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An empirical study of international correspondent banking in

Soon-Lim Chan University of Wollongong

Chan, Soon-Lim, An empirical study of international correspondent banking in Aus- tralia, Doctor of Philosophy thesis, Department of Marketing, University of Wollongong, 2001. http://ro.uow.edu.au/theses/1476

This paper is posted at Research Online.

Appendices 235

APPENDICES APPENDIX 1

INDIVIDUAL AUTHORISED BANKS IN AUSTRALIA ASAT310CTOBER1996

Bank Name Abbreviations BSB Majors: Australia and New Zealand Banking Group Limited ANZ 01&71 ANZ Grindlays Bank Limited (a subsidiary of ANZ (HO@MeIbourae) Banking Group Limited) of Australia CBA 06 (HO@Sydney) Commonwealth Development Bank of Australia (a subsidiary of Commonwealth Bank of Australia fromJanuar y 1991) Limited NAB 08 (HO@Melboume) Bank of New Zealand (a foreign branch in Australia but it is a subsidiary of NAB from November 1992) Banking Corporation WBC 03 (HO@Sydney) Challenge Bank Limited (a subsidiary of Westpac Banking Corporation from December 1995)

Non-Majør/Regional Banks Adelaide Bank Limited ADL 610(HO@Adelaide) Australia Limited ADV 192 (HO@Sydney) Bank of Limited (a subsidiary of Advance Limited from August 1995) 55 (HO@Melboume) Bank of Melboume Limited BML 633 (HO@Bendigo) Bendigo Bank Limited BBL 12 (HO@Brisbane) 9 Bank of Limited BQL SBN 40 (HO@Sydney) 10 Colonial State Bank Limited (formerly State Bank of ) 18(H0@Sydney) 11 Macquarie Bank Limited MBL 48 (H0@Brisbane) 12 Metway Bank Limited MET 13 Queensland Industry Development Corporation QIB 924 (HO@Brisbane) 14 St. George Bank Limited STG 11 (HO@Sydney) St. George Partnership Banking Limited (formerly a retail arm of Barclays Bank Australia Limited; a subsidiary of St George Bank fromApri l 1994) 42 (HO@Hobart) 15 Tmst Bank TBT

Foreign Banks - US Banks: 23 (HO@Sydney) 16 National Tmst and Savings BAL Association (B) 26 (HO@Sydney) 17 Bankers Tmst Australia Limited (S) BTA 24 (HO@Sydney) 18 CitibankN.A. (B) CTI Citibank Limited (S) 915(HO(^delaide) 19 The First National Bank of Chicago and NBD (B) FNC 920 20 Morgan Guaranty Tmst Company of New York (B) MGT (HO(^elboume) 913(HO@Sydney) 21 State Street Bank and Tmst Company (B) SSB 21 (HO@Sydney) 22 The Chase Manhattan Bank Limited (B) CMB APPENDK 1 Foreign Banks - British Banks: 23 Barclays Bank PLC (B) BCB Nil (HO@Sydney) 24 Hongkong Bank of Australia Limited (S) HBA 34 (HO@Sydney) 25 Lloyds Bank NZA Limited (S) LBL 31(H0@Sydney) 26 Midland Bank PLC (B) MID 921 (HO@Sydney) 27 Netwest Markets Australia Limited (S) NWA 25 (HO@Sydney) 28 Standard Chartered Bank Australia Limited (S) SCB 43 (HO@Sydney) 29 Bank of Westem Australia Limited (S) (a subsidiary of BWA 30 (HO@Perth) the Bank of Scotland)

Foreign Banks - Japanese Banks: 30 Tlie Asahi Bank Limited (B) ABS 630 (HO@Sydney) 31 Bank of Tokyo-Mitsubishi (Australia) Limited (S) BOT 29&39 (HO@Sydney) 32 The Dai-Ichi Kangyo Bank Limited (B) DKB 918 (HO@Sydney) 33 IBJ Australia Bank Limited (S) IBJ 36 (HO@Sydney)

Foreígn Banks - European Banks: 34 Banque Nationale de Paris (B) BNP 22 (HO@Sydney) 35 Credit Suisse (B) CRSS Nii (HO@Melbounie) 36 Aktiengesellschaft (B) DBA 41 (HO@Sydney) 37 ING Mercantile Mutual Bank Limited (S) ING 923 (HO@Sydney) 38 Nederland (B) PIB 14 (HO@Sydney) Primary Industry Bank of Australia Limited (S) (a foreign owned subsidiary bank of RabobankNederland from October 1994)

Foreign Banks - Asian Banks: 39 . BankofChina(B) BOC 35 (HO@Sydney) 40 • Overseas-Chinese Banking Corporation Limited (B) OCB 45 (HO@Sydney) • Bank of Singapore (Australia) Ltd (S) (a subsidiary of OCB)

41 • Overseas Union Bank Limited (B) OUB Nil (HO@Sydney) 42 • Limited (B) UOB 922 (HO@Sydney) 43 • Arab Bank Australia Limited (S) ARA 917 (HO@Sydney) Sources: RBA's Individual Authorised Banks in Australia as at 1 November 1996 and BSB Numbers in Australia April 1997 edition. Notes: 1. Banks in Australia classified in three groups - Australian owned banking companies (total=:20), foreign subsidiary banks (total =13) and foreign branch banks (total=19). 2. Reserve Bank of Australia (RBA) is the central bank of Australia: HO@Sydney and its BSB is 09. Kevs: AHO=Australian Head Office and HO=Head Office. BSB=Bank-State-Branch APPENDDí 2 List of Bank Participants in the Corbanking Survey, 1996/1997

Bank Contact Person(s) ANZ Banking Group Ltd. Brian T Barry, Senior Manager Corbanking Products and Services Conunonwealth Bank of Australia Gavin E J Forte, General Manager Financial Institutions Group, Institutional Banking National Australia Bank Ltd. Allan H. Harvey, Manager, Asia Pacific, Intemational Banking Relations Westpac Banking Corporation Peter R Larsen, Head of Global Banking Relationsliips, Europe, Middle East and Africa, Institutional & Intemational Business Group Adelaide Bank Ltd. Graham Schulte, Manager Payment Systems Advance Bank Australia Ltd. Mariella Dovmey, Manager Treasury Settlements Bendigo Bank Ltd. David Spence, Manager Retail Deposit Services Bank of Melboume Ltd. Keven R. Hodgson, Manager Treasury Settiements Ltd. Howard Smith, Manager Intemational Banldng Colonial State Bank Ltd. John Elmer, Manager Intemational Operations Macquarie Bank Ltd. Sarah Harrington, Associate Director, Correspondent Banking Metway Bank Ltd. Rodney J. Dark, Manager Intemational BanJdng Services QIDC Robert Veronica, Manager Business Development St. George Bank Ltd. Simon Barker, Executive Manager Treasury Operations & Support Services Trust Bank of Tasmania Leigh Albertson, Manager Intemational Services Bank of America, NT. & SA. Mark A. Troutman, Vice President Correspondent Banking; John Hadlow, Vice President and Senior Portfolio Manager-Financial Institutions Risk Management - Asia Bankers Tmst AustraUa Ltd. Managing Director and Division Head South Asia CitiBank Ltd Christopher S. Moore, Vice Present Intemational Correspondent Banking The First National Bank of Paul Shinkfield, Vice Present & General Manager Chícago and NBD Corporate &Institutional Banking Morgan Guarantee Tmst Company Anthony St. G. Edmonds, Vice Present Corporate of New York Banking State Street Bank and Tmst John Rail, Manager Operations Company Chase Manhattan Bank Ltd. Grahame M Batger, Manager Operations Global Payment & Treasury Service, Vice President 5û THE UNIVERSITY OF APPENDK 3 SOUTHERN QUEENSLAND Leslie Chan 'OOMBA TOOWOOMBA QUEENSLAND 4350 Department ofF hance &'B5nmg' AUSTRA LiA Fãculty of Commerce TELEPHONE(076)3I2100 Phone: (076)312904 (Business) Fax: (076) 312625 E'mail: [email protected]

4November 1996

Dear Respondent

Re: Empirical Research Survey: International Correspondent Banking

Thank you for agreeing to participate in this empirical survey. The purpose of this study is to gain insight into the contemporary intemational correspondent batiking. The study is a major component of my Doctor of Pfailosophy research. I am a member of stafif of University of the Southem Queensland and a PhD candidate of the University of Wollongong. This study is the first major investigation of correspondent and will clarify many of the issues conceming contemporary practice.

The study consists of Six main sections. Your responses will of course remain confidential. For analysis and reporting purposes your responses wiU be combined with those fromothe r fínancial institutions.

Please attempt to answer all questions on the survey. If you have any queries or require flirther clarification regarding any part of the survey, please do not hesitate to contact myself

If you would like to receive a summary of the main findings of my research, please include your business card with your completed survey, or to ensure your confidentiality send your business card separately to me at the above address.

I would like to take this opportunity to express my appreciation for your cooperation in completing and retuming this questionnaire as soon as possible, and to thank you for your valuable assistance with my research.

Yours sincerely

LeslieChan' Supervisor: Dr Tony Naughton Phone: (076)312904 (Busmess) (02)3855858 Fax: (076) 312625 E-mail: [email protected] APPENDK 2

BZW-hivestment Div Barclays lain Hiscock, Manager Equities Administration BankPLC HSBC Group Australia Ltd Russell W. Shields, Senior Manager Financial Institutions Group, Australia & New Zealand LlovdsBankNZALtd Stewart Keuneman, Manager Settlements Country Natwest Securities Tony McCulIough, Director Australia Ltd Standard Chartered Bank Australia John Plumridge, Country Executive, Australiasia Ltd. Institutional Banking Bank of Westem Australia Ltd Tom Branch, Manager Operations Asahi Bank Ltd Jin H. Lim, Chief Manager Corporate Banking Bank of Tokyo-Mitisubishi Ltd. Oliver Mak, General Manager Operations Dai-Ichi Kangyo Bank Ltd. Neil Leow, Chief Manager Operations and Loan Administration IBJ Australia Bank Ltd. Andrew Tagg, Financial ControIIer BNP Wayne R. J. Green, Senior Manager Capital Markets Credit Suisse Christopher E. Ammarm, Manager Corporate Finance Deutsche Bank AG. Sydney Ron Perry, Senior Manager Foreign Exchange Settlements and Payments ING Mercantile Mutual Bank Ltd. David Lim Manager Intemational Operations Rabo Australia Ltd & Primary Mark Houghton, Manager Treasury Settlements hdustry Bank of Australia , Sydney Terrance Y Wang, Deputy General Manager OCBC Ltd. - Bank of Singapore Julie Lew, Manager Operations Overseas Union Bank Ltd. Kacey Lim, Vice Present & Head Operations United Overseas Bank Ltd. C.C. Ong, Manager Operations Arab Bank Australia Ltd. Jack Beighton, Managing Director CoreStates Bank, Representative Judy Margala, Vice President & Chief Office, Sydney Representative Bank of New York, Representative WiIIiam S. Watson, Vice Present & Country Office, Melboume Manager APPENDIX 3 Department of Management University of Wollongong Survev Questionnaires For Correspondent Bankin^ j^y I remind you that all responses are completely confidential and will be used only in combination with the replies of others for analysis and reporting purposes. IFYOUARE A CORRESPONDENTBANKINGSERVICES USERONLY, PLEASE COMPLETE ALL SECTIONS EXCEPT SECTION 2.

Section 1: Background Information of Your Bank flease answer or circle the appropriate answers on bold numher(s).

1.1 Your Bank Name is

1.2 The designation(s) of person(s) completing this questioimaire is/are

1.3 What is/are your bank's roles in the correspondent banking business? 1. a corbanking services provider 2. a corbarJdng services user 3. a corbanking services user and provider 4. Others

If your answer is 2.- user please complete all sections except section 2(Provider)

1.4 Please hst the number of your intemational correspondent banks as follows: L total number world-wide ; 2. at least one corbank m the foUowing major fínancial centres: please circle the appropriate answers: 3. New York/4. London/5. Tokyo/6. Franlíftirts/7. Amsterdam/S. Zurich/9. Honglcong/ 10. Singapore/IL Bahrain

1.5 How many staíf are working in your correspondent banking íunction/units? staff

Section 2: Correspondent Banking(Corbanking) Services Provider Acorbanking provider or supplier, also known as a Correspondent Bank, is a bank supplying corbanking products and services to its banker clients fromth e seller's point of view.( Please circle the appropriate answers on bold number(s): l=most important, 2=very important, 3=important, 4=fairly important and 5=least important.)

2.1 Is CorrespondentBankingoneofyourcorebusiness? 1. Yes 0. No

22 What is the status of yoxxr correspondent banking unit? 1. No specific corbanking unit. 2. a corbanking unit within a department such as BiIIs or intemational or institutional department/xmit. 3. an independent department. 4. others(please speciíy) If you answered 2 or 3 to Question 2.2, please answer (a)&(b): (a) How many years has your first correspondent banking unit been estabhshed? years. (b) What is the existing name of your corbanking unit? 1 APPENDIX 3 What are the reasons/objective for your bank as a corbanking provider to set up corbanking business^í'i ^^most important & 5=least important) 1. SelUng excess capacity 12 3 4^ 2. Risk diversification 1 2 3 4 S 3. Customer driven/needs 1 2 3 4 S 4. Reciprocity 12 3 4 5 5. Intemationalisation Strategy 12 3 4 5 6, Liquidity 12 3 4 5 7. Necessity/Needs 12 3 4 5 8. Complete banking services 12 3 4 5 9. Growingof Bankassets 12 3 4 5 10. Increasing profit 12 3 4 5 11. GrowingofBusiness 12 3 4 5 12. Integrating the bank's operations 12 3 4 5 13. Using the bank's location advantage 12 3 4 5 14. Reducing competition 12 3 4 5 15. Economiesof scale 12 3 4 5 16. Others(please specify) 12 3 4 5

Continue to answer the foUowing subquestions: (a) What are your customers'(banker clients) needs for corbanking services? 1. clearing services 1 2 3 4 5 2. trade-related services 1 2 3 4 5 3. treasury services 1 2 3 4 5 4. intemational syndicated loans 1 2 3 4 5 custodian services 3 4 advisory services 3 4 7. others(Please specifi^) 1 3 4

(b) What are your reciprocal arrangements with your banker clients/users? 1. exchange test/SWIFT key 12 3 4 concessional fees 3 4 share information 1 3 4 share technology and facilities provide reciprocal credit lines 3 4 6. maintain balances 3 4 others(please specifi^)_ 3 4

2.4 Does your bank have the correspondent banking fimctions as foIlows?(the functions are not necessarily performed by a correspondent banking unit but performed by a few departments or unit in your bank) Circle each that is appropriate and indicate the staffnumber Number of StaíF 1. Relationship management 2. Risk management 3. Marketing management(Selling) 4. Resources management(Piu"chasing) ___— 5. Others

2,5 Are operational fiinctions such as opening LC, maintaimng accounts transactions also íunctions of your corbanking unit? 1. Yes 0. No. If yes, please specify other operational fiinctions: APPENDIX 3 26 If you are a market leader in the Australian market, please select one or more of the following corbanking services and products in which you are a leader and estimate your market share: Market Share in %(estimate) 1. clearing services 2. trade-related services 3. intemational syndicated loans 4. treasury services 5. custodian services 6. advisory services 7. others

2.7 Do you consider your corbanking unit/fimctions? 1. a cost centre 2. a profit centre 3. mixtureof 1.&2. 4. others

2.8 Where is the income generated by your corbanking imit/function allocated ? 1. split revenue between corbanking unit and operational units or other units. 2. income staying with the operational units. 3. others(please specify)

2.9 What are the approximate percentages of your banker clients (users) in your banker chents portfolio ? % of your bankers chents 1. Foreign banks in Australia 2. Intemational Banks in foreign countries(Worldwide) 3. Australian majors 4. Regional banks 5. Non-bank financial institutions Total percentage 100%

2.10 Which types of your corbanking products or services generating revenue (in %) contribute to the total corbanking revenue of your bank? Approx. % of the total revenue 1. clearing services 2. trade-related services 3. intemational syndicated loans 4. treasury services 5. custodian services 6. advisory services 7. Tailor made services 8. Others Total 100%

2.11 Do you target on selling to a few key banker clients(respondents)? l.Yes 0. No. If yes, how many key banker clients do you have?^ ^ ^key clients

2.12 How much total balances (estimate) are held in vostro accounts with your bank? A$ andUS$ : APPENDIX 3 (a) Comparing with the past 10 years, have the compensating balances in vostro accounts: 1. increased 2. decreased 3. remained about the same (b) If you answered 1 "increased" to Question 2.12(a), are those accounts with increasing balances which are accounts fi-om underdeveloping coimtries? l.Yes 0. No If Yes, which are the main countries?_

(c) If you answered 2 "decreased" to Question 2.12(a), are those accounts with decreasing balances firom developed countries? 1. Yes 0. No Which are the main cotmtries?

2.13 What are your preferences regarding the benefit for providing corbanking services? (Please circle the degree ofpreference: I =mostpreferential, 2=very preferential, 3=preferentiaî, 4=fairly & 5=Ieastpreferential) 1. Charge fuU fees 12 3 4 5 2. Charge lower fees but with account balances 12 3 4 5 3. Charge no fee but with minimal balance 12 3 4 5 4. Charge no fee but expecting banker clients(users) giving 12 3 4 5 you other business-reciprocity

2.14 Do you charge fees for providing corbanking services? 1. Yes 0. No. If you select Yes, please circle the foUowing: (a) Do you give concessional rates to the foUowing banker clients? 1. havmg acceptable vostro account balances; 2. having reciprocal arrangement or relationship; 3. having historical good relationship; 4. having lower risk rating by your bank; 5. having good relationship rating by your bank 6. others(please specify)

2,15 Do you target to develop your corbanking business in the foUowing location? Asia 3 4 Pacific area 3. North America 3 4 Europe 3 4 5. others(please specify) 3 4

What are your target countries of regions you choose in Question 2.15 for development the corbanking business?

