Tuesday, April 2, 2019
Study and Overview of Multinational Banking
Study and Over glance of Multinational BankingIntroductionBanks train everlastingly been a subject field of great discussion as well as great importance. The Banks have been an integral smash of the totally preservation of the realm and hence add greater value to its existence. However, the away suggests that the banks have broken in their domestic shackles and entered unlike markets in opposed countries. Global banking has thus emerged as single the near important and biggest diligence in the world. This was primarily because of the assessments do by bank management on the product and profits associated with world(prenominal)ization. In the current scenario, almost e very(prenominal) bank internationalizes its operation sooner or later and hence steels it yet more than important to understand the associated concepts in globalization policy. The explore is to propose a well scrutinized description of its determinants and risks associated with it. A further empha sis is burstn in regards to the risks of transnational banking as the medieval decades have experienced a lot of banking crises which mevery regard as an adverse effect created by diversification of banks. Studies in the past have more been on the FDI made by Multinational corporations in pot effort however less has been written about FDI in banking industry even though they have been neck and neck with the other industries in terms of globalization with banks such as HSBC, ICICI, JP Morgan, Citibank, Royal Bank of Scotland and Barclays art g whollyery the way.The massive banking industry makes it very difficult to conduct a screw study of all its aspects and hence the gravestone aspects of its globalization have been considered and look fored.The link of the author in a enquiry cerebrate to the study of international banking is ca employ because of the following reasonsFirstly, banking industry has been a come a hide sector in the prudence of any country and the succe ss of a country has at quantify also depended on the hold outing of its banks.Secondly, the author has immense interest in the banking field and has always been fascinated by the activities and operations of banks across the globe.Lastly, the in the flesh(predicate) interests of the author in the globalization field as how and when have firms entered overseas markets. Hence, the investigation of cross country banking industry has made the study very appealingThe primary objective of this study is to investigate and highlight the determinants for the growth of transnational banks and to develop an integrated approach to beg off the phenomenon of multi nationalization of the banking industry. Also, to mingled the risk associated with multi nationalizing of banking operations. The primary consideration underlying the study is the fact that most of the explore and resulting hypothesis argon confined to manufacturing and extractive industries. Indeed, lack of empirical studies on international banking was also highlighted by Aliber (1984) in the only survey of the books on this subject.The following are the specific questions that have been dealt and explained in the look into studyWhat are the key determinants behind a bank opting for globalization of its activities? wherefore do some banks and not others adopt this policy?Why is foreign rather than domestic operation advantageous in fortune foreign markets?What are the risks associated with globalizing of banking activities?What are the key considerations in terms of which server country to invest and globalize activities in?The research strategy, object and methodology provide the reader with an in depth view into the framework of the research process undertaken for this study. A separate section has been created called Research Methodology which analyses all the various techniques used in the research such as a research design, difference between the various types of research and the ethod adopte d. Also, it highlights the sample used for conducting the primary research and also the research method adopted to learn the primary info. The primary data to brief it up has been collected by dint of a qualitative in depth interview covering a sample of five management level interviewees from banks of UK as well .This chapter starts of with the substance of the commencement of the study highlighting the key reasons behind the selection of the topic and includes a background to the study as well as the person-to-person interests of the researcher which further motivated the specific research. Also, the chapter lays down the aims and objectives of the research with a brief introduction to all chapters included in the study.This chapter has been further dual-lane into two chapters. Chapter 2A stresses on the multinational banking industry as a whole and lays down the translations and the key characteristics of international banking. Also, it highlights the various entry method o ptions for sale to a bank in entering specific foreign markets. Chapter 2B indeed emphasizes on the growth of this industry and reasons behind its outburst. Determinants and risks associated with global banking are discussed in the next section. The chapter ends with a schematic conceptual model developed by the researcher to diagrammatically explain the multinational banking phenomenon.This chapter has been prepared to give cleverness to the way the whole research has been conducted. The chapter starts of with a strategy of adopting the form of research design and then follows a pattern of discussing, differentiating and selecting among the various options available in conducting the research such as qualitative or quantitative, primary or secondlyary, questionnaire or interview. The chapter then lays down the difficulties faced by the researcher in his research.Before this chapter, the research has been primarily been related to collecting secondary data from literature resour ces and primary data from the sample selected for the survey. However, this chapter deals with the analysis and interpretations of the collected data. Hence, the chapter becomes even more important for the correct interpretation of all the data collected. This chapter has been shared into several sections putting light into all aspects discussed in the research method. Also, this chapter explains the nurture collected from the survey which is then compared and contradicted with the literature. This chapter