Why has United Nations been more successful than League of Nations Essay

Why has United Nations been more successful than League of Nations - Essay Example Any comparison between the two international bodies as League of Nations and United Nations can be done only by tracing their origin.In order to amply answer the thesis question, one needs to analyze in details the prevailing world situation when these two bodies were formed. One needs to appreciate that both the bodies were formed in the aftermath of World Wars that ravaged a large part of the developed world when nations tired of war were thinking of some permanent solution to banish war for ever from the face of the earth. The nations thought of creating some international supervisory body that would mediate and diffuse tensions that might brew between nations and ensure that such tensions never spill over into full fledged armed conflict. The bane of war was very much realized by all the combatants what with European economy in tatters after the savagery and mindless destruction that was unleashed during the two World Wars. It seemed that all parties concerned had come to their s enses and have realized the hard way that war can never be a solution; one war inevitably leads to other wars more savage and more ferocious than the previous one. The stage was set, as one would assume, for the creation of one such international body at the end of First World War. This body would, or at least those who took leading part in its formation thought so, would be an international mediator that would diffuse the glowing embers of a potential armed confrontation before it turned into an uncontrollable inferno (Knock, 1995). Inception of League of Nations By mid-December 1918 World War I was practically over, the shooting part, that is, and USS George Washington was approaching French coastline with US President Woodrow Wilson on board. The President was buoyant with notions of setting up a world order that would usher in everlasting peace in world. The idea and mission was surely a laudable one but little did the President know of the pitfalls that lay ahead in implementin g his grandiose and eminently lofty plans that would prevent forever any war from erupting into a frenzy of genocide and destruction. This effort of his earned him the Nobel Prize for peace in 1919 but Wilson was perhaps not aware that his allies were determined that Germany atone for her sins by paying heavily and were in no mood to forgive and forget and start afresh. But why blame only the European nations? Many Americans also feared that the birth of any multinational body like the League of Nations would take on the role of a global monitor and prevent member nations from pursuing their independent foreign policies. This strain of isolationism had pervaded foreign policy relations of United States right from its arrival on the international scene as a power of consequence. This trait perhaps had a direct link with its geographical location being bound on either sides by oceans and thus not having to share boundaries with equally powerful nations as most European countries had t o. Canada on the north and Mexico on the south were so inferior in military and economic strength as compared to itself that United States had never faced the predicament of dealing with a prickly and potentially dangerous neighbor. Hence, the general feeling among American public was not favorable towards the formation of an international body. They, instead, felt their independence in charting their foreign policy course to be much more important than engaging in some sort of understanding and compromise with fellow developed countries so that a World war is never repeated. League of Nations thus started its journey amid much misgivings and mutual distrust and was doomed perhaps even before it was formally brought into being (Lerner, 2004).

Source evaluation Essay Example | Topics and Well Written Essays - 750 words - 4

Source evaluation - Essay Example study were subjected to writing as well as reading assessments and the parents were given a set of questionnaires to fill in information regarded their views on video games. The parents were to do some analysis as well as to take up roles in the study behavior of their children as to see if what they had been instructed to undertake were actually true over a period of four months. (Weis, Robert, and Brittany C. Cerankosky, 12-17). They then filled in another set of questionnaire at the end of the four months and those results were heavily relied upon by the two psychologists to come up with their final analysis and conclusion. The study revealed that young boys who did not own video games put their parents under pressure to buy them such items. Upon receiving them, they become their main source of addiction. They noted that boys who had acquired the system began to register low academic performance in schools. Their research proved that video games were not appropriate among school going boys who could no longer concentrate in their studies thus having lower reading and writing scores. Video games have caused a displacement in the after-school activities such as artistic games that had a lot of positive impact on the academic performance of students. This book is of great importance to this research owing to the fact that it expands on the role of video games on academic performance among children. The article was published in Sage on 18th February 2010 which makes it very relevant for the purpose of this study. They developed an understanding on the correlation between playing of violent video games and violent antisocial behavior in the society. The book considers how playing video games may lead to children and the youth acquiring violent attitudes. The relationship between the two variables is best evident among children who spent a lot of time playing the games. There are fewer factors to cause alarm in the video gaming industry provided that adequate steps

New London Airport Research Proposal Example | Topics and Well Written Essays - 2000 words

