Bestimmtheit in Short Film :: Movies History Time D.W. Griffith Papers

Bestimmtheit in Short Film Short film has been around for longer than many of us think. The very first films made in the early 1910s were not feature-length by any stretch of the imagination, and never more than 15 minutes long. D. W. Griffith, well-known for experimentation in cinematography, was the first director to venture into films longer than 15 minutes. These first films were short films (or "shorts"), these pioneer directors experimenting with what they could or could not do with a moving camera. Early shorts involved filming people boarding a train, or some similar mundane act. People reacted to this, and flocked to watch these movies, simply because of the novelty of watching reflections, instead of shadows, on screen. But as the audience got more sophisticated, filmmakers began to see the need to innovate. In the 1920s, experiments in surrealism occurred, with people, such as Salvadore Dali, dabbling in the "new" art of filmmaking (Cooper, ii). Despite great advances made in the field of technologi cal expertise and film technique, short films of today still suffer from the same limitation that their predecessors had: time. For a single narrative to be compressed within 15 minutes, the director and scriptwriter have to be sure that every single object within the mise-en-scà ©ne is of absolute relevance, thus maximising the use of screen-time (also known as "story-time", or histoire). This essay uses a contemporary short film and an 18th century text to discuss Chatman's concern of bestimmtheit in films. I hope to address certain concerns such as the extent to which a film can "specify" a particular object and what this specification does with regards to our understanding of the text. In addition, I will relate the compression of information into imagery to the limitations of time, given that a short film has a limit of 15 minutes. To do this, I shall analyse the cinematography of the short film, and show how relevant they are in bringing out certain scenarios described in Defoe's text. The short film in question is The Periwig-Maker, a clay-animated film directed by Stephen Schaeffler and narrated by actor Kenneth Brannagh, and it will be analysed with relation to the text it is based on, A Journal of the Plague Year by Daniel Defoe. To clarify certain misconceptions regarding the origin of The Periwig-Maker, let me first add a disclaimer. Stephen Schaeffler had based the events that

Bindge Drinking

We have all heard the terms boozing, drinking to get drunk, sloshed, tanked, tipsy, tooted, and hammered. But have you ever really thought about what you were saying when you used these terms. You were saying that all that you did the night before was binge drink. Binge drinking on college campuses is something that has grown to an all time high but who’s to blame? All too often we have heard the horror stories of how kids are getting behind the wheel of a car after a night of binge drinking, and end up killing everyone involved, but themselves. Binge drinking must be stopped, but it’s easier said than done. College administrators shouldn’t be held 100 percent accountable for students actions, the idea for colleges to crack down on binge drinking sounds unrealistic. In his essay â€Å"Binge Drinking must be stopped† director of the college alcohol studies program at the Harvard school of public health, Henery Wechsler states â€Å"An incoming freshman learns during the first week of school where the alcohol and parties and often has a binge drinking experience even before purchasing a textbook. If students can find it so easily so can college administrators it’s not that complicated† (32). It shouldn’t be the administrators responsibility to constantly hover over their Lee 2 students. We’re not talking about high school students here,we’re talking about college students! These are people who are 18 years old are older so it’s time for them to take on some responsibilities. I believe that if your caught intoxicated on campus and your under the age of 21 your parents shouldn’t be notified by an college administrator, you should be taken straight to jail until you sober up. I mean aren’t you considered an adult once you turn 18? (elaborate more) â€Å"if we know so much about the problem, why is it that we have not been able to do much about it† (33). Realistically speaking how are u going to be able to stop binge drinking? â€Å"Drunken parties are usually at certain frat houses and housing complexes. The heaviest drinking most likely takes place in a few bars near campus† (33). Why is it that administrators have to take on all the responsibilities? Do you really expect administrators to go around busting in frat houses or local bars like some type of Robocops? That would be stepping on students privacy , and everyone has a right to their privacy. Consequences and reprecutions should be enforced in order to make students think twice before they go out and binge drink. Students need to take on more responsibilities for themselves instead of being baby sitted by college administrators

