PART 1: BASIC CONCEPTS AND OPERATIONS 1 WHAT IS INTERNATIONAL BANKING? 1.1 THE ECONOMIC ROLE OF BANKS 1.

2 WHO ARE INTERNATIONAL BANKS? 1.3 REVIEW 1.3.1 SUMMARY 1.3.2 QUESTIONS 2 ASSOCIATED RISKS 2.1 PRODUCT BASED RISKS 2.2 CREDIT RISK 2.3 SETTLEMENT RISK 2.4 ENVIRONMENT RELATED RISKS 2.5 CURRENCY RISK 2.6 COUNTRY RISK 2.6.1 SOVEREIGN RISK 2.6.2 TRANSFER RISK 2.7 REVIEW 2.7.1 SUMMARY 2.7.2 QUESTIONS 3 BASIC OPERATIONS IN FX MARKETS 3.1 OVERVIEW 3.2 DIRECT AND INDIRECT RATES 3.3 CROSS-RATES 3.4 REVIEW 3.4.1 SUMMARY 3.4.2 QUESTIONS 4 INSTRUMENTS TO MANAGE CURRENCY RISK 4.1 SPOT AND FORWARDS 4.2 FORWARD AGREEMENTS 4.3 FUTURE CONTRACTS 4.4 CURRENCY OPTIONS 4.5 REVIEW 4.5.1 SUMMARY 4.5.2 QUESTIONS 5 PRICING FOREIGN EXCHANGE TRANSACTIONS 5.1 THE INTEREST RATE PARITY THEOREM 5.2 INVESTING AT HOME OR ABROAD? 5.3 CURRENCY ARBITRAGE 5.4 PREMIUM IN THE FORWARD MARKET 5.5 REVIEW 5.5.1 SUMMARY 5.5.2 QUESTIONS 6 THE EUROCURRENCY MARKET 6.1 THEORETICAL UNDERPINNINGS 6.1.1 SCOPE OF BANKING MARKETS 6.1.2 DOMESTIC MARKET 6.1.3 FOREIGN SEGMENT 6.1.4 OFF-SHORE MARKETS 6.2 BRIEF HISTORY (1960-1995) 6.2.1 ORIGINS OF INTERNATIONAL MARKETS 6.2.2 ORIGIN OF EUROMARKETS 6.2.2.1 BIRTH 6.2.2.2 SECONDARY DEVELOPMENTS 6.2.2.3 INSTITUTIONAL DEVELOPMENTS 6.2.3 LATE DEVELOPMENTS 6.3 PRICING TRANSACTIONS

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6.3.1 6.3.2 6.3.3 6.3.4 6.4 6.4.1 6.4.2 6.4.3 6.5 6.6 6.6.1 6.6.2

OVERVIEW NEGOTIABLE CERTIFICATES OF DEPOSIT EURODOLLAR COMMERCIAL PAPER LONDON EURODOLLAR BANKERS' ACCEPTANCES EUROBOND ANALYSIS BOND RATING COUPON TERM BOND PRICING REVIEW SUMMARY QUESTIONS REFERENCES

