International Banking and Financial Centers
Abstract
The development of international financial centers (IFCs) has paralleled the rapid expansion of international banking and Eurocurrency activities. During the past decade and a half, the international banking and financial markets have experienced phenomenal growth along with the parallel expansion of IFCs. The size of the Eurocurrency market grew from 4,000 billion by 1987, while the total international assets of all banking institutions rose from 4,800 billion during the same period. Some of the preeminent IFCs are playing a major role in the international financial markets, as demonstrated by the size of their international assets: Bahamas (174 billion), Singapore (130 billion), Bahrain (32 billion). The patterns of Euroborrowing and Eurolending activities in these IFCs have been undergoing major changes. These changes came about as a result of the introduction of the floating exchange rate system in 1973, recent financial deregulation, internationalization of the financial markets, securitization of financial assets and liabilities, and global financial innovations. Since the pioneering work of Kindleberger in 1974 on the formation of financial centers, there has not been a comprehensive study to reflect the recent developments, trends and the mystique that have surrounded the IFCs' functions and operations in the international money and capital markets.
Chapters (14)
In recent years the volume of cross-border international financial flows has risen sharply, dwarfing that of international trade. While the total world trade volume has reached the $4 trillion mark a year, the total cross-border international financial flows are about fifty times as much, estimated at $200 trillion per year. Thus, unlike in earlier decades the engine of growth in international financial flows is no longer the world trading activities but the accelerating momentum of international financial market activities. The huge volume of cross-border financial flows is directly related to the enormous size of the international financial market system. As of the end of 1987 the gross size of the Eurocurrency market was $4.4 trillion, while the total amount of funds raised on international financial markets reached $384 billion in 1987.1
In his first state-of-the-state address of January 1986, Governor of Alaska, Steve Cowper, outlined an economic plan to alleviate a state economy plagued by the persistent fluctuation and uncertainties that have lately engulfed world oil prices. According to the Governor’s plan, the State of Alaska should take positive steps to diversify its energy-based economy and to rid itself of the dangers of relying on oil as the premiere source of state income. Governor Cowper envisioned, among other things, the need for promotion of international trade in Alaska’s natural resources and other products through export credit guarantee facilities that may be offered by the Alaska Industrial Development and Export Authority (AIDEA); establishment of a statewide international trade center that would conduct in-depth marketing studies; establishment of a foreign trade zone in Anchorage; and promotion of the highly promising tourism sector. The institutionalized umbrella under which these promotional needs would be addressed is called “Trade Alaska.” The working blueprint for this promotional and educational organization entails developing a strategy to meet the goal of diversification.
With the dramatic increase in the importance of the Asia-Pacific region as a source of international trade, there has been an explosion of interest in where the financial activity generated by that trade will be located. Those cities which have dominated the international financial marketplace and which are located in the European-Atlantic Region, such as New York and London, seem too detached to service the new center of gravity of international trade. For more political than economic-geographical reasons, there is also doubt about the prospects of Hong Kong and even of Singapore in capturing the new financial business derived from trade emanating in the Pacific Rim. It is for this reason that attention has been turned to cities such as Anchorage and Vancouver to determine if they might stake a position in this arena.
The evolution of major international financial markets represents a captivating study in politics and economics. Some international financial markets assumed prominent roles in the world economy by careful designs capitalizing on some natural advantages which were political, geographic and/or economic. Other financial centers achieved prominence slowly over time without identifiable, explicit policy measures to which the realized success can be, on the whole, directly attributed. Historical developments and sheer economic and political weight brought prominence to certain financial centers.
This paper discusses three intertwined questions. First, what makes Hong Kong an international financial center? Second, how should a prospective borrower approach Hong Kong banks for financing? And, third, to what extent are Hong Kong banks involved in financing energy and natural resources projects?
It started in New York with the abolishing of the fixed commissions in 1975. They called it “May Day.” It later moved to London, and by October 27, 1986, the “fixed commission-single function era” came to an end. They called it “Big Bang.” This has obviously put pressures on other countries and markets in Europe, leading to what can be called “European Bang.” These pressures are being felt increasingly worldwide at present as financial authorities face the choice of either matching the liberal terms elsewhere or seeing business move away, leading to what can be termed as “Global Bang.”
In general, international banking activities may be classified into five areas:
(1)
foreign trade financing, such as issuance of letters of credit for import
(2)
currency exchange, such as buying and selling of foreign currencies — foreign exchange trading
(3)
transfer of funds across national boundary, and foreign currency deposits fall under this heading
(4)
foreign borrowing and lending and,
(5)
foreign investment.
