Question

In: Economics

TALK BRIEFLY ABOUT a) Universal banking b) Eurocurrency c) Eurobonds d) Foreign bonds

TALK BRIEFLY ABOUT
a) Universal banking
b) Eurocurrency
c) Eurobonds
d) Foreign bonds

Solutions

Expert Solution

A) Universal Banking-Universal banking is a system in which banks proffer numerous comprehensive financial services. These services include retail, commercial and investment services. Universal banking is common in European countries.

Universal banking combines the services of commercial bank and investment bank , proffer all services from within one entity.

A system of universal banking does not impose compulsion on the participating banks to provide all the services but allows them to offer wide range of services. The participating banks choose services according to comfort, convenience and confidence.

Answer B) Euro currency-Euro currency is that currency which is deposited by national governments or corporations, outside of its home currency. It is a currency held in banks located outside the country which issues the currency.

Euro currency is the new single currency of Monetary union , which was adopted on January 1,1999 by 11 member states. On January 1,2002, these countries officially introduced Euro banknotes and coin as legal tender. Greece was 12 member who adopted Eurocurrency and Slovenia was 13 member to adopt euro currency.

Answer C) Euro bonds-Euro bond is a fixed income debt security denominated in different currency than local currency , where the bonds been issued.

Eurobonds gives permission to raise funds by issuing bonds in a foreign currency. If a Eurobond is denominated in USD then it will be considered as euro dollar bond.


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