Explain the classifications of international banking, examining the differences between traditional foreign banking, Eurocurrency banking and multinational banking.

International bank can be classified by the services they perform.

1. Retail/ Commercial bank- It serves consumers with basic transaction services like; deposits and withdrawals.

It has been internationalised by incorporating investment banking feature, give accessibility to global market bfor investing tobtheir clients.

2. Correspondent bank- It implies a relationship between at least two banks including those in different countries.

MNCs may utilise these banks for conducting their global business. These banks are usually small and may have representative office for serving MNCs outside of their home country.

3. Foreign branch bank- It is a type of foreign bank that is obligated to follow the rules- regulations of home and host company. These banks have branches in US and main headquarters in another country.

4. Subsidiary bank- It is incorporated to one country ,but, is fully or partially owned by parent bank in another country.

Its work affiliated by parent company but operates independently.

5. Edge Act bank- Edge Act banks conduct business internationally under a federal charter. It is physically located in US.

6. Offshore banking- These banks allow foreign accounts and functions independently from country' s banking regulations. Eg- Swiss bank

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Traditional foreign banking is involved in taking deposits or giving loans in domestic currency to non residents of the country where the bank was located. Like; UK bank would lend sterling to a person or a company living vor located in US.

While, Eurocurrency banking involves wholesale foreign exchange transactions ( loans and deposits) with both residents and non residents.

Traditional foreign bank and euro currency bank does not necessarily require physical presence in a foreign country.

Whereas, multinational banking requires some element of ownership and control of banking operations outside home market through foreign direct investment.