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multinational cash management

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The Acme Company is exploring many strategic options. Whichever global business strategy the Acme Company eventually chooses, the firm inevitably will require the services of a bank to help manage its working capital. Many major multinational banks provide a variety of working capital and multinational cash management services.

Here is a list of Acme's assumptions:

*It will have subsidiaries in South America and Asia that import materials and parts and assemble for export.

*It wants to centralize cash management.

*It needs local lending sources for operating cash.

*It needs short-term investment vehicles for excess cash balances.

*It needs foreign exchange and forward market services.

*It will have bills to pay in both local and other currencies.

Using the websites of a variety of these cross-border banks (starting with the banks listed below), search out the international banks that offer multinational cash management services that combine banking with foreign exchange management. Select one bank and describe how the services it offers will take care of Acme's international working capital management requirements. Be sure to demonstrate why you believe your choice is the best alternative among the banks you investigated (i.e., compare and contrast).

Bank of America
HSBC
Wachovia

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Solution Preview

There are a wide number of banks providing such international cash management/ working capital management and treasury management services worldwide. Some of the most prominent names in this regard alongwith the ones listed above ( Bank of America, HSBC, Wachovia) are:

Citibank
Standard Chartered Bank
Deustche Bank
Credit Suisse
UBS
Royal Bank of Scotland
Natwest
BNP Paribas
Barclays

For a company like Acme which is planning to set up operations globally, especially in regions like Latin America and Asia, one needs a bank which has global presence in these regions and can provide all the solutions under one roof at affordable prices. The bank should be easily accessible in all the countries where the company will be operating and should provide a host of services for every conceivable cash management and treasury management requirement.

Even though there will be quite a few strong candidates who will fit this profile, such as HSBC, UBS, etc., my choice for Acme will be Bank of America (BOA), which conducts business in over 180 countries throughout Europe, Latin America, Asia and North America via a chain of international offices in 28 countries and a network of 2,500 correspondent relationships. Therefore, Acme can look forward to Bank of America in all the countries in which it is planning to operate, not only in the current phase but also in the future phases.

The Bank has won several accolades, especially in the cash management arean, which makes it an ideal choice for a company like Acme:

"Best Bank for Payments and Collections in North America" and "Best Liquidity/Working Capital Bank in ...

Solution Summary

Using the websites of a variety of these cross-border banks (starting with the banks listed below), search out the international banks that offer multinational cash management services that combine banking with foreign exchange management.

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