U.S. Banking in an Increasingly Integrated and Competitive World Economy

Abstract

It is almost trite to say that the world has become increasingly integrated commercially since the Second World War. Trade in producer and consumer products has expanded as the costs of transporting goods, services, and information have declined, as consumers’ tastes have expanded to include products made and used in other countries, and as technologies that developed in one country have been adopted worldwide. Banking services have both reflected and led this movement. The services provided by banks in most countries are very similar, and money or access to credit can be transported quickly and cheaply across great distances and national boundaries, particularly when laws and regulations do not impede such movements. Hence, it is not surprising that banking has become increasingly international.¹ Indeed, one of the historically important products offered by banks is facilitation of international trade with credit instruments such as acceptances and letters of credit.