Section 3: Correspondent Banking Services User (Respondents) A corbanking user or puichaser which is also known as a Respondent Bank is a bank buying corbaiUdng products andservices from the buyer's point of view.( Please circle the appropriate answers on bold number(s): 1 most important, 2=very important, 3=important, 4=fairly important and 5=least important.) APPENDK 3 3.1 What are the reasons for having Interaational/Domestic Correspondent Banks/network? 1. Location not physically present 1 2 3 4 5 1 Liquidity i ;; 3 4 3. Profitability 3 4 4. Testing foreign market for entry 12 3 4 5. Reciprocity 12 3 4 6. Customer Driven 3 4 7. Complete intemational network 3 4 8. Provide one stop banking services 3 4 9. Increase Bank assets 10. Intemationalisation Strategy 3 4 11. Gainmg access to local market 3 4 12. Cost saving 3 4 13. Minimise capital investment 1 2 3 4 5 14. Competitiveness 1 2 3 4 5 15. To prevent fraud/money laundering 1 2 3 4 5 16. Necessity/needs 1 2 3 4 5 17. Improve efficiency 1 2 3 4 5 18. Others(Please specify) 1 2 3 4 5

3,2 Criteria of Selecting key correspondents/providers are Hsted as follows, which are more important criteria than other? 1 =most important & 5=îeast important 1. Formal banldng present 1. 2 3 4 5 2. Range of services provided 1. 2 3 4 5 3. Linkage to SWIFT, netting system and etc real 1. 2 3 4 5 time/latest facilities for communication 4. Operational capabilities 1[ 2 3 4 5 5. Historical relationship 1L 2 3 4 5 6. Competitive pricing IL 2 3 4 5 7. Financial Strength: Financial 1L 2 3 4 5 resources/quality/stability 8. Reciprocitv ^L 2 3 4 5 9. Effective accoimt or relationship officers IL 2 3 4 5 10. Good/effective/efficient product deliverv 1L 2 3 4 5 11. Risk ratmg ^[ 2 3 4 5 12. Market renutation \L 2 3 4 5 13. Broad domestic and global branch network I[ 2 3 4 5 14. Consistent business pohcv ^[ 2 3 4 5 15. Innovative in product design ^[ 2 3 4 5 16. Technological level ^1 2 3 4 5 17. Continuous reUabilitv of supply ^I 2 3 4 5 18. Pricina ^I 2 3 4 5 id ————— ' 4 19. Compatibility of services with vour bank Jl 2 3 5 20. Location ^I 2 3 4 5 21. Othpr« ]L 2 3 4 5

Continue answer the foUowing questions: APPENDIX 3 (a) What are the reasons for selecting those locations of your corbanks? 1. Strategic location __^^^^ , 3 4 2. Access to a region 3 4 Access to customers 3 4 4. Proximity of industrial, commercial and banking/financial centres i 3 4 5. Inexpensive supporting services 1 _5_ Well-developed communication hnks with the rest of the world 1 3 4 5 A convenient uitemational Time Zone i 3 4 _5_ 8. Favourable Taxation for non-residents 1 3 4 _5_ Lowcostof fimds 1 _5_ 10. Well-developed transportation links with the rest of the worid 3 4 11. Pohtical and economic/financial system stability 3 4 _5_ 12. An unambiguous Regulatory firamework _5_ 13. A pool of expertise in banking, finance and supporting services 1 3 4 5 e.g. legal 14. Costs ofbankingservices _5_ 15. Existence of a signifícant number of banks 5 16. Strategic mteractions (e.g movement of fimds among banks) 1 2 3 4 5 17. A mature and sound legal system 1 2 3 4 5 18. A well-established reputation in fínancial affairs 1 2 3 4 5 19. Others(Please specify) 1 2 3 4 5

3,3 Do you concentrate on buying from a few key suppliers/correspondents 1. Yes 0. No. Ifyes, how many key suppliers? key suppliers Names of your suppliers:

3,4 What are the corbanking services used by you? 1. clearing services 3 4 2. trade-related services 3 4 3. treasury services 3 4 4. intemational syndicate loans 3 4 custodian services 3 4 5_ 6. advisory services 3 4 5 7. others 3 4

3,5 Do you have procedures to select the right suppliers? 1. Yes 0. No. If yes, are the foUowing procedures used for selection? circle appropriate answers. 1. estabhshed policy and procedures 2. use prioritised effort e.g. prices and quality of the products 3. make objective assessment 4. review and measure previous transaction records 5. fít into its culture 6. looking for any confhcting objectives 7. others

36 Do you have more than one corbank ûi a foreign country or cify? l.Yes 0. No. ^^ Do you have at least one corbank in major fînancial centres in the world? 1. Yes 0. No. APPENDIX 3 3.8 Do you rationalise(e.g. reduce and concentrate fewer number of supphers) a hst of your supphers/correspondentsaccordingtothefoUowingpurposes? 1. Improve efficiency 3 4 2, Less docmnentation 3 4 3. Easier communication _5_ 4. Better use of technology 3 4 5 5. Reduce costs 3 4 6. Simpler currency fimding and reconciliation 3 4 7. Lower price 3 4 8. Rebates 3 4 9. Improve customer services 3 4 10. Others

Section 4: Relationship Management (Please circle the appropriate answers on bold number(s):i=wos/ important & 5=least important)

4,1 Do you review your existing banker clients frequently? 1. yearly 2. semiannually 3. quarterly 4. others

4,2 Do you grade your corbanking relationships? I, Yes 0. No If yes, how many grades? grades and Do you grade your corbanking rating based on the following factors? 1. Revenue generating 1 2 3 4 5 2. Range of services and products-availability 1 2 3 4 5 3. Number of transactions 1 2 3 4 5 4. Profit 1 2 3 4 5 5. Risk rating 1 2 3 4 5 6. Providing low price products 1 2 3 4 5 7. Reciprocify 1 2 3 4 5 8. Potential of business 1 2 3 4 5 9. Service Customization 1 2 3 4 5 10. Commitment to do business 1 2 3 4 5 11. Responsiveness 1 2 3 4 5 12. Reliability 1 2 3 4 5 13. Competitiveness 1 2 3 4 5 14. Quahty of services 12 3 4 5 15 Pricing/cost 12 3 4 5 16. Others(please specifi^)_ 12 3 4 5

4,3 What are primary advantages of long-term corbanking relationships? 1- Price stability 12 3 Enhanced marketing efficiency 12 3 4 Optúnised capacity 3 4 _4. Customer orientation 3 4 5. Sharing information 12 3 4 _ 6. Others(please specify)_ 3 4 APPENDIX 3 44 How do you commit/estabUsh your bank's correspondent banking relationships? 1. by fomial written contract for all relationships 2. some relationships by formal written contract and some without contract 3. by verbal and without formal written contract for all relationships 4. others(please specify) If you answered 2 to Question 4.4, are all key corbanking relationships estabhshed by formal written contract? 1. Yes 0. No.

4.5 Does your corbanking unit/fijnction have the following authorities? 1. the authority to approve credit limit without restriction. 2. tíie authority to approve restricted credit hmit (e.g. short term or contingent limit only). 3. no authorify to approve credit limit at all. 4. others(please specify)

4.6 Does the country limit of your bank equals the aggregate hmits of banks in a particular country'? 1. Yes 0. No.

4.7 Is your head office the only office authorised to estabUsh correspondent banking relationships? 1. Yes 0. No. If yes, please specify the name of the unit/function of your head office authorised to estabhsh corbanking relationships . If no, does your branch authorised to establish corbankmg relationships? 1. Yes 2. No.

4.8 What are the disadvantages of correspondent banking?(7 =most important disadvantage & 5=îeast I mportant advantage) 1. Coimterparfy risk 12 3 4 5 2. Reluctance to grant credit facilities without prior 1 2 3 4 5 arrangement 3. Lack of flexibility 1 2 3 4 5 4. Corbanks lack of motivation to do business because of 1 2 3 4 5 different ownership 5. Others 1 2 3 4 5

4,9 Please compare the foUowing business performance: (a) In comparison to other businesses m your bank, please rate your corbankúig business on the following cnXstúdi-.CPlease circle the appropriate answersfor each oftiie criteria listedbelow: l=mucii higher, 2=a little higher, 3=similar, 4=a little Iower,5=much lower) 1. Profítability 12 3 4 5 Revenue/Sales 3. Change to profitability Retum on Asset Market Share Growth in volume of business tn DoUars 1^3—4_ Over all performance of the business 1 2 3—4_ (b) ]n comparison to your key competitors, rate your corbanking busmess on the foUowing critena: 1. Profitability J—J ^—^ ^ Revenue/Sales 3 4 3. Change to profitabiUty 3 4 4. Retum on Asset 3 4 5. Market Share . 6. Growth in volume of business in Do lars 3 4 7. Over all performance of the business 8 APPENDIX 3 (c) Please indicate how you would rate your current corbanking performance on the following criteria, in comparison to (3) years ago (1993): ProfitabiUty 1L 2 3 4 5 Revenue/Sales [ 2 3 4 5 Change to profitability ]L 2 3 4 5 _4^ Retum on Asset ]I 2 3 4 5 Market Share ]l 2 3 4 5 6. (jTowth m volume of business in DoUars ]I 2 3 4 5 Over aU performance of the bushiess ]l 2 3 4 5

Section 5: Risk Management

5,1 What are the sources of support for corbanking relationships risk assessment? 1. Rating Agencies-Moodys, S&P etc. 12 3 4 5 2. In House credit team(including risk policies) 1L 2 3 4 5 3. Other banks(market rumours/gossips) ]L 2 3 4 5 4. Regulators ]L 2 3 4 5 5. Banker clients management ]L 2 3 4 5 6. Other cUents ]I 2 3 4 5 7. Extemal adviser e.g. lawyers & accountanls ]l 2 3 4 5 8. Periodicals/publications exclu.reports from 1. ]L 2 3 4 5 9. Others ^l 2 3 4 5

If you choose 2.:mhouse credit team to Question 5.1, your in-house credit team is at which level? 1. Branchlevel 2. Head-office level 3. Branch and Head-office level

5,2 Banks are less risky than corporations in general, however, counterparty risk (liquidify, capital, portfoho and management) for overseas banks could be assessed by looking at: 1. Supervisionof regulator/protection 1L 2 3 4 5 2. Status of bank in the banking system IL 2 3 4 5 3. Political support L 2 3 4 5 4. Asset quality L 2 3 4 5 5. Performance L 2 3 4 5 6. Funding L 2 3 4 5 7. Liquidity L 2 3 4 5 8. CapitaUsation L 2 3 4 5 9. Market risk L 2 3 4 5 10. Confidence L 2 3 4 5 n. Extemal support L 2 3 4 5 12, Others l 2 3 4 5

5.3 Do you classify risk ratmg of your correspondent banks into dififerent gradings? 1. Yes 0. No. Is a bank necessary to have threshold risk gradmg for establishment of corbankmg

relationships? 1. Yes 0. No.

Section 6: Future of Correspondent Banking 61 Do you agree corbanking is emerging as a strategy for banking business development? 1. Yes 0. No.

9 APPEXDIX 3 6.2 Are the foUowing factors (strategic issues) important to the fiiture of correspondent banking? 1 =most important & 5=least important 1. Technology advance(e.g. naging technology) 2. Regulation 3 4 Risk reduction(e.g. Derivatives) J. 3 4 J. Specialisation(e.g. centraUsed LCs & Pavments) 3 4 Globalisation _5: 3 4 6. Concentration of services/products 3 4 7. Falling balance income 3 4 8. Outsovu-cmig 9. FiUl services 3 4 10. Strategic aUiances 3 4 11. Less people intensive products 3 4 12. Others

Rapid developments of kitemational corbanking hi the areas as mentioned in Question 6.2 make corbanking face the foUowing problems: 1. develop services and products; 12 3 4 2. nurture customers-service customer needs; 1 : 3 4 3. motivate human resources; 1 2 3 4 5 4. needs for training of corbankmg staff; 1 2 3 4 5 5. better measure performance; 1 2 3 4 5 6. develop marketing; 1 2 3 4 5 7. improve quality of services and products 1 2 3 4 5 8. others(please speciíV) 1 2 3 4 5

6.4 Should long term strategies of correspondent banking be? 1. cost leadership for at least one product 1 2 3 4 5 2. system focus-high value products 1 2 3 4 5 3. system focus-high volmne 1 2 3 4 5 4. long-term customer relationships _5_ 5. other 5

6,5 DoesyourbankhavestrategicalUances? 1. Yes. 0. No If yes, what are main reasons for havmg strategic aUiances? 1. share risks 3 4 2. share costs e.g. new technology 3 4 3. share knowledge and experience 3 4 4. share mformation e.g. from data base 5. buUd global market capabilities 3 4 6. speed innovation and product introduction 7. stmcture competition 3 4 8. provide economies e.g.R&D;and marketing 3 4 9. jump market barriers 3 4 J_ 10. cope with complexities and costs of intemational banking services 3 4 5 11. cut exit costs 3 4 12. Others(please specify)_

- End, Thank You

10 APPENDDC 4

Statistical Analysis of Section 1: Background Information

Table 1.3.1 Corbanking Provider and User (Quest on 1.3) Provider/User No. of Banks % All Banks in Australia Provider 1 2.3 User 21 48.8 Provider & User 21 48.8 43 100 Australian Banks User 8 53.3 Provider & User 7 46.7 15 100 Foreign Banks Provider 1 3.6 User 13 46.4 Provider & User 14 50 28 100 Majors Provider & User 4 100 4 100 Non-Wlajors User 8 72.7 Provider & User 3 27.3 11 100 American Banks Provider 1 14.3 User 2 28.6 Provider & User 4 57.1 7 100 British Banks User 3 42.9 Provider & User 4 57.1 7 100 Japanese Banks User 1 25 Provider & User 3 75 4 100 European Banks 60 User 3 Provider & User 2 40 5 100 Asian Banks 80 User 4 Provider & User 1 20 5 100 APPENDK 4

Table 1.3.2 Crosstab between types of corbanking and size of banks(n=43) for All Banks in Australia in 1000 million $ (Question 1.3)

Bank Síze .2-.499 .5-.999 1-4.999 5-9.999 10-59.999 60&over Row Total

Provider 1* 1 100* 2.3 12.5* 2.3* User 1 3 11 4 2 21 4.8 14.3 52.4 19 9.5 48.8 50 50 57.9 50 50 2.3 7 25.6 9.3 4.7 Provider & User 3 1 3 8 3 2 4 21 4.8 14.3 38.1 14.3 9.5 19 48.8 50 50 42.1 37.5 50 100 2.3 7 18.6 7 4.7 9.3 Column 2 6 19 8 4 4 43 Total 4.7 14 44.2 18.6 9.3 9.3 100 Note: * 1:Count, 100: Row %, 12.5: Column % and 2.3: Total %. APPENDK 4

Table 1.4.1 Number of Correspondent Banks (Question 1.4)

All Banks in Australia (^=43) Mean 558.19 Std Err 168.05 Min 1 Median 32 Variance 1214388 Max 5246 5%Trim 382.53 Std Dev 1101.99 Range 5245 IQR 496 Australlan Banks (n=15) Mean 676.80 Std Err 359.60 Min 1 Median 43 Variance 1939706 Max 5246 5%Trim 460.50 Std Dev 1392.73 Range 5245 ÍQR 1249

Foreign Banks (n=28) Mean 494.64 Std Err 176.40 Min 1 Median 29.50 Variance 871271 Max 3500 5% Trim 363.04 Std Dev 933.42 Range 3499 ÍQR 484.50

Majors (n=4) Mean 2399 Std Err 951.85 Min 1250 Median 1550 Variance 3624071 Max 5246 5%Trim 2304.67 Std Dev 1903.70 Range 3996 iQR 3022

Non-Majors (n=11) Mean 50.55 Std Err 30.99 Min 1 Median 4 Variance 10564.47 Max 350 5%Trim 36.66 Std Dev 102.78 Range 349 IQR 42

American Banks (n=7) Mean 50.55 Std Err 30,99 Min 1 Median 4 Variance 10564.47 Max 350 5%Trim 36.66 Std Dev 102.78 Range 349 IQR 42

British Banks (n=7) Mean 584 Std Err 490.75 Min 1 Median 32 Variance 1685850 Max 3500 5%Trim 454.39 Std Dev 1298.40 Range 3499 IQR 498

Japanese Banks (n=4) Mean 119.75 Std Err 78.09 Min 3 Median 63 Variance 24394,92 Max 350 5%Trim 113.44 Std Dev 156.19 Range 347 IQR 263.75

European Banks (n=5) Mean 114.40 Std Err 87.84 Min 4 Median 25 Variance 38577.3 Max 462 5%Trim 101.22 Std Dev 196.41 Range 458 IQR 263,5

Aslan Banks (n=5) Mean 15 Std Err 3.77 Min 6 Median 12 Variance 71 Max 27 21 5%Trim 14.83 Std Dev 8.43 Range IQR 15.5 APPENDK 4

Table 1.5.1 Number of Staff Working in Corbanking Functlon/Unlts (Question 1.5)

All Banks in Australia (n=43) Mean 9.88 Std Err 4.82 Min 0.25 Median 2.00 Variance 1000.11 Max 200.00 5% Trim 3.95 Std Dev 31.62 Range 199.75 IQR 4 Australlan Banks | n=15) Mean 6.20 Std Err 1.79 Min 1 Median 2.00 Variance 48.28 Max 22 5% Trim 5,61 Std Dev 6.95 Range 21 IQR 12,50 Forejgn Banks (n= 28) Mean 11.85 Std Err 7.37 Min 0.25 Median 2.00 Variance 1519.15 Max 200.00 5%Trim 4.13 Std Dev 38.98 Range 199.75 IQR 2 Majors (n=4) Mean 16.75 Std Err 1.80 Min 14 Median 15.50 Variance 12.92 Max 22 5%Trim 16.61 Std Dev 3.59 Range 8 IQR 6.25 Non-Majors (n=11] Mean 2.36 Std Err 0.52 Min 1 Median 2.00 Variance 3.00 Max 7 5%Trim 2.18 Std Dev 1.73 Range 6 IQR 0.50 American Banks (n=7) Mean 14.29 Std Err 9.06 Min 1 Median 6.00 Variance 574.24 Max 68 5%Trim 12.04 Std Dev 23.96 Range 67 IQR 8 British Banks (n=7) Mean 29.79 Std Err 28.37 Min 0.25 Median 2.00 Variance 5634.05 Max 200 5%Trim 21.97 Std Dev 75.06 Range 199.75 IQR 1 Japanese Banks (r 1=4) Mean 1.25 Std Err 0.25 Min 1 Median 1.00 Variance 0.25 Max 2 5%Trim 1.22 Std Dev 0.50 Range 1 IQR 0.75 European Banks (r 1=5) Mean 2.25 Std Err 0.83 Min 0.25 Median 2.00 Variance 3.44 Max 5 5% Trim 2,21 Std Dev 1.85 Range 4.75 IQR 3.38 Asian Banks (n=5) Mean 1.40 Std Err 0.40 Min 1 Median 1.00 Variance 0.80 Max 3 5%Trim 1.33 Std Dev 0.89 Range 2 IQR 1 APPENDIX 4

Statistical Analysis of Section 2: Corbanking Service Providers

Table 2.1.1 Corbanklng as a Core Business (Question 2.1) Business No. of Banks % All Banks in Australia (n=43) Not a Core Business 33 76.7 A Core Business 10 23.3 Total 43 100 Australlan Banks (n=15) Not a Core Business 12 80 A Core Business 3 20 Total 15 100 Foreign Banks (n=28) Not a Core Business 21 75 A Core Business 7 25 Total 28 100 Majors (n=4) Not a Core Business 1 25 A Core Business 3 75 Total 4 100 Non-Wlajors(n=11) Not a Core Business 11 100 A Core Business 0 0 Total 11 100 American Banks (n=7) Not a Core Business 3 42.9 A Core Business 4 57.1 Total 7 100 British Banks (n=7) Not a Core Business 4 57.1 A Core Business 3 42.9 Total 7 100 Japanese Banks(n=4) Not a Core Business 4 100 A Core Business 0 0 Total 4 100 European Banks (n=5) 100 Not a Core Business 5 A Core Business 0 0 Total 5 100 Asian Banks (n=5) 100 Not a Core Business 5 0 A Core Business 0 Total 5 100 APPENDK 4

Table 2.2.1 Status of Correspondent Banking Units (Question 2.2) Corbanking Unit No. of Banks % All Banks in Australia (n=43) No Specific 20 46.5 Within Other Unit 18 41.9 Independent Unit 5 11.6 Total Number of Banks 43 Australian Banks(n=15) No Specific 2 13.3 Within Other Unit 11 73.3 Independent Unit 2 13.3 Total Number of Banks 15 100 Foreign Banks(n=28) No Specific 18 64.3 Within Other Unit 7 25 Independent Unit 3 10.7 Total Number of Banks 28 100 Majors(n=4) No Specific 0 0 Within Other Unit 2 50 Independent Unit 2 50 Total Number of Banks 4 100 Non-Majors(n=11) No Specific 2 18.2 Within Other Unit 9 81.8 Independent Unit 0 0 Total Number of Banks 11 100 American Banks(n=7) No Specific 2 28.6 Within Other Unit 5 71.4 Independent Unit Total Number of Banks 7 100 Brltish Banks(n=7) No Specific 4 57.1 Within Other Unit 0 0 Independent Unit 3 42.9 Total Number of Banks 7 100 Japanese Banks(n=4) No Specific 4 100 Within Other Unit 0 0 Independent Unit 0 0 Total Number of Banks 4 100 European Banks(n=5) 60 No Specific 3 40 Within Other Unit 2 0 Independent Unit 0 100 TotalNumberof Banks 5 Asian Banks(n=5) 100 No Specific 5 0 Within Other Unit 0 0 Independent Unit 0 100 Total Number of Banks 5 APPENDK 4

