Business Administration 4440Q/R/S/T Study Guide - Federal Reserve Act, Eurodollar, Correspondent Account

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Questions: briefly discuss some of the services that international banks provide their customers and the market place. Answer: international banks can be characterized by the types of services they provide that distinguish them from domestic banks. Foremost, international banks facilitate the imports and exports of their clients by arranging trade financing. They also serve their clients by arranging for foreign exchange necessary to conduct cross-border transactions and make foreign investments and by assisting in hedging exchange rate risk in foreign currency receivables and payables through forward and options contracts. Since international banks have established trading facilities, they generally trade foreign exchange products for their own account. Two major distinguishing features between domestic banks and international banks are the types of deposits they accept and the loans and investments they make. Large international banks both borrow and lend in the eurocurrency market.