Background Of Islamic Banking Essay Example Pdf - Free Essay Example

Sample details Pages: 23 Words: 6757 Downloads: 8 Date added: 2017/06/26 Category Finance Essay Type Narrative essay Tags: Banking Essay Did you like this example? This chapter provides a brief background of Islamic banking in the World as well as in the UK about its system and practice. The Islamic financial law has long history but Islamic banking and finance industry came into existence with Profit and Loss Sharing investment by Egypts Mit Ghamr Saving Banks in 1963. After official existence Islamic banking has grown in the area of finance, banking, insurance, mortgage, and assets management business with annual growth rate of 10-15 %. Don’t waste time! Our writers will create an original "Background Of Islamic Banking Essay Example Pdf" essay for you Create order But actual development in Islamic banking is started after 1970 with new investment techniques, strategies and product development (Steward, 2008). Dubai Islamic Bank (DIB) is known as world first Islamic bank it was formed in 1975. Currently it has 48 branches which great services. Dubai Islamic Bank offers higher returns than conventional banking system as well they provide auto, home and personal finance products, (Platt, 2008). Islamic banking is a relatively little known in the West, and greater interest in disgust. The idea of Islamic Banking, but contains much more than the prohibition of interest. Islamic banking shows that ethics and finance can be connected to serve the society. The idea is to eliminate the banking system of injustice in the society. A clear link with the religion of Islam can lead to mistrust among the citizens in the West, perhaps out of fear of the unknown. Todays global society in the Arab world and the Islamic banking system is closer to us and must be treated. If the Islamic bank and its ethical values for the first time it will be utopia, the economic actors in the world. Attitudes are changing, but slowly, and in recent years, the value of the traditional banking system, which has begun to look neutral, the conscience of a growing number of people. Author do not want to funds, banks and financial institutions, releases to companies which invest ethically and socially harmful act. The aim of this study is the question of Islamic banking important to clarify and explain some of their links to politics, history and religion. Islamic finance is on Islamic law Shariah that offers all the solutions and economic problems of the foundation. Under Islamic law, interest completely forbidden in Islam, because the interest rates very negative impact on society, such as the ability, purchasing power and increasing poverty, uneven distribution of the credit crisis and the economy. According to Usmani (2005) the main drawback in interest based system is financier has no concern with money when he gives an interest bearing loan to a client. But in Islamic financial contract cash money is not given to client, first of all they purchase the commodity and transfer to client then all profit and loss will be distributed between parties according to agreed terms and conditions (Usmani, 2005). Authers allegations that investment in Islamic financial system is very good for the economy, since the actual failure and the equilibrium, and it is helpful to improve the economy and society. Economic Law of Islam, there are some funds methods, such as Musharaka, Murabaha, Ijarah mudaraba and all the details of the case of the treaty, and some agreements in place systems for sharing profits and losses. Islamic financial system is based on the sharing of risks between the parties and the burden is not entirely consistent with the Parties. Islamic finance is not only the Muslim community because they are the moral and ethical approach to finance and investment. Islamic finance is also popular in all communities in the United Kingdom. Islamic finance has a number of challenges in the UK because the financial system is attractive to the traditional banking system, but the Islamic banking has great potential in the United Kingdom because it has less to five years in an Islamic bank carried out a significant role in the British financial markets . 1.1 The Problem According to the figures of Office for National Statistics 2001, there was 2.2 million (3.4%) Muslims living in the United Kingdom (National Statistics, 2010), but according to Home Secretary the Muslim population is increasing with high growth rate. In just seven years there is an increase of 40,000 Muslims in the UK and figures reached on more than 2 million which consist of 3.3% of total UK population (Guardian, 2010) There was no way available to the Muslims in the United Kingdom before 2000, but the Muslim population would spend their lives for their faith. Depending on the interest of Islamic education in Islam is strictly forbidden, and they want banking services such as savings accounts, checking accounts, mortgages, insurance and loans, backed by the Islamic law Shariah. The United Kingdom is a non-Muslim and all of its financial rules and rules for the traditional banking system. While the Muslim community has an active role in the economy, there was no need for a s ystem that can start to accept these people. Islamic banking began in England in 2003, so that the Financial Services Authority. By 2003-2009, there is sufficient improvement and development of Islamic banking. There are currently two main part of traditional banks and Islamic banks, Islamic banking in its entirety. But the growing Islamic banking and start-up phase, and the Islamic bank is is a number of challenges in western society as a socially, economically, and the contract terms. Instead of all the Islamic Bank now traditional banks also offer Islamic banking services with traditional banks such as HSBC Amanah offers the authors name is his own account in the name Lloyds TSB Islamic current account. 1.2 Aims and Objectives The United Kingdom is a non-Islamic country, the financial and banking rules most of the traditional banking system, because it is an Islamic bank is facing difficulties in the way of his progress. In other words, these problems, big challenges in the Islamic banking business, if they work hard to develop the Islamic banking in a short time. The study aims to identify opportunities for development and growth of Islamic banking in the United Kingdom and who are the biggest problems currently facing from the Islamic banking in the world in general and the United Kingdom in particular. I have divided the investigation of issues in three different areas, know that the banks and the Islamic banking sector, because is difficult without a basic understanding of information, develop the financial system, whether the opportunity for growth and development in the UK and what are the Challenges for Islamic Banking. This area will cover the basic and fundamentals of Islamic banking. It show s if the community and banks have better understanding about Islamic finance and its exercise then it will play important role for development of Islamic banking in the UK. How important is to know the fundamentals of Islamic banking for Muslim Community and services providers? Do Muslim community really believe and understand the difference of Islamic and conventional banking? What are the factors that make Islamic banking prior to conventional banking to Muslim community? How important is Shariah law and its practice for Islamic finance and the role of Islamic scholars in promoting Islamic banking services and its products? The main research objectives of this project to be addressed are as follow: Is Islamic banking sector has a potential for product development? Whether Islamic banking is in position to satisfy its customers? Is Islamic banking has a potential to perform active role in the UK Financial Market and its growth in market development? Do Islamic banking able to enhance the investment opportunities in the UK and whether it can play prominent role for the UK economy? Is there any affect of the UK environment (political, social and geographical) for growth and development of Islamic banking? Is Islamic banking has proper regulatory and institutional framework in the UK? Whether Islamic banking has any problem in the UK in respect of supervision and scholarly committee? Is Islamic banking full informative to its customers or facing any difficulty in its marketing sector? Is Islamic banking in position to survive and develop in the age of competition and globalization? Ch. 2 Literature Review This literature review shows the extent of the concept and principles of Islamic Banking around the world in general and particularly in the United Kingdom. Islamic finance is a universal concept of the traditional banking system, the practice of many of its products in most high street banks in Britain such as HSBC, Lloyds TSB, and just as the Islamic Bank of Britain. In this study, an attempt at a qualitative and empirical success, challenges and opportunities for Islamic finance UK. This reseach is of great importance in recent Shariah the implementation of legislation in the UK. Islamic Finance for a large portion of their customers and the rewards and the British economy. 