Table 2.2.2 Number of Years of Establishing Corbanking (Question 2.2) All Banks in Australia(n=43) Mean 9.50 Std Err 1.79 Min 0 Median 8.00 Variance 137.92 Max 60 5% Trim 7.98 Std Dev 11.74 Range 60 IQR 9 Australian Banks(n =15) Mean 14.57 Std Err 4.17 Min 0 Median 8.00 Variance 260.46 Max 60 5%Trim 12.85 Std Dev 16.14 Range 60 IQR 22 Foreign Banks(n=28) Mean 6.79 Std Err 1.43 Min 0 Median 6.50 Variance 57.58 Max 30 5% Trim 5.90 Std Dev 7.59 Range 30 IQR 10 Majors(n=4) Mean 30.5 Std Err 11.08 Min 12 Median 25.0 Variance 491.00 Max 60 5% Trim 29.9 Std Dev 22.16 Range 48 IQR 41 Non-Majors(n=11) Mean 8.77 Std Err 2.68 Min 0 Median 6.00 Variance 78.87 Max 25 5% Trim 8.36 Std Dev 8.88 Range 25 IQR 12 American Banks(n==7 ) Mean 11,71 Std Err 4.76 Min 0 Median 10.00 Variance 158.90 Max 30 5%Trim 11.35 Std Dev 12.61 Range 30 IQR 28 Britísh Banks(n=7) Mean 2.57 Std Err 1.27 Min 0 Median 0.00 Variance 11.29 Max 8 5% Trim 2.41 Std Dev 3.36 Range 8 IQR 5 Japanese Banks(n==4 ) Mean 9.25 Std Err 0.48 Min 8 Median 9.50 Variance 0.92 Max 10 5% Trim 9.28 Std Dev 0.96 Range 2 IQR 1.75 European Banks(n:=5 ) Mean 1.20 Std Err 0.97 Min 0 Median 0.00 Variance 4.70 Max 5 5%Trim 1.06 Std Dev 2.17 Range 5 IQR 3 Asian Banks(n=5) Mean 9.4 Std Err 0.40 Min 8 Median 10.0 Variance 0.80 Max 10 5% Trim 9.4 Std Dev 0.89 Range 2 IQR 1.50 APPENDIX 4

Table 2.3.1 Reasons for Banks to Provide Corbanking Services for All Banks in Australia(n=43) (Question 2. 3) Reasons Mean SD 95% Cl for Mean t-value 2 Tail Sig Growing of Bank Assets 3.71* 1.3015 3.1588-4.2579 2.67 0 014 Complete banking services 2.42* 1.2129 1.9045-2.9288 -2.36 0 027 Growing of Business 2.50 1.7693 1.7529-3.2471 -1.38 0 180 Reducing Competition 3.88** 1.454 3.2610-4.4890 2.95 0.007 Customer Driven 2.17** 1.2394 1.6433-2.6900 -3.29 0,003 Economies of Scale 3.29 1.459 2.6756-3,9077 0.98 0.338 Internationalisation Strategy 2.88 1.2619 2,3421-3.4079 -0.49 0,632 Using the Bank's Location 2.58** 1.4116 1.9872-3.1794 3.42 0.002 Necessity/Needs 3.17 1.3406 2.6006-3.7327 0.61 0.548 Integrating Bank's Operation 3.13 1.2959 2.5778-3.6722 0.47 0.641 Increasing Profit 2.58 1.6918 1.8689-3.2977 -1.21 0.240 Liquidity 3.75** 1.0734 3.2967-4.2033 3.42 0,002 Reciprocity 3.04 1.3015 2,4921-3.5912 0.16 0.877 Risk Diversification 4.00*** 1.1034 3.5341-4.4659 4.44 0.000 Selling Excess Capacity 3.96** 1.3981 3.3680-4.5487 3.36 0.003 Notes: Missing Cases:19 and Valid Cases:24 *<.05, **<,01, ***<.001

Table 2.3a Customer Needs for Corbanking Services for All Banks in Australia(n=43) (Question 2.3(a)) Customer Needs of Services Mean SD 95%ClforMean tvalue 2 Tail Sig Advisory 3.97*** 1.3413 3.5184-4.4261 4,35 0,000 Clearing 2.17** 1,5024 1.6583-2.6750 -3.33 0.002 Custodian 3.83** 1.4639 3.3380-4.3286 3.42 0.002 International Syndication Loan 3.61* 1.3369 3.1588-4.0635 2.74 0.010 Trade-related 2.31* 1.5273 1.7888-2.8223 -2.73 0.010 Treasury 2.42* 1.3175 1.9709-2.8624 -2.66 0.012 Notes: Valid Cases:36 and Missing Cases:7 *<.05,**<,01,***<.001

Table 2.3b Items for Reciprocal Arrangements (Question 2.3(b)) Reciprocal Arrangements Mean SD 95% Cl for Mean t value 2 tail Sig Maintain Balances 3.67** 1.4541 3.1747-4.1586 2.75 0.009 Concessional Fees 3.72** 1.2786 3.2896-4.1549 3.39 0,002 Provide Reciprocal Credit 3.67** 1.4343 3.1814-4,1520 2.79 0.008 Share Information 3.86*** 1.0462 3.5071-4.2151 4.94 0 Exchange Test/SWIFT Key 1.44*** 1.0541 1.0878-1.8011 -8.85 0 Share Technoloqv&Facilities 4.25*** 1.079 3.8849-4.6151 6.95 0 Notes: Valid Cases:36 and Misslng Cases:7 *<,05,**<.01,***<,001 APPENDIX 4

Table 2.5.1 Operational Functions Included in Corbanking Units (Question 2.5) Operation No. of Banks % All Banks in Australia(n=43) Not Included 12 27.9 Included 31 72.1 Total 43 100 Australían Banks(n=15) Not Included 5 33.3 Included 10 66.7 Total 15 100 Forelgn Banks(n=28) Not Included 7 25 Included 21 75 Total 28 100 Majors(n=4) Not Included 4 100 Included 0 0.0 Total 4 100 Non-Majors(n=11) Not Included 1 9.1 Included 10 90.9 Total 11 100 American Banks(n=7) Not Included 4 57,1 Included 3 42.9 Total 7 100 British Banks(n=7) Not Included 2 28.6 Included 5 71.4 Total 7 100 Japanese Banks(n=4) Not Included 0 0 Included 4 100 Total 4 100 European Banks(n=5) Not Inciuded 1 20 Included 4 80 Total 5 100 Asian Banks(n=5) Not Included 0 0 Included 5 100 Total 5 100 APPENDIX 4

Table 2.7.1 Corbanking Unit/Function as a Cost or/and Proflt Centre (Question 2.7) Cost/Profit Centre No. of Banks % All Banks in Australia(n=43) Cost Centre 24 55.8 Profit Centre 10 23.3 Mix Cost & Profit Centre 9 20.9 43 100 Australian Banks(n=15) Cost Centre 7 46.7 Profit Centre 6 40 Mix Cost & Profit Centre 2 13.3 15 100 Foreign Banks(n=28) Cost Centre 17 60.7 Profit Centre 4 14,3 Mix Cost & Profit Centre 7 25 28 100 Majors(n=4) Profit Centre 3 75 Mix Cost & Profit Centre 1 25 4 100 Non-Major(n=11) Cost Centre 7 63,6 Profit Centre 3 27.3 Mix Cost & Profit Centre 1 9.1 11 100 American Banks(n=7) Profit Centre 2 28,6 Mix Cost & Profit Centre 5 71.4 7 100 Brîtish Banks(n=7) Cost Centre 6 85.7 Profit Centre 1 14.3 7 100 Japanese Banks(n=4) Cost Centre 2 50 Mix Cost & Profit Centre 2 50 4 100 European Banks(n=5) Á r\f\ Cost Centre 5 100 5 100

Asian Banks(n=5) C\r\ Cost Centre 4 80 Profit Centre 1 20 5 100 APPENDIX 4

Table 2.8.1 Distribution of Revenue (Question 2.8) Revenue No. of Banks % All Banks in Australia(n=4) ~~ Split bettA/een Corbkg & Operation Unit 5 11.6 Stay with Operation Unit 36 83.7 Stay with Corbanking Unit 2 4.7 Total 43 100 Australian Banks(n=15) Split between Corbkg & Operation Unit 2 13.3 Stay with Operation Unit 12 80 Stay with Corbanking Unit 1 6.7 Total 15 100 Foreign Banks(n=28) Split between Corbkg & Operation Unit 3 10.7 Stay with Operation Unit 24 85.7 Stay with Corbanking Unit 1 3.6 Totai 28 100 Majors(n=4) Split between Corbkg & Operation Unit 2 50 Stay with Operation Unit 1 25 Stay with Corbanking Unit 1 25 Total 4 100 Non-Majors(n=11) Split between Corbkg & Operation Unit 0 0 Stay with Operation Unit 11 100 Stay with Corbanking Unit 0 0 Total 11 100 American Banks(n=7) Split between Corbkg & Operation Unit 1 14.3 Stay with Operation Unit 5 71.4 Stay with Corbanking Unit 1 14.3 Total 7 100 Britîsh Banks(n=7) Split between Corbkg & Operation Unit 1 14.3 Stay with Operation Unit 6 85.7 Stay with Corbanking Unit 0 0 7 Total Japanese Banks(n=4) 0 Split between Corbkg & Operation Unit 0 100 Stay with Operation Unit 4 0 Stay with Corbanking Unit 0 100 Total 4 European Banks(n=5) 0 Split between Corbkg & Operation Unit 0 100 Stay with Operation Unit 5 0 Stay with Corbanking Unit 0 5 100 Total Asian Banks(n=5) 20 Split between Corbkg & Operation Unit 1 4 80 Stay with Operation Unit 0 Stay with Corbanking Unit 0 5 100 Total APPENDK 4

Table 2.9.1 Banker Clients of Corbanking for All Banks in Australla (Question 2.9) Types of Clients No. of Banks % Foreign Banks in Australia NotActive 10 23.3 Normal 18 41,9 Active 2 4.7 International Banks in Foreign Countries Not Active 7 16.3 Normal 2 4.7 Active 21 48.8 Australian Majors Not Active 19 44.2 Normal 6 14 Active 5 11.6 Non-Bank Financial Instítutions Not Active 17 39.5 Normal 10 23.3 Active 3 7 Regional Banks Not Active 15 34.9 Normal 13 30.2 Active 2 4.7 Notes: Missing Cases: 13, Total Cases: 43 APPENDK 4

Table 2.10.1 Types of Corbanking Services and Products Generating Income of Providers (Question 2.10) Level of Revenue Frequency Percent Advisory Services No Revenue 21 48.8 Revenue 1 2.3 No answer 21 48.8 43 100 Clearing Services No Revenue 4 9.3 Revenue 8 18.6 Main Revenue 10 23.3 No answer 21 48.8 43 100 Custodian Services No Revenue 14 32.6 Revenue 6 14 Main Revenue 2 4.7 No answer 21 48.8 43 100 International Sydicated Loans No Revenue 19 44.2 Revenue 3 7 No answer 21 48.8 43 100 Tailor Made Services No Revenue 20 46.5 Reveune 1 2,3 Main Revenue 1 2.3 No Answer 21 48,8 43 100 Trade-Related Services No Revenue 4 9.3 Reveune 9 20,9 Main Revenue 9 20.9 No Answer 21 48.8 43 100 Treasury Services No Revenue 10 23.3 Reveune 8 18.6 Main Revenue 4 9.3 No Answer 21 48.8 43 100 Others No Revenue 19 44.2 Reveune 2 4.7 Main Revenue 1 2.3 No Answer 21 48.8 43 100 Note.Valid cases: 22 Missing cases: 21 were unable to answer or not willing to answer APPENDIX 4

Target at No. of Banks •^%=^ •'•' All Banks in Australia(n==43 ) No Key Buyer 29 67.4 Key Buyers 14 32.6 43 100 Australian Banks(n=15) No Key Buyer 10 66.7 Key Buyers 5 33.3 15 100 Foreign Banks(n=28) No Key Buyer 19 67.9 Key Buyers 9 32.1 28 100 Majors(n=4) Key Buyers 4 100 4 100 Non-Majors(n=11) No Key Buyer 10 90.9 Key Buyers 1 9.1 11 100 American Banks(n:=7 ) No Key Buyer 2 28.6 Key Buyers 5 71.4 7 100 British Banks(n=7) No Key Buyer 4 57.1 Key Buyers 3 42.9 7 100 Japanese Banks(n:=4 ) No Key Buyer 4 100 4 100 European Banks(n:=5 ) No Key Buyer 5 100 5 100 Asian Banks(n=5) No Key Buyer 4 80 Key Buyers 1 20 5 100

Table 2.11.2 Number of Key Banker Clients for AH Banks in Australia(n =43) (Question 2.11) Mean 15 Std Err 6.59 Min 0 Median 0 Variance 1865.43 Max 250 5% Trim 7.27 Std Dev 43.19 Range 250 IQR 10 Note: No missing case but many banlcs have no key clients APPENDIX 4

Table 2.12.1 Trends of Vostro Account Balance fnrthe Past Ten Years (Question 2.12) Vostro Account No. of Banks % ÃifBãnks în Austral a(n=43) Increase 16 37.2 Decrease 11 25.6 Remain 16 37.2 43 100 AustralianBanks(n=15) Increase 8 53.3 Decrease 3 20 Remain 4 26.7 15 15 Foreign Banks(n=28) Increase 8 28.6 Decrease 8 28.6 Remain 12 42.8 28 100 Nlajors(n=4) Increase 3 75 Decrease 1 25 4 100 Non-l\/lajor(n=11) Increase 5 45.5 Decrease 6 54.6 11 100 American Banks(n=7) Increase 1 14.3 Decrease 4 57.1 Remain 2 28.6 7 100 British Banks(n=7) Increase 3 42.9 Decrease 1 14.3 Remain 3 42.9 7 100 Japanese Banks(n=4) Increase 1 25 Remain 3 75 4 100 European Banks(n=5) Decrease 1 20 Remain 4 80 5 100 Asian Banks(n=5) Increase 3 60 Decrease 2 40 5 100

Table 2.13.1 Types of Preferential Fees r2,13) tvalue 2tailSig Cfiarging Fee Mean SD 95% Cl for Mean 2.16** 1.4789 1.7077-2.6179 -3.71 0.001 -0.77 0.445 LowerFee 2.79 1.7803 2.2428-3.3386 3.8253-4.6863 5.89 0.000 ^o Pee but Reciprocal Business 4.26*** 1.3989 4.2338-4.7430 11.80 0.000 J^ feebutwithMinBalance 4.49*** 0.8273 APPENDK 4

Table 2.14.1 Charglng Fees for Corbanking Services jQuestion 2.14) Fee No. of Banks % All Banks in Australia(n=43) No Fee 14 32.6 Fee 29 67.4 43 100 Australian Banks(n=15) NoFee 3 20 Fee 12 80 15 100 Foreign Banks(n=28) No Fee 11 39.3 Fee 17 60.7 28 100 Majors(n=4) No Fee 0 0 Fee 4 100 4 100 Non-Major(n=11) NoFee 3 27.3 Fee 8 72.7 11 100 American Banks(n=7) NoFee 1 14.3 Fee 6 85.7 7 100 British Banks(n=7) NoFee 1 14.3 Fee 6 85.7 7 100 Japanese Banks(n=4) No Fee 3 75 Fee 1 25 4 100 European Banks(n=5) NoFee 4 80 Fee 1 20 5 100 Asian Banks(n=5) NoFee 2 40 Fee 3 60 _ 5 100 APPENDIX 4

Table 2.14a Reasons for Concessional (Lower) Fees of Corbanking Services (Question 2.14(a)) Reasons No. of Banks % Busíness Volume No 11 37.9 Yes 18 62.1 29 100 Good Relationship No 27 93.1 Yes 2 6.9 29 100 Historical Relatlonship No 25 86.2 Yes 4 13.8 29 100 Lower Risk Rating No 28 96.6 Yes 1 3.4 29 100 Reciprocial Arrangement No 19 65.5 Yes 10 34.5 29 100 Other Reasons No 27 93.1 Yes 2 6.9 29 100 APPENDIX 4

Statistical Analysis of Section 3: Corbanking Service Users

Table 3.1.1 Determinant Factors for International Correspondent Banking RelationshÍDs (Question 3.1) ^

2-Tail Determinant Factors Mean SD 95% Cl for Mean t Value Sig Cronbach's a All Banks in Australia(n=43) Bank Size 11,795.33** 23800.9 4470.479-19120.17 3.25 0.002 0.842 Customer Driven 1.95*** 1.1329 1.6048-2.3021 -6.06 0 0,821 Competitiveness 2.51* 1.3865 2.0849-2.9383 -2.31 0.026 0.'794 Cost Saving 3.19 1.5159 2.7195-3.6526 0.8 0.425 0.794 Test Foreign Market Entry 4.33*** 1.0170 4.0126-4.6386 8.55 0 0.809 Prevent Fraud/Money Laundering 3.88*** 1.3664 3.4632-4.3042 4.24 0 0,810 Gain Access to Local Market 3.26 1.4158 2.8201-3.6915 1.18 0.243 0.791 Increase Bank Assets 4.26*** 1.0931 3.9194-4.5922 7,53 0 0.815 Improve Efficiency 2.23** 1.3599 1.8140-2.6511 -3,7 0.001 0.810 Complete Int'l Network 2.44** 1.3148 2.0372-2.8465 -2.78 0.008 0,812 Internationalisation Strategy 3.35 1.5100 2.8841-3.8136 1.51 0.137 0.808 Liquidity 3.81*** 1.1600 3.4570-4.1709 4.6 0 0.814 Location Not Physically Present 1.67*** 0.9691 1.3762-1.9727 -8.97 0 0,842 Minimise Capital Investment 3.51* 1.5019 3.0494-3.9739 2.23 0.031 0.798 Necessity/Needs 1.98*** 1.0576 1.6513-2.3022 -6.34 0 0,836

Provide One Stop Banking 3.05 1.4467 2.6013-3.4917 0.21 0.834 0.808 Profitability 3.35 1.3253 2,9410-3.7567 1.73 0.092 0.816 Reciprocity 3.65** 1.3072 3.2489-4.0535 3.27 0.002 0.825

Australian Banks(n=15 1 Bank Size 28,525.87** 34966.3 9162.184-47889.55 3.16 0.007 Customer Driven 1.73** 1.2228 1.0562-2.4105 -4.01 0.001 Competitiveness 2.27* 1.2799 1.5579-2.9754 -2.22 0.044 Cost Saving 2.93 1.4864 2.1102-3.7565 -0.17 0.865 Test Foreign Market Entry 4.00* 1.3628 3.2453-4.7547 2.84 0.013 Prevent Fraud/Money Laundering 4.13** 1.302 3.4123-4.8544 3.37 0.005 Gain Access to Local Market 3.13 1.5523 2.2737-3.9929 0.33 0.744 Increase Bank Assets 3.93* 1,3345 3.1943-4.6724 2.71 0.017 Improve Efficiency 2.07* 1.387 1.2986-2.8348 -2.61 0.021 Complete Int'l Network 2.47 1.3558 1.7159-3.2175 -1.52 0.15 Internationalisation Strategy 3.53 1.5523 2.6737-4.3929 1.33 0.205 Liquidlty 3,87* 1.1255 3.2434-4.4899 2.98 0.01 Location Not Physicaily Present 1.40*** 0.7368 .9920-1.8080 -8.41 0 Minimise Capital investment 3.47 1.6417 2.5575-4.3758 1.1 0.29 Necessity/Needs 2.27* 1.2799 1.5579-2.9754 -2.22 0,044 0,052 Provide One Stop Banking 2.27 1.3345 1.5276-3.0057 -2.13 Profitability 2.80 1.3202 2.0689-3.5311 -0.59 0.567 2.22 0.044 APPENDK 4

Foreign Banks(n=28) Bank Size 2,832.54*** Customer Driven 2902.27 1707.152-3957 920 5,16 0 2.07*** 10862 1.6502-2.4926 Competitiveness -4,52 0 2.64 1.4457 2.0823-3.2034 Cost Saving -1.31 0.202 3.32 1.5409 2.7239-3.9189 Test Foreign Market Entry 1,1 0.279 4.50*** 0.7454 4.2110-4.7890 Prevent Fraud/Money 10.65 0 Laundering 3.75** 1.4044 3.2054-4.2946 2.83 Gain Access to Locai 0,009 Market 3.32 1.3623 2.7932-3.8497 1.25 Increase Bank Assets 0.223 4.43*** 0.9201 4.0718-4.7853 8 22 Improve Efficiency 0 2.32* 1.3623 1.7932-2.8497 -2,64 Complete Int'l Network 0.014 2.43* 1.3174 1.9178-2.9394 -2.3 internationalisation 0.03 Strategy 3.25 1.5062 2.6660-3.8340 0.88 0.388 Liquidity 3.79** 0,002 Location Not Physically 1.1974 3.3214-4,2500 3.47 Present 1.82*** Minimise Capital 1.056 1.4120-2.2309 -5,91 3.54 Investment 0,061 1.4525 2.9725-4,0989 1.95 Necessity/Needs 1.82*** 0 0.9049 1.4706-2.1723 -6.89 Provide One Stop Banking 3.46 1.3467 2.9421-3.9865 1.82 0.079 Profitabiiity 3.64* 1.2536 3.1568-4.1289 2.71 0.011 Recipocity 3.61* 1.3427 3.0865-4.1278 2.39 0.024 lVlajors(n=4) Bank Size 82,980.25** 10324.4 66551.90-99408.60 16.07 0.001 Customer Driven 1.25** 0.5 .4544-2.0456 -7 0.006 Competitiveness 1.75* 0.5 .9544-2.5456 -5 0,015 Cost Saving 1.75* 0.5 .9544-2.5456 -5 0.015 Test Foreign Market Entry 4.25* 0.5 3.4544-5.0456 5 0,015 Prevent Fraud/Money Laundering 4.00 0,8165 2.7008-5.2992 2.45 0.092 Gain Access to Local Market 2.50 0.5774 1.5813-3.4187 -1.73 0.182 Increase Bank Assets 4.25* 0.5 3.4544-5.0456 5 0.015 Improve Efficiency 1.25** 0.5 .4544-2.0456 -7 0.006 Complete Int'l Network 2.00 0.8165 .7008-3.2992 -2.45 0,092 Internationalisation Strategy 3.00 1.4142 .7497-5.2503 0 1 Liquidity 3.75 0.5 2.9544-4.5456 3 0.058 Location Not Physically Present 1.25** 0.5 .4544-2.0456 -7 0.006 Minimise Capital Investment 3.25 1.5 .8632-5.6368 0.33 0.761 Necessity/Needs 2.00 1.1547 .1626-3.8374 -1.73 0.182

