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  1. Unregistered

    i need the following analysis paragraphs to be rephrased but with the same no.of word

    Nationalization is increasingly becoming a reality for some banks. And for those firms that are in the crosshairs, nationalization could equal disaster for their leveraged finance teams. Moreover, the causalities go beyond the banks, with companies across all industries losing access to the financing they need to stay afloat. Moreover, banks that underwrite loans and bonds have been branded with a scarlet letter that symbolizes the greed associated with private equity firms and highly levered deals. "When the government is talking about putting money into banks, leveraged finance is not what they are talking about. This has been the case with the Royal Bank of Scotland, which is now majority-owned by U.K. taxpayers. Citigroup, which the U.S. government now owns more than one-third.

    The truth is, nationalization is not a painless cure for unhealthy banks. It could get both expensive and messy. But it may nevertheless be the right solution for one or more of the biggest, most vulnerable institutions. The reason is simple: The U.S. economy continues to spiral downward despite nearly two years' worth of half-measures aimed at propping up the status quo. Extreme actions are needed to fix the financial system. It could turn out that such steps can be taken only via nationalization. That would give the federal government power to negotiate and, if necessary, force a workable solution for all of the important players. Banks will receive funds in the form of capital, preference shares and subordinated debt. Majority shareholders will see their holdings diluted for the time being but they will have first refusal on buying back the stakes from the government over a four-year period.

    The key to understanding the nationalization debate is to focus on who will bear the pain of bank restructuring: Mostly it will be institutional investors and common shareholders, as it has been so far, Or will the pain be shared by preferred shareholders and even some classes of creditors, ranging from foreign bondholders to other banks to the counterparties of exotic derivative contracts.

    Other nationalization issues generate heat but are distractions. We can safely ignore the controversy over whether the government will spend a lot of money to support nationalized banks; institutional investors are already spending billions, with or without nationalization. Likewise, while the risk that the government could interfere in lending decisions is valid, it's avoidable, especially if the bank is quickly reprivatized.

    The collapse in UK bank stocks last month reflected more than just fear that others would report results in line with the dire forecast from RBS of up to 28 billion ($39.6 billion) in operating losses and goodwill impairment charges for 2008.

    The coincidence of that shocking trading update with news that the UK government was converting its high-yielding RBS preference shares into ordinary shares and launching a second banking sector bail-out plan led many investors to conclude that full-blown nationalization of RBS was imminent and might soon follow for Lloyds and maybe others. the government to get on with the task of nationalizing the banks as a necessary step in the process of cleansing their balance sheets and restoring their capacity to lend.
    In the absence of urgent need to prevent outright failure, full-scale nationalization is neither needed nor desirable.

    The share prices of RBS, Lloyds and Barclays have been crushed. The equity markets simply must adjust to banks' reduced status.

    At the start of 2008, Royal Dutch Shell was the largest constituent of the FTSE 100 index with a market capitalization of 134 billion. Beneath it, six banks ranked among the top-20-largest companies in the UK. HSBC was the third-largest constituent, with a market cap of 99.6 billion; RBS ranked seventh at 44.7 billion; Barclays 14th at 33 billion; HBOS 17th at 27.5 billion; Lloyds 18th at 26.6 billion and Standard Chartered 19th at 25.8 billion.Fast-forward to January 23, 2009 and HSBC remained the fourth-largest FTSE stock, worth 64 billion, behind first-ranked BP, worth 91.8 billion. But no other bank ranked within the largest 20 quoted UK companies. The combined market cap of RBS, Barclays and the new Lloyds Banking Group, now incorporating HBOS, amounted to just 17.8 billion. At such low valuations, should the banks need to raise more capital the markets might not provide it, in which case the government will have to.

    But full nationalization should remain a very last resort. In other circumstances, such share price collapses might quickly have destabilized the entire business of the banks, spooked depositor and creditor flight and required rescue by the public sector. But that has not happened precisely because the government's rescue has been a work in progress for five months already. Deposit guarantees have been raised, further guarantees provided for up to 250 billion of senior debt, 37 billion of capital injected and a new asset protection scheme announced to insure banks against fat-tail risk in damaged credit portfolios.

    The government already has vast economic exposure to the banks as guarantor, and nationalization might permit the accounting and reporting formalities to catch up with this reality. But continued private sector investment in the banks has value. It holds out a requirement that the new business model for banks, which government will now shape through its oversight and direct influence while the banks stand under its protection, should be geared towards the profitable funding of discerning risk-taking for a commercial return. Banks might ultimately become more utility-like but they should and must match their business model to the requirements of private sector investors.

