International Banking Facilities

As multinational companies expand, and as companies doing business in more than one nation become commonplace, the need for international finance has also grown. There was a time when international banking meant that banks based in one country, such as the United States, had branches in other nations, such as countries in Western Europe. Increasingly, this has shifted to the point where banks in one nation work with "correspondent" banks in other countries rather than risking their own capital in the foreign nation. This has meant a change in the type of services offered, and international banking facilities now include a variety of offerings by both traditional thrift institutions as well as other organizations. This research examines the types of international banking facilities available and how companies can make use of these alternatives.

Advances in transportation and telecommunications have led to an expansion in international trade, and most international banking facilities now serve domestic customers seeking to do business overseas, although there is also a large portion of international funds flowing to help companies in the target country (Mastrull 7). Where banks operating on an international level once had physical branches overseas, that has now given way to representative offices. The banks now form correspondent relationships with banks in the host nation, diminishing the resources required to enter the foreign country and inc

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ks outside Europe. Since the early 1960s, the BIS has hosted meetings of central bank governors of the Group of Ten (G-10) countries, which provide a forum for the ongoing discussion of issues of common interest. The BIS is also the site of periodic and ad hoc meetings of central bank officials in the subsidiary committees of the G-10 central bank governors, including: the Basle Committee on Banking Supervision, the Committee on Payment and Settlement Systems, the Euro-Currency Standing Committee, and the Gold and Foreign Exchange Committee. The Basle Committee on Banking Supervision developed the international agreement on minimum capital standards for internationally active banks and continues to be the forum for designing a cooperative framework for supervision of international bank activities. Meetings of the Basle Committee are also attended by bank supervisors from G-10 countries who represent institutions other than the central banks. The United States, for example, is represented by officials from the Comptroller of the Currency and the Federal Deposit Insurance Corporation as well as the Federal Reserve. The Committee on Payment and Settlement Systems has formulated principles and minimum standards for the operatio

Category: Economics - I