It is accurate to say that before 1976 there were no financial institutions or markets in the People’s Republic of China (PRC), as we understand them in the West. There was only one gigantic bank, the People’s Bank of China (PBC), and numerous small rural credit cooperatives. The PBC served as both a bank for the government and a “commercial bank” for the country. The PBC was established on December 1, 1948, eleven months before the Communist Party came to power. It is, in fact, a ministry-level organization (see Byrd 1983, p. 13). By 1953, all private banks were nationalized, and the PBC became the only bank which had offices throughout the country. Because of government policy, the bank had little to do with the financial markets of the non-communist world. Since 1976, under the program of financial reform which was stimulated by the “four-modernization” policy, a variety of financial institutions and instruments have been gradually developed. However, the PRC’s financial system, to date, still can be characterized as primitive according to western standards.
The purpose of this paper is to evaluate the costs and benefits of offshore banking operations. Specifically the objective of the paper is to assess the impact of offshore banking on the economic development of primary international banking centers such as New York, Montreal, and Vancouver, as well as secondary centers such as Singapore, Hong Kong, and Panama.
Offshore banking centers (OBCs) have developed during the last few decades to the point where they have come to play a major role in the innovative world of international finance. This phenomenal growth can be attributed to several factors: the restrictive policies and regulatory procedures in banking in some industrial developed countries, expansion of international trade, impact of the recycling of petrodollars and the borrowing requirements of developing countries. These phenomena, combined with a telecommunications revolution which enables banking institutions to access large quantities of current financial information and to disseminate it via a global network, have accelerated the growth of the OBCs. In turn, this OBC expansion has contributed to the development of world finance and the world economy in a number of ways.
The unabated fluctuation of oil prices in the world markets and their drastic decline since 1985 has prompted the state of Alaska, and other states whose economies rely primarily on oil, to look more seriously into the possibilities of diversifying the sources of their income. One possibility is to consider the establishment of an international financial center (IFC) in Anchorage, the largest city in Alaska. The proposed center would function as an interbank market, comprised of foreign and local financial institutions, in which short-term, medium-term and long-term international lending and borrowing—for purposes of investment, financing, hedging, and speculation—denominated in Eurocurrencies are consummated. Lenders and borrowers would include multinational corporations, banks, and governments.
Should the government establish an offshore banking center within its jurisdiction? This question is one which many governments have faced and answered in the affirmative. The number of countries which have established such offshore centers has perhaps given rise to a common perception not only that the benefits must outweigh the costs, but also that the benefits of hosting financial centers are quite substantial. I present a framework here for evaluating the benefits and costs, direct and indirect, of hosting a financial center. At the same time I review the existing evidence to assess the net position and thus the implications for the supply of financial centers. The result is an assessment that, although the benefits are slight, the costs of hosting a center in small countries are often slighter. Thus, we see the frequent creation of such centers in open, island economies.
It is well known that the State of Alaska has experienced severe economic difficulties in recent years. The adverse economic impact on the people of Alaska is exacerbated by the fact that the state used to enjoy bountiful economic growth in the 1970s riding on the crest of the Alaskan oil boom.
In recent years, concern about the continued vitality of the world economy has led some observers to conclude that international financial institutions and markets, as they are presently structured, may not be fully capable of performing the traditional functions of providing:
(1)
Large amounts of capital at relatively cheap rates for borrowers, and
(2)
Safety and liquidity for savers and investors.
... There is evidence that technological innovation, industrial upgrading [1] and human capital can be effective in reducing CEI [18]. However, RDI is associated with technological innovation, industrial upgrading, and human capital [10,13,14,18,19]. Thus, RDI can be effective in reducing CO2 emissions [13]. ...
... The coefficient of the core explanatory variable lnRDI is −0.129 and significant at the 10% level, indicating that RDI has a significant negative effect on CEI, and RDI can effectively reduce CEI [18]. This is similar to the findings of Churchill et al. who concluded that there is a significant relationship between RDI and CEI [19]. Strengthening RDI can attract more talent, purchase advanced equipment and machines, improve the level of technological innovation, and promote economic development while reducing CEI [8]. ...
Among the ways to reduce carbon emission intensity (CEI), increasing the intensity of research and development intensity (RDI) plays an important role in the process. In China, how RDI reduces CEI has attracted widespread attention. Most scholars have not considered spatial effects in the study of the correlation between RDI and CEI; therefore, this paper uses panel data of 30 Chinese provinces from 2007–2019 as a research sample to explore the spatial effects of RDI on CEI using spatial measures, analyzes the regulatory effects of the market and government in the process using the interaction effect model, and explores the role and mediating effects in the process of industrial upgrading, technological innovation and human capital effects using the mediating effect model. The empirical results illustrate that: (1) RDI and CEI have significant positive spatial autocorrelation. The spatial clustering characteristics of CEI have obvious regional differences. (2) RDI reduces the CEI of the local area while it has the same reducing effect on the CEI of the surrounding areas. The conclusion is robust. (3) The market and government play a facilitating role in RDI that affects CEI, but there are regional differences. (4) RDI can indirectly reduce CEI by promoting industrial upgrading, improving technological innovation, and increasing human capital. Finally, according to the research conclusions, the paper put forward policy suggestions: strengthen regional cooperation, guide funds into the research and development field, improve the business environment, promote technological innovation and train relevant talents. The research content and findings of this paper enrich the theories related to the influence of RDI on CEI, and have certain implications for future research on CEI based on spatial perspective.
