商业银行管理Bank ManagmentFinancial Services7th第20章课后题答案.docx
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商业银行管理BankManagmentFinancialServices7th第20章课后题答案
CHAPTER20
INTERNATIONALBANKINGANDTHEFUTUREOFBANKINGANDFINANCIALSERVICES
GoaloftheChapter:
Thepurposeofthischapteristolearnwhatservicesinternationalbanksoffertheircustomersandtodiscovertheoptionsabankmanagerhasunderlawandregulationtoorganizeamultinationalbank.
KeyTopicsinThisChapter
∙TypesofInternationalBankingOrganizations
∙RegulationofInternationalBanking
∙ForeignBankingActivityintheUnitedStates
∙ServicesProvidedbyInternationalBanks
∙ManagingCurrencyRiskExposure
∙ChallengesforInternationalBanksinForeignMarkets
∙TheFutureofBankingandFinancialServices
ChapterOutline
I.Introduction
II.TypesofForeignBankingOrganizations
A.RepresentativeOffices
B.AgencyOffices
C.BranchOffices
D.Subsidiaries
E.JointVentures
F.EdgeActCorporations
G.AgreementCorporations
H.InternationalBankingFacilities(IBFs)
I.ShellBranches
J.ExportTradingCompanies(ETCs)
III.RegulationofInternationalBanking
A.GoalsofInternationalBankingRegulation
B.U.S.Banks’ActivitiesAbroad
C.ExpansionandRegulationofForeignBankActivityintheU.S.
1.TheInternationalBankingActof1978
2.ForeignBankSupervisionEnhancementActof1991
D.NewCapitalRegulationsforMajorBanksWorldWide
1.InternationalLendingandSupervisionAct
2.BaselAgreement
IV.
ServicesSuppliedbyBanksinInternationalMarkets
A.MakingForeignCurrenciesAvailableforCustomerandProprietaryTransactions
B.HedgingAgainstForeignCurrencyRiskExposure
1.ForwardContracts
2.CurrencyFuturesContracts
C.OtherToolsforReducingCurrencyRisks
1.TheDevelopmentofCurrencyOptions
2.CurrencySwaps
D.SupplyingCustomerswithShort-andLong-TermCreditorCreditGuarantees
1.NoteIssuanceFacilities
2.Europaper
3.IssuingandManagingDepositoryReceipts
E.SupplyingPaymentsandThrift(Savings)InstrumentstoInternationalCustomers
1.PaymentsServices
2.Savings(Thrift)Services
F.UnderwritingCustomerNoteandBondIssuesintheEurobondMarket
G.ProtectingCustomersAgainstInterestRateRisk
1.InterestRateSwaps
2.InterestRateCaps
3.FinancialFuturesandOptions
H.HelpingCustomersMarketTheirProductsThroughExportTradingCompanies
V.ChallengesforInternationalBanksinForeignMarkets
A.GrowingCustomerUseofSecuritiesMarketstoRaiseFunds
B.DevelopingBetterMethodsforAssessingRiskinInternationalLending
1.InternationalLoanRisks
2.PossibleSolutionstoTroubledInternationalLoans
3.InternationalLoanRiskEvaluationSystems
C.AdjustingtoNewMarketOpportunitiesCreatedbyDeregulationandNewInternationalAgreements
1.OpportunitiesCreatedbyNAFTAandCAFTA
2.OpportunitiesintheExpandingEuropeanCommunity
3.OpportunitiesinAsiaasBarriersErode
VI.TheFutureofBankingandFinancialServices
A.Convergence
B.Consolidation
C.SurvivalofCommunityFinancialServiceInstitutions
D.ReachingtheMassMedia
E.InvasionbyIndustrialandRetailingCompanies
F.TheWal-MartChallenge
VII.SummaryoftheChapter
ConceptChecks
20-1.Whatorganizationalformsdointernationalbanksusetoreachtheircustomers?
Theseformsincluderepresentativeoffices,branchoffices,subsidiaries,jointventures,EdgeActsubsidiaries,IBFs,shellbranches,andETCs.Representativeofficesgenerallydonotprovideconventionalbankingservicesbutserveasachanneltoroutecustomerserviceneedsbacktoabank'shomeoffice,whilebranchofficesgenerallyofferafullrangeofbankingservices.Subsidiariesareseparatecorporationsthatareownedbyabankingfirm,whilejointventuresaresharedbusinessoperationsusuallyjointlyownedbyaforeignbankorbankholdingcompanyandadomesticfirm.EdgeActsubsidiariesareoperatedinsidetheUnitedStatesbybothdomesticandforeignbanksandmust,byregulation,devotethebulkoftheirserviceactivitiestoprovidinginternationalbankingservicestooffshorecustomers.IBFsareinternationalbankingfacilitieslocatedinU.S.territorythatreflectstransactionscarriedoutonbehalfofinternationalcustomers.BothforeignanddomesticU.S.banksmayoperatethesecomputerizedsetsofaccountsknownasIBFs.Shellbranchesaremerelyoffshorebookingofficestokeeptrackofborrowingsofinternationalmoney-marketfundsandtoavoiddomesticregulations.Finally,ETCsareexporttradingcompaniesthatprovidefinancing,insurance,marketanalysis,andotherservicesneededbybusinessesexportingorimportinggoodsfromabroad.
20-2.Whyaretheresomanydifferenttypesofinternationalorganizationsinthefinancialinstitutions’sector?