then explains the conceptual model shown in the literature review chapter.The chapter summarizes the whole research process by pose down the key findings. It further highlights the answers suggested in the study for the aims and objectives laid in the introduction. The chapter further suggests how this study could be used in the banking field and how this research could be enhanced by the future researchers. To conclude the researcher expresses fewer recommendations to the man agement in the way the globalization of banking is conducted in the modern era.The key contents of the study have been laid down in this chapter to give an idea of what the study has been conducted for. The aims and objectives of the research have been briefly explained. Also, the research has been more of a personal interest as the study topic has been gripping for the researcher. The second chapter now focuses on the literature in the field of global banking highlighting the key findings and views made by the early researchers.LITERATURE reexaminationIntroduction to Multinational BankingThis chapter explores critically the literature that has surrounded multinational banking for the past few decades. The literature has been divided into 2 parts. The first part (A) explores the multinational industry as a whole with a detailed explanation of its key characteristics and the modes of entry a bank good deal apply for it globalization. Whereas, part (B) highlights the background an d the growth of multinational banking as a major industry in the world business followed by a scrutiny of its key determinations and risks.Concept of Multinational BankingThis chapter emphasizes on the concept Multinational Banking and the various aspects related with it. The chapter is divided into four sections to make it simple and clear. The chapter begins with the basic meaning and definition of a multinational bank and the types of multinational banks. The second Section then highlights the key characteristics of MNB. The modes of entries for a MNB are then discussed illustrating the various ways in which a bank washbowl internationalize. The chapter finishes with the concluding comments in fifth section. interpretation of a Multinational Bank (MNB)Multinational banking involves the ownership of banking facilities in one country by the citizens of another Baker and Bradford (1974), Baum (1974), Lees (1974 and 1976) and Robinson (1972). The definition of a MNB is subject to an graze of interpretations and is also used interchangeably with terms such as internationalistic Bank or Transnational Bank. Broadly, a multinational bank female genitals be sort out as an institution done correspondent relationship, foreign direct investment or direct lending to customers from home offices that engages into cross country banking. In many instances, however, multinational bank is used to bear on to a bank with physical presence outside its home country through a branch, an agency, a wholly or a volume owned subsidiary, or a bank formed by merger of two or more banks based in different countries and not the ones with a correspondent relationship or a representative office. Robinson (1972) outlined Multinational banking as operating a bank in, and conducting banking operations that benefit from, many different countries and national systems. A multinational bank can be compared to a multinational company and can be classified as a financial multinational corp oration as they enthral similar advantages and disadvantages in master of ceremonies country. However, this theory can only be applied to commercial bank that engages in local banking activities in the host country and hence competes with the native banks. Whereas, a Multinational corporation can little be compared with the bank that operates in the super national markets such as Euromarkets as they do not compete with the local endemical banks. (M.K Levis 1987).H. G Grubel (1977) was one of the first authors who offered a prevalent theory to explain the existence of multinational banking. He argued that MNB had three different types, which needed different explanations. The first was the multinational retail banking, which entered foreign markets to serve local customers through the same local deposits and loans facilities as domestic banks in the host countries. The second category was the multinational service banking, which consisted of banks servicing the requirements of cor porate clients and expatriates from its home economy in foreign markets. Lastly, the multinational wholesale banking, it involves taking large deposits, and the devising of large loans and investment. It is worth mentioning that Hoschkas (1993) similar definition of a multinational financial services corporation (MFSC) is confined to firms that provide banking services. In his view the fact of possession of a representative office in a given country does not imply that the owner of this office whitethorn be called an MFSC, as it merely serve a liaison function for a parent firm but cannot actively operate in the host market. However, the definition the researcher has used for the multinational bank is of any bank which internationalizes it operation. (Jones. G)After we have discussed the related literature on multinational banking in the chapter two, this chapter discusses in depth the research strategy, design process and the methodology used for investigation. It provides the rea der with an insight into the various methods and techniques used for this study. The main discussed issues are based on the proposed stages of the research process by Antonio as shown in the table belowProblem Discovery and DefinitionResearch designSamplingData collectionData processing and analysis inferenceThe stages of the research processAntonio Exploring Marketing Research, USA The Dryden PressProblem uncovering and definitionThe formulation of the problem is often more essential than the solution. Albert Einstein. gibe to Malhotra and Birks (2003), problem definition can be defined as the the general problem and the identification of the specific components of the marketing research problem. Problem breakthrough and definition is regarded as the primary method in any research and also one of the most important. Therefore, it is very important to understand the nature, mount and limitations of the problem in order to avoid any misinterpretation and to make it understandable to marketing decision makers and marketing researchers.