Provide One Stop Banking 3.25 0.9574 1.7265-4.7735 0.52 0.638 Profitability 3.75 0.9574 2.2265-5.2735 1.57 0.215 Reciprocity 2.75 0.9574 1.2265-4.2735 -0.52 0.638 APPENDIX 4

Non-Major(n=11) Bank Size 8,724.27** 7892.68 3421.900-14026.65 3.66 0.004 Customer Driven 1.91* 1.3751 .9853-2.8329 -2.63 0,025 Competitiveness 2.45 1.4397 1.4873-3.4217 -1.26 Cost Saving 0.237 3.36 1.5015 2.3549-4,3724 0.8 Test Foreign Market Entry 0.441 3.91 1.5783 2.8488-4,9694 1.91 Prevent Fraud/Money 0.085 Laundering 4.18* 1.4709 3.1936-5,1700 2.66 0.024 Gain Access to Local Market 3.36 1.7477 2.1895-4.5378 0.69 0.506 Increase Bank Assets 3.82 1.5374 2.7853-4.8510 1.77 0.108 improve Efficiency 2.36 1.5015 1.3549-3.3724 -1.41 0.19 Complete Int'l Network 2.64 1.5015 1.6276-3.6451 -0.8 0,441 Internationalisation Strategy 3.73 1.6181 2.6402-4.8143 1.49 0.167 Liquidity 3.91* 1,3003 3,0355-4.7827 2.32 0.043 Location Not Physically Present 1.45*** 0.8202 .9035-2.0056 -6.25 0 Minimise Capital Investment 3.55 1.7529 2.3678-4.7231 1.03 0.326 Necessity/Needs 2.36 1.3618 1.4488-3.2785 -1.55 0.152

Provide One Stop Banking 1.91* 1,3003 1.0355-2.7827 -2.78 0.019 Profitability 2.45 1.2933 1,5857-3.3234 -1.4 0.192 Reciprocity 4.09* 1.221 3.2706-4.9112 2.96 0.014 American Banks(n=7) Bank Size 3,642.57* 3796.51 131.3867-7153.756 2,54 0,044 Customer Driven 1.43*** 0.5345 .9342-1,9229 -7.78 0 Competitiveness 2.14 1.4639 .7890-3.4967 -1.55 0,172 Cost Saving 1.86 1.4639 .5033-3.2110 -2.07 0.084 Test Foreign Market Entry 4.43** 0.7868 3,7009-5,1562 4.8 0,003 Prevent Fraud/Money Laundering 2.71 1.2536 1.5549-3.8736 -0.6 0.569 Gain Access to Local Market 2.86 1.7728 1.2176-4.4967 -0.21 0.838 Increase Bank Assets 4.29* 0,9512 3.4060-5.1654 3.58 0.012 improve Efficiency 1.71 1.496 .3307-3.0979 -2.27 0,063 Complete Int'i Network 1.29*** 0.488 .8344-1.7370 -9,3 0 Internationalisation Strategy 2.57 1.8127 .8950-4,2479 -0.63 0.555 Liquidity 4.00* 1 3.0752-4.9248 2,65 0.038 Location Not Physically Present 1.71** 0.7559 1.0152-2.4134 -4.5 0.004 Minimise Capitai Investment 2.43 1.5119 1.0303-3.8268 -1 0,356 Necessity/Needs 1.57* 1.1339 .5228-2.6201 -3,33 0.016

Provide One Stop Banking 2.57 1.8127 .8950-4.2479 -0.63 0.555 Profitability 3.71 1,1127 2.6852-4.7434 1.7 0.14 Reciprocity 4.14* 1.215 3.0192-5.2665 2.49 _.0.047_ APPEiNDIX 4

British Banks(n=7) Bank Size 3,545.29* 3465.42 340.3087-6750.263 Customer Driven 1.71* 2,7 0.035 1.1127 .6852-2.7434 Competitiveness 2.29 -3,06 0.022 1.496 .9021-3.6693 CostSaving 4.14* -1.26 0.253 0.8997 3.3107-4.9750 3.36 Test Foreign Market Entry 4.71*** 0.015 0.488 4.2630-5.1656 9.3 Prevent Fraud/Money 0 Laundering 4.43*** 0.5345 3.9342-4.9229 7.07 Gain Access to Local 0 Market 3.71 1.1127 2.6852-4.7434 1.7 Increase Bank Assets 4.00 0.14 1.291 2.8060-5.1940 2 05 Improve Efficiency 2.43 0.086 1.3973 1.1363-3.7208 -1.08 Complete Int'l Network 3.14 0.321 1.4639 1,7890-4.4967 0.26 0.805 Internationalisation Strategy 3.29 1.2536 2.1264-4.4451 0.6 0.569 Liquidity 4.29** 0.7559 3.5866-4.9848 4.5 0,004 Location Not Physically Present 2.14* 0.8997 1.3107-2.9750 -2,52 0.045 Minimise Capital Investment 4.00 1.1547 2.9321-5.0679 2.29 0.062 Necessity/Needs 1.86** 0.6901 1.2189-2,4953 -4,38 0,005 Provide One Stop Banking 3.86* 0.8997 3,0250-4.6893 2,52 0.045 Profifabílity 4.29** 0.7559 3.5866-4.9848 4.5 0,004 Reciprocity 3.43 1.3973 2.1363-4.7208 0.81 0,448 Japanese Banks(n=4) BankSize 2,088.75* 1077.35 374.4419-3803.058 3.87 0.03 Customer Driven 3.00 1.4142 .7497-5.2503 0 1 Competitiveness 3.50 1.7321 .7439-6.2561 0.58 0.604 CosfSaving 4.50 1 2.9088-6.0912 3 0.058 Test Foreign Market Entry 4.75** 0.5 3.9544-5.5456 7 0.006 Prevent Fraud/Money Laundering 4.25 0.9574 2.7265-5.7735 2.61 0,08 Gain Access to Locai Market 3.75 0.9574 2.2265-5.2735 1,57 0,215 Increase Bank Assets 4.50 1 2.9088-6.0912 3 0.058 Improve Efficiency 3.25 1.5 .8632-5.6368 0.33 0.761 Complete Int'l Network 3.25 1,2583 1.2478-5.2522 0.4 0,718 Internationalisation Strategy 3.75 1,5 1.3632-6.1368 1 0.391 Liquidity 4.50 1 2.9088-6.0912 3 0.058 Location Not Physically Present 1.25** 0.5 .4544-2.0456 -7 0.006 Minimise Capital Investment 3.75 1.5 1.3632-6.1368 1 0.391 Necessity/Needs 2.25 1.2583 .2478-4.2522 -1.19 0,319

Provide One Stop Banking 3.50 1.291 1,4457-5,5543 0.77 0.495 Profitabiiity 4.25 0.9574 2.7265-5.7735 2.61 0.08 _Reciprocity 3 1.4142 .7497-5.2503 0 1 APPENDIX 4

European Banks(n=5) Bank Size 3,246.80 2881.21 -330.700-6824.300 2.52 0.066 Customer Driven 2.60 0.8944 1.4894-3,7106 -1 0.374 Competitiveness 2.60 1.5166 .7169-4.4831 -0.59 0 587 Cost Saving 2.80 1.4832 \J ,\J\J 1 .9583-4.6417 -0.3 0.778 Test Foreign Market Entry 4.40* 0.8944 3.2894-5.5106 3.5 0.025 Prevent Fraud/Money Laundering 2.80 2.0494 .2553-5.3447 -0.22 0 838 Gain Access to Local W. \J\JKJ Market 2.80 1.4832 .9583-4.6417 -0.3 0.778 Increase Bank Assets 4.80** 0.4472 4.2447-5.3553 9 0.001 Improve Efficiency 1.80* 0.8367 .7611-2.8389 -3.21 0.033 Complete Int'l Network 2.40 1.5166 .5169-4.2831 -0.88 0.426 Internationalisation Strategy 3.00 1.5811 1.0368-4.9632 0 1 Liquidity 3.00 1.5811 1.0368-4.9632 0 1 Location Not Physically Present 2.40 1.9494 -.0204-4.8204 -0.69 0.529 Minimise Capital Investment 3.20 1.6432 1,1597-5.2403 0.27 0,799 Necessity/Needs 1.80* 0.8367 .7611-2.8389 -3.21 0.033

Provide One Stop Banking 3.60 1.3416 1.9341-5.2659 1 0.374 Profitability 3.20 1.3038 1.5811-4.8189 0,34 0.749 Reciprocity 3.20 1.4832 1.3583-5,0417 0.3 0.778 Asian Banks(n=5) Bank Size 881.40* 697.873 14,8766-1747.923 2.81 0.048 Customer Driven 2.20 1.0954 .8398-3,5602 -1.63 0.178 Competitiveness 3.20 1.0954 1.8398-4.5602 0.41 0.704 Cost Saving 3.80 1.3038 2.1811-5.4189 1,37 0.242 Test Foreign Market Entry 4.20 1.0954 2.8398-5.5602 2,45 0.07 Prevent Fraud/Money Laundering 4.80** 0.4472 4.2447-5.3553 9 0,001 Gain Access to Local Market 3.60 1.3416 1.9341-5.2659 1 0.374 Increase Bank Assets 4.80** 0.4472 4.2447-5.3553 9 0,001 Improve Efficiency 2.80 1.3038 1.1811-4.4189 -0.34 0.749 Complete Int'l Network 2.40 0.8944 1.2894-3.5106 -1.5 0.208 Internationalisation Strategy 4.00 1.4142 2.2440-5.7560 1.58 0.189 Liquidity 3.00 1.2247 1.4793-4.5207 0 1 Location Not Physically Present 1.40** 0.5477 .7199-2.0801 -6.53 0.003 Minimise Capital Investment 4.60** 0.5477 3.9199-5.2801 6,53 0.003 Necessity/Needs 1.80* 0.8367 ,7611-2,8389 -3,21 0.033

Provide One Stop Banking 4.00 1 2.7583-5.2417 2.24 0.089 Profitability 2.60 1.6733 .5223-4.6777 -0.53 0.621 Reciprocity 4.00 1.4142 2.2440-5.7560 1,58 0.189 Notes:*<.05, **<.01, ***<.001 and test value=3 if not specified. APPENDIX 4

Tyhie3.2.1 Selection Criteria of Correspondents (Question 3.2) -^ Selection Criteria Mean SD 95% Cl Tor Mean t Value 2-Tail Siã' íJJÍBãnks in Australia(n=43) Broad Domestic&Global Br-Network 2.58* 1.258 2.1942 -2.9685 -2.18 0.035 Effective Account Officer 2.14*** 0.99 1.8349 -2.4442 -5.7 0 Financial Strength 2.14*** 1.1037 1.7999 -2.4792 -5.11 0 Fornial Bank Present 1.86*** 1.037 1.5413 -2.1796 -7.21 0 Effective&Efficient Product Delivery 1.72*** 0.9083 1.4414 -2.0005 -9.23 0 Hjstorical Relationships 2.88 1.159 2.5270 -3.2404 -0.66 0.514 Innovative Product Design 2.86 1.1666 2.5014-3.219 5 -0.78 0.437 LinkagetoSWIFT&Netting 1.60*** 1.0497 1.2816 -1.9277 -8.72 0 L cation 1.98*** 1.0576 1.6513 -2.3022 -6.34 0 Market Reputation 2.07*** 0.9359 1.7817.•2.357 8 -6.52 0 Operational Capabilities 1.95*** 1.1117 1.6114--2.2956 -6.17 0 Consistent Business Policy 2.63* 1.0006 2.3200-•2.9358 -2.44 0.019 Prícing 0.8786 1.8459--2.3867 -6.6 0 Range of Services 1.91*** 0.9465 1.6157-•2.1983 -7.57 0 Reciprocity 3.02 1.5195 2.6556-•3.4909 0,1 0.921 Risk Rating 2.26*** 1.1147 1.9128-•2.5989 -4,38 0 Compatibility of Services 2.42** 1.0742 2.0880--2.7492 -3.55 0.001 ReliabilityofSupply 1.79*** 1.0364 1.4717-•2.1097 -7.65 0 Tecfinological Level 0 O'i *** 1.2063 1.8381-2.5805 -4.3 0 Australian Banks(n=15) Selection Criteria Mean SD 95% Cl for Mean t Value 2-Tail Sig Broad Domestic&Global Br-Network 2.20* 1.0823 1.6006-2.7994 -2.86 0.013 Effective Account Officer 1.73** 1.0998 1.1243-2.3424 -4.46 0.001 Financial Strength 2.13* 1.2459 1.4434-2.8233 -2.69 0.017 Formal Bank Present 1.67*** 0.8165 1.2145-2.1188 -6.32 0 Effective&Efficient Product Delivery 1 .47*** 0.7432 1.0551-1.8783 -7.99 0 Historical Relationships 3.53 1.1255 2.9101-4.1566 1.84 0.088 Innovative Product Design 2.73 1.0998 2.1243-3.3424 -0.94 0.364 LinkagetoSWIFT&Netting 1.33*** 0.8165 .8812-1.7855 -7.91 0 Location 2.13* 1.1255 1.5101-2.7566 -2,98 0,01 Market Reputation 2.13** 0.8338 1.6716-2.5951 -4.03 0.001 Operational Capabilities 1.47*** 0.9155 .9597-1.9736 -6.49 0 Consistent Business Policy 2.27** 0.7037 1.8770-2.6564 -4.04 0.001 Pricing 1.87*** 0.8338 1.4049-2.3284 -5.26 0 Range of Services 1.73*** 0.8837 1.2439-2.2227 -5.55 0 Reciprocity 3.27 1.4864 2.4435-4.0898 0.69 0.499 Risk Rating 2.60 1.3522 1.8512-3.3488 -1.15 0.271 Compatibility of Services 2.27** 0.7988 1.8243-2.7090 -3.56 0.003 Reliability of Supply 1.47* 0.7432 1.0551-1.8783 -7.99 0 Te_c_hnojo_g[cal_Levej_ 1.93** 1.0328 1.3614-2.5053 -4 0.001 APPENDIX 4

Foreign Banks(n=28) Broad Domestic&Global Br-Network 2.79 1.3154 2.2757-3.2958 -0.86 Effective Account Officer 0.396 2.36** 0.8698 2.0199-2.6944 -3.91 Financial Strength 0.001 2.14*** 1.044 1.7380-2.5477 -4.34 0 F íinalBankPresent 1.96*** 1.138 1.5230-2.4055 -4.82 0 ; Øfective&Efficient Product Delivery 1.86*** 0.9705 1.4808-2.2334 -6.23 0 Historical Relationships 2.54* 1.0357 2.1341-2.9373 -2.37 Innovative Product Design 0.025 2.93 1.215 2.4574-3.3997 -0.31 Linkage to SWIFT&Netting 0.758 1.75*** 1.1426 1.3069-2.1931 -5.79 0 L cation 1.89*** 1.0306 1.4932-2.2925 -5.68 0 Mlarket Reputation 2.04*** 0.9993 1.6482-2.4232 -5.11 0 perational Capabilities 2.21** 1.1339 1.7746-2.6540 -3,67 0.001 Consistent Business Policy 2.82 1.0905 2.3986-3.2443 -0.87 0.394 Pricing 2.25*** 0.8872 1.9060-2.5940 -4.47 0 Range of Services 2.00*** 0.9813 1.6195-2.3805 -5.39 0 Reciprocity 2.89 1.5477 2.2927-3.4930 -0.37 0.717 RiskRating 2.07*** 0.94 1.7069-2.4359 -5.23 0 Compatibility of Services 2.50* 1.2019 2.0340-2.9660 -2.2 0.036 ReliabilityofSupply 1.96*** 1.138 1,5230-2.4055 -4.82 0 Technological Level 2.36* 1.2828 1.8597-2.8545 -2.65 0.013 llllajors(n=4) Broad Domestic&Global Br-Network 1.75 0.9574 .2265-3.2735 -2.61 0.08 Effective Account Officer 2.25 1.2583 .2478-4.2522 -1.19 0.319 Financial Strength 1.50 1 -.0912-3.0912 -3 0.058 Formal Bank Present 1.75 0.9574 .2265-3.2735 -2.61 0.08 Effective&Efficient Product Delivery 1.50* 0.5774 .5813-2.4187 -5.2 0.014 Historical Relationships 2.75 0,5 1.9544-3.5456 -1 0.391 Innovative Product Design 3.00 0.8165 1.7008-4.2992 0 1 LinkagetoSWIFT&Netting 1.25** 0,6 .4544-2.0456 -7 0.006 L cation 1.75 0.9574 .2265-3.2735 -2.61 0.08 Market Reputation 2.00 1.1547 .1626-3.8374 -1.73 0.182 Operational Capabilities 1.25** 0.5 .4544-2.0456 -7 0.006 Consistent Business Policy 2.50 0.5774 1.5813-3,4187 -1.73 0.182 Pricing 2.00 0.8165 .7008-3.2992 -2.45 0.092 Range of Services 1.75* 0.5 .9544-2.5456 -5 0.015 Reciprocity 2.50 0.5774 1.5813-3,4187 -1.73 0.182 RiskRating 1.50 1 -.0912-3.0912 -3 0.058 Compatibility of Services 2.50 0.5774 1.5813-3.4187 -1.73 0.182 Reliability of Supply 2.00 0.8165 .7008-3.2992 -2.45 0.092 Technojoj[cal_Level 1.75* 0.5 .9544-2.5456 -5 0.015 APPEIVÍDIX 4

