Article Abstract:
A review of the Japanese banking system highlights some of the cultural and operational differences in structure, method of payment, operating service cost structure, and cash balance management. The banking structure includes ordinary banks with traditional commercial activities and a number of specialized government and private institutions. Most day-to-day business of US multinational corporations is handled by the ordinary banks in the society where goods and services are paid for in cash. The unimportance of checks reduces the importance of mail and clearing float. The managing and monitoring of bank compensation is difficult because banks in Japan do not generate account analysis statements while measuring the status of the minimum balance negotiated when an account was opened. The high associated costs deter from the selection of Japan as an Asian center for financial operations of most US multinational corporations.
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Article Abstract:
Decentralized management of decentralized foreign exchange exposure can work just as well for some firms as complete centralization works for others. Treasurers attempting to choose a specific framework should investigate such issues as intercompany billing policy, the volume of intercompany cash flows, third-party billing policy, cash-flow volume by country, marketing's determination of the foreign-currency-denominated price of a service or product that has a US dollar cost price, the location within the company of foreign exchange risk management expertise, the segmentation of the company's exposure management information and accounting needs, and the extent to which centralization might lead to fewer conversions. An organizational matrix is presented showing four ways to manage foreign exchange exposure.
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Article Abstract:
Corporate treasury managers of US firms that conduct business in Great Britain should understand British banks and clearing systems, payment instruments, short-term working capital funds, and foreign exchange controls. The major clearing mechanisms are: town clearing, which is the same-day settling of sterling transactions; general clearing; and the Bankers Automated Clearing Services. Payment instruments other than cash include checks, electronic funds transfers, bank drafts, and bankers' payments. Borrowing and investment instruments include bank advances, bills of exchange, and notice money. Exchange controls have not been exercised in the UK since 1979. These and other aspects of British controllership and treasury operations at the corporate level are explained.
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