The Evolution Of Basel Iis Development Finance Essay - Free Essay Example

Sample details Pages: 18 Words: 5304 Downloads: 5 Date added: 2017/06/26 Category Finance Essay Type Research paper Did you like this example? A lot of insolvencies of loan takers at the beginning of the 1990s, which led to a drastically reduction of equity within bank, was the crucial factor for developing new rules of equity. The industry realized more than before that equity is necessary to handle unexpected operational and internal risks. The current equity coverage was not sufficient, what bore an essential risk for banks. Don’t waste time! Our writers will create an original "The Evolution Of Basel Iis Development Finance Essay" essay for you Create order Some banks could not manage to compensate the big losses due the mentioned credit defaults and ended up in bankruptcy. Moreover, uniform competition rules were needed, since many banks started to operate on an international level (Cluse, 2005) Therefore the Basel Committee on Banking Supervision tries to arrive at significantly more risk sensitive capital requirements for the stability of the financial system (Lamy 2006). This is linked to the risk of lending and the right amount of provision, i.e., the capital requirement to reduce the risk of non-solvability or the credit risk. This will be done efficiently if the bank manages this risk on two levels: It needs to manage both its credit risk (on the banks level) and its clients credit risk. By ensuring a right capital requirement on the banks level and on the clients level, this will cover the potential banks future losses. On one side, the capital requirement will limit the possibility for a bank to provide loans because its provision should be sufficient to cover losses. If this provision is not adequate, this will create a problem of insolvability. Numerous banks have already faced this Credit Crunch. On the other side, a company needs also to have sufficient provision in case of a negative scenario. The bank will provide a loan regarding this capital amount inside the company. So the model of Basel I and II is discipline for borrowers (banks client) and lenders (the bank itself). That is why Basel I and II will provide a risk-weighted system that reflects the loss history of a specific company or a bank and the type of loan. This system has the characteristic to be particularly sensitive to counterpart risk (Carling 2002). This system and its effects will be explained more precisely. The Evolution of Basel IIs Development Globalisation and developments within the European Domestic market did change the countenance of the financial markets due to interconnections. Standardization of equity requirements were needed to face these changes in risk (Paul, 2004). However, the fast development of the information technology (IT) also improved the internal risk evaluation of credit risks or operational risks for especially big banks. Resultant from that, a discrepancy between supervisory regulations (BASEL I) and internal estimates rose. In June 2004, according to these facts, the BCBS has published the International convergence of capital measurement and capital standards, a revised framework, the New Accord or more simply BASEL II. This New Accord has been signed by 13 countries, members of the Basel committee (Platt, 2004). The majority of regulators all over the world have agreed to implement it with different laps of time. While Basel I focused only on credit risk, Basel II is based on a broader range of risks. This is essential since the former regulations were too weak and static according to the credit risk. Nowadays there is a much more complex risk environment to consider. To ensure market discipline and stability, BASEL II needs to take into account not only the credit risk, but also other sources of risks. It also provides new adequate sophisticated methods to assess the risk inside a bank. These methods should also better identify the capital requirement considering the risk inside a bank (Katz, 2001). BASEL II is applicable for all international banks including tiers that belong to the group. So it has an application on the international level. This includes banks, securities and other financial subsidiaries. It also includes important investments and other financial entities. The Constitution of Basel II The Request of Minimum Capital This request significantly copes with the three important risks including credit risk, operational risk and market risk. To make it simple, the bank still needs to calculate the Minimum Capital Requirement (MCR). It was based on the COOKE ratio for BASEL I and the risk weighted asset of the credit. Now, its based on the DONOUGH ratio for Basel II. In this ratio, it will take into account the three kinds of risks and calculate them with precisions (BCBS, 2004). DONOUGH ratio, MCR % OR Solvency ratio: 8% Capital/risk weighted asset for credit, market and operation. CR for Basel II = Credit risk CR + Market risk