Discussion2 : please provide feedback on my classmate paper

| November 9, 2018

Here was the question that my classmate answer:Each country has methods used to monitor and regulate their commercial banks. Provide examples of differences in regulations that exist between those of the U.S. and at least two other countries. Provide at least one citation other than your book that was used in composing your response.and now here is the paper my classmate wrote and i need feedback on his paper based to the question:Each country has their own methods that they use to monitor and regulate their commercial banks. Sometimes it involves their central bank doing the monitoring, and sometimes it doesn’t (Barth, Caprio, & Levine, 2013). Countries such as Italy, Brazil, and Argentina utilize the central bank only as their supervisory authority. Others such as Canada, France, and Norway have a single supervisory authority over their banking industry which is not their central bank. Some countries like the United Arab Emirates and Uruguay prohibit commercial banks “from insurance and real estate activities” while allowing “unrestricted securities activities” (p.12). Other countries like Hong Kong and Switzerland allow unrestrictive powers in all three of these areas. Each of these four countries has a single supervisory entity, not the central bank, over their banking industry. Other countries such as Germany, Austria, and the US utilize their central bank in combination with other regulatory agencies in monitoring and regulating their banks.The US has several banking supervisory authorities including the Federal Reserve, the Comptroller of the Currency, the FDIC, and state agencies (Madura, 2013). National banks and state banks have different governing authorities over them. Bank holding companies can have subsidiaries involved in banking, real estate, insurance, and securities activities. Single banks can’t be involved in insurance activities, but they can do banking, real estate, and securities activities, although there are restrictions on the securities activities.Canada, on the other hand, has not been and is not as restrictive as the US in regards to allowing banks to operate in securities activities (Madura, 2013). They’ve also recently been allowed to venture into insurance activities, unlike the US where single banks can’t be involved in insurance activities.Many countries also allow banking companies to own non-financial firms (Barth, Caprio,& Levine, 2013). Although, more countries allow ownership by non-financial firms of banking companies than they do banking companies of non-financial firms. The US restricts “the mixing of banking and commerce” (p.13).Capital requirements also differ among nations, even though the Basel Accords have guidelines to follow (Barth, Caprio, & Levine, 2013). Countries differ in the amount or level, nature and source of capital they require banks to hold. The US, Australia, and Canada have increased the strictness of their capital requirements after the credit crisis, while other countries such as Russia, Spain, and the United Kingdom have decreased the strictness of their capital requirements and regulations.Other countries are getting increasingly wary of the US because of their restrictive laws and regulations which reach far and wide. An example of this reach is the recent fining of BNP Paribas, a large French bank. They were fined $8.9 billion because they violated US law in regards to doing business with companies in countries that are under sanction by the US, in particular Sudan (Putnam, 2014). Most countries resent the US forcing their will and their laws on their countries. Furthermore, large foreign companies are increasingly skittish about violating US laws, and thus they are being more careful in their international endeavors.ReferencesBarth, J.R., Caprio, G., & Levine, R. (2013, January). Bank regulation and supervision in 180 countries from 1999 to 2011. Retrieved from:file:///C:/Documents%20and%20Settings/klarson/My%20Documents/Downloads/BankRegulationAndSupervisionIn180C_preview.pdfMadura, J. (2013). Financial markets and institutions(10th ed.). Mason, OH: South-Western Cengage Learning.Putnam, T. (2014). An $8.9 billion fine shows that foreign banks evade US laws at their peril. The Washington Post.Retrieved from:http://www.washingtonpost.com/blogs/monkey-cage/wp/2014/06/30/an-8-9-billion-fine-shows-that-foreign-banks-evade-u-s-laws-at-their-peril/

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