By What Means Do The Poets in These Five War Poems Convey Their View Of War? Essay

We have studied five poems of that only two poems- â€Å"The Charge of the Light Brigade† and â€Å"Who’s For The Game† are pro-war the other three are anti-war. â€Å"Who’s For the Game† is a poem aimed at all those young men at the time of the First World War to try and get them to enrol in the army. It talks about the war, as a fun game and that you should join with your mates as a bit of a laugh and kill some Germans while you are at it. In the first verse Jessie Pope the poet who wrote the poem compares the war to a game of rugby with lines such as â€Å"who’ll grip and tackle the job unafraid†. This puts the idea in the readers head that only strong tough rugby player will be able to fight for their country and that only the weak men who are scared stay behind while everyone else has the fun and gets praised and cheered. In the second and third verse they use the idea of inspiring guilt in the men into joining the army by saying such things as â€Å"Who’ll give his country a hand† it personifies the country as a human that is in a fight and you are the only person that can help it. It also uses the idea of all your mates going and having all the fun without you and you being left behind. It uses ballad rhythm very well to get the reader to read it in an up beat way like a song or a chant. â€Å"The Charge of the Light Brigade† is also the other pro-war poem. It’s a poem about a cavalry charge in the Crimean war that goes on a suicide charge to their deaths because a mistake was made in the communication between the officers. This poem is all about how the cavalrymen were prepared to charge to their deaths for Britain and because of this they become heroes. It starts with a use of feet in the rhythm it uses anapaestic diameter. This gives the idea of hooves galloping â€Å"Half a league, half a league, half a league onward,† This rhythm is broken in the third line, the poet does this to emphasize the word â€Å"Death† as it is an important word in this poem. In the second verse the poet expresses that the cavalry were oblivious to the situation they would be in soon as they rode into the valley, â€Å"Not tho’ the soldiers knew someone had blundered.† There is a sense of patriotism, as they do not ask why they just do, â€Å"Theirs not to reply, theirs not to reason why Theirs but to do and die,† In the third verse the poet emphasizes the fact that they are trapped by repeating the word cannon to the left to the right and in front of them this works and brings up he idea of despair. It also personifies death as a horrible monster that has big powerful jaws, â€Å"Boldly they rode and well, into the jaws of Death, into the mouth of Hell.† In the fourth verse the poet stresses the fact that even though the cavalry was greatly out numbered they still went in ‘all guns blazing’ as the saying goes, with the sabres in the air fearless. It also talks about the amount of men at the end of each verse it talks of there being six hundred at the start of the poem â€Å"Rode the six hundred† but as we go through the poem the number slowly depletes â€Å"Then they rode back but not the six hundred.† At the end of the poem they tell us to honour them, â€Å"Honour the charge they made! Honour the Light Brigade, Noble six hundred!† The next three poems are all anti-war programs ‘Drummer Hodge’ is a poem written by Thomas Hardy it is a poem about The Boar War were they used to hire under age drummers that were too young to join the army to fight but they used to join so that they could play the drums for the soldiers. In this case there is a young boy that loses his life along with a lot of other boys. â€Å"They throw in Drummer Hodge, to rest uncoffined-just as found† this is the first line in this poem and it uses the word throw to almost mean that he was forced to his death or as the poet puts it â€Å"to rest†. The poet stresses the fact that Drummer Hodge was just a young boy from Wessex that did not know anything about the war and was not involved with the cause of the war yet still has to go and die in it, â€Å"Young Hodge the Drummer never knew- Fresh from his Wessex home- the meaning of the broad Karoo.† The Drummer doesn’t even get any acknowledgement or funeral but is just left to rot without a coffin, underneath the stars. He never even gets taken home but left there in a strange place along way from home. The poet gives us the impression that he is a long way from home by bringing the fact that there are strange stars that he has never seen before, â€Å"Strange stars amid the gloam†¦ And strange-eyed constellations reign†. Also in the last line, â€Å"His stars eternally† this is the poet’s way of saying that even though he didn’t get a funeral and no one even realized he had gone but the stars will always remember him. The next poem is I called ‘Disabled’ and it is written by Wilfred Owen. It is a poem about a man that served in the war that has lost his all his limbs. In the first verse he talks of â€Å"his ghastly grey suite† this is a suite that he would be made to wear it because it has been specially made for him without any limbs. It goes on to say that he hears the boys playing like used to before he became disabled and this saddens him, â€Å"Voices of boys rang saddening like a hymn.† He looks forward to the nurse coming to him and putting him to bed to blot out his sorrow and take him away from this world, â€Å"Till gathering sleep had mothered them from him.† In the second verse he goes back to before the war and talks about how he used to swing and swagger down the street on a Saturday night in the town. Now he knows that he will never be appealing to girls again and now they touch him with no love or care but just purely professionalism and no passion or attachment, â€Å"Girls’ waists are, or how warm their subtle hands; all of them touch him like some queer disease.† He then goes back to talking about when he was before the war and says that he used to have artists wanting to paint him because he had such a good looking face but since the war it is almost as if he has had all the blood drained from his body, when he lost his limbs and all the colour has been lost from his face. All that is left is a pasty white body. â€Å"He’s lost his colour very far from here, Poured it down shell-holes till the veins ran dry†¦ and leap of purple spurted from his thigh.† He carries on talking about how when he used to play football with his mates that he would like a bit of blood on his leg because then it would look like he had played hard, â€Å"One time he liked a blood- smear down his leg, After the matches, carried shoulder high.† He goes on to say how he didn’t even join up to the army for any real reason it was just because he had had too much to drink and he did it to impress the ladies and he wasn’t even old enough. He joined because he thought he would look good in a kilt and would like to pose in front of the ladies. He wanted to join up with his mates and have a laugh with them and bond with them. He talks about when he came back from the war he got a small cheer off some people but not as much as when he scored a goal in football. He feels that he got let down by the country as all that he got back was a small thank you off a priest and some fruit but he gave all his limbs, â€Å"Some cheered him home, but not as crowds cheer Goal. Only a solemn man who brought him fruits.† He reflects on how he must take pity like benefits from the nurses and also and how the girls were the main reason he joined up in the first place but now they look upon him with pity and turn to the other whole men, â€Å"To-night he noticed how the women’s eyes passed from him to the strong men that were whole.† At the end of the poem he can’t wait till the nurses come and put him to bed so he can drift away into his dreams and get out of this world, â€Å"How cold and late it is! Why don’t they come and put him into bed? Why don’t they come?† The last Poem is called ‘The Night Patrol’ and it is written by Arthur Graeme West. It is about a night patrol in the second world war that goes out into ‘no mans land’ to listen to the Germans and see if they are up to anything. In the first verse it is direct speech presumably by an officer telling the soldiers what to do. Once the soldiers get over the top of the trench the poet goes on to explain in detail about what it is like in ‘no-mans land’ the poet gets the point across that this patch of land has not been used for its original use for many years, â€Å"tufts of crackling cornstalks, two years old, No man had reaped,†. The poet also goes into detail about the things that are strewn there from recent attacks, â€Å"Packs, rifles, bayonets, belts and haversacks, shell fragments, and the huge whole forms of shells.† He then goes on talk about the dead laying there and he talks of â€Å"the vile sickly smell of rottenness;â €  which spares no feelings for the senses. There is no dignity for the soldier they even put them in weird positions so that they can guide their way back to their trench. The poet then talks of coming to the next obstacle which happens to be a number of dismembered corpses. This angers the soldiers because it is easy to dodge one dead corpse on your belly but it is harder to dodge lots of pieces of dead corpse, â€Å"All blown to bits, an archipelago of corrupt fragments, vexing to us three.† In the poem the soldiers finally get to the German wire the poet and the poet write of them lying down like the dead listening to the Germans, â€Å"We lay in the shelter of the last dead man , ourselves as dead,†. At the end of the poem they get back to the trench past all the dead corpses â€Å"and through the wire and home, and got our rum,† rum being the reward for doing what they did. Out of all the poems I think Disabled by Wilfred Owen is the most hard-hitting and moving. It talks about touching him like a â€Å"queer disease†. It is similar to ‘Drummer Hodge’ as it stresses the fact that there is no reason for these wars and these innocent lives to go to waste. I think ‘The Charge of the Light Brigade’ and ‘The Night Patrol’ are also similar as they both tell a story about a group of soldiers. Even though one of them is anti-war and the other one is pro-war. I think that ‘Who’s for the Game’ is on its own because it is written by a woman that has no experiences of war like the other poets.