CR + Operational risk CR (Choi, 2003). Each type of risk has to have its individual securitization with capital. As the credit risk is the most important risk for a bank, this part will analyze the way the Standard Approach and Internal Rating Based Approach (IRBA) will manage it. Then, it will focus on how the two other types of risk can be managed through the request of minimum capital. The Standard Approach The Standard Approach is nearly the same than in BASEL I for the Minimum Capital Requirement (Capital / risk weighted assets). Only one new risk class 150% has been added, which is reserved for loan taker with a bad credit rating. So it is the basic analysis of credit risk. But the main difference compared with the Standard Approach in BASEL II with BASEL I is, that BASEL II takes into account a wider range of credit risk. This can be viewed with the credit risk mitigation (credit risk reduction) inside a bank will collateral. Banks usually use collateral to reduce the risk of the counterparty (client of the bank). For instance the clients exposure may be reduced thanks to cash, securities or a third party. A bank may also use credit derivatives and SWAP to protect against various forms of credit risks. The Standard Approach is especially good to use for small banks (at least in the beginning), which only have a low degree of risk management. Bigger banks will probably not use this approach, since they have their own internal risk control system (Cluse, 2005). By calculating the Minimum Capital Requirements (MCR) there are two methods to determine the risk weighted assets: Simple method: This method is based on the risk weighted asset of the collateral instrument; i.e. the instrument that hedge the counterparty in case of default. So in this method, the analyst simply substitutes the risk weighted asset of the counterparty by the collaterals one. Comprehensive method: This method is based on both risk weighted asset of the collateral and the counterparty. This is more adequate since it is done proportionally to the amount of exposure. Generally speaking, the better the credit scoring or credit assessment of the collateral, the lower its risk. This reduces the counterpartys risk and the capital requirements. Further that allows a better coverage of credit risks exposure. For example, if the collateral is scored A+ (compared to A-), it will be better f or the counterparty. The main disadvantage of this method is that it may create residual risks or indirect risks even if the main objective is to reduce credit risks. Residual risks are legal, market and operational risks. The Internal Ratings Based Approach IRBA takes into account a lot of variables to assess the credit risk for a bank. This method is much more precise and adequate to determine Minimum Capital Requirement and anticipate the risk. As its a complex method, it has to be approved by the banking supervision before banks can use it. Without entering too deeply into details of the complex formulae, this part will provide an overview of IRBA. This will be useful to analyse the effects of such a method on banks. First, IRBA includes new criteria such as PD (Probability of Default), LGD (Loss Given Default), EAD (Exposure at Default) and M (Maturity). These variables will affect the risk of the counterparty. In addition to this, IRBA is founded on EL (Expected Loss) and UL (Unexpected Loss). These components will also determine the risk of the counterparty. And last but not least, by using IRBA, the asset classes have to be defined. This will determine the nature of the borrower, its potential risk, so it will influence i ts risk weighted assets. The borrower can be classified into 5 ranges of assets: corporate, sovereign, bank, retails and equity. Inside the corporate class, there are sub-classes of specialized lending: PF (Project Finance), OF (Object Finance), CF (Commodities Finance), IPRE (Income Producing Real Estate), HVCRE (High Volatility Commercial Real Estate). These sub-classes also identify the type of risks of the borrower: For example Project Finance is much more risky than an IPRE. Indeed, Project Finance is a way of financing large-scale and long term capital investment such as complex installation. The return on investment and the cash flow for such projects are not sure. Banks repayment is only based on cash flow generated by the project so its risky. A well known Project Finance is the Channel Tunnel. IPRE has a lower risk because cash flow is generated by the property so banks repayment is quite sure. Banks are also allowed to distinguish the size of the company: Small and Medium sized Enterprises (SME) compared to Multinational Corporations for example. SME generally speaking will have a higher risk than multinational corporate. Indeed, the risk is diversified all over the world for big one (Shapiro, 2006). As risk is higher, the risk-weighted assets will also be higher for the small one. These three types of variables are included with different weight in formulas. Depending also on which IRBA methods a bank