Saturday, April 4, 2009

international Bank lending (2)

exclusive domestic focus is no longer appropriate . the table presents data on international bank lending . international bank lending .such lending or financing ,which constitutes a loan across country border ,can occur for many reasons ,for example ,domestic banks may lend funds to private firms abroad that wish to undertake real investment projects and that find the domestic banks lending terms to be more favorable than bank lending terms in the firms own countries .Or domestic banks may purchase foreign financial instruments (such as certificates of deposit offered by foreign banks) with excess reserve in order to earn a higher return than is available domestically on comparable instruments .
Or foreign banks may borrow fund from domestic banks to obtain domestic currency working balances to meet various needs of their (the foreign banks) customer .

No comments:

Followers