Banking failures Essay Example | Topics and Well Written Essays - 1750 words

Banking failures - Essay Example The research is based on the recent International financial crisis of UK banking system 08/09, which failed to adhere to existing financial and national regulations. The significant impact of shadow banking system that facilitates complex financial structures, derivatives and asset securities have resulted in extreme trading risk as compared to the normal banking operations. The banking system is regulated by the competition commission, which summon operations of the banks towards a complex monopoly for banking giants as compared to the smaller banks. Banking failures are termed as shutting down the operations of the bank due to inability of paying of its depositors or have lesser funds to meet its creditors and regulators obligations. The distributions of its assets and liabilities are evident due to insolvency of the bank which implicit that its assets are undervalued as compared to its liabilities at market value. The banking regulations are accredited by three organisations mainl y FSA (Financial Services Authority), Treasury and Bank of England. The interventions of the regulators were limited to aggressive situations only but since the banking crisis, the regulators are alarmed with the current regulation system. The most critical drawback for increased regulations in United Kingdom is enforcement of international banks to operate in lesser regulated environment offshore. This could result in a huge impact on the employment and financial institution of the country and across the globe. (Buckle & Thompson, pp. 333-345, 2005). The banking system is adhered to principle based approach as compared to the U.S rules based regulatory system. The FSA regulates promotion of efficient and rational financial services to its consumers and to achieve its objective, it ensures standards are in place for the operational activities of banks and financial institutions (Buckle & Thompson, pp. 333-345, 2005). The banking stability in UK is adhered to the Banking Act (2009), which implicit that influential organisations can be held responsible for taking control over the bank in midst of crisis and banking regulations (Parliament, 2010). It also stimulates that in case of bankruptcy of failure of banking system the ownership is controlled under public or government organisation such as Bank of England and Treasury. This has led in recent downfall of financial institutions like Northern Rock, which was rescued by the Bank of England and later on sold to Virgin group. This could be termed as failure in banking system of the oldest British financial institution during the 08/09 financial crunch (Buckle & Thompson, pp. 333-345, 2005). 2. Literature Review The British Banking system has been subject to prudential regulations for quite a long time but is now affirmative in accepting a shift to integrated system, which divulges a single regulator controlling the entire financial intuition sector. According to Buckle and Thompson (2005), the banking failure was apparent since the Great Depression of 1920 when numerous banks and financial institutions collapsed due to failure of regulators and lack of compliance of banking legislations. The British banking sector was not affected with the major crisis until 1973, when Bank of England rescued several secondary banks that were strongly depended on heavy deposits due to intra-bank

New Pharmaceuticals Essay Example | Topics and Well Written Essays - 750 words

New Pharmaceuticals - Essay Example Secondly, the labeling of the drug is verified and its contents are determined. Thirdly, the methods of manufacturing adopted are verified for their effectiveness in retaining the drug’s â€Å"identity, strength, quality and purity† in adequate measures. The NDA has been so designed as to reveal the whole history behind development the drug such as animal studies, human clinical trials, mechanism of action of the drug on the body, methods of manufacture and packaging (NewDrugApplication). Development Process Discovery or invention of a new drug usually involves selecting a few say five out of more than 5,000 new compounds that are considered safe enough to conduct trials in humans and pre-clinical evaluations lasting for three to six years. From the five compounds selected, only one is approved by the FDA for introduction in the market for treatment. The research process involves the following sequence; Target identification, target prioritization/validation, lead ident ification and lead optimization. Once the drug is optimized through in vivo and in vitro studies involving animals, it is used in human volunteers as an investigational drug. There are a number of phases of testing of drug on humans consisting of Phase I Clinical studies, Phase II clinical studies, Phase III clinical studies, Phase IIIb/IV studies and Post Approval studies. Phase I meant for verification of safety and tolerability in humans lasts for six to nine months. Usually 20 to 100 healthy volunteers are given the investigational drug for a short term for documentation as to how the drugs is absorbed, distributed, metabolized in the body and excreted from the body. Phase II determines the effectiveness and further safety of the candidate drug on the humans. This phase would last for a period of six months to three years. In Phase III, the drug undergoes randomized and blind clinical trials involving several hundred to thousands of volunteering patients for whose diseases the d rug is intended. Phase III b is usually the immediate pre-approval stage. Post approval stage involves testing of the drug introduced in the market focusing on unknown side effects and other risk factors (PPD). Cost of development It has been estimated that new drug discoveries have increased human life expectancy and economic gains from new drugs are estimated to be more than $ 500 billion per year. In view of the above said prolonged development phases, a company has to incur costs not less than $ 800 million to $ 2 billion per drug. In once instance, Pfizer has reported an investment of $ 800 million for Phase III trials alone for one drug. The cost is huge because the U.S. F.D.A. approves just one drug out of five compounds selected out of 5,000 to 10,000 compounds originally studied. It takes at least 12 to 15 years for discovery and development of a drug. Though the patent period is 20 years for a drug, effective period available to the drug developer is hardly 12 years in vie w of the time consumed in the developmental period when the drug developer is allowed to use the drug along the way on volunteers (Masia n d ) Works Cited Masia, Neal. The Cost of Developing a New Drug, Focus on Intellectual Prperty Rights. n.d . 27 March 2011