- •Государственное образовательное учреждение высшего профессионального образования
- •«Хабаровская государственная академия экономики и права»
- •European Central Bank (1999) The Effects of Technology on the EU Banking Systems, Report, http://www.ecb.int./pub/pdf/other/techbnken.pdf.
- •The Economist (2003) “Banking in China: strings attached”, 6 March
- •European Central Bank (2002) Mergers and Acquisitions Involving the EU Banking Industry, Press release, December, http://www.ecb.int/press/pr/date/2000/html.
- •CHAPTER 1
- •The Role of Banks and Their Main Functions
- •1.1 Introduction
- •1.2 The nature of financial intermediation
- •Figure 1.1 The intermediation function
- •Lenders' requirements:
- •Borrowers' requirements:
- •Figure 1.3 Direct and indirect finance
- •Financial
- •Indirect financing
- •Financial
- •Intermediaries
- •Figure 1.4 Modern financial intermediation
- •Financial
- •Indirect financing
- •Financial
- •Intermediaries
- •1.3 The role of banks
- •a) Size transformation
- •b) Maturity transformation
- •c) Risk transformation
- •REVISION QUESTIONS
- •CHAPTER 2
- •Banking Services
- •2. Find out if there are credit card holders in your group and what for they use their cards.
- •3. What credit card systems do you know?
- •5. Discuss recent changes and trends in the banking system of your country.
- •2.1. Introduction
- •2.2 What do banks do?
- •2.3 Banks and other financial institutions
- •Figure 2.1 Classification of financial intermediaries in the UK
- •2.4 Banking services
- •2.4.1 Payment services
- •2.4.2 Deposit and lending services
- •2.4.4 E-banking
- •Box 2.2. New online banking and financial services delivery channels for large companies
- •Table 2.6 Bankinlsg services offered via branches and remote channels
- •Table 2.7 Foreign exchange online trading sites
- •Box 2.3. Is internet banking profitable?
- •2.5 Current issues in banking
- •2.5.1 Structural and conduct deregulation
- •2.5.2 Supervisory re-regulation
- •2.5.3 Competition
- •2.5.4 Financial innovation and the adoption of new technologies
- •2.6 Responses to the forces of change
- •2.6.1 Mergers and Acquisitions
- •2.6.2 Conglomeration
- •2.6.3 Globalisation
- •2.6.4 Other responses to the forces of change
- •Box 2.4 Focus on globalisation
- •CHAPTER 3
- •Types of Banking
- •3.1. Introduction
- •3.2 Traditional versus modern banking
- •Table 3.1 Traditional versus modern banking
- •3.2.1 Universal banking and the bancassurance trend
- •Figure 3.1 Bancassurance models
- •3.3 Retail or personal banking
- •3.3.2 Savings banks
- •3.3.3 Co-operative banks
- •3.3.4. Building societies
- •3.3.5 Credit unions
- •3.3.6 Finance houses
- •3.4. Private banking
- •Table 3.2 Best global private banks
- •3.5 Corporate banking
- •3.5.1 Banking services used by small firms
- •3.5.1.1 Payment services
- •3.5.1.2 Debt finance for small firms
- •3.5.1.3 Equity finance for small firms
- •3.5.1.4 Special financing
- •3.5.2 Banking services for mid-market and large (multinational) corporate clients
- •3.5.2.1 Cash management and transaction services
- •3.5.2.2 Credit and other debt financing
- •Short-term financing
- •Commercial paper
- •Euronotes
- •Repurchase agreements (repos)
- •Long-term financing
- •Syndicated lending
- •Eurobonds
- •3.5.2.3 Commitments and guarantees
- •3.5.2.4 Foreign exchange and interest rate services offered to large firms
- •3.5.2.5 Securities underwriting and fund management services
- •3.6 Investment banking
- •3.7 Universal versus specialist banking
- •CHAPTER 4
- •International Banking
- •GETTING STARTED
- •4.1 Introduction
- •4.2 What is international banking?
- •4.5 Types of bank entry into foreign markets
- •4.5.1 Correspondent banking
- •4.5.3 Branch office
- •Box 4.2 Canadian Imperial Bank of Commerce (CIBC) correspondent banking services
- •Source: Adapted from http://www.cibc.com/ca/correspondent-banking.
- •4.5.4 Agency
- •4.5.5 Subsidiary
- •4.6 International banking services
- •4.6.1.1 Money transmission and cash management
- •4.6.1.2 Credit facilities - loans, overdrafts, standby lines of credit and other facilities
- •4.6.1.3 Syndicated loans
- •4.6.1.4 Debt finance via bond issuance
- •Figure 4.2 Bond features
- •Bond characteristics
- •4.6.1.5 Other debt finance including asset-backed financing
- •4.6.1.6 Domestic and international equity
- •4.6.1.7 Securities underwriting, fund management services, risk management and information management services
- •4.6.1.8 Foreign exchange transactions and trade finance
- •Letters of credit
- •Forfaiting
- •Countertrade
- •4.7 Increasing role of foreign banks in domestic banking systems
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usually insured with a specialist insurance firm to achieve a higher credit rating for the different tranches (parts) of the CDO. Depending on the underlying assets, CDOs are also known as collateralised bond or loan obligations.
4.7 Increasing role of foreign banks in domestic banking systems
Over recent years there has been a substantial growth of foreign bank activity in many banking markets. The increased presence of foreign banks reflects the global liberalisation of financial systems that has encouraged new entry plus the desire of banks to seek out new sources of profit internationally. The growth of new markets in China, southeast Asia and in the transition economies of eastern Europe has prompted a wave of foreign bank expansion. In addition, as non-financial companies seek to source production and distribution facilities in a global marketplace this has also encouraged banks to follow suit. Banks not only operate in many different countries but they also do locate various parts of their operations in various parts of the world - call and IT centres in India being a noticeable example.
In various countries such as New Zealand, Luxembourg and Bostwana nearly all the banks are foreign - for example in New Zealand foreign banks (mainly Australian) control over 99 per cent of the domestic banking system. In the United Kingdom foreign banks account for slightly below 53 per cent of total banking sector assets.
Much of the foreign bank activity undertaking in domestic banking systems relates to traditional commercial banking business, namely deposit and loans business. (For instance, in Chapter 14 we note that foreign banks operating in the new EU Member States of central and eastern Europe mainly operate in the domestic retail market and compete head-on with domestic operators.)
Remember that at the start of this chapter we explained that international banking relates to banks doing business across borders and/or with foreign currencies and that this can encompass all types of banking activity - retail banking, corporate banking, investment banking, and so on. The focus of most of this chapter has been on banks providing international banking services to large firms as the products and services on offer tend to be different from those provided to domestic retail and small firm customers. However, one should always be aware that international banking (despite generally being commonly viewed as banking relationships with large multinational companies) also includes retail and other commercial banking business in foreign markets and that these activities barely differ from domestic retail operations.
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REVISION QUESTIONS
1.In what ways does traditional foreign banking differ from Eurocurrency banking?
2.Why do banks go overseas? What are the main theories on the rationale for international baking?
3.Explain the main strategic reasons why banks may wish to establish foreign operations.
4.What do correspondent banking relashionships involve?
5.Explain why banks engage in syndicated loans.
6.Outline the main type of bonds that an international banking institution can issue.
7.What is Euroequity issue?
CONTENTS
Chapter 1 |
The Role of Banks and Their Main Functions |
4 |
Chapter 2 |
Banking Services |
10 |
Chapter 3 |
Types of Banking |
40 |
Chapter 4 |
International Banking |
68 |
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