WAYS LEGAL OPINIONS ARE USED TO MANAGE LEGAL RISKS IN INTERNATIONAL BANKING TRANSACTIONS

Ways Legal Opinions Are Used To Manage Legal Risks In International Banking Transactions

Ways Legal Opinions Are Used To Manage Legal Risks In International Banking Transactions

Introduction

Worldwide, but impelled initially from U.S., banks and new entrants have taken advantage of technological innovation and growth of competition in sector. There is now the greater range of products and services available and access to financial markets retail and wholesale through electronic distribution in form known as e-banking.

Significantly, Bank for International Settlements (BIS) (Central Bank Central Bank) has acknowledged risks inherent in banking business by issuing documents Electronic Banking Group (EBG) of Committee on Banking Supervision Basel. It seeks to identify responsibilities of banks' risk management in relation not only domestic but also border between banking and focusing attention on need for monitoring country of origin of boundary between electronic banking transactions .

Whatever individual thinking in field of risk, banking should be finally moving into banking industry if Bank of International Settlements is taking the special interest in subject. Fortunately, its focus on risks of electronic banking has happened before horses have bolted stable and financial scandal, losses and failures with resulting losses for customers have been produced.

Discussion

Electronic banking offering new services through additional capacity, but these services themselves lead to new risks. They must be recognized, evaluated and managed by banking institutions to carry them out. As Bank for International Settlements expressed succinctly, these risks can be characterized by speed of innovation in technological change and customer service assistant. These are manifested through global nature of electronic networks they use, requirement to integrate with what are known as legacy systems of banks and growing dependence on third parties to provide information technology.

Electronic banking is use of electronic channels to communicate and do business with international clients, primarily through use of Internet and World Wide Web. This has allowed banks and other financial institutions to increase use of electronic channels for reception and delivery of products and services. BIS broadly classified electronic banking, both domestic and international, in three categories:

• Basic information websites, which only convey information about banking products and services offered to bank customers and general public.

• simple transactional web sites that allow bank customers to submit applications for various services, make inquiries on balances and send instructions to bank, but will not allow account transfers.

• Advanced transactional web sites that allow bank customers to electronically transfer funds to and from your accounts, pay bills and conduct other banking transactions online.

Risks arise mainly in last two categories that allow transactions, although it is clear that the site can find information at risk issues arising from representations inaccurate, misleading or deceptive, including on bank's products and services.

Fundamental distinction between domestic and cross-border electronic banking (international) electronic banking is that former provides transactional banking products or services online to residents only in its home market. Cross-border e-banking is defined as provision of transactional banking services online through the bank of the ...