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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.
Home / Markets / Industries / Energy
Tuesday, May 27, 2008
Flint Energy Services Ltd. Announces Appointment to Board of Directors
Comtex
CALGARY, May 27, 2008 (Canada NewsWire via COMTEX) ----(TSX: FES)
John Geddes, Chairman of the Board of Flint Energy Services Ltd. ("Flint") announced that Mr. Philip C. Lachambre has been appointed to Flint's Board of Directors effective May 13, 2008. Mr. Lachambre has over 36 years of experience in the oil and gas industry, including a 31 year career with Syncrude Canada where he most recently served as Executive Vice President and Chief Financial Officer from 1994 until his retirement in February 2007. Mr. Lachambre, a resident of Edmonton, Alberta, is currently the President of PCML Consulting Inc., a private consulting firm. He holds a Bachelor of Commerce degree from the University of Alberta; is a Certified Professional Purchaser (CPP); and is a graduate of the Executive Management Program of the University of Western Ontario. Mr. Lachambre is a Director of GLM Industries Inc; Director of PowerComm Inc; and Director of the University of Alberta Hospital Foundation.
Mr. Geddes said, "Philip brings specific industry experience and senior management oversight that will certainly complement the strengths and depth of our existing board of directors."
Flint is a market leader providing an expanding range of integrated products and services for the oil and gas industry including: production services; construction; oilfield transportation; process equipment design and manufacturing; and tubular management services. Flint provides this unique breadth of products and services through over 62 strategic locations in the oil and gas producing areas of western North America, from Inuvik in the Northwest Territories to Mission, Texas on the Mexican border. Flint is a preferred provider of infrastructure construction management, module fabrication, and maintenance services for upgrading and production facilities in Alberta's fast growing oil sands sector. Flint Energy Services Ltd. is a publicly traded company listed on the Toronto Stock Exchange under the symbol "FES".
FORWARD LOOKING STATEMENTS
Certain statements in this news release are "forward-looking statements", which reflect current expectations of the management of Flint regarding future events or Flint's future performance. All statements other than statements of historical fact contained in this news release may be forward-looking statements. Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in the forward-looking statements. Flint believes that the expectations reflected in such forward-looking statements are reasonable, but no assurance can be given that these expectations will prove to be correct and such forward-looking statements should not be unduly relied upon. The forward-looking statements are expressly qualified in their entirety by this cautionary statement. The forward-looking statements are made as of the date of this news release and Flint assumes no obligation to update or revise them to reflect new events or circumstances, except as expressly required by applicable securities law. Further information regarding risks and uncertainties relating to Flint and its securities can be found in the disclosure documents filed by Flint with the securities regulatory authorities, available at www.sedar.com.
SOURCE: Flint Energy Services Ltd.
W.J. (Bill) Lingard, President & Chief Executive Officer; Paul M. Boechler, Chief Financial Officer; or Guy Cocquyt, Director of Investor Relations, Telephone: (403) 218-7100, Fax: (403) 215-5481, Website: www.flintenergy.com
Copyright (C) 2008 CNW Group. All rights reserved.
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