... Linkage of banking performance and corruption In light of the recent financial crisis, corruption and its effects on the banking industry are vital to investigate (Park and Essayyad, 2012). According to Chen et al. (2015), a study has been done on the impact of corruption on bankers' willingness to take risks. ...
... Leverage and debt maturity ratios can be explained by a country's legal and tax systems, corruption and capital provider preferences (Hu et al., 2019;Treisman, 2000). Park and Essayyad (2012) evaluate the influence of corruption on banking performance in 76 nations and found a positive linkage between corruption and banking performance. ...
Purpose
This study aims to examine the impact of anti-money laundering (AML) regulations on financial inclusion using a comprehensive measure of AML regulations developed by the Basel Institute on Governance. Again, this study investigates the existence of threshold effects in the AML regulations–financial inclusion nexus.
Design/methodology/approach
This study uses panel data across 212 economies (developed, developing and Africa) of the globe-spanning from 2012 to 2019. This study uses the dynamic panel threshold estimation technique proposed by Seo et al. (2019).
Findings
In general, the results indicate that AML regulations promote financial inclusion across the globe. However, AML regulations spur financial inclusion below the threshold of AML regulations, whereas, above the thresholds, AML regulations have damaging effects on financial inclusion. Further, the author finds that AML regulations have a detrimental impact on financial inclusion for developed economies. In contrast, AML regulations promote financial inclusion at all levels of AML regulations for African countries.
Practical implications
The findings of this study imply that countries must make conscious efforts in combating the incidence of money laundering by establishing sound AML regulatory regimes as a means of promoting financial inclusiveness. However, there is a need for regulators to ensure cost-effective and efficient implementation of AML regulations.
Originality/value
The value of this paper is its contribution to literature as it is a major attempt in empirically assessing the impact of AML regulations on financial inclusion. Again, to the best of the author’s knowledge, this is the first study to examine the non-linear relationship between AML regulations and financial inclusion.
... Linkage of banking performance and corruption In light of the recent financial crisis, corruption and its effects on the banking industry are vital to investigate (Park and Essayyad, 2012). According to Chen et al. (2015), a study has been done on the impact of corruption on bankers' willingness to take risks. ...
... Leverage and debt maturity ratios can be explained by a country's legal and tax systems, corruption and capital provider preferences (Hu et al., 2019;Treisman, 2000). Park and Essayyad (2012) evaluate the influence of corruption on banking performance in 76 nations and found a positive linkage between corruption and banking performance. ...
Purpose
This research aims to examine the impact of money laundering (ML) and corruption on the asset quality of conventional and Islamic banks.
Design/methodology/approach
The current study used the data of conventional and Islamic banks of Pakistan from 2012 to 2018. In this study, we used fully modified ordinary least squares, dynamic ordinary least squares and pooled ordinary least square methods to analyze the data.
Findings
The results found that corruption and ML positively affect the conventional banking non-performing loans (NPLs). In contrast, corruption and ML harm the Islamic bank’s loan portfolio quality.
Originality/value
To the best of the authors’ knowledge, the relationship between corruption, ML and NPLs in conventional and Islamic banks of Pakistan are examined for the first time.
Practical Implications
According to the study’s findings, bank authorities should establish an effective method for monitoring loan activities and developing new and innovative products in Islamic banks. Additionally, the Pakistani government needs to improve anti-corruption and anti-ML policies to earn investors’ trust.
... Financial agglomeration appears in the mature financial industry, and the result of agglomeration is the financial center. A large number of financial institutions in the financial agglomeration area are geographically adjacent and share resources and information with each other to reduce costs (Park & Essayyad, 1989). High-intensity financial agglomeration is not only conducive to the development of financial institutions, but also makes investors' funds flow to financiers who can maximize their income, which has a positive effect on the growth of enterprises in the region, and the result of agglomeration is the formation of financial centers (Kindleberger, 1974;Pandit et al., 2002). ...
In the contemporary world, finance is crucial to economy and financial agglomeration has a lasting effect on the economic growth. The areas of financial agglomeration will influence the economy of the local parts throughout agglomeration effect, and have an impact on its spatially related parts. Based on Chinese inter-provincial panel data from 2007 to 2018, this study constructs an indicator system of financial agglomeration and measures provincial agglomeration levels to examine its impact on regional economic growth. The results show that, first, the level of financial agglomeration has a trend of steady change and presents a ladder-decreasing agglomeration pattern. Second, financial agglomeration could effectively promote the economic growth of local and spatially related regions. The development of the financial industry depended more on geographical distance, and the diffusion effect of financial agglomeration in the eastern, central, and western regions are in different stages. Finally, by summarizing the research conclusions, this study put forward some suggestions for China’s regional economic growth.
