international finance 120181-1165 international banking

International finance 120181-1165

International banking


Lecture outline

International banking as a part of the IMS

International banking market

Supervision in international banking



International banks

International financial organisations

Central banks

International financial institutions



Banks servicing international trade

Interbank financial settlements system

Financing international trade


International banking activity

Interbank loans and deposits

Financing international transactions

Issuance od eurobonds

Consortium credit

Servicing eurocurrency markets

Managing international asset portfolios


The international banking market

A part of the international financial market

Participants

Finacial centres


International banking centres

Number of foreign banks

Share of foreign currency transactions

Share of non-residents


International banking centres

Onshore centres

Offshore centres

Onshore offshore centres


The international banking market

Forms of activity on the market International banking activity

American international banking

The globalisation of financial markets and

international banking


Forms of activity on the market

Correspondent banks

Representative offices

Subsidiaries and branches

Shell branches



Intesive activity on the offshore markets

International Banking Facilities- 1981

An enclave of the American banking

market



The dominance of American international

banking in the sector

Limitations to the banking activity

Limitation of foreign transactions

financing



Edge Act- 1916

Edge Act corporations

Eclectic intitutions


International banking and the globalisation of financial markets

Changing the activity profile of the banks

Deregulation

Technological progress

Innovations

Competitive pressure



Banking regulation vs. protection

Capital concentration oligopolistic

structure

Competing through „sevices quality”



Deposit guarantees

Lender of last resort

Subventions

Too big to fail



New services

The competition of investment funds

Shrinking area of banking activity

New banking strategies



Decrease of intermediation

Product diversification

New areas for banking activity



Banking corporations

Securitisation

Investment banking



Internationalisation of banks

International banking stategies

New risk management techniques


International banking supervision

The goals: Ensuring safe and effective payment settlements

Risk minimalisation

Ensuring international financial system stability



Environment of the regulation: Financial markets globalisation

Non-banking institutions

Banking crises



The Basel Comitee

Recommendations International banking supervision

Minimum prudential criteria



Basel I - 1988

Basel II- 2004

Basel III- work in progress


Basel I

Banking supervision- international responsibility

Information exchange

The Cook indicator


Basel II

Risk diversification

Operational vs. credit risk

Limiting regulatory arbitrage


Basel II

3 pillars minimum equity requirements

improvement of supervisory tools

market disciplne


Basel II

The fiancial crisis 2008-2009

Frequent appliance of leverages

Securitised vs. notsecuritised products

Stressed value-at-risk


Basel III

Increase of capital requirements

Common equity

Leverage indicator

Anticyclical equity buffer

Default risk limitation

Short term and medium term liquidity indicators


Basel III

The too big to fail problem solved???

Banking liquidity

Preventing future crises???


Basel III

Anticyclical regulations

The euro-area- specific conditions

Anticyclical regulations instead of

anticyclical monetary policy


Regulation in respective countries

USA

EU countries


International banking regulation difficulties

Offshore banking

No deposit guarantees

No minimum reserve requirements

Diffuculties in supervision

Lender of last resort???


International banking regulation difficulties

National regulations

Emerging markets

International non-banking institutions


Summing up

International bankin as a part of the IMS

International banking activities

Specific role of the American international

banking

Financial markets globalisation


Summing up

The Basel Committee

Risk diversification

Changes of the regulations brought by the

financial crisis 2007-2009


References

E. Chrabonszczewska, L. Oręziak, Międzynardowe rynki

finansowe, Oficyna Wydawnicza SGH, Warszawa 2000, P. Krugman, M.Obstfeld, International economics: theory and

policy, Pearson, Addison Wesley, Boston 2009, K. Lutkowski, Finanse międzynarodowe. Zarys problematyki.,

PWN, Warszawa, 2007,

International framework for liquidity risk measurement, standards

and monitoring, Basel Committee on Banking Supervision, BIS,

2010

Strengthening the resilience of the banking sector, Basel

Committee on Banking Supervision, BIS, 2009.

international finance 120181-1165 international banking

Documents

failinternational finance

ims banks

activity profile

resort subventions

sector limitations