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We like to think that when we deposit a dollar at the bank, it goes into a big vault and we can pull out that same dollar at any time. But that¿s not how the U.S. banking system works. Banks take that money and invest it to make money themselves, so cash gets spread around. This, naturally, leads to a big risk: What happens if those investments go sour? Well, you¿d be out of luck. You can¿t get your dollar back.
The Federal Reserve doesn¿t like that scenario, so it prohibits banks from putting all the cash it has on deposit on the line. In fact, the Fed forces banks to keep a portion of their assets at the Federal Reserve itself, to make sure that some of your assets won¿t get squandered if the bank¿s bets go south. These are called ¿reserves,¿ (hence, Federal Reserve. Got it? Good), and usually amount to 10% of the total cash kept in checking accounts.
These reserves are never exactly 10%, and banks like to keep a little extra in reserve ¿ not, as you might think, to make you more comfortable that they¿re in good financial shape, but rather so they can take that excess and lend it to other banks and make money off it. (They¿re banks, they can¿t help themselves.) The rate at which they make these loans is called the Federal Funds rate, which is set by the Federal Reserve¿s Federal Open Market Committee.
When you hear people chattering about how the Fed cut or hiked interest rates, this is what they¿re talking about: the interest rate banks can charge for lending money from their reserves. This begs the question: If these are essentially loans between banks, why is the Fed Funds rate so important for the rest of the economy?
Well, simply put, because loans make the financial world go round. Bank A lends Bank B $10,000 at a Fed Funds rate of 5%. Bank B then lends out $10,000 to a small business at 7%. The small business then takes that money and expands the business and hires new workers. Now someone is employed, Bank B has made interest off the loan, and Bank A is the richer for making it all happen. It¿s perhaps overly simplistic, but you get the idea. When you want the economy to thrive, you make lending cheaper.
Of course, sometimes you don¿t want the economy to thrive. In fact, you might want it to cool down, mostly to avoid money flooding the system and causing inflation. In that case, the Fed raises interest rates, making it difficult to lend or borrow.
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Monday, September 15, 2008
CryptoLogic, WagerLogic Fight Fraud With Ethoca
Comtex
DUBLIN, IRELAND, Sep 15, 2008 (MARKET WIRE via COMTEX) ----ALL FINANCIAL FIGURES ARE IN US$
CryptoLogic Limited (TSX: CRY)(TSX: CXY)(NASDAQ: CRYP)(LSE: CRP), a leading software developer to the global Internet gaming market, announced today that it has joined a global fraud-fighting community operated by Ethoca Limited. Ethoca will work directly with WagerLogic, the CryptoLogic subsidiary that licenses the company's acclaimed Internet gaming software and services to many of the world's top Internet casino and poker sites.
The agreement provides WagerLogic with the ability to accept more valid player deposits - meaning reduced fraud for its licensees, enhanced protection for its players and increased revenue for the company.
"Our business is built upon the twin pillars of integrity and innovation, and that's why we look for innovative approaches to protect the integrity of our business," said Antony Demetriades, Managing Director of WagerLogic Ltd. "Fighting fraud is both a challenge and an opportunity - for our multi-billion-dollar industry, our customers, our players and our bottom line."
Ethoca is driving collaboration for fraud management in e-commerce and other customer-not-present environments, including phone, fax or mail-order. By securely connecting its members to a collective pool of member-provided payment experience information, Ethoca enables its members to make more informed decisions about their customer transactions in a way that is efficient, effective and ethical, and in a way that is not a competitive threat.
Headquartered in Dublin, CryptoLogic pioneered today's multi-billion-dollar global Internet gaming market more than a decade ago. The company has earned widespread acclaim for its Internet casino software, earning Gambling Online Magazine's Top Casino Software Award in each of the last three years. Based on the votes of players from around the world, this is widely considered the industry's top honour.
"CryptoLogic and WagerLogic are the pioneers of the global Internet gaming space," said Andre Edelbrock, CEO of Ethoca. "In the same way that CryptoLogic continually advances the future of online gaming, we look forward to their participation in helping to build the Global Fraud-Fighting Community powered by Ethoca. We applaud CryptoLogic for leading the way and encouraging other companies to join the collaborative fight against fraud."
WagerLogic, based in Cyprus, licenses CryptoLogic-developed software and services to an exclusive group of the world's most trusted gaming and entertainment brands, including InterCasino, William Hill, Maharajah Club and 888.com. WagerLogic has processed more than US$54 billion in secure electronic transactions for over 2.5 million players worldwide. The company has earned widespread acclaim for its customer service, including winning the title of Best Contact Centre in Europe, the Middle East and Africa from ContactCentreWorld.com.
About CryptoLogic(R) (www.cryptologic.com)
Focused on integrity and innovation, CryptoLogic Limited is a world-leading, blue-chip public developer and supplier of Internet gaming software. Its leadership in regulatory compliance makes it one of the very few companies with gaming software that is certified to strict standards similar to land-based gaming. WagerLogic(R) Limited, a wholly-owned subsidiary of CryptoLogic, is responsible for the licensing of its gaming software and services to blue-chip customers who offer their games around the world to non-U.S. based players. For information on WagerLogic, visit www.wagerlogic.com.
CryptoLogic's common shares trade on the Toronto Stock Exchange (CRY, CXY), the NASDAQ Global Select Market (CRYP) and the Main Market of the London Stock Exchange (CRP).
About Ethoca
Working in partnership with forward-thinking businesses, individuals and law enforcement, Ethoca is making e-commerce safer and more profitable by building and powering the Global Fraud-Fighting Community.
To be more successful in combating fraud, companies must collaborate across and within industries by securely sharing transaction experiences in a way that is not a competitive threat. Ethoca enables businesses that operate in customer-not-present environments (Internet, phone, fax or mail) to make more informed decisions about their customer transactions, by sharing transaction experience data in a way that is secure, automated, effective and ethical. Community members see reduced fraud, lower fraud-related costs, increased revenue from fewer wrongly rejected orders and improved customer satisfaction rates.
Ethoca(TM) is a registered trademark of Ethoca Limited. For more information about Ethoca visit www.ethoca.com.
CRYPTOLOGIC FORWARD LOOKING STATEMENT DISCLAIMER:
Statements in this press release which are not historical are forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Investors are cautioned that all forward-looking statements involve risks and uncertainties including, without limitation, risks associated with the company's financial condition and prospects, legal risks associated with Internet gaming and risks of governmental legislation and regulation, risks associated with market acceptance and technological changes, risks associated with dependence on licensees and key licensees, risks relating to international operations, risks associated with competition and other risks detailed in the company's filings with securities regulatory authorities. These risks may cause results to differ materially from those projected in the forward-looking statements.
Contacts: CryptoLogic Stephen Taylor Chief Financial Officer 35316641682 Argyle Communications Karen Passmore (North American and gaming industry media) (416) 968-7311, ext 228 kpassmore@argylecommunications.com Argyle Communications Daniel Tisch (North American and gaming industry media) (416) 968-7311, ext 228 dtisch@argylecommunications.com Corfin Communications Neil Thapar (UK media only) +44 207 977 0020 Corfin Communications William Cullum (UK media only) +44 207 977 0020 Corfin Communications Harry Chathli (UK media only) +44 207 977 0020
SOURCE: CryptoLogic Limited
mailto:kpassmore@argylecommunications.com mailto:dtisch@argylecommunications.com
Copyright 2008 Market Wire, All rights reserved.
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