NPV profile, seems all Greek to me

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Key similarities and differences between central banks and financial & banking institutions

Banks play a key role in the financial sector by contributing to economic growth and the services of individuals and entities. In addition to the basic function of lending, banks can provide various other services that help the economy to function smoothly. Serving the general public with a variety of services, they perform representation functions such as collecting bills of exchange, offering pension and insurance services with the aim of social responsibility, pushing for savings and protection (compensation for property and accidents). But by offering investment products, acting as financial advisers helping their clients with stock quotes, bond offers as well as mergers or acquisitions.

In contrast, the central bank is a financial institution where it differs from the rest. It is the body that regulates the entire banking and monetary system of the country, finding the ways by which it will achieve the goals set by the government (inflation targets) in order to maintain economic stability, managing the monetary and credit system of the nation. It is a non-profit public institution unlike the rest where it can be either public or private with non-profit functions. The link between the two is the role of the central bank to regulate various parameters of commercial banks such as the ratio of cash reserves, the legal liquidity ratio and also exercising direct controls in cases of ethics and emergency lending of banks.

The opportunities for a bank to enter foreign markets.

There is a wide range of theories in the explanation behind the logic of bank expansion abroad, which provides possibilities that vary from case to case. Depending on how a bank chooses to enter a foreign market, it acquires the corresponding exposure in it. The simplest form of entry is through correspondent banking where you do not need a physical presence abroad, acquiring basic cash management services, transactions (domestic, foreign currency) and trade credit. It can be argued that responsive banking is not a strategy of competitive entry into foreign markets but an offer of services in foreign financial markets and to serve international customers without having to open branches abroad. Banking services for credit facilities (loans, overdrafts and pending loans) are not easily provided without the Bank's representation in the market.

When deciding to enter they should consider the cost of entry, exit and operation. The way to bring the lowest possible cost is a representative office, where it can not operate independently but only to attract and create business activities for the parent bank. Entry methods are different for different types of banks, specialized banks such as investment banks aαre more attractive in getting representative offices than setting up an agency or branch as there is no need to access basic functions such as deposits and loans but mainly financing the holding of securities through the commitment of these securities in repurchase agreements (repo). The branch in the foreign market is not an independent legal entity but an integral part as a legal and operational part of the parent company. The decision-making process is not fully outsourced but has greater autonomy compared to domestic branches, providing all the functions allowed by the host country's banking authorities where they are subject to banking supervision by both the parent company and the branch. . If it wants to enter as a separate legal entity to have its own funds, it will choose the subsidiary where it can be the result of an acquisition or a newly established company (greenfield) signaling a greater commitment with a more positive assessment of prospects for sustainability and business efficiency.

The financial operation of the bank that has entered the foreign market in addition to the functions of secured financing with assets, discounting invoices and agency. It has to do with the size of the foreign market client where traditional bank loans and overdraft financing are for relatively small businesses with international operations, as opposed to multinational bonds and syndicated loans. In general, the possibilities offered by a bank in financing bonds and letters of credit to foreign companies can be differentiated based on the company's experience in the market, issuing European Shares and Letters of Credit (LOC) for start-ups and securities, fund management, guarantees, collateral, and syndicated loans to finance essential projects.

Why the Central Banks should be independent?

The central bank's crucial role is to ensure the stability of the currency through complete independence while keeping inflation levels low and stable. But it is not often where its role will lead to preventive oversight of functions that are inextricably linked to action. For example, the functions of a central bank tax representative. In addition, the financial sector of the central bank with regulatory functions and advisory powers, as well as its own participation in the financial system allow to encourage the development of the sector, which will require close coordination with the government, for example in legal reform.

Economists argue that banning monetary financing of governments is a key element in ensuring the operational independence of a central bank. By protecting its independence, it helps ensure that monetary policy decisions are geared towards monetary objectives while maintaining the health of the economy, rather than having to accept pressure from public authorities to help finance government deficits. But it is very common for a central bank to declare independence of an institution without independence of purpose. In this case, the government sets its own monetary policy goals and leaves the choice of instruments to the central bank, depriving it of long-term economic stability.