Question
12.A bank may establish a multinational operation for the reason of growth. The rationale being that a. multinational banks are often not subject to the
12.A bank may establish a multinational operation for the reason of growth. The rationale being that
a. multinational banks are often not subject to the same regulations as domestic banks. There may be reduced need to publish adequate financial information, lack of required deposit insurance and reserve requirements on foreign currency deposits, and the absence of territorial restrictions.
b. growth prospects in a home nation may be limited by a market largely saturated with the services offered by domestic banks.
c. by maintaining foreign branches and foreign currency balances, banks may reduce transaction costs and foreign exchange risk on currency conversion if government controls can be circumvented.
d. greater stability of earnings is possible with international diversification. Offsetting business and monetary policy cycles across nations reduces the country-specific risk of any one nation.
15.Eurocurrency
a. is a time deposit of money in an international bank located in a country different from the country that issued the currency.
b. is a demand deposit of money in an international bank located in a country different from the country that issued the currency.
c. is the euro, the common currency of Europe.
d. is either a time deposit of money in an international bank located in a country different from the country that issued the currency or a demand deposit of money in an international bank located in a country different from the country that issued the currency.
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