Non-Major(n=11) Broad Domestic&Global Br-Network 2.36 1-1201 1.6112-3.1161 -188 0.089 Effective Account Officer 1.55** 1.0357 .8496-2.2413 -4.66 0.001 FínancialStrength 2.36 1.2863 1.4995-3.2278 -164 0.132 Formal Bank Present 1.64*** 0.809 1.0928-2.1799 -5 59 0 Effective&Efficient Product Deíivery 1.45*** 0.8202 .9035-2.0056 -6.25 0 Hístorical Relationships 3.82* 1.1677 3.0337-4.6027 2.32 0.042 Innovative Product Design 2.64 1-206 1.8261-3.4466 -1 0.341 LínkagetoSWIFT&Netting 1.36*** 0.9244 .7426-1.9847 -5.87 0 L cation 2.27 1.1909 1.4727-3,0728 -2 03 0.07 MarketReputation 2.18** 0.7508 1.6775-2.6862 -3.61 0.005 perational Capabilities 1.55** 1.0357 .8496-2.2413 -4.66 0.001 Consistent Business Policy 2.18** 0.7508 1.6775-2.6862 -3.61 0.005 1.82** 0.8739 1.2311-2.4053 -4,49 0.001 RangeofServices 1.73** 1.009 1.0494-2.4052 -4.18 0.002 Reciprocity 3.55 1.6348 2.4471-4.6438 1.11 0.294 RiskRating 3.00 1.2649 2.1502-3.8498 0 1 Compatibility of Services 2.18* 0.8739 1.5947-2.7689 -3.11 0.011 ReliabilityofSupply 1 01*** 0.6467 .8383-1.7072 -8.86 0 Technological Level 2.00* 1.1832 1.2051-2.7949 -2.8 0.019 American Banks(n=7) Broad Domestic&Global Br-Network 3.43 1.5119 2.0303-4.8268 0.75 0.482 Effective Account Officer 2.14* 0.6901 1.5047-2.7811 -3,29 0.017 Financial Strength 2.43 1.2724 1.2518-3.6054 -1.19 0.28 Formal Bank Present 2.14 1.4639 .7890-3,4967 -1,55 0.172 Effective&Efficient Product Delivery 1.71* 1.1127 .6852-2.7434 -3.06 0.022 Historical Relationships 2.57 1.1339 1.5228-3,6201 -1 0.356 lnnovative Product Design 3.00 1.291 1.8060-4,1940 0 1 LinkagetoSWIFT&Netting 1.71 1.496 ,3307-3.0979 -2.27 0.063 L cation 2.00 1.5275 .5873-3,4127 -1,73 0.134 lilarket Reputation 1.86** 0.6901 1.2189-2.4953 -4.38 0.005 Operational Capabilities 2.14 1.5736 .6875-3.5982 -1.44 0.2 Conslstent Business Policy 2.43 1.2724 1.2518-3.6054 -1.19 0.28 Pricing 2.29 0.9512 1.4060-3.1654 -1.99 0.094 RangeofServices 2.00 1.5275 .5873-3.4127 -1.73 0.134 Reclprocity 2.86 1.215 1.7335-3.9808 -0.31 0.766 RiskRating 1.86** 0.6901 1.2189-2.4953 -4.38 0.005 I Compatibility of Services 2.71 1.6036 1.2312-4.1973 -0.47 0.654 ReiabilityofSupply 1.43** 0.7868 .7009-2.1562 -5,28 0.002 TechnoJoj[cal Level 2.29 1.3801 1.0093-3.5621 -1.37 0.22 APPENDK 4

British Banks(n=7) 2.57 Broad Domestic&Global Br-Network 1.2724 1.3946-3.7482 -0.89 0.407 EffectiveAccountOfficer 2.43 0.9759 1.5260-3.3311 -1.55 0.172 FinancialStrength 1.29*** 0.488 .8344-1.7370 -9.3 0 Fomial Bank Present 2.14* 0.8997 1.3107-2.9750 -2.52 0.045 Effective&Efficient Product Delivery 1.43*** 0.5345 .9342-1.9229 -7.78 0 Historical Relationships 2.71 0.9512 1.8346-3.5940 -0.79 0.457 Innovative Product Design 2.43 1.1339 1.3799-3.4772 -1.33 0.231 LinkagetoSWIFT&Netting 1.71* 0.9512 ,8346-2.5940 -3.58 0.012 Location 1.71* 0.9512 .8346-2.5940 -3,58 0.012 MarketReputation 1.86** 0.6901 1.2189-2.4953 -4.38 0.005 Operational Capabilities 2.57 1.1339 1.5228-3.6201 -1 0.356 Consistent Business Policy 2.71 0.9512 1.8346-3.5940 -0.79 0.457 Pricing 2.00** 0.5774 1.4660-2.5340 -4.58 0.004 Range of Sen/ices 2.00** 0.5774 1.4660-2.5340 -4.58 0.004 Reciprocity 3.14 1.3452 1,8988-4.3869 0.28 0.788 RiskRatlng 1.86* 0.8997 1,0250-2,6893 -3.36 0.015 Compatibility of Services 2.86 1.215 1.7335-3.9808 -0.31 0.766 ReliabilityofSupply 1.71* 1.1127 .6852-2.7434 -3.06 0.022 Technological Level 2.00 1.291 .8060-3.1940 -2.05 0.086 Japanese Banks(n=4) Broad Domestic&Global Br-Network 1.75 0.9574 .2265-3.2735 -2.61 0.08 Effective Account Officer 2.50 1.291 .4457-4.5543 -0.77 0.495 Financial Strength 2.25 0.9574 .7265-3.7735 -1.57 0.215 Formal Bank Present 1.50* 0,5774 .5813-2.4187 -5.2 0.014 Effective&Efficient Product Delivery 2.00 0,8165 .7008-3.2992 -2.45 0.092 Historical Relationships 1.50* 0.5774 .5813-2.4187 -5.2 0.014 Innovative Product Design 3.75 1.5 1.3632-6.1368 1 0.391 LinkagetoSWIFT&Netting 2.00*** 0.005 1.9945-2.0105 -399 0 Locatlon 1.50* 0.5774 ,5813-2.4187 -5.2 0.014 Market Reputation 2.00 1.4142 -.2503-4.2503 -1.41 0.252 Operatlonal Capabilities 1.75* 0.5 ,9544-2,5456 -5 0.015 Consistent Business Policy 2.75 0.5 1.9544-3.5456 -1 0.391 Priclng 2.75 1.2583 .7478-4.7522 -0.4 0.718 Range of Sen/ices 2.75 0.9574 1.2265-4.2735 -0.52 0.638 Reciprocity 1.00*** 0.005 .9945-1.0105 -799 0 RiskRating 1.75 0.9574 .2265-3.2735 -2.61 0.08 Compatibility of Services 3.00 1.4142 .7497-5.2503 0 1 Rellability of Supply 2.50 1 .9088-4.0912 -1 0.391 Technological Level 3.00 0.8165 1.7008-4.2992 0 1 Note8:Linkage to Swift&Nettlng: Asahi Bank changed to 2.01 Refiprocity: Tokyo-Mitsushi Bank changed to 1.01 APPENDIX 4

European Banks(n=5) Broad Domestic&Global Br-Network 2.80 1.3038 1.1811-4.4189 -0.34 Elfective Account Officer 2.00 0.749 1 .7583-3.2417 -2 24 Fínancial Strength 2.40 0.089 1-1402 .9843-3.8157 -1 18 Fomial Bank Present 1.20** 0.305 0.4472 .6447-1.7553 -9 0.001 Effective&Efficient Product Delivery 1.60* 0.8944 .4894-2.7106 -3 5 Historical Relationships 2.60 0.025 1.1402 1.1843-4.0157 -0 78 0.477 Innovative Product Design 2.60 1.1402 1.1843-4.0157 -0.78 0.477 Linkage to SWIFT&NettÍng 1.00*** 0.0045 .9964-1.0076 -999 0 L cation 2.20 0.8367 1.1611-3.2389 -2.14 0.099 MarketReputation 2.20 1.0954 .8398-3.5602 -1.63 0.178 perational Capabilities 1.60* 0.8944 .4894-2.7106 -3,5 0.025 2.80 Consistent Business Policy 1.3038 1.1811-4.4189 -0.34 0.749 2.00 Pricing 1.2247 .4793-3.5207 -1.83 0.142 1.40** RangeofSen/ices 0.5477 .7199-2.0801 -6.53 0.003 3.00 Reciprocity 2 .5167-5.4833 0 1 2.00 Risk Rating 1.2247 .4793-3.5207 -1.83 0.142 1.80** Compatibility of Services 0.4472 1.2447-2.3553 -6 0.004 1.80 ReliabilityofSupply 1.3038 .1811-3.4189 -2.06 0.109 2.00 Technological Level 1.4142 .2440-3.7560 -1.58 0.189 Nates: Linkage to Swift&Netting: BNP changed tol.01 Asian Banks(n=5) Broad Domestic&Global Br-Network 3.00 1.2247 1.4793-4.6207 0 1 EffectlveAccount Officer 2.80 0.4472 2.2447-3.3553 -1 0.374 Financial Strength 2.60 0.8944 1.4894-3.7106 -1 0.374 Formal Bank Present 2.60 1.5166 .7169-4.4831 -0.59 0,587 Effective&Efficient Product Delivery 2.80 1.0954 1.4398-4.1602 -0.41 0,704 Hisíorical Relationships 3.00 1 1.7583-4.2417 0 1 Innovative Product Design 3.20 1.0954 1.8398-4.5602 0.41 0.704 Llnkage to SWIFT&Netting 2.40 1.6733 .3223-4,4777 -0.8 0.468 L catlon 2.00 1 .7583-3.2417 -2.24 0.089 MarketReputation 2.40 1.5166 .5169-4.2831 -0.88 0.426 ; Operational Capabilities 2.80 0.8367 1.7611-3.8389 -0.53 0.621 Conslstent Business Policy 3.60 1.1402 2.1843-5.0157 1.18 0.305 Pricing 2.40 0.5477 1.7199-3.0801 -2.45 0.07 Range of Services 2.00* 0.7071 1.1220-2.8780 -3.16 0.034 Reciprocity 4.00 1.4142 2.2440-5.7550 1.58 0.189 Risk Ratlng 3.00 0.7071 2.1220-3.8780 0 1 Compatibility of Services 2.00* 0.7071 1.1220-2.8780 -3.16 0.034 Rellability of Supply 2.80 1.3038 1.1811-4.4189 -0.34 0.749 Iechnolo.qical Level 2.80 1.4832 .9583-4.6417 -0.3 0.778 Notes: •<,05, "^.oi, ***<.ooiand test value=3 if not specified APPENDIX 4

iks' Locations (Question 32(fl)) Reasons Mean ^f^ «-"' '>»• - -~— AilBanks in Australia(n=43) »o7o ui Tor Mean1 tValue 2-TaÍISic] Access to Customer 2.72 1.2785 2.3275-3.1144 Access to a Region 2.7209 0.195 2.37 1.3805 1.9472-2.7970 Costs of Banking Services 2.3721 0.211 2.14 1.0819 1.8066-2.4725 Convenient Time Zone 2.1395 0.165 3.74 1.1566 3.3882-4,1001 Developed Communication Link 3.7442 0.176 1.98 1.0576 1.6513-2.3022 Developed Transportation Link 1.9767 0.161 3.86 1.1869 3.4952-4.2257 Established Reputation 3.8605 0.181 2.35 1.1929 1.9817-2.7160 Favourable Tax for Non Resident 2.3488 0.182 4.09 1.2113 3.7202-4.4658 4.093 Inexpensive Support Services 0.185 3.23 1.2118 2.8596-3.6055 3.2326 LowCostofFunds 0.185 3.40 1.3118 2.9916-3.7991 3.3953 0.2 Mature & Sound Legal System 2.98 1.2438 2.5940-3.3595 2.9767 0.19 Political/Financial System Stability 2.74 1.2742 2.3521-3.1363 2.7442 0.194 Pool of Expertise in Banking&Supporting 3.02 1.1017 2.6842-3.3623 3.0233 0.168 Proximityto Financial/Com/lnds Centres 3.28 1.98 2.6697-3.8884 3.2791 0.302 Existence a Significant Number of Banks 3.56 1.1609 3.2009-3.9154 3.5581 0.177 Strategic Location 2.23 1.3063 1.8305-2.6346 2.2326 0.199 Strategic Interactions, e.g.Fund Movement 3.23 1.2313 2.8536-3.6115 3,2326 0.188 Unambiguous Regulation Framework 2.98 1.0799 2.6444-3.3091 2.9767 0.165 N tes: Valid Cases:43 and Missing Cases:0 Austraíian Banks(n=15) Access to Customer 2.40 1.2421 1.7121-3.0879 -1.87 0.082 Access to a Region 2.07** 1.0998 1.4576-2.6757 -3.29 0.005 Costs of Banking Services 1.80*** 0.6761 1.4256-2,1744 -6.87 0 Convenlent Time Zone 3.87* 1.2459 3.1767-4,5566 2.69 0.017 Develop Communication Link 1.93*** 0.8837 1,4439-2,4227 -4.67 0 Develop Transportation Link 3.87* 1.3558 3.1159-4.6175 2.48 0.027 Established Reputation 2.27* 1.1629 1.6227-2,9107 -2.44 0.028 Favourable Tax for Non Resident 4.27** 1.2228 3.5895-4.9438 4.01 0.001 Inexpensive Support Services 3.33 1.2344 2.6497-4.0169 1.05 0.313 LowCostofFunds 3.53 1.3558 2.7825-4.2841 1.52 0.15 Mature & Sound Legal System 2.87 1.1872 2.2092-3.5241 -0.43 0.67 Politlcal/Financial System Stability 2.47 1.3558 1.7159-3.2175 -1.52 0.15 Poolof Expertise in Banking&Supporting 2.67 1.0465 2.0871-3.2462 -1.23 0.238 Proximityto Fin/Com/lnds Centres 3.47 1.1872 2.8092-4.1241 1.52 0.15 Existence a Significant Number of Banks 3.47 1.302 2.7456-4.1877 1.39 0.187 Strategic Location 2.20* 1.0823 1.6006-2.7994 -2.86 0.013 Strategic Interactions, e.g.Fund Movement 3.27 1,2228 2.5895-3.9438 0.84 0.413 Unambiguous Regulation Framework 2.80 0,8619 2.3227-3.2773 -0.9 0.384 [|otes:_ValidCase_sr15_and Missing Cases:0 APPENDIX 4

Foreign Banks(n=28) AccesstoCustomer 2.89 1.2864 2.3941-3.3917 Access to a Region -0.44 0.663 2.54 1.5026 1.9531-3.1184 CostsofBankingServices -1.63 0.114 2.32** 1.2188 1.8488-2.7940 Convenient Time Zone -2.95 0.007 3.68** 1.1239 3.2428-4.1144 Develop Communication Link 3.19 0.004 2.00*** 1.1547 1.5523-2.4477 Develop Transportation Link -4.58 0 3.86*** 1.1127 3.4257-4.2886 Establlshed Reputation 4.08 0 2.39* 1.2274 1.9169-2.8688 Favourable Tax for Non Resident -2.62 0.014 4.00**'' 1.2172 3.5280-4.4720 Inexpensive Support Services 4.35 0 3.18 1.2188 2.7060-3.6512 LowCostofFunds 0.78 0.445 3.32 1.3068 2.8147-3,8281 1.3 Mature & Sound Legal System 0.204 3.04 1.2905 2.5353-3,5361 0.15 Polltical/Financial System Stability 0.885 2.89 1.2274 2.4169-3.3688 -0.46 0.648 P ol of Expertise in Banking&Supporting 3.21 1.1007 2.7875-3.6411 1.03 0.312 Proximity to Fin/Com/lnds Centres 3.18 2.3103 2.2827-4,0744 0.41 0,686 Existence a Significant Number of Banks 3.61** 1.1001 3.1806-4,0337 2.92 0.007 Strategic Location 2.25* 1.4305 1.6953-2.8047 -2.77 0.01 Strategic Interactions, e.g.Fund Movement 3.21 1.2578 2.7266-3.7020 0,9 0.375 Unambiguous Regulation Framework 3.07 1.1841 2.6123-3.5306 0.32 0.752 Notes: Valid Cases:28 and Missing Cases:0 Majors(n=4) Access to Customer 2.25 0.5 1.4544-3.0456 -3 0.058 Access to a Region 3.00 1.4142 .7497-5.2503 0 1 Costs of Banking Services 2.00*** 0.005 1.9945-2.0105 -399 0 Convenient Time Zone 4.25 0.9574 2,7265-5.7735 2.61 0.08 Develop Communication Link 2.50 0.5774 1.5813-3.4187 -1.73 0.182 Develop Transportation Link 4.50* 0.5774 3,5813-5.4187 5.2 0,014 Established Reputation 3.25 1.5 ,8632-5.6368 0.33 0.761 Favourable Tax for Non Resident 4.50 1 2.9088-6.0912 3 0.058 lnexpensive Support Services 3.75 0.5 2.9544-4,5456 3 0.058 L wCostofFunds 3.75 0.9574 2.2265-5,2735 1.57 0.215 Mature & Sound Legal System 3.00 0.8165 1.7008-4.2992 0 1 Polltical/Financial System Stability 2,25 0.9574 ,7265-3,7735 -1.57 0.215 P olof Expertise in Banking&Supporting 3.75 0.9574 2.2265-5.2735 1.57 0.215 Proximity to Fin/Com/lnds Centres 3.25 1.2583 1.2478-5.2522 0.4 0.718 Existence a Significant Number of Banks 3.75 0.9574 2.2265-5.2735 1.57 0.215 Strategic Location 3.00 0.8165 1.7008-4.2992 0 1 Strategiclnteractions, e.g.Fund Movement 2.75 0.5 1.9544-3.5456 -1 0.391 Unambiguous Regulation Framework 2.75 0.5 1.9544-3.5456 -1 0.391 Notes: Valid Cases:4 and Missing Cases:0 îojts f Banking_S6rvices_. ANZ changed to 2.01 APPENDIX 4

Non-Nlajor{n=11) AccesstoCustomer 2.45 1.4397 1.4873-3.4217 -1.26 0.237 AccesstoaRegion 1.73*** 0.7862 1.1991-2.2555 -5.37 0 C StsofBankingServices 1.73*** 0.7862 1.1991-2.2555 -5.37 0 Convenient Time Zone 3.73 1.3484 2.8214-4.6331 1.79 0.104 Develop Communication Link 1.73** 0.9045 1.1196-2.3349 -4.67 0.001 Develop Transportation Link 3.64 1.5015 2.6276-4.6451 1.41 0.19 Established Reputation 1.91** 0.8312 1.3507-2.4675 -4.35 0.001 Favourable Tax for Non Resident 4.18* 1.328 3.2896-5.0740 2.95 0.014 Inexpensive Support Services 3.18 1.4013 2.2404-4.1232 0.43 0.676 LowCostofFunds 3.45 1.5076 2.4418-4.4673 1 0,341 Mature & Sound Legal System 2.82 1.328 1.9260-3.7104 -0.45 0.659 P liticaFinancial System Stability 2.55 1.5076 1.5327-3.5582 -1 0.341 Poolof Expertise in Banking&Supporting 2.27* 0.7862 1.7445-2.8009 -3.07 0.012 Proximityto Fin/Com/lnds Centres 3.55 1.2136 2.7302-4.3607 1.49 0.167 Existence a Significant Number of Banks 3.36 1.4334 2.4007-4.3266 0.84 0.42 Strategic Location 1.91** 1.0445 1.2074-2.6108 -3.46 0.006 Strategiclnteractions, e.g.Fund Movement 3.45 1.3685 2.5352-4.3739 1.1 0.296 Unambiguous Regulation Framework 2.82 0.9816 2.1587-3.4777 -0.61 0.553 Noles:ValidCases:11 and Missing Cases:0 American Banks(n=7) Access to Customer 3.00 1.5275 1.5873-4.4127 0 1 Access to a Region 3.00 1.9149 1.2291-4.7709 0 1 C sts of Banking Services 2.00* 1 1.0752-2.9248 -2,65 0.038 ConvenientTime Zone 4.14* 1.215 3.0192-5.2665 2.49 0,047 Develop Communication Link 1.71** 0.7559 1.0152-2.4134 -4.5 0.004 Develop Transportation Link 3.43 1.5119 2.0303-4,8268 0.75 0,482 Established Reputation 2.14 1.3452 ,8988-3.3869 -1,69 0.143 Favourable Tax for Non Resident 3.43 1.7182 1.8395-5,0177 0,66 0.534 loexpensive Support Services 2.57 1.3973 1.2792-3.8637 -0.81 0.448 LowCostofFunds 2.29 1.496 .9021-3.6693 -1.26 0.253 Mature & Sound Legal System 1.86* 1.069 .8684-2.8458 -2.83 0.03 Politlcal/Financial System Stability 2.14 1.069 1.1542-3.1316 -2.12 0.078 Poolof Expertise in Banking&Supporting 2.57 1.1339 1.5228-3.6201 -1 0.356 Proximity to Fin/Com/lnds Centres 3.14 1.5736 1,6875-4,5982 0.24 0.818 Existence a Significant Number of Banks 3.14 1.5736 1,6875-4,5982 0.24 0.818 Strategic Location 2.71 1.7995 1.0501-4.3785 -0.42 0.689 Strategic Interactions, e.g.Fund Movement 2.57 1.5119 1.1732-3.9697 -0.75 0.482 Unambiguous Regulation Framework 2.29 1.1127 1.2566-3.3148 -1.7 0.14 No!es:ValidCajes:7 and Missing Cases:0 APPENDIX 4