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PART 2: TRADE FINANCE 1 OVERVIEW 2 TRADITIONAL METHODS 3 EXPORTER RISK INSTRUMENTS 3.1 CONSIGNMENT 3.2 OPEN ACCOUNT SALE 3.3 SECURED BANK OVERDRAFT 3.4 DOCUMENTS FOR COLLECTION 3.5 REVIEW 3.5.1 SUMMARY 3.5.2 QUESTIONS 4 SHARED RISK INSTRUMENTS 4.1 CREDIT INSURANCE 4.2 SHORT TERM GUARANTEES 4.3 REVIEW 5 THIRD PARTY RISK 5.1 CONFIRMING HOUSE ARRANGEMENT 5.2 BUYER CREDIT ARRANGEMENTS 5.4 LINES OF CREDIT 5.4 EXPORT LEASING ARRANGEMENTS 5.5 REVIEW 5.5.1 SUMMARY 5.5.2 QUESTIONS 6 ALTERNATIVES TO BANK FINANCE 6.1 REDUCED EXPOSURE 6.2 DISCOUNTING AND DRAFTS 6.3 FORFEITING 6.4 INTERNATIONAL FACTORING 6.5 REVIEW 6.5.1 SUMMARY 6.5.2 QUESTIONS 7 LETTERS OF CREDIT 7.1 MAIN CHARACTERISTICS 7.2 CONFIRMED LETTERS OF CREDIT 7.3 REVOCABLE LETTERS OF CREDIT 7.4 TRANSFERABLE LETTERS OF CREDIT 7.5 RISK IN LETTERS OF CREDIT 7.6 REVIEW 7.6.1 SUMMARY 7.6.2 QUESTIONS 8 DOCUMENTATION FOR LETTERS OF CREDIT 8.1 OVERVIEW

8.2 8.3 8.4 8.5 8.5.1 8.5.2 9 10 10.1 10.2 10.3 11 11.1 11.2 11.3 11.4 11.5 11.5.1 11.5.2 12 12.1 12.2 12.3 12.3.1 12.3.2 12.3.3 12.3.4 12.3.5 12.4 12.4.1 12.4.2

BILL OF LADING INVOICES SPECIAL REQUIREMENTS REVIEW SUMMARY QUESTIONS GOVERNMENT STIMULUS TO TRADE FINANCE THE OECD ARRANGEMENT OVERVIEW MIXED CREDITS GUARANTEES AND INSURANCE NEW TRADE FINANCE INNOVATIONS ELECTRONIC LETTERS OF CREDIT CAPITAL MARKET INSTRUMENTS EXPORT TRADE NOTES CURRENCY SWAPS REVIEW SUMMARY QUESTIONS COUNTER TRADE MAIN CHARACTERISTICS COUNTER TRADE BANKING MOST COMMON TRANSACTIONS COUNTERPURCHASE BUY-BACK OFFSET CLEARINGS SWITCH TRADING REVIEW SUMMARY QUESTIONS GLOSSARY OF SELECTED TERMS REFERENCES

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PART 3: OTHER ISSUES 1 GOVERNING BODIES 1.1 INTERNATIONAL MONETARY FUND 1.2 BASEL COMMITTEE 1.2.1 INTENTIONS 1.2.2 BASEL CONCORDAT 1.4 INSTITUTIONS OF THE EUROPEAN UNION 1.4.1 ORIGINS 1.4.2 A FRAMEWORK FOR EMU 1.4.3 SINGLE MARKET IN FINANCIAL SERVICES 1.4.4 EUROPEAN MONETARY SYSTEM 1.4.5 LAST STAGE OF THE EMU 1.4.6 BANKING REGULATION IN EUROPE 1.4.6.1 REGULATION OF MARKET ENTRY 1.4.6.2 HARMONIZATION OF REGULATION 1.4.6.3 CREATION OF SINGLE MARKET 1.4.7 CAPITAL ADEQUACY 1.5 SUMMARY 2 TYPES OF ESTABLISHMENT 2.1 CROSS-BORDER TRANSACTIONS 2.2 REPRESENTATIVE OFFICES 2.3 FOREIGN BRANCHES

2.4 2.5 2.6 3 3.1 3.2 3.3 3.3.1 3.3.2 3.3.3 3.3.4 3.4

FOREIGN AFFILIATES AND SUBSIDIARIES CORRESPONDENCE BANKING SUMMARY ELECTRONIC PAYMENT SYSTEMS OVERVIEW FEATURES OF CROSSS-BORDER PAYMENTS MAJOR INSTITUTIONS INTERLINKING SYSTEMS RETAIL SYSTEMS WHOLESALE SYSTEMS SETTLEMENT OF SECURITIES SUMMARY REFERENCES

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