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Financial Markets: Distinguishing between international banking and
Finance & Accounting
Pages 12 (3012 words)
Financial Markets (Name) (Tutor’s Name) (Course) (Date) Financial Markets 1. Distinguishing between international banking and global banking is a difficult task owing to similarity of identities in their application as the two concepts look analogous in a general sense.
More phenomenally, the difference is identified between the fund raising and distribution stream of both of them while they deal with foreign deposits and borrowings. Straightly speaking, international banking deals with collection funds in favor of a target client in a foreign country while global banking refers to gathering funds for financing the claims of foreign borrowers from within the same country. Business transactions of both of them differ in the function fund distribution and risk allocation strategy. International banking borrows directly from another country; in this regard, the lender country collects funds by obtaining deposits from residents and transfers it on term bases. Global banking, on the other hand, recruits different bodies in the borrowing country for attracting potential local depositors and distribute the fund thereby. In the international banking deal, the funding system starts with a foreign saver and the deposit flows to the head office in the lending country. During transfer it is considered as an international loan and the currency exchanged is subject to value variations. Though this scenario is common in both aspects, it is more directly felt in international banking. b) A strict choice between both international and global banking has to be exercised while allocating fund flow on debt basis to a foreign country. ...
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