... Domestic scholars Huang Jieyu and Yang Zaibin (2006) put forward the concept of financial agglomeration earlier, believing that financial agglomeration is a process of financial industry agglomeration in a certain regional space. In terms of the formation motivation of financial agglomeration, the main viewpoints are that the formation of financial agglomeration is caused by economies of scale [2] [3] [4], information flow [5] [6], spatial externality [4], industrial agglomeration [7], economies of scale [8]. In the measurement of financial agglomeration, there are mainly single index method and comprehensive index method. ...
... In China, RDI is an essential 62 part of science and technology finance, and RDI intensity refers to the proportion of 63 R&D expenditure per unit of GDP, which better reflects the importance that Chinese The research structure of this paper is as below. In Section 2, we mainly sort out (Park, 1989). However, RDI, as a part of financial activities, has prominent 91 spatial characteristics. ...
Climate change caused by greenhouse gas emissions has received widespread attention in recent years. In this paper, panel data of 30 Chinese provinces from 2007 to 2019 are used as research samples to explore research and development input (RDI) on carbon emission intensity (CEI). They are using spatial measurement method, interaction effect model, and mediation effect model, this paper studies whether RDI reduces China's CEI. The empirical results illustrate a positive spatial autocorrelation between RDI and CEI. The spatial agglomeration characteristics of CEI have apparent regional differences. RDI can reduce not only the local CEI, but also the CEI of surrounding areas, and the results are robust. The market and government play an important role in RDI that affects CEI, but there are regional differences. At the same time, RDI can indirectly reduce CEI by promoting industrial upgrading, improving technological innovation, and increasing human capital.
... Our last condition is whether a given jurisdiction is an international financial center, which can be defi ned as hubs that attract fi nancial institutions and fl ow from around the world. The reason for selecting this condition is the high trading of foreign currencies in these centers and their capacity to issue bonds in currencies besides their own (Park and Essayyad, 1989). ...
We explore how China's geographically targeted policies impact RMB overseas use individually or in combination. The policies include swap agreements, clearing banks, investment quotas, and direct trading between Chinese renminbi (RMB) and non‐USD currencies. Adopting a fuzzy‐set qualitative comparative analysis and using Bank of International Settlements cross‐country data on foreign exchange markets, we find that institution building has lowered the barriers to international adoption of the RMB. Specifically, for countries economically close to China, high RMB trading is explained by either (i) having a clearing bank in the host market and direct quotations between the RMB and the local currency, or (ii) being a financial center and having access to the Chinese capital market. This combination of policies is explained by the creation of (i) “trading posts” that provide RMB liquidity abroad, and (ii) channels that allow actors to “recycle” offshore RMB funds. We triangulate our results with interviews conducted with senior People's Bank of China officials.
... Through external economics of scale, financial intermediaries can improve the efficiency of collecting and organizing information on various investment opportunities, and allocate funds from less productive projects to more productive ones (Buera et al., 2011). Park and Essayyad (1989) demonstrated that FA can promote information exchange and resource sharing between financial institutions and other related industries and utilize existing network systems and infrastructure to achieve scale economy effects, thereby promoting GD in local and neighboring areas. ...
Financial agglomeration is a key to promoting the green transformation of the global economy and environmental governance. The existing literature mainly analyzes the impact of financial agglomeration on economic development, but rarely examines its comprehensive impact on economic growth and environmental governance concerning spatial spillover effects. Based on the perspective of spatial spillover effects, this paper uses the panel data of 285 cities above the prefecture-level in China to examine the impact and mechanism of financial agglomeration on green development. The results show that: (1) During the study period, financial agglomeration and green development in China are significantly different in directions of spatial distribution and expansion, but the spatial correlation between the two is relatively high. (2) Financial agglomeration can exert significant spatial spillover effects on green development. (3) Financial agglomeration has more obvious positive spatial spillover effects on green development of cities in the servitization stage or with high administrative level. (4) Industrial structure upgrading effect, labor upgrading effect and technological innovation effect are the main paths that financial agglomeration affects green development. The research results can provide a new perspective and approach to promote the green transformation of economy and sustainable development of the world.
... Wu studied the spatial effect of venture capital agglomeration on regional innovation capability [13]. Park & Musa found that in areas with a high level of capital factors agglomeration, this dynamic is conducive to information exchange and resource sharing, which can make more effective use of existing network systems and infrastructure to achieve economies of scale [14]. Wurgler uses the data regarding manufacturing output value and the total investment of 65 countries to confirm that the more developed the capital market is, the higher the efficiency of resource allocation is. ...
