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International Activities of U.S. Banks and in U.S. Banking Markets James V. Houpt, of the Board’s Division of Banking HISTORICAL BACKGROUND Supervision and Regulation, prepared this article. Mark Peirce, as well as Steve Schacht and Suzie For U.S. banks, the 1960s and 1970s were years of Taylor, provided assistance with data. rapid growth in international banking. The few truly global ones, which had long before ventured abroad, The globalization of financial markets, made possible refined their networks and penetrated foreign markets largely through market deregulation and technologi- more deeply. Other large regional and money center cal gains, has been widely recognized. Increased banks also expanded their operations, though they trading and derivatives activities, in particular, are largely confined their activities to foreign financial often cited as making financial markets more liquid centers and to commercial lending and wholesale and efficient and bringing markets throughout the financial business. world closer together. International lending by U.S. Meanwhile (mostly in the 1970s), many smaller and foreign banks, along with international trade and U.S. regional institutions began to recognize the bene- the innovative financing necessary to support trade fits of a foreign presence, principally to accommodate and economic growth, has also grown rapidly in and retain domestic customers whose activities were recent decades. beginning to extend beyond U.S. borders. Some of Nevertheless, the extent of global markets and t