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CHAPTER 1 : INTRODUCTION TO INTERNATIONAL BANKING (Factors (:lock:…

- - - - Define:
        -Liberalization gone in hand with a steady increase in economic integration at the global level
        -This process have shown that the efficiency of bank in these countries has generally increased.
      - Example:
        Liberalization in India showed an increase in banking efficiency
    - - Define:
        Given opportunities for the international transfer of best practices in banking & for a more efficient use of resources
      - Types of integration
        : :check:Social integration
        :check:Racial integration
        :check:Economic integration
        :check:Educational integration
        :check:Horizontal integration
    - - Define:
        -Process of international connection/engagement arising from the interchange of world view, product and ideas
      - Major factor in globalization:
        -Telecommunication
        -Transportation
        -Facilities & infrastructure
        -Rise usage internet/WiFi
- - - - Its started in the 1830 and spurred by the underwriting securities activities performed in the second half of the 19 century by J.P Morgan, Lehman Brothers and Goldman sachs.
      - • These big campanies sold the underwritten securities in London to European investors
      - • The expansion of bank in overseas during the first half of the 20 century was slightly limited.
      - •This was due to the decline of British and its colonial empires.
      - • Economic uncertainty brought about by the world wars, and the changing in political, views in many countries has restricted the rivalries coming from foreign countries in order to establish their own banking systems.
    - - starting in 1960s and lasting three decades, was mainly related to international banking transactions among developed countries
      - was the emergence of the US as a key economic power and the growth of their foreign direct investments (FDIs) through MNCs took place
      - this occured when US banks began to expand out of the country to meet the financial requirement of MNCs
      - take advantage of cheaper financing outside the local market and to gain competitive advantage
      - US Bank were subject to limits on their interest payment on the deposits and maintain the reserve requirements as required by Central Bank
    - - The evolution of banking and financial institutions were begun in the 16th century
      - Colonialism- late 8th century consider as the preferred system for the exploitation of lesser developed nations
      - As colonialism developed- became an established corporate governance policy by which governments, especially economically developed ones in Europe, systematically controlled and exploited lesser developed nations
      - The reason why they promote and develop this system :
      - They believed that the profits could be made in two conditions; forced trade and natural resource exploitation
      - Ruling nation assumed to be superior- they supposed to help the people of the colony towards civilization
    - - In 1990s, international banking was denominated by large banking institutions and from specifically large country such as UK, US, and Japan.
      - Major trend was formed through the consolidation within national frontiers, cross-boarder M&A, and the on going shift to universal.
      - Refers to the ability to offer the full range of financial services.
      - Biggest challenge is to invest in R&D, to implement new system or technology and to be entrepreneurs friendly by the islamic banking sector.
      - It was associated with the concentration strategy applied by their branches and subsidiaries which lead to declining.