria developed by the Spanish Bank urged the institution to promote “clarity, objectivity and non-misleading” advertising messages, as well as the requirements for internal controls and procedures that tend to support such requirements.

Ordonez will oversee the campaign after it has been made under such conditions and may require the institution to correct any inappropriate behavior, and cessation or correction of ads that do not meet the forecasts provided.

New circular also urges institutions to comply with self-regulatory body that approved the advertising business.

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According to a statement, you should see that the publicity does not harm the interests of consumers and have all the actors involved in the process and the participation of consumer organizations.

Decree of the Minister of Economy and Finance, without prior authorization that the agency gives ‘ad campaign’ means eliminating filter bank is more important and one of several criteria that provide credibility and reliability for this sector, “any form of guarantee that the consumer should receive the advertisement by the bank left now at the mercy of the goodwill of the financial organizations themselves. “

The UCE has asserted a claim of authority action against violations of financial products for consumption.

Practice self-control, exclusively by financial institutions, “is always translated into countless forms of harassment against the interests of consumers, as evidenced by the thousands of cases that stand for misleading advertising in the credit.”

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The small entrepreneurs start their business with few resources. As a general rule it is impossible to build a company (legitimate) without money, the employer must rely on credit to finance your business.

Entrepreneurs who start usually have an aversion to credit, would prefer if possible to work with own resources and who have neither the experience nor the management of the instruments, or access to credit. For the entrepreneur that starts everything is risk, has not sufficient confidence in their own forces or in their business and go through a transition state where he tries to be independent and earn risking a minimum.

That is not possible, because only those who earn profit risk is usually in proportion to the risks. If someone wants to be an entrepreneur and he’s afraid to borrow, you’d better find another job or settle for a micro business of subsistence. The first rule to borrow money is that money borrowed must be used in investment and spending ever. Investment is anything that generates money and the money generated by the investment should be much greater than the interest paid on credit.

This may seem obvious is not always understood by entrepreneurs who start, it is not unusual to borrow to buy a car or expensive equipment that will generate (presumably) the same gain more economic. That differential, as well as many other personal expenses that do not generate income are the costs, deadweight. The luxuries and any unproductive expenditure should never be financed with borrowed money.

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The currency market is the biggest market in the world. Its daily volume is the combination of volume generated by the NYSE and NASDAQ for 1 full month of trading. They have become, often, fetish market, because for the speculators and investors makes they feel like they are side by side with large institutions, including central banks.

And in fact the case. The currency market is now a reality thanks to technological boom and the internet revolution. Market was reserved only for central banks, commercial banks and large financial institutions, but totally forbidden to retail investors. The fact that it is a decentralized market, no one central physical body to govern it (with good and bad that entails), made with the advent of internet, liquidity providers themselves could provide houses / firms smaller part of that liquidity, so that they in turn passed it to individual customers end. And thus was born the retail Forex (foreign exchange for particular).

The retail market has evolved considerably since its inception back in 1996. Currently, end users can access a more than acceptable operating conditions, with robust platforms and suppliers of graphics and next-generation systems. Particular customer needs only to a computer, an Internet connection and an account with a firm (broker), which can be opened within 24 hours online, in complete comfort.

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