used, these three types of variables are treated in a different way. Two IRBA Methods: With Foundation IRBA, the bank calculates its own estimate of PD/ The other variables are supervisory estimates (LGD, EAD and M) With Advanced IRBA, the bank calculates by itself all the necessary estimates: PD, LGD, EAD and M. The Advanced method is more precise than Foundation IRBA so it is the method required for a bank to perfectly manage credit risk. Given all these components and the way there are treated in several formulas, these two methods d etermine precisely the Minimum Capital Requirements. Compared to BASEL I it should better handle the credit risk. These methods were implemented inside banks in 2006/2007 (Banking Financial Services Report 2004). The Control Process of Banking Supervision The control process of banking supervision emphasizes on supervisory revision. It also give methods to deal with other risks a bank has to face such as legal, reputation and name risk. These risks are known as residual risks. Supervisory review helps supervisors inside a bank to determine how well they manage the risk. So supervisors will verify that the first pillar and approaches are efficiently implemented. Supervisors will work with internal auditors too (Singh 2005). Banks should have the right process to adequately measure risks and the Minimum Capital Requirements. Supervisors should evaluate the implementation of the regulatory capital ratios, strategies and the adequacy of capital requirement. They can take actions to improve the situation according to the respective risks. Supervisors should make the bank operate above the Minimum Capital Requirement. The supervisor should take rapid actions, and act quickly to prevent internal failures. (BCBS, 2004) They will check the implementation of the request of minimum capital depending of the three different types of risks a bank has to face: Market risks or interest rate risks: Supervisors need to forecast the losses in case of interest rates fluctuation. They need to be careful especially when the banks economic value decreases by more than 20% of the capital (Tier1 capital + Tier 2 capital). Methods such as gap analysis (comparison of the asset before and after the interest rate changes), static and dynamic simulation (technical simulation to measure potential effects) improve anticipations. Credit risks: Supervisors and other analysts can use stress tests to check the adequacy between the Minimum Capital Requirements and an unexpected bad event. Thanks to stress tests, they check how well pillar 1 has been implemented. This method will help to identify credit risk concentration (Dempster 2002) (exposure with large potential losses). Operational risks: Supervisors should check if the capital for operational risk is sufficient for the bank. They should compare it with the same size or type of banks (Thoraval Duchateau 2003). Extended Disclosure Extended disclosure is based on market discipline. This is a list of relevant information to anticipate and assess every type of risk inside the bank. It is like a big summary providing quantitative and qualitative information about the different kind of risks and their importance inside the bank. As this piece of information has to be published regularly, it improves banks transparency (Sigrist 2004). This disclosure is divided into two parts a general and a specific part. The basic part organizes the disclosure of equity, scope, and taken risks in general. The special part goes into detail in which way the disclosure has be done and handles mitigation techniques and securitization of internal approaches as IRBA and therefore it has to be in order with the (future) reporting standards. This process will only be performed on the highest aggregation level a bank. The Impact of Basel II on the Planning and Implementation of Banking Regulation and Supervision Capital Regulation and Promote Implementation of the New Capital Accord The Implementation of Capital Regulation Requirement In 2008, the CBRC put priority on urging commercial banks to meet the CAR requirement in a bid to enhance their risk resilience. Firstly, the CBRC formed synergy with government agencies, regulatory authorities and commercial banks to enhance the capital adequacy at commercial banks and to push forward their risk resolution. Secondly, the CBRC urged commercial banks to take initiatives for capital injection. Various actions were taken to encourage banks to build stronger capital base, including organizing seminars, issuing regulatory documents, and adopting the CAR requirement as the precondition for new business license. As a result, commercial banks made remarkable efforts to replenish capital by issuing new shares, cutting down on risk assets, increasing reserves, as well as writing-off bad loans. Thirdly, the CBRC pressed commercial banks to improve capital-based operation, strengthen capital constraint, and strike a balance between businesses growth and capital adequacy. Last but not the least, the CBRC encouraged banks to explore