The spatial agglomeration of capital factors has become an important force affecting regional economic development and industrial structure. Investigating the spatial relationship of capital factor agglomeration is a key way to accelerate the upgrading of urban industrial structure and realize sustainable development. Based on the panel data of 284 cities in China from 2008 to 2017, we use the theoretical framework of spatial econometrics and estimate the spatial effects of capital factor agglomeration on the upgrading of urban industrial structure. Both the global Moran index and the local Moran scatter chart present that the agglomeration of capital factors and the upgrading index of urban industrial structure shows the characteristics of spatial agglomeration. The results reveal that the agglomeration of capital factors can significantly promote the upgrading of the industrial structure of local and surrounding cities. Still, the spatial spillover effect is not significant. We then explore the possible factors that limit the spatial spillover effects of capital agglomeration. Using the results of the paper, we provide policy suggestions for strengthening urban industrial construction and optimizing the urban governance model.
... Insert table 4 here 6.2 Financial Centre effects In the financial services sector, internationalisation played a critical role in the recent crises, increasing challenges for firms, regulators and investors. There has been an increase in the discussion of International financial centres (see Park and Essayyad, 1989). It is suggested that such centres have unique features, which benefit international banking in general and the borrower country. ...
This article considers the cross-border lending stock from 19 advanced countries as
directed towards 28 European countries using quarterly data for the period 1999-
2014. A "gravity" model is conditioned on distance and mass primarily measured by
GDP as a benchmark adapted to explain the behaviour of cross-border lending stocks.
We focus particularly on the role of EU integration on cross border banking, and
show that there is no role for ‘time zone’ effects. The data permits an analysis of the
effect of financial crises. These are differentiated by type into systemic banking crises
and the Euro debt crisis Our results suggest that well-functioning institutions and EU
Integration have a large effect on cross-border lending. However, there seems to be
little impact from the single currency and from eliminating bilateral exchange rate
volatility. These results are robust to a range of econometric specifications, samples,
and institutional characteristics.
... As shown in Table 3, the overall spatial correlation coefficients of four models are positive and pass the tests at the 1% significance level, indicating that there are positive spatial dependent relationships between the local financial efficiency and the neighboring regions' financial efficiency; that is, the economic activities of geography neighborhood regions or regions with similar level of economic development have obvious spillover effect on local financial efficiency, thereby causing imitation and strategic competition of financial development and innovation among regions. On one hand, the geographical adjacency and similarity of economic development in different regions bring huge convenience to cooperation between financial enterprises, sharing of infrastructure, information exchange and communication, innovation and diffusion of knowledge 8 Discrete Dynamics in Nature and Society and technology, flowing of financial resources among regions, which causes regional financial development and innovation, and imitation and strategic competition among regions [37]; on the other hand, the restriction of transportation cost on financial sector is not strong and the rapid development of internet technology leads to cross-regional financial transactions and innovation, thus further expanding the clustering effect, effect of economic scale, and spatial spillover effects of financial development. The coefficients of lag item (fe -1 ) of financial efficiency in DSDM models are positive, and they are, respectively, 0.211 and 0.212; both of them pass the tests at the 1% significance level, indicating that the previous inputs and outputs of production will be present through the financial efficiency increasing in later stage (or later period), and financial efficiency increasing is a dynamic systemic process. ...
Based on panel data covering the period from 2003 to 2012 in China’s 281 prefecture-level cities, we use superefficiency SBM model to measure regional financial efficiency and empirically test the spatial effects of fiscal decentralization on regional financial efficiency with SDM. The estimated results indicate that there exist significant spatial spillover effects among regional financial efficiency with the features of time inertia and spatial dependence. The positive promoting effect of fiscal decentralization on financial efficiency in local region depends on the symmetry between fiscal expenditure decentralization and revenue decentralization. Additionally, there exists inconsistency in the spatial effects of fiscal expenditure decentralization and revenue decentralization on financial efficiency in neighboring regions. The negative effect of fiscal revenue decentralization on financial efficiency in neighboring regions is more significant than that of fiscal expenditure decentralization.
... the products available in the center. Park and Essayyad 1989 combined the functional approach with some consideration of the volumes involved. Thus one may compare centers in terms of the daily value of forex transactions that occur there or the assets on the books of the banks there. ...
This essay reviews much of the recent literature on international financial centers from both economics and geography and critiques the thesis of an "end of geography." Banks have dispersed from traditional centers those activities involving frequent routine, standardized, and small-scale transactions. At the same time, the banks have kept in the international financial centers those activities involving innovative, customized, and large-scale transactions. In all of this, place still matters, but different places matter for different activities. Finally, foreign banks make their greatest contribution to their host center when the presence of foreign banks enhances domestic competition and innovation. The innovation that the rivalry between institutions induces makes the environment in international financial centers a turbulent one.
... International financial centers are increasingly discussed by academics, regulators and law makers (see Park and Essayyad, 1989). The consensus is that these centers must have some distinct features which benefit international banking in general and the host country in particular. ...
