Marketing Strategies for Real Estate Industry

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The authors examine whether the Basel capital framework that introduced the ratings-based system for the regulation banks had any profound effect on the link between finance and economic growth. Hassan, Hassan and Kin (2016) review the GDP growth per capita and the rate of international bank lending across 77 countries from 1999 to 2013 to get their results. The results revealed that ever since the Basel 2 capital regulations were implemented, the weight of risk associated with sovereign credit rating systems have had a significant effect on economic growth in both the lending and recipient states. Hassan, Hassan and Kin (2016) also found evidence that indicates the tendency of multinational banks to increase overseas lending to sovereign investments due to the lower risks, has contributed to reduced economic growth in the beneficiary nations. Nonetheless, the negative effects of the Basel regulations are negated due to the presence of open financial markets that have more advanced banking systems.

Hassan, Hassan and Kin (2016) conclude that the results mentioned above will have apparent effects for the upcoming Basel 3 regulations that are being implemented progressively across the globe. The Basel 3 rules will usher in a capital ratio that reduces risk of investment; it will be an important benchmark for financial markets in the future. Due to this and the increasingly narrow definition of regulatory capital, the association between the lending decisions that banks make and risk weight transforms. Ultimately, the association between finance and economic growth will become more prominent. Since the researchers establish the link between the ratings-based regulation and credit allocation by multinational banks, future studies should focus on the impact of ratings-based regulation on distribution of income.

Venkateshwara and Hanumantha (2012) analyze the role of credit rating services in the Indian financial sector by evaluating how the sector helps in the evaluation of risk and return on investments. They place their focus on new and existing Indian companies which have sourced their financing from the capital markets from 2000-2010. The authors note that the competition among corporations for investors has increased rapidly. This has been facilitated by the rise credit rating businesses which have helped to reduce the gap of knowledge that existed between lenders and investors, on one hand, and issuers, on the other hand, regarding the creditworthiness of countries and companies. Venkateshwara and Hanumantha (2012) also note that the credit rating sector in India is very significant since it is the platform that facilitates economic growth due to three factors. These include; increased circulation of money in the Indian market; reduced dependency on the cooperate bond market, and implementation of the Basel 2 regulations. On top of this, they note that credit rating is important for the development of financial markets. The increased circulation of money in the market is brought about by capital investments that have been enabled by debt. Due to better access to debt services, the dependency on the cooperate bond market is reduced.

The authors conclude that an investment grade rating can enhance the reputation of a country, company or security on a global scale, hence, attracting foreign investments and boosting the economy of any given nation. Such ratings are especially important for emerging economies since it shows their worthiness of receiving foreign investments. In this regard, future research should focus on how ratings enable efficient financial markets.

Becker and Milbourn (2011) analyze how the entry of a new player (Fitch) in the credit rating business, has affected the credit system as a whole since it has been dominated by two firms (S&P and Moody's) ever since its inception. The authors empirically analyzed how the entry Fitch to the industry has affected the credit system in developed states. Becker and Milbourn (2011) conclude that the enhanced competition brought by the entry of Fitch has coincided with reduced quality ratings from officials. The level of ratings increased while the effect of ratings on the financial markets decreased. Further, the ability of ratings to forecast rate of defaults decreased. Such observations bring into question the decision of liberate the credit rating industry.

The researchers conclude that the negative association between quality and competition is statistical and cannot be explained by the concept of reverse causality. Furthermore, it's unlikely that the shopping for rates or its growth can explain the negative patterns. The economic effect of increased competition in the credit ratings industry has a significant economic impact. For instance, a single standard deviation increase in the market share of Fitch is forecasted to enhance the average bond and firm rating. Therefore, the entry of a new player in the credit ratings market will reduce the quality of ratings and this will negatively affect economic growth. Becker and Milbourn's (2011) research is very significant for policy makers and regulators since the increased competition in the industry introduces the risk of running the reputation of quality ratings. Future research should be centered on the exit effect of a credit rating firm on the quality of the credit rating system.

Fakultet u Rijeci, E (2012) centers his research on the inability of credit rating systems to perform their primary goal, that is, forecasting, and how this has enhanced the financial crisis being experienced in the European Union due to real state. The author derives his empirical evidence by focusing on the three global credit agencies, Moody's Investors Service, Standard & Poor's, and Fitch Ratings and their influence on the escalation of the Eurozone financial crisis.

Fakultet u Rijeci, (2012) asserts that the Asian, Latin and Russian economic crises that have been experienced in past two decades, as well as the economic meltdown of 2007, have been as a result of the failings of rating agencies to predict the ability of debtors to repay private and public debt within the required time period. Hence, the functionality and existence of rating agencies is in doubt since many evaluations have exposed significant deficiencies in the credit ratings of individual nations. Fakultet u Rijeci, (2012) concludes that this deficiency is brought about by emphasis on subjective aspects when handing out ratings. Furthermore, rating agencies are usually late when it comes to reduction of ratings and they tend to ignore the various macroeconomic indicators. Fakultet u Rijeci also believes that rating agencies reduce ratings out of panic, rather than taking the role of calming the financial markets through proper forecasting of economic shifts.

