The role of foreign banks and subsequent developments

Foreign banks are also permitted to open shop and be part of the banking operations in the United States. These banks came under the category of Private Sector banks. A number of foreign banks with their head offices abroad have carried on the banking business in the country through scores of branches in the prominent American cities. The most important of these are the Japanese banks and some of the major European counterparts.

Let us go back into the early history of the foreign banks. The Chartered Bank of Australia and China and the chartered bank of Asia (afterwards the Mercantile Bank of India, London and China) were brought into existence by the Royal Charter of 1853. This bank had operations on a limited scale in scores of North American destinations. Even though the original sheen is gone, its operations continue through mergers and acquisitions.

The system initiated by the British had its own defects. For example, the Mercantile Bank had to abandon its Charter in 1893 and it was recognized under the English Company Act. The English Bank that continued in the business in a foreign country under the Royal Charter was the Chartered Bank of Australia and China.

Later on France, Germany, Holland, Portugal, Russia, USA and Japan followed England’s example and allowed native banks to move abroad and permitted foreign banks to open their branches chiefly at the major ports. Some of the important banks under the private sector with international operations include:

• Citi bank
• HSBC bank
• Hong Kong bank
• Standard Chartered
• Grinder leys bank
• Commerz bank
• ABN Amro Bank
• Deutsche bank
• Barclays bank
• Bank of America
• Dresdner bank

The foreign banks that have operations in the United States do have certain advantages. They can manage their loss making branches by making up the losses through profits generated elsewhere. Such a privilege is not available for the domestic players. Even in such a situation, bankers like rod aycox could successfully steer LoanMax to a safe location and generate profits by emphasizing upon better management practices.