diversified capital replenishment channels (Figure ). The CBRC continued to support commercial banks to replenish tier-2 capital through issuing subordinated debt, and encouraged banks to explore new types of capital vehicles such as innovative hybrid tier-1 capital bonds and stripped convertible corporate bonds, for the purpose of gradually improving the framework for commercial banks capital replenishment. The CBRC set strict capital requirement pursuant to prudential regulatory principle. Firstly, the CBRC sets strict limit on the proportion of tier-2 capital, adequacy ratio of core capital, and subscription of subordinated bonds by nonbank financial institutions. Secondly, commercial banks that engaged in cross-sector and cross-border businesses were required to maintain a higher level of capital. Thirdly, the CBRC has also strengthened the examinations on loan migrati on and asset swaps to ensure capital adequacy ratio has been calculated accurately. By the end of 2008, the assets of banks that met the CAR requirement accounted for 99.9 percent of the total assets of the banking industry. All major commercial banks have satisfied minimum capital requirement. This symbolized a historical breakthrough in the development of the Chinas banking sector. PICTURE In September 2008, in order to urge the large commercial banks to prepare for the New Capital Accord (the request of minimum capital in Basel II) implementation, the CBRC issued the first batch of regulations for carrying out the New Capital Accord. In formulating the implementation scheme for the New Capital Accord, the CBRC took into account the reality of the Chinas banking industry, and prioritized the objectives of enhancing banks risk management and improving its own regulatory capacities. The CBRC worked out guiding principles for the implementation, took into consideration the l atest developments of the New Capital Accord. During 2008, drawing upon the local market practice, the CBRC identified some weaknesses in the implementation process of the New Capital Accord which were revealed in the global financial crisis. On top of this, the CBRC further promoted the implementation initiative, and launched extensive rule-making efforts for the implementation. In September 2008, the CBRC issued the first batch of five supervisory guidance on the implementation of the New Capital Accord, namely the Guidance on Risk Exposures Classification of Commercial Banks, the Guidance on Supervision of Internal Rating System of Commercial Banks, the Guidance on Capital Charge for Specialized Lending of Commercial Banks, the Guidance on Implementing Risk Mitigation in Basel II by Commercial Banks, and the Guidance on Capital Charge for Operational Risk of Commercial Banks. The second batch of supervision guidance is expected to be available shortly. In order to provide g uidance for the banks preparation to implement the New Capital Accord, the CBRC has established a designated project team to carry out in-depth research, such as, risk management of specialized loans, measurement of the New Capital Accord s quantitative impact, liquidity risk management and supervision, methods and efficiency of cross-border supervision under the New Capital Accord, interest rate risk management, and information disclosure. In the meantime, the CBRC has attached great importance to international cooperation and exchange, and invited experts from the IMF, the Basel Committee and international commercial banks to jointly explore solutions for technical issues. Furthermore, the project team has dispatched more than 20 experts to attend a series of international seminars on the New Capital Accord, so as to keep abreast with the implementation progress of the New Capital Accord overseas. Large commercial banks have made significant progress and achieved early outcomes with regard to preparation for the New Capital Accord implementation under the CBRCs support. Among the seven pilot banks, six of them have developed their internal rating systems that could cover most of their credit assets, with the coverage ratio ranging from 60 percent at the minimum and 100 percent at the maximum. Also, six of them have established debtor rating system for corporate risk exposures; four banks started the development of debt rating system; three banks completed the internal rating system for retail risk exposures. All of the seven banks have set up market risk management framework; three banks are capable of calculating VAR on a daily basis, and conducting day-to-day stress-testing. The internal rating systems for corporate risk exposure of six banks have started to function in the processes of credit review and approval, risk monitoring and limit setting. Meanwhile, infrastructure construction of commercial banks data management and IT system has been constant ly improved. Four banks have established unified, company-wide database that can perform automatic collection of data. Two banks have built up multi-layered data warehouse. Supervision on Corporate Governance and Internal Control