BBA603 & ROLE OF INTERNATIONAL FINANCIAL INSTITUTIONS

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Assignment

PROGRAM	BBA(REVISED FALL 2014)
SEMESTER	VI
SUBJECT CODE & NAME	BBA603 & ROLE OF INTERNATIONAL FINANCIAL  INSTITUTIONS
CREDIT	4
BK ID	B1905
MAX.MARKS	60

Note: Answer all questions. Kindly note that answers for 10 marks questions should be approximately of 400 words. Each question is followed by evaluation scheme.

1 Explain the main functions of banks. Write down the lending activities and lending policies of bank.

Answer:

Functions of banks

A. Primary Functions of Banks ↓

The primary functions of a bank are also known as banking functions. They are the main functions of a bank. These primary functions of banks are explained below.

1. Accepting Deposits

The bank collects deposits from the public. These deposits can be of different types, such as :-

·         Saving Deposits

2 Write the objectives of global financial regulation. Explain the key features of Basel III and its impact.

Answer:

Aims of regulation

The objectives of financial regulators are usually:

·         Market confidence – to maintain confidence in the financial system

·         Financial stability – contributing to the protection and enhancement of stability of the financial system

·          

·          

3 Explain the role of government in financing international trade.

Answer: Export-Import Bank of India is the premier export finance institution in India, established in 1982 under the Export-Import Bank of India Act 1981. Since its inception, Exim Bank of India has been both a catalyst and a key player in the promotion of cross border trade and investment. Commencing operations as a purveyor of export credit, like other Export Credit Agencies in the world, Exim Bank of India has, over the period, evolved into an institution that plays a major role in partnering Indian industries, particularly the Small and

4 There are different determinants in exchange rates. Explain all the determinants of exchange rates.

Answer: Interest rates and inflation, the exchange rate is one of the most important determinants of a country's relative level of economic health. Exchange rates play a vital role in a country's level of trade, which is critical to most every free market economy in the world.

1. Differentials in Inflation

As a general rule, a country with a consistently lower inflation rate exhibits a rising currency value, as its purchasing power increases relative to other currencies. During the last half of the twentieth century, the countries with low inflation included Japan, Germany and Switzerland, while the U.S. and Canada achieved low inflation only later.

5 Explain the Balance of Payment (BOP) accounting with sources and uses of funds with examples. How is accounting equilibrium different from accounting disequilibrium?

Answer: Balance of Payment: The balance of payments (BOP) of a country is the record of all economic transactions between the residents of a country and the rest of the world in a particular period (over a quarter of a year or more commonly over a year). These transactions are made by individuals, firms and government bodies. Thus the balance of payments includes all external visible and non-visible transactions of a country during a given

6 Explain the challenges and emerging trends of international finance.

Answer: International finance: International finance (also referred to as international monetary economics or international macroeconomics) is the branch of financial economics broadly concerned with monetary and macroeconomic interrelations between two or more countries. International finance examines the dynamics of the global financial system, international monetary systems, balance of payments, exchange rates, foreign direct investment, and how these topics relate to international trade.

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