International banking is now a days becoming backbone of any economy. It plays a vital role in the development of financial system of country. International banking activities has been grown-up speedily due to increased international trade flows and foreign direct investment activities, the globalization of capital markets, and the liberalization of domestic financial markets since 1960s. International banking activities may involve cross-border activities and activities of banks outside their home country (i.e. foreign banks). Banking has gradually become more globalized, which leads towards advances in communications and technology, economic integration. Especially, foreign bank entry has increased sharply in the last few decades, which helped different nations in the development of their financial system. Foreign banks also helped the economies in financial crisis to deal with it and also helped in the establishment and restructuring of their financial system after that crisis.
Many studies have taken out on this issue, i.e. on foreign banking on different developed and under-developed nations and transition economies as well. The competitive advantage of the foreign banks was first investigated by Goldberg (1992). Following this original study, many studies including Meinster and Elyasiani (1988), Mahajan et al. (1996), DeYoung and Nolle (1996), Elyasiani and Mehdian (1995), Jagtiani and Khanthavit (1996) have been taken and gave deeper and meaningful analysis. All of these studies had uses formal econometric analysis based on a precise theoretical background of microeconomics. These studies concluded that cost structure and performances differ between domestic and foreign banks as they are different in management strategies,...
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...e the efficiency of domestic banks by encouraging domestic banks to cut cost and perform better than earlier. In the presence of foreign banks, domestic banks are forced to improve the quality of their services so as to hold their existing market shares and customers as well. This may improve the quality of existing financial services of domestic banks and their profits as well. So we can say that foreign bank presence directs to positive spill-over effects.
The results of their study show that foreign bank presence and domestic banks’ performance are positively related. Hermes and lensink further argued that foreign bank presence is associated with higher costs and margins of domestic banks at lower levels of financial development, while foreign bank presence is associated with falling costs and margins of domestic banks at higher levels of financial development.
After World War II, many nations were left with weak economy and financial instability. Offshore banking became a method to escape national regulation as many national regulators turned a blind eye on deposits in currencies other than their own. The offshore market became popular due to its ability to facilitate new finance innovations and keeping transaction costs low. Eurodollar market for example is a product of this trend. As offshore banking became competitive, the U.S. had to remove limits on national banking and the division between commercial and investment banking. Canada also benefitted from this new trend as it appeared to be very promising for international expansion. However, differing from the United States, Canadian Banking Act was in place to protect domestic banks from new foreign entrants and also effectively manage risk. With the increase of international investment, not only does funding needs were satisfied but new business information systems were also developed due to the increased need for more centralization and a variety of services. New regulations such as The International Banking Act of 1978 was formed to level the playing field between foreign and American banks by requiring mutuality from any country whose banks are seeking permission to enter the United States. The Gramm-Leach-Bliley Act also removed barrier for commercial banks, investment banks,
A Report on NatWest Bank and an Analysis of the Banking Industry 1. Introduction This report focuses on NatWest and the industry in which it operates. The purpose of the report is to give a concise but accurate view of how NatWest operates as an organisation and the links between its environment, in this case the banking industry. Company History =
American Express is a world wide travel related service company. American Express works with both consumers and business with their financial planning as well as offers numerous amounts of credit card products and travel assistance. They have many products and services that are used throughout the world by consumers and businesses. As American Express moves towards the future, like most credit card companies, they want to be competitive and responsive to the needs of the consumer.
Empirical studies of banking efficiency (see for example Karimzadeh, 2012) often measure each of these three types of efficiency. However, some scholars (see for example Sufian, 2011) have measured technical efficiency alone. Following Sufian’s methodological example, only the technical efficiency of private banks in Northern Cyprus will be measured in the current study.
