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. Commercial Bank

    A financial institution that provides services, such as accepting ...
  5. Multinational Corporation - MNC

    A corporation that has its facilities and other assets in at ...
  6. Retail Banking

    Typical mass-market banking in which individual customers use ...
RELATED FAQS
  1. Can a foreign individual open a savings account in the United States?

    A non-U.S. citizen can open a bank account in the United States – an American Social Security number is not necessary for ... Read Full Answer >>
  2. What is the difference between investment banks and merchant banks?

    Merchant banks and investment banks, in their purest forms, are different kinds of financial institutions that perform different ... Read Full Answer >>
  3. What role do SPVs / SPEs play in public-private partnerships?

    When created and used in conjunction with a public-private partnership (PPP), a special purpose vehicle (SPV) -- sometimes ... Read Full Answer >>
  4. After Enron, are SPVs / SPEs considered good business practice?

    A special purpose vehicle (SPV), also known as a special purpose entity (SPE), is a separate entity created by a company ... Read Full Answer >>
  5. Is there a limit to the number of SPVs / SPEs a company can create?

    There are no fixed, definable legal limits on the number of affiliate companies that a corporation can create. Special purpose ... Read Full Answer >>
  6. What is the most typical holding in an SPV?

    Special Purpose Vehicles, or SPVs, have been extensively used as a means of securitizing property-based assets. Since the ... Read Full Answer >>
Related Articles
  1. Personal Finance

    What Is International Trade?

    Everyone's talking about globalization, so we explain what is it and why some oppose it.
  2. Investing

    How Special Purpose Entities Help Fight Risk

    A special purpose entity, sometimes called a special purpose vehicle, is a legal entity created for one very limited, particular task. Typically, SPEs are subsidiaries of a larger corporation.
  3. Personal Finance

    Countries With The Largest Shadow Markets

    These nations have the largest informal economies relative to their respective GDPs.
  4. Investing Basics

    Some Thoughts On The Shadow Market

    The "shadow market" is a broad-based moniker with both positive and negative connotations.
  5. Mutual Funds & ETFs

    Investing In Oil And Gas UITs

    Unit investment trusts provide direct exposure to the energy sector, fueling better returns.
  6. Options & Futures

    An Introduction To Swaps

    Learn how these derivatives work and how companies can benefit from them.
  7. Taxes

    The Basics Of REIT Taxation

    The unique tax advantages offered by these investments can translate into superior yields.
  8. Home & Auto

    3 Types Of REITs For Your Portfolio

    Learn the key features of three subcategories of equity REITs: industrial, multifamily and hotel REITs.
  9. Personal Finance

    The Enron Collapse: A Look Back

    This was one of the most complex bankruptcies in U.S. history. Ten years later, we look back at what happened and how it permanently impacted the financial markets.
  10. Options & Futures

    The Benefits Of ETF Investing

    Exchange-traded funds provide unique opportunities for investors. Find out how.

You May Also Like

Hot Definitions
  1. Bund

    A bond issued by Germany's federal government, or the German word for "bond." Bunds are the German equivalent of U.S. Treasury ...
  2. European Central Bank - ECB

    The central bank responsible for the monetary system of the European Union (EU) and the euro currency. The bank was formed ...
  3. Quantitative Easing

    An unconventional monetary policy in which a central bank purchases private sector financial assets in order to lower interest ...
  4. Current Account Deficit

    A measurement of a country’s trade in which the value of goods and services it imports exceeds the value of goods and services ...
  5. International Monetary Fund - IMF

    An international organization created for the purpose of: 1. Promoting global monetary and exchange stability. 2. Facilitating ...
  6. Risk-Return Tradeoff

    The principle that potential return rises with an increase in risk. Low levels of uncertainty (low-risk) are associated with ...
Trading Center
×

You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!