international bank regulation

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1、InternationalBankRegulationShwetambariHeblikarKyleBriggsBankFailureWhenunabletomeetitsobligationstoitsdepositorsLoansnotrepaid,Liquidity,Assets/Liabilitiesunbalanced,ect.“Runonthebank”(Depositorswithdrawfrombank)AssetsbelievedtodeclineinvalueEvenifassetsaresound,negativ

2、eexpectationsmayleadtofinancialpanicsEffectstravelthroughfinancialsystemOnebank’sproblemsmayeasilyspreadtosounderbanksConsequencesofBankFailureBankriskvssocialriskAbankcanaffordahigherlevelofriskthansocietycanaffordBankscanpassrisktootherbanksforapriceandsoonUltimately,

3、societymustpaythepriceofriskSub-primeMortgagecrisis2007UnregulatednatureofglobalbankingleavestheworldfinancialsystemvulnerabletobankfailuresonamassivescaleGreatDepressionManyoftheprecautionarybankregulationmeasurestakenbygovernmentstodayareadirectresultoftheircountries’

4、experiencesduringtheGreatDepressionU.S.SafeguardsDepositinsurance(FDIC)Lossesupto$250,000MemberbanksrequiredtomakecontributionstocovercostsReserverequirements(Fed)CapitalrequirementsandassetrestrictionsMinimumrequiredlevelsofcapitaltoreduceriskoffailureBankexamination(F

5、ed,FDIC,OfficeoftheComptroller)Lenderoflastresort(Fed)BorrowfromFed’sdiscountwindowInternationalBanksAninternationalbankisafinancialentitythatoffersavarietyoffinancialservicessuchaspaymentaccountsandlendingopportunitiestoforeignclients.Additionally,Internationalbankssho

6、uldalsobeabletoofferinformationonthefollowingvalueaddedtradeproductsandservicessuchasPrepaymentandstructuredpre-exportfacilities,exportreceivablesfinancing,governmentbackedinsuranceandguaranteeprograms,providingcreditsupportorenhancement,globaltrademanagementandmanymore

7、valueaddedservices.TheneedtoregulateinternationalbanksarisesduetothefactthatanychangeofvarianceofrulesmayresultinconflictingtransactionsInordertohavesupervisorystandardsacrosscountriestheBaselCommitteewasformedBaselCommitteeTheBaselCommitteewasformedbythecentralbankgove

8、rnorsofthegroupoftencountriesattheendof1974.Itsobjectiveistoenhanceunderstandingofkeysupervisoryissuesandimpro