New London Airport - Research Proposal Example In UK the latest government forecasts predict a 239% change on 1995 by 2015 of the terminal passenger numbers. I t shows a requirement equivalent of an extra 3 -4 airports the size of Heathrow. The country needs to follow the sustainable development policy of its own and of EU. The required framework of aviation should reduce impact, increase growth and protect environment. (DETR 1997 as cited inWhitelegg 2000). A few recommendation suggested are: putting an environment charge based on emissions, ending of all subsidies and tax exemptions and more stringent noise and emission standards.(Whitelegg 2000) Environmental data and criteria: The London mayor is particularly optimistic about environmental safety by moving airport into the Thames estuary. It would cut noise since planes could approach the airport over the North Sea. Moreover, the Heathrow expansion would put pressure on the dense west London while there is alternative to the east. The noise has been the complaint of many residents and the levels of global warming emission gases have gone beyond EU and Environmental Agency norms (Katz 2008). Ben Stewart of Greenpeace argues that increase in number of flights from a four runway would negate the environmental benefits. He feels that new runways are new runways and we should rather think about bringing emission down by funding for railways and other low carbon emission transports. (Murray 2008). Unite, Britain's biggest union feels that Thames is not the best place due to tidal and storm surges, which can increase sea level by several metres. The noise would not be solved when airport is moved, it will only shift to another area. The resort towns of North Kent and South Essex would suffer the noise pollution instead of the population of west London. The area is also a bird sanctuary raising the worries of bird strikes causing aircraft engines and windscreens to fail (PR News, 2008).The environmental data must clearly indicate levels of CO, SO2, NOX, O3, Particulate Matter and Lead generated and their effects on coastal resources, fish and wild life, wading birds. The scientific study must also provide data on light emission and visual impacts on people around airport (Halcrow group 2003). In the light of these suggestions and protests the data needed by the minister for environment are : NOISE: The noise damages health and quality of life. It can cause sleep disturbances, psychological and mental disturbances, annoyance and can make one hearing impaired ( WHO 1993 as cited in Whitelegg 2000). The idea of new airport into Thames estuary is attractive to some planners because planes could fly over the North Sea, alleviating concerns about noise pollution and allowing it to operate 24 hours a day (Katz 2008). How many are already living in the 57Decibel or higher (for a restful life it is upto 55dB) contour of noise and how many more would be added in coming years. This aspect seems in favour of Thames estuary airport as zero population would be added by 2015. While expansion of Heathrow may add another 107000, Stansted 3000 and at Gatwick a further addition of 9000, who would be living in this noise contour if further expansion of the later three airports is allowed . Expansion of Heathr

Why has United Nations been more successful than League of Nations Essay

Why has United Nations been more successful than League of Nations - Essay Example Any comparison between the two international bodies as League of Nations and United Nations can be done only by tracing their origin.In order to amply answer the thesis question, one needs to analyze in details the prevailing world situation when these two bodies were formed. One needs to appreciate that both the bodies were formed in the aftermath of World Wars that ravaged a large part of the developed world when nations tired of war were thinking of some permanent solution to banish war for ever from the face of the earth. The nations thought of creating some international supervisory body that would mediate and diffuse tensions that might brew between nations and ensure that such tensions never spill over into full fledged armed conflict. The bane of war was very much realized by all the combatants what with European economy in tatters after the savagery and mindless destruction that was unleashed during the two World Wars. It seemed that all parties concerned had come to their s enses and have realized the hard way that war can never be a solution; one war inevitably leads to other wars more savage and more ferocious than the previous one. The stage was set, as one would assume, for the creation of one such international body at the end of First World War. This body would, or at least those who took leading part in its formation thought so, would be an international mediator that would diffuse the glowing embers of a potential armed confrontation before it turned into an uncontrollable inferno (Knock, 1995). Inception of League of Nations By mid-December 1918 World War I was practically over, the shooting part, that is, and USS George Washington was approaching French coastline with US President Woodrow Wilson on board. The President was buoyant with notions of setting up a world order that would usher in everlasting peace in world. The idea and mission was surely a laudable one but little did the President know of the pitfalls that lay ahead in implementin g his grandiose and eminently lofty plans that would prevent forever any war from erupting into a frenzy of genocide and destruction. This effort of his earned him the Nobel Prize for peace in 1919 but Wilson was perhaps not aware that his allies were determined that Germany atone for her sins by paying heavily and were in no mood to forgive and forget and start afresh. But why blame only the European nations? Many Americans also feared that the birth of any multinational body like the League of Nations would take on the role of a global monitor and prevent member nations from pursuing their independent foreign policies. This strain of isolationism had pervaded foreign policy relations of United States right from its arrival on the international scene as a power of consequence. This trait perhaps had a direct link with its geographical location being bound on either sides by oceans and thus not having to share boundaries with equally powerful nations as most European countries had t o. Canada on the north and Mexico on the south were so inferior in military and economic strength as compared to itself that United States had never faced the predicament of dealing with a prickly and potentially dangerous neighbor. Hence, the general feeling among American public was not favorable towards the formation of an international body. They, instead, felt their independence in charting their foreign policy course to be much more important than engaging in some sort of understanding and compromise with fellow developed countries so that a World war is never repeated. League of Nations thus started its journey amid much misgivings and mutual distrust and was doomed perhaps even before it was formally brought into being (Lerner, 2004).