Bajaj Capital- Training, Recruitment and Selection

cRECRUITMENT, PERFORMANCE APPRAISAL AND TRANING AND DEVELOPMENT IN BAJAJ CAPITAL 1) RECRUITMENT PROCESS AT BAJAJ CAPITAL FORMALITIES AFTER THE JOINING BY THE HR Reference check v Validation v Entry in the Joining Kit Tracker v Preparing the Partial Kit v Getting the kit signed v Dispatching the kit to  the corporate office STEP BY STEP RECRUITMENT PROCESS AT BAJAJ CAPITAL * Short listing of the candidate by the TM. In case of internal recruitment then they should assure that they have fulfilled the criteria. And in case of external recruitment they should follow the  process note forwarded to them by the HR  Department. The interview needs to be conducted very properly; selection of the candidate should be done only he satisfies the criteria for that post. Proper care should be  taken while selecting a candidate. * After  the  interview  is  conducted  and  reference  check  of  thecandidate is done, the papers need to be processed to the HR  Department. W hen processing the papers the TM should ensure that the following documents are  there:–Interview Assessment Sheet-CV-Appointment letter of the  previous company-Salary slip of  last two months-Reference Check form On receiving the papers at HR, entry needs to be made in the documents received tracker. If all the documents are complete then the IP Code, (CV Code) needs to be allotted to it and then the papers should be forwarded to the respective HR Cluster Heads. In case any documents are pending then the candidate needs to be called for the  papers. * On receiving the complete documents, the HR needs to negotiate the salary with the candidate and close the offer. On closing the offer  the an offer mail is to be sent to the candidate stating his post, salary, date of joining and as to what documents they are to bring along with them. On the day of joining, the candidate needs to fill the joining kit and the  online  PDF  Form. The  kit  contains  inform ation  about  the candidate i. e. their personal details, education qualification, work  experience, and other information that are required  by the firm. The online PDF Form contains general details such as name, address, identification mark, place of posting, etc. * Once through with the kit, the documents are to be collected and should see that the kit is properly filled i. e. the date of joining, place of posting, and that they have signed where required. On receiving the complete kit, the joining kit tracker needs to be updated. The tracker contains information such as the BDF No, name, address, contact details, position & location of the candidate, his previous work experience, his account No, & PAN No. , the date of joining and the date of dispatching the kit to the corporate office * Once the tracker is updated, the kit needs to be validated. It is done in  order  to  generate  the  SAP  Code  of  the  employee. Duringvalidation  information  su ch  as  the  post  &  the  location  of  the employee, SAP Code of their reporting authority and their CTC is required. After all these formalities, the partial kit is to be prepared and the kit needs to be signed by the HRM, then the kit is to be dispatched to the corporate office . Job opportunities may be identified by studying jobs and determining the knowledge and skills each one requires. Once career paths are developed and employees are identified on the career ladder, it is possible to inventory the jobs and determine where individuals with the required skills and knowledge are needed or will be needed. Beyond recruitment, organization also needs to consider the progression of employees through a series of jobs.In this way they can manage not only the immediate contribution of individuals to the organization, but the long term contribution throughout their career. In order to be successful, a career management program must receive the support of top managemen t. The program should reflect the goals and the culture of the organization, and managerial personnel at all levels must be trained in the fundamentals of job design, performance appraisal, career planning and counseling. The objectives and opportunities of the career development program should be announced widely throughout the organization.We often think that successful people plan their careers out and then work toward their goals in a very logical, sequential manner. Although some successes are designed and implemented this way, others are created through insight, preparedness, and taking advantages of opportunities as they rise. 2) PERFORMANCE APPRAISAL Performance appraisal is the process of obtaining, analyzing and recording information about the relative worth of an employee. The focus of the performance appraisal is measuring and improving the actual performance of the employee and also the future potential of the employee.PERFORMANCE APPRAISAL IN BAJAJ CAPITAL In the Bajaj Capital the performance appraisal is called performance improvement process (PIP). THE PIP SHARED BY MBO IN BAJAJ CAPITAL MBO- Management by objective has been defined as â€Å"a process whereby the superior & subordinate managers of an organization jointly identify its common goals setting for each individuals & gives largely & use the measures as guides for operating the unit & assessing the contribution of each & its members.GOAL SETTING- The goals are defined in clear, precise & measurable terms. They should be challenging yet attainable. A thorough analysis of internal environment(strengths & improvement area) and (opportunities & threats)of the organization is made to made to set these goal. The goal is set for financial, customers, people, process etc. PERFORMANCE TARGET- On the basis of organization goal, performance for each employee may be decided on the of organizational charts & job description.Every subordinate writes down his own performance goal which are work relat ed & career oriented. His manager also writes down the goal he thinks the subordinate should satire for. The employee of all levels are involved in goal setting. Action plan required to achieve the goals are also decided through consultant among an employee & his superior. Joint goal setting & joint goal setting & joint action planning are essential elements of appraisal through MBO.PERFORMANCE REVIEW- Frequent performance review meeting between the mangers & the subordinate are held Initially, monthly reviews may be used & then extended to quarterly reviews. In the reviews meeting, progress is assessed, improvement area & constraints are identified & steps to be taken to improve performance are decided. Subordinate actively participate in the process. It leads to self control by the employee. GUIDELINES FOR CONDUCTING SIX MONTHLY & YEARLY APPRAISAL REVIEW 1.Objective of review is to help improve individual performance & thereby business performance. 2. Two hour workshops to be indu cted each year one month before above reviews (5th & 11th month of appraisal year). 3. HRD group to devote one month (each for half yearly &yearly review) fully focused to complete all reviews. 4. HRD facilitator to be present during review &fill up check list to help improve process in future. Initially recommended to slant for 1st 3rd 1-4th &l-v level. 5. HRD facilitator to be senior in level than appraise. ) TRAINING AND DEVELOPMENT:- The various training programs used in Bajaj capital that encourage people to maximize their full potential through training & development programs which are tailored to suit the business needs of their partners are:- a) Basic & Advanced Mutual Fund Training:- Training provides a firmer foundation of understanding for how mutual funds work and how they interact with other investments in client's portfolio. Additionally, the designation adds prestige and lets their clients know they can be confident in their recommendations. ) AMFI training: – AMFI, Association of Mutual Funds in India, is an industry association, formed in 1995, for the overall growth of the mutual fund industry. It is also responsible for testing and certification of intermediaries, including individual mutual fund advisors. So as an individual, one cannot indulge in selling of mutual funds, till he or she has cleared AMFI exam and thus is certified. In other words, AMFI test is the gateway to the ever growing mutual fund industry and takes you one step closer to providing complete personal finance solutions to your clients. ) Certified Financial Planner: – A Certified Financial Planner professional takes a holistic view of financial life of an individual and provides strategic advice in regard to investment, insurance, tax, retirement and estate needs. Unlike product sellers who represent the interest of manufacturers of these products, a Certified Financial Planner professional works for the consumer, and does not have any particular product in mind when approaching a client. ) Registered Financial Planner: – Registered financial training is provided to empower the account holder of Bajaj Capital Advisors Network in the field of financial planning by imparting them technical knowledge with a practical approach based on Registered Financial Planner model with emphasis on case studies embedded with soft skills element. e) Soft Skills: – The Soft Skills Training programs encompass a wide range of skills that most organizations find to be integral and necessary part of everyday business.From basic communication skills to strategic management, a gamut of training programs are offered to address every business training need. f) Sales techniques: – Sales technique training is provided to increase the productivity of the sales. This training develops knowledge and use of the key selling skills that have the greatest impact on increasing sales productivity. All other sales training is incomplete without first learning these skills. g) Business Coaching: – Business coaching is a type of personal or human resource development.It provides positive support, feedback and advice to an individual or group basis to improve their personal effectiveness in the business setting. Business coaching includes executive coaching, corporate coaching and leadership coaching. h) TAX Advisory: – A tax advisor is a financial expert specially trained in tax law. Organizations usually require tax advisors to minimize taxation, to avoid learning the details of tax law in complicated financial situations themselves or to learn the details of tax law from a professional advisor.

