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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 increasing the expertise available to make business decisions.

International banking came under scrutiny in the 1970s and 1980s as a number of banks with international loans found those loans to be in danger of default. BankAmerica and its loans to Latin American countries is just one example of this situation. As a result of these bad loans and due to increases in telecommunications and information processing, American banks (and those based elsewhere in the world) are now more likely ...

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International Banking Facilities. (1969, December 31). In Retrieved 21:54, November 30, 2021, from