This chapter discusses the theme of this book, which provides a comprehensive assessment of the consequences of the Iraq War for the national security of the United States. The book evaluates the overall costs and benefits of the war to U.S. national security, and the degree to which the war has in fact reduced the principal threats and challenges to the United States and its interests. The chapter also explains the justification for conducting this study, which is based on the proposition that the independent evaluation of public policies is vital to the health of representative democracies such as the United States.
2004 is the year when companies around the world need to move their financial reporting to the rules laid down by the International Accounting Standards Board. In this article the chairman of that board, Sir David Tweedie outlines what this change will mean. He also points out that the success of the process is down to way that the regulators behave and whether vested interests are allowed to triumph.
Every year the think‐tank, the Centre for the Study of Financial Innovation, produces a survey which highlights the major areas of risk which financial institutions are worried about. This article charts the findings of the latest survey and finds, amongst other things, that regulation is now seen as a risk.
The Combined Code enshrines the principles of corporate governance for UK companies. It has been very influential but many companies also question its value. The authors, with the help of survey results from Deloitte, assess the change which is being brought about.
The author, chief executive of the Association of Corporate Treasurers, looks ahead at two challenges of 2004 in the continuing arguments over international financial reporting rules on financial instruments, which he believes will create inconsistencies in banking accounts and treasury practices, and in the implementation of the Sarbanes‐Oxley legislation which he believes will create a burden of excessive certification.
The author, technical director of the UK’s biggest accounting body, assesses how businesses will cope with new financial reporting rules in 2004 and predicts that an emphasis on reporting on prospective financial information will come to the fore.
The author, chairman of one of the biggest international accounting firms in the world, takes a worried look ahead at 2004. He predicts that greater regulation could bring as many problems as benefits around the world.
Capital matters to most corporations in free markets, but there are differences. Companies in non‐financial industries need equity capital mainly to support funding to buy property and to build or acquire production facilities and equipment to pursue new areas of business. While this is also true for financial institutions, their main focus is somewhat different. Banks actively evaluate and take risks on a daily basis as part of their core business processes. For example, the commercial lending business inherently involves weighing the credit risk of new loans and their associated mitigates. This involves analysis of the credit quality of the underlying obligor, the effectiveness of guarantees, collateral, cross‐default and other forms of credit protection. Today, however, best practice does not stop there. It also is necessary to evaluate the impact of portfolio diversification (e.g. in terms of geographical or industry concentration of exposures) and the degree of correlation among exposures on the bank's balance sheet. Another example is trading activity whereby a bank benefits from high trading volumes (by earning the bid/ask spread) and hopes to gain from proprietary net positions, but must bear some degree of market risk in the process.
Historically, risk management was understood as a pure risk reporting function that included the monitoring of restrictions and portfolio management activities. More detailed analysis of customer portfolios was not necessary, and never requested. Resources were allocated to gain more capital, so it was client relationship management that drove the business. In this context, risk management has been mainly regarded as a “necessary” cost factor.
There have been many efforts at improving corporate governance in the last few years following the spate of American corporate scandals. The reforms have resulted in the focus now moving to one of the most glaring anomalies in the link of safeguards against the risk of the integrity of financial reporting being damaged. The author looks at the whole difficult, tangled and sometime opaque system of shareholder voting and assesses whether proposed reforms to the system will work.
The author, the European Commission’s chief of financial reporting in financial markets, argues that 2004 could be a year of crisis or a year of progress. Which it will be depends on whether financial reporting rises to the challenges which the European Commission has created. He suggests that people’s behaviors are just as important as rules in creating an effective capital market.
The author, one of the leading business thinkers in the USA and a former Harvard Business School professor, puts forward his hopes and fears for the year 2004. He hopes that the worlds of financial reporting and corporate governance will become clearer and more effective but he worries that resistance from company directors and a preference for rules rather than principles will hinder this process. On balance he concludes that he is more hopeful than fearful for the year ahead.
The author provides a seven point plan for what 2004 holds. The predictions range from a tougher environment for company directors as investors fight back and a greater focus from financial reporting on the future and cash.
