Chapter 6 : Issues in International Banking (Islamic Banking Issues…
: Issues in International Banking
International Banking Evolvement
The foreigner bank decides its presence in the participial capital of the bank in the other country.
The consortium bank is a common MNC in the form of joint venture with shareholders from two or more banks of different nationalities.
Off Shore Banking
The bank is installed in a foreigner country, in order to provide services not to residents of the local country.
The banking and financial institutions include themselves organically in the financial system of the country where they are located.
Asian Financial Crisis
Firstly,sudden shifts in market expectations and confidence were the key sources of the the initial financial turmoil, its propagation over time and regional contagion.
According to the other view, the crisis reflected structural and policy distortions in the countries of the Asian region.
Secondly, fundamental imbalances caused the currency and financial crisis in 1997. Once the crisis started, market overreaction and hearding caused the plunge of exchange rates, asset prices economic activity to be more severe than warranted by the initial weak economic conditions.
The Root of the Asian Crisis
Explain the multifaceted evidence on the structure of incentives under which the corporate and financial sectors operate in the region.
The root focus is in the context of regulatory inadequacies and close relations between public and private banking and financial institutions.
Mid2007 - many experts believed that the crisi would be contained within the arena of mortgage issuers who had overload on subprime loans.
Subprime loans referred to as near-prime,non-prime and second-chance lending
Roots of The Subprime Crisis
Historically Low Interest Rates
Housing Market Collection
The Rise of Subprime Lending
Declining Risk Premiums
Islamic Banking Issues
Vocabulary of Islamic Banking
Modul Operandi of Financial Instruments and Documentation
Pricing Formulas for Islamic Financial Products
Training of Banking Professional
Shariah Audit instead of Reliance on Shariah Supervision
Finance Gap between Islamic Banks and Small Medium Enterprise