A regional bank has decided to
open an office overseas for serving those businesses that are expanding
internationally. Choose a country with a large financial center that you
believe would be helpful to your customer base.
·
Discuss some of the challenges
you may face in this new environment.
o
What are the cultural, ethnic,
social, and educational characteristics?
·
Describe the political and
legal systems.
·
How much does the government
intervene in the private sector?
o
How will that affect your
financial institution?
·
What type of economic system
does it have?
o
What is the history of that
economic system?
·
How is the country involved in
international trade?
o
How does the government get
involved in trade issues?
o
Will that help or hurt your
financial institution?
·
Will your presence in this
country be helpful in your attempts to invest in other developing countries?
·
Is this country involved in
any regional integration efforts? How so?
·
Why did you choose this
location for your bank?
·
As a manager, what would be
your overall assessment about whether you want to pursue opening an office
there?
o
Are the financial risks worth
taking?
o
Will it be beneficial to all
of the stakeholders?
In pursuing this, what type of presence do you
think would be best suited to your objectives?
·
How should the plant be
financed?
·
Should they hedge foreign
exchange or something else? Explain.
·
Identify 3 foreign exchange
instruments you would recommend?
·
What, if any, government
regulations that would affect earnings and cash flow should they be aware of?
·
Include the need to be aware
of inflation and interest rates and how it affects exchange rates.
·
Keep in mind that the country
that the plant is in does not necessarily have to be where the financing is
done.
·
References