2.2 Concept of Islamic Banking Islamic banking appeared on world forum as a prominent player over two decades ago. But actually many principles of Islamic banking system have been generally accepted all over the world for centuries rather than decades (Islamic-Banking, 2010). Islamic economic system is different from the Muslim community that the situation in time. In fact, the Islamic finance system, the ability to the demands of society for an honourable way is to do justice. Islamic finance is a growing sector and its diversity and different segments of the spectrum. It is for Muslims and Muslims religious societies and countries where Muslims are a minority. Moreover, it is a standard width: a non-Muslim people and the communities that ethical financial solutions have to look for, interested in Islamic banks. It is clear from banking practice that Islamic banking is equally popular in all communities (HSBC Amanah, 2010). It is clear from above statements that Islamic banking is not only Islamic or specifi c banking but actually it is a system which provides more ethical and moral concept of financial issues as well as it is really helpful to create a peaceful, economically prosperous and welfare society. The Organization of Islamic Conference (OIC) defined an Islamic banking as a financial institution whose statutes, rules and procedures expressly state its commitment to the Principles of Islamic Shariah and to the banning of the receipt and payment of interest on any of its operations (Hassan, 1999). This explanation, it is clear that the interest is completely forbidden in Islamic law, because they affect the poor and the negative impact on society and the economy. Base formed in the light of economic development, because of how rich people get wealth through the impact on the middle and lower classes. Economy, interest rates, the middle class can have a positive impact on the economic system gradually towards travel economy, financial crises, such as the credit crisis. Islamic Finance is a broker and a trustee other peoples money, with the difference that it shares, the gains and losses to its depositors. In practice the most Islamic banks have an organizational set-up very matched and similar to their conventional counterpart banks (Dar and Presley, 2000). Islamic banking is phenomenally profitable because, although its underlying funding mechanism is the same as conventional banking, its default experience is better, and its charges higher and less transparent (Cook, 2006). Because of the Islamic bank is not very different from the traditional banking system. They are the same regime as the economy and the economy, but there are fundamental differences in approaches and objectives. Islamic financing is the interest rate and the main objectives are the same department, reduce poverty and investment. It is very advantageous Muslim population who wish to solve all the financial matters of religion. As the number of Islamists, and some banks, high street in the world to offer products and services that are compatible with the Shariah (standard Chartered, 2010). Although the western media frequently suggest that Islamic banking in its present form is a recent phenomenon, in fact, the basic practices and principles date back to the early part of the seventh century (Islamic Finance: A Euro money Publication, 1997) (Islamic Banking, 2010). These statements are the result of the fact that the Islamic finance system, which is not new. Its roots are in the early days of Islam and the age of Hazrat Umer was settled form of discipline for all financial matters of Islamic law on state enterprises. Islamic financial system has gradually improved, and today it is desirable and in many Islamic countries and some non-Muslims, particularly in the United Kingdom, the USA and Australia. Although Islamic finance is a very famous Muslim and non-Muslim communities and it is a system that is completely solve the economic and financial situation, but also the Islamic financial and banking system is not structured and Islamic countries. Islamic finance is the shortage of challenges for the administration and the lack of an institutional framework for the implementation of this plan for the child. The banking system is relatively fixed, and the natural, economic and institutional all Muslims and non-Islamic countries. 2.3 The Principles of Islamic Banking The principles of Islamic banking are based on Islamic law, known as Shariah, which mean: 2.3.1 Interest (Riba) Interest cannot be paid or received on transactions in any case where money is exchange for money because the money is not actually any value accordance to Islam if it is not employed in business. Prohibition of Riba (Interest) Many Muslim scholars and some western thoughts believe and still considering that just interest free banking is as an Islamic banking. Actually interest is fully prohibited in Islam that is proved in Quran and Sunnah. The interest that you give in order to increase the wealth of the people, does not increase in the sight of Allah; and the Zakat that you pay in order to win Allahs approval, its payers do indeed increase their wealth (Surah Al-Rome no. 39)(Shafi and Usmani, 1997, p.67). It is beautiful and powerful statement from Quran which shows that interest is prohibited by God because it can only increase the wealth of individual not the society. Exclusion of interest from financial activities does not necessarily mean that the financier cannot earn a profit. If financing is meant for a commercial purpose, it can be based on concept of profit and loss sharing, for which Musharakah and Mudarabah have been designed since the very inception of Islamic commercial law (Usmani, 200 5, p.10). It is wrong and confusing the concept of society in the Islamic banking system, but Islam provides an alternative that the proportion of total investment and made a profit. In the event of losses by all parties to the agreement agreed conditions have suffered. Islamic financial system is effective only if all economic activity is guaranteed under the law of Islamic finance. Allah deprives interest of all blessing and develops charity; and Allah does not like an ungrateful, sinful person ( Surah Al-Baqarah no.276)(Shafi and Usmani, 1997, p.49). Zarqa (1983), Khan (1986), Chapra (2000), El-Gamal (2000) and Gafoor (1997), have illustrated the macro-economic stability that can form a profit and loss sharing system; an Islamic form of banking would replace interest-based transactions that characterise western transactions (Shanmugam, Perumal and Ridzwa, 2004). It is from the top states that Islam is not interested in made in the room. Interest rates have been totally p rohibited in Islam. On the basis of the economic interests of depositors more interest and desire, their property would increase by interest preserved. They were not involved in investment, and this will lead to the collapse of the credit crisis. On the other hand, banks charge high rates of low-interest loans, it will cause difficulties for the poor in society and lead to the rich and the industry giants. 2.3.2 Gharar and Maysir Transactions must avoid uncertainty (Gharar), speculation (Maysijr) or anything that could lead to the unjust enrichment or unfair exploitation of one of the parties to a contract (Imeson, 2007). In case of speculation the big investors and industrialists turn the economic financial system toward their own and personal benefits. 2.3.3 Unethical Businesses Transaction cannot be made that involve prohibited products or activities, such as alcohol, illicit drugs and tobacco because Islam wants to develop a ethical and friendly environment in the society (Imeson, 2007, p.5). 