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The MNE Enjoys a Much Greater Choice of Banking Sources

question 47

Essay

The MNE enjoys a much greater choice of banking sources to fund its working capital needs than do domestic firms.Banking sources available to MNEs include in-house banks funded by unrepatriated capital,international banks,and local banks where subsidiaries are located.Describe how an in-house bank works to finance working capital needs.


Definitions:

Federal Depository Bank

A financial institution that is authorized to hold deposits for the Federal Reserve System and process related transactions.

Payroll Taxes

Taxes imposed on employers and employees, calculated as a percentage of the salaries that employers pay their staff, including social security and Medicare taxes in the United States.

Contingent Liabilities

Potential financial obligations that may occur depending on the outcome of a future event.

Future Event

A prospective occurrence or situation that has yet to happen, often considered in planning and strategy contexts.

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