The solution to the failing credit rating agencies seems to lie with public bodies that would examine credit ratings. These state agencies would be organizationally and financially autonomous from the stakeholders and publish a comprehensive system for awarding credit ratings. Future studies should focus on the effect of leaving the role of credit rating to public bodies so as to examine if this solution is viable.

Matthies (2013) examines the credit rating system and its effect on global financial systems. He does this by analyzing current and past empirical studies on corporate credit ratings and their association with the ratings of other agencies. In particular, he examines three aspects; the link between credit ratings and default of payments, the effect of credit ratings on capital markets, and the factors of credit ratings and their changes.

The results of the study illustrate the general character of the rating system, Matthies (2013) states that the differences in rating categories do not correlate to the same differences in the probability of default. Consequently, this means that rating changes and market reactions have an asymmetrical relationship. In particular, markets react better to rating downgrades than to rating upgrades, even when the default probability is considered. Such differences are a result of two factors. Firstly, it is as a result of the method through which rating agencies operate or certain characteristics of the market. Secondly, it might be as a result of behavior of companies and how they release the required data.

Through his research Matthies establishes the discrepancies that exist between rating agencies. Even though these agencies are supposed to utilize a universal system, they offer vastly differently results when rating a particular country or company; these discrepancies have gotten worse ever since the global financial meltdown of 2007.These agencies play a crucial role for any given economy, but continually fail to offer an accurate reflection of the financial climate. In order to improve future prediction, the causes of these failures should be analyzed. As such, future research should focus on the factors that cause failure of the credit rating system.

The Background of Procurement and Commissioning

Public procurement is the procedure whereby governmental agencies purchase services and goods from third parties. It compromises most that reinforce the work of the government and varies from conventional items like furniture, stationery, IT services, or printed forms, to multifaceted sectors, such as funding projects, construction, manufacture of arms or reinforcement to significant change projects. It also includes an increasing spend whereby the third and private sectors facilitate critical services directly to the public in domains like social care, tertiary education, health, and welfare-to-work. The public sector may offer such services directly, and in some scenarios, even this public supply can be executed using procurement mechanisms. A governmental agency may compete with private sector companies in bidding for government work using a formal competitive process.

Commissioning is a term that means discrete things to different people. Organizations usually develop their varieties of commissioning, and there does not exist a universal definition. Many at times, commissioning is confused with procurement, which centers on ensuring delivery of service rather than its plan. There is also a primary assumption that commissioning has to include a market-based approach to the provision of services. Government agencies typically describe their commissioning strategies when referring to a procurement policy. The confusion does not end there since some individuals within organizations handed the title of commissioner are procurement experts, whereas others work almost discreetly from procurement experts . Commissioning does not have to include any purchase activity. Persisting with in-house delivery of a service may be an official decision of a commissioning body, similar to funding a VCS organization through grants. On that account, the simplest definition of commissioning is making optimal use of resources that are available to develop the best outcomes for citizens. The simplicity of this definition hides the complexity that surrounds the activities that enable things to happen.

Technological advances are one of the core reasons globalization has rapidly increased in the past decade. More specifically, technological innovations in information and communication have the world to seem smaller and facilitated the escalation of globalization. In my local area, technological developments in information and communication have changed the way of life at work, home, school and at leisure. The internet, in particular, has had the most significant impact in our lives. In the education sector, students are now able to access books and learning materials that were not available previously. As a result, the academic performance of schools has greatly increased in the past decade. Through the internet, citizens have been able to access developmental stories from tall over the world and thus have been able to gauge local development with that of other regions. Following this, they are able to challenge local leaders through social media so that they engage in developmental matters. As a result, my locality has seen an increased number of schools, roads and hospitals that have been built to world class standards.

The technological flow in my local configuration has been largely been shaped by economic forces. Economic development has improved the living standards thus people are able to have disposable income which they can spend on technological devices. Through devices such as mobile phones and computers, locals are able to access the internet and become part of the globalization process.


Appadurai, Arjun. The Future as Cultural Fact: Essays on the Global Condition. Verso Books, 2013. Print.

Becker, Bo, and Milbourn, Todd. ""How did increased competition affect credit ratings?""Journal of Financial Economics 101.3: 493-514. 2011.

Fakultet u Rijeci, E. ""Credit Rating Agencies and Their Impact On Spreading the Financial Crisis On the Eurozone."" EKON. MISAO PRAKSA DBK. GOD XXI. 639-661.2012

Hasan, I., Wu, E., Hassan, G., &Kim, S. J. ""The Real Impact of Basel Ratings-Based Capital Rules on the Finance-Growth Nexus.""SSRN 2737912. 2016

Matthies, Alexander B. ""Empirical Research on Corporate Credit-Ratings: A Literature Review. No. SFB649DP2013-003."" Sonderforschungsbereich. 649. 2013

Martin, Tonya. (2011). 2011 Best Practices. Professional Retail Store Maintenance Association

Venkateshwara Kumar, K. S., & Hanumantha Rao, S. ""Credit Rating Role in Modern Financial System.""International Journal of Marketing, Financial Service and Management, 1(8), 135. 2012

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