2.4 Fundamentals of Islamic Banking Islamic commercial law is actually based on four basic principles. The fundamental of first Islamic business principle is profit and loss sharing and the second is based on fixed service fees and charges and third is based on free of cost and no charges. The other principles are changing with the situation of the business and its operation (Bellalah and Ellouz, 2004). Musharakah (Partnership Finance) Musharakah is a contract in which the bank and the industrialist contribute jointly to the capital of a company or project to make a profit. Profit and losses are shared between the parties on agreed term and condition of the contract. Mudarabah (Trust Financing) Mudarabah is a contract in this contract it is the responsibility of bank provides all the capital while the partner contributes commercial efforts, professional skills and experiences. Finally, the bank receives a predetermined proportion of the profits. In the case of a loss, the bank bears all the financial loss whilst the manufacturer goes unrewarded (Rob, 1992). It is concluded that this system encourage the individual to participate in financial activity and prove himself as an active part of society. The third principles and the free charges among the principles within the fixed charges category are: Murabaha (Cost-plus financing) The Murabaha is a contract in which the bank informs the industrialist about the acquisition cost of a good and negotiates with him the profit margin. It is one of the most popular modes used in Islamic banking system in different countries to promote interest-free transactions. Bai-muajjal ( Deferred Payment Sale) The Bai-muajjal is a deferred payment sale contract which is traded without additional costs. Ijara (Leasing) The Ijara is a rent contract by which the owner of the good rents it to another party beeding it. After that the latter can purchase it and rent is reduced until the good become the possession of the client (Bellalah and Ellouz, 2004). Nowadays the Home Finance and Islamic mortgage are based on the concept of Ijara and it is very successful tool in Islamic financial system. Quard Hassan In Islamic financial system the customers who are facing financial crises or unpredicted expenditure banks provide welfare loan without paying any fees or interest. According to Rob (1992) Islamic banks can raise the funds through sale of shares to public and further through three main deposit accounts such as investment deposits, saving deposits and current deposits. Islamic and Conventional Banking Islamic banking has the same purpose and practice of the traditional banking system, except that the Islamic banks in accordance with the laws Shariah. The basic principles of Islamic banking are profit and loss sharing agreement between the parties and also strongly prohibits Riba (interest). Islamic banking and conventional, in reality it is no different. Both the banking system is virtually the same objectives, and the only difference between the application of relevant information, because the interest is completely forbidden in Islam. Islamic banking is the traditional area of banking, will ensure that Islamic banking that all financial matters in accordance with Islamic law and economic rules and regulations and in particular the state, such as the Financial Services Authority (FSA), the United Kingdom (Shanmugam, Perumal and Ridzwa, 2004). Islamic banking almost provides same services as conventional banking such as current accounts, saving accounts, insurances, mortgages an d investment opportunities in the society. According to Nienhaus (1995) Islamic banks, in compliance with the welfare principle of Islam, offer facilities more or less the same segment of the economy as the conventional banks. The practices and situations are not so different from conventional banking such as the costs of funds are closely related to interest rates and guarantees are nearly as important in Islamic banks as they are in the conventional banks (Hassan, 1999). This research has the functions of these statements of Islamic banking are paired with traditional banking system as interest expense compared to conventional banks, Islamic banks can offer services such services on the pricing of mortgages and charges brought prices are probably the same in both the banking system, but only that the Islamic banking rules of Ijarah in which the payment follow up on the basis of one months rent plus the cost of services of the bank. Scope of Islamic banking in the UK Office for National Statistics 2001 figures UK there are about 1.6 million Muslims are living in UK, which comprises 2.8% of the total population of the country, in which 50% are estimated to reside in the London area (BBC, 2010). According to Home Secretary UK, Jacqui Smith, in United Kingdom the Muslim population is nearly 2 millions. It means that the Muslim population is about 3.3% of the UK population (guardian, 2010) Figure: 1 The Muslim population in some European countries Country Total Population Muslim Population Percentage % Belgium 10.3 million 0.4 million 4% Denmark 5.4 million 279,000 5% France 62.3 million 5 to 6 million 8 to 9.6% Germany 82.5 million 3 million 3.6% Italy 58.4 million 825,000 1.4% Netherland 16.3 million 945,000 5.8% Spain 43.1 million 1 million 2.3% Sweden 9.0 million 300,000 3% Switzerland 7.4 million 310,800 4.2% United Kingdom 58.8 million 1.6 million 2.8% Source (BBC, 2010) There is an increase of 400,000 in Muslim community in just seven years. The Muslim is fast growing community in UK, it reflects from the figures from the population censes of 2001 which increase from 2.7% to 3.3% in 2008 From these figures it is clear that France and Germany and UK are the most Muslim populated countries. But in UK the population growth rate is higher than other countries. The UK Government is also interested in growth of Islamic banking because Muslims are playing prominent and active role in the development of the United Kingdom. With the growth of Islamic banking the Muslim community can free contribute and enhance the investment in their permissible businesses. Figure: 2 The Muslim Population in the UK According to Community Background No. Country Origin Share in Muslim Population 1 Pakistan 43% 2 Bangladesh 17% 3 India 9% 4 Arab, African and Other 31% Source (Guardian, 2010) Figure 2 is reported that the majority of the Muslim community was moved to the South Asian countries. The author think the reason for the rapid growth of Islamic banking in the United Kingdom is the South Asian community because they are better trained and are strictly follow the Islamic rules in all areas of their lives. Germany and France, the Muslim population of Arab origin, they are interested in investing their money in their own country. But in Britain most of the High Street for small and medium-sized enterprises in the Asian community. It has the advantage that the British Government is to improve on the activities of Islamic finance in the country, it is really to improve the economy and reducing the economic crisis. To meets the requirements of the Muslim community, the Islamic financial products in the United Kingdom for several high street banks such as current accounts and mortgages and other financial services. The United Kingdom is the first country in the West, wh ich began in the area of retail banking, whether Shariah. Islamic Bank of Britain was founded in 2004, which led to the FSA. The Kingdom is a major economic center and international companies and the Middle East, the most traditional banks offering Islamic banking products in the United Kingdom and other countries as well as (FSA. Gov, 2010) Growth and Development in UK Islamic finance has grown worldwide by 10-15 percent per year over the last ten years that the popularity of the traditional banking system been so fast that the Islamic financial institutions are currently more than 51 countries. Despite continued growth, many felt that supervisors and market participants, the process by which Islamic banks are introduced into the mainstream (Sole, 2007). Although the growth rate of Islamic banking is very high, but the important thing to understand, because many Muslims have not yet sufficient information on the reasons for it. All major banks have opened Islamic financing windows, for example, the Saudi-American and the Kingdom of Saudi Arabia banks and international financial actors such as HSBC and Citibank, one Islamic banking unit created. Lloyds TSB expands to the requirements of Islamic banking more and more the possibility of customers in the United Kingdom. Islamic current account and financial service products, which is governed solely by Islamic law Shariah in different branches of banks across the country are designed to provide. Customers of the banks current accounts pay no interest loans to these customers and there are no crossing facilities that account. Household active bank financing reduces Musharaka program and the end of the sales contract of Ijarah assets (Guardian, 2010). HSBC has a great contribution in Islamic banking