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Chapter Twenty

Chapter Twenty. International Banking and the Future of Banking and Financial Services. Representative Offices Agency Offices Branch Offices Subsidiaries Joint Ventures Edge Act Corporations. Agreement Corporations International Banking Facilities Shell Branches Export Trading Companies.

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Chapter Twenty

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  1. Chapter Twenty International Banking and the Future of Banking and Financial Services

  2. Representative Offices Agency Offices Branch Offices Subsidiaries Joint Ventures Edge Act Corporations Agreement Corporations International Banking Facilities Shell Branches Export Trading Companies Types of Foreign Banking Organizations

  3. Goals of International Banking Regulation • Protecting the Safety of Depositor Funds • Promote Stable Growth in Money and Credit • Foreign Exchange Controls • Restrict the Outflow of Scarce Capital • Protect Domestic Financial Institutions and Markets from Foreign Competition

  4. Regulation of Foreign Bank Activity in the U.S. • International Banking Act of 1978 • Foreign Bank Supervision Act of 1991 • International Lending and Supervision Act of 1983 • Basel Agreement

  5. Customer Services Supplied By Banks in International Markets • Making Foreign Currency Available • Hedging Against Foreign Currency Risk Exposure • Supplying Customers with Short and Long Term Credit and Credit Guarantees • Supplying Payment and Thrift Instruments • Underwriting Customer Note and Bond Issues in the Eurobond Market • Protecting Customers Against Interest Rate Risk • Helping Customers Market Their Products Through an Export Trading Company

  6. Tools for Reducing Currency Risk • Forward Contracts • Currency Futures Contracts • Currency Options • Currency Swaps

  7. Ways of Supplying Customers with Credit • Note Issuance Facilities • Eurocommercial Paper (ECP) • Depository Receipts (DR)

  8. Payment and Thrift Instruments • Payment Services • Sight Drafts • Time Drafts • Thrift services • Tap CDs • Tranche CDs • Floating Rate CDs • Floating Rate Notes

  9. Future Problems for International Banks • Growing Customer Use of Securities Markets to Raise Funds • Developing Better Methods to Estimate Risk in International Lending • Adjusting to New Market Opportunities Created By Deregulation and New International Agreements

  10. Solutions to Troubled International Loans • They may be Restructured • They can be Sold in the Secondary Market • They can be Written Off, Either a Portion or in its Entirety

  11. International Loan Risk Evaluation Systems • The Checklist Approach • The Delphi Method • Advanced Statistical Methods • Published Country-Risk Indicators • Euromoney Magazine • Institutional Investor Index • International Country Risk Guide

  12. New Opportunities • Opportunities Created By NAFTA and CAFTA • Opportunities in the Expanding European Community • Opportunities in Asia as Barriers Erode

  13. The Future of Banking and Financial Services • Convergence • Consolidation • Survival of Community Financial-Service Institutions • Reaching the Mass Media • Invasion by Industrial and Retailing Companies • The Wal-Mart Challenge

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