What is international banking, and why is it necessary?
Banking
Asked by Question Bot03/Feb/20131 answer
1 Answer
F
Faisal Khan
Answered 03/Feb/2013
International Banking: We need this to be able to better work (read: bank) in other countries. Each country has its own set of complex regulatory laws. International Banking is mostly comes under cross-border trade (be it physical trade, currencies, or equities/bond markets).
For most banks, International Banking isn't a department by itself, but more or less a function within each department. For very large banks, with a global footprint, International Banking may be a department by itself.
If you were to look at a single example of say Trade, for most cases each bank has a Trade Department within. This department would most likely process L/C (Letter of Credits) for both Import and/or Export. To work with a country where this particular bank is not present, a Bank may forge partnership with a correspondent bank in another country to assist for L/C preparation, for a cut of the fees.
This is done to ensure that all laws on both sides of the border are obeyed and followed. Such laws typically pertain to banking, trade and finance laws of each country as set out by the Central Bank and/or the Financial Regulator.
For most banks, International Banking isn't a department by itself, but more or less a function within each department. For very large banks, with a global footprint, International Banking may be a department by itself.
If you were to look at a single example of say Trade, for most cases each bank has a Trade Department within. This department would most likely process L/C (Letter of Credits) for both Import and/or Export. To work with a country where this particular bank is not present, a Bank may forge partnership with a correspondent bank in another country to assist for L/C preparation, for a cut of the fees.
This is done to ensure that all laws on both sides of the border are obeyed and followed. Such laws typically pertain to banking, trade and finance laws of each country as set out by the Central Bank and/or the Financial Regulator.