Nobody downloaded yet

Banking Globalization and Global Imbalances - Essay Example

Comments (0) Cite this document
Summary
The paper “Banking Globalization and Global Imbalances” will look at banks, which face uncertainty about the expected costs and the expected gains of such a decision. On the cost side, there is an accepted notion that the foreign banks face more cost disadvantages…
Download full paperFile format: .doc, available for editing
GRAB THE BEST PAPER95.5% of users find it useful
Banking Globalization and Global Imbalances
Read TextPreview

Extract of sample "Banking Globalization and Global Imbalances"

Download file to see previous pages As such, in order for a bank to operate profitably in the foreign market, it must be able to gain or realize gains that are not available to local competitors. These gains to be realized when a bank is operating in foreign financial sector usually stem from; geographical risk diversification, competitive and comparative advantage factors and efficiencies that are not attained when operating exclusively in the local markets.
On comparative advantages, better intermediation technologies, superior management quality, and innovative products are among the factors frequently cited by both the internalization theory and the electric theory of multinational corporations (De Haas & Lelyveld 2010). However, these factors are not permanent in the case of banks diversifying internationally based on the assumption that financial firms usually have intangible assets that cannot be imitated and management quality is easily transferable. Information is a crucial comparative advantage for a bank to operate in abroad markets. Organizations prefer doing business with a less number of banks to ensure that their sensitive financial information is not revealed to too many financial firms. As such, once a bank establishes a relationship with an organization, it has a competitive advantage in serving the firm’s operations in the foreign markets. The increased importance of information in the banking sector has resulted to the shift from cross-border borrowing and lending towards the foreign banks’ local operations in the emerging countries (Mariotti & Piscitello, 2010).
One of the best ways of exploiting comparative advantages arising from the private information in foreign markets is following the client. This means that banks usually expand in the countries where their client choose to invest so that they can be able to offer them services that they need.  ...Download file to see next pagesRead More
Cite this document
  • APA
  • MLA
  • CHICAGO
(“Banking Globalization and Global Imbalances Essay”, n.d.)
Banking Globalization and Global Imbalances Essay. Retrieved from https://studentshare.org/business/1665602-acritically-examine-banks-motivations-for-diversifying-internationally-why-the-banks-go-overseas-why-the-banks-do-business-with-foreign-b-with-reference-to-the-2007-2009-global-financial-crisis-evaluate-the-risks-of-banking-globalisation
(Banking Globalization and Global Imbalances Essay)
Banking Globalization and Global Imbalances Essay. https://studentshare.org/business/1665602-acritically-examine-banks-motivations-for-diversifying-internationally-why-the-banks-go-overseas-why-the-banks-do-business-with-foreign-b-with-reference-to-the-2007-2009-global-financial-crisis-evaluate-the-risks-of-banking-globalisation.
“Banking Globalization and Global Imbalances Essay”, n.d. https://studentshare.org/business/1665602-acritically-examine-banks-motivations-for-diversifying-internationally-why-the-banks-go-overseas-why-the-banks-do-business-with-foreign-b-with-reference-to-the-2007-2009-global-financial-crisis-evaluate-the-risks-of-banking-globalisation.
  • Cited: 0 times
Comments (0)
Click to create a comment or rate a document

CHECK THESE SAMPLES OF Banking Globalization and Global Imbalances

Global Macroeconomic Imbalances as the cause of the crisis

...to prevent the crisis from occurring. The project seeks to present the wide variety of views generated on the subject. There have been views that the global policies aimed at preventing the occurrence of another crisis must primarily need to emphasize on improving the banking regulations. Reducing the global imbalances is considered to be secondary to them. This assignment seeks to present the various views of researchers with regards to the fact whether the micro-economic imbalance account for the main cause behind the crisis. Global macroeconomic imbalances are the cause of the crisis The economic researchers have been...
13 Pages(3250 words)Essay

Power Imbalances

...Power Imbalances Abstract The purpose of this coursework is to analyse the impact of power imbalances on conflict mediation process. For this analysis, power imbalances in contemporary organizational structure have been considered. Impact of these power imbalances in certain scenarios, within the organizational context, has been analysed considering some perspectives from the literature. Recommendations to minimize power imbalances in these scenarios have been made and conclusions have been drawn based on the analysis. 1. Introduction: Most of the great achievements of contemporary organizations have been accomplished by adopting...
5 Pages(1250 words)Coursework