Basel Norms in India

B. C. D. E. F. G. Background Functions of Basel Committee The Evolution to Basel II – First Basel Accord Capital Requirements and Capital Calculation under Basel I Criticisms of Basel I New Approach to Risk Based Capital Structure of Basel II First Pillar : Minimum Capital Requirement Types of Risks under Pillar I The Second Pillar : Supervisory Review Process The Third Pillar : Market Discipline 3 3 3 3 3 4 4 II. The Three Pillar Approach A. B. C. D. 5 5 6 6 7 7 7 III. Capital Arbitrage and Core Effect of Basel II A. Capital Arbitrage B. Bank Loan Rating under Basel II Capital Adequacy Framework C. Effect of Basel II on Bank Loan Rating IV. Basel II in India A. Implementation C. Impact on Indian Banks D. Impact on Various Elements of Investment Portfolio of Banks E. Impact on Bad Debts and NPA’s of Indian Banks D. Government Policy on Foreign Investment E. Threat of Foreign Takeover 8 8 9 10 10 10 V. Conclusion A. SWOT Analysis of Basel II in Indian Banking Context B. Challenges going ahead under Basel II 11 11 13 13 VI. VII. References The Technical Paper Presentation Team 2 I. Introduction: A. Background Basel II is a new capital adequacy framework applicable to Scheduled Commercial Banks in India as mandated by the Reserve Bank of India (RBI). The Basel II guidelines were issued by the Basel Committee on Banking Supervision that was initially published in June 2004. The Accord has been accepted by over 100 countries including India. In April 2007, RBI published the final guidelines for Banks operating in India. Basel II aims to create international standards that deals with Capital Measurement and Capital Standards for Banks which banking regulators can use when creating regulations about how much banks need to put aside to guard against the types of financial and operational risks banks face. The Basel Committee on Banking Supervision was constituted by the Central Bank Governors of the G-10 countries in 1974 consisting of members from Australia, Brazil, Canada, United States, United Kingdom, Spain, India, Japan, etc to name a few. The ommittee regularly meets four times a year at the Bank for International Settlements (BIS) in Basel, Switzerland where its 10 member Secretariat is located. B. Functions of the Basel Committee The purpose of the committee is to encourage the convergence toward common approaches and standards. However, the Basel Committee is not a classical multilateral organisation like World Trade Organisation. It has no founding treaty and it does not issue binding regulat ions. It is rather an informal forum to find policy solutions and promulgate standards. C. The Evolution to Basel II – First Basel Accord The First Basel Accord (Basel I) was completed in 1988. The main features of Basel I were: †¢ †¢ †¢ Set minimum capital standards for banks Standards focused on credit risk, the main risk incurred by banks Became effective end-year 1992 The First Basel Accord aimed at creating a level playing field for internationally active banks. Hence, banks from different countries competing for the same loans would have to set aside roughly the same amount of capital on the loans. D. Capital Requirements and Capital Calculation under Basel – I Minimum Capital Adequacy ratio was set at 8% and was adjusted by a loan’s credit risk weight. Credit risk was divided into 5 categories viz. 0%, 10%, 20%, 50% and 100%. Commercial loans, for example, were assigned to the 100% risk weight category. To calculate required capital, a bank would multiply the assets in each risk category by the category’s risk weight and then multiply the result by 8%. Thus, a Rs 100 commercial loan would be multiplied by 100% and then by 8%, resulting in a capital requirement of Rs8. E. Criticisms of Basel – I Following are the criticisms of the First Basel Accord (Basel I):†¢ †¢ It took too simplistic an approach to setting credit risk weights and for ignoring other types of risk. Risks weights were based on what the parties to the Accord negotiated rather than on the actual risk of each asset. Risk weights did not flow from any particular insolvency probability standard, and were for the most part, arbitrary. 3 †¢ †¢ †¢ The requirements did not account for the operational and other forms of risk that may also be important. Except for trading account activities, the capital standards did not account for hedging, diversification, and differences in risk management techniques. Advances in technology and finance allowed banks to develop their own capital allocation models in the 1990’s. This resulted in more accurate calculation of bank capital than possible under Basel I. These models allowed banks to align the amount of risk they undertook on a loan with the overall goals of the bank. Internal models allow banks to more finely differentiate risks of individual loans than is possible under Basel – I. It facilitates risks to be differentiated within loan categories and between loan categories and also allows the application of a capital charge to each loan, rather than each category of loan. F. New Approach to Risk-Based Capital †¢ †¢ †¢ By the late 1990’s, growth in the use of regulatory capital arbitrage led the Basel Committee to begin work on a new capital regime (Basel II) Effort focused on using banks’ internal rating models and internal risk models June 1999: The Basel Committee issued a proposal for a new capital adequacy framework to replace Basel – I. In order to overcome the criticisms of Basel – I and for adoption of the new approach to riskbased capital, Basel II guidelines were introduced. G. Structure of Basel – II Basel – II adopts a three pillar approach: †¢ †¢ †¢ Pillar I – Minimum Capital Requirement (Addressing Credit Risk, Operational Risk Market Risk) Pillar II – Supervisory Review (Provides Framework for Systematic Risk, Liquidity Risk Legal Risk) Pillar III – Market Discipline Disclosure (To promote greater stability in the financial system) II. The Three Pillar Approach The first pillar establishes a way to quantify the minimum capital requirements. The main objective of Pillar I is to align capital the adequacy ratios to the risk sensitivity of the assets affording a greater flexibility in the computation of banks’ individual risk. Capital Adequacy Ratio is defined as the amount of regulatory capital to be maintained by a bank to account for various risks inbuilt in the banking system. The focus of Capital Adequacy Ratio under Basel I norms was on credit risk and was calculated as follows: Capital Adequacy Ratio = Tier I Capital+Tier II Capital Risk Weighted Assets Basel Committee has revised the guidelines in the year June 2001 known as Basel II Norms. Capital Adequacy Ratio in New Accord of Basel II: Capital Adequacy Ratio = Total Capital (Tier I Capital+Tier II Capital) Market Risk(RWA) + Credit Risk(RWA) + Operation Risk(RWA) *RWA = Risk Weighted Assets Calculation of Capital Adequacy Ratio: Total Capital: Total Capital constitutes of Tier I Capital and Tier II Capital less shareholding in other banks. Tier I Capital = Ordinary Capital + Retained Earnings Share Premium – Intangible assets. Tier II Capital = Undisclosed Reserves + General Bad Debt Provision+ Revaluation Reserve+ Subordinate debt+ Redeemable Preference shares Tier III Capital: Tier III Capital includes subordinate debt with a maturity of at least 2 years. This is addition or substitution to the Tier II Capital to cover market risk alone. Tier III Capital should not cover more than 250% of Tier I capital allocated to market risk. A. First Pillar : Minimum Capital Requirement B. Types of Risks under Pillar I . Credit Risk Credit risk is the risk of loss due to a debtor’s non-payment of a loan or other line of credit (either the principal or interest (coupon) or both). Basel II envisages two different ways of measuring credit risk which are standarised approach, Internal Rating-Based Approach. The Standardised Approach The standardized approach is conceptually the same as the present Accord, but is more ri sk sensitive. Under this approach the banks are required to use ratings from External Credit Rating Agencies to quantify required capital for credit risk. The Internal Ratings Based Approach (IRB) Under the IRB approach, different methods will be provided for different types of loan exposures. Basically there are two methods for risk measurement which are Foundation IRB and Advanced IRB. The framework allows for both a foundation method in which a bank estimate the probability of default associated with each borrower, and the supervisors will 5 supply the other inputs and an advanced IRB approach, in which a bank will be permitted to supply other necessary inputs as well. Under both the foundation and advanced IRB approaches, the range of risk weights will be far more diverse than those in the standardized approach, resulting in greater risk sensitivity. 2. Operational Risk An operational risk is a risk arising from execution of a company’s business functions. As such, it is a very broad concept including e. g. fraud risk, legal risk, physical or environmental risks, etc. Basel II defines operational risk as the risk of loss resulting from inadequate or failed internal processes, people and systems, or from external events. Although the risks apply to any organization in business, this particular risk is of particular relevance to the banking regime where regulators are responsible for establishing safeguards to protect against systematic failure of the banking system and the economy. Banks will be able to choose between three ways of calculating the capital charge for operational risk – the Basic Indicator Approach, the Standardized Approach and the advanced measurement Approaches. 3. Market Risk Market risk is the risk that the value of a portfolio, either an nvestment portfolio or a trading portfolio, will decrease due to the change in value of the market risk factors. The four standard market risk factors are stock prices, interest rates, foreign exchange rates, and commodity prices. The preferred approach is VAR(value at risk). C. The Second Pillar : Supervisory Review Process Supervisory review process has been introduced to ensure not only that banks have adequate capital to support all th e risks, but also to encourage them to develop and use better risk management techniques in monitoring and managing their risks. The process has four key principles – a) Banks should have a process for assessing their overall capital adequacy in relation to their risk profile and a strategy for monitoring their capital levels. b) Supervisors should review and evaluate bank’s internal capital adequacy assessment and strategies, as well as their ability to monitor and ensure their compliance with regulatory capital ratios. c) Supervisors should expect banks to operate above the minimum regulatory capital ratios and should have the ability to require banks to hold capital in excess of the minimum. ) Supervisors should seek to intervene at an early stage to prevent capital from falling below minimum level and should require rapid remedial action if capital is not mentioned or restored. D. The Third Pillar : Market Discipline Market discipline imposes strong incentives to banks to conduct their business in a safe, sound and effective manner. It is proposed to be effected through a series of disclosure requirements on capital, risk exposure etc. so that market participants can assess a bank’s capital adequacy. These disclosures should be made at least semiannually and more frequently if appropriate. Qualitative disclosures such as risk management objectives and policies, definitions etc. may be published annually. 