INTERNATIONAL BANKING

International Banking

INTERNATIONAL BANKING

Question One:

What is the impact of government financial regulation on the development of international banking? Illustrate your points by relevant examples.

For the purpose of understanding the role of governmental financial institutions, we can easily look around for evidences and evidentiary support to prove the claim that the sovereign authority of making significant changes and amending the expansion or contraction of circulation of money within the economy and the country rest with the government alone. Each country has been identified and vested with a government that caters all areas and avenues of making significant progress in terms of making viable changes and support the claim for making progress in the overall financial stability in the country.

To begin with, let us begin with the key trend that has been witnessed in recent times. With almost 39 years of independence and with a strict policy implementation of the notion, 'come one hour early and leave one hour late', the Chinese market has grown significantly, outdoing major corporations (Nokia shut down its first ever mobile producing facility in Finland due to Chinese operations and manufacturing) and putting all other firms and producing facilities out of order. According to statistics intend by Ernst and Young, China and Brazil account for almost 2/3rd of the global capital. This means that in a few years time it will become the largest global enterprise around the world to have and hold the world's economy in its hands. Predictions that have been made by the world's finest financial managers, research analysts and projectors have suggested that the growth of the Chinese economy will undoubtedly tarnish and strip the economy of the U.S. if the rates continue to escalate and that a consistent speed is maintained. (Aaker, 2000, 8)

Second, the cost of compliance and lower cost margins has also greatly changed the focus of many organizations to the extent that they have molded their actual reason of existence. With the rising competition on a domestic and international platform, companies and organization have changed their focus from quantitative to qualitative approach, which is, truly and effectively catering and adhering to the needs, wants and demands of current and potential customers present in the target market respectively.

Next, another major trend that has been witnessed is the diversification of the clients that are being catered. What this means that companies are now aiming and attempting the accounts of servicing their portfolio of clients that shall help them gain more market on an international level and platform accordingly. Customers today are more fragmented than ever before, and banks which are quick to respond benefit from the changing demographics. For instance, banks have now started to make effective contributions towards implementing Islamic Shariah board of rules on accounts of customers and broaden their base in terms of client servicing respectively.

Fourth in line comes e-commerce and e-trade. This trend has seriously improved the entire situation of meeting customer demands but at the same time has seriously hampered the 'human connection' ...