Although the generally accepted notion among researchers in that the main bank relationship in Japan is extremely stable, this evidence suggests that the Japanese main bank is one of much more fluidity than has been generally believed. Now, the paper presents some factors that might account for the actual changing patterns of main bank affiliations. These factors are (a) the uncertainty of companies’ operating performance, assuming the main bank relationship serves an important function of risk-sharing between companies and banks, it can be derived that an increase in the uncertainty of the business environment for a specific industry should decrease the proportion of companies that change their main bank, thus, changes in main bank affiliation will be systematically related to changes in the uncertainty of the performance of corporate borrowers; (b) the history of the main bank relationship, as the accumulated value of the main bank relationship is assumed to be positively correlated with the duration of the relationship, the longer a company has continued to maintain a main bank relationship with a specific bank, ceteris paribus, the less likely the company is to break that relationship off; this proposition concerning the changeableness of the main bank relationship is also a testable one; (c) the growth of the borrowing companies, it can be regarded as related to main bank changes in 2 ways: first, the growth of a company raise its
In the integration of Indian financial market with international markets, the Reserve Bank of India to market development has been that of cautious and informed by the experience of other developed and developing countries. Even within the constraints imposed by this approach, the Reserve Bank and the India Government have taken steps that include progressive liberalization of capital flows, calibrated increase in investment limits for Foreign Institutional Investors in government and corporate debt, introduction of Qualified Foreign Investor as a separate investor class, expansion of the menu of risk management instruments,
In this chapter, the data collected were systemically processed, tabulated and made suitable for analysis and interpretations. It was a study on stock price movement in selected banking companies through data collected for the nine months from July to March. The performance is analyzed for the stock prices of Current market price, Yearly high, Yearly low, Last completed financial year value, Sales, Operating profit margin, Net profit, Equity, Earning per share, Book value, Factor value, Dividend and Price Earnings. The results obtained were classified, tabulated and the following analyses were performed in fulfilling the objectives of the study.
This section displays the theoretical and empirical context applied in the study. Although the performance of Canada's banking sector was addressed by many scholars, however, it is essential to stay updated with their stance as it is one of the largest countries worldwide. And generally it is quite interesting to look at how they were performing lately. Therefore, for the above two mentioned reasons; the Canadian Banking Industry is reconsidered in particular. Efficiency and Profitability of Canadian banks were previously studied at both branch and institutional levels.
Prasad, Eswar S., et al. “Effects of Financial Globalization on Developing Countries: Some Empirical Evidence.” The National Bureau of Economic Research. National Bureau of Economic Research, 2003. Web. 10 Dec. 2013. .
Commercial banks are the most important savings, mobilization and financial resource allocation institutions. Consequently, these roles make them an important phenomenon in economic growth and development. In performing this role, it must be realized that banks have the potential, scope and prospects for mobilizing financial resources and allocating them to productive investments (Olokoyo , 2011). The importance of efficient financial system is mostly felt in developing countries since their financial markets are underdeveloped and not strong thus banks plays a crucial role of integrating the whole economic sector of a country by serving as a vital source of finance for the enterprises (Ntow–Gyamfi
This is followed in section 5 by an analysis of the recent changes in the banking industry. With the development of the financial system, declining entry barriers and the deregulation of the banking industry make banks no longer the monopoly suppliers of banking services and reduce their comparative advantages which they usually hold in the past. Whether the reasons give rise to the existence of banks are still powerful will be examined here, while section 6 offers a way of considering whether banks are declining by looking at the value added by the banks. When the value added by banks is examined, banks are not a financial intermediation, which not only conduct the traditional services but also provide more diversified
The main aim of this report is to identify the key roles played by bank capital in the banking business. This report briefly outlines the main functions of bank capital and takes a brief look at the benefits of bank capital to the bank and the banking industry. It is hoped that from reading this paper a general understanding of the roles of bank capital in the banking business can be gained.
While banking and financial institutions have play an important role in contributing the economic growth by collecting and allocating the resources to those who in need of finance, it also can bring the financial chaos to the economy as well. Since this industry is a sentitive and fragile one, the banking superivision is required to monitor on the banking system aiming to identify and measure risks in order to protect not only the financial institutions but also the customers from the contagious risk that would happen without any alert. Moreover, banking supervision is established in order to protect depositors against avoidable losses, thereby contributing to confidence in the financial system and the
Banks sector is playing an important role in economies. The banking industry, as the classic and the most influential of financial intermediaries, facilitates economic operations. Financial sector in the worldwide country has been changes over these years by looking the changes of financial structure environment and economic conditions. Thus, banks are a very important point to financial system and play an important role as control and contribute growth to the economic sector.
It is a known fact that the banking industry plays a huge role in today’s society, the industry has grown rapidly of many decades and still growing. The banking sector is that sector of the society that is actually responsible for the handling of financial assets for other sector of the economy, they do this by investing the financial assets in order to create more wealth in the society while regulating all the activities involved in the process. (What is the banking Sector 2015)