Simple Banking Basics

A good way to understand how banks work is to imagine starting your own bank.

The first thing you need to do is put up some of your own money. You won’t receive a banking license unless you have your own capital at risk.

After a while your balance sheet and erarnings will look like.

Look HERE to learn more on banking basics!

Lessons from the Credit Crisis

Which car can travel faster around a race track, one with brakes or one without?

A car will face many obstacles, let alone many bends in the track before it reaches the finish line. The ability to brake allows the race car driver to slow down to meet these challenges and to accelerate only when there is the most gain to be had.

Similarly, companies want to be resilient in the face of risk and also to be able to exploit it should opportunities for gain arise. Especially in the financial community, an enterprise risk management system that is quick and responsive to change is central to ensuring success.

More at: Actuaries Abroad: ERM Lessons from the Credit Crisis

However, if you think everything is under control, remember Andretti's one liner:

Even in risk management: Think twice.....

Ageing and the Sustainability of Dutch Public Finances

In a 2006 (but still actual) research called, "Ageing and the Sustainability of Dutch Public Finances", it's stated that the ageing of the population jeopardises the sustainability of public finances in the Netherlands.

The doubling of the ratio between the number of retirees and the number of workers destroys the balance between future public expenditure and tax revenues. Indeed, the increase in expenditure on public pensions and health and long-term care will outweigh the increase in tax revenues.




Budgetary reforms are therefore necessary in order to avoid that future generations will have to raise taxes or economize on public expenditure.

Reforms in the field of social security of the last few years are a step in the right direction, but are insufficient. In particular, the decline of interest rates and the reduced wealth of pension funds have worsened the sustainability of public finances. The effects of reforms on the intergenerational balance are important for the question which further reforms are most attractive.