New London Airport Research Proposal Example | Topics and Well Written Essays - 2000 words

New London Airport - Research Proposal Example In UK the latest government forecasts predict a 239% change on 1995 by 2015 of the terminal passenger numbers. I t shows a requirement equivalent of an extra 3 -4 airports the size of Heathrow. The country needs to follow the sustainable development policy of its own and of EU. The required framework of aviation should reduce impact, increase growth and protect environment. (DETR 1997 as cited inWhitelegg 2000). A few recommendation suggested are: putting an environment charge based on emissions, ending of all subsidies and tax exemptions and more stringent noise and emission standards.(Whitelegg 2000) Environmental data and criteria: The London mayor is particularly optimistic about environmental safety by moving airport into the Thames estuary. It would cut noise since planes could approach the airport over the North Sea. Moreover, the Heathrow expansion would put pressure on the dense west London while there is alternative to the east. The noise has been the complaint of many residents and the levels of global warming emission gases have gone beyond EU and Environmental Agency norms (Katz 2008). Ben Stewart of Greenpeace argues that increase in number of flights from a four runway would negate the environmental benefits. He feels that new runways are new runways and we should rather think about bringing emission down by funding for railways and other low carbon emission transports. (Murray 2008). Unite, Britain's biggest union feels that Thames is not the best place due to tidal and storm surges, which can increase sea level by several metres. The noise would not be solved when airport is moved, it will only shift to another area. The resort towns of North Kent and South Essex would suffer the noise pollution instead of the population of west London. The area is also a bird sanctuary raising the worries of bird strikes causing aircraft engines and windscreens to fail (PR News, 2008).The environmental data must clearly indicate levels of CO, SO2, NOX, O3, Particulate Matter and Lead generated and their effects on coastal resources, fish and wild life, wading birds. The scientific study must also provide data on light emission and visual impacts on people around airport (Halcrow group 2003). In the light of these suggestions and protests the data needed by the minister for environment are : NOISE: The noise damages health and quality of life. It can cause sleep disturbances, psychological and mental disturbances, annoyance and can make one hearing impaired ( WHO 1993 as cited in Whitelegg 2000). The idea of new airport into Thames estuary is attractive to some planners because planes could fly over the North Sea, alleviating concerns about noise pollution and allowing it to operate 24 hours a day (Katz 2008). How many are already living in the 57Decibel or higher (for a restful life it is upto 55dB) contour of noise and how many more would be added in coming years. This aspect seems in favour of Thames estuary airport as zero population would be added by 2015. While expansion of Heathrow may add another 107000, Stansted 3000 and at Gatwick a further addition of 9000, who would be living in this noise contour if further expansion of the later three airports is allowed . Expansion of Heathr

The Impact of Pre-Cooling as an Intervention Strategy to Minimize Cardiovascular system Essay Example for Free

The Impact of Pre-Cooling as an Intervention Strategy to Minimize Cardiovascular system Essay The aim of this report was to investigate whether the utilization of pre-cooling (cooling vest) prior to a 10, 000m road-race run within a hot and humid environment, would result in improved performance. The report also aimed to examine any performance-related effects, and their underlying physiological mechanisms. Fourteen (n=14) well-trained adult runners participated in two 10,000m-time trials, spaced 72 hours apart. Ambient conditions of both the control and experimental conditions were T= 32.5 Â °C, rel. humidity= 65% and T= 32.8’C, rel. humidity= 63% respectively. Procedure consisted of a 30 minute warm up (20 minutes steady state running at RPE 13, 10 minutes individualized stretching activity). During the warm up, the control condition required participants to wear a normal tee shirt, with the experimental condition requiring participants to wear a commercially available gel-based cooling vest. Conclusion of the 30 min warm up saw the tee shirt or ice- vest replaced with the race singlet, before commencing the 10, 000 m time trial. Time, pre and post body mass, heart rate, skin temperature and core temperature were all variables measured and recorded. Participants were able to complete the 10,000m road-run in less time following the pre-cooling condition, suggesting that pre-cooling as an intervention strategy improved endurance performance. Results indicate this occurrence was due to significantly lower starting core and skin temperatures, reduced starting heart rate as well as an overall lower sweat rate. These factors allowed for a greater capacity of heat storage, minimizing thermoregulatory and cardiovascular strain and therefore allowing the body to operate at a higher level of performance before reaching critical limiting temperature. Results Figure 1 displays the difference between time trials obtained in both the control and pre-cooling conditions. The pre-cool time trial was significantly shorter than the control time trial (p0.05). The difference between baseline and post body mass (BM) were recorded to calculate sweat rate (L/hr.). Figure 2 displays the difference in sweat rate between the control and pre-cool conditions. Control sweat rate was significantly higher then sweat rate recorded for the pre-cool condition. The above graph (Figure 3) depicts the mean heart rates and standard deviations for both control and pre-cool conditions. HR was recorded and displayed over three phases of the time trial (start, mid and end). Statistical analysis determined that there was a significant difference in HR between the three phases of the time trial (p0.05). Statistical significance also occurred between control start HR and pre-cool start HR, with control start HR 