British Banks(n=7) AccesstoCustomer 2.57 0.9759 1.6689-3.4740 -1.16 AccesstoaRegion 0.289 2.29 1.6036 .8027-3.7688 -1.18 0.283 CostsofBankingServices 1.43*** 0.5345 .9342-1.9229 -7.78 0 Convenient Time Zone 3.57 0.7868 2.8438-4.2991 1.92 Develop Communication Link 0.103 2.00 1.4142 .6921-3.3079 -1.87 0.111 DevelopTransportation Link 4.00** 0.5774 3.4660-4.5340 4.58 0.004 Established Reputation 2.43 1.5119 1.0303-3.8268 -1 0.356 Favourable Tax for Non Resident 4.43*** 0.5345 3.9342-4.9229 7.07 0 Inexpensive Support Services 3.71 0.9512 2.8346-4.5940 1.99 0.094 LowCostof Funds 3.71* 0.7559 3.0152-4.4134 2.5 0.047 Mature & Sound Legal System 3.14 1.4639 1.7890-4.4967 0.26 0.805 Political/Financial System Stability 3.00 1.291 1.8060-4.1940 0 1 Poolof Expertise in Banking&Supporting 3.43 1.1339 2.3799-4.4772 1 0.356 Proximityto Fin/Com/lnds Centres 3.14 1.4639 1.7890-4.4967 0.26 0.805 Existence a Significant Number of Banks 3.57 0.9759 2.6689-4.4740 1.55 0.172 Strategic Location 2.29 1.6036 .8027-3.7688 -1.18 0.283 Strategic Interactions, e.g.Fund Movement 3.00 1.4142 1.6921-4.3079 0 1 Unambiguous Regulation Framework 3.00 1.1547 1,9321-4.0679 0 1 Notes: Valld Cases:7 and Misslng Cases:0 Japanese Banks(n=4) Access to Customer 3.00 0.005 2.9945-3.0105 1 0.391 Access to a Region 2.00 0.8165 .7008-3.2992 -2.45 0.092 Costs of Banking Services 2.75 1.2583 .7478-4.7522 -0.4 0.718 Convenient Time Zone 3.75 1.5 1.3632-6.1368 1 0.391 Develop Communication Link 2.50 1.291 .4457-4.5543 -0.77 0.495 Develop Transportation Link 4.25 0.9574 2.7265-5.7735 2.61 0.08 Established Reputation 2.25 0.9574 .7265-3.7735 -1.57 0.215 Favourable Tax for Non Resident 3.50 1.291 1.4457-5.5543 0.77 0.495 Inexpensive Support Services 2.75 1.2583 .7478-4.7522 -0.4 0,718 L wCostofFunds 3.50 1.291 1.4457-5.5543 0,77 0,495 lilature & Sound Legal System 3.50 1 1.9088-5.0912 1 0,391 Polltlcal/Financial System Stability 3.00 1.4142 .7497-5.2503 0 1 Poolof Expertise in Banking&Supporting 3.00 0.8165 1.7008-4.2992 0 1 Proximityto Fin/Com/lnds Centres 2.50 1 .9088-4.0912 -1 0.391 Existence a Significant Number of Banks 3.25 0.5 2.4544-4.0456 1 0.391 Strategic Location 1.50* 0.5774 .5813-2.4187 -5.2 0.014 Strategic Interactions, e.g.Fund Movement 3.50 0.5774 2.5813-4,4187 1.73 0.182 Unambiguous Regulation Framework 3.25 0.9574 1.7265-4.7735 0.52 0,638 Notes: Vaiid Cases:4 and Missing Cases:0 tesMoCustomers: Asahi Bank changed to 3.01 APPENDIX 4

European Banks(n=5) Access to Customer 3.00 1.5811 1.0368-4.9632 0 1 AccesstoaRegion 2.60 1.1402 1.1843-4.0157 -0.78 CostsofBankingServices 0.477 2.20 1.0954 .8398-3.5602 -1.63 0.178 Convenient Time Zone 2.80 1.0954 1.4398-4.1602 -0.41 0.704 Develop Communication Link 2.00 1.7321 -.1506-4.1506 -1.29 0.266 Develop Transportation Link 3.60 1.1402 2.1843-5.0157 1.18 0,305 Established Reputation 2.40 1.1402 .9843-3.8157 -1.18 0,305 Favourable Tax for Non Resident 4.20 1.3038 2.5811-5.8189 2.06 0.109 Inexpensive Support Services 2.80 1.3038 1.1811-4.4189 -0.34 0.749 LowCostofFunds 3.40 1.5166 1.5169-5.2831 0.59 0.587 Mature & Sound Legal System 3.80 0.8367 2.7611-4.8389 2.14 0.099 Politlcal/Financial System Stability 3.60 0.8944 2.4894-4.7106 1.5 0.208 Poolof Expertise in Banking&Supporting 3.60 1.1402 2.1843-5.0157 1.18 0.305 Proximityto Fin/Com/lnds Centres 2.20 1.3038 .5811-3.8189 -1.37 0.242 Existence a Significant Number of Banks 4.20* 0.8367 3.1611-5.2389 3.21 0,033 Strategic Location 3.00 1.4142 1.2440-4.7560 0 1 Strategic Interactions, e.g.Fund Movement 3.20 1.0954 1.8398-4.5602 0.41 0.704 Unambiguous Regulation Framework 3.40 1.1402 1.9843-4.8157 0.78 0.477 N tes: Valld Cases:5 and Missing Cases:0

Asian Banks(n=5) Access to Customer 3.00 1.8708 .6771-5.3229 0 1 Access to a Region 2.60 1.8166 .3444-4.8556 -0.49 0.648 Costs of Banking Services 3.80 1.0954 2.4398-5.1602 1.63 0.178 Convenient Time Zone 4.00 1 2.7583-5.2417 2.24 0.089 Develop Communication Link 2.00* 0.7071 1,1220-2.8780 -3.16 0,034 Develop Transportation Link 4.20 1.3038 2.5811-5.8189 2.06 0.109 Establlshed Reputation 2.80 1.3038 1.1811-4.4189 -0.34 0,749 Favourable Tax for Non Resident 4.40* 0.8944 3.2894-5.5106 3.5 0,025 Inexpensive Support Services 4.00* 0.7071 3.1220-4.8780 3.16 0,034 LowCostofFunds 4.00 1 2.7583-5.2417 2.24 0,089 Mature & Sound Legal System 3.40 1.1402 1.9843-4.8157 0.78 0.477 Politlcal/Financial System Stability 3.00 1.4142 1,2440-4.7560 0 1 Poolof Expertise in Banking&Supporting 3.60 1.1402 2.1843-5,0157 1.18 0.305 Proximity to Fin/Com/lnds Centres 4.80 4.6583 -.9841-10.5841 0.86 0.436 Existence a Significant Number of Banks 4.00 1 2.7583-5,2417 2.24 0.089 Strategic Location 1.40** 0.5477 ,7199-2.0801 -6.53 0.003 Strategic Interactions, e.g.Fund Movement 4.20* 0.8367 3.1611-5.2389 3.21 0.033 Unambiguous Regulation Framework 3.80 1.3038 2.1811-5.4189 1.37 0.242 !!°teiValidCases:5 and Missina Cases:Q Notes:*<,05, **<,01, *"<,oo; and Test Value= 3. APPENDIX 4

Table 3.3.1 Buying Corbanking Services from Key Correspondents (Small Number) (Question 3.3) Key Corbanks No. of Banks % All Banks in Australia(n=43) Key Corbanks Not Used 9 20.9 Key Corbanks Used 34 79.1 43 100 Australian Banks(n=15) Key Corbanks Not Used 2 13.3 Key Corbanks Used 13 86.7 15 100 Foreign Banks(n=28) Key Corbanks Not Used 7 25 Key Corbanks Used 21 75 28 100 Majors(n=4) Key Corbanks Not Used 2 50 Key Corbanks Used 2 50 4 100 Non-IVIajor(n=11) Key Corbanks Used 11 100 11 100 Amerícan Banks(n=7) Key Corbanks Not Used 3 42.9 Key Corbanks Used 4 57.1 7 100 British Banks(n=7) Key Corbanks Not Used 1 14.3 Key Corbanks Used 6 85.7 7 100 Japanese Banks(n=4) Key Corbanks Not Used 2 50 Key Corbanks Used 2 50 4 100 European Banks(n=5) Key Corbanks Not Used 1 20 Key Corbanks Used 4 80 5 100 Asian Banks(n=5) Key Corbanks Used 5 100 5 100

Table 3.3.2 Statistics of Number of Key Correspondents (Question 3.4) Mean 13.74 Std Err 7.11 Minimum 1 Median 4,00 Variance 1767.79 Maximum 250 5%Trim 6.33 Std Dev 42.05 Range 249 IQR 9

Note: For those banks buying corbanking services from key correspondents Valid cases:35 and Missing Cases: Nil APPENDIX 4

Table 3.4-1 Corbanking Services Used by Respondents (Question 3.4) fof AiiBanks in Australia(n=43) Mean SD 95%ClforMean tvalue ^tailSig 3.98*** 1.2815 3.5823-4.3711 5.00 0.0000 1.37*** 0.8458 1.1118-1.6324 -12.62 0.0000 3.70** 1.5045 3.2347-4.1607 3.04 0.0040 l níational syndication loans 3.81*** 1.4016 3.3826-4.2453 3.81 0.0000 rade-related 2.56 1.5322 2.0866-3.0297 -1.89 0.0660 Treasur 2.16*** 1.3616 1.7438-2.5818 -4.03 0.0000 Nole; Valid Cases: 43, Missing Cases: Nil APPENDIX 4

Table 3.5.1 Havlng Procedures for Selection of Rights SuDDliers (Question 3.5) HH'o* Procedure No . of Banks % All Banks in Australia(n=43) No Procedure 13 30.2 Use Procedure 30 69,8 43 100 Australian Banks(n=15) No Procedure 3 20 Use Procedure 12 80 15 100 Foreign Banks(n=28) No Procedure 10 35.7 Use Procedure 18 64.3 28 100 Majors(n=4) Use Procedure 4 100 4 100 Non-Major(n=11) No Procedure 3 27.3 Use Procedure 8 72.7 11 100 American Banks(n=7) No Procedure 1 14.3 Use Procedure 6 85.7 7 100 British Banks(n=7) No Procedure 4 57.1 Use Procedure 3 42.9 7 100 Japanese Banks(n=4) No Procedure 1 25 Use Procedure 3 75 4 100 European Banks(n=5) No Procedure 3 60 Use Procedure 2 40 5 100 Asian Banks(n=5) No Procedure 1 20 Use Procedure 4 80 5 100

Table 3.5.2 Approaches Used for Selecting Right Suppliers (Question 3.5) (From 30 Respondents with Procedure Shown in Table 3.5.1) Not Using Approaches No. of Banks % of Banks The Approach Look for Conflicing Objectives 11 36.7 19 Fit into its Culture 4 13.3 26 Make Objective Assessment 16 53.3 14 Establish policy & procedure 23 76.7 7 Previous Transaction Records 12 40 18 Prioritised Effort 19 63.3 11 Note: 30 banks have procedures to select corbanks, no missing cases APPENDDÍ 4

Table 3.6.1 One Corbank or More in a Country or Citv (Question 3.6) ' No. of Corbank in a Country/Citv No. of Banks Percentaqe All Banks in Australia(n=43) One Bank 18 41.9 More Than One Bank 25 58.1 43 100 Australîan Banks(n=15) One Bank 5 33.3 More Than One Bank 10 66.7 15 100 Foreign Banks(n=28) One Bank 13 4~\J,^6 4 More Than One Bank 15 53.6 28 100 Majors(n=4) More Than One Bank 4 100 4 100 Non-Majors(n=11) One Bank 5 45.5 More Than One Bank 6 54.5 11 100 American Banks(n=7) One Bank 4 57.1 More Than One Bank 3 42.9 7 100 British Banks(n=7) One Bank 3 42.9 More Than One Bank 4 57.1 7 100 Japanese Banks(n=4) One Bank 2 50 More Than One Bank 2 50 4 100 European Banks(n=5) One Bank 1 20 More Than One Bank 4 80 5 100 Asian Banks(n=5) One Bank 3 60 More Than One Bank 2 40 5 100 APPENDIX 4

^b^S^Least One Corbank i„ Major Fr„a„cia, Centres

No. of Corbanks OTbanks Percentaq All Banks in Australia(n=43) No Corbank 5 11.6 One & More Than One Corbank 38 88.4 43 100 Australian Banks(n=15) One & More Than One Corbank 15 100 15 100 Foreign Banks(n=28) No Corbank 5 17.9 One & More Than One Corbank 23 82.1 28 100 Majors(n=4) One & More Than One Corbank 4 100 4 100 Non-Majors(n=11) One & More Than One Corbank 11 100 11 100 American Banks(n=7) No Corbank 1 14.3 One & More Than One Corbank 6 85.7 7 100 British Banks(n=7) No Corbank 3 42.9 One & More Than One Corbank 4 57.1 7 100 Japanese Banks(n=4) No Corbank 1 25 One & More Than One Corbank 3 75 4 100 European Banks(n=5) One & More Than One Corbank 5 100 5 100 Asian Banks(n=5) One & More Than One Corbank 5 100 5 100 APPENDIX 4

Table 3.8.1 Purposes for Rationalisation for All Banks in Australia (Question 3.8) Purposes bf Rationalisation Mean SD 95%ClforMean tvalue 2-Tail Sig Easier Communication 2.56* 1.3328 2,1480-2.9683 -2.37 0,0230 Reduce Costs 2.44** 1.4193 2.0051-2.8787 -2,76 0.0080 Simpler Currency Funding 2.49** 1.3161 2.0833-2.8934 -2.74 0.0090 Improve Customer Services 2.05*** 1.2141 1.6729-2.4201 -5.36 0.0000 Less Documentation 3.28 1.297 2,8799-3.6782 1.52 0.1350 Improve Efficiency 1.98 1.2245 1.5999-2.3536 -1.52 0.1350 Lower Price 2.65*** 1.2702 2,2602-3.0421 -5.69 0.0000 Rebates 3.49** 1.2223 3.1122-3.8645 2.74 0.0090 Better Use of Technology 2.56* 1.3148 2.1535-2.9628 -2.4 0.0210 Note: Test Value=3, No Missing Value APPENDEX 4

Statistical Analysis of Section 4: Relationship Management

Table 4.1.1 Frequencies of Reviewing Corbanks (Question4.1) Review Yearly % HalfYearly % Quarterly 0/0/ All Banks in Australia(n=43) Others Review 21 48.8 1 2.3 3 7 22 51.2 NoReview 22 51.2 42 97.7 40 93 21 48.8 43 100 43 100 43 100 43 100 Australían Banks(n=15) Review 7 46.7 1 6.7 2 13.3 8 53.3 No Review 8 53.3 14 93.3 13 86.7 7 46.7 15 100 15 100 15 100 15 100 Foreign Banks(n=28) Review 14 50 0 0 1 3.6 14 50 No Review 14 50 28 100 27 96.4 14 50 28 100 28 100 28 100 28 100 Majors(n=4) Review 3 75 0 0 2 50 4 100 No Review 1 25 0 0 2 50 0 0 4 100 4 100 4 100 4 100 Non-Major(n=11) Review 4 36.4 1 9.1 0 0 8 72,7 No Review 7 63.6 10 90.9 0 0 3 27,3 11 100 11 100 11 100 11 100 American Banks(n=7) Review 6 85.7 0 0 0 0 2 28.6 No Review 1 14.3 0 0 0 0 5 71.4 7 100 7 100 7 100 7 100 British Banks(n=7) Review 4 57.1 0 0 0 0 3 42.9 No Review 3 42.9 0 0 0 0 4 57.1 7 100 7 100 7 100 7 100 Japanese Banks(n=4) Review 1 25 0 0 0 0 3 75 No Review 3 75 0 0 0 0 1 25 4 100 4 100 4 100 4 100 European Banks(n=5) Review 1 20 0 0 1 20 3 60 No Review 4 80 0 0 4 80 2 40 5 100 5 100 5 100 5 100 Asian Banks(n=5) Review 2 40 0 0 0 0 3 60 No Review 3 60 0 0 0 0 2 40 . 5 100 5 100 5 100 5 100 APPEfíDIX 4

Table 4.2.1 Formal or No Formal Grading Corbanking Relationships (Question 4.2) Grading No. of Banks % All Banks in Australia(n=43) No Formal Grading 28 65.1 Formal Grading 15 34.9 43 100 Australian Banks(n=15) No Formal Grading 10 66.7 Formal Grading 5 33.3 15 100 Foreign Banks(n=28) No Formal Grading 18 64.3 Formal Grading 10 35.7 28 100 Majors(n=4) Formal Grading 4 100 4 100 Non-Major(n=11) No Formal Grading 10 90.9 Formal Grading 1 9.1 11 100 American Banks(n=7) No Formal Grading 4 57.1 Formal Grading 3 42.9 7 100 British Banks(n=7) No Formal Grading 4 57,1 Formal Grading 3 42,9 7 100 Japanese Banks(n=4) No Formal Grading 4 100 4 100 European Banks(n=5) No Formal Grading 4 80 Formal Grading 1 20 5 100 Asian Banks(n=5) No Formal Grading 2 40 Formal Grading 3 60 5 100 APPENDDC 4

Table 4.2.2 Number of Grades for Corbanking Relationships of All Banks in Australia (Question 4.2) No. of Grades No. of Banks % 0 26 60.5 2 9 20.9 3 2 4.7 4 3 7 5 2 4.7 10 1 2.3 Total 43 100 Notes: Mean:1.302, SD:2.065, iMin;0, Max:10.

Table 4.2.3 Factors for Grading Correspondents of Ali Banks in Austraiia (Question 4.2) Bases of Grades Mean SD 95% Cl for Wlean t Value 2-Tail Sig Gommitment to Do Business 2.95 1.3266 2.3664-3.5427 -0.29 0.774 Competitiveness 2.32** 1.1291 1.8176-2.8188 -3.14 0.004 Service Customization 2.86 1.3556 2.2626-3,4647 -0.71 0.486 Providing Low Price Products 2.73 1.3159 2.1438-3,3107 -0.43 0.67 Pricing/Cost 1.86*** 0.9902 1.4246-2,3027 -6.93 0 Range of Services 2.50* 1.4058 1,8767-3.1233 -2.66 0.013 Profit 2.82 1.6514 2,0860-3.5504 -0.72 0.478 Potential Business 3.09 1.1088 2.5993-3.5825 0.16 0.876 Quaiity of Services 1.50*** 0.5976 1.2350-1,7650 -14 0 Reciprocity 3.36 1.3988 2.7434-3,9838 0.12 0.904 Reiiability 1 4-]*** 0,7341 1.0836-1.7346 -12.75 0 Responsiveness 1.68*** 0.9946 1.2408-2.1228 -8.04 0 Revenue Generating 3.05 1.7587 2.2657-3.8252 -0.11 0.915 Risk Rating 2.59* 1.4362 1.9541-3.2277 -2.12 0.045 Number of Transactions 2.82 1.3675 2,2119-3.4245 -0.58 0.566 Notes: Valid Cases:22 and Missins3 Cases:21 APPENDIX 4

Table 4.3.1 Primary Advantages of Long Term Corbanking Relationships for All Banks in Australia (Question 4.3) Advantages of Corbanking Mean SD 95%ClforMean tValue 2-Tail Sig Optimised Capacity 2.67 1.085 2.3405-3.0083 -1.97 0.056 Enhanced Marketlng Efficiency 2.65 1.2514 2,2661-3.0363 -1.83 0.075 Customer Orientation 1.81*** 0.8798 1.5432-2.0847 -8.84 0 Price Stabiîity 2.40** 1.3477 1.9806-2.8101 -2.94 0.005 Sharing Information 3.42* 1.2389 3.0373-3.7999 2.22 0.032 Notes: Valid Cases:43 and Missing Cases:0 APPENDIX 4

Table 4.4.1 Establishment of Relationships by Contract (Question 4.4) Establishing Relationships No. of Banks % All Banks in Australia(43) All by Contract 30 69.8 Some by Contract 12 27.9 Without Contract 1 2.3 Total 43 100 Australian Banks(n=15) All by Contract 12 80 Some by Contract 3 20 Without Contract 0 0 Total 15 100 Foreign Banks(n=28) All by Contract 18 64.3 Some by Contract 9 32.1 Without Contract 1 3.6 Total 28 100 Majors(n=4) All by Contract 3 75 Some by Contract 1 25 Without Contract 0 0 Total 4 100 Non-Majors(n=11) All by Contract 9 81.8 Some by Contract 2 18.2 Without Contract 0 0 Total 11 100 American Banks(n=7) All by Contract 5 71.4 Some by Contract 2 28.6 Without Contract 0 0 Total 7 100 British Banks(n=7) All by Contract 4 57.1 Some by Contract 2 28.6 Without Contract 1 14.3 Total 7 100 Japanese Banks(n=4) All by Contract 2 50 Some by Contract 2 50 Without Contract 0 0 Total 4 100 European Banks(n=5) All by Contract 4 80 Some by Contract 1 20 Without Contract 0 0 Total 5 100 Asian Banks(n=5) All by Contract 3 60 Some by Contract 2 40 Without Contract 0 0 Total 5 100 APPENDIX 4

