Does an Italian bank use a business process management tool and other technically advanced software like your bank in the USA? When did banking begin, and in what country? How does the USA compare in world rankings? Read on for a brief overview of world banking and statistics. The facts may surprise you.
?
Islamic banks forbid earning interest. Following Islamic code, banks must strictly rule out accumulating interest and instead earn profit from service and handling fees. China ranks #1, #2, and #3 in the world for bank market capitalization. The USA comes in at #5, following the UK. That's right, both China and the UK are beating the USA in that category of finance.
?
Anyone who has handled a bank account in another country knows that banking processes are not all the same. Although most Americans prefer to think of their bank as a trusted government-like institution, banks are in fact just another sector of business. Banking abroad can put an American into an extreme state of "culture shock" after they are slapped with hidden fees and unusual requirements. Despite including moments of sheer terror, banking in another country can pad your pocket book, too.
Lower interest rates and tax exemptions are reasons why the rich take their money offshore.
?
Banking traces back to the ancient Roman Empire, where moneylenders would set up tables in the middle of cozy courtyards, eating grapes and trading coins. The word bank comes from the Italian word banco, which means "desk." These desks were merely the vessel for the precious commodity that makes the world go round: cash. During the time of the Roman Empire, bankers were doing little more than converting foreign money into the Imperial Mint of Rome.
?
For centuries, banks dealt mainly with commercial and business lending. Banking for every-day consumers is a relatively new invention, and now a seemingly mandatory part of every person's life.
?
In Austria and other European countries, you pay a quarterly fee just for the privilege of banking. Other fees and restrictions apply. For example, bank accounts of the deceased go directly to the state, who determines what portion, if any, the surviving family may receive.
?
Who is on top? Which banks in the world have the most money? Earlier I recounted that China is leading the world in market capitalization, but Americans will be relieved to know that the USA ranks #1 and #2 in the world for bank shareholder equity. Who is biting at our heels in that category? The UK, coming in at #3, Japan at #4, and France at #5. So the French really do have a reason to act haughty.
?
For the top banking assets in the world, sadly, the USA falls out of of #1 again, landing at #3. In the lead is the UK at #1 and Switzerland at #2. The UK takes #1 again in the ranking of Tier 1 capital, with 79 billion dollars in the HSBC Company. The USA's powerhouse companies are Citigroup, Bank of America and JP Morgan Chase, taking the rankings of #2, #3 and #4, respectively.
?
Since the USA is not number one, on several counts, diversifying your money in other countries' financial institutions may not be a bad option. Of course, you will want there to be a clear benefit to you, in interest or taxes, in whichever foreign bank you choose.
