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The formation of the Lehman Brothers dates back to the 1844 when Henry Lehman and his two brothers (Emmanuel Lehman and Mayer Lehman) established a small shop trading in cotton, utensils and other general merchandise. As the cotton industry grew, Lehman brothers progressed and made significant stride in the Cotton exchange market, and later joined in the New York Stock Exchange in early 1900s. Lehman in 2006-2008 By 2006, Lehman Brother became a well-known investment bank, operating in three business segments: capital markets, investment banking, and investment management, providing a full of services in equity and fixed income sales, etc.
For several years prior to 2007, the market for securitization and mortgage-backed securities (MBS) and subprime mortgage had expanded rapidly due to the high growth in the U. S. housing market. As securitization became an increasingly profitable business, Lehman Brother aggressively making investment in commercial real-estate and had had significant exposure to housing and subprime mortgage. As the market condition became unfavorable, Lehman suffered substantial financial loss, and failed because of inability to finance itself.
After the great depression of 1929-30, one of the worst economic downfall happened in 2007-09. This recession was caused mainly due to bursting of the USA housing bubble. Default on Subprime lending, easy credit conditions, weak and fraudulent underwriting practices and deregulation were the attributing factors. This event of economic crisis could have been prevented if a strong compliance system was in place and enforced. An estimated amount of more than $1 trillion were lost by the large US and European banks on toxic assets and bad loans from January 2007 to September 2009 (Reuters, 2009). Recent plunge in the stock market prices China had got regulators and investors worried about a future financial crisis. Focus once again turns on to the regulations and compliance on financial institutions as they play the key role in maintaining the economy.
Compliance generally refers to the conformance to a set of laws, regulations, policies, best practices, or service-level agreements. Compliance governance refers to the set of procedures, methodologies, and technologies put in place by a corporation to carry out, monitor, and manage compliance. Compliance governance is an important, expensive, and complex problem to deal with. It is important because there is increasing regulatory pressure on companies to meet a variety of policies and laws or safety mishaps (Patrícia Silveira, 2012) After the great depression of 1929-30, one of the worst economic downfall happened in 2007-09. This recession was caused mainly due to bursting of the USA housing bubble. Default on Subprime lending, easy credit conditions, weak and fraudulent underwriting practices and deregulation were the attributing factors.
This event of economic crisis could have been prevented if a strong compliance system was in place and enforced. An estimated amount of more than $1 trillion were lost by the large US and European banks on toxic assets and bad loans from January 2007 to September 2009 (Reuters, 2009). Recent plunge in the stock market prices China had got regulators and investors worried about a future financial crisis. Focus once again turns on to the regulations and compliance on financial institutions as they play the key role in maintaining the economy.
Since the crisis of 2008, there is a continuous intense flow of new rules and regulations regionally, nationally and internationally. Every part of an organization is affected by this complex web of changing rules and regulations which subject it to enforcement actions, fines and reputational risks (Sexton, 2015 – 16). Institutions must think of the costs of new rules in terms of both the capital they will need to keep on hand, rather than investing, and the people and automated systems they must add to comply with regulations (McCleskey, n. d. ). Another cost of regulation is the cost of non-compliance.
While post-financial-crisis increased regulations are aimed at reducing risk in financial markets around the world, such changes come with significant and widespread implications for financial institutions. In the United States, Bank of America and JP Morgan have been fined for malfeasance, with JP Morgan tentatively facing a record $13 billion settlement with the U. S. government for wrongdoing relating to its mortgage-backed securities business (McCleskey, n. d. ). Can compliance Management done as a project? A project is temporary in that it has a defined beginning and end in time, and therefore defined scope and resources. And a project is unique in that it is not a routine operation, but a specific set of operations designed to accomplish a singular goal. So a project team often includes people who don’t usually work together – sometimes from different organizations and across multiple geographies (Project Management Institute, 2016) in Existing Issues with Compliance Management.
Benefits of having compliance as a project
For the project to be successful we would work closely with you and establish clear goals and creative solutions based on Royal Bank of Canada’s needs. Our route to attain this is as follows:
At this phase our experts will determine the projects objective, define stakeholder’s expectations, identify assumptions and constraints, define success criteria and draft project charter (Mak, 2016).
After drafting a project charter, the next step is to establish and prioritize task and activities, establish schedule and budget, assign resources, establish project plan and obtain approval (Mak, 2016). Also at this stage the various risks associated with the organization are identified and analyzed.
This is the stage when the project plan is carried out. With execution comes managing the team, reporting on project success, resolving any problems and implementing any changed if necessary (Mak, 2016).
Once the project is in action it is necessary to monitor the activities to know if everything is working as per plan. If not corrective measures are taken to correct the deviations, analyze proposals for any changes and obtain approval if the changes are to be established.
Once the execution is complete, the project is evaluated and reported. Decision is taken at this stage whether to disband the team or not (Mak, 2016). Is my team the best choice for you?
Our Team of dedicated and qualified staff will ensure:
Royal Bank of Canada in order to reduce the non-compliance risk, costs and increase efficiency regarding compliance need to design a compliance project that will integrate into the existing structure of the organization. Our team consists of dynamic and well equipped staff that has a successful track record with similar clients and projects. We take pride in delivering only the best services for our clients to increase their productivity and lasting business.
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