5.10% greater than pre-cool start HR. Skin temperature was also recorded and statistically analysed. Figure 4 displays the mean and standard deviations for skin temperature (Tsk) over three phases of the time trial for both the control and pre-cool conditions. Significant differences between both control and pre-cool conditions were found (p0.05). Significant statistical differences were also discovered between each of the phases of the time trial (p0.0167). Figure 5 depicts mean and standard deviations for core temperature (Tc). Significant statistical difference occurred between the three different stages of the time trial (p0.05). When compared separately, significant differences were found between all stages of the time trial (start vs. mid, start vs. end, mid vs. end) (p0.0167). Discussion The purpose of this study was to investigate whether pre-cooling through the utilization of a cooling vest would augment endurance performance undertaken in the heat. Findings obtained from the study indicate that pre-cooling did improve performance, as the pre-cooling condition time trials were significantly shorter than the control condition (p0.05). This ability to perform at a higher intensity, decreasing time taken to complete the 10,000m run can be explained by the physiological mechanisms behind pre-cooling. The ability to exercise under hot and humid conditions is significantly impaired (Nielsen, Hales, Strange, Christensen, Warberg Saltin, 1993) when ambient temperature exceeds skin temperature. Reduced heat loss that would normally occur through convection and radiation, results in an increase in body temperature (Marino Booth, 1998). By lowering pre-performance body temperature, the body’s ability to capacitate metabolic heat production is increased (Siegel Laursen, 2012), therefore increasing the time to reach critical limiting temperature, at which exercise performance deteriorates or can no longer be maintained (Marino et al. 1998). Sweat rate was lower following pre-cooling compared to the control condition. A number of studies have also obtained similar results, finding greater heat storage capacities and subsequent sweat rates as a result of precooling (Olschewski Bruck, 1988)(Lee Haymes, 1995)(White, Davis Wilson, 2003). This can be explained by the greater heat storage, that is stimulated by precooling, delaying the onset of heat dissipation and subsequent sweat threshold (White et al. 2003). Furthermore, by minimizing sweat rate, the flow of blood to the skin surface is also reduced. This allows more blood to be distributed to the active muscles, reducing cardiovascular strain (White et al, 2003). Another physiological mechanism stimulated through pre-cooling, that aids in reducing cardiovascular strain is heart rate (HR)(Kay, Taaffe Marino, 1999). Recorded data over both conditions showed an increase in HR from the start to the end of the time trial. However, the only significant difference between control and precooling was found between the starting HR recordings. The precooling start HR was 5.10% lower than the control start HR (p0.0167). This significant difference was not maintained throughout mid and end recordings, with both the control and precooling end HR reaching approximately 191 bpm. Kay et al. (1999) found similar results, with HR slightly reduced following precooling within the first 20 minutes of exercise, however this difference was not maintained at 25 and 30 minutes of exercise. A review of relevant literature by Marino (2002) also indicated a lower HR during the start of exercise that was not seen throughout the rest of the exercise bout. These findings can be explained by greater central blood volume, a result of reduced body temperature and therefore no need to distribute blood flow to skin to lose heat. A greater central blood volume produces an increase in stroke volume, ultimately reducing HR and cardiovascular strain (Marino, 2002). Skin temperature results were also recorded over three phases of the time trial. Similar to HR, a significant difference between control and precooling start skin temperature recordings were found (p0.0167), but diminished throughout the remaining two phases of the time trial. Through the use of precooling and consequent lower skin temperature recordings, blood flow was not required at the skin, centrally withholding blood volume and assisting in reducing cardiac strain (Drust, Cable Reilly, 2000). The final variable assessed in this study was core temperature. According to Neilsen et al. (1993), high core temperature is the most important factor leading to exhaustion and impaired performance during exercise under hot and humid conditions. This may be due to brain and core body temperature having a corresponding relationship. Therefore, an increase in core temperature may result in an increase in brain temperature, resulting in central fatigue and affecting motor performance (Nybo, 2012). Core temperature results showed similarities to the findings for HR and skin temperature. Statistical significant differences were found between each phase that core temperature was recorded (p0.05)(start, mid and end time trial), showing a gradual rise from the start of the time trial to the end. A comparison of means via a T-test between start core temperature (control) and start core temperature (precool) showed a significant difference (p0.0167), which was not seen between samples during m id and end time trial. The findings from this study indicate and present the benefits precooling has on improving endurance performance in hot and humid environments. A number of studies and reviews studying precooling as an intervention strategy (Kay et al. 1993)(Marino, 2002)(Marino et al. 1998) have all shown the positive physiological mechanisms that arise from precooling. Time trials were significantly shorter in time following precooling, showing an improvement in performance. The significantly lower heart rate, skin temperature and core temperature stimulated by precooling at the start of the time trial, all contribute to a greater capacity for metabolic production. This greater capacity provides precooled subjects with the ability to work at a higher intensity for longer, before critical limiting temperature is reached, ultimately improving endurance performance.