6 III. Capital Arbitrage and Core Effect of Basel II Regulatory arbitrage is where a regulated institution takes advantage of the difference between its real (or economic) risk and the regulatory position. Securitization is the main means used by Banks to engage in Regulatory Capital Arbitrage. Example of Capital Arbitrage is given below: A. Capital Arbitrage †¢ Assume a bank has a portfolio of commercial loans with the following ratings and internally generated capital requirements – AA-A: 3%-4% capital needed – B+-B: 8% capital needed – B- and below: 12%-16% capital needed Under Basel I, the bank has to hold 8% risk-based capital against all of these loans To ensure the profitability of the better quality loans, the bank engages in capital arbitrage, it securitizes the loans so that they are reclassified into a lower regulatory risk category with a lower capital charge Lower quality loans with higher internal capital charges are kept on the bank’s books because they require less risk-based capital than the bank’s internal model indicates. †¢ †¢ †¢ B. Bank Loan Rating under Basel – II Capital Adequacy Framework †¢ On April 27, 2007, the Reserve Bank of India released the final guidelines for implementation of the New Capital Adequacy Framework (Basel II) applicable to the Banking system of the country The new framework mandates that the amount of capital provided by a bank against any loan and facility will be based on the credit rating assigned to the loan issue by an external rating agency. This means that a loan and a facility with a higher credit rating will attract a lower risk weight than one with a lower credit rating. †¢ †¢ Illustration of capital-saving potential by banks on a loan of Rs 1000 million Rating Basel I Basel II Capital Saved (Rs Long Short Risk Capital Risk Capital Million) Term Term Weight Required* Weight Required Rating Rating (Rs Million) (Rs Million) AAA P1+ 100% 90 20% 18 72 AA P1 100% 90 30% 27 63 A P2 100% 90 50% 45 45 BBB P3 100% 90 100% 90 0 BB P4 P5 100% 90 150% 135 (45) below Unrated Unrated 100% 90 100% 90 0 *Capital required is computed as Loan Amount ? Risk Weight ? 9% C. Effect of Basel – II on Bank Loan Rating †¢ †¢ Banks would either prefer that the Borrower should get itself rated, or, It would prefer that the borrowing institution should pay a higher rate of interest to compensate for the loss. 7 To substantiate the above fact, following example is taken in respect of a strong company: Loan of Rating AAA is taken of Rs 100 Crores @ 12% interest rate Capital Adequacy Rating Risk % Capital Required Opportunity Ratio (Rs Crores) Interest lost by the Bank (Rs Crores) C. A. R. Unrated 100% 9. 00 1. 08 C. A. R. New 20% 1. 80 0. 22 Total Opportunity Interest lost by the Bank (Rs Crores) 0. 86 Hence, Banks would resort to the above-mentioned measures in order to reduce or curb this loss on opportunity interest. Worse affected by this action taken by Banks would be the weaker companies. They would either be charged a higher rate of interest on loans to compensate for the loss or would alternatively have to approach another bank charging a lower rate of interest. The ideal solution to this problem would be that a weaker company should get itself rated and also take steps in order to have a better credit rating. Credit Rating is an evaluation of credit worthiness of a person, company or instrument. Thus, it indicates their willingness to pay for the obligation and the net worth. IV. Basel II in India A. Implementation The deadline for implementing the base approach of Basel II norms in India, was originally set for March 31, 2007. Later the RBI extended the deadline for Foreign banks in India and Indian banks operating abroad to meet those norms by March 31, 2008, while all other scheduled commercial banks were to adhere to the guidelines by March 31, 2009. Later the RBI confirmed that all commercial banks were Basel II compliant by March 31, 2009. Keeping in view the likely lead time that may be needed by the banks for creating the requisite technological and the risk management infrastructure, including the required databases, the MIS and the skill up-gradation, etc. , RBI has proposed the implementation of the advanced approaches under Basel II in a phased manner starting from April 1, 2010 B. Impact on Indian Banks Basel II allows national regulators to specify risk weights different from the internationally recommended ones for retail exposures. The RBI had, therefore, announced an indicative set of weights for domestic corporate long-term loans and 8 bonds subject to different ratings by international rating agencies such as Moody’s Investor Services which are slightly different from that specified by the Basel Committee (Table 1). C. Impact on various elements of the investment portfolio of banks The bonds and debentures portfolio of the banks consist of investments into higher rated companies, hence the corporate assets measured using the standardised approach may be exposed to slightly lower risk weights in comparison with the 100 per cent risk weights assigned under Basel I. The Indian banks have a large short-term portfolio in the form of cash credit, overdraft and working capital demand loans, which were un-rated, and carried a risk weight of 100 per cent under the Basel I regime. They also have short-term investments in commercial papers in their investment portfolio, which also carried a 100 per cent risk weight. The RBI’s capital adequacy guidelines has prescribed lower risk weights for short-tem exposures, if these are rated (Table 2). This provides the banks with an opportunity to benefit from their investments in commercial paper (which are typically rated in A1+/A1 category) and give them the potential to exploit the proposed short-term credit risk weights by obtaining short-term ratings for exposures in the form of cash credit, overdraft and working capital loans. The net result is that the implementation of Basel II provided Indian banks with the opportunity to significantly reduce their credit risk weights and reduce their required regulatory capital, if they suitably adjust their portfolio by lending to rated but strong corporate and increase their retail lending. According to some reports, most of the Indian banks who have migrated to Basel II have reported a reduction in their total Capital Adequacy Ratios (CARs). However, a few banks, those with high exposures to higher rated corporate or to the regulatory retail portfolio, have reported increased CARs. However, a recent study by New Delhi-based industry lobby group Assocham has concluded that Capital Adequacy Ratio (CAR) of a group of commercial banks, which were part of the study improved to 13. 48% in 2008-09 from 12. 35% in 2007-08, due to lower risk weights, implementation of Basel II norms and slower credit growth. 9 D. Bad debts and requirement of additional capital In this context, the situation regarding bad debts and NPA’s is very pertinent. The proportion of total NPAs to total advances declined from 23. 2 per cent in March 1993 to 7. per cent in March, 2004. The improvement in terms of NPAs has been largely the result of provisioning or infusion of capital. This meant that if the banks required more capital, as they would to implement Basel II norms, they would have to find capital outside of their own or the governmentâ₠¬â„¢s resources. ICRA has estimated that, Indian banks would need additional capital of up to Rs. 12,000 crore to meet the capital charge requirement for operational risk under Basel II. Most of this capital would be required by PSBs Rs. 9,000 crore, followed by the new generation private sector banks Rs. 1,100 crore, and the old generation private sector bank Rs. 750 crore. In practice, to deal with this, a large number of banks have been forced to turn to the capital market to meet their additional regulatory capital requirements. ICICI Bank, for example, has raised around Rs. 3,500 crore, thus improving its Tier I capital significantly. Many of the PSBs, namely, Punjab National Bank, Bank of India, Bank of Baroda and Dena Bank, besides private sector banks such as UTI Bank have either already tapped the market or have announced plans to raise equity capital in order to boost their Tier I capital. E. Government Policy on foreign investment The need to go public and raise capital challenged the government policy aimed at restricting concentration of share ownership, maintaining public dominance and limiting foreign influence in the banking sector. One immediate fallout was that PSBs being permitted to dilute the government’s stake to 51 per cent, and the pressure to reduce this to 33 per cent increased. Secondly, the government allowed private banks to expand equity by accessing capital from foreign investors. This put pressure on the RBI to rethink its policy on the ownership structure of domestic banks. In the past the RBI has emphasised the risks of concentrated foreign ownership of banking assets in India. Subsequent to a notification issued by the Government, which had raised the FDI limit in private sector banks to 74 per cent under the automatic route, a comprehensive set of policy guidelines on ownership of private banks was issued by the RBI. These guidelines stated, among other things, that no single entity or group of related entities would be allowed to hold shares or exercise control, directly or indirectly, in any private sector bank in excess of 10 per cent of its paid-up capital. F. Threat of foreign takeover There has been growing pressure to consolidate domestic banks to make them capable of facing international competition. Indian banks are pigmies compared with the global majors. India’s biggest bank, the State Bank of India, which accounts for onefifth of the total banking assets in the country, is roughly one-fifth as large as the world’s biggest bank Citigroup. Given this difference, even after consolidation of 10 omestic banks, the threat of foreign takeover remains if FDI policy with respect to the banking sector is relaxed. Not surprisingly, a number of foreign banks have already evinced an interest in acquiring a stake in Indian banks. Thus, it appears that foreign bank presence and consoli dation of banking are inevitable post Basel II. V. Conclusion A. SWOT Analysis of Basel II in Indian Banking Context Strenghts †¢ †¢ Aggression towards development of the existing standards by banks. Strong regulatory impact by central bank to all the banks for implementation. Presence of intellectual capital to face the change in implementation with good quality. †¢ †¢ †¢ Weaknesses Poor Technology Infrastructure Ineffective Risk Measures Presence of more number of Smaller banks that would likely to be impacted adversely. †¢ Opportunities †¢ †¢ Increasing Risk Management Expertise. Need significant connection among business,credit and risk management and Information Technology. Advancement of Technologies. Strong Asset Base would help in bigger growth. †¢ †¢ Threats Inability to meet the additional Capital Requirements Loss of Capital to the entire banking system, due to Mergers and acquisitions. Huge Investments in technologies †¢ †¢ †¢ B. Challenges going ahead under Basel II †¢ The new norms will almost invariably increase capital requirement in all banks across the board. Although capital requirement for credit risk may go down due to adoption of more risk sensitive models – such advantage will be more than offset by additional capital charge for operational risk and increased capital requirement for market risk. This partly explains the current trend of consolidation in the banking industry. Competition among banks for highly rated corporates needing lower amount of capital may exert pressure on already thinning interest spread. Further, huge implementation cost may also impact profitability for smaller banks. The biggest challenge is the re-structuring of the assets of some of the banks as it would be a tedious process, since most of the banks have poor asset quality leading to significant proportion of NPA. This also may lead to Mergers Acquisitions, which itself would be loss of capital to entire system. The new norms seem to favor the large banks that have better risk management and measurement expertise, who also have better capital adequacy ratios and geographically diversified portfolios. The smaller banks are also likely to be hurt by the rise in weightage †¢ †¢ †¢ 11 of inter-bank loans that will effectively price them out of the market. Thus, banks