International Banking

International banking is not a new phenomenon.1 International lending by means of letters of credit and bills of exchange can be retraced as far back as the 21st century BC. Florentine banking houses of the 14th and 15th centuries had branches and subsidiaries through Europe. British and European bankers were deeply involved in the development of the ‘new world’. The breakdown of the gold standard, the decline of sterling as the world’s major currency, and the emergence of foreign exchange and trade restrictions in the inter-war period were to have a major influence on the growth and evolution of the international banking business. What distinguishes recent spurts in international banking from earlier periods is the size and scope of the business.