Differences between Domestic and International Banks - Essay Example

International banks traverse geographical boundaries and transactions of various countries can be done in these countries. Because of the smaller scale in which domestic banks operate, the financial standards are low as compared to the international banks. U.S. companies use international banks to run the usual financial operations of financial institutions for growth and financial developments. The companies use the banks to invest large amounts of capital especially with the aim of expanding their international business.

These companies seek the partnerships of other foreign companies and thus use the international banks for the transactions. Modern multinational companies also benefit in many ways from the use of international banks. International banks are sources of financial products and services, cash management is the key service offered (Demsetz & Strahan, 2007). The range of services enables the efficient management of the complex processes of the companies. The companies also use the banks for foreign exchange services and even equity offerings.

These services give back large value to the companies and at the same time ensure the companies are well-engaged on the global business scale.