Global Media and Globalization

...? Global Media Introduction Globalization and global media are two interconnected terms and they mutually support the development of each other. Globalization can be simply referred to the cross border movement of capital, labor, ideas, and cultures for the creation of a global economy. The concept of globalization enhances foreign direct investment, cross border trade, migration, and technology sharing. Global media have played a notable role in enhancing globalization. “The global media is part of an open society in the manner of building its own international organization through new forms of interacting and exchange of world visions and ways of solving domestic problems.” (qtd in Moawad & Muhammed 177). Global media enhanced... the...
4 Pages(1000 words)Essay

IT Evolution in Global Banking

...IT Evolution in Global Banking Introduction Developments in information technology have brought new opportunities for banks. Information technology has facilitated banks to efficiently reach customers all over the world with less overhead costs. With technology, most of the banking operations are now going towards electronic service and there is a substantial reduction in the number of customers that require physical banking services (Kamel 2005). Technology in the recent past has allowed customers to open accounts even when they do not have banks within the adjacent vicinity. The customers can also access their...
6 Pages(1500 words)Essay

IT Evolution in Global Banking

...IT evolution in Global Banking Insert Insert Grade Insert Insert Introduction Developments in information technology have brought new opportunities for banks. Information technology has facilitated banks to efficiently reach customers all over the world with less overhead costs. With technology, most of the banking operations are now going towards electronic service and there is a substantial reduction in the number of customers that require physical banking services (Kamel 2005). Technology in the recent past has allowed customers to open accounts even when they do not have banks within the adjacent vicinity. The...
5 Pages(1250 words)Essay

Global Banking Operations and Strategy

...Global Banking Operations and Strategy Table of Contents Analysis of financial position of Royal Bank of Scotland by CAMELS Approach 3 Capital Adequacy 3 Capital Adequacy Ratio (CAR) 3 Debt Equity Ratio 4 Asset quality 5 Net Non performing asset (NNPA) to Total Assets 5 Total investment to Total assets (TI/TA) 6 Management Quality 7 Total Advances to Total Deposits 7 Profit per employee (PPE) 8 Earning quality 9 Operating profit to average working funds 9 Percentage growth in net profit 10 Liquidity 10 Liquidity assets to demand deposits 10 Liquidity assets to total deposits 11 Sensitivity to market risk 12 Reference Lists 13 Appendix 1- Capital Adequacy 15 Appendix 2 – Asset...
5 Pages(1250 words)Essay

Global Banking Operations and Strategy

...income return (BBC News, 2013). The shrinkage of assets is another major weakness of RBS. From 2009 to 2013, the bank consistently reduced its assets, which affected its market image, share and equity altogether (RTT News, 2014). List of References BBC News, 2013. RBS must do better after payment fault, says boss. [Online] Viewed at: [Accessed 17 March 2014]. Risk Business International, 2011. RBS management to blame. Research Report. London: RBI Ltd. RTT News, 2014. European Markets Decline, RBS Drops On Results. [Online] Viewed at: [Accessed 17 March 2014]. The Telegraph, 2014. RBS...
1 Pages(250 words)Essay

Global banking issues

...ID Number: Global Banking Issues Question a) There are four major functions of money. The first major function of money is that it serves as an exchange medium. The second major function of money is that it acts as a value store. The other function of money is that it serves as a value measurement or unit of accounts. The last major function is that money can be referred to as deferred payments standard. In the earlier days the concept of barter system encompassed trading of goods by people. In such a context the purchasing power cannot be easily stored. As there was trade development the goods exchange was not able to the meet the requirements of people as the goods that was being exchanged was not able...
2 Pages(500 words)Assignment

Global banking issues

...Monetary Policy Tools There are a number of monetary policy tools that central banks apply to control the money supply or circulation in the economy. The reserve requirement and open market operations are the most common among all monetary tools used by central banks. Central banks can influence the money multiplier through the reserve requirements. The increase in reserve requirement helps the central bank to limit multiple deposits expansion in the banking systems. In the United States, commercial banks borrow reserves from Fed when the federal fund rate is higher than Feds discount rate. Therefore, the reserve requirement is affected...
2 Pages(500 words)Assignment

What are global imbalances Did they cause the 2008 crisis

...terms and the structure of the currency in relation to the assets, as well as liabilities under the ownership of the European banking systems and institutions in the case of the U.S (Obstfeld & Rogoff, 2009). Taking this into consideration, the significant role of the European banking systems and institutions in the U.S financial markets undermines the critical notion that the global imbalances were essential in executing causal role in the crisis. It is impossible for the economic practitioners and researchers to explain the fall in the long-term interest rates in the U.S while utilising volumes of the capital flows from the European nations, as well as the emerging and...
12 Pages(3000 words)Essay
sponsored ads
We use cookies to create the best experience for you. Keep on browsing if you are OK with that, or find out how to manage cookies.

Let us find you another Essay on topic Banking Globalization and Global Imbalances for FREE!

Contact Us