Differentorganizationalformsareusedforseveralreasons.Thesedifferentorganizationalformsoftenservedifferentfunctionsandwhichoneaninstitutionchoosestousemaydependontheirgoalsandobjectives.Inaddition,thelawsinonecountrymayrestrictorprohibittheuseofaparticulartypeoforganizationalform.Finally,theremaybetaxadvantagesofoneformoveranotherandtheremaybedifferingabilitiestoraisecapitalandotherfunds.
20-3.Whataretheprincipalgoalsofinternationalbankingregulation?
Theprincipalgoalsofinternationalbankingregulationinclude:
protectingthesafetyofdepositorfunds,
promotingstablegrowthinmoneyandcredit,
protectinganationagainstlossofitsforeigncurrencyreserves,
restrictingtheoutflowofscarcecapital,and
protectingdomesticfinancialinstitutionsandfinancialmarketsfromforeigncompetition.
20-4.WhatwerethekeyprovisionsoftheU.S.InternationalBankingActof1978andtheInternationalLendingandSupervisionActof1983?
TheU.S.InternationalBankingActof1978broughtforeignbanksoperatingintheUnitedStatesunderfederalregulationforthefirsttime.Itrequiredforeignbankingofficestakingdepositsfromthepublictopostreserverequirementsandallowedthemtoapplyfordepositinsurance.
TheInternationalLendingandSupervisionActof1983mandatedminimumlevelsofcapitalforU.S.banksandsoughttoreducebankriskexposurefrominternationalloans.
20-5.ExplainwhattheBaselAgreementisandwhyitissoimportant.
TheBasleAgreementisanegotiatedagreementbetweenbankregulatoryauthoritiesintheUnitedStates,Canada,GreatBritain,Japan,andeightothernationsinWesternEuropetosetcommoncapitalrequirementsforallbanksundertheirjurisdiction.TheimportanceoftheBasleAgreementistwofold:
(1)itstrengthensinternationalbanks,therebystrengtheningpublicconfidenceinthem,and
(2)itremovesimportantinequalitiesinbankingregulationbetweennationsthatcontributetocompetitiveinequalitiesbetweenbanks.
20-6.Describetheprincipalcustomerservicessuppliedbyinternationalbanksservingforeignmarkets.
Theprincipalcustomerservicessuppliedbyinternationalbanksare:
(1)makingforeigncurrenciesavailableforcustomertransactions,
(2)helpingsheltertheircustomers'currencyriskexposurethroughtheuseofforwardcontracts,currencyfuturescontracts,currencyoptions,andcurrencyswaps,(3)supplyingcustomerswithshort-andlong-termcreditorcreditguarantees,(4)supplyingpaymentsandthrift(savings)instrumentstointernationalcustomers,(5)underwritingcustomernoteandbondissuesintheEurobondmarket,(6)protectingcustomersagainstinterestraterisk,and(7)helpingcustomersmarkettheirproductsthroughexporttradingcompanies.
20-7.Whattypesofriskexposuredointernationalbanksstrivetocontrolinordertoaidtheircustomers?
Internationalbanksstrivetocontrolcurrencyriskexposureandinterestrateriskexposureinordertoaidtheircustomers.
20-8.WhatisaNIF?
AnADR?
Anoteissuancefacility(NIF)isamedium-termcreditagreementbetweenaninternationalbankanditslargercorporateandgovernmentalcreditcustomers,wherethecustomerisauthorizedtoperiodicallyissueshort-termnotes,eachofwhichusuallycomesdueandisretiredin90to180days,overastipulatedcontractperiod(suchasfiveyears),withthebankpledgingtobuyanynotesthecustomercannotselltootherinvestors.AnAmericandepositoryreceipt(ADR)isareceiptissuedbyaU.S.bankthatmakesiteasierforaforeignbusinessborrowertosellitssecuritiesintheUnitedStates.
20-9.OfwhatbenefitmightNIFsandADRsbetointernationalbanksandtheircustomers?
BothNIFsandADRsprovidefeeincometointernationalbanks,andallowthebankstoofferadditionalservicestotheircustomers.NIFsprovidecreditguaranteesforcustomers'borrowingsintheopenmarket.ADRsmakeiteasierforaforeignbusinessborrowertosellitssecuritiestoU.S.investors.
20-10.WhatareETCs?
WhatservicesdotheyprovideandwhatproblemshavetheyencounteredinsidetheUnitedStates?
AnETCisanexporttradingcompanylaunchedbylargebanks.ThepurposeoftheseETCsistoresearchforeignmarkets,identifyfirmsinthoseforeignmarketsthatcoulddistributeproducts,andthenprovideorarrangethefunding,insurance,andtransportationneededtomovegoodstomarket.
20-11.WhatdothetermsEuropaperandEurobondsreferto?
Whyaretheseinstrumentsimportanttointernationalbanksandtheircustomers?
EuropapersconsistofshorttermIOUsandEurobondsarelongtermdebtsecuritiesplacedindenominationthatarenotthecurrencyofthecountrywheretheyareissued.ThemainmarketforthesesecuritiesisinLondon.TheseinstrumentsallowcompaniesthatarenotabletocracktheUSmarkettolaunchdollardenominatedsecurities.Inaddition,Eurobondsareusedbycompaniestofinancetheirforeigninvestments.
20-12.Whattypesoftools