Indias Foreign Exchange System: An Analysis

Indias Foreign Exchange System: An Analysis CHAPTER-2 LITERATURE REVIEW 2.1 Introduction: It is a fact that the currencies of different countries have different values that is based upon their actual economic and monetary strength. It is from this difference that the genesis of foreign exchange occurs. Foreign exchange can be termed as the act of matching the different values of the goods and services that is involved in the international business transaction process in order to attain the exact value that is to be transferred between the parties of an international trading transaction in monetary terms. Foreign exchange as an activity had started the day civilization and independent principalities got established in the world. But in those days it was a case of exchanging value in the form of transfer of goods and services of identical value that is commonly identified with barter system. Moreover the transactions were done on a one-to-one basis, and the terms and conditions were determined by the parties entering into such transactions. There was no universal system or rule that determined these transactions. In that way foreign exchange and international monetary system is a modern day trend that gained an institutional form in the first half of the twentieth century and has been developing since then. 2.2 Foreign Exchange: According to International Monetary Fund (IMF), Foreign Exchange is defined as different forms of financial instruments like foreign currency notes, deposits held in foreign banks, debt obligations of foreign banks and foreign governments, monetary gold and Special Drawing Rights (SDR) that are resorted to make payments in lieu of business transactions that is done by two business entities or otherwise, of nations that have currencies having different inherent monetary value (www.imf.org). Leading economist Lipsey Richard G.,1993 has mentioned that the foreign exchange transactions are basically a form of negotiable instrument that are resorted to deliver the cost of goods and services that form a part of trading transactions and otherwise, between business and public entities of nations of the global economy. Sarno, Taylor and Frankel, 2003 gives the definition of foreign exchange as denoting the act of purchase and sale of currencies of different economies that is performed over the counter for various purposes that includes international payments and deliverance of cost of various business transactions, where the value is usually measured by tallying the value of the currencies involved in the foreign exchange transaction with that of the value of U.S. Dollar. According to Clark and Ghosh 2004, Foreign Exchange denotes transactions in international currency i.e. currencies of different economies. In such transactions the value of a currency of one country is tallied and exchanged with similar value of the currency of the country in order to exchange the cost of a business transaction or public monetary transfer that is taking place between two entities of these economies. 2.2.1 Foreign Exchange Transactions: Transactions in foreign exchange are done through various types and various modes between different countries of the world. According to information mentioned in the Reuters Financial Training Series, 1999,TOD Transactions, TOM Transactions, Swap Rates, Spot Rates, Forward Rates, Margin Trading and Buy / Sell on Fixed Rates foreign exchange transaction methods are some of the commonly used methods that are widely used by global managers for their foreign exchange transaction activities. 2.2.1.1 TOD Operations: TOD Operations are foreign exchange transaction methods where the trader uses the exchange rate of the day on which the foreign exchange transaction order is to be executed. In other words TOP operations are commonly used in intra-day foreign exchange transactions. As a result they are commonly resorted to by speculators in foreign exchange transactions and those who general speculate on the rates of different foreign exchange markets of the globe. 2.2.1.2 TOM Operations: In this type of transactions the transaction process carried forward to the next day instead of it being an intra-day trading. TOM transactions rate is fixed on the day the transaction is signed, but the rate of exchange is agreed upon to be that of the next day. 2.2.1.3 SPOTTransactions: SPOT Transactions can be compared with TOM transactions because here also the exchange rate is fixed at a value that prevails over the exchange rate of intra-day trading of shares. But SPOT transactions have been separated as a different category because unlike TOM transactions, SPOT transactions contracts are executed on the third day after the signing of agreement between the Bank and the client. 2.2.1.4 Forward Contract: Forward contracts are those exchange rate contracts where the currency conversion exchange rate agreement is decided at a certain rate at a time that is well before the date of execution of the exchange contract. In that way they are similar to TOM transactions. The only differ from them in the fact that these transactions are made for a long term i.e. generally for one year, and the parties involved in making this foreign exchange transaction deposit five percent of the contract value with the bank involved in facilitating the transaction at the time of executing the contract which is then returned to the client after execution of the exchange transaction. The need for depositing this amount is to secure the transaction against any loss due to market fluctuations. 2.2.1.5 SWAP: The greatest advantage of SWAP transactions is that the clients involved in the foreign exchange get prior information about the exchange rate of the currencies that are part of the transaction. In this type of transaction the bank first buys the amount of transaction form the client and resells it to the client after a few days after disclosing the exchange rate of the currencies involved in the transaction process. SWAP transactions are much sought after by traders because here they get to know beforehand the exchange rate of the currencies involved in the transaction process that helps them in avoiding fluctuations in market rate and gives them the advantage of determining the prices of goods, the nature of the currency market notwithstanding. . 