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Why do large banks look beyond their own national borders?
ABecause their home regulator requires them to expand
BTo find profitable opportunities and unmet customer needs
CTo escape the deposit insurance premiums levied at home
DBecause they must hold reserves in a foreign currency
Answer & Solution
Correct answer: B. To find profitable opportunities and unmet customer needs
1. Consumers in some countries need banking services that banks in their own country do not provide.
2. That unmet need is an opening for a foreign bank.
3. Large banks therefore look beyond their national borders for profitable banking opportunities.
4. Expansion is a commercial choice, so no regulator is ordering it.
_Source: OpenStax Introduction to Business (CC BY 4.0), Ch 15 "Understanding Money and Financial Institutions", section 15.5 International Banking_
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