will have to re-structure and adopt if they are to survive in the new environment. †¢ Since improved risk management and measurement is needed, it aims to give impetus to the use of internal rating system by the international banks. More and more banks may have to use internal model developed in house and their impact is uncertain. Most of these models require minimum historical bank data that is a tedious and high cost process, as most Indian banks do not have such a database. The technology infrastructure in terms of computerization is still in a nascent stage in most Indian banks. Computerization of branches, especially for those banks, which have their network spread out in remote areas, will be a daunting task. Penetration of information technology in banking has been successful in the urban areas, unlike in the rural areas where it is insignificant. An integrated risk management concept, which is the need of the hour to align market, credit and operational risk, will be difficult due to significant disconnect between business, risk managers and IT across the organizations in their existing set-up. Implementation of the Basel II will require huge investments in technology. According to estimates, Indian banks, especially those with a sizeable branch network, will need to spend well over $ 50-70 Million on this. Computation of probability of default, loss given default, migration mapping and supervisory validation require creation of historical database, which is a time consuming process and may require initial support from the supervisor. With the implementation of the new framework, internal auditors may become increasingly involved in various processes, including validation and of the accuracy of the data inputs, review of activities performed by credit functions and assessment of a bank’s capital assessment process. Pillar 3 purports to enforce market discipline through stricter disclosure requirement. While admitting that such disclosure may be useful for supervisory authorities and rating agencies, the expertise and ability of the general public to comprehend and interpret disclosed information is open to question. Moreover, too much disclosure may cause information overload and may even damage financial position of bank. Basel II proposals underscore the interaction between sound risk management practices and corporate good governance. The bank’s board of directors has the responsibility for setting the basic tolerance levels for various types of risk. It should also ensure that management establishes a framework for assessing the risks, develop a system to relate risk to the bank’s capital levels and establish a method for monitoring compliance with internal policies. The risk weighting scheme under Standardised Approach also creates some incentive for some of the bank clients to remain unrated since such entities receive a lower risk weight of 100 per cent vis-a-vis 150 per cent risk weight for a lowest rated client. This might specially be the case if the unrated client expects a poor rating. The banks will need to be watchful in this regard. †¢ †¢ †¢ †¢ †¢ †¢ †¢ †¢ We can conclude by saying that the Basel II framework provides significant incentives to banks to sharpen their risk management expertise to enable more efficient risk-return tradeoffs, it also presents a valuable opportunity to gear up their internal processes to the 12 international best standards. This would require substantial capacity building and commitment of resources through close involvement of the banks’ Top Management in guiding this arduous undertaking. Notwithstanding intense competition, the expansionary phase of the economy is expected to provide ample opportunities for the growth of the banking industry. The growth trajectory, adherence to global best practices and risk management norms are likely to catapult the Indian Banks onto the global map, making them a force to reckon with. VI. References 1. The Evolution to Basel II by Donald Inscoe, Deputy Director, Division of Insurance and Research, US Federal Deposit Insurance Corporation. 2. Basel II – Challenges Ahead of the Indian Banking Industry by Jagannath Mishra and Pankaj Kumar Kalawatia. 3. Basel II Norms and Credit Ratings by CA Sangeet Kumar Gupta. 4. The Business Line Magazine. 5. The Chartered Accountant – Journal of the Institute of Chartered Accountants of India. 6. www. bis. org 7. www. rbi. org. in 8. www. wikipedia. org 9. www. google. com VII. The Technical Paper Presentation Team Name of Member Email ID’s rahulscsharma@icai. org tulsyan. abhishek@yahoo. co. in sikha. kedia0311@gmail. com ca. gouravmodi@gmail. com Praveen_did@yahoo. com 1. Rahul Sharma 2. Abhishek Tulsyan 3. Sikha Kedia 4. Gourav Modi 5. Praveen Didwania 13 Basel Norms in India Basel Norms in India Basel Norms in India B. C. D. E. F. G. Background Functions of Basel Committee The Evolution to Basel II – First Basel Accord Capital Requirements and Capital Calculation under Basel I Criticisms of Basel I New Approach to Risk Based Capital Structure of Basel II First Pillar : Minimum Capital Requirement Types of Risks under Pillar I The Second Pillar : Supervisory Review Process The Third Pillar : Market Discipline 3 3 3 3 3 4 4 II. The Three Pillar Approach A. B. C. D. 5 5 6 6 7 7 7 III. Capital Arbitrage and Core Effect of Basel II A. Capital Arbitrage B. Bank Loan Rating under Basel II Capital Adequacy Framework C. Effect of Basel II on Bank Loan Rating IV. Basel II in India A. Implementation C. Impact on Indian Banks D. Impact on Various Elements of Investment Portfolio of Banks E. Impact on Bad Debts and NPA’s of Indian Banks D. Government Policy on Foreign Investment E. Threat of Foreign Takeover 8 8 9 10 10 10 V. Conclusion A. SWOT Analysis of Basel II in Indian Banking Context B. Challenges going ahead under Basel II 11 11 13 13 VI. VII. References The Technical Paper Presentation Team 2 I. Introduction: A. Background Basel II is a new capital adequacy framework applicable to Scheduled Commercial Banks in India as mandated by the Reserve Bank of India (RBI). The Basel II guidelines were issued by the Basel Committee on Banking Supervision that was initially published in June 2004. The Accord has been accepted by over 100 countries including India. In April 2007, RBI published the final guidelines for Banks operating in India. Basel II aims to create international standards that deals with Capital Measurement and Capital Standards for Banks which banking regulators can use when creating regulations about how much banks need to put aside to guard against the types of financial and operational risks banks face. The Basel Committee on Banking Supervision was constituted by the Central Bank Governors of the G-10 countries in 1974 consisting of members from Australia, Brazil, Canada, United States, United Kingdom, Spain, India, Japan, etc to name a few. The ommittee regularly meets four times a year at the Bank for International Settlements (BIS) in Basel, Switzerland where its 10 member Secretariat is located. B. Functions of the Basel Committee The purpose of the committee is to encourage the convergence toward common approaches and standards. However, the Basel Committee is not a classical multilateral organisation like World Trade Organisation. It has no founding treaty and it does not issue binding regulat ions. It is rather an informal forum to find policy solutions and promulgate standards. C. The Evolution to Basel II – First Basel Accord The First Basel Accord (Basel I) was completed in 1988. The main features of Basel I were: †¢ †¢ †¢ Set minimum capital standards for banks Standards focused on credit risk, the main risk incurred by banks Became effective end-year 1992 The First Basel Accord aimed at creating a level playing field for internationally active banks. Hence, banks from different countries competing for the same loans would have to set aside roughly the same amount of capital on the loans. D. Capital Requirements and Capital Calculation under Basel – I Minimum Capital Adequacy ratio was set at 8% and was adjusted by a loan’s credit risk weight. Credit risk was divided into 5 categories viz. 0%, 10%, 20%, 50% and 100%. Commercial loans, for example, were assigned to the 100% risk weight category. To calculate required capital, a bank would multiply the assets in each risk category by the category’s risk weight and then multiply the result by 8%. Thus, a Rs 100 commercial loan would be multiplied by 100% and then by 8%, resulting in a capital requirement of Rs8. E. Criticisms of Basel – I Following are the criticisms of the First Basel Accord (Basel I):†¢ †¢ It took too simplistic an approach to setting credit risk weights and for ignoring other types of risk. Risks weights were based on what the parties to the Accord negotiated rather than on the actual risk of each asset. Risk weights did not flow from any particular insolvency probability standard, and were for the most part, arbitrary. 3 †¢ †¢ †¢ The requirements did not account for the operational and other forms of risk that may also be important. Except for trading account activities, the capital standards did not account for hedging, diversification, and differences in risk management techniques. Advances in technology and finance allowed banks to develop their own capital allocation models in the 1990’s. This resulted in more accurate calculation of bank capital than possible under Basel I. These models allowed banks to align the amount of risk they undertook on a loan with the overall goals of the bank. Internal models allow banks to more finely differentiate risks of individual loans than is possible under Basel – I. It facilitates risks to be differentiated within loan categories and between loan categories and also allows the application of a capital charge to each loan, rather than each category of loan. F. New Approach to Risk-Based Capital †¢ †¢ †¢ By the late 1990’s, growth in the use of regulatory capital arbitrage led the Basel Committee to begin work on a new capital regime (Basel II) Effort focused on using banks’ internal rating models and internal risk models June 1999: The Basel Committee issued a proposal for a new capital adequacy framework to replace Basel – I. In order to overcome the criticisms of Basel – I and for adoption of the new approach to riskbased capital, Basel II guidelines were introduced. G. Structure of Basel – II Basel – II adopts a three pillar approach: †¢ †¢ †¢ Pillar I – Minimum Capital Requirement (Addressing Credit Risk, Operational Risk Market Risk) Pillar II – Supervisory Review (Provides Framework for Systematic Risk, Liquidity Risk Legal Risk) Pillar III – Market Discipline Disclosure (To promote greater stability in the financial system) II. The Three Pillar Approach The first pillar establishes a way to quantify the minimum capital requirements. The main objective of Pillar I is to align capital the adequacy ratios to the risk sensitivity of the assets affording a greater flexibility in the computation of banks’ individual risk. Capital Adequacy Ratio is defined as the amount of regulatory capital to be maintained by a bank to account for various risks inbuilt in the banking system. The focus of Capital Adequacy Ratio under Basel I norms was on credit risk and was calculated as follows: Capital Adequacy Ratio = Tier I Capital+Tier II Capital Risk Weighted Assets Basel Committee has revised the guidelines in the year June 2001 known as Basel II Norms. Capital Adequacy Ratio in New Accord of Basel II: Capital Adequacy Ratio = Total Capital (Tier I Capital+Tier II Capital) Market Risk(RWA) + Credit Risk(RWA) + Operation Risk(RWA) *RWA = Risk Weighted Assets Calculation of Capital Adequacy Ratio: Total Capital: Total Capital constitutes of Tier I Capital and Tier II Capital less shareholding in other banks. Tier I Capital = Ordinary Capital + Retained Earnings Share Premium – Intangible assets. Tier II Capital = Undisclosed Reserves + General Bad Debt Provision+ Revaluation Reserve+ Subordinate debt+ Redeemable Preference shares Tier III Capital: Tier III Capital includes subordinate debt with a maturity of at least 2 years. This is addition or substitution to the Tier II Capital to cover market risk alone. Tier III Capital should not cover more than 250% of Tier I capital allocated to market risk. A. First Pillar : Minimum Capital Requirement B. Types of Risks under Pillar I . Credit Risk Credit risk is the risk of loss due to a debtor’s non-payment of a loan or other line of credit (either the principal or interest (coupon) or both). Basel II envisages two different ways of measuring credit risk which are standarised approach, Internal Rating-Based Approach. The Standardised Approach The standardized approach is conceptually the same as the present Accord, but is more ri sk sensitive. Under this approach the banks are required to use ratings from External Credit Rating Agencies to quantify required capital for credit risk. The Internal Ratings Based Approach (IRB) Under the IRB approach, different methods will be provided for different types of loan exposures. Basically there are two methods for risk measurement which are Foundation IRB and Advanced IRB. The framework allows for both a foundation method in which a bank estimate the probability of default associated with each borrower, and the supervisors will 5 supply the other inputs and an advanced IRB approach, in which a bank will be permitted to supply other necessary inputs as well. Under both the foundation and advanced IRB approaches, the range of risk weights will be far more diverse than those in the standardized approach, resulting in greater risk sensitivity. 