INTERNATIONAL BANKING

International Banking



REGULATION BANK

The regulation bank is the Government's regulatory bank that determines the requirements, restrictions and guidelines, which the other banks in the economy have to follow. The goal of a regulation bank is to take decisions and make regulations that will benefit the country's economy. The most common are: (Beck, 2000,, 261).

Prudential- in order to reduce the level of bank exposure to the creditor (ie, protection of depositors)

Reduce systemic risk and reduce the risk of unfavourable conditions of trade disruption caused by a number of banks or large banks fail

Avoid bank abuse, in order to minimize the possibility of the services provided by banks used for unlawful purposes, e.g. money laundering

To protect the confidence on the banking sector

Controlling credit allocation

The regulating banks can have very different requirements across the different countries.

Minimum requirements

Requirements imposed on banks to facilitate supervision. The most important function for a regulation is to make sure that the banks maintain minimum their capital requirements.

Oversight review

Bank regulatory agencies should be issued with a banking license to operate the business for banks and regulatory body to monitor and respond to licensed banks through the access requirements and business, to direct the request to impose penalties or revocation of banking license violation.

Market discipline

Regulators require banks to reveal their financial information and all other information pertaining to the operations of the bank, the depositors and the creditors could use the information to evaluate the degree of risk, and make decisions regarding investment.

International banking

The International banking can be defined as the process in which the banks allow their clients, which could include both individuals and companies, to utilize their financial services. Possibly, the most famous international banks can be found in Switzerland. Nevertheless, a number of countries have highly developed infrastructures for an international bank.

RELATIONSHIP BETWEEN GOVERNMENT AND INTERNATIONAL BANK

The government between an international bank and the government of a country is pretty much the same as the relationship between a local bank and a government. The government decides the rules and regulations that a bank has to follow in order to run its operations in the country. The government of a country gives special importance to an international bank that is operating in their country, because an international bank provides the country with a chance to create many employment opportunities in the country (Beck, 2000,, 261).

IMPACT OF GOVERNMENT REGULATIONS ON INTERNATIONAL BANKS

The government usually designs the rules and regulations for the banking sector in a country. The basic aim of the government in designing rules and regulations is that they want equal distribution of income in the economy, and the banks in the country do not make abnormal profits and do not create a monopoly in the country. However, in doing so they also create a number of problems for the banks, which are operating in the country, especially for the international banks because the government in one way or the other increase the different ...