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, August 04, 2008

Platts to Announce 2008 Top 250 Global Energy Companies

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NEW YORK, Aug 04, 2008 (PR Newswire Europe via COMTEX) ----The Ranking, In Its 7th Year, To Be Unveiled At 3rd Annual Top 250 Global Energy Companies Asia Leadership Awards Dinner

Platts, the world's leading energy information provider and a division of The McGraw-Hill Companies (NYSE: MHP), will announce its annual Platts Top 250 Global Energy Companies in Singapore on October 20, 2008.

The Platts Top 250 Global Energy Companies ranking, now in its seventh year, measures corporate leadership by examining each company's performance and tracks the changes in ranks of regional energy companies as they increasingly assume a greater role in global energy sustainability.

The underlying data are derived from the Compustat(R) database, which is compiled and maintained by Standard & Poor's (like Platts, a division of The McGraw-Hill Companies.) All ranked companies have assets greater than (U.S.) two billion dollars. Energy companies are grouped according to their Global Industry Classification Standard (GICS(R)) code.

The top performers will be announced at the third annual Platts Top 250 Global Energy Companies Asia Leadership Awards Dinner and Executive Summit at the St. Regis Hotel in Singapore. Some 200 energy executives, largely from the Asia-Pacific region, are expected to attend. For the third year, Logical Information Machines (LIM) is the key sponsor. LIM provides data, analytics and research to the energy and financial sectors. Its customers are among the world's largest hedge funds, mutual funds, banks and energy concerns.

In addition to announcing the Platts Top 250 Energy Companies globally, Platts will recognize the Top 10 Asian Energy Companies, the Top 10 Fastest-Growing Asian Energy Companies, and the Top Asian Energy Companies in each of eight industry segments as follows:

-- Diversified utilities -- Exploration and production -- Electric utilities -- Gas utilities
   -- Integrated oil and gas companies -- Refining and marketing -- Independent power producers -- Coal and consumable fuel companies

Attendance at the Platts Top 250 Global Energy Companies Asia Awards Dinner is open to all companies with business interests in Asia or to top energy companies worldwide. For additional information, a list of last year's Platts Top 250 rankings, or to reserve attendance, visit http://www.platts.com/top250/. Credentialed media may attend the Awards Dinner as guests with advance registration at http://s-l8060-52804.sgizmo.com . Television cameras are permitted.

Additional sponsorships for this year's event are still available. For details, please visit http://www.platts.com/Events/singapore250/sponsor.xml .

About Platts:

Platts, a division of The McGraw-Hill Companies (NYSE: MHP), is a leading global provider of energy and metals information. With nearly a century of business experience, Platts serves customers across more than 150 countries. From 17 offices worldwide, Platts serves the oil, natural gas, electricity, nuclear power, coal, petrochemical and metals markets. Platts' real-time news, pricing, analytical services, and conferences help markets operate with transparency and efficiency. Traders, risk managers, analysts, and industry leaders depend upon Platts to help them make better trading and investment decisions. Additional information is available at http://www.platts.com.

About The McGraw-Hill Companies:

Founded in 1888, The McGraw-Hill Companies (NYSE: MHP) is a leading global information services provider meeting worldwide needs in the financial services, education and business information markets through leading brands such as Standard & Poor's, McGraw-Hill Education, BusinessWeek and J.D. Power and Associates. The Corporation has more than 280 offices in 40 countries. Sales in 2007 were US$6.8 billion. Additional information is available at http://www.mcgraw-hill.com.

Note to Editors: List of 2007 Winners

In 2007, the Platts Top 250 ranked ExxonMobil Corporation as #1 globally and PetroChina Co. Ltd as #1 in the Asia/Pacific Rim region. China Resources Power Holdings of Hong Kong was Asia's #1 Fastest Growing Company. In 2007 India and China had seven companies each in the Top 250 ranking. China had 4 companies in the ranks of the Top 250's Fastest Growing Energy Companies.

Web site: http://www.platts.com http://www.mcgraw-hill.com

Kathleen
   Tanzy, +1-212-904-2860, Kathleen_tanzy@platts.com; Europe: Shiona Ramage, +44-20-7176-6153; Asia: Casey Yew, +65-653-06552

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