The CBRC further urged commercial banks to improve corporate governance as the cornerstone for sound business growth. Firstly, the CBRC tried to advocate best practices by setting rules and regulations. In 2008, the CBRC conducted a specific study on in small and medium-sized commercial banks corporate governance, based on which, the CBRC worked out the Opinions on Further Improving the Corporate Governance of Small and Medium-sized Commercial Banks. Secondly, the CBRC took initiatives to address the prominent problems in the corporate governance of banking institutions. For example, the banking institutions have been required to further improve board election, optimize equity structure and standardize shareholders behaviors. Thirdly, the CBRC has urged banking institutions to improve incentive scheme and required them to set up a prudent equity incentive structure, reasonably decrease the senior managers remuneration level and introduce appropriate incentive systems for senior man agement and staff. Fourthly, the CBRC further improved its market entry control on the qualification of banks senior management, via qualification reviews and qualification conversation for the candidates. Fifthly, the CBRC urged foreign banks to strengthen the responsibilities of the board of directors within their locally incorporated entities, and enhance their independence. The CBRC has also strengthened oversight on foreign banks related-party transactions, for the purpose of effectively avoiding conflicts of interests with their parent banks and shareholders. Lastly, the CBRC guided the joint-stock reform of the CDB, urged the CDB to establish and improve corporate governance structure and gradually transform from a policy bank to a commercial bank with the establishment of modern operating procedures and robust internal controls. The CBRC continued its efforts in urging banks to establish and optimize internal control framework and pushing forward the transformation to SBU -based banks. Firstly, the CBRC directed banking institutions to accelerate SBU-based restructuring. Banks have further improved their institutional framework and business procedures to achieve better efficiency and quality of bank service. Secondly, the CBRC has provided guidance for banking institutions to enhance internal control mechanisms. Banks have been urged to constantly nurture their compliance culture, improve the internal control mechanism including self-discipline and checks-and-balances. Thirdly, the CBRC required stronger accountability system. Through the enforcement of accountability system, the critical role of board of directors and senior managers in risk management could be highlighted so as to ensure effectiveness of internal controls. Supervision of Credit Risk The CBRC required commercial banks to further prevent risks arising from cross-sector business between the banking sector and the capital market, identified illegal credit funding to the stock market, and penalized the rule-breaking institutions. Banks were strictly forbidden to provide guarantee for corporate bonds and client-based derivatives trading, thus preventing financial risks from spreading from the debt market and other markets to the credit market. Moreover, the CBRC has improved consolidated supervision of large commercial banks and strengthened oversight of cross-border and cross-sector risks. The CBRC has urged commercial banks to optimize credit portfolio in compliance with macroeconomic policies. The CBRC is also highly alert to the adverse influence of policy shifts on banks credit quality, and has intensified the monitoring on the volume and migration of bad loans. The CBRC also traced and analyzed the trend of the risk profile on a monthly basis, and carefully examined credit risk of each individual industry. The CBRC put emphasis on overseeing the growth of credit to the real estate sector. Following the joint notice with PBOC, namely the Notice on Strengthening the Management of the Credit Extension to Real Estate on Commercial Basis and the Supplementing Notice on Strengthening the Management of the Credit Extension to Real Estate on Commercial Basis. The CBRC further adjusted and fine-tuned policies on property development loans and housing consumption loans. On top of the more strict management of property development loans, favorable terms were granted to first home buyers, while the lending terms for investment, real estate on commercial basis or for the second home purchase were tightened as the down payment and mortgage rate were raised above the benchmark. Following these moves, the CBRC issued the Notice of China Banking Regulatory Commission on Further Improving the Credit Risk Management in the Real Estate Industry, which ar ticulated clear requirements to commercial banks on the risk management of their property loan business. The CBRC conducted onsite examinations on default cases of some major property developers, and identified the problem of fake documents in some real estate transactions. The CBRC also urged commercial