A Bank May Establish a Multinational Operation for the Reason

A bank may establish a multinational operation for the reason of risk reduction.The underlying rationale being that

A) by maintaining foreign branches and foreign currency balances,banks may reduce transaction costs and foreign exchange risk on currency conversion if government controls can be circumvented.
B) greater stability of earnings is possible with international diversification.Offsetting business and monetary policy cycles across nations reduces the country-specific risk of any one nation.
C) multinational banks are often not subject to the same regulations as domestic banks.There may be reduced need to publish adequate financial information,lack of required deposit insurance and reserve requirements on foreign currency deposits,and the absence of territorial restrictions.
D) multinational banking operations help a bank prevent the erosion of its traveler's check,tourist,and foreign business markets from foreign bank competition.