Table 4.5.1 CreditApproval Limitof Corbanking Unit (Question 4.5) ^ Authority for Approval No. of Banks % All Banks in Australia(n=43) Authority of Credit Limit 2 4 B5 No Authority to Approve Credit 25 \J\J.58 11 4^ Authority of Restricted Limit 16 37.21 43 100.00 Australian Banks(15) Authority of Credit Limit 1 6.67 No Authority to Approve Credit 7 46.67 Authority of Restricted Limit 7 46.67 15 100.00 Foreign Banks(28) Authority of Credit Limit 1 3.57 No Authority to Approve Credit 18 64.29 Authority of Restricted Limit 9 32.14 28 100.00 Majors(4) Authority of Credit Limit 0 0.00 No Authority to Approve Credit 1 25.00 Authority of Restricted Limit 3 75.00 4 100.00 Non-major(ll) Authority of Credit Limit 1 9.09 No Authority to Approve Credit 6 54.55 Authority of Restricted Limit 4 36.36 11 100.00 American Banks(7) Authority of Credit Limit 0 0.00 No Authority to Approve Credit 4 57.14 Authority of Restricted Limit 3 42.86 7 100.00 British Banks(7) Authority of Credit Limit 0 0.00 No Authority to Approve Credit 6 85.71 Authority of Restricted Limit 1 14.29 7 100.00 Japanese Banks(4) Authority of Credit Limit 0 0 No Authority to Approve Credit 3 75 Authority of Restricted Limit 1 25 4 100 European Banks(5) Authority of Credit Limit 1 20.00 No Authority to Approve Credit 2 40.00 Authority of Restricted Limit 2 40.00 5 100.00 Asian 6anks(5) Authority of Credit Limit 0 0.00 No Authority to Approve Credit 3 60.00 Authority of Restricted Limit 2 40.00 5 100.00 APPENDIX 4

lZlZ\o.'^r::r '^"="= '"^ *^«-«''^ ^'-" 0' ^-^^ in Country and Aggregate Limit No. of Banks % Banks in Australia(n=43) Not Equal 30 69.77 Equal 13 30.23 43 100.00 Australian Banks(n=15) Not Equal 10 66.67 Equal 5 33.33 15 100.00 Foreign Banks(n=28) Not Equal 20 71.43 Equal 8 28,57 28 100.00 Majors(n=4) Not Equal 2 50.00 Equal 2 50.00 4 100.00 Non-Major(n=11) Not Equal 8 72.73 Equal 3 27.27 11 100.00 American Banks(n=7) Not Equal 6 85,71 Equal 1 14.29 7 100.00 British Banks(n=7) Not Equal 0 0.00 Equal 7 100.00 7 100.00 Japanese Banks(n=4) Not Equal 3 75.00 Equal 1 25.00 4 100.00 European Banks(n=5) Not Equal 2 40.00 Equal 3 60.00 5 100.00 Asian Banks(n=5) Not Equal 2 40.00 Equal 3 60.00 5 100.00 APPENDIX 4

Table 4.7.1 Crosstabs Head Office/Branch Authorities to Establish Corbanking Relationships (Question 4.7)

Banks in Australia(n=43) Head Office No Authority Authorised Total % Branch No Authority 0 28 28 65.12 Authorised 15 0 15 34.88 Total 15 28 % 34.88 65.12 100 Australian Banks(n=15) No Authority 0 15 15 100.00 Authorised 0 0 0 0.00 Total 0 15 % 0.00 100.00 100 Foreign Banks(n=28) No Authority 0 13 13 46.43 Authorised 15 0 15 53.57 Total 15 13 % 53.57 46.43 100 Majors(n=4) No Authority 0 4 4 100.00 Authorised 0 0 0 0.00 Total 0 4 % 0.00 100.00 100 Non-Major(n=11) No Authority 0 11 11 100.00 Authorised 0 0 0 0,00 Total 0 11 % 0.00 100.00 100 American Banks(n=7) No Authority 0 3 3 42.86 Authorised 4 0 4 57.14 Total 4 3 % 57.14 42.86 100 British Banks(n=7)^ No Authority 0 6 6 85.71 Authorised 1 0 1 14.29 Total 1 6 % 14.29 85.71 100 Japanese Banks(n=4) No Authority 0 1 1 25.00 Authorised 3 0 3 75.00 Total 3 1 % 75.00 25.00 100 European Banks n=5) No Authority 0 0 0 0.00 100.00 Authorised 5 0 5 Total 5 0 100 % 100.00 0.00 Asian Banks(n=5 60.00 No Authority 0 3 3 40.00 Authorised 2 0 2 Total 2 3 100 % 40.00 60.00 Notes; Branches have authority to establish corbanking relation implying its also has authorlty APPENDIX 4

Table 4.8.1 Disadvantages of Correspondent Banking (Question 4.8) Disadvantages of Corbanking Mean SD 95% Cl for Mean t Value 2-Tail Sic^ All Banks in Australia(n=43) Reductance to Grant Credit Facilities 2.79 1.1864 2.4256-3.1558 -1.16 0.2540 Lack of Flexibility 2.77 1.0654 2.4396-3,0953 -1.43 0.1600 Corbanks Lack of Motivatiion 3.35 1.3253 2,9410-3,7567 1.73 0,0920 Counterparty Risk 2.56*** 0,888 1.5174-2.0640 -8.93 0.0000 Notes; Valid Cases;43 and Missing Cases;0 Australian Banks(n=15) Reductance to Grant Credit Facilities 2.80 1,2649 2.0995-3.5005 -0.61 0.550 Lack of Flexibility 2.67 1.0465 2.0871-3.2462 -1.23 0.238 Corbanks Lack of Motivatiion 3.27 1.5337 2.4173-4.1160 0.67 0.512 Counterparty Risk 2.60*** 0.9411 1.2788-2.3212 -4.94 0,000 Notes: Valid Cases:15 and Missing Cases:0 Foreign Banks(n=28) Reductance to Grant Credit Facilities 2.79 1.1661 2.3335-3.2379 -0.97 0.3390 Lack of Flexibility 2.82 1.0905 2.3986-3.2443 -0.87 0.3940 Corbanks Lack of Motivatiion 3.39 1.2274 2.9169-3.8688 1,69 0.1020 Counterparty Risk 2.54*** 0.8759 1.4461-2.1254 -7.34 0.0000 Notes: Valid Cases;28 and Missing Cases;0 IV!ajors(n=4) 2.75 Reductance to Grant Credit Facilities 1.2583 .7478-4,7522 -0.4 0.7180 3.00 Lack of Flexibility 1.4142 .7497-5.2503 0 1.0000 2.50 Corbanks Lack of Motivatiion 1.291 .4457-4.5543 -0,77 0.4950 2.25** .4544-2.0456 Counterparty Risk 0.5 -7 0.0060 Notes: Valid Cases:4 and Missing Cases:0 Non-Major(n=11) 2.82 1.328 1.9260-3.7104 -0.45 0.6590 Reductance to Grant Credit Facilities 2.55 0.9342 1.9179-3.1731 -1.61 0.1380 Lack of Flexibility 3.55 1.5725 2.4890-4.6019 1.15 0.2770 Corbanks Lack of Motivatiion 2.73** 1 1.3282-2,6718 -3.32 0,0080 Counterparty Risk Notes: Valid Cases;11 and Missing Cases:0 American Banks(n=7) 2.43 1.1339 1.3799-3.4772 -1.33 0,2310 Reductance to Grant Credit Facilities 2.71 1.2536 1.5549-3.8736 -0.6 0.5690 Lack of Flexibility 3.43 1.2724 2.2518-4.6054 0.89 0.4070 Corbanks Lack of Motivatiion 2.57** 0.7868 ,7009-2.1562 -5,28 0,0020 Counterparty Risk Notes: Valid Cases:7 and Missing Cases:0 British Banks(n=7) 2.86 1,069 1.8684-3,8458 -0,35 0.7360 Reductance to Grant Credit Facilities 2.43 0.9759 1.5260-3.3311 -1.55 0.1720 Lack of Flexibility 3.43 1.2724 2.2518-4.6054 0.89 0.4070 Corbanks Lack of Motivatiion 3.29 0.9512 1.4060-3.1654 -1,99 0.0940 Counterparty Risk Notes: Valid Cases;7 and Missing Cases;0 1.9088-5.0912 1 0.3910 Japanese Banks(n=4) 3.50 1 1.9088-5.0912 1 0.3910 Reductance to Grant Credit Facilities 3.50 1 1.4457-5.5543 0,77 0.4950 Lack of Flexibility 3.50 1.291 -.0912-3.0912 -3 0.0580 Corbanks Lack of Motivatiion 3.00 1 Counterparty Risk Notes: Valid Cases:4 and Missing Cases:0 .9341-4.2659 -0.67 0.5410 European Banks(n=5) 2.60 1.3416 1.1843-4.0157 -0.78 0.4770 Reductance to Grant Credit Facilities 2.60 1.1402 1.5169-5.2831 0.59 0.5870 Lack of Flexibility 3.40 1.5166 .9199-2.2801 -5.72 0.0050 Corbanks Lack of Motivatiion 1.60** 0.5477 Counterparty Risk Notes; Valid Cases:5 and Missing Cases:0 -0.3 0.7780 2.80 1.4832 .9583-4.6417 Asian Banks(n=5) 0.41 0.7040 3.20 1.0954 1.8398-4.5602 Réductánce to Grant Credit Facilities 0.34 0.7490 3.20 1.3038 1.5811-4.8189 Lack of Flexibility -2,24 0.0890 2.00 1 .7583-3.2417 Corbanks Lack of Motivatiion Counterparty Risk ^tes: Valid Cases:5 and Missing Cases:0 APPENDIX 4

Statistical Analysis of Section 5: Risk Management

Table 5.1.1 Sources of Support for Corbanking Relationships Risk Assessment iQuestion5.1) Sources Mean SD 95% Cl for Mean tValue 2-Tail Sîg •gBanks in Australia(n=43) Banker Clients Management 3.05 1.1537 2.6914-3.4016 0.26 0.793 Extemal Advisers 4.26*** 1.0022 3.9474-4.5642 8.22 0 Inliouse Credit Team 1.84*** 1.2136 1.4637-2.2107 -6.28 0 Other Banks 3.35 1.2888 2.9522-3.7455 1.77 0.083 Other Clients 3.84*** 1.0449 3.5156-4.1588 5.25 0 Periodicals/Publications 2.81 1.2772 2.4209-3.2070 -0.96 0.345 Rating Agencies 1.91*** 1.13 1.5592-2.2547 -6.34 0 Regulators 3.16 1.2136 2.7893-3.5363 0.88 0.384 Notes: Valid Cases;43 and Missing Cases:0 Australian Banks(n=15) Banker Clients Management 2.73 1.0328 2.1614-3.3053 -1 0.334 External Advisers 4.27*** 1.0328 3.6947-4.8386 4.75 0 Inhouse Credit Team 1.80** 1.2649 1.0995-2.5005 -3.67 0.003 Other Banks 2.73 1.0998 2.1243-3.3424 -0.94 0.364 0.065 Other Clients 3.67 1.291 2.9517-4.3816 2 Periodicals/Publications 2.53 1.1255 1.9101-3.1566 -1.61 0.131 Rating Agencies 1.93** 1.1629 1,2893-2.5773 -3.55 0.003 0.334 Regulators 3.27 1,0328 2,6947-3.8386 1 Notes: Valid Cases;15 and Missing Cases;0 Foreign Banks(n=28) 0.352 Banker Clients Management 3.21 1.1974 2.7500-3.6786 0.95 0 External Advisers 4.25*** 1.0046 3.8604-4.6396 6.58 0 Inhouse Credit Team 1.86*** 1.2084 1.3886-2.3257 -5 0.009 Other Banks 3.68** 1.2781 3.1830-4.1742 2.81 0 Other Clients 3.93*** 0.8997 3.5797-4.2775 5.46 0.889 Periodicals/Publications 2.96 1.3467 2.4421-3.4865 -0.14 0 Rating Agencies 1.89*** 1.1333 1.4534-2.3323 -5.17 0.67 Regulators 3.11 1,3149 2,5973-3.6170 0.43 N tes: Valid Cases;28 and Missing Cases:0 Majors(n=4) 0.8165 1.7008-4.2992 0 1 Banker Clients Management 3.00 0.9574 2.7265-5.7735 2.61 0.08 External Advisers 4.25 0.5 .4544-2.0456 -7 0.006 Inhouse Credit Team 1.25** 1 Other Banks 3.00 0 8165 1.7008-4.2992 0 0.9574 2.7265-5.7735 2.61 0.08 Other Clients 4.25 1291 .4457-4.5543 -0.77 0.495 Periodicals/Publications 2.50 0.8165 .7008-3.2992 -2.45 0.092 Rating Agencies 2.00 0.5 2.4544-4.0456 1 0.391 Regulators 3.25 Notes: Valid Cases:4 and Missing Cases; Non-Wlajor(n=11) 0.307 2.64 1 1201 1.8839-3.3888 -1-08 Banker Clients Management 0.003 4.27** 1.1037 3.5312-5.0142 3.82 Extemal Advisers 0.041 2.00* 1.4142 1.0499-2.9501 -2.35 Inhouse Credit Team 0.341 2.64 1206 1.8261-3.4466 -1 Other Banks 0.296 3.45 1 3685 2.5352-4.3739 11 OtherClients 0.211 2.55 1 1282 1.7876-3.3034 -1-34 l^eriodicals/Publications 0.019 1.91* 1 3003 1.0355-2.7827 -2.78 Rating Agencies 0.465 1 1909 2.4727-4.0728 0.76 Regulators 3.27 Notes^Vaiid Cases:11 and Missmg_Case_s:0 APPENDIX 4

American Banks(n=7) Banker Clients Management 2.71 1.7043 1.1380-4.2905 -0.44 0.673 External Advisers 4 -71*** 0.488 4.2630-5.1656 9.3 n Inhouse Credit Team 1.43** 0.7868 \J .7009-2.1562 -5,28 0.002 Other Banks 3.14 1.6762 1.5927-4.6930 0,23 0.829 Other Clients 4.29** 0.7559 3.5866-4.9848 4,5 0 004 Periodicals/Publications 2.71 1.1127 \J.\J\J^ 1.6852-3.7434 -0,68 0,522 Rating Agencies 1.86* 1.069 .8684-2.8458 -2.83 0.03 Regulators 3.29 1.3801 2.0093-4.5621 0.55 0.604 N tes: Valid Cases:7 and Missing Cases:0 British Banks(n=7) Banker Clients Management 3.29 1.3801 2.0093-4.5621 0.55 0.604 External Advisers 4.29** 0.7559 3.5866-4.9848 4.5 0.004 Inhouse Credit Team 1.43** 0.7868 .7009-2.1562 -5.28 0.002 ther Banks 4.00 1.291 2.8060-5.1940 2.05 0.086 ther Clients 3.71 0.9512 2.8346-4.5940 1.99 0,094 Periodicals/Publications 2.57 1.5119 1.1732-3.9697 -0.75 0,482 Rating Agencies 1.29*** 0.488 .8344-1.7370 -9.3 0 Regulators 3.14 1.3452 1.8988-4.3869 0.28 0,788 Notes: Valid Cases:7 and Missing Cases;0 Japanese Banks(n=4) Banker Clients Management 3.25 0.5 2.4544-4.0456 1 0,391 External Advisers 4.00 1.1547 2.1626-5.8374 1.73 0,182 Inh use Credit Team 3.00 1.8257 .0948-5.9052 0 1 Other Banks 3.25 0.5 2.4544-4.0456 1 0.391 Other Clients 3.75 0.9574 2.2265-5.2735 1.57 0.215 Perlodicals/Publications 4.00 0.8165 2.7008-5.2992 2.45 0,092 Rating Agencies 3.50 1.7321 .7439-6.2561 0.58 0.604 Regulators 2.50 0.5774 1.5813-3,4187 -1.73 0,182 Notes: Valid Cases:4 and Missing Cases:0 European Banks(n=5) Banker Clients Management 3.20 0.4472 2.6447-3,7553 1 0.374 External Advisers 3.40 1.5166 1.5169-5.2831 0.59 0.587 Inhouse Credit Team 2.20 1.6432 .1597-4.2403 -1.09 0.338 Other Banks 4.00 1 2.7583-5.2417 2.24 0.089 OtherClients 3.80 1.0954 2.4398-5.1602 1.63 0.178 Periodicals/Publications 3.40 1.5166 1.5169-5.2831 0.59 0.587 Rating Agencies 2.00* 0.7071 1.1220-2.8780 -3.16 0.034 Regulators 2.20 1.3038 ,5811-3.8189 -1.37 0.242 Notes: Valid Cases:5 and Missing Cases:0 Asian Banks(n=5) Banker Clients Management 3.8 1.0954 2.4398-5.1602 1.63 0.178 Extemal Advisers 4.60* 0.8944 3.4894-5.7106 4 0.016 Inhouse Credit Team 1.80* 0.8367 .7611-2.8389 -3.21 0.033 OtherBanks 4.00 1.4142 2.2440-5.7560 1.58 0.189 OtherClients 4.00 1 2.7583-5.2417 2.24 0.089 Periodicals/Publications 2.60 1.5166 .7169-4.4831 -0,59 0.587 Rating Agencies 1.40** 0.5477 ,7199-2.0801 -6.53 0.003 Regulators 4.20 1.0954 2.8398-5.5602 2.45 0.07 !!2!S!Lyalid Cases;5 and Missing Cases;0 APPENDIX 4

