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Assignment 2

Uncertainty and Termination

Satnam Singh Bawa

School of Business and Economics, Algoma University

ADMN 1016_A: Introduction to Canadian Business

Prof. Marisa Lauri

Due Date: - 24 Nov, 2022

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Introduction

The phrase "banking disaster" refers to unforeseen circumstances that affect banks and prevent
them from conducting their regular activity. From sole proprietors to multinational
conglomerates, customers may find banking services at their local branches. Banks provide
customers with services to help them manage their money, such as deposit and lending accounts.
A nation with a fixed exchange rate will be constrained in its ability to pursue its monetary
policy, as opposed to one with a more flexible rate.

Problem Statement

How to prevent catastrophic catastrophes and ensure that the banks operate effectively is the
fundamental challenge. The following are three areas where the stakeholders are conflicted:

Stakeholder Analysis

Employees: As a direct consequence of the economic crisis, the employment hierarchy was
subjected to in-depth analysis and was reorganized. For example, during the pandemic, when the
virus was diagnosed in most bank employees, the banks conducted temporary internal transfers
that disrupted the employees' regular job duties. These transfers took place during the pandemic.
Customers: Out of all the stakeholders, the customers are the ones who are affected the most
whenever something unexpected takes place. Customers run the risk of having the money that
they have toiled so hard to earn stolen during events such as demonetization, pandemics, or
bankruptcy, to name just a few, and they also have to deal with the catastrophic changes in the
banking industry, which turns out to be the most challenging duty. Customers risk having their
money stolen during events such as demonetization, pandemics, or bankruptcy, to name a few.
Government: A structure that provides a system of direction and control for the banks is called
governance, which refers to that structure. The regulatory framework that the government has
provided must be followed by all financial institutions, specifically financial institutions in the
form of banks. It is imperative that the government exercise extreme caution at every stage of the
process to prevent catastrophes, maintain the continuity of banking operations, and ensure the
effectiveness of these operations in the face of any crisis.
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Recommended Solution

As a result of the need to conduct their business in a manner more akin to that of a factory,
financial institutions only sometimes enthusiastically support recommendations to cut
operational expenses. Bringing down the cost of producing one unit of output across the board
would, in the end, increase the bank's efficiency ratio. However, non-banks are growing their
presence in the retail payments industry in the Eurozone and expanding their presence in the
lending sector. Now I'd like to talk about the second problem that the banks of the Eurozone
have to deal with, and that is the market's challenge.

A long-term shift toward financing based on capital markets has occurred in the Eurozone due to
factors including the deleveraging of banks and the meager cost of market borrowing. The
"Financing Markets Union" (CMU) project has the potential to advance the development of
Europe's financial markets significantly. This could be accomplished by, among other things,
making it less complicated for new businesses to gain access to risk capital, for smaller firms to
issue bonds, and for the growth of high-quality securitization.

Alternatives

To ensure that central banks can continue functioning without political interference, fixed
exchange rate regimes can be implemented. Since the beginning of the global financial crisis,
there has been a lot of attention paid to the roles that monetary policy plays in preserving
financial stability, as well as the interactions and potential conflicts that can arise between
policies that seek to maintain both price stability and financial stability. Since ensuring financial
stability has long been a top priority for central banks and has played a crucial role in the
foundation of these organizations in many countries, their current focus on this issue should be
no surprise.

Conclusion

As we've seen, banking is a fundamental component of our day-to-day activities. We have a

responsibility to conduct ourselves by the regulations of the monetary system because we are
upstanding citizens. To put it another way, the existence of money is crucial to the operation of
any economy. Currently, it is used as the most common currency in commercial transactions.
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Because they enable us to save money, make investments, and borrow money under
predetermined terms and conditions, banks are the most reliable financial institution we use.

References

 Introduction to Canadian Business Chapter 13(Page 535)

 Introduction to Canadian Business Chapter 17
 My own experience