banks to carry out stress test specifically for property loan, and to adopt risk control measures according to the result, such as increasing loan loss reserves or adjusting business plan and strategy. The CBRC required commercial banks to implement strict policy for credit issuance, enforce rigid process and procedures for loan review and approval, reinforce compliance examination, and prevent risks resulting from misconducts. Firstly, banks were prohibited to provide bundled loans. Secondly, the revolving of project loans was also rigidly forbidden. Thirdly, banks should not grant any forms of funding to manufacturing industry projects before they obtain formal approvals from r elevant authorities. Last but not the least, banks were strictly forbidden to securitize NPLs and develop zero-return REITS. The CBRC has repeatedly recognized commercial banks to adjust client and asset structures to optimize the allocation of funding resources. Special focus has been on enhancing their management of credit granting to group clients, for the purpose of guarding against risk concentration. At the same time, the CBRC has set strict cap for concentration limit, namely maximum 10 percent for a single client and maximum 15 percent for one group client. It has also encouraged syndicated lending or bond issuance to fund large corporate client. The CBRC has further improved its system for monitoring large NPLs. It has intensified dynamic monitoring, analysis and control of NPLs occurrence, provisioning allocation, collection and write-off. Meanwhile, measures have been taken to improve credit default information disclosure and sharing, broaden monitoring scope of cus tomer information, and realize information sharing of local database and national database for customer risk monitoring and risk warning within the CBRC system. The CBRC has made a significant breakthrough in propelling commercial banks to improve the disposal of NPLs and the write-off of bad debt. Commercial banks have been urged to proactively deal with impaired assets by means of collection, auction, or write-off, and to increase provision coverage. In 2008, banking institutions made significant progress in the write-off of bad loans and build-up of stronger provisions. The ratio and stock of NPLs of banking institutions realized double-decline. By the end of 2008, the amount of commercial banks NPLs was RMB560.3 billion, down by RMB708.2 billion within one year; and the NPL ratio dropped to 2.4 percent, down by 3.75 percentage points during the same period. Supervision of Market Risk Based on prudential regulatory principle, the CBRC further encouraged banking institutions to strengthen market risk management, improved the analysis, reporting, contingency plans, and management scheme for new products and business with regard to market risk. Banks have been required to clearly distinguish banking account and trading account, have in place effective measures and systems to identify, measure, monitor and control market risk, increase independent pricing capacity and improve market risk management framework. Due to the financial turmoil, interest rates and exchange rates were extremely volatile and the market environment has severely deteriorated. At the beginning of 2007 when the sub-prime crisis emerged, the CBRC immediately established a designated taskforce, and developed a monthly monitoring scheme to analyze risks arising from sub-prime investment. In 2008, the sub-prime crisis evolved into a global financial crisis. TheInternational Financial Turmoil Emer gency Group was promptly founded by the CBRC to actively lead and urge commercial banks to enhance risk management and control. In order to prevent risk contagions, the CBRC has required commercial banks to improve risk prevention awareness, and optimize risk management for foreign currency assets and liabilities. Firstly, a mark-to-market arrangement dedicated to risk arising from foreign currency assets was established to closely track market movements. Secondly, commercial banks were asked to pay close attention to losses in trading with high-risk global banking institutions, and adjust credit risk exposure to overseas correspondent banks. Thirdly, portfolio structure of foreign currency bonds should be adjusted with proper timing. Fourthly, banks were encouraged to actively protect asset by using legal methods. Last but not the least, banks were required to timely, truthfully and accurately disclose the performance of client-based QDII business and the impact of the turmoil o n the operation and financial positions, to guard against reputational risk. Supervision of Operational Risk The CBRC issued the Guidance on Regulatory Capital Measurement for Commercial Banks Operational Risk, which clarified the requirements on banks to calculate capital for operational risk under the New Capital Accord, pressing commercial banks to improve operational risk management and ensure sound business operation. I309 fraud cases were discovered within banking institutions, a reduction of 129 cases