ISET

Why do central banks regulate commercial banks and not that of, say, bakeries? This was the fundamental question Giorgi Kadagidze, a former governor of the National Bank of Georgia, tried to answer during his presentation for ISET students, faculty, and executives enrolled in ISET’s Finance for Professionals course on Tuesday, March 15.
According to Mr.Kadagidze, banks, unlike bakeries, operate with other people’s money. They are taking deposits and are transforming them into loans. Mr.Kadagidze used an ordinary balance sheet to demonstrate some of the basic principles of banking regulation: “fit and proper” (essentially to make sure that a bank’s shareholders and principals are not thieves); capital adequacy (how much own capital does a bank has to compensate depositors in case some of its loans go bad); asset quality (for instance, are loans too concentrated in a particular sector), and liquidity (does the bank have enough cash to handle an increase in short-term obligations).

2016 marked 20 years of BP’s successful partnership with Georgia, elevating the country’s role in the global economy and helping its economy and civil society. (We should note that BP has been instrumental in the creation of ISET. It was a key member of the initial donor consortium behind ISET with a core contribution of more than $2.3mln.) To celebrate this remarkable milestone, ISET hosted Mr. Chris Schlueter, Head of BP’s Georgian Section. Mr. Schlueter’s presentation started with two videos featuring BP’s 2015 Energy Outlook and comments by Spencer Dale, the company’s Chief Economist, which shed light on global energy production and consumption patterns, the increasing role of renewables, as well as current and future energy price dynamics.

Mr. Schlueter explained that the world oil market is saturated. Not only does supply exceed demands, but storage facilities are also full to the brim. This suggests that oil prices will not recover any time soon. On the one hand, low oil prices hurt high cost oil producers in the US, bringing many projects to a halt, and reducing supply in the medium term. Unfortunately, cheap oil also hurts efforts to curb consumption of carbon energy, and reduces the amount of funding available for research into low emission and energy efficient technologies and renewables.

On Wednesday, January 27th ISET hosted Mr. Marcio Favilla Lucca de Paula, Executive Director for Operational Programmes and Institutional Relations at the World Tourism Organization (UNWTO) based in Madrid, Spain. World Tourism Organization became one of the UN specialized agencies in 2013 and is the newest one among 14 specialized agencies. The organization has more than 150 member states along with affiliate members encompassing private organizations and universities.
Dr. de Paula delivered a speech on global tourism trends and perspectives. He started his presentation with global tourism statistics showing impressive increase in the number of international tourists travelling around the world from 25 mln tourist arrivals in 1950 to 1 bln in 2012. He also discussed the definition of the term “tourist” and the difference between 1 day visitors and visitors who stay in the country at least for 1 night but less than for 365 days. Latter are defined as tourists. He also pointed out the importance of residence instead of nationality when accounting for international tourists.

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