What is Global Banking?

According to Hongkong and Shanghai Banking Corporation Global Banking and Markets
focuses on building partnerships with our corporate, government and institutional clients to
help them achieve consistent, long-term performance. We use the strength of HSBC’s
international network to connect emerging and mature markets, covering key growth areas.
Our products and services include advisory, financing, prime services, research and
analysis, securities services, trading and sales, and transaction banking.
Who are what organization needs Global Banking?

 Consumers
 Multinational
 Corporation
 Individual
 Institution investor
 Financial intermediaries
What are the function of Global Banking?

 Separate Books
o One of the main reasons for the establishment of IBFs was to eliminate the
transactional pricing advantages of offshore euro dollar-denominated
banks, as opposed to the conduct of the same transactions at United
States-based banks. The IBF regulations allow existing U.S. banks to set-
up separate branch books for foreign transactions without having to incur
the costs of providing reserve requirements, Federal Deposit Insurance
Corporation (FDIC) insurance, assessments and interest rate ceilings.
These cost-saving measures that were enjoyed by off-shore banks helped
to attract euro dollars to the U.S. from branches of U.S. banks located in
the Caribbean, as well as from other institutions. Furthermore, some states
have granted special tax treatment for the operating profits of IBFs. For
example, in Florida, IBFs are entirely exempt from state taxes.
 Loan and Deposits
o The main functions of an IBF are to take deposits and make loans to non -
resident persons, entities and banks. In order to insure that IBFs are not
competing with domestic markets, the initial maturity for deposits taken
must be at least two working days, which prevents IBFs from establishing
checking accounts. The minimum transaction with an IBF must be
$100,000 unless interest is being withdrawn or an account is being closed.
Furthermore, IBFs may not offer negotiable instruments, such as
certificates of deposit, because they would directly compete with U.S.
markets. Deposits and loans must also not be related to the non-resident's
domestic activities, such as the financing of a factory in the U.S.
 Interbank Activities
o IBFs that need to borrow money in order to make loans or lend money
because of excess deposits use the interbank markets. They are allowed to
conduct transactions with foreign banks, other IBFs and their parent bank.
The same limitation rules apply to interbank activities as outlined above for
loans and deposits. However, IBF transactions tend to be quite large and
the IBF interbank market helps to reduce exchange and interest rate risk by
the conduct of swap transactions. For example, if the maturity of a large
loan is nine months from now, but the books of the IBF do not contain a
matching nine-month deposit at an appropriate interest rate, the IBF will
swap one of its deposits with another IBF or foreign bank that has a
matching maturity and appropriate interest rate, thereby helping to insure
that the loan is properly covered.