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.

Home / Markets / Industries / Energy

Tuesday, July 08, 2008

BLACK ENTERPRISE Announces the 40 Best Companies for Diversity

Email this Story | Respond to Editor | Print

Comtex

NEW YORK, Jul 08, 2008 (BUSINESS WIRE) ----BLACK ENTERPRISE (BE) has announced its fourth annual tally of the 40 Best Companies for Diversity as featured in the July issue. The companies identified in the special report demonstrated strength and outperformed their peers in one or more of four key categories: supplier diversity, senior management, board involvement, and employee base.

Of the 40 best, both McDonald's Corp. and MGM Mirage met BE's criteria in all four categories. Among the companies that hit the mark in three of the four areas are AETNA Inc., the Coca-Cola Co., Pepco Holdings Inc., WGL Holdings Inc., and Xerox Corp. Making their debut on this year's list are Burger King Holdings, Sempra Energy, and Sodexho USA.

With the number of African American CEOs at America's largest companies dwindling, BE focused additional reporting on companies that have demonstrated the ability to retain and develop diverse executive talent. Featured in this year's report are several bold, energetic leaders-to-be, including cover subjects Abram Mercedes of IBM and Tonya Berry of Chrysler.

The full list of the BLACK ENTERPRISE 40 Best Companies for Diversity consists of the following companies:

 Aetna Inc., Hartford, CT MGM MIRAGE, Las Vegas,
   NV Aflac Inc., Columbus, GA Pepco Holdings, Inc. , Washington, D.C. American Express Co., New York, NY Pepsi Bottling Group
   Inc., Somers, NY ARAMARK Corp., Philadelphia, PA PepsiCo Inc., Purchase, NY AT&T, San-Antonio, TX PG&E Corp., San
   Francisco, CA Bank of America, Charlotte, NC Pitney Bowes Inc., Stamford, CT Burger King Holdings, Miami, FL Procter &
   Gamble Co., Cincinnati, OH Chrysler L.L.C., Auburn Hills, MI Ryder System Inc., Miami, FL Coca-Cola Co., Atlanta, GA Sempra
   Energy, San Diego, CA Comcast Corp., Philadelphia, PA Sodexho USA, Gaithersburg, MD Eastman Kodak Co., Rochester, NY Starwood
   Hotels & Resorts Worldwide Inc., White Plains, NY Exelon Corp., Chicago IL State Farm Insurance Cos., Bloomington, IL
   Fannie Mae, Washington, D.C. TIAA-CREF, New York, NY FedEx Corp., Memphis, TN Toyota Motor North America Inc., New York, NY
   General Mills Inc., Minneapolis, Marriott International Inc., MN Washington, D.C. General Motors Corp., Detroit, MI United
   Parcel Service Inc. (UPS), Atlanta, GA IBM Corp. (IBM), Armonk, NY Verizon Communications Inc., Washington, D.C. Johnson Controls
   Inc., Milwaukee, WGL Holdings Inc., Washington, D.C. WI Kellogg Co., Battle Creek, MI Xerox Corp., Stamford, CT McDonald's
   Corp., Oak Brook, IL Yum! Brands Inc., Louisville, KY

The 2008 40 Best Companies for Diversity were determined by analyzing responses from a survey administered to major corporations. BE conducted a comprehensive outreach effort to the CEOs and diversity executives of the top 1,000 publicly traded companies, and the diversity executives of the 50 leading global companies with strong U.S. operations.

The complete special report, including methodology and selection criteria, is available in the July 2008 issue of BLACK ENTERPRISE magazine, on newsstands now.

BLACK ENTERPRISE, your ultimate source for wealth creation, is the premier business, investing, and wealth-building resource for African Americans. Since 1970, BE has provided essential business information and advice to professionals, corporate executives, entrepreneurs, and decision makers. Every month, BLACK ENTERPRISE magazine provides 3.9 million readers with information on entrepreneurship, careers, and financial management. A multimedia company, BE also produces radio and television programming, business and lifestyle events, Web content, and digital media. BLACK ENTERPRISE is the definitive source of information for and about African American business markets and leaders, and the authority on black business news and trends.

SOURCE: BLACK ENTERPRISE

BLACK
   ENTERPRISE Andrew Wadium, 212-886-9598 Media Relations Director wadiuma@blackenterprise.com www.blackenterprise.com/press.html

Copyright Business Wire 2008 ********************************************************************** As of Friday,
   07-04-2008 23:59, the latest Comtex SmarTrend� Alert, an automated pattern recognition system, indicated a DOWNTREND on 06-19-2008
   for AET @ $41.17. As of Friday, 07-04-2008 23:59, the latest Comtex SmarTrend Alert, an automated pattern recognition system,
   indicated a DOWNTREND on 06-27-2008 for BKC @ $27.37. As of Friday, 07-04-2008 23:59, the latest Comtex SmarTrend Alert, an
   automated pattern recognition system, indicated a DOWNTREND on 06-06-2008 for MCD @ $57.19. For more information on SmarTrend,
   contact your market data provider or go to www.mysmartrend.com SmarTrend is a registered trademark of Comtex News Network,
   Inc. Copyright � 2004-2008 Comtex News Network, Inc. All rights reserved.