Bankfin

• Representative offices- usually prohibited from engaging in general banking activities
• Account relationships - are developed with foreign banks to facilitate internationa payment mechanisms between the institutions.
• Export Credit - is a form of financing in which a bank located in the exporter's country provides a loan (line of credit) to the importer in order for the importer to buy goods from exporter.
• Representative Office - most commonly used and the most limited in the function of all foreign banking operating internationally.
• International Representative Office - fuctions mainly as a liaison between correspondent banks and parent bank.
• International Banking - is a process that involves banks dealing with money and credit between different countries across political boundaries.
• International banking is also known as foreign/offshore banking.
• International banking involves banking activities that cross national frontiers.
• International banking - concerns the international movement of money and the offering of financial services through offshore branching, correspondent banking, representative offices, branches and agencies, limited branches, subsidiary banking, acquisitions, and mergers with other foreign banks.
• All the basic tools and concepts of domestic bank management are relevant to international banking.
• International banking deals with all banking transactions-private and governmental of two or more countries.
• Major activities involved in International Banking; claims of domestic bank offices on foreign residents, claims of foreign bank offices on local residents, and claims of domestic bank offices on domestic residents in foreign currency
• Modern Banking Systems originated in Renaissance Italy.
• Three important core services provided through international banking include letters of credit, export credit, and foreign exchange.
• Letters of Credit - a document that provide a guarantee of payment from a bank to the seller in the event that the buyer fails to make payment.
• Letters of credit can be considered as a financial contract between the bank, the buyer, and the seller.
• Letters of Credit - the buyer can use this document during transaction as payment for the goods and services being purchased.
• Foreign Exchange - is the process of converting one country's currency into that of another.
• Foreign Exchange - it is typically done in order to facilitate international trade and investment as it allows businesses to access markets in different countries without having to worry about exchange rates.
• Correspondent Banks - established by the commercial banks to supplement their own facilities worldwide.
• Account relationships are developed with foreign banks to facilitate international payment mechanisms between the institutions while providing services and keeping costs minimal.
• Representative offices - may not receive deposits or make loans.
• Branch - is any office of a foreign bank at which deposits are received.
• Agency - is an office at which deposits may not be accepted from citizens or residents of the US if they are not engaged in international activities, but at which credit balance may be maintained.
• Agencies - cannot accept deposits for US citizens or residents and can only maintain credit balances related to their international activities.
• Agencies cannot engage in fiduciary or investment advisory activities with the exception of acting as custodians for individual customers.
• Branches - are generally subject to more stringent state regulation than agencies due to more extensive nature of their operations.
• Federal Branch - similar in scope to those of a national bank.
• Federal Branch - possess full deposit-taking, loan and commercial banking powers in addition to other trust powers. Subject to duties, restrictions and limitations similar to those of a national bank organized in the same area.
• Pursuant to the International Banking Act., an additional means by which a foreign bank may participate in the foreign banking market is through called the "Limited Federal Branch.
• Limited Federal Branch - an office chartered by the Comptroller of the CUrrency subject to the condition that the foreign bank enters into an agreement with the country's apex bank or regulatory authorities restricting the branch deposit-taking activities to those permitted by law.
• Limited Federal Branch - they are restricted to deposit-taking activities of an international nature since they may be established outside the foreign bank's home state.
• Foreign Banks gain control of subsidiary banks by establishing new institutions or by acquiring existing domestic banking institutions and these subsidiaries generally may engage in a full line of banking activities.
• A subsidiary bank of a foreign bank may be either a national or a state bank.
• State Banks - are governed by the laws of the state in which they are located.
• National Banks - are chartered by the Comptroller of the Currency under the National Bank Act.
• Firms willing to gain access to international banking operation may also adopt the acquisition approach by acquiring indigenous or domestic banks.
• Bank Mergers are another option that is open to those who wish to provide international banking services in foreign countries.
• Foreign Bank to merge with Domestic Bank provides an expedient and economical means of expanding into new markets.
• Specific reasons for expanding operations abroad includes the ff: (1) The saturation of the domestic market (2) The discovery of lucrative opportunities in other countries (3) Desire to expand the volume of operations in order to obtain economies of scale.