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7 DePaul Bus. L.J. 143 (1994-1995)
Towards the Next Phase in International Banking Regulation

handle is hein.journals/depbus7 and id is 149 raw text is: NOTE TOWARDS THE NEXT PHASE IN INTERNATIONAL BANKING REGULATION I. INTRODUCTION International banking activity has grown in both volume and speed. Individuals and corporations move trillions of dollars across borders with incredible ease. The speed of these transactions makes regulation increasingly difficult. International banking has become a mainstay, rather than an exceptional part of commerce, as almost one-third of total bank assets are international in character.' Although not widely discussed, evidence suggests that international banking is no longer the exclusive province of the developed West with developing coun- tries now the source and destination for international movement of funds.' Unfortunately, the current regulatory system is inadequate to deal with these new challenges. Notwithstanding recent reforms in the United States and Europe, destabilizing activity will continue, due in part to the lack of binding, uniform laws in all countries with interna- tional banks. 1. Mary E. Footer, GATT and the Multilateral Regulation of Banking Services, 27 INT. LAW. 343 (1993). Indeed, as the author notes, in offshore banking centers, international transactions make up as much as 90 percent of all transactions. See also Catherine L. Mann, U.S. International Trans- actions in 1993, 80 Federal Reserve Bulletin 365, 377 (1994) (gross transactions in U.S. Treasury Securities by institutions in Bermuda, the British West Indies and the Netherland Antillies rose from $300 billion in 1992 to $400 billion in 1993). In 1988, U.S. bank exposure to borrowers in the devel- oping world amounted to $104 billion or 37% of foreign exposure. The American Banker, Jan. 25, 1989, p.18. See also, Will Hutton, World in Need of p Grand Bargain, THE GUARDIAN, July 18, 1994, p.10 (cross border lending now exceeds a quarter of the industrialized countries GDP); Note, The Bank of Credit and Commerce International Scandal: A warning for Bank Regulators, 24 LAW & POL'Y INT'L Bus., 1267 (1993) (assets of U.S. branches of foreign banks quadrupled between 1980 and 1990 reaching $626 billion); Scott, infra note 3, at 491 (in addition to $626 billion in branches, $174 billion foreign bank assets are deposited in subsidiaries). 2. Id. at 359 (stating that [tiowards the late 1970s, multinational banking institutions with a developing country origin accounted for about 20 percent of branches and 6 percent of subsidiaries worldwide .... [i]ndeed Indian commercial banks by 1984 had 141 branches operating in twenty-five countries.).