    The financial system's failure has been a failure of government as well as of the free market. Governments have shown themselves just as capable of fudging the figures on the public accounts to make them look good as any bonus-greedy executive chasing the next short-term pay-off. Scrutinizing governments through both the established mechanisms of public sector accountability and the regular reporting requirements of the stock market might be the best safeguard for investors and customers have for ensuring the restoration of a banking system fit for purpose and bank stocks will be a good place to watch for the first signs of sustained recovery.

    The uncertainty over nationalization is costly and self-defeating. Several big banks have seen their borrowing costs rise as bondholders fear that they, too, will suffer in any government restructuring. Weaker share prices and dearer credit will worsen the economy, further weaken banks' loan books and increase the need for yet more public capital.
    Government control of big banks is not a quick and painless solution to the banking mess. Given the scale of the crisis, the depth of the recession and the burden of
    the underlying debt, government involvement in any bank is unlikely to be unwound quickly. Sweden, widely praised for its handling of its early 1990s banking bust, took several years to clean up and privatize the banks it nationalized.

    Explicit government ownership would be an improvement over the onerous, fiddly and capricious intervention of today. An arms-length bank management board would both keep the interferers at bay, and also require the public sector to bear the consequences of its meddling on the bank's performance. Rather than an escalation of public control, as government capital is gradually converted into common equity to cover the banks' losses, it would be better to lay out the scale and scope of public ownership as soon as possible.
    Some banks need a lot of capital. If the government has to provide it, taking control as it does so in some cases, so be it. If the government becomes the owner, it needs to act as such, selling businesses, breaking them up and firing managers if needs be.
    If that happens, shareholders will be heavily diluted--though, crucially, they will not be wiped out, as investors now fear. It is tempting to suggest that the bondholders of big banks should suffer too, just as they can suffer when small banks fail and is taken over by the Federal Deposit Insurance Corporation. Though that would indeed set an example (and drastically lower the cost to the public purse) it risks a catastrophic Lehman-style flight from all bank debt.

    The opportunities to raise capital today are very scarce, selling preferred shares to the government will cost banks roughly half of what they might pay for capital raised by other means, bankers and analysts said. And that is assuming banks could even find willing investors.

    For example, under this Capital Purchase Program, the Treasury intends to purchase $250 billion of senior preferred shares in financial institutions, with $125 billion set aside for community and regional banks. Those that issue the shares would pay a 5% rate for the first five years and 9% after that, and the proceeds from the sale of the shares would qualify as Tier 1 capital. The aim of the Treasury's plan is to get banks lending again, though healthy banks are expected to also use the money to acquire weaker rivals.

    If we still need to nationalize the banks after all that, then we are condemning our own bailout plan as a failure which is not a good signal.

    The banks are hugely important to UK companies. They have a big marketplace to rediscover a profitable means of operating and on the back of which to attract private capital.

    Private ownership brings requirements for regular reporting, which the proponents of nationalization say is unduly burdensome and at odds with the critical need to restructure. This is the heart of the matter.

    • Join Date: Apr 2009
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    Re: i need the following analysis paragraphs to be rephrased but with the same no.of

    i need the following analysis paragraphs to be rephrased but with the same no.of word
    Gosh, for a second there I thought you were trying to sucker somebody into rephrasing this professional-caliber work so that you could pass it off as your own.

    Of course, then it occurred to me that there's no way that could be true, since no one could possibly be that lame.

    So, good luck then.


    • Join Date: Aug 2009
    • Posts: 1,131

    Re: i need the following analysis paragraphs to be rephrased but with the same no.of

    Quote Originally Posted by Unregistered View Post
    i need the following analysis paragraphs to be rephrased but with the same no.of word
    Oh God! I need that too!

    Thank GOODNESS you posted this!

    I just didn't know how to ask... I felt so.... well, you know....

    But now BOTH of us will have what we need!

    Thank you more than I can say, Unregistered! Thank you! Thank you!

  2. Editor,
    English Teacher
    • Member Info
      • Native Language:
      • British English
      • Home Country:
      • UK
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      • Laos

    • Join Date: Nov 2002
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    Re: i need the following analysis paragraphs to be rephrased but with the same no.of

    Quote Originally Posted by dragn View Post
    Of course, then it occurred to me that there's no way that could be true, since no one could possibly be that lame.

    So, good luck then.

    It's the second time they have posted it- I deleted one earlier.

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