sector its goal is to provide Islamic financial services throughout the world where the Muslim community is living in Islamic as well as non-Islamic countries. According to manager of HSBC Amanah Amjid Ali HSBC has a plan about Future developments in Islamic section such as Shariah insurance, pensions and savings accounts (Bown, 2005). HSBC provides services of Islamic mortgages and current accounts as well as they have great participation such as HSBC Amanah which consists of following feature: Investment account through Murabaha contract Amanah cards which are based on f ixed services fee Home finance and vehicle finance through Ijarah concept Personal loan based on the theory of Tawrraq Takaful (Islamic insurance) Islamic Bank of Britain offers saving accounts, terms deposit accounts and treasury deposit accounts. Islamic Bank of Britain to invest this money in trade Shariah compliant investments. The customers of the Islamic Bank of Britain are fully compliant with the investment criteria of the officials of the bank satisfied (Islamic-bank, 2010). All profits will be distributed from the investment bank and its customers. They also offer services to non-Muslim investors who want to avoid industries such as tobacco and alcohol. Personal loans are also available in the system of variable fee (Bown, 2005). London is a leading financial markets in the world and is the regulatory environment is well established and respected in the world. London has a large number of people in the financial sector, especially trained, the traditional side of the banking system. Islamic finance is the usefulness of these skills through the employment of these employees will receive the traditional banking Islamic banking (Teran, 2007). Due to world financial crisis there is a big opportunity to develop Islamic banking on modern basis because in modern world financial distortion is created by interest based system. Nowadays many Muslim and other qualified and skilled worker are interested in the field of Islamic banking in UK it will help to develop and boost Islamic financial system in this shacked economy. According to Percy, chief executive of the bank of London and Middle East (BLME), Islamic finance in the United Kingdom has passed the primary development phase and has entered in stage of its growth (Imeson, 2007). Islamic bank of Britain created in 2004 as a retail Islamic bank in UK and BLME has been launched in July 2007. There are 21 conventional institutes in the UK which provide Islamic financial services according to Shariah law to 1.8 million Muslim people (Imeson, 2007). It is concluded from the above statements about the Islamic banking in the UK was such an important economic player in the market. It is in good shape and to improve Islamic finance for five to six years. If the organizers of the Islamic finance sector in all the hard work, e.g in connection with the FSA and the rules of the authorities, product development, market development, awareness program, the institutional and legal framework, while keeping regional Islamic finance this prestigious position in the UK financial sector. Challenges Islamic finance in the economy is doing well in Britain, but some of the opportunities and challenges of Islamic banking needs to be treated kindly in all segments of the economy and society. There is a need for a generally clear and transparent Islamic banking, which covers all areas of society and economy to the challenges and threats for the future needs of the financial sector. Islamic banking faces many challenges due to its origin. Islamic finance is in a transitional phase and the phase of development in different countries over the past two decades . According to Khalaf (2007) Islamic banking industries have always suffered with the issue of different opinions of Islamic scholars, suppose a product or practice may be accepted to one scholar, could be considered un-Islamic by another scholar. In Islamic banking system there is a serious shortage of scholars and qualified managers. Unfortunately the managers are not well trained in the use of Islamic financial practices (Iqbal, Ahmad and Khan, 1998). Islamic banking in western countries especially in UK is facing the problem of legal system because Islamic banking not yet proper regulated due to this there is possibility to create tension between Islamic banking and regulators (Karbhari, Naser and Shahin, 2004). It is fact that Islamic banking is not well regulated at the moment because they have not a strong branch network. Islamic bank of Britain has only eight branches around the UK (Islamic-bank, 2010). I think that is not enough to fulfil the requirements of a big Muslim community. Currently Islamic banking is facing the challenge of the new mode of conventional banking in opening of Islamic banking window. It will improve the services of Islamic banking butthere is a need that Islamic scholars work hard to maintain the priority of Islamic Shariah law (Iqbal et al. 1998). According to Bokhari (2007) Islamic financial institutions are facing various challenges and difficulties in which the main and important is the lack of skilled and trained professionals to fulfil the requirements of this fast growing industry. Conclusion I reviewed in this literature, various aspects of Islamic finance is essentially a concept and practice of Islamic banks in the United Kingdom. The United Kingdom is a center of Islamic financial activities in the West, and auther also saw that the British Society of conventional banks in Islamic banking window offers the best services in accordance with the laws of Shariah satisfying the requirements of the Muslim community in various fields especially Ijarah (leasing), Takaful (Insurance) Sukuk (bonds) and provision of services in the home loans, personal loans, checking and savings accounts. UK Islamic Bank has great growth potential, since many Muslims around the world in the UK, they play an effective role in the economy. Islamic banking is also a huge challenge, because there is no knowledge of Islamic banking business to their clients and also some other issues related to the British regulator, the structure of Islamic government and its realization Shariah. Ch. 3 Methodo logy (Phenomenology, positivism discuss in theoretically) 3.1 Purpose Islamic banking is a hot topic in western countries especially in the UK. In the UK almost 2 million Muslims community is living and they want to spend their lives according to their religion (Guardian, 2010). This community is well contributing to the economy of the UK due to this the UK government gives more importance in the sector of Islamic banking. Nowadays the UK is the hub of Islamic banking and most of the high street banks providing the services of Islamic window. Due to this growing demand, Islamic banking faces some difficulties and challenges in western countries. The purpose of the study is to examine and analyze the growth and opportunities of Islamic banking in the UK. 3.2 The Paradigms and Methodologies There are two main research paradigms positivistic and phenomenological. It is possible that different authors may use the alternative terms for these main paradigms in different time. The most commonly and alternatively used the terms are quantitative research method for positivistic and qualitative for phenomenological (Collis and Hussey, 2003). The originally the positivistic paradigm was developed in the natural sciences to study natural phenomena and it is confirmatory and deductive in nature. The phenomenological paradigm was developed in the social sciences to facilitate the researchers to research and analyze social and cultural phenomena and this approach is exploratory and inductive in nature (social Research Methods, 2010). The paradigm is very important because it gives you a right path to use the right methodology. According to Collis and Hussy (2003 p.55) Regardless of which paradigm you are employing, it is important that you pay attention to all the features, and en sure that there are no contradictions or deficiencies in your methodology. The paradigm of this research is phenomenological because it tends to produce qualitative data not quantitative. The quantitative research is objective in nature that involves analysis of numerical data by applying statistical tests (Collis and Hussey, 2003). But the qualitative research is much more subjective in nature, concerned with generating theories and can be generalized in understanding of the phenomenon of challenges and opportunities of Islamic banking in UK. 3.3 Reason for chosen Qualitative Research In qualitative research methods it is easy to get detailed, conceptual and