Question

What are financial institutions? What are some examples of financial institutions? How are they regulated and what are some of their internationalization strategies?

Answer 1

As name suggest , financial Institutions are companies to provide services in financial market . Some of the major services are saving , deposits , lending , wealth management , investment , insurance , banking etc.

Some popular financial institutions are:

• central Banks
• commercial Banks
• Insurance companies
• credit Unions
• Investment bankers
• Mortgage institutions
• Hedge fund
• Mutual fund house

These financial institutions are heavily regulated under different laws and act .Regulatory structures are varies from country to country , but generally involve prudential regulation ,market structure and protection of consumer for stability in market.

Some major agencies of regulation are.

• the Federal Financial Institutions Examination Council
• The  Federal Deposit Insurance Corporation
• Federal reserve
• Office of the Comptroller of the Currency
• Securities and exchange commission

These financial institutions can expand their business by method of internationalization , some popular strategies used :

• Greenfield investment strategy : starting new company in different country
• Acquisition
• Joint venture with existing institution of the country
• Open representative office for limited excess of business
• Open branch in foreign bank category

etc.