2.2.1.6 MarginTrading: The key element of Margin trading is that any trader can opt for SPOT trading round the clock by going through the margin trading mode. The other key element of margin trading is that the traders can make deals with a minimal spread for a huge amount of funds by projecting fraction of the needed amount. In that way it is a unique form of global financial transaction where the threshold value that can be transacted through the margin trading mode is $ 100000 with bigger deals being multiples of $ 100000. But in order to deal in margin trading the trader has to make a security deposit of five recent of the contract value that has to be replenished from time to time in order to maintain the amount from which the probable losses from margin trading transactions are accommodated. 2.2.1.7 Buying/Selling on Fixed Rate Order: This is a mutual agreement between the buyer and seller of foreign exchange. Neither its rate nor its other terms and conditions are based upon actual conditions. Rather the deal is based keeping the mutual profitability of the buyer and seller intact where both of them get their desired amount. 2.3 Global Foreign Exchange Market: According to the table depicting the Triennial Bank Survey of Foreign Exchange and Derivatives Market Activity done by Bank for International Settlements (BIS)2007, as shown below the global foreign exchange market has an average daily turnover of over $ 2 trillion, which is an increase of around forty percent in terms of volumes . This rise in foreign exchange transactions it is observed has been due to rise in the volume of trading in Spot and Forward markets. This is indicative towards increase in volatility of foreign exchange markets around the world. (www.bis.org). Global Foreign Exchange Market Turnover Daily averages in April, (in billions $) Year 1989 1992 1995 1998 2001 2004 Spot Transactions 317 394 494 568 387 621 Outright Forwards 27 58 97 128 131 208 Swaps in Foreign Exchange 190 324 546 734 656 944 Gaps in Reporting (Estimated) 56 44 53 60 26 107 Total Turnover (Traditional) 590 820 1,190 1,490 1,200 1,880 Memo: Turnover (At April 2004 Exchange Rates) 650 840 1,120 1,590 1,380 1,880 (BIS Triennial Central Bank Survey, 2004) As observed by Jacque Laurent L.1996, Studies in foreign exchange point to the fact that the volume involved in foreign exchange transactions in the total markets around the globe has the potential to affect the overall functioning of the global financial system due to the systematic risks that are part and parcel of the foreign exchange transaction system. Most of the transactions occur in the major markets of the world with the London Exchange followed by New York and Tokyo Stock Exchange accounting for over sixty percent of the foreign exchange transactions done around the globe. Among these transactions the largest share is carried out by banks and financial institutions followed by other business transactions i.e. exchange of value for goods and services as well as dealers involved in securities and financial market transactions. According to the studies by Levi Maurice D., 2005, in foreign exchange transactions most of the transactions happen in the spot market in the realm of OTC derivative contracts. This is followed by hedging and forward contracts that are done in large numbers. The central banks of different countries of the world and the financial institutions operating in multiple markets are the main players that operate in the foreign exchange market and provide the risk exchange control mechanism to the players of the exchange market and the system where around $ 3 trillion amount of money is transacted in 300000 exchanges located around the globe. The largest amount of transactions takes place in the spot rate and that too in the liquidity market. The quotation on price in these markets sometimes reaches to around two thousand times in a single day with the maximum quotations being done in Dollar and Deutschemark with the rates fluctuating every two to three minutes with the volume of transaction for a dealer in foreign exchange i.e. both individual and companies going to the range of $ 500 million in normal times. In recent years the derivativ e market is also gaining popularity in OTC dealings with regards to the foreign exchange market. 2.4 Global Foreign Exchange Market Management Risks: According to the researcher Kim S. H., 2005, Foreign exchange transactions are identified by their connection with some financial transactions occurring in some overseas market or markets. But this interconnectivity does not affect the inherent value of the currency of the country which is determined by the economic strength of that country. This means that the inherent value of each currency of the world is different and unequal. So when the need arises to exchange the value of some goods or service between countries engaged in such activity it becomes imperative to exchange the exact value of goods and services. Considering the complexity and volume of such trading and exchange activity occurring in the global market between countries it is but natural that the currencies of individual countries is subject to continual readjustment of value with the currency with which its value has to be exchanged. This gives rise to the importance of foreign exchange transactions as a separate ar ea of study and thereby needs much focus for its understanding (Frenkel , Hommel and Rudolf , 2005). In addition to this it is to be realized that with the growing pace globalization and integration of global economic order there has been a tremendous increase in international business transactions and closer integration of economic systems of countries around the world especially between the members of WTO, that has led to the increase in economic transactions and consequent activity in international foreign currency exchange system (Adams, Mathieson and Schinasi, 1998). Added to this is the fact that the exchange value of currencies in the transactions is not determined by the respective countries but by the interplay of value of the currencies engaged in an international foreign exchange transaction and the overall value of each currency in the transaction prevailing at that time. In fact each country in the global economic order would want to determine the value of its currency to its maximum advantage, which was possible a few years ago in when the countries used to determine the value of their currency according to the existing value of their economy. The individual countries till the early nineties used to follow a policy of total or partial control over the exchange value of their currency in the global market. At the same time there also were a group of countries that followed the policy or system in determining the exchange value of their currency i.e. left it to the interplay of global economic activity where the value was determined by its economic performance. The currencies of countries that provide full or partial amount of control in the international exchange value of its currency are known to follow a Fixed Rate whereas the currencies of countries that allow its currency to seek its inherent value through its performance in the global economic system are termed as following the Floating Rate of foreign exchange conversion mechanism. Though lo gically both the type of mechanism of foreign exchange face the effect of exchange rate fluctuations and consequent volatility in rate it is the currencies having a floating rate that are continually affected by the fluctuations in exchange rate in the global market when in the case of currencies with a fixed rate it is more of a controlled and regulated affair (Chorafas Dimitris N., 1992). 