Banks have been heavily involved in selling their services across national borders from the industry’s very beginning. The first banks were located principally in global trading centers around Mediterranean Sea, including Athens, Cairo, Jerusalem and Rome, aiding merchants in financing shipment of raw materials and goods for sale and exchanging one nation’s currency and coin for that of another to assist travelers as well as local merchants.
Nowadays international bankers face unprecedented challenges in both raising and allocating funds. Gerald Corrigan, president of the Federal reserve Bank of New York, perhaps has best captured the essence of today’s global bank management problems: “Financial markets and institutions are caught up in an unprecedented wave of change and innovation which makes it very difficult to distinguish ends from means, causes from effects, and actions from reactions”.
Сredit and crediting
Credit – transactions between two parties in which one (the creditor or lender) supplies money, goods, services or securities in return for a promised future payment by the other ( the debtor or borrower). Creditor is someone who money is owedto.Debtor is someone who owes money.Credit given is an indication of trust in that person to pay for the goods given or money lent. Credit transactions normally include the payment of interest to the lender. Credit may be extended by public or private institutions to finance business activities, agricultural operations, consumer expenditures or government projects. Most modern credit is extended through specialized financial institutions, of which commercial banks are the oldest and more important. The lender must judge each loan he makes on the basis of the character of the borrower, his capacity to repay and his collateral. Loan is an amount of money that you borrow from a bank. Customers lenders may publicly regulate the terms of credit transactions to prevent abuses.
The price system
Who tells workers where to work or what occupation to choose? Who declares how many cars should be produced and how many homes should be built? Who specified the predominant style of women’s dress or men’s suits?
The greater the degree of competition the more these matters are decided impersonally and automatically by the price system or the market system. This may view as a system of rewards and penalties. Rewards include profits for firms and people who succeeds. Penalties include losses, or probably bankruptcy, for those whofails. The price system is fundamental to the traditional concept of market economy.
The price system basically will operate on the principles that everything that exchanges – every good, every service and every resource – has its price. In a free market with many buyers and sellers, the prices of these things reflect the quantities that sellers make available and the quantities that buyers wish to purchase.