Tài chính doanh nghiệp - International banking

Money and Capital Markets26C h a p t e rEighth EditionFinancial Institutions and Instruments in a Global MarketplacePeter S. RoseMcGraw Hill / IrwinSlides by Yee-Tien (Ted) FuInternational Banking Learning Objectives To understand the importance of large multinational banks in both domestic and foreign markets.To explore how multinational banks operate around the globe and to identify the financial services that they offer.To see how and why international banking is closely regulated in many areas of the world.The Scope of International Banking ActivitiesThe facilities operated by multinational banking corporations include:international departments in their home officesfull-service branch offices in foreign marketsshell branches on offshore islandsrepresentative officesEdge Act and Agreement corporationsinternational banking facilities (IBFs)agency officesThe Scope of International Banking ActivitiesThe kind of facility adopted by a multinational bank depends on government regulations, as well as the bank’s size, goals, and location.Services Offered by International BanksMultinational banks offer a wide variety of international financial services to customers:issuing letters of credit for importersbuying and selling foreign currenciesaccepting Eurocurrency deposits and making Eurocurrency loansmarketing and underwriting domestic and Eurocurrency bonds, notes, and equity sharessecuritizing loansadvising and assisting foreign investmentsServices Offered by International BanksSome of the world’s largest banking firms attempt to offer their customers “one-stop shopping” and become “universal banks.”Universal banking combines traditional banking, insurance, securities trading, and even real estate brokering under one corporate umbrella.Foreign Banks in the United States$ billionsTotal assets held by commercial banks in the U.S.Assets held by domestically owned banksAssets held by U.S. offices of foreign banks5.3%11.9%16.1%21.4%21.7%19.9%Data Source: Board of Governors of the Federal Reserve SystemForeign Banks in the United StatesThere was pressure on Congress for more extensive regulation of foreign banks, so as to be fair to domestic banks, and to ensure the effectiveness of domestic monetary policy.Bank Holding Company Act Amendments (1970)International Banking Act (1978)Depository Institutions Deregulation and Monetary Control Act (1980)Foreign Bank Supervision Enhancement Act (1991)Regulation of the International Banking Activities of U.S. BanksThe Federal Reserve Board is the chief regulatory agency for U.S. international banking activities, especially where Fed member banks are involved.Since it is difficult to separate a bank’s foreign operations from its domestic activities, the protection of domestic deposits and the stability of the domestic banking system is of prime concern to the Fed.The Future of International BankingThe future of international banking is clouded at this time due to the many cross-currents of economics and politics that pervade our world.Considering political and currency risk, lending funds in the international arena is riskier, on average, than domestic lending.Not surprisingly, surveys of U.S. banks show that loans to distant nations are mainly short term, and many are made to banks themselves.The Future of International BankingA persistent problem in international banking is the preservation of public confidence in the banking system.Essentially, this means protecting the major multinationals against failure.International Lending and Supervision Act (1983)Basle Agreement (1988) (11 countries)The Future of International BankingDeregulation: There is a growing trend toward relying more on the private marketplace and less on government rule-making in order to regulate global banking.At the same time, regulatory cooperation and harmonization of banking regulations across nations is necessary to ensure a minimum level of public scrutiny.Prospects and Issues for the 21st CenturyLimited by capital and the availability of experienced management, the future growth of international banking should be more gradual and loan quality more of a factor.The actions of regulatory authorities and competition from nonbank firms can also affect the future development of international banking.Money and Capital Markets in CyberspaceMore information about international banking can be found at: ReviewThe Scope of International Banking ActivitiesMultinational Banking CorporationsTypes of Facilities Operated by Banks AbroadServices Offered by International BanksUniversal Banking Services and One-Stop ShoppingForeign Banks in the United StatesRecent Growth of Foreign Banks in the U.S.Federal Regulation of Foreign Bank ActivityChapter ReviewRegulation of the International Banking Activities of U.S. BanksThe Future of International BankingThe Risks of International BankingPublic Confidence and Bank FailuresThe Spread of Deregulation: How Fast Should We Go?Prospects and Issues for the 21st Century