2.5 Foreign Exchange Risks Prevailing in the Global Market: Risks related to the exchange rate of a currency in the global market as has been mentioned, occurs due to the interplay of inherent value of each currency of the respective countries that are part of the global financial mechanism. Risks related to foreign exchange come into picture and are also inevitable in this world marching towards increased interaction due to globalization. The risks will occur due to business interaction and consequent exchange of value for goods and services. According to Kodres LauraE., 1996, the risks related to foreign exchange occur when there is increased interaction between the currency of a country with that of other countries in the international market and that too if the currency has a floating exchange rate. In that case the value of the currency is continually affected by its business and financial performance. This relation with other currencies in the market affects it during the time when the need arises to exchange it with another currency for settlement of financial transaction in some business or financial purposes and gives rise to various types of risks. The prominent risks associated during this situation are Herstatt Risk, and Liquidity Risk. 2.5.1 Herstatt Risk: Herstatt risk is a risk that is named after a German Bank that got liquidated by the German Government in the seventies of the last century and made to return all; the claims accruing to its customers. This is because its creditworthiness was affected and it could not pay the settlement claims to its customers and also on behalf of its customers to their clients. It is basically connected to the time aspect of foreign exchange value claim settlements in which the foreign exchange transactions do not get realized as the bank loses its ability to honour the transaction in the intervening period due to some causes. In the particular case the German bank failed to honour the financial settlement claims of its clients to their counter parties that were to be paid in values of U.S Dollars. The main issues that arose were regarding quantifying the amount to be delivered and the time of the transaction process due to the two countries financial systems being located and working according to different or separate time zones. This case has established a phenomenon in foreign exchange market where there may erupt situations in which the working hours of banks located in different time zones may never match with each other leading to foreign exchange settlement transactions getting affected during the mismatch of the two banks closing and opening time. In fact the Alsopp Report that studied this phenomenon in detail said that though the foreign exchange transactions are made in pen and paper on a single day the actual transfer of value takes place within three to four days. And with the exchange value of currencies operating in the international market always remaining in a state of flux they either get jacked up or devalued. In either case it affects the clause of transactions that was decided on an intra-day rate, as the value of both the currencies in the international market has changed during these days. 2.5.2 Risks related to Liquidity: There can crop up different problems related to the banking systems operations and dynamics i.e. in both technical and management systems as well as inability in terms of volume of available liquidity strength or in mismatch in tallying of time etc; that can affect the capacity of banks to honour foreign exchange transactions in terms of transfer of liquidity. These types of risks are being commonly witnessed in newly emerging economies that are being unable to cope with the sudden surge in volume of global business transactions thereby leading to exchange rate settlement and payment delays, outstanding payments and dishonouring of financial commitments in the exchange rate transaction market. 2.5.3 Financial Repercussions: According to the Studies in foreign exchange related risks by Dumas and Solnik, 1995 aver that risk related to transactions in foreign exchange have increased with globalization and the rise of global economic integration process with the countries getting affected in relation to the volume of their transactions in the global financial and business marketplace. This is because the market is now more oriented towards market value driven convertibility of currencies that is influenced by the global financial movements and transactions, and any independent transaction especially of transnational and multinational companies; will automatically affect other transactions happening in the global financial marketplace (Klopfenstein G.,1997). However, according to another study by Gallati Reto R., 2003, these multinational and transnational companies are simultaneously being affected by the fluctuations in exchange rate of different currencies of the global market that is exposing their business operations in different global markets to exchange rate related risks especially due to difference in Spot and Forward rates and the inevitable fluctuations (Choi , 2003) that give rise to foreign exchange settlement related problems. 