The structure of the U.S. banking abroad

July 27, 2012 UEFIMA.RU: U.S. banks have most of their offices in Latin America, the Far East, the Caribbean and London. The largest amount of assets have offices in London, which is a major international financial center and the focal point of the Eurodollar market. Latin America and the Far East have many branches in the investigation of the importance of U.S. trade with these regions.
Caribbean (Bahamas and the Cayman Islands) is an important place of international banking as a "tax haven", where there are no taxes or have restrictive regulation. Indeed offices Bahamas and the Cayman Islands - a "shell institution" because that function primarily as accounting offices and do not provide normal banking services.
An alternative to the structure of U.S. banks that operate abroad, there is a law on the Edge corporation, which is mainly for the international banking. Corporation established by law Edge (Act of 1919) allows U.S. banks to compete more effectively with foreign banks by the release of part of the U.S. banking regulation.
For example, a corporation under the law Edge, are exempt from the ban on the establishment of offices in other states. They may have branches in different states to promote trade with the different parts of the world: the separation of the West. Coast to manage the financing of trade with Japan, an office in Miami to finance trade with Latin America and so on.
U.S. banks (through their holding companies) may own a controlling share of foreign banks and foreign companies that provide financial services. International activities of banks - members of the Federal Reserve System, bank holding companies and corporations created under the Edge Act (covering the entire international financial activities, which are U.S. banks), regulate the rules of the Federal Reserve System (Regulation "K").
In late 1981, the Federal Reserve System in the United States adopted the creation of international banking channels (MBC), which can take time deposits from foreigners. These contributions do not fall under the reserve requirements under any restrictions on the payment of interest. IBC can also provide loans to foreigners, but prohibit the loans to residents. U.S. encourages the creation of IBC, freeing them from the payment of taxes, state and local taxes.
MBC actually treated as foreign branches of U.S. banks, which are not subject to domestic regulation and taxation. The purpose of the IBC is to encourage the U.S. and foreign banks to expand banking operations in the United States rather than abroad. From this position, MBC succeed. In two years, their assets have grown to almost 200 billion dollars.
The growth in international trade is not only stimulated U.S. banks to open branches abroad, but also to encourage foreign banks to open branches in the United States. Now there are about 500 branches of foreign banks operating in the United States and has over 20% of total U.S. bank assets.