Briefly discuss some of the services that international banks provide their customers and the market place.
Answer: International banks can be categorized by the types of services they offer that differentiate them from domestic banks. Primary, international banks make easy the imports and exports of their clients by arranging trade financing. In addition, they serve their clients by arranging for foreign exchange essential to conduct cross-border transactions and make foreign investments and by helping in hedging exchange rate risk in foreign currency receivables and payables by forward and options contracts. As international banks have established trading facilities, they usually trade foreign exchange products for their own account.
Two main distinguishing features among domestic banks and international banks are the sorts of deposits they accept and the loans and investments they make. Large international banks both the lend and borrow in the Eurocurrency market. Furthermore, depending on the regulations of the country where it operates and its organizational type, an international bank might contribute in the underwriting of Eurobonds and foreign bonds. In the United States, only investment banks and the investment banking operations of bank holding companies are permitted to participate in the underwriting of international bonds.
International banks often offer consulting services and advice to their clients in the areas of interest rate, exchange hedging strategies and currency swap financing, and international cash management services. Not all international banks offer all services. Banks that do offer a majority of these services are termed as universal banks or full service banks.