This paper investigates the effects of home country banking regulations on the performance of foreign banks in Luxembourg’s financial center. We control for the main regulatory indicators, such as capital requirements, private monitoring, official disciplinary power and restrictions on bank activities, accounting for the regulatory regime applied to foreign banks. We also control for the level of GDP in the home country and its position in the business cycle. The two-stage bootstrap method proposed by Simar and Wilson (2007) is applied to bank panel data covering 1999-2009. The analysis carries policy implications for bank regulators in both home and host countries and provides insight into the choice between establishing a branch or a subsidiary, when developing cross-border activities through financial centers.
... International financial centers are increasingly discussed by academics, regulators and law makers (see Park and Essayyad, 1989). The consensus is that these centers must have some distinct features which benefit international banking in general and the host country in particular. ...
The paper investigates the operating efficiency differences of a sample of commercial banks across 10 European countries. First, the paper analyzes the technical efficiency of each country sample following the basic Data Envelopment Analysis (DEA) model incorporating only banking variables. Then, a complete DEA model is introduced, incorporating environmental factors together with the banking variables of the basic model. The comparison between the two models shows that country-specific environmental conditions exercise a strong influence over the behavior of each country's banking industry.
... Several measures, as Kerr (1965), Park & Essayyad (1989) and Porteous (1995) have suggested, can be used to identify specific cities which have functioned as financial centres. These measures include employment in the financial sector relative to the total employment, assets of financial institutions, the proportion of cheques cashed, the turnover value of stock exchange, volume of communications in terms of express mails and telecommunications, and the presence of foreign banks and head offices of large multinational non-financial corporations. ...
This paper examines the role of 'information hinterland' as a determinant to financial agglomeration and financial centre development. The concept is then applied to investigate the potentials of Beijing and Shanghai in becoming financial centres in China. Specifically, the information hinterlands of the two cities are identified in two steps: first, the boundaries of the hinterlands are demarcated on the basis of distance, intensity of transport connection and interactions in terms of migration. Second, the intensity of information from the hinterland is assessed in terms of business information, policy information and the seats of multinational headquarters. Results of the analysis and their implications are discussed. Copyright (c) 2007 by the Royal Dutch Geographical Society KNAG.
An extensive economic growth mode leads to resource depletion and environmental degradation. Green development is the best way to solve this problem. We analyzed the sample data of 41 cities in the Yangtze River Delta of China from 2007 to 2019. We used the spatial Durbin model and interaction term model to study the effects of regional financial agglomeration (FA) on green development and the moderating role of green technology innovation. The results show that FA promotes local green development but inhibits the green development of neighboring areas. Because the polarization effect of the growth pole is greater than its dispersion effect, cities with high levels of FA have a strong “siphon effect” on the surrounding areas. Green technology innovation positively moderates the promoting effect of FA on green development; the higher the level of green technology innovation and the degree of emphasis on it, the stronger the promoting effect. The government should encourage green finance to promote green technology innovation and promote the green development of the regional economy. These findings provide new insights for developing countries to achieve sustainable development under environmental constraints.
The topic of this study is focused on international financial centers as a vital center in the global economic system, especially after the acceleration of its development and increasing its influence on the economies of countries due to the huge size of global cash and financial flows in them, as well as the diversity of specialized financial institutions from banks, foreign exchange markets, and capital markets, insurance companies and various financial intermediaries, and the variety of financial instruments traded in them from contracts, financial operations, and transfers with abroad in circulated values and in all foreign currencies, as these centers play a fundamental role for transferring money globally
Global money transfers is the statement that various mechanisms differ according to the different goals of investors and the type of investments between short, medium or long-term investments, as international financial centers play a fundamental role in global money transfers by collecting financial resources from saved economic units in which there are financial surpluses, and then Transferring them to economic units that suffer from a financial deficit, through various investment mechanisms of various forms and through various channels.
But despite all the contributions that international financial centers make to the global economy, there is a special type of them, that called offshore companies, which are used as a legitimate channel for suspicious financial transactions such as tax evasion, money laundering and other illegal practices, due to their legal characteristics that protect them, as well as And the advantages it provides to its investors. The danger of these suspicious practices on the global economy has been clarified, through a detailed presentation of some recent leaks that have caused global scandals, such as the "Swiss Lux" leak, the "Panama" leak and "Paradise" leaks.
Key words: International Financial Centers, International Money Transfers, Money Laundering Offshore Companies
Using two unique confidential datasets summarizing the cross‐border lending of banks in France and the UK, we examine whether recipient‐country prudential policies can help to reduce the spillover effects of euro‐area (EA) monetary policy. We address this question from a novel angle, focused on the role of international financial centres, by considering differences in bank size and location (lending from French headquarters vs. from French affiliates located in the UK). For small French banks that lack a presence in international financial centres, the response of direct cross‐border lending from France to EA monetary policy is partially offset by recipient‐country prudential policy. For larger banks, however, the offsetting effect applies only to lending that passes through foreign affiliates located in London. This suggests the existence of a “London Bridge”: banks adapt their flows to the UK conditional on EA monetary policy and global prudential policies; and from their UK affiliates to third‐party countries in a manner that depends on local prudential settings.
