International Banking Regulation

International Banking Regulation- Basel III is a collection of international banking regulations produced by the Bank for International Settlements to improve security in the international financial system. The Basel III regulations are created to reduce loss to the economy by banks that take on excess risk.

The objectives of examining international activities are largely the same as those of examining domestic activities. However, the specialized nature of international banking may require modification of some examination activities due to different accounting procedures, documentation requirements, or laws and regulations. For example, access to information at foreign branches varies according to foreign laws governing such access and the FDIC’s relationships with foreign supervisors. The examination of international activities is usually conducted concurrently with the risk management examination. The scope of the examination and staffing requirements should be established during pre-examination planning. Prior examination reports will usually indicate the existence of an international department, identify foreign branches or subsidiaries, and discuss the type and the volume of international activities. 

Due to the increased globalization of international markets and competition from non-bank intermediaries, U.S. banks have become less involved in trade finance and more involved in direct loans to foreign banks, participation in syndicated credit facilities, and loans to individuals and foreign businesses.

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