rich ideas because these methods provide the results that how people feel and what they think because they feel relax to comments on any specific topic (orau.gov, 2010). In my research it is comfortable to hold qualitative research because it is related to banks authorities and banking customers. From the interviews with banks authorities it is easy to get information about growth and development of Islamic finance in the UK and as well understanding of Islamic financial products between banks and customers. There are some advantages of qualitative research over quantitative research. In qualitative research it is easy to explore topic in detail and more depth than quantitative research methods. Qualitative research has the advantages over quantitative research because it is less expensive there is no need to contact with many participants as well no need to use the expensive methods and software for analysi s. The qualitative research is more flexible in term of locations and timing because there is no need to interviews a large number of people to take result (orau.gov, 2010). It is resulted that qualitative methods can provide all the information in detailed because in unstructured and semi-structured interviews the participants feel no hesitation to discuss matters in details. The qualitative research has some demerits as well because it is not able to produce the exact figures that how many people of society understand the topic and it is difficult to express what people like and dislike (orau.gov, 2010). It is difficult to analyse the data in qualitative research because the collected information are too much and to conclude this data is a hard job due to time constraint. 3.4 Research Method For this research project, I chose to undertake qualitative research method. The qualitative method is a type of research that emphasizes the quality of meaning in consumer perceptions and behaviours; there are different criteria or techniques can be used in qualitative method such as in-depth interviews and focus groups (Marketing about, 201). In-depth interview Focus group Case study Direct observation 3.4.1 Reason for chosen in-depth Interviews Author chose the deep-in-interview technique in qualitative research because of its unique advantages over other methods such as focus groups and questionnaires. In the way of depth interviews, it is easy for an individual and to remain focused on the specific topic of speech, it is difficult to concentrate, compared to the group interviews. There are many time saving and reduce the disadvantages of having a certain date. The main advantage of in-depth interview is that the interviews can be easily conducted with key community leaders through that researcher can get a fast overview of a community according to research requirements (caps.ucsf, 2010). In-depth interview has advantages on the basis of research questions that the researcher can obtain the information itself, and there is no difference in the understanding and analysis of data for the result. In the questionnaires, it is possible that some participants are not to respond, in time, and for some time, it is difficult t o understand the issue of questionnaires. According to Collis and Hussey (2003) the major problem in questionnaires especially distributed by post that delay in response and some time no response by the participants. 3.5 Data Sources 3.5.1 The Primary Data This research is based on a study by the United Kingdom, because the growing population of the Muslim community is a positive role in the economy of the United Kingdom. In fact, most Muslims want their lives to spend according to their faith. In this research, the problems and opportunities for Islamic banking in the United Kingdom are discussed. Author will use the qualitative method of research in this project. There are several techniques of the qualitative method, but depending on the situation of the depth interview is the form best suited for this project. According to Collis and Hussey (2003) in phenomenological approach the interview questions are unstructured or semi- structured in pattern not closed questions like positivistic approach. The plan is that the researcher will prepare semi-structured questions that are helpful to take maximum information from interviewees because in closed questions it is possible that some important information will be ignored. In semi-st ructured interviews the researcher has an opportunity to probe various areas and to raise specific queries during the semi-structured interviews (iiu.edu, 2010). 3.5.2 The Secondary Data According to the project requirement the existing literature will be used for theoretical study from all resources such as academic and scholarly journals, newspapers and magazines. The interviewer will also follow the previous research of Islamic banking with regard to challenges and growth in Australia and Malaysia because there is lot of work in this sector. 3.5.3 Data Collection Methods For the collection of primary data researcher will in the technique of depth interviews. The plan is to keep the seven-depth interviews in different sectors of society. The researcher has three interviews with the authorities of banks such as HSBC, Lloyds TSB and the Islamic Bank of Britain, that the clear facts and figures are on the growth, opportunities and issues related to Islamic Finance in regards Shariah compliance and state authorities. Two with Muslims, for example, a customer of an Islamic bank, the research by providing information on why they do Islamic Banking, which facilitate the advantages and disadvantages of this system and the scope of Islamic banking in the United Kingdom. Two of the Muslims who are not useful with the Islamic banking product to find out why they are not the Islamic banking products and the factors that prevent these services on the basis of their faith. researcher Plan is for non-Muslims to speak using Islamic Banking products, which will prov ide the best information for growth and sound fundamentals of Islamic banking. The proposed date is to conduct these interviews by sending letters to the authorities and banks, e-mail Customer Services Department the banks to provide a point of view. For interviews with clients and not customers of Islamic banking, the interviewer is the use of posters in mosques and libraries in this area, where Muslims live in the majority. The interviews are recorded with voice recorder with respondents permission if the voice recorder is not possible, then the review of interviewer notes show, as summarized in its entirety and these notes will continue on the application. 3.6 Limitation of the Study According to the proposed planned of seven interviews it is possible that there should be some hurdle to get all information from customers of Islamic banking. In the course of research if the researcher will feel to get more widely information about the growth of Islamic banking then mini open ended questionnaires will be conducted. According to Collis and Hussey (2003) it is possible that the method of questionnaires can be applied in both methodologies. The success rate of the project will be examined based on the existing theory of Islamic banking and assumptions made during the research. The primary data will be analyzed on the base of actual ambition of the Islamic banking and its implementation. Ch. 4 Results and Discussions The aim of the research is to find opportunities for growth and development and the key challenges facing Islamic finance in the UK. According to the research plan nine participants took part in the processes belonging to different sectors of the community, as three of the bank supervisory authority, three of the clients with the Islamic banking system and three Muslims, who currently holds non Islamic bank account. The primary data is collected through detailed interviews to comply with different opinions of community members about the scope and the future of Islamic banking in the United Kingdom. The results and the results of this in-depth interviews with the aims and objectives of the research to be adjusted. By comparing discussion of the results and conclusions from primary sources and coordinated with the secondary data collected from various newspapers, websites, and previous research. The purpose of this discussion is to show the current position of the Islamic banking, pr actice, weaknesses and opportunities. HOW and justify Philosophy/approach inductive/deductive positivism/phenomenology WHICH What is ql What is Qn? Prim/Sec? which you will use? WHY How collect? WHY? Ch.4 Result and Discussion Ch. 5 Conclusion

An Analysis of William Edward Burghardt Du Bois Proposed...

