Part of these services was the act of foreign banks buying up United States banks, internationalizing them by making transactions available in many world currencies.
According to a study by the U.S. Comptroller's office, 102 U.S. banks were acquired by foreign concerns during the period from 1970 to 1984, a period which also saw the beginning of bank failures. Franklin National Bank, for instance, was undercapitalized and highly leveraged and when it folded in 1974, was purchased by European American Bancorp, a company owned by six European banks (McClintock, 1996, 15).
In 1982, the world banking community was shocked when it was revealed that Banco Ambrosiano which had close links with the Vatican, was for all practical purposes financially insolvent (Allis, 1987, 54). The scandal heightened when its chairman Roberto Calvi was found hanged in a suicide. The news stories blamed poor management and bad investments and Ambrosiana had to be merged with the Catholic bank, Banca Cattolica del Veneto and be renamed Banca Ambroveneto before it could regain stability (Tully, 1987. 28). For blatant fraud and mismanagement, as well as illegal conversion of funds, the BCCI scandal of 1991 is unequaled. In a report entitled "The BCCI Affair" it is described as "an elaborate corporate spider web with BCCI's founder, Agha Hassan Abedi and his assistant, Swatch Naqvi, in the middle -- was an essential component of its spectacular growth, and a guarantee of its eventual collapse" (BCCI Affair..., 1992, 1).
A similar report on the failed Bank of Barings by the Bank of England suggests that that bank institution failed because of "unauthorized and concealed trading activities of the bank" and a "serious failure of controls and management confusion within Barings" (Extract from..., 1998, 1). In effect, all of these bank failures can be attributed to currency trading practices and poor management.
Banking in the Asian Currency Crisi...
Crisis in Southeast Asia. (1969, December 31). In LotsofEssays.com. Retrieved 08:27, December 18, 2014, from http://www.collegetermpapers.com/viewpaper/1303427781.html