The Panama Papers, or as they are commonly called the Panama Leaks, are around 12 million documents that contain vastly discrete financial and attorney-client information, dating back to early 1970s, of about 215,000 offshore corporations created by Mossack Fonseca, a Panama-based corporate law firm, for their various clients worldwide. The said documents were leaked by an unidentified source (John Doe) from inside the firm and are believed to contain incisive personal information regarding clandestine financial activities of several current and former head-of-states, wealthy aristocrats and high ranking officials of various governments which until now was unknown to the general public. The anonymous source inside Mossack Fonseca (John Doe) responsible for this information disclosure provided these documents to Bastian Obermayer, a German journalist working for Süddeutsche Zeitung (SZ). In a statement issued on May 6, 2015, he cited severe dangers to his life in wake of these startling revelations since they exposed corrupt activities of world's most powerful people who could cross any limit to safeguard their vested interests. Additionally, he said that it was global income inequality and massive injustice portrayed in these documents which forced him to affect this iniquitous leak. He offered full support to the investigators/prosecutors subject to provision of immunity. After SZ confirmed that the said statement was indeed issued by the Panama Papers source; ICIJ put the complete document on its web portal. Owing to their resource inadequacy, to analyze this massive volume of information, SZ sought the help of International Consortium of Investigative Journalists (ICIJ) which comprising of journalists belonging from over 100 media organizations based in 80 countries worldwide who were tasked with investigating/analyzing the documents pertaining to the operations of Mossack Fonseca. On April 3, 2016, after investigation and analysis spanning over one year, the first news stories along with 150 original documents were published. While establishment of offshore companies is perfectly legal and permissible, investigations revealed that majority of offshore corporations created by Mossack Fonseca facilitated illegal activities e.g. financial fraud, money laundering, tax evasion and evasion of international embargos. As far as field of investigative journalism is concerned, this project symbolizes a significant landmark in the use of mobile collaboration and data journalism software tools.
The Panama Papers, or as they are commonly called the Panama Leaks, are around 12 million
documents that contain vastly discrete financial and attorney–client information, dating back to early 1970s, of
about 215,000 offshore corporations created by Mossack Fonseca, a Panama-based corporate law firm, for their
various clients worldwide. The said documents were leaked by an unidentified source (John Doe) from inside the
firm and are believed to contain incisive personal information regarding clandestine financial activities of several
current and former head-of-states, wealthy aristocrats and high ranking officials of various governments which until
now was unknown to the general public. The anonymous source inside Mossack Fonseca (John Doe) responsible for
this information disclosure provided these documents to Bastian Obermayer, a German journalist working for
Süddeutsche Zeitung (SZ). In a statement issued on May 6, 2015, he cited severe dangers to his life in wake of these
startling revelations since they exposed corrupt activities of world’s most powerful people who could cross any limit
to safeguard their vested interests. Additionally, he said that it was global income inequality and massive injustice
portrayed in these documents which forced him to affect this iniquitous leak. He offered full support to the
investigators/prosecutors subject to provision of immunity. After SZ confirmed that the said statement was indeed
issued by the Panama Papers source; ICIJ put the complete document on its web portal. Owing to their resource
inadequacy, to analyze this massive volume of information, SZ sought the help of International Consortium of
Investigative Journalists (ICIJ) which comprising of journalists belonging from over 100 media organizations based
in 80 countries worldwide who were tasked with investigating/analyzing the documents pertaining to the operations
of Mossack Fonseca. On April 3, 2016, after investigation and analysis spanning over one year, the first news
stories along with 150 original documents were published. While establishment of offshore companies is perfectly
legal and permissible, investigations revealed that majority of offshore corporations created by Mossack Fonseca
facilitated illegal activities e.g. financial fraud, money laundering, tax evasion and evasion of international
embargos. As far as field of investigative journalism is concerned, this project symbolizes a significant landmark in
the use of mobile collaboration and data journalism software tools
In the last decades, progress in transport technology, telecommunications and data processing has heavily stimulated the worldwide dispersion of financial operations. Given the necessary equipment and decision-making power, the dealer in a remote office can trade with his colleagues all over the world through the SWIFT system and other systems of telecommunication. In spite of these worldwide professional ‘home banking’ opportunities, financial activities tend to remain geographically concentrated in some areas and places, old and new. When transactions with overseas – with and among non-residents – are important in these places, we call them international financial centres (IFCs). Their activity adds an international, geographical and institutional dimension to financial activity, which we will try to discuss in this paper.