2. Operational Risk An operational risk is a risk arising from execution of a company’s business functions. As such, it is a very broad concept including e. g. fraud risk, legal risk, physical or environmental risks, etc. Basel II defines operational risk as the risk of loss resulting from inadequate or failed internal processes, people and systems, or from external events. Although the risks apply to any organization in business, this particular risk is of particular relevance to the banking regime where regulators are responsible for establishing safeguards to protect against systematic failure of the banking system and the economy. Banks will be able to choose between three ways of calculating the capital charge for operational risk – the Basic Indicator Approach, the Standardized Approach and the advanced measurement Approaches. 3. Market Risk Market risk is the risk that the value of a portfolio, either an nvestment portfolio or a trading portfolio, will decrease due to the change in value of the market risk factors. The four standard market risk factors are stock prices, interest rates, foreign exchange rates, and commodity prices. The preferred approach is VAR(value at risk). C. The Second Pillar : Supervisory Review Process Supervisory review process has been introduced to ensure not only that banks have adequate capital to support all th e risks, but also to encourage them to develop and use better risk management techniques in monitoring and managing their risks. The process has four key principles – a) Banks should have a process for assessing their overall capital adequacy in relation to their risk profile and a strategy for monitoring their capital levels. b) Supervisors should review and evaluate bank’s internal capital adequacy assessment and strategies, as well as their ability to monitor and ensure their compliance with regulatory capital ratios. c) Supervisors should expect banks to operate above the minimum regulatory capital ratios and should have the ability to require banks to hold capital in excess of the minimum. ) Supervisors should seek to intervene at an early stage to prevent capital from falling below minimum level and should require rapid remedial action if capital is not mentioned or restored. D. The Third Pillar : Market Discipline Market discipline imposes strong incentives to banks to conduct their business in a safe, sound and effective manner. It is proposed to be effected through a series of disclosure requirements on capital, risk exposure etc. so that market participants can assess a bank’s capital adequacy. These disclosures should be made at least semiannually and more frequently if appropriate. Qualitative disclosures such as risk management objectives and policies, definitions etc. may be published annually. 6 III. Capital Arbitrage and Core Effect of Basel II Regulatory arbitrage is where a regulated institution takes advantage of the difference between its real (or economic) risk and the regulatory position. Securitization is the main means used by Banks to engage in Regulatory Capital Arbitrage. Example of Capital Arbitrage is given below: A. Capital Arbitrage †¢ Assume a bank has a portfolio of commercial loans with the following ratings and internally generated capital requirements – AA-A: 3%-4% capital needed – B+-B: 8% capital needed – B- and below: 12%-16% capital needed Under Basel I, the bank has to hold 8% risk-based capital against all of these loans To ensure the profitability of the better quality loans, the bank engages in capital arbitrage, it securitizes the loans so that they are reclassified into a lower regulatory risk category with a lower capital charge Lower quality loans with higher internal capital charges are kept on the bank’s books because they require less risk-based capital than the bank’s internal model indicates. †¢ †¢ †¢ B. Bank Loan Rating under Basel – II Capital Adequacy Framework †¢ On April 27, 2007, the Reserve Bank of India released the final guidelines for implementation of the New Capital Adequacy Framework (Basel II) applicable to the Banking system of the country The new framework mandates that the amount of capital provided by a bank against any loan and facility will be based on the credit rating assigned to the loan issue by an external rating agency. This means that a loan and a facility with a higher credit rating will attract a lower risk weight than one with a lower credit rating. †¢ †¢ Illustration of capital-saving potential by banks on a loan of Rs 1000 million Rating Basel I Basel II Capital Saved (Rs Long Short Risk Capital Risk Capital Million) Term Term Weight Required* Weight Required Rating Rating (Rs Million) (Rs Million) AAA P1+ 100% 90 20% 18 72 AA P1 100% 90 30% 27 63 A P2 100% 90 50% 45 45 BBB P3 100% 90 100% 90 0 BB P4 P5 100% 90 150% 135 (45) below Unrated Unrated 100% 90 100% 90 0 *Capital required is computed as Loan Amount ? Risk Weight ? 9% C. Effect of Basel – II on Bank Loan Rating †¢ †¢ Banks would either prefer that the Borrower should get itself rated, or, It would prefer that the borrowing institution should pay a higher rate of interest to compensate for the loss. 7 To substantiate the above fact, following example is taken in respect of a strong company: Loan of Rating AAA is taken of Rs 100 Crores @ 12% interest rate Capital Adequacy Rating Risk % Capital Required Opportunity Ratio (Rs Crores) Interest lost by the Bank (Rs Crores) C. A. R. Unrated 100% 9. 00 1. 08 C. A. R. New 20% 1. 80 0. 22 Total Opportunity Interest lost by the Bank (Rs Crores) 0. 86 Hence, Banks would resort to the above-mentioned measures in order to reduce or curb this loss on opportunity interest. Worse affected by this action taken by Banks would be the weaker companies. They would either be charged a higher rate of interest on loans to compensate for the loss or would alternatively have to approach another bank charging a lower rate of interest. The ideal solution to this problem would be that a weaker company should get itself rated and also take steps in order to have a better credit rating. Credit Rating is an evaluation of credit worthiness of a person, company or instrument. Thus, it indicates their willingness to pay for the obligation and the net worth. IV. Basel II in India A. Implementation The deadline for implementing the base approach of Basel II norms in India, was originally set for March 31, 2007. Later the RBI extended the deadline for Foreign banks in India and Indian banks operating abroad to meet those norms by March 31, 2008, while all other scheduled commercial banks were to adhere to the guidelines by March 31, 2009. Later the RBI confirmed that all commercial banks were Basel II compliant by March 31, 2009. Keeping in view the likely lead time that may be needed by the banks for creating the requisite technological and the risk management infrastructure, including the required databases, the MIS and the skill up-gradation, etc. , RBI has proposed the implementation of the advanced approaches under Basel II in a phased manner starting from April 1, 2010 B. Impact on Indian Banks Basel II allows national regulators to specify risk weights different from the internationally recommended ones for retail exposures. The RBI had, therefore, announced an indicative set of weights for domestic corporate long-term loans and 8 bonds subject to different ratings by international rating agencies such as Moody’s Investor Services which are slightly different from that specified by the Basel Committee (Table 1). C. Impact on various elements of the investment portfolio of banks The bonds and debentures portfolio of the banks consist of investments into higher rated companies, hence the corporate assets measured using the standardised approach may be exposed to slightly lower risk weights in comparison with the 100 per cent risk weights assigned under Basel I. The Indian banks have a large short-term portfolio in the form of cash credit, overdraft and working capital demand loans, which were un-rated, and carried a risk weight of 100 per cent under the Basel I regime. They also have short-term investments in commercial papers in their investment portfolio, which also carried a 100 per cent risk weight. The RBI’s capital adequacy guidelines has prescribed lower risk weights for short-tem exposures, if these are rated (Table 2). This provides the banks with an opportunity to benefit from their investments in commercial paper (which are typically rated in A1+/A1 category) and give them the potential to exploit the proposed short-term credit risk weights by obtaining short-term ratings for exposures in the form of cash credit, overdraft and working capital loans. The net result is that the implementation of Basel II provided Indian banks with the opportunity to significantly reduce their credit risk weights and reduce their required regulatory capital, if they suitably adjust their portfolio by lending to rated but strong corporate and increase their retail lending. According to some reports, most of the Indian banks who have migrated to Basel II have reported a reduction in their total Capital Adequacy Ratios (CARs). However, a few banks, those with high exposures to higher rated corporate or to the regulatory retail portfolio, have reported increased CARs. However, a recent study by New Delhi-based industry lobby group Assocham has concluded that Capital Adequacy Ratio (CAR) of a group of commercial banks, which were part of the study improved to 13. 48% in 2008-09 from 12. 35% in 2007-08, due to lower risk weights, implementation of Basel II norms and slower credit growth. 9 D. Bad debts and requirement of additional capital In this context, the situation regarding bad debts and NPA’s is very pertinent. The proportion of total NPAs to total advances declined from 23. 