INTERNATIONAL BANKS
INTERNATIONAL BANKS
An essential aspect of the growth of international business has been the increase in international banking services. Firms would have been unable to expand as they have without the timely flow of money and other resources provided by the international banks. Not only do banks facilitate the flow of existing corporate resources, they also provide debt financing from local and international markets. A Canadian bank, for example, could loan funds to a Canadian corporation that is attempting to acquire a U.S. business, or it could provide that financing through the Eurodollar market. Because of the entrance of commercial banks into investment-banking activities and vice-versa, it is difficult to separate commercial banks from other financial-services firms. However, these latter firms, such as Goldman Sachs and Nomura Securities, will be discussed after the section on banking.
Leading World Commercial Banks
U.S. MNEs are among the world's largest, but U.S. banks are not. Table 9.3 illustrates that the only U.S. bank in the top ten in 1988 was Citicorp, which ranked third, but even it was not on the top-ten list in 1989. The top-ten was
dominated by the Japanese in both years. Prior to 1988 The Banker ranked banks according to asset size, but in 1988 it shifted to capital, consistent with the recommendations by the Bank for International Settlements. According
to the new BIS requirements, banks doing cross-border business must have capital equal to at least 8 percent of their assets by March 1993. The definition of capital includes permanent shareholders' equity and disclosed reserves.
The strong emergence of the Japanese banks is startling. Using the old asset measurement to rank order international banks, there was only one Japanese bank in the entire list in 1980, and it was number ten; that same bank was first in the world in 1987. In 1980 Citicorp was number one, Credit Agricole was number three, and Banque Nationale de Paris was number four. In terms of asset size, the Japanese would still hold seven of the top ten places in 1989, with the other three going to Credit Agricole (seven), Banque Nationale de Paris (eight), and Citicorp (ten). The strength of the yen and Japan's large trade surpluses have boosted the power of Japanese banks worldwide.
Table 9.4 shows the country representation of most of the top banks in the world in 1989. It is interesting to note how many of the largest 1000 banks are in the United States, even though they don't rank in the top ten in terms of capital. In fact, Citicorp is the only U.S. bank in the top 25 in the world.
An essential aspect of the growth of international business has been the increase in international banking services. Firms would have been unable to expand as they have without the timely flow of money and other resources provided by the international banks. Not only do banks facilitate the flow of existing corporate resources, they also provide debt financing from local and international markets. A Canadian bank, for example, could loan funds to a Canadian corporation that is attempting to acquire a U.S. business, or it could provide that financing through the Eurodollar market. Because of the entrance of commercial banks into investment-banking activities and vice-versa, it is difficult to separate commercial banks from other financial-services firms. However, these latter firms, such as Goldman Sachs and Nomura Securities, will be discussed after the section on banking.
Leading World Commercial Banks
U.S. MNEs are among the world's largest, but U.S. banks are not. Table 9.3 illustrates that the only U.S. bank in the top ten in 1988 was Citicorp, which ranked third, but even it was not on the top-ten list in 1989. The top-ten was
dominated by the Japanese in both years. Prior to 1988 The Banker ranked banks according to asset size, but in 1988 it shifted to capital, consistent with the recommendations by the Bank for International Settlements. According
to the new BIS requirements, banks doing cross-border business must have capital equal to at least 8 percent of their assets by March 1993. The definition of capital includes permanent shareholders' equity and disclosed reserves.
The strong emergence of the Japanese banks is startling. Using the old asset measurement to rank order international banks, there was only one Japanese bank in the entire list in 1980, and it was number ten; that same bank was first in the world in 1987. In 1980 Citicorp was number one, Credit Agricole was number three, and Banque Nationale de Paris was number four. In terms of asset size, the Japanese would still hold seven of the top ten places in 1989, with the other three going to Credit Agricole (seven), Banque Nationale de Paris (eight), and Citicorp (ten). The strength of the yen and Japan's large trade surpluses have boosted the power of Japanese banks worldwide.
Table 9.4 shows the country representation of most of the top banks in the world in 1989. It is interesting to note how many of the largest 1000 banks are in the United States, even though they don't rank in the top ten in terms of capital. In fact, Citicorp is the only U.S. bank in the top 25 in the world.
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