ПРИНЦИПЫ И ПОДХОДЫ К ФОРМИРОВАНИЮ РЕГИОНАЛЬНОЙ
КОНКУРЕНТОСПОСОБНОСТИ
В статье рассмотрены подходы и методы формирования и оценки
региональной конкурентоспособности. Речь идет о конкурентоспособности региона в
условиях глобализации, о повышении экономики региона, сохранения и улучшения
позиции. Дана характеристика системы региональной конкурентоспособности.
Рассмотрены факторы региональной конкурентоспособности. Речь идет о создании
имиджа региона, производстве и факторах конкурентоспособности продукции
региона, об обеспечении и повышении безопасности региона. Представлены
преимущества экономическо-географического положения региона. Речь идет о
специализации и месте региона, в системе территориального раздела труда, об
инструментах привлечения форм в регион. Рассмотрены вертикальные и
горизонтальные формы конкуренции.
Ключевые слова: региональная конкурентоспособность, методы,
инструменты, подходы, оценка, процесс
How do foreign banks respond to financial crises? Does their response depend on their organizational form, size, and nationality? Do foreign banks perform better than domestic banks? In this chapter, we address all these questions by examining the performance of banks operating in the Luxembourg financial center between 1995 and 2010. Performance is analyzed in terms of productivity change, along with efficiency and technical changes, estimated by Data Envelopment Analysis (DEA)-based Malmquist Index. The analysis carries policy implications for bank regulators in both home and host countries and provides insight into (a) the choice between establishing a branch or a subsidiary and (b) the optimal bank size to take advantages in productivity when developing cross-border activities through the financial center. Moreover, for the local regulators it provides insight into the foreign country with a banking sector more productive and on which the host country might rely more.
This paper addresses why the relatively unknown island of Jersey emerged as a major Offshore Finance Centre (OFC) during the 1960s. Was the OFC purely the result of the context of the 1960s and the significant changes in international banking, especially in London, i.e. was Jersey just a child of its times, or was there more to it than that?Orthodox international banking theory would suggest that the location of OFCs is based upon issues of taxation or regulatory differentials, bank secrecy and political stability. However, this paper uses a materialist, fractions of capital approach to analyse the political economy of the onshore state and its specific relationship to its dependent island territories. This paradoxical political relationship underpins the feasibility of OFCs. Arguably, UK financial capital had reached hegemony by the 1960s, giving it the effective regulatory and fiscal ‘space’ for banking innovation as first manifested in the London offshore currency markets (Eurocurrencies), and then later in the concomitant emergence of small island OFCs such as Jersey.
Since China began to implement the strategy of Development of the Western Regions, and in order to realize sustainable stable development of the economy, establishing regional financial center has become the focus of academic research, which has gradually been accepted among southeastern provinces. However, still now, which city will be chosen to implement regional financial center strategy is still in argument, which needs more precise empirical analysis. Therefore, by adopting empirical method of factor analysis, this essay discusses the importance and rationality of building regional financial center of southeastern region in Chengdu and provides the relevant advice on policies.
This paper builds a theoretical link between agglomeration economies of Multinational Corporations (MNCs) headquarters and the development of financial service centres, with special account in the extant literature of financial geography. Specifically, four distinctive factors, namely path dependency, asymmetric information, institutional support and exogenous advantage are brought forward as the determinants of managerial considerations for MNCs strategic locations. Among them, the factor of asymmetric information is argued as the key factor to drive geographic agglomerations of financial activities in China. To examine the validity of the theory, China's Beijing-Shanghai city-pair is presented as a case. A binary logistic regression model-test is applied to compare the locational behavior of MNCs regional headquarter in the two cities. Finally, a financial centre index (Findex) analysis which quantifies the significance of financial sectors in the city-pair is conducted. The results reveal that contrary to the traditional point of view, Beijing has more advantages than Shanghai in developing to be a strong service and financial centre in China.
Offshore centers have come to play an important role in the institutional structure of international financial markets. The article identifies two dimensions of dynamic competition that are relevant for an analysis of the offshore center phenomenon. First, there is competition between the offshore centers and one or more domestic financial markets. Second, there is dynamic competition among the offshore centers. The system of offshore centers generates a three-tier structure of international financial markets: domestic, foreign traditional, and offshore markets, both with respect to financial intermediaries as well as securities markets. This structure constitutes the institutional base for trends in the international financial markets which result in a process of increasing globalization.
The paper focuses on the role of offshore centers and markets in international finance during the past two decades and the migration of financial activity from the major financial centers to these offshore markets. The paper examines the prospects of offshore centers in view of the convergence of fiscal and regulatory regimes of offshore and domestic financial centers in recent years, the greater involvement of banks in derivative finance at the expense of the traditional offshore interbank markets, and the increased concentration of financial activity in the major financial centers.
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