Cross border banking is, of course, determined by trade and investment flows. Trade and foreign direct investment (FDI) in Asia – both intra-regional and international – is growing by more than 10 per cent, almost twice the growth in G-7 countries. But the growth of financial integration is still limited with home country banking business being more than three fourth of their services.
Given the intraregional trade flow, trade finance implies greater transaction banking opportunity, but the financial institutions have yet to grab the opportunity. As such, cross border presence and transactions of banks depends upon the size of capital and volume of transaction.