Table 5.1.2 Level of Inhouse Credit Team (Question 5.1) Head Office/ Branch Level No. of Banks % All Banks in Australia(n=43) Branch 8 18.6 Head Office 24 55.8 Branch & Head Office 11 25.6 43 100 Australian Banks(n=15) Head Office 13 86.7 Branch & Head Office 2 13.3 15 100 Foreign Banks(n=28) Branch 8 28.6 Head Office 11 39.3 Branch & Head Office 9 32.1 28 100 Majors(n=4) Head Office 3 75 Branch & Head Office 1 25 4 100 Non-Majors(n=11) Head Office 10 90.9 Branch & Head Office 1 9.1 11 100 American Banks(n=7) Branch 2 28.6 Head Office 1 14.3 Branch & Head Office 4 57.1 7 100 British Banks(n=7) Branch 1 14.3 Head Office 4 57.1 Branch & Head Office 2 28.6 7 100 Japanese Banks(n=4) Branch 1 25 Head Office 1 25 Branch & Head Office 2 50 4 100 European Banks(n=5) Branch 3 60 Head Office 1 20 Branch & Head Office 1 20 5 100 Asian Banks(n=5) Branch 1 20 Head Office 4 80 5 100 Table 5.2.1 Factors for Assessing Counterparty Risk (Question 5.2) Factors of Counterparty Risk Mean SD 95%ClforMean tValue 2-Tail Sig All Banks in Australia(n=43) Asset Quality 1.74*** 0.6933 1.5308-1.9575 -11.88 0 Capitalisation 2.23*** 0.9961 1.9260-2.5391 -5.05 0 Confidence 2.37*** 1.0241 2.0569-2.6873 -4.02 0 External Support 2.72 1.0539 2.3966-3.0453 -1.74 0.09 Funding 3.07 4.6157 1,6493-4.4903 0.1 0.922 Liquidity 1.86*** 0.774 1.6223-2.0987 -9.65 0 Market risk 2.60* 1.1576 2.2484-2.9609 -2.24 0.03 Performance 1.93*** 0.7036 1.7137-2.1468 -9.97 0 Political Support 2.56* 1.0758 2.2271-2.8892 -2.69 0.01 Supervision/Protect 1.98*** 0.9126 1.6959-2.2576 -7.35 0 Status 1.95*** 0.7854 1.7118-2.1952 -8.74 0 Notes: Valid Cases:43 and Missing Cases;0 Australian Banks(n=15) Asset Quality 1.87 0.7432 1.4551-2.2783 1.8667 0.192 Capitalisation 2.40 0.9856 1.8542-2,9458 2,4 0.254 Confidence 2.47 0.9155 1,9597-2.9736 2.4667 0.236 External Support 2.60 0.8281 2.1414-3.0586 2.6 0.214 Funding 4.73 7.592 .5290-8.9376 4.7333 1.96 Liquidity 2.33 0.7237 1.9325-2.7341 2.3333 0,187 Market risk 2.93 1.1629 2.2893-3.5773 2.9333 0.3 Performance 2.20 0.7746 1.7710-2.6290 2.2 0.2 Political Support 2.40 0.9103 1.8959-2.9041 2.4 0.235 Supervision/Protect 1.87 0.9155 1.3597-2,3736 1,8667 0.236 Status 1.93 0.7988 1.4910-2.3757 1,9333 0.206 Notes: Valid Cases:15 and Missing Cases:0 Foreign Banks(n=28) Asset Quality 1.43 0.5345 .9342-1.9229 1,4286 0.202 Capitalisation 1.71 0.7559 1.0152-2.4134 1,7143 0.286 Confidence 2.29 1.496 .9021-3.6693 2.2857 0.565 External Support 2.43 1.3973 1.1363-3.7208 2.4286 0.528 Funding 1.86 1.069 ,8684-2,8458 1.8571 0.404 Liquidity 1.43 0.5345 .9342-1.9229 1,4286 0.202 Market risk 2.71 1.496 1.3307-4.0979 2,7143 0.565 Performance 1.57 0.7868 .8438-2.2991 1.5714 0.297 Political Support 1.86 1.215 .7335-2.9808 1.8571 0.459 Supervision/Protect 1.29 0.7559 .5866-1.9848 1,2857 0.286 Status 1.29 0.488 .8344-1.7370 1.2857 0.184 Notes: Valid Cases;7 and Missing Cases;0 Majors(n=4) -7 0.006 Asset Quality 1.25** 0.5 .4544-2.0456 Capitalisation 1.75* 0.5 .9544-2.5456 -5 0.015 Confidence 2.75 0.5 1.9544-3.5456 -1 0.391 External Support 3.00 0.8165 1.7008-4.2992 0 1 Funding 2.50 0.5774 1.5813-3.4187 -1.73 0.182 Liquidity 2.25 0.9574 .7265-3.7735 -1.57 0.215 Market risk 2.00*** 0.005 1.9945-2.0105 -399 0 Performance 1.75* 0.5 .9544-2.5456 -5 0.015 Political Support 2.75 0.5 1.9544-3.5456 -1 0.391 Supervision/Protect 2.00 0.8165 .7008-3.2992 -2.45 0.092 Status 2.25 0.5 1.4544-3,0456 -3 0.058 Notes; Valid Cases:4 and Missing Cases:0 APPENDIX 4 Non-Major(n=11) Asset Quality 2.00* 0.8165 1.2449-2.7551 -3.24 0.018 Capitalisation 2.86 1.215 1.7335-3.9808 -0.31 0.766 Confidence 2.29 1.2536 1.1264-3.4451 -1.51 0.182 External Support 2.43 0.9759 1.5260-3.3311 -1.55 0.172 Fundlng 3.29 0.9512 2.4060-4.1654 0.79 0.457 Liquidity 2.57 0.7868 1.8438-3.2991 -1.44 0.2 Market risk 3.43 1.1339 2.3799-4.4772 1 0,356 Performance 2.43 0.9759 1.5260-3.3311 -1.55 0,172 Political Support 2.14* 0.8997 1.3107-2.9750 -2.52 0.045 Supervision/Protect 1.57** 0.7868 .8438-2.2991 -4.8 0,003 Status 1.57** 0.7868 .8438-2.2991 -4.8 0,003 Notes; Valid Cases:7 and Missing Cases;0 American Banks(n=7) Asset Quality 1.43*** 0.5345 .9342-1.9229 -7.78 0 Capitalisation 1.71** 0.7559 1.0152-2,4134 -4.5 0,004 Confidence 2.29 1.496 .9021-3.6693 -1.26 0,253 External Support 2.43 1.3973 1.1363-3.7208 -1.08 0,321 Funding 1.86* 1.069 .8684-2.8458 -2.83 0.03 Liquidity 1.43*** 0.5345 .9342-1.9229 -7.78 0 Market risk 2.71 1.496 1.3307-4.0979 -0.51 0.631 Performance 1.57** 0.7868 .8438-2.2991 -4.8 0.003 Political Support 1.86* 1.215 .7335-2.9808 -2.49 0,047 Supervision/Protect 1.29** 0.7559 .5866-1.9848 -6 0.001 Status 1.29*** 0.488 .8344-1.7370 -9.3 0 Notes: Valid Cases:7 and Missing Cases;0 British Banks(n=7) Asset Quality 1.29*** 0.488 .8344-1.7370 -9.3 0 Capitalisation 2.71 1.1127 1.6852-3,7434 -0.68 0.522 Confidence 2.29 0.9512 1.4060-3.1654 -1.99 0.094 Extemal Support 3.14 1.3452 1,8988-4,3869 0.28 0.788 Funding 2.14 1.3452 ,8988-3,3869 -1.69 0.143 Liquidity 1.29*** 0.488 ,8344-1.7370 -9.3 0 Market risk 2.43 1.2724 1.2518-3.6054 -1.19 0.28 Performance 1.57*** 0.5345 1.0771-2.0658 -7.07 0 Political Support 2.86 1.215 1,7335-3.9808 -0.31 0.766 Supervision/Protect 2.29** 0.488 1.8344-2.7370 -3.87 0.008 Status 2.29 1.1127 1.2566-3.3148 -1.7 0.14 Notes; Valid Cases:4 and Missing Cases;0 Japanese Banks(n=4) Asset Quality 2.25 0.5 1.4544-3.0456 -3 0.058 Capitalisation 2.25 1.2583 .2478-4.2522 -1.19 0.319 Confidence 1.75* 0.5 ,9544-2,5456 -5 0.015 External Support 2.25 0.9574 .7265-3.7735 -1.57 0.215 Funding 2.25 0.5 1.4544-3.0456 -3 0.058 Liquidity 1.50* 0.5774 ,5813-2.4187 -5,2 0.014 Market risk 2.25 0.5 1,4544-3.0456 -3 0.058 Performance 1.75* 0.5 .9544-2.5456 -5 0.015 Politica! Support 2.50 0.5774 1.5813-3.4187 -1.73 0.182 Supervision/Protect 2.75 1.7078 .0325-5.4675 -0.29 0.789 Status 1.75* 0.5 .9544-2.5456 -5 0.015 APPENDDC 4 European Banks(n=5) Asset Quality 2.00* 0.7071 1.1220-2.8780 -3.16 0.034 Capitalisation 1.60** 0.5477 .9199-2.2801 -5.72 0.005 Confidence 2.20 0.8367 1.1611-3.2389 -2.14 0.099 External Support 2.80 0.4472 2.2447-3.3553 -1 0.374 Funding 1.80** 0.4472 1.2447-2.3553 -6 0.004 Liquidity 1.60** 0.5477 .9199-2.2801 -5.72 0.005 Market risk 2.40 0.8944 1.2894-3.5106 -1.5 0.208 Performance 2.00*** 0.0045 1.9964-2.0076 -499 0 Political Support 3.20 1.3038 1.5811-4.8189 0.34 0.749 Supervision/Protect 2.20* 0.4472 1.6447-2.7553 -4 0.016 Status 2.20* 0.4472 1.6447-2.7553 -4 0.016 Notes; Valid Cases;5 and Missing Cases;0 Perfomnance;BNP Changed to 2.01 Asian Banks(n=5) Asset Quality 1.80* 0.8367 .7611-2.8389 -3.21 0.033 Capitalisation 2.40 1.1402 .9843-3.8157 -1.18 0.305 Confidence 3.00 1.2247 1.4793-4.5207 0 1 External Support 3.20 1.3038 1.5811-4.8189 0.34 0.749 Funding 3.00 0.0045 2.9964-3.0076 1 0.374 Liquidity 2.40 0.8944 1.2894-3.5106 -1.5 0.208 Market risk 2.20 1.3038 .5811-3.8189 -1.37 0.242 Performance 2.20 0.8367 1.1611-3.2389 -2.14 0.099 Political Support 3.00 1 1.7583-4.2417 0 1 Supervision/Protect 2.00* 0.7071 1,1220-2,8780 -3.16 0,034 Status 2.40 0.5477 1.7199-3,0801 -2.45 0,07 Notes: Valid Cases:5 and Missing Cases:0 Funding;BOC Changed to 3.01 APPENDK 4

Table 5.3.1 Banks Classifying Risk Rating of Correspondents (Question 5.3) Risk Classification No . of Banks % All Banks in Australia(n= 43) No Classification 18 41.86 Classification 25 58.14 43 100.00 Australian Banks(n:=15 ) No Classification 8 53.33 Classification 7 46.67 15 100.00 Foreign Banks(n=28) No Classification 10 35.71 Classification 18 64.29 28 100.00 Majors(n=4) No Classification 1 25.00 Classification 3 75.00 4 100.00 Non-Major(n=11) No Classification 7 63.64 Classification 4 36.36 11 100.00 American Banks(n==7 ) No Classification 2 28.57 Classification 5 71.43 7 100.00 British Banks(n=7) No Classification 2 28.57 Classification 5 71.43 7 100.00 Japanese Banks(n==4 ) No Classification 3 75.00 Classification 1 25.00 4 100.00 European Banks(n:=5 ) No Classification 1 20.00 Classification 4 80.00 5 100.00 Asian Banks(n=5) No Classification 2 40.00 Classification 3 60.00 5 100.00 APPEDIX 4

Table 5.3.2 Without/With Threshold Risk Limit for Establishment of Corbank ng Relationships (Question 5.3) Threshold Risk No. of Banks Percentage All Banks In Australia(n-=43) Without Threshold 12 27.91 With Threshold 31 72.09 Total 43 100.00 Australian Banks(n =15) Without Threshold 6 40.00 With Threshold 9 60.00 Total 15 100.00 Foreign Banks(n=28) Without Threshold 6 21.43 With Threshold 22 78.57 Total 28 100.00 Majors(n=4) Without Threshold 1 25.00 With Threshold 3 75.00 Total 4 100.00 Non-Majors(n=11) Without Threshold 5 45.45 With Threshold 6 54,55 Total 11 100,00 American Banks(n==7 ) Without Threshold 2 28.57 With Threshold 5 71.43 Total 7 100.00 British Banks(n=7) Without Threshold 2 28.57 With Threshold 5 71.43 Total 7 100.00 Japanese Banks(n:=4 ) Without Threshold 0 0.00 With Threshold 4 100.00 Total 4 100.00 European Banks(n =5) Without Threshold 2 40.00 With Threshold 3 60.00 Total 5 100.00 Asian Banks(n=5) Without Threshold 0 0.00 With Threshold 5 100.00 Total 5 100.00 APPENDEX 4

Statistical Anaíysis of Section 6: Future of Corbanking

Table 6.1.1 Correspondent Banklng Emerged as a Strateqv (Question 6.1) *" Emerging Strategy No. of Banks Percentage All Banks in Australia(n =43) Non-strategy 17 39.53 Strategy 26 60.47 Total 43 100.00 Australian Banks(n=15) Non-strategy 11 73.33 Strategy 4 26.67 15 100.00 Foreign Banks(n=28) Non-strategy 10 35.71 Strategy 18 64.29 Total 28 100.00 Majors(n=4) Non-strategy 0 0.00 Strategy 4 100.00 Total 4 100.00 Non-Majors(n=11) Non-strategy 7 63.64 Strategy 4 36.36 Total 11 100.00 American Banks(n=7) Non-strategy 2 28.57 Strategy 5 71.43 Total 100.00 British Banks(n=7) Non-strategy 2 28.57 Strategy 5 71.43 Total 7 100.00 Japanese Banks(n=4) Non-strategy 2 50.00 Strategy 2 50.00 Total 4 100.00 European Banks(n=5) Non-strategy 3 60.00 Strategy 2 40.00 Total 5 100.00 Asian Banks(n=5) Non-strategy 1 20.00 Strategy 4 80.00 Total 5 100.00 APPENDK 4

Table 6.2.1 Factors Importance to Future Corbanking (Question 6.2) Factors for Future Corbanking Mean SD 95%ClforMean t Value 2-Tail Sig Ãll Banks in Australia(n=43) ~~ ' ' Concentration of Services/Products 2.44** 1.1609 2.0846-2.7991 -3.15 0.003 Falling Balance Income 3.05 1.068 2.7178-3.3752 0.29 0.777 Full Services 2.60* 1.198 2.2360-2.9733 -2.16 0.036 Globalisation 1.58*** 0.698 1.3666-1.7962 -13.33 0 Less People Intensive Products 2.81 1.314 2.4096-3.2183 -0.93 0.358 Outsourcing 2.47* 1.3156 2.0602-2.8700 -2.67 0.011 Regulation 2.02*** 0.9126 1.7424-2.3041 -7.02 0 Risk Reduction 2.42** 1.0962 2.0813-2.7560 -3.48 0.001 Specialisation 2.44** 1.2209 2.0661-2.8176 -3 0,005 Strategic Alliances 2.72 1.2785 2.3275-3.1144 -1.43 0,16 Technology Advance 1.37*** 0.6555 1.1704-1,5738 -16.29 0 Notes: Valid Cases:43 and Missing Cases:0 Australian Banks(n=15) Concentration of Services/Products 2.00** 1.069 1,4080-2.5920 -3.62 0,003 Falling Balance Income 2.93 0.7988 2.4910-3.3757 -0.32 0.751 Full Services 2.33* 1.1127 1.7171-2.9495 -2.32 0.036 Globalisatíon 1.60*** 0.8281 1.1414-2.0586 -6.55 0 Less People Intensive Products 2.6 1.4041 1.8224-3.3776 -1.1 0.288 Outsourcing 2.33 1.291 1.6184-3.0483 -2 0.065 Regulation 2.13* 1.1255 1.5101-2.7566 -2.98 0.01 Risk Reduction 2.4 1.1832 1.7448-3.0552 -1.96 0.07 Specíalisation 2.20* 1.2071 1.5315-2.8685 -2.57 0.022 Strategic Alliances 2.27* 1.2799 1.5579-2.9754 -2.22 0.044 Technology Advance 1.27*** 0.5936 .9379-1.5954 -11.31 0 Notes: Valid Cases:15 and Missing Cases;0 Foreign Banks(n=28) Concentration of Services/Products 2.68 1.1564 2.2302-3.1270 -1.47 0.153 Falling Balance Income 3.11 1.1969 2.6430-3.5712 0.47 0.64 Full Services 2.75 1.236 2.2707-3.2293 -1.07 0,294 Globalisation 1.57*** 0.6341 1.3255-1,8173 -11,92 0 Less People Intensive Products 2.93 1.2745 2.4344-3.4228 -0.3 0.769 Outsourcing 2.54 1.3467 2.0135-3.0579 -1.82 0.079 Regulation 1.96*** 0.7927 1.6569-2.2716 -6.91 0 Risk Reduction 2.43** 1.069 2.0140-2.8431 -2.83 0.009 Specialisation 2.57 1.2301 2.0944-3.0484 -1.84 0.076 Strategic Alliances 2.96 1.2317 2.4867-3.4419 -0.15 0.879 Technology Advance 1.43*** 0.6901 1.1610-1.6962 -12.05 0 Notes: Valid Cases;28 and Missing Cases:0 IWajors(n=4) Concentration of Services/Products 1.50* 0.5774 .5813-2.4187 -5.2 0.014 Falling Balance Income 3.25 0.5 2.4544-4.0456 1 0.391 Full Services 2.5 0.5774 1.5813-3.4187 -1.73 0.182 Globalisation 1.50* 0.5774 .5813-2.4187 -5.2 0.014 Less People Intensive Products 2.5 1 .9088-4.0912 -1 0.391 Outsourcing 2.5 0.5774 1.5813-3.4187 -1.73 0.182 Regulation 2 0.8165 .7008-3.2992 -2.45 0,092 Risk Reduction 2.25 0.9574 .7265-3.7735 -1.57 0.215 -3 0.058 Specialisation 2.25 0.5 1.4544-3.0456 -1.73 0.182 Strategic Alliances 2 1.1547 .1626-3.8374 -7 0.006 Technology Advance 1.25** 0.5 .4544-2.0456 Notes: Valid Cases;4 and Missing Cases:0 .Market Risk; ANZ changed to 3.01 APPENDIX 4

Non-Major(n=11) Concentration of Services/Products 2.18* 1.1677 1.3973-2.9663 -2.32 0.042 Falling Balance Income 2.82 0.8739 2.2311-3.4053 -0.69 0,506 Full Services 2.27 1.2721 1.4181-3.1273 -1,9 0,087 Globalisation 1.64** 0.9244 1.0153-2,2574 -4.89 0.001 Less People Intensive Products 2.64 1.5667 1.5838-3.6889 -0.77 0.459 Outsourcing 2.27 1.4894 1.2722-3.2733 -1.62 0.136 Regulation 2.18 1.2505 1.3418-3.0219 -2.17 0,055 Risk Reduction 2.45 1.2933 1.5857-3.3234 -1.4 0.192 Specialisation 2.18 1.4013 1.2404-3.1232 -1.94 0.082 Strategic Alliances 2.36 1.3618 1.4488-3,2785 -1.55 0.152 Technology Advance 1 0"7*** 0.6467 ,8383-1.7072 -8,86 0 Notes: Valid Cases;11 and Missing Cases:0 American Banks(n=7) Concentration of Services/Products 1.86* 0.8997 1.0250-2.6893 -3.36 0.015 Falling Balance Income 2.71 1.1127 1.6852-3.7434 -0.68 0,522 Full Services 2.43 1.1339 1.3799-3.4772 -1.33 0.231 Globalisation 1 14*** 0.378 .7933-1.4924 -13 0 Less People Intensive Products 2.29 1.2536 1.1264-3.4451 -1.51 0,182 Outsourcing 1.57** 0.7868 .8438-2.2991 -4.8 0.003 Regulation 1.71** 0.7559 1.0152-2.4134 -4.5 0,004 Risk Reduction 1.86* 0.8997 1.0250-2.6893 -3,36 0,015 Specíalisation 2.14 1.4639 .7890-3.4967 -1.55 0.172 Strategic Alliances 2.71 1.3801 1,4379-3.9907 -0.55 0.604 Technology Advance 1.29*** 0.488 .8344-1.7370 -9.3 0 Notes: Valid Cases:7 and Missing Cases:0 British Banks(n=7) Concentration of Services/Products 2.86 1.069 1.8684-3,8458 -0.35 0,736 Falling Balance Income 3 1,5275 1.5873-4.4127 0 1 Full Services 1.86** 0,6901 1.2189-2.4953 -4.38 0.005 Globalisation 1.57*** 0,5345 1.0771-2.0658 -7.07 0 Less People Intensive Products 3.14 1.3452 1,8988-4.3869 0,28 0.788 Outsourcing 1.86*** 0.378 1.5076-2.2067 -8 0 Regulation 2.29* 0.7559 1.5866-2.9848 -2,5 0,047 Risk Reduction 2.71 0.9512 1.8346-3.5940 -0,79 0,457 Specialisation 3 1 2.0752-3.9248 0 1 Strategic Alliances 3.14 1.3452 1.8988-4.3869 0.28 0.788 Technology Advance 1.29*** 0.488 ,8344-1,7370 -9,3 0 Notes: Valid Cases;7 and Missing Cases;0 Japanese Banks(n=4) 0,182 Concentration of Services/Products 3.5 0.5774 2.5813-4.4187 1,73 Falling Balance Income 3.25 0.5 2,4544-4,0456 1 0.391 1.57 0.215 Full Services 3.75 0.9574 2.2265-5.2735 -3 0.05 Globalisation 2.25* 0.5 14544-3.0456 0.4 0.718 Less People Intensive Products 3.25 1.2583 1.2478-5.2522 1.4457-5.5543 0.77 0.495 Outsourcing 3.5 1.291 1.5813-3.4187 -1.73 0.182 Regulation 2.5 0.5774 2.4544-4.0456 1 0.391 Risk Reduction 3.25 0.5 1.5813-3.4187 -1.73 0.182 Specialisation 2.5 0.5774 1.5813-3.4187 -1.73 0.182 Strategic Alliances 2.5 0.5774 .2478-4.2522 -1.19 0,319 Technology Advance 2.25 1.2583 Notes: Valid Cases:4 and Mis_sing_Cases:