StudentShare solutions
Triangle menu

International Banking - Essay Example

Nobody downloaded yet

Extract of sample
International Banking

Exchange rate risk is the risk to earnings or capital arising from movement of exchange rates. The need to manage the exchange rate risk is very crucial for any bank and it has generally been observed that the exchange rate risk management form the integral part of the risk management policies of all major global banks. [Gorton, G. & Rosen, R., 1995] When a multinational operates in such a number of markets, internationally, it is exposed to a great deal of risks, and in order to operate as per its predetermined objectives, the management of these risks is of prime importance.[ Moffet, M. & Karlsen, J., 1994] These risks pose a direct threat to the assets, liabilities and operative income of the firm which commonly results from the variations in interest rates, exchange rates and inflation rates. Macroeconomic environment of different countries plays n important role in setting up these risks which affect different countries according to their structure. ...
Exposure of a firm can be defined as the value of its assets and liabilities, presented in its functional (primary) currency, exposed to the change in the foreign interest rates, exchange rates and inflation rates.[ Nobile, J. (2007)] The foreign risk exposure can be classified into two broad categories. Transaction Exposure; and Translation Exposure Transaction and Translation Exposure Transaction exposure can be defined as the risk arising due to the unanticipated change in the exchange rate which affects the cash inflow or outflow at the time of the settlement of an asset or liability. An important factor to consider in these types of risks is that the foreign currency value in such circumstances is fixed and thus these types of risks are also termed as contractual exposure. On the other hand, translation exposure arises due to the operation of the accounting and legislative standards which requires the foreign currency balances of assets and liabilities appearing in the balance sheet, to be revalued at the closing spot rate. These assets are of the time which is not going to be liquated in the near future. Translation risk, which is also termed as the accounting risk, is basically the related measure of variability. Exchange rate can be defined as the relative price of one currency in terms of other. The exchange rate plays a very significant role in determining the capital flows and investments between international boundaries. In order to exercise prudent financial management, it is of prime importance for the multinationals to forecast the future exchange rates so that they do not suffered exchange losses and incur additional liability. There are two famous theories used for the determination for the prevailing exchange rates. One is interest ...Show more
Cite this document
  • APA
  • MLA
(“International Banking Essay Example | Topics and Well Written Essays - 1250 words”, n.d.)
Retrieved from
(International Banking Essay Example | Topics and Well Written Essays - 1250 Words)
“International Banking Essay Example | Topics and Well Written Essays - 1250 Words”, n.d.
  • Cited: 0 times


Introduction Banks and financial institutions have played a significant role in integrating the different economics of the world. A brief analysis of the global economic scenario can highlight the fact that the banking industry has always been that sector which has either strengthen or uplifted the economic outlook of a particular region, or has caused turmoil …
International Banking
Read Text Preview
Save Your Time for More Important Things
Let us write or edit the essay on your topic
"International Banking"
with a personal 20% discount.
Grab the best paper

Check these samples - they also fit your topic

International banking law
And yet, the banking sector’s role in the economy of a country or even in the world, in general defines the baseline of any financial transaction within each country and between, parties around the world. The Basel III consultative document presents the Basel Committee’s proposal to strengthen global capital and liquidity regulations with the goal of promoting a more resilient banking sector.
15 pages (3750 words) Essay
International banking
According to the Basel Committee of Banking Supervision, funding liquidity refers to the ability of banking institutions to discharge their respective liabilities as and when they stand due (BIS, 2008). On the other hand, as per the definition of International Monetary Fund (IMF), funding liquidity is the ability of financial institutions to discharge their promises regarding payments as per the agreed terms and conditions, which are meant to be referring to time of payment (International Monetary Fund, 2008).
8 pages (2000 words) Essay
International Banking
It marked the first global financial crisis to be experienced in the 21st century. From its impacts, it gained the name the Great Recession. A crisis is an urgent, difficult, or dangerous situation as may be rendered by factors such as the financial, economic, and political instabilities.
8 pages (2000 words) Essay
International Banking
These are situations where a bank may not be in a position to meet its obligations with urgency or immediacy. This kind of risk will in most cases arise when revenues are not synchronised. It is important that the bank liquidity risk be measured in order to avoid crises in the future.
8 pages (2000 words) Essay
International Banking
The subject matter of this comment is banking crises. The role of banks in the growth of an economy cannot be overemphasised; this is because banks represent the main channel by which funds can flow from lenders to borrowers. In addition to this, it plays the role of a custodian for valuables such as gems, will; money e.t.c.
6 pages (1500 words) Essay
The international banking market
Credit to non-bank borrowers in the United States rose noticeably, driving a fifth Consecutive quarter of strong growth in total claims on non-banks. In addition, banks in Asia, including some central banks, deposited funds in banks abroad. Combined, these placements overshadowed greater lending to borrowers in emerging Europe and Asia-Pacific, and were behind an overall net outflow of funds from emerging markets.
13 pages (3250 words) Essay
International Banking
In so doing, the Islamic principles of risk management and profit sharing are explained to help understand how Islamic banking functions without involving interest. It also examines the possibility of applying Islamic banking principles in Western economies to safeguard against
8 pages (2000 words) Essay
International banking assignment
In this case, those that have capital surpluses will often keep their money with the bank, so that those that do not have can borrow. Banks are to be important systems that determine the
8 pages (2000 words) Essay
International Banking
Liquidity risk in general refers to a situation whereby an asset cannot be traded quickly enough to make gains rather than a loss (Laycock, 2014). This refers to a
6 pages (1500 words) Essay
International Banking
On the other hand, liquidity can also be defined as the capacity to change an asset to ready money swiftly. That process is called "marketability." As a result, there is no particular liquidity model.
6 pages (1500 words) Essay
Comments (0)
Click to create a comment
Let us find you another Essay on topic International Banking for FREE!
Contact us:
Contact Us Now
FREE Mobile Apps:
  • About StudentShare
  • Testimonials
  • FAQ
  • Blog
  • Free Essays
  • New Essays
  • Essays
  • The Newest Essay Topics
  • Index samples by all dates
Join us:
Contact Us