Chapter_06 - International Banking Services International...

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International Banking Services International Banks do everything domestic banks do and: Arrange trade financing. Arrange foreign exchange. Offer hedging services for foreign currency receivables and payables through forward and option contracts. Offer investment banking services (where allowed).
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The World’s 10 Largest Banks Citigroup U.S. Mizuho Bank/ Mizuho Corp Bank Japan HSBC Holdings U.K. Bank of America France JP Morgan Chase U.S. Deutsche Bank Germany Royal Bank of Scotland Group U.K. Sumitomo Mitsui Banking Group Japan HypoVereinsbank Germany UFJ Bank Ltd. Japan
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Reasons for International Banking Low Marginal Costs Managerial and marketing knowledge developed at home can be used abroad with low marginal costs.
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Reasons for International Banking Low Marginal Costs Knowledge Advantage The foreign bank subsidiary can draw on the parent bank’s knowledge of personal contacts and credit investigations for use in that foreign market.
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Reasons for International Banking Low Marginal Costs Knowledge Advantage Home Nation Information Services Local firms in a foreign market may be able to obtain more complete information on trade and financial markets in the multinational bank’s home nation than is obtainable from foreign domestic banks.
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Reasons for International Banking Low Marginal Costs Knowledge Advantage Home Nation Information Services Prestige Very large multinational banks have high perceived prestige, which can be attractive to new clients.
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Reasons for International Banking Low Marginal Costs Knowledge Advantage Home Nation Information Services Prestige Regulatory Advantage Multinational banks are often not subject to the same regulations as domestic banks.
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Reasons for International Banking Low Marginal Costs Knowledge Advantage Home Nation Information Services Prestige Regulatory Advantage Wholesale Defensive Strategy Banks follow their multinational customers abroad to avoid losing their business at home and abroad.
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Reasons for International Banking Low Marginal Costs Knowledge Advantage Home Nation Information Services Prestige Regulatory Advantage Wholesale Defensive Strategy Retail Defensive Strategy Multinational banks also compete for retail services such as travelers checks, tourist and foreign business market.
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Reasons for International Banking Knowledge Advantage Home Nation Information Services Prestige Regulatory Advantage Wholesale Defensive Strategy Retail Defensive Strategy Transactions Costs Multinational banks may be able to circumvent government currency controls.
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Reasons for International Banking Home Nation Information Services Prestige Regulatory Advantage Wholesale Defensive Strategy Retail Defensive Strategy Transactions Costs Growth Foreign markets may offer opportunities to growth not found domestically
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Reasons for International Banking Prestige
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Chapter_06 - International Banking Services International...

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