Foreign branches would want to keep their profits here in low corporate tax America.
Thus foreign branches of international corporations keep money overseas to invest and create more jobs, rather than bringing the profits home.
In November 2008 the RBI had to lend foreign currencies to Indian banks to help them meet the obligations of their foreign branches.
ECONOMIST: India is caught in two minds about financial globalisation
Indian banks have 141 foreign branches and 21 subsidiaries.
ECONOMIST: India is caught in two minds about financial globalisation
The Financial Services Authority (FSA), Britain's financial regulator, has also been busy, issuing new proposals on the management of liquidity by banks (including branches of foreign institutions) in its domain.
Still, Luxembourg's banking sector consists largely of subsidiaries and branches of foreign banks, so that significant support might be expected from mother banks and, ultimately, the governments of those mother banks, in the event of a crisis.
Partly as a result of the Iceland fiasco, the British government has written to the European Commission seeking urgent consideration of improvements to legislation of cross-border banking in the EEA, including better ways of protecting depositors in branches of foreign banks.
Participation in the DPS is compulsory for all banks authorised by the Central Bank of Cyprus, i.e. banks incorporated in the Republic of Cyprus, including their branches in other countries, and the Cyprus branches of foreign banks, incorporated outside the Republic of Cyprus or the Member-States of the European Union.
Now the Reserve Bank of India (RBI), the regulator, wants local rules to apply to foreign banks with over 20 branches in India.
The U.K. has been a prime target of these warnings, after regulators pressured foreign-owned banks to convert their branches in the U.K., which are regulated by the government where the bank is based, into subsidiaries, which are regulated by the U.K. and have their own capital and liquidity.
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