2.5.4 Remedies to Foreign Exchange Settlement Risks: As there risks that have cropped up in foreign exchange transactions due to increase in volume and frequency of transactions mainly as a result of globalization so, also there have come up remedies to minimize the risk related to adverse conditions in foreign exchange transactions. The Bank for International Settlements (BIS) in one of its studies in 1999 has said that settlement of claims is the most predominant risk that is related to foreign exchange transactions, especially the speed with which these transactions are materialized and the roadblocks that they may face in the process due to tremendous increase in volume of foreign exchange transactions that cannot be cleared in expected times. The solution to these risks according to the study is to simultaneously clear transactions on either side i.e. for both the parties side so that they simultaneously give and receive payments at the agreed rate of exchange. This would solve the problem of extended time of actual payment when the rate of exchange fluctuates, thereby creating problems for both the parties. This arrangement is related to deals being processed simultaneously, which requires the concurrence and common cause of both the parties. This is because the party that is expecting a hike in value of it s currency may not agree to such a proposal. In that case there should be some law or arrangement that would make it mandatory for both the parties to settle their intra-day payments on that day itself so that there is no scope left for speculation by them. According to the study, such arrangements have been made in USA and Europe where systems like Fedwire and Trans- European Automated Real-Time Gross Settlement Express Transfer (TARGET) have been established. Fedwire facilitates payments in foreign exchange transactions under the mode of Real Time Gross Settlements (RTGS)and TARGET facilitates intra-day transfer of foreign exchange between parties of member countries of Europe on the same day itself. But, for simultaneous release of funds by both the parties and the intra-day settlement of claims to succeed it is imperative that the member countries of the global economic system should come together have concurrence on these issues. This is because all said and done the foreign exchange transaction related rules and laws are still governed by the respective countries. And most of these countries are reluctant to make any headway in linking their currency system to the global currency system for speedy disposal of foreign exchange transactions for fear that such a move would expose their currency end financial system to the baneful effects of risks and volatility of global foreign exchange system (Hagelin and Pramborg, 2004). At the level of international trading corporations there has been initiated some steps whereby they have formed a private arrangement known as Group of Twenty. They are a group of twenty internationally acclaimed global clearing banks who have formed an system called the Global Clearing Bank that acts as a connection between the payment systems of different countries and verifies international foreign exchange transactions in order to simultaneously satisfy both the parties regarding authenticity of the process of transaction. The thing is that this system puts a high amount of strain on the financial and foreign exchange system as well as reserves of individual countries along with requiring them to bring about some amount of commonality between the financial rules and regulations of individual countries which is easier said than done. All the same the establishment of Bilateral Netting System and Multilateral Netting Systems as well as of Exchange Clearing House (ECHO) are trying t o facilitate foreign exchange transactions and minimize the inherent risks involved (McDonough ,1996). 2.6 Indian Foreign Exchange System: 2.6.1 Historical Background: The historical background of foreign exchange system in India was a saga of excess control and monitoring with even minor transactions being made to undergo the rigorous scrutiny of concerned government authorities to avoid any risks associated with such transactions and save the scarce foreign exchange reserves from being frittered away in some transactions considered unimportant or anti-national by the government. The Foreign Exchange Regulation Act (FERA) that was enacted in 1947 and made more stringent in 1973 was the embodiment of the prevailing sentiment of the governments of those days, which was to completely regulate and control all the foreign exchange transactions and protect the foreign currency reserves. (Mehta, 1985) All these changed in the nineties of the last century with the opening up of Indian economy in 1991 in keeping with the recommendations of the High Level Committee on Balance of Payments set up under the chairmanship of Dr C. Rangarajan by the Ministry of Finance, Government of India and subsequent entry of India into World Trade Organization (WTO) in 1994. This was preceded by the liberating of current account transactions and establishing full convertibility of current account transactions in 1993. In 1994 also the Government of India accepted Article VIII of Agreement of the International Monetary Fund that established the system of current account convertibility and the exchange value of rupee came to be determined according to the market rates with only the convertibility of capital account being under the control of the government (Krueger,2002) as the Tarapore Committee on Capital Account Convertibility of 1997 (Panagariya A., 2008) suggested the government to keep adequate sa feguards before allowing the convertibility of capital account to be determined according to the market forces as there was need to consolidate the financial system and have an accepted inflation target before such a venture. The Tarapore Committee also suggested that the legal framework governing the foreign exchange transaction system in India also needs to be modernized before going for total convertibility of the capital account due to which the Government repealed the FERA Act of 1973 and promulgated the Foreign Exchange Management Act (FEMA) in 2000. This new act did away with the system of regulation and control and established a system of facilitation and management of foreign exchange transactions thereby promoting all the activities related to foreign exchange transactions. The most important thing that was done by FEMA was to recognize violations or mistakes in foreign exchange transactions as a civil offence instead of a criminal offence as was done by FERA. FEMA also shifted the responsibility of proving the violation or mistake in foreign exchange transaction and related rules from the prosecutor to the prosecuted. And if the prosecuted was proved guilty he or she was to pay only monetary fine or compensation instead of being jailed as was the earlier provision under FERA. FEMA also simplified many of the rules and notified specific time frames for delivering judgments related to violations of foreign exchange rules and regulations and provide rules for establishing special tribunals and forums to deal with such cases. Th e compounding rules were also made less stringent and all matters related to compounding rules were notified to be dealt by Reserve Bank of India (RBI) instead of the previously assigned Enforcement Directorate. RBI was made the designated Compounding Authority in all related matters. Only the cases involving hawala transactions were left from its purview As per Mecklal and Chand