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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Wednesday, July 23, 2008

Global Services Provider in Insurance, Banking and Asset Management

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Jul 23, 2008 (Hugin via COMTEX) ----Allianz Employs Kenexa's Survey Platform to Rollout Leadership and Global Employee Surveys Aimed at Improving Employee Engagement

WAYNE, PA--(Marketwire - July 23, 2008) - Allianz SE, a DAX 30 member and a leading global provider in insurance, banking and asset management, has selected Kenexa's survey platform to administer the organization's leadership culture and employee engagement surveys.

Allianz will use Kenexa's survey solutions to deliver the Allianz Leadership Culture Survey to its management teams globally. In addition, Kenexa will administer Allianz's group-wide employee engagement survey with each participating entity having the ability to add local questions. The anonymous and confidential survey results will enable Allianz leadership to shape programs that strengthen employee relationships and enhance overall job satisfaction.

"Kenexa's experience will help us to further refine our leadership and engagement surveys for the betterment of our organization and workforce," said Klaus Scheurich, assistant vice president Group HR Allianz.

The selection of Kenexa as Allianz's survey partner underscores Kenexa's ability to seamlessly customize and manage the organization's complex global survey program. Additional selection consideration included Kenexa's survey technology, resources, consulting and research, its global footprint with local expertise and, most importantly, experience with managing similar global projects in the financial services industry.

"Our survey solutions are ideal for large, global organizations that value the opinions of their employees, such as Allianz, and we are excited that Kenexa has been selected as a vendor of choice to administer its leadership and employee engagement surveys," said Ritu Mohanka, managing director, Central and Eastern Europe, Kenexa. "We look forward to working with Allianz to further support its commitment of valuing its employees."

About Allianz Group

The Allianz Group is one of the leading global services providers in insurance, banking and asset management. With approximately 180,000 employees worldwide (as of March 31, 2008), the Allianz Group serves more than 80 million customers in about 70 countries. On the insurance side, Allianz is the market leader in the German market and has a strong international presence. In fiscal 2007 the Allianz Group achieved total revenues of over EUR 102 billion. Allianz is also one of the world's largest asset managers, with third-party assets of EUR 765 billion under management at year end 2007.

About Kenexa

Kenexa (NASDAQ: KNXA) is a global leader in building the world's greatest workforces using a combination of software, employee research science and business process optimization. Kenexa's global solutions include applicant tracking, onboarding, recruitment process outsourcing, employment branding, skills and behavioral assessments, structured interviews, performance management, multi-rater feedback surveys, employee engagement surveys and HR Analytics. Kenexa is headquartered in Wayne, Pa. (outside Philadelphia). Additional information about Kenexa and its global products and services can be accessed at www.kenexa.com.

Note to Editors: Kenexa is a registered trademark of Kenexa Corporation. Other product or service names mentioned herein remain the property of their respective owners.

MEDIA CONTACT Jennifer Meyer Kenexa (612) 332-6383 Email Contact

Note to Editors: Kenexa is a registered trademark of Kenexa Corporation. Other product or service names mentioned herein remain the property of their respective owners.

MEDIA CONTACT Jennifer Meyer Kenexa (612) 332-6383 jennifer.meyer@kenexa.com

SOURCE: Kenexa

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