Foreign Branch Bank

AAA

DEFINITION of 'Foreign Branch Bank'

A type of foreign bank that is obligated to follow the regulations of both the home and host countries. Because the foreign branch banks' loan limits are based on the parent bank's capital, foreign banks can provide more loans than subsidiary banks.

INVESTOPEDIA EXPLAINS 'Foreign Branch Bank'

Banks often open a foreign branch in order to provide more services to their multinational corporation customers. However, operating a foreign branch bank may be considerably complicated because of the dual banking regulations that the foreign branch needs to follow.

For example, suppose the Bank of America opens a foreign branch bank in Canada. The branch would be legally obligated to follow both Canadian and American banking regulations.

RELATED TERMS
  1. Correspondent Bank

    A financial institution that provides services on behalf of another, ...
  2. Conference Of State Bank Supervisors ...

    A national organization founded in 1902 to further advance the ...
  3. Grandfathered Activities

    Nonbank activities, some of which would normally not be permissible ...
  4. Retail Banking

    Typical mass-market banking in which individual customers use ...
  5. Subsidiary Bank

    A type of foreign bank that is incorporated in the host country ...
  6. International Bank Account Number ...

    A standard numbering system developed to identify bank accounts ...
Related Articles
  1. What Is International Trade?
    Personal Finance

    What Is International Trade?

  2. What is the difference between investment ...
    Investing

    What is the difference between investment ...

  3. Investing In Oil And Gas UITs
    Mutual Funds & ETFs

    Investing In Oil And Gas UITs

  4. An Introduction To Swaps
    Options & Futures

    An Introduction To Swaps

comments powered by Disqus
Hot Definitions
  1. Last In, First Out - LIFO

    An asset-management and valuation method that assumes that assets produced or acquired last are the ones that are used, sold ...
  2. Ghosting

    An illegal practice whereby two or more market makers collectively attempt to influence and change the price of a stock. ...
  3. Elasticity

    A measure of a variable's sensitivity to a change in another variable. In economics, elasticity refers the degree to which ...
  4. Tangible Common Equity - TCE

    A measure of a company's capital, which is used to evaluate a financial institution's ability to deal with potential losses. ...
  5. Yield To Maturity (YTM)

    The rate of return anticipated on a bond if held until the maturity date. YTM is considered a long-term bond yield expressed ...
  6. Net Present Value Of Growth Opportunities - NPVGO

    A calculation of the net present value of all future cash flows involved with an additional acquisition, or potential acquisition. ...
Trading Center