Nobody downloaded yet

International Banking - Essay Example

Comments (0) Cite this document
On one hand, liquidity refers to the extent to which a property or security can get purchased or sold in the marketplace devoid of touching the assets value. Equally, liquidity gets typified by a greater degree of trading functions (Evanoff 2007, 50). Therefore, assets that can…
Download full paperFile format: .doc, available for editing
GRAB THE BEST PAPER92.5% of users find it useful
International Banking
Read TextPreview

Extract of sample "International Banking"

Download file to see previous pages Banks, by their communally useful effort of converting temporary assets to standard and long-standing credits (changing maturities) get uncovered to liquidity hazards. Hence, the comprehensive banking catastrophe, which started in 2007 summer, has showed this peril and has pressed us to re-evaluate bank threat organization as a whole and liquidity risk specifically. As a result, this risk has gotten ignored until up to the present in errand of other hazards such as credit perils with market hazards. Actually, Basell I (1989) and Basell II (2005) expelled liquidity hazard control from their claim span.
Transmission from financing liquidity hazard to marketplace liquidity risk does not involve a single direction. In fact, these dual risks can get jointly underpinning in a controlled system relating the spot to marketplace. Certainly, stock prices lower than their basic prices get instantly shown on the figure of banks balance sheets because of the spot to market (Evanoff 2007, 50).Thus, they get mandated to immediately streamline their balance sheets and discover themselves obliged to vend more resources cheaply to congregate solvency as well as capital dogmatic requirements. In this instance, banks get themselves entangled in hazardous descending liquidity curves.
(Evanoff 2007, 50 bring to mind dual equilibriums. The foremost happens when marketplaces become liquid with good margin environment and painless access to funding for speculators, who as a result help out progress this liquidity via their actions. The next one takes place when bazaars become illiquid. Such raised margin necessities, restricts access to financing liquidity to investors who in the end offer smaller amount souk liquidity. Hence, this common strengthening of financing illiquidity with marketplace illiquidity gets mirrored in liquidity curves, which can be margins curves or loss curves.
It refers to the plan ...Download file to see next pagesRead More
Cite this document
  • APA
  • MLA
(“International Banking Essay Example | Topics and Well Written Essays - 1500 words - 3”, n.d.)
International Banking Essay Example | Topics and Well Written Essays - 1500 words - 3. Retrieved from
(International Banking Essay Example | Topics and Well Written Essays - 1500 Words - 3)
International Banking Essay Example | Topics and Well Written Essays - 1500 Words - 3.
“International Banking Essay Example | Topics and Well Written Essays - 1500 Words - 3”, n.d.
  • Cited: 0 times
Comments (0)
Click to create a comment or rate a document

CHECK THESE SAMPLES OF International Banking

International Banking

...?INTERNATIONAL BANKING-LAW AND PRACTICE Task Questions Regulation of Banks 2. Security for secured syndicated loans in an international context NAME OF STUDENT STUDENT NUMBER LAW M591 INSTRUCTOR’S NAME 22ND DECEMBER 2011. Table of Contents Table of Contents 1 1.0REGULATION OF BANKS 2 1.1 Introduction 2 1.2 Banking Regulation Policy Highlights 2 1.3 Main objectives of bank regulation 3 1.4 Disadvantages to the regulation of these businesses because of the behaviours they encourage in the regulated entities and their customers. 8 2.0SECURITY FOR SECURED SYNDICATED LOANS IN AN INTERNATIONAL CONTEXT 10 2.1...
18 Pages(4500 words)Assignment

International Banking Assignment

...these risks. Secondly, internal Investment is another strategy that was applied by most of these banks. There was a high tendency of the executives of these banks to invest heavily on the shares of the banks they headed. Consequently, this tendency made them disregard the possibility of falling into the crisis. They only perceived the upward trend of investing more and more to increase their share holding in their companies. According to Calomiris and Mason (2004), it is against this background, that a need to regulate the executive pay was realized. This move is to ensure that the executives’ financial capacity is strongly linked to the shareholders interest. This being...
6 Pages(1500 words)Assignment

International banking

...? Measurement and Interaction of Bank Funding Liquidity Risk and Market Liquidity Risk Measurement of Bank Funding Liquidity Risk and Market Liquidity Risk Before going ahead with the discussion relating to measurement of funding liquidity risk, it is pertinent to describe what funding liquidity is. 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...
8 Pages(2000 words)Essay

International Banking

...? International Banking Lecturer: Introduction The 2008 economic and financial recession sent the world’s economy into financial shock that has since then taken a great deal of financial resolutions as put forth by the world economists to ensure financial recover by a number of countries and enterprises. 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. The 2008 crisis is considerably the first crisis in the era of globalization, as caused by a number of factors which include funding liquidity... , and...
8 Pages(2000 words)Essay

International Banking

...? International Banking How to measure bank funding liquidity risk and market liquidity risk Banks over the years have been faced with crises emanating from various factors. A major player that has historically been associated with these crises is the funding liquidity risk. 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. Measuring bank liquidity risk incorporates the comparison of accumulated expected cash shortfalls for a given period of time with the stock available for funding the cash sources... ...
8 Pages(2000 words)Essay

International Banking facilitated and banks where they act as agents to customers. If for one reason or the other, a bank is unable to meet this statutory obligation, the resultant is a banking crises, the banks are then said to have failed. Another terminology that requires definition is credit risk. This can alternatively be referred to as Expected Loss and is a product of Probability of default, Exposure of default and loss given default. These three factors which are considered in credit risk all have standard measurement yardsticks against which they are calculated. Probability of default (PD) is measured using statistical data (past default rates, external and...
6 Pages(1500 words)Essay

International Banking

...International Banking paper Islamic banking: a comparative perspective and its potential in avoiding future financial crises Islamic banking differs from conventional banking as practiced in the West in present times in some fundamental ways. This paper explores the key differences between the two systems, especially with respect to how risk is managed and how money and other material rewards are made. 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...
8 Pages(2000 words)Essay

International Banking

...International Banking International Banking International banking involves aspects in terms of services and operations involving the facilitation of international trade, loans, and grants to governments and other private institutions, and the manner in which money flows both for investments and for making payments. The United States banks involvement in international banking remains limited to the large banks in which the volume of the markets is concentrated. However, despite the late entry into international banking for...
4 Pages(1000 words)Assignment

International Banking

...PREDICTING BANK LIQUIDITY BY EVALUATING BANK STOCK TRENDS Contents Introduction 3 Bank Liquidity Risk 3 Measurement of Bank Liquidity Risk 4 Bank Liquidity Risks and Bank Stock Returns 5 Methodology 6 Findings 6 Conclusion 7 Bibliography 9 Introduction This paper examines the concept of bank liquidity and how it is measured in the context of international banking. The paper addresses this in two parts. The first part will involve a theoretical analysis of the concept. This will culminate in the evaluation of a realistic analysis of variables and historical data relating to...
6 Pages(1500 words)Essay

International Banking

...International banking International banking is a monetary system that provides financial services such as lending and payment accounting to exotic customers. It has rapidly expanded for the last three decades. International banking has been significant in promoting financial globalization as well as integration. Furthermore, international banking is almost synonymous with international financial markets as both augment each other. These foreign customers can be either individuals or business companies. Individuals work with international banks for...
9 Pages(2250 words)Research Paper
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 International Banking for FREE!

Contact Us