So, as per latest assessment Citi Private Bank (CPB) was med Best Private Bank for Customer Services and Best Global Brand in Private Banking. CPB was highly commended for Best Private Bank for UHNW clients. Citi has been one of the leading banks in utilising customer feedback, mainly through its ‘voice of the client’ survey, but also through its high-speed digitisation project, where complaints from clients were sought and acted on at every stage of digital development. The Global Private Banking Awards, held in London last Week, now in its 9th year, is firmly established as the world’s most prestigious private banking event with over 125 banks entering from countries around the world.
The Global Are: Fincial Intermediation by Intertiol Banks
Fincial intermediation at the intertiol level involves intermediation similar to the home country’s range of bank and non-bank fincial intermediaries. The intertiol fincial intermediation process is essentially a recycling process and on a global basis one country’s surplus is equal to another country’s deficit. Intertiol banking intermediates world fincial imbalances and maturity preferences.
According to Danièle Nouy, Chairperson of the Supervisory Board of the European Central Bank - Global fincial institutions facilitate trade and investment, create new sources of funding for the economy and improve capital allocation across tions,.
Clearly, the global banking system is a network of interconnected nodes each depicting a specific location. Intertiol banking is the process in which fincial institutions render their services to foreign clients. Intertiol banking involves the transactions relating to the acceptance of deposits and loans anywhere in a currency other than that of the country in which the bank is located.
Though the most talked-about intertiol banks are located in Switzerland. Yet a number of countries have fully developed intertiol banking infrastructures. Many individuals and companies participate in intertiol banking to minimize (or evade) their tax liability. This strategy has certain disadvantages. In addition, several intertiol organizations have made recent efforts to curb the use of intertiol banks as tax havens.
However, a global banking sector poses global risks. Banks can operate intertiolly and set up their operations in different countries for various reasons. But risks remain where the banking business is.
turally, effective measures have to accompany the trend of global expansion. As in the case of other forms of fincial intermediation, intertiol banking is also involved in maturity transformation - this process has been eased with roll-over credits where syndicated loan may be finced by banks borrowing money with a six month maturity. The interest rate risk here in such a maturity mismatch is transferred from the bank to the borrower. This is based on the practice whereby interest rate is reset every six months on the basis of interest rate paid by the bank (LIBOR) on six month money.
Still, specific attention is to be continued to ensure that the risks like sovereign risk, risk arising out of a diversified portfolio held by an intermediary, among others, are maged.
Intertiol banks are capable of tackling the risks, of course in a better manner, especially after the shock received via sub-prime crisis. For example: the Euro-dollar market also lets banks adjust their overall liquidity position in both domestic and foreign currencies. Bank’s constituents are offered forward exchange positions without the banks themselves incurring an undesired open forward position. Basel III journey- a good going!
Not in ICU But Not Out of the Woods Yet
Deteriorating bank profitability is a common phenomenon in most advanced economies, as the prolonged ultra-loose monetary policy has squeezed net interest margins.
The BoJ observes rightly that the low profitability of Japanese banks is “striking from an intertiol perspective”.
Declining trends in long-term interest rates have been a global phenomenon that has been observed in many advanced economies, including Japan, the US and Europe, since the 1990s. Major central banks increasingly have been paying attention to these movements, especially after the global fincial crisis, which, in turn, reflects their concerns about declining potential economic growth – long-run growth prospects – and weaker-than-expected inflation performance.
Obvious enough: the fincial system in Europe is bigger now, relative to its GDP, than before the crisis. It is also more concentrated plus non-banks play a bigger role in it. According to the European Central Bank while capital ratios have increased, non-performing loans remain high in key member states - hampering recovery in the region’s periphery, limiting credit growth and putting fincial stability in jeopardy. Silver lining - economic growth is picking up in these economies. Portugal has been growing above the euro zone average, thanks to stronger exports. The central bank expects GDP to expand by 2.5 percent in 2017, up from 1.5 percent in 2016. This rate is expected to be 0.3 percent higher than the eurozone average. Exports are predicted to outperform consumption and investment in boosting the economy. They should expand by 7.1 percent in 2017, the central bank says, up from 4.1 percent in 2016.
Not to lose sight of - even in developed economies the question of overbanking is coming up. The Bank of Japan has warned the excessive number of bank employees and branches has led to intensified competition among banks and resulted in a decline in profitability. The question remains – will Metro Regions Remain overbanked?
So far the developing block is concerned the going can be located as moderate.
Indian Banking sector, thanks to the continuous attention being received from learned RBI backed by slow but steady reform measures, has been able to keep the head above water. Still growing size of NPA has been causing deep concerns.
Whatever is: the big question is already before us - is Chi at risk of a fincial crisis? Many influential voices believe so, including the Bank for Intertiol Settlements, which recently warned that one of its indicators of banking risk, the credit-to-GDP gap, had now risen to over three times the level it considers a danger sigl.
Still, the world is not stopping – time stays we go out!!
The latest trend is that of open banking. It is an emerging service model that allows customers to share access to their fincial data with non-bank third parties, which can then use that data to provide them with better banking. Some large banks plan to make major investments in open banking initiatives by 2020.
But competition is bound to go north – more intense. There is nothing wrong in it. Economists from Adam Smith to Kenneth Arrow are in favour of competition. A competitive market allocates resources as well as is possible, also foster innovation and thus economic growth. That, it can reasobly be said, is the basic and standard position. So, it can reasobly be concluded that the challenge is how to keep the head above water. It is the positive result-based risk magement backed by speed and stability, which help staying alive on the wicket.
Obvious enough global banking makes it possible for the world economy to function, by being the instrument for transferring money across tiol borders. So, as of now the challenge that hovers: can we avoid another fincial crisis?