and a decline of 29 percent compared in 2008. Among these cases, the number of large cases involving a value of more than RMB1 million was 89, a reduction of 37 cases or 29 percent on a year-on-year basis. The total value involved in bank fraud cases was RMB1.07 billion, among which large cases with value over 1 million recorded an amount of RMB0.98 billion, down by RMB0.75 billion and RMB0.72 billion respectively. The average occurrence of bank frauds was dropping close to a moderate level. At the end of 2008, the CBRC established the Bureau of Criminal Investigation (Bureau of Ba nking Security), which is specialized in fraud investigation, prevention and control, and security management of the banking institutions. Referring to IT risk supervision, the CBRC has improved its regulations on IT risks. In April 2008, the Notice of China Banking Regulatory Commission on Implementing the Provisional Rules Governing Contingency Management of Key Information Systems in the Banking System was issued, bringing IT risk into the overall risk management framework of banks. It clearly defined the emergency management responsibility of the board, senior management, IT risk management department, business department and technology department of banks respectively for technology risk incidents, and reinforced the risk prevention, emergency response and safeguard requirements to ensure the continuity of bank operation and services. The CBRC launched the special campaign of Safeguarding Olympics on bank IT system, which included establishing the joint-work mechanism wit h PBOC and CSRC for emergency management. The CBRC arranged specific self-checking programs on banks IT risk, and piloted comprehensive inspection for banks key IT systems and devices. In addition, by taking emergency response fire drill for the Beijing Olympic Games, banks significantly improved their own ability of emergency management. All systems of banks operated in a stable and smooth manner during the Beijing Olympic Games. The CBRC enhanced off-site surveillance for IT risk. Tailoring to the features of IT risk, the CBRC raised supervisory requirements by issuing a series of 12 IT risk guidances. Supervision of Liquidity Risk The increasing volatility in the capital markets, the real estate market, as well as the impact of monetary policy resulted in a rapid change of banking liquidity. The CBRC constantly required commercial banks to strengthen liquidity risk management. Firstly, commercial banks were advised to raise liquidity risk awareness. Through periodic econ omic situation briefings and offsite surveillance reports, the CBRC promptly informed banking institutions of overall bank risk profile. It organized commercial banks to conduct comprehensive training on liquidity risk management, and implement stress-testing and take preventive measures. Secondly, commercial banks were encouraged to optimize their asset liability management. Through the review of internal organizational structure for liquidity management, banks were expected to clearly divide responsibilities, streamline management process, improve efficiency in fund clearing and transfer, refine the risk monitoring system and strengthen the liquidity risk management. Thirdly, banks were urged to strengthen liquidity management in foreign currency, and maintain adequate liquidity positions in foreign currency reserves in order to survive market fluctuations. In response to the potential liquidity difficulties which might occur to the parent bank of some foreign banks and potenti al impact on their local operations, the CBRC proposed a regulatory plan including early-warning, reporting, risk assessment, and emergency measures to deal with emergencies, with a view to preventing and managing liquidity risk of individual foreign bank in a timely and effective manner, and safeguarding sound operations of the banking sector. As required by the central government, the CBRC acted as a leading agency in the joint-ministry efforts to fight against illegal fund-raising activities. The CBRC played an active role in promoting the issuance of laws and policies regarding anti-illegal fund-raising by legislative and judicial bureaus. Based on in-depth research and extensive solicitation of opinions, the CBRC led the work in formulating the Provisional Working Procedure to Address the Illegal Fund-raising Activities, and compiled the Handbook to Address the Illegal Fund-raising Activities. Meanwhile, the CBRC further promoted a joint-ministry committee to tackle illegal fund-raising, intensified supervision on prevention. On the one hand, the CBRC focused on material cases and took active and appropriate measures. On the other hand, the CBRC conducted a series of publicity and education campaigns to raise public awareness of risk prevention. Remarkable progress was made in fighting against illegal fund-raising activities. A few nation-wide material cases that involved a huge amount of funds and significant number of people were duly resolved. Serious complaints were handled appropriately.