INTERNATIONAL BANKING AND LARGE COMMUNITY BANKS: A PRELIMINARY LOOK

Banking has had a rich and illustrious history. Much of its development can be related to the banks' ability to provide international banking services. This paper looks at the trends and current state of the U.S. banking industry, specifically large community banks, with regards to providing international services. Using FDIC call report data, we document how fewer institutions (large community banks) are offering international services. The study excludes larger, money center banks due to their likely involvement in international finance from a trading or hedging perspective rather than one of servicing customers. Smaller banks are excluded because they tend to have neither the customer base to demand such services nor the resources necessary to provide them. We focus on determining specific operating and financing characteristics that are associated with banks more often involved with providing international banking services. The results shed some insights on the apparent inconsistencies in which institutions operating in the most dynamic financial markets in the world are avoiding activities that would be expected to benefit both themselves and their customers. [PUBLICATION ABSTRACT]