Chapter15 - Chapter 15 INTERNATIONAL BANKING Two Components...

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Chapter – 15 INTERNATIONAL BANKING
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Two Components : U.S. Banks operating overseas Foreign Banks operating in U.S. Reasons for U.S. Banks’ Global Expansion Increased expansion of U.S. trade Growth of multinational corporations Regulation avoidance Small number of U.S. banks have large network of international banking affiliates Decline of Japanese banking industry in 1990’s How are foreign banking activities of U.S. banks regulated? most foreign countries have less stringent bank regulations Banks allow to engage in a wider range of business activities
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U.S. regulators focus on : Safety soundness Competitive banking markets Separation of banking from other businesses Avoid “concentration of economic power” Conflicts of interest Regulation of foreign banking activities of U.S. banks – primarily Federal Reserve and Comptroller of Currency (OCC) Allowable banking activities abroad to enhance competitiveness Limited equity investments in non-financial companies Security underwriting ( expanded abilities in U.S.) Still more restraints on U.S. banks than on foreign banks e.g. U.S. bank can’t own a controlling interest in a foreign
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How do U.S. banks deliver banking services overseas?
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Chapter15 - Chapter 15 INTERNATIONAL BANKING Two Components...

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