International Banking System

1. Analysis of how the risk that international banks experience in cross-border operations

2. International Bank determines of the process of banking where the financial transactions and services are performed with the foreign banking customers. • The international banking system is also known as the global banking system which determines transaction those are related to the acceptance of loans and deposits. • The system of international banking is based on the network of interconnected knots where each bank will depict a certain place in the globe.

3. International Banking generates flexibilities to MNC, so as to deal with variable currencies. • International Banking system provides assistance to different foreign clients by making the financial transaction process ease, in order to promote services throughout different countries in the globe. • International Banking provides other business an easy accessibility towards the global bill payments through these banks and also through online. • International Banking system also take into account of every records globally in a candid way.

4. • Problem Loans • Private Banking • E-banking • Social Media • Theft in identity • Foreclosures • Assets and/or liability management • Capital and Dividend Planning • Prepaid and Postpaid card activities • Reviewing of loan and scoring of credit • CRA and Fair lending laws • Protection and privacy in data of customers • Foreign investments • Strategic Planning • Electronic Fund Transfer System • Automated Clearing House

5. The most important risk that is faced by international bank is country risk. • Economic, social, political events could be included in the possibility of counter effect on international banking system. • Country risks also consist of nationalization of personal assets, control in exchange factors, certain currency and monetary devaluation, disapproval in external indebtedness by government. • These risks include several exposures and disclosure in bank statements and can assess to public-sector and private-sector and even to foreign based third parties.

6. There are several factors which could be able to manage country risks: • Adequate amount of risk management policies and strategies. • To prevent oversight by the board of directors. • Accurate process in analyzing country risk. • Effective systems for reporting country exposures. • Paradigm in country exposures. • The country risk rating system should be forward looking. • Timely testing of country exposures • Efficient control in internal and quality accounts and auditing functions. • Monitoring of the condition of the country must be regulated every day.

7. IN • The management should follow and maintain few policies and procedures as provided below: • Properly specifying products, facilities, services and other affiliations which includes banks, its branches, other affiliation bodies, joint ventures, holding companies, etc. • Proper articulation of strategies in order to conduct international activities. • Proper laying out of accountability and responsibility in order to make country risk management findings. • Properly establish and to comply with the government bodies and following the regulatory framework required for those bodies.

8. INTERNATIONAL LENDING • Importers, exporters, MNC, foreign organisations, government bodies, customers, overseas branches of several banks, foreign banks are the organisations that could borrow or lend funds. • International Lending acts as a great source of profit for banking organisations that handle several international activities. • The international lending is confined to the wide global banking institutions and several other numbers of small institutions in selected markets such as NYC, Australia, San Francisco, Miami, USA.

9. SEVERAL FORMS OF INTERNATIONAL LENDING • Trade Finance • Letters of credit • Bankers’ acceptance • Foreign Receivable Financing • Government-guaranteed Trade Finance

10. FOREIN CURRENCY EXCHANGE MARKET • Several transactions are made under foreign currency exchange market and this can be facilitated among any sort of business organizations, government bodies or individual bodies. • The financial institutions are excellent foreign exchange mediators as they have proper knowledge in executing financial markets and have high experience in catering may financial services.

11. Exchange rate risk • Country risk • Operational risk • Credit risk • Maturity-gap risk

12. IN FOREIGN

13. Figure: Diagram showing presence of international bank in global market Figure: Graph showing risks in international banking

14. Figure: Graphs showing the prevention of risks

15. The main reason for the improvement and development of the international banks in the global market is due to globalization and growing economy. • International banks break all the regional boundaries and borders in order to maintain a swift and smooth link between customers all around the world. • Galloping phases are seen in big banks enhancing themselves in the global market. • Hence, to retain these banks it requires financial service of international banking which will result in enhancing the demand for international banks and banking.