2 per cent in March 1993 to 7. per cent in March, 2004. The improvement in terms of NPAs has been largely the result of provisioning or infusion of capital. This meant that if the banks required more capital, as they would to implement Basel II norms, they would have to find capital outside of their own or the governmentâ₠¬â„¢s resources. ICRA has estimated that, Indian banks would need additional capital of up to Rs. 12,000 crore to meet the capital charge requirement for operational risk under Basel II. Most of this capital would be required by PSBs Rs. 9,000 crore, followed by the new generation private sector banks Rs. 1,100 crore, and the old generation private sector bank Rs. 750 crore. In practice, to deal with this, a large number of banks have been forced to turn to the capital market to meet their additional regulatory capital requirements. ICICI Bank, for example, has raised around Rs. 3,500 crore, thus improving its Tier I capital significantly. Many of the PSBs, namely, Punjab National Bank, Bank of India, Bank of Baroda and Dena Bank, besides private sector banks such as UTI Bank have either already tapped the market or have announced plans to raise equity capital in order to boost their Tier I capital. E. Government Policy on foreign investment The need to go public and raise capital challenged the government policy aimed at restricting concentration of share ownership, maintaining public dominance and limiting foreign influence in the banking sector. One immediate fallout was that PSBs being permitted to dilute the government’s stake to 51 per cent, and the pressure to reduce this to 33 per cent increased. Secondly, the government allowed private banks to expand equity by accessing capital from foreign investors. This put pressure on the RBI to rethink its policy on the ownership structure of domestic banks. In the past the RBI has emphasised the risks of concentrated foreign ownership of banking assets in India. Subsequent to a notification issued by the Government, which had raised the FDI limit in private sector banks to 74 per cent under the automatic route, a comprehensive set of policy guidelines on ownership of private banks was issued by the RBI. These guidelines stated, among other things, that no single entity or group of related entities would be allowed to hold shares or exercise control, directly or indirectly, in any private sector bank in excess of 10 per cent of its paid-up capital. F. Threat of foreign takeover There has been growing pressure to consolidate domestic banks to make them capable of facing international competition. Indian banks are pigmies compared with the global majors. India’s biggest bank, the State Bank of India, which accounts for onefifth of the total banking assets in the country, is roughly one-fifth as large as the world’s biggest bank Citigroup. Given this difference, even after consolidation of 10 omestic banks, the threat of foreign takeover remains if FDI policy with respect to the banking sector is relaxed. Not surprisingly, a number of foreign banks have already evinced an interest in acquiring a stake in Indian banks. Thus, it appears that foreign bank presence and consoli dation of banking are inevitable post Basel II. V. Conclusion A. SWOT Analysis of Basel II in Indian Banking Context Strenghts †¢ †¢ Aggression towards development of the existing standards by banks. Strong regulatory impact by central bank to all the banks for implementation. Presence of intellectual capital to face the change in implementation with good quality. †¢ †¢ †¢ Weaknesses Poor Technology Infrastructure Ineffective Risk Measures Presence of more number of Smaller banks that would likely to be impacted adversely. †¢ Opportunities †¢ †¢ Increasing Risk Management Expertise. Need significant connection among business,credit and risk management and Information Technology. Advancement of Technologies. Strong Asset Base would help in bigger growth. †¢ †¢ Threats Inability to meet the additional Capital Requirements Loss of Capital to the entire banking system, due to Mergers and acquisitions. Huge Investments in technologies †¢ †¢ †¢ B. Challenges going ahead under Basel II †¢ The new norms will almost invariably increase capital requirement in all banks across the board. Although capital requirement for credit risk may go down due to adoption of more risk sensitive models – such advantage will be more than offset by additional capital charge for operational risk and increased capital requirement for market risk. This partly explains the current trend of consolidation in the banking industry. Competition among banks for highly rated corporates needing lower amount of capital may exert pressure on already thinning interest spread. Further, huge implementation cost may also impact profitability for smaller banks. The biggest challenge is the re-structuring of the assets of some of the banks as it would be a tedious process, since most of the banks have poor asset quality leading to significant proportion of NPA. This also may lead to Mergers Acquisitions, which itself would be loss of capital to entire system. The new norms seem to favor the large banks that have better risk management and measurement expertise, who also have better capital adequacy ratios and geographically diversified portfolios. The smaller banks are also likely to be hurt by the rise in weightage †¢ †¢ †¢ 11 of inter-bank loans that will effectively price them out of the market. Thus, banks will have to re-structure and adopt if they are to survive in the new environment. †¢ Since improved risk management and measurement is needed, it aims to give impetus to the use of internal rating system by the international banks. More and more banks may have to use internal model developed in house and their impact is uncertain. Most of these models require minimum historical bank data that is a tedious and high cost process, as most Indian banks do not have such a database. The technology infrastructure in terms of computerization is still in a nascent stage in most Indian banks. Computerization of branches, especially for those banks, which have their network spread out in remote areas, will be a daunting task. Penetration of information technology in banking has been successful in the urban areas, unlike in the rural areas where it is insignificant. An integrated risk management concept, which is the need of the hour to align market, credit and operational risk, will be difficult due to significant disconnect between business, risk managers and IT across the organizations in their existing set-up. Implementation of the Basel II will require huge investments in technology. According to estimates, Indian banks, especially those with a sizeable branch network, will need to spend well over $ 50-70 Million on this. Computation of probability of default, loss given default, migration mapping and supervisory validation require creation of historical database, which is a time consuming process and may require initial support from the supervisor. With the implementation of the new framework, internal auditors may become increasingly involved in various processes, including validation and of the accuracy of the data inputs, review of activities performed by credit functions and assessment of a bank’s capital assessment process. Pillar 3 purports to enforce market discipline through stricter disclosure requirement. While admitting that such disclosure may be useful for supervisory authorities and rating agencies, the expertise and ability of the general public to comprehend and interpret disclosed information is open to question. Moreover, too much disclosure may cause information overload and may even damage financial position of bank. Basel II proposals underscore the interaction between sound risk management practices and corporate good governance. The bank’s board of directors has the responsibility for setting the basic tolerance levels for various types of risk. It should also ensure that management establishes a framework for assessing the risks, develop a system to relate risk to the bank’s capital levels and establish a method for monitoring compliance with internal policies. The risk weighting scheme under Standardised Approach also creates some incentive for some of the bank clients to remain unrated since such entities receive a lower risk weight of 100 per cent vis-a-vis 150 per cent risk weight for a lowest rated client. This might specially be the case if the unrated client expects a poor rating. The banks will need to be watchful in this regard. †¢ †¢ †¢ †¢ †¢ †¢ †¢ †¢ We can conclude by saying that the Basel II framework provides significant incentives to banks to sharpen their risk management expertise to enable more efficient risk-return tradeoffs, it also presents a valuable opportunity to gear up their internal processes to the 12 international best standards. This would require substantial capacity building and commitment of resources through close involvement of the banks’ Top Management in guiding this arduous undertaking. Notwithstanding intense competition, the expansionary phase of the economy is expected to provide ample opportunities for the growth of the banking industry. The growth trajectory, adherence to global best practices and risk management norms are likely to catapult the Indian Banks onto the global map, making them a force to reckon with. VI. References 1. The Evolution to Basel II by Donald Inscoe, Deputy Director, Division of Insurance and Research, US Federal Deposit Insurance Corporation. 2. Basel II – Challenges Ahead of the Indian Banking Industry by Jagannath Mishra and Pankaj Kumar Kalawatia. 3. Basel II Norms and Credit Ratings by CA Sangeet Kumar Gupta. 4. The Business Line Magazine. 5. The Chartered Accountant – Journal of the Institute of Chartered Accountants of India. 6. www. bis. org 7. www. rbi. org. in 8. www. wikipedia. org 9. www. google. com VII. The Technical Paper Presentation Team Name of Member Email ID’s rahulscsharma@icai. org tulsyan. abhishek@yahoo. co. in sikha. kedia0311@gmail. com ca. gouravmodi@gmail. com Praveen_did@yahoo. com 1. Rahul Sharma 2. Abhishek Tulsyan 3. Sikha Kedia 4. Gourav Modi 5. Praveen Didwania 13

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Effects Of Toxic Pollutants On Food Chains Environmental Sciences Essay When a factory pours harmful chemicals or wastes into the air or water, when oil leaks from a burning oilrig or when a tanker runs aground, and when a farmer puts pesticides or fertilizers on a field to increase crop yield, it is said that these things pollute the environment. Pollution can take many forms. Its effects can have a major impact on food chains both in the water and on the land.  Ã‚  Everything from plants to animals, large and small is impacted. Pollutants like oil, pesticides, fertilizers such as nitrogen and phosphate from fertilizers, and lead can have a tremendous impact on the ecosystem, especially if the water gets polluted. Effects of Toxic Pollutants on Food Chains An ecosystem can be defined, as a self-contained, dynamic system made of a population of species in its physical environment. 