The foreign exchange business of the Australian trading banks

Abstract

The role played by the Australian trading banks in financing foreign trade has undergone substantial changes in the last thirty years. The present article examines this evolutionary process. According to the author, during this period the Australian banks "made themselves increasingly independent of London bank intermediaries for foreign (as contrasted with sterling) exchange business, by developing direct correspondent relations with banks in most foreign countries. Since World War II, exchange control has still further strengthened their position by eliminating all legal competition for any ‘outside market' within Australia, which earlier had at times made inroads into their business". Special attention is given to the technical aspects which today characterise the various types of operation carried on by the Australian banks, both in financing oversea trade and the performance of complementary services.

JEL: F31, G21