SEPTEMBER 2015 & OCTOBER 2016
a) The history of international banking can be viewed as the progress in business practices., technology and regulations. Its evolution can be seen in two different phases or periods of time. Briefly discuss the two(2) evolution phases of international banking.
Can be discussed in two different phases which is Colonial Banking and Modern Banking.
Nature of colonial banking consisted mostly of holding deposits and making loans.
Holy venues like religious temple used and served as banks as they often have treasuries and valuable items.
ii)Modern International Banking
Can be explained in three forms which is first, second, and third wave.
• First wave
Started in 1830, spurred by underwriting securities activities performed in second half of 19th century by J. P. Morgan, Lehman Brother and Goldmaan Sachs.
Sold underwritten securities in London to European investor.
• Second wave
Started in 196, mainly related to international banking transactions among developed country.
Emergence between US as key economic power and growth of Foreign Direct Investment (FDI) through MNC took place.
• Third wave
End 1990, International Baking denominated by large banking and financial institutions from US, Japan, Germany.
Formed through consolidation within national frontiers, cross border M&A and ongoing shift to universal banking.