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In a lake, for example, it can change the ecological balance by stimulating plant and algae growth, causing the death of fish due to suffocation from the lack of oxygen dissolved in the water. The oxygen cycle will eventually stop. The polluted water will also have a significant affect the animals dependant on the lake water. With no food to eat, or water to drink, they will be forced to move to another area, or face death. Both the Deepwater Horizon oil spill in the Gulf of Mexico in 2010 and the Exxon Valdez Spill in Alaska in 1989 caused significant damage to marine and wildlife habitats. In the Gulf of Mexico, it is reported that balls of oil continue to wash up along the shore, while dredging has shown mats of oil resting on the ocean floor, and oil sheen trails are still seen in the wake of fishing boats (CBS). Wetlands marsh grass remains fouled and dying, and oil can be seen in the pore space of sand and gravel deposits along the estuary edges of the Gulf. Although there was an extensive use skimmer ships, containment booms, raking of beaches and chemical and biological remediation (by introducing oil eating bacteria to eat the oil), the dispersion of the pollutants seems to have had minimal effect. In the short term, after several months, the fishing industry was allowed to resume operations (although in some areas, oil balls are found in the fishing nets). It is, however, too soon to know what the long terms effects will be. In Prince William Sound, Alaska, the use of a detergent dispersant had little effect and was stopped when it was found to be toxic to the cleanup workers and native wildlife. Wave action, which is important to disperse the oil in the water, was not enough, and the process was stopped (MacAskill). Attempts to burn the oil away, on a small scale, were successful, but had to be stopped when the weather changed. Ecosystems here form the basis of the coastal food chains. Animal life impacted by the spill included aquatic mammals, fish, birds as well as their related food chains. In the short term, hundreds of thousands of mid- and upper-level food chain animals were impacted, along with future generations (the eggs laid by salmon), for example, and in the long-term, scientists are still seeing contamination which has lead to a drastic reduction in populations across the board (Gill Elliott). Living in upstate New York, the use of nitrogen- and phosphorus-based fertilizers to increase cro p yield are commonplace. The chemicals and nutrients found in them, while beneficial for agricultural crops can be lethal in high doses for fish, birds and other wildlife. Pesticides, designed to kill pests chemically, are also dangerous when leached into soil or groundwater supplies. Heavy amounts of fertilizer chemicals like potassium, nitrogen and phosphorus in natural water systems can actually cause dead zones where wildlife cannot survive because of lower oxygen levels and chemical poisoning. Insects and organisms like honeybees and soil microbes that are beneficial to the food chain can be killed alongside the pests, eliminating that part of the ecosystem that is beneficial to crop health and sustainability. Nitrate (NO3) is a naturally occurring form of nitrogen found in soil. Nitrogen is essential to all life, and most crop plants require large quantities to sustain high yields. The formation of nitrates is an integral part of the nitrogen cycle in the environment. In moder ate amounts, they are a harmless constituent of food and water. Plants use nitrates from the soil to satisfy nutrient requirements and may accumulate nitrates in their leaves and stems (Relyea). Due to its high mobility, nitrates can also leach into groundwater, where ingestion can cause rare illness such as methemoglobinemia (found especially in infants) to occur. Nitrates form when microorganisms break down fertilizers, decaying plants, manures or other organic residues. Plants naturally take up these nitrates, but rain and irrigation water can cause them to runoff into lakes or streams, or leach them into groundwater. Although nitrate occurs naturally in some groundwater, in most cases higher levels are thought to result from human activities (Relyea). Common sources of nitrate include: fertilizers and manure, animal feedlots, municipal waste and sludge, septic systems and natural nitrogen fixation conducted by legumes, bacteria, and lightning. Nitrates that enter the food chain through non-natural means can have serious, and sometimes long-lasting effects on both plants and animals. Cattle and sheep (ruminants) are susceptible to nitrate poisoning when they drink contaminated water, animal feed or fodder. To protect drinking water, it is important to limit the loss of excess water and plant nutrients, and match fertilizer and irrigation applications to precise crop uptake needs in order to minimize groundwater contamination. While it may be technically possible to treat contaminated groundwater, it can be difficult, expensive and not totally effective. For this reason, prevention is the best way to ensure clean water. Water treatments include distillation, reverse osmosis, ion exchange or blending. Phosphorus is another common constituent of agricultural fertilizers, manure, and organic wastes in sewage and industrial effluent. It is an essential element for plant life, but when there is too much of it in water, it can spe ed up eutrophication (a reduction in dissolved oxygen in water bodies caused by an increase of mineral and organic nutrients) of rivers and lakes. Soil erosion is a major contributor of phosphorus to streams. Bank erosion occurring during floods can transport a lot of phosphorous from the riverbanks and adjacent land into a stream. It gets into water in both urban and agricultural settings, tends to attach to soil particles and, moves into surface-water bodies from runoff. A United States Coast and Geological Survey (USGS) study on Cape Cod, Massachusetts showed that phosphorus could also migrate with ground-water flows (Perlman). Since ground water often discharges into surface water, such as through stream banks into rivers, there is a concern about phosphorus concentrations in ground water affecting the water quality of surface water. Pesticides are substances or a mixture of substances, of chemical or biological origin, used by human society to eliminate or repel pests such as bacteria, nematodes, insects, mites, mollusks, birds, rodents, and other organisms that affect food production or human health (Pimentel). They usually act by disrupting some component of the pests life processes to kill or inactivate it. In a legal context, pesticides also include substances such as insect attractants, herbicides, plant defoliants, desiccants, and plant growth regulators. They can have an effect on both the water and soil. These pollutants have had some of their most striking effects on birds, particularly those in the higher trophic levels of food chains, such as bald eagles, hawks, and owls. These birds are often rare, endangered, and susceptible to pesticide residues such as those occurring from the bioconcentration (the amount of solute per unit volume of solution) of organic, chlorine-based insecticides through land-b ased food chains. Pesticides may kill grain- and plant-feeding birds, and the elimination of many rare species of ducks and geese has been reported. Populations of insect-eating birds such as partridges, grouse, and pheasants have decreased due to the loss of their insect food in agricultural fields through the use of insecticides. Bees are extremely important in the pollination of crops and wild plants, and although pesticides are screened for toxicity to bees, and the use of pesticides toxic to bees is permitted only under stringent conditions, many bees are killed by pesticides, resulting in the considerably reduced yield of crops dependent on bee pollination. The movement of pesticides into surface and groundwater happens through the processes of infiltration (when water sinks into unsaturated layers of soil) and runoff. Wildlife is affected, and human drinking water is sometimes contaminated beyond acceptable safety levels. In Beekman, New York, pesticides used to kill an infes tation of insects in a public school lead to the contamination of the village water supply when it leached into the reservoir. Sediments dredged from U.S. waterways are often so heavily contaminated by pesticide residues that it becomes hard to safely dispose of them on land. A major environmental impact has been the widespread death of fish and marine invertebrates due to the contamination of aquatic systems by pesticides. This has resulted from the agricultural contamination of waterways through fallout, drainage, or runoff erosion, and from the discharge of industrial wastes into waterways. Historically, most of the fish in Europes Rhine River were killed by the discharge of pesticides, and at one time fish populations in the Great Lakes became very low due to pesticide contamination (Smith). Many of the organisms that provide food for fish are extremely susceptible to pesticides, so the indirect effects of pesticides on the fish food supply may have an even greater effect on fis h populations. It is evident that pesticides cause major losses in global fish production, as they are extremely toxic to aquatic organisms. The literature on pest control lists many examples of new pest species that have developed when their natural enemies are killed by pesticides. This has created a further dependence on pesticides not very different from drug dependence. Finally, the effects of pesticides on the biodiversity of plants and animals in agricultural landscapes, whether caused directly or indirectly by pesticides, constitute a major adverse environmental impact of pesticides. Conclusion As chemicals diffuse up through the food chain, the top-level predators end up with the highest concentration of the chemicals in their bodies, and suffer the worst effects. They can have a major impact on all levels of the food chain. Excessive levels of pollution are causing a lot of damage to human and animal health, plants and trees, including tropical rainforests, as well as the wider environment. All types of pollution, air, water and soil, have an impact on the living environment. The effects in living organisms may range from mild discomfort to serious diseases such as cancer or physical deformities (extra or missing limbs in frogs). Experts admit that pollution effects are quite often underestimated and that more research is needed to understand the connections between pollution and its effects on all life forms. Waterborne diseases caused by polluted water can include: typhoid, amoebiasis, giardiasis, scariasis, hookworm, rashes, ear ache, pink eye, respiratory infections, hepatitis, encephalitis, gastroenteritis, diarrhea, vomiting, and stomach aches. Conditions related to water polluted by chemicals (such as pesticides, hydrocarbons, persistent organic pollutants, heavy metals etc) can include: cancer (prostate cancer and non-Hodgkins lymphoma), hormonal problems that can disrupt reproductive and developmental processes, damage to the nervous system, liver and kidney damage, damage to the DNA, and exposure to mercury (heavy metal). Soil pollution has many effects, as well, including: cancer, and leukemia. Lead in soil is especially hazardous for young children causing developmental damage to the brain. Mercury can increase the risk of kidney damage; cyclodienes (an organic insecticide) can lead to liver toxicity. Other effects can include neuromuscular blockage, depression of the central nervous system, headaches, nausea, fatigue, eye irritation and skin rash. Research Gill, C.  Ã‚   Elliott, J.   (2003). Influence of Food Supply and Chlorinated Hydrocarbon Contaminants on Breeding Success of Bald Eagles.   Ecotoxicology,  12(1-4),  95- 111.   Retrieved April 9, 2011, from ProQuest Biology Journals. (Document ID:  404134371). Gulf Oil Slick Endangering Ecology. CBS Broadcasting [written transcript]. 2010-04-30. http://wcco.com/video/?id=78277. Retrieved April 9, 2011, from ProQuest Biology Journals. MacAskill, E. (February 2, 2007). 18 years on, Exxon Valdez oil still pours into Alaskan waters, The Guardian. http://environment.guardian.co.uk/waste/story/0,,2004154,00.html. Retrieved April 9, 2011, from ProQuest Biology Journals. Perlman, H. (February, 2011). U.S. Department of the Interior. U.S. Geologic Survey. http://ga.water.usgs.gov/edu/urbanpho.html. Retrieved April 9, 2011, from ProQuest Biology Journals. Pimentel, D., Lehman, H., eds. (1993). The Pesticide Question: Environment, Economics, and Ethics. New York: Chapman and Hall. Relyea,  R.   (2009). A cocktail of contaminants: how mixtures of pesticides at low concentrations affect aquatic communities. Oecologia,   159(2),  363-76.   Retrieved April 9, 2011, from ProQuest Biology Journals. (Document ID:  2021561771). Self, J. Waskom, R. (October, 2008) Colorado State University Soils Testing. Colorado State University Press: Denver. Smith,  J.,  Walker,  L.,  Shore,  R.,  Le V Dit Durell,  S.,  Howe,  P.,  Ã‚  Taylor,  M.   (2009). Do estuaries pose a toxic contamination risk for wading birds?   Ecotoxicology,  18(7),  906-17.   Retrieved April 9, 2011, from ProQuest Biology Journals. (Document ID:  1847368111). Veerina, S.,   Parker, N   Fedler, C.   (2002). Effects of Sludge Filtrate on the Survival and Reproduction of Ceriodaphnia dubia.   Ecotoxicology,  11(2),  113-8.   Retrieved April 9, 2011, from ProQuest Biology Journals. (Document ID:  386223921).