Abstract Education is the most important part of any individuals life. It shapes characters and builds personalities, introvert and extrovert, pessimistic and optimistic, loving and aggressive. For a better society an improved educational system is a must, a system based on ethics and knowledge. The paper examines the work and educational principles of W.E.B. Dubois and then compares his proposed system to the currently prevalent educational system. Introduction William Edward Burghardt Du Bois is one of the greatest African Americans in history. He was born, 23rd February 1868 in Massachusetts. Du Bois had an unusual life, in the sense that in his early years he knew nothing of the racial discrimination prevalent in the South. He lived a life of privilege for a black in U.S. He faced neither outright discrimination nor economic difficulties. He graduated as a Valedictorian and the only colored student and even went on to become the first black to secure a doctorate degree in history, from Harvard. It was during graduation that he got first taste of the racial prejudice prevalent in the American society. He began educating himself in the history of discrimination. He took a Bachelors degree from Fisk University, where he came face to face with racism and frequent lynching or name calling. He vowed to elevate the status of his race and help solve what he referred to as, the Negro problem. At Fisk he was part of the Mozart society, editor of college newspaper and a

Research Methodology of Climate Stress on Australian Businesses

Question: Discuss about the Research Methodology of Climate Stress on Australian Businesses. Answer: Introduction Multifarious impacts of climate have been seen and visualized globally, some of it is on business(Hennessy, 2008). Australia being located away from most continents of the world is surrounded by the ocean. UN reports major climatic change and impacts have been brought about by vulnerability, caused by way of increasing pollution. Major studies conducted indicated impacts of such climate change on the human society, but its detrimental impacts on businesses are now being diagnosed. A 2 to 3 degree rise in temperature has caused wide spread damage to the ecosystem, causing major animal, plant and fish species to become extinct(Mulki, 2008). This has affected fishing on a major scale in Australia, hampering the fishing industry. The scope of this report evaluates methodologies adopted in order to conduct the study. Aim and Objectives In order to attain goals of the study, the following aims and objectives needs to be attained. Research Objective 1: To analyse the impact caused by climate stress on businesses in general Research Objective 2: To understand the impact of climate stress on oceans. Research Objective 3: To examine fluctuations in ocean temperatures impact on marine life Research Objective 4: To understand revenue generated from fishing and its impact on Australian economy Research Objective 5: To analyse the negative impact of reduced aquatic life to the fishing industry(Harle, 2007) Methodology In order that the aims along with goals of the study is met, a comprehensive literature review is undertaken(Nelson, 2008). Research methodology is a process of developing research ways and means, such that aims and goals of a study by means of data collection and analysis is undertaken. Then findings and analysis reflects results from key understanding related to the study. Literature Review A literature review is a comprehensive analysis of relevant literature sources that have been taken from the study. There are several literature texts and journals that has been undertaken for the purpose of analysis, which are as follows. W.N.Adger (2009), Four reasons for concern about adaptation to climate change. In Environment and Planning A, pages 2800 to 2805(Adger, 2009). The scope of this journal reflects the necessary areas that are reflects adaptations that needs to be undertaken for particular climatic changes. M.Alston (2011), Gender and climate change in Australia. In Journal of Sociology, pages 53 to 70(Alston, 2011). This journal refelcts climatic impacts specific to Australia. M.R.Anwar (2007), Climate change impact on rainfed wheat in south-eastern Australia. In Field Crops Research, pages 139 to 147(Anwar, 2007). Climate changes on Australian food system is referred in this. L.Berry (2011), Climate change and farmers mental health: risks and responses. In Asia Pacific Journal of Public Health, pages 119S to 132S(Berry, 2011). This journal analyses specific climatic change bringing health impacts on farmers. S.A.Bond (2010), Psychosocial safety climate, workplace bullying, and symptoms of posttraumatic stress. In Organization Development Journal, page 37 is another journal refered for the purpose of this study(Bond, 2010). K.F.Hennessy (2008), An assessment of the impact of climate change on the nature and frequency of exceptional climatic events. In Australian Government Bureau of Meteorology: Melbourne analyses relevant climatic impacts on Australian governments (Hennessy, 2008). J.P.Mulki (2008), Effect of ethical climate on turnover intention: Linking attitudinal-and stress theory. In Journal of Business Ethics, pages 559 to 574 analyses ethical impact of climate(Mulki, 2008). Data Collection Various quantitative and qualitative data needs to be collected for undertaking this study(Eriksson, 2015). Data is collected form source primary and secondary in nature. Primary data has been collected through interviews whereas secondary data is collected from journals, newspapers, internet sources and other relevant sources. Interviews Interview is used as a data collection source for the purpose of this study(Silverman, 2016). Interview with several small and medium enterprises has been obtained and then analyzed in order to arrive at results for the analysis. References Adger, W. N. (2009). Four reasons for concern about adaptation to climate change. Environment and Planning A, 2800-2805. Alston, M. (2011). Gender and climate change in Australia. . Journal of Sociology, 53-70. Anwar, M. R. (2007). Climate change impact on rainfed wheat in south-eastern Australia. Field Crops Research, 139-147. Berry, H. L. (2011). Climate change and farmers mental health: risks and responses. Asia Pacific Journal of Public Health, 119S-132S. Bond, S. A. (2010). Psychosocial safety climate, workplace bullying, and symptoms of posttraumatic stress. . Organization Development Journal, 37. Eriksson, P. . (2015). Qualitative methods in business research: A practical guide to social research. Sage. Harle, K. J. (2007). The potential impact of climate change on the Australian wool industry by 2030. . Agricultural Systems, 61-89. Hennessy, K. F. (2008). An assessment of the impact of climate change on the nature and frequency of exceptional climatic events. . Australian Government Bureau of Meteorology: Melbourne. Mulki, J. P. (2008). Effect of ethical climate on turnover intention: Linking attitudinal-and stress theory. Journal of Business Ethics, 559-574. Nelson, R. H. (2008). Using adaptive governance to rethink the way science supports Australian drought policy. environmental science policy, 588-601. Silverman, D. e. (2016). Qualitative research. Sage.

Lab Questions free essay sample

Jazz is a musical style that originated at the beginning of the 20th century in African American communities in the Southern USA. One of the contributions of Latino to the US, Latin jazz gained popularity In the sasss into the late sass. 2. They were the original Mambo Kings In New York In the ? 40? S and are considered the most Innovative and Influential orchestra In the genre. 3. Dizzy Gillespie Incorporated Latin music Into his music by the rhythmical of Latin music with Jazz ND also using Latin musicians in his band. . The Palladium was once a studio in New York but then was home of the mambo where people from different races danced and had fun. 5. The television and films increased the exposure because movies and television shows were exposing some genres of Latin music by dancing and singing in the shows and also in the films. 6. Latin music influenced rock music using some Latin rhythms in their songs to make their song even better. We will write a custom essay sample on Lab Questions or any similar topic specifically for you Do Not WasteYour Time HIRE WRITER Only 13.90 / page 7.Latin sic had such a great influence on the development of popular music because popular music were using some Latin material in their songs and people were amazed to what they were listening to so more and more artists were using Latin rhythms In their music and It sounded great. 8. Well yes because I love dancing so when I listen to some songs to dance to I can hear the Latin material In the songs and It amazes me to know that Latin music Is really a big part of our music culture.

Mainting Job Descriptions Essays - Human Resource Management

Maintaining Job Descriptions BUS 335 Staffing Organizations Prof. Humphries Name Frederika Lewis Date July 25, 2011 Maintaining Job Descriptions Brief summary of the situation InAndOut, Inc is a small company that provides warehousing and fulfillments services. Supply and demand along with technology changes has the company moving forward and growing fast. The general manger found his self in a situation where the company has started expanding, and more growth is expected, and the job descriptions for the current employees are outdated, and some don?t have job descriptions at all. However he has to discuss any initiatives or ideas with the owner of the company before he can make any decisions. Knowing this he hires a part-time HR intern to help him. The intern?s duty is to prepare a proposal to present to the owner of the company to justify his ideas of the importance of updating and maintaining the job descriptions, and creating new job descriptions, and the hiring of new employees. Examine the reasons why it is important to update and write new job descriptions. Job descriptions are written statements that describe the: duties, responsibilities, most important contributions and outcomes needed from a position, required qualifications of candidates, and reporting relationship and coworkers of a particular job.It is important to update and write new jobs descriptions, because jobs are the building blocks of an organization. They are explicitly designed and aligned in ways to enhance the production of the organization?s good and services. Jobs are constantly evolving, they are born out of organizational need, grow in scope and responsibility and the needs grow, and sometimes, die when the needs change. Example as with the case Maintaining Job Descriptions the general manager found that the descriptions had not been revised in several years, and some of the employees were working without job descriptions. Every job has its own set of extrinsic and intrinsic rewards. Developing Job Descriptions is an essential part of managing organizations from an HR perspective. Job Descriptions are needed to benchmark your organization's jobs to those in the external labor market. Developing strong Job Descriptions and keeping them up to date is time well spent. Creating your organization's Job Description ahead of time can lead to success down the road. (Doug Sayed founder and principal of Applied HR Strategies, Inc., 1999) Outline a process that will yield a set of thorough, current job descriptions. The jobs descriptions for an organization come directly from the organization's mission and structure. A job description is a basic HR management tool that can help to increase individual and organizational effectiveness. If your job descriptions are out of date, the first task is to conduct a job analysis. Job analysis is a process for systematically collecting information to help you fully understand and describe the duties and responsibilities of a position as well as the knowledge, skills and abilities required to do the job. The types of information collected during job analysis will be specific to each organization. However, typical kinds of information that are gathered are: Summary of duties ?Details of most common duties ?Supervisory responsibilities ?Educational requirements ?Special qualification ?Experience ?Equipment/tools used ?Frequency of supervision I. Job Matrix A.Identify and record the job requirements II. Task Dimensions B.Identify a set of task this includes the job?s entire major task and excludes no relevant or trivial task. III Job Description A.Establish the tasks or functions that need to be done B.Group the tasks into meaningful and challenging jobs C.Determine the experience, knowledge, skills and other characteristics that are required D. Determine any special working conditions or physical requirements E. Write or update the job description Recommend a process to be used in the future for periodically reviewing and updating the new job descriptions. All job descriptions should be periodically reviewed and employees should be asked at times if any changes have taken place in there position that would require a re-write of their job descriptions, make note of any added duties, and or stopped duties from the employee. A process that could be use in the future for periodically updating the new job descriptions is, first review the current job description that requires updating. Make reference to any changes; determine what changes have taken place since the job description was originally created. Develop a task list to

The ghosts speech in Hamlet Research Paper Example

The ghosts speech in Hamlet Research Paper Example The ghosts speech in Hamlet Paper The ghosts speech in Hamlet Paper The extract commences with the usage of a caesura which reinforces the lack of time that the ghost of Hamlet has to spare till day breaks. The ghost then begins to use an anecdote, where offstage action is brought on stage. The ghost speaks of his custom of sleeping in the orchard during the afternoon; the word custom highlights the manipulative and conniving nature of Claudius. This manipulative brother stole which refers to the sin of theft; this is also an attribution to the Ten Commandments listed in the bible, which quoted Thou shall not steal. Claudius stole Hamlets life with cursed hebenon, which was noted to be potent when it mixes with the blood stream, and causes the blood to curdle. The ghost of Hamlet then uses the metaphor of describing the ears as a porch which is the natural extrusion of the body. The leperous distilment refers to the cursed hebenon which curdles blood, and leperous is an apt adjective as it describes the effect of the poisonous liquid. The effect is described as enmity with the blood of man, as if personifying the liquid as abhorrent to human blood. Hebenons rapid action is compared to the swiftness of quicksilver or mercury as the metaphor of the natural gates and alleys of the body is used to makes the comparison effective as it effectively curdles blood. The theme of redundancy is brought out again, by using another example of curd. Hamlets ghost then uses a simile as curd curdles milk. Hamlets ghosts blood like the milk became curdled by the dropping of curd. There is use of contrast as the word thin is used to emphasize the thickness of anything curdled. Hamlets ghost soon was tainted by a skin ailment, he then specifies how the skin ailment if lazar-like or like leprosy. Shakespeare again uses contrast to reiterate the ill effects of this lecherous liquid, as the words of loathsome crust being the result of the transition from his smooth body. Hamlet again underlines the politic nature of Claudius by saying that he was sleeping. Shakespeare then makes clear to the audience of the nature of the murder. This murder didnt just rob King Hamlet of his life, but also two more esteemed possessions, his crown and wife. Hamlets ghost also uses the word dispatched which is a euphemism compared to the accusations of theft mentioned previously. The sacrosanct nature of King Hamlet is brought out as he mentions numerous Christian beliefs. It was believed that one must seek salvation and confess before ones death, but King Hamlet was unaware of the cruel slaughtering of his life, he was cut in the blossoms of his sin. Unhouseled refers to how the ghost was without sacrament and the Eucharist. Disappointed infers how Hamlet was unprepared for death, and he couldnt confess to sins and seek absolution. Unanointed refers to how King Hamlet has not received the holy oil from a priest. The theme of redundancy which is frequently used through the play, is seen in the lines oh horrible, oh horrible, most horrible to advocate the nefarious nature of the crime. Hamlet then uses a tall command by leaving him virtually with no choice by saying bear it not, what he shouldnt bear is noticed to be the same view point as his son. He cant see his wife and throne as the foundations of damned incest. This again alludes to the third intent of Claudius. But to startle the audience, King Hamlets undying love is once again brought out, telling him not to contrive against his mother, Leave her to Heaven. This yet again shows the religious nature of Hamlet, who will only let St. Peter at the gates of heaven judge his wife, as it is no mortals right. King Hamlet then uses the metaphor of the thorn that in her bosom lodge which refers to the guilt ridden state that the rosy queen will be subjugated to. The passage of time is again brought through the words of the ghost, he says Fare thee well since daylight must be soon approaching, by using an example of the glowworm and how its fire is soon being burnt out as the day light is soon approaching. King Hamlet then says Adieu, adieu, adieu to shows the speed at which he must soon depart. Remember me connects to the soliloquy made by Hamlet who is in desperation to lose the harsh memories asked Must I remember? Young Hamlet then in the state of desperation and shock beckons Heaven and earth, his state of desperation is highlighted by the numerous exclamation marks. He calls upon the host of heaven which is composed of the choir of angels He then ponders whether he should request help from even hell? He immediately repents by saying Oh fie. The theme of repetition is once again through hold, hold to show the emotional attachment and the grief that he has experienced through finding out the actual truth as to why his father is currently dead. Hamlet starts to speak to himself, by reassuring his sinews to stay strong and not grow instant old, but to make sure he doesnt faint. Remember thee? This is used twice in the next few lines, shows that Hamlet cant accept that his father even questions whether he will remember him. Hamlet speaks of a distracted globe, this globe could be his mind, in which memory will always hold a seat, and his distracted temperament due to realization to the truth. The globe could also be a reference to the globe theater which was going through turbulent times. Hamlet then speaks of the table which was a notebook used for recording, through this metaphor he compares his memory to the table. Trivial fond this statement is an oxymoron of a kind, since fond memories are those which usually hold the reins of ones memory, but he sees these happy memories as petty. Hamlet then uses pauses to shows his reflection so he can list all of which he will wipe away from his memory, so that the commandment can alone live. He refers to his fathers words as a commandment, giving his father an almost equal status to the divine, which shows the extent to which he will obey his fathers commands. He then personifies his mind as a library where books and volumes are housed, which will soon be forgotten. Hamlet then condemns women, by using the adjective pernicious, which is harsh to describe the dangerous and untrustworthy nature of his mother and women in general. Hamlet then repeats the word villain to reemphasize the nature of the current king; he also uses the verb smiling to describe Claudius. The smiling criminal is one that Shakespeare oft refers to most well noticed in Macbeth where he writes Theres daggers in mens smiles. This intensifies the dramatic impact, as the smiling which is associated to joy, is now being portrayed as villainous. Hamlet then uses the word may as to whether there is a smiling villain in Denmark; this again shows doubt as to whether the ghost is actually his father or a poltergeist trying to beguile him. This is why later on through the play, Hamlet the man of words, is slow to react. He then addresses his uncle as kin, he quotes his father Adieu, adieu, remember me. Except this is a more malicious way of vociferating the words of his father. Hamlet has sworn to avenge his inscrutable father. This extract enacts the major twist in the play, as Hamlet finds out the truth and all further actions by characters is partly dependent on this knowledge. The extract simultaneously develops the character of King Hamlet, Claudius, young Hamlet and Gertrude, by universally explaining the fallings of man. Show preview only The above preview is unformatted text This student written piece of work is one of many that can be found in our International Baccalaureate World Literature section.

How would you evaluate the performance of a bank using published Essay

How would you evaluate the performance of a bank using published accounting data. What other data would you use in this evaluation - Essay Example And according to many industry experts, a new era of global banking is emerging (Kubris-Labiak, 2005). It is important to have a method of analysing banks’ performance, in order that problems could be threshed out early on and government intervention could protect the public’s savings and preserve the public trust in the safety of the banking system in general (Mishkin & Eakins, 2003). The basic function of a bank is to source funds from savers, and to deploy the funds into productive undertakings by producers. (Madura, 1992). The degree to which banks are capable of discharging this function is the measure of its performance. (Fraser & Ormiston, 2001) The fundamental source of data for measuring bank performance is the income statement. This is the financial report that describes the source of income and expenses that affect the bank’s profitability (Saunders & Millon Cornett, 2008). This paper will walk through a hypothetical bank’s financial statement, which is given here as ABC Bank, a typical commercial bank. A cursory inspection of the income statement above shows several important items. Operating income is the income that comes from a bank’s ongoing operations. It is comprised of the interest income and non-interest income. Most of a bank’s income is interest income, because the banking function is basically that of converting deposits to loans that earn income. In the above table, interest income is shown to account for 73.5% of ABC Bank’s operating income. Interest income fluctuates with the level of interest rates. Non-interest income, on the other hand, makes up about 26.5% of total income in the above example, and is generated partly by service charges on deposit accounts. Typically, however, the bulk of non-interest income comes from off-balance sheet activities, such as trading in financial instruments and generating income from fees and loan sales. The importance of these activities