CHAPTER 11 International Banking and Money Market.docVIP

CHAPTER 11 International Banking and Money Market International Banking Services The World’s Largest Banks Reasons for International Banking Types of International Banking Offices Correspondent Bank Representative Offices Foreign Branches Subsidiary and Affiliate Banks Edge Act Banks Offshore Banking Centers International Banking Facilities Capital Adequacy Standards International Money Market Eurocurrency Market Eurocredits Forward Rate Agreements Euronotes Eurocommercial Paper International Debt Crisis History Debt-for-Equity Swaps International Finance in Practice: LDC Lenders Should Have Listened to David Hume The Solution: Brady Bonds Japanese Banking Crisis The Asian Crisis Summary MINI CASE: Detroit Motors’ Latin American Expansion Appendix 11A: Eurocurrency Creation International Banking Services International banks are different from domestic banks in what way(s)? International banks can arrange trade financing International banks can arrange for foreign exchange transactions. International banks can assist their clients in hedging exchange rate risk. All of the above Answer: d) Major distinguishing features between domestic banks and international banks are: The types of deposits they accept. The types of loans and investments they make. Membership in loan syndicates. All of the above Answer: d) Merchant banks are different from traditional commercial banks in what way(s)? Merchant banks can engage in investment banking activities Merchant banks can arrange for foreign exchange transactions. Merchant banks can assist their clients in hedging exchange rate risk. All of the above Answer: a) The World’s Largest Banks By far the most important international finance centers are: New York and London New York, London, and Tokyo New York, London, Tokyo, Paris, and Zurich New York, London, Tokyo, Paris, Zurich, and Frankfurt Answer: b) Reasons for International Banking Multinational banks are often not subject to the same regulations as domestic b