Banking in foreign countries is often regulated by a central, or reserve, bank. Central banks in foreign countries (and in the U.S.) are responsible for maintaining the stability of the nation's currency. A central bank, for instance, regulates interest and foreign exchange rates, among other duties.

In many ways, foreign banks are not so different from U.S.-based banks. Central banks of various countries supervise and regulate the entire banking industry for the given nation. Without these central banks, foreign banks might be highly unstable and prone to fail more often.

To gain a better understanding of how international banking works, learn more about what foreign centralized banks do for a nation's economy. For example:

1. Foreign centralized banks act as a banker for the country's banks, even lending money if a bank is in dire need of funds.

2. Foreign central banks manage the government's stock register, set gold standards and regulate exchange rates.

3. Central banks in foreign countries set the country's interest rates and regulate all the banks in the country.

Action Steps
The best contacts and resources to help you get it done

Know how to access and understand economic information through foreign central banks

The central bank of Japan will have different exchange rates, interest rates and information than the central bank of India. Explore central bank data and information by country to understand the economic picture in certain locales.

I recommend: Central Banking Publications provides a list of links to central banks in other countries, including European central bank links. New York University School of Law offers online information and real-time classes for those who want to better understand banking in foreign countries.

Study and compare statistical information on foreign central banks

Central bank statistics can help you stay current on exchange rates, government deficit and other factors, which help you gain a clear understanding of the economics in a foreign country.

I recommend: ExchangeRate.com provides statistical information to give you up-to-date information on banking, securities, exchange rates and other economic information in foreign countries. European Central Bank’s website offers a wealth of information from the central banks throughout Europe.

Use research and resources from central banks in foreign countries

Understanding banking in foreign countries helps you make better international business decisions and investments. Many central banks offer tools and resources, and comprehensive research, to help you gain a worldwide perspective on the world of finance.

I recommend: Bank for International Settlements offers a research hub which will help you gather information to learn more about banking in foreign countries and it also offers a list of central bank websites you can search through to find which banks serve which countries. Bank of England maintains an easy-to-use interactive database, so you can always understand the value of a dollar...internationally.

Tips & Tactics

Helpful advice for making the most of this Guide

• •  Foreign banks may operate like U.S. banks in many ways, but in some ways, they can be very different. Read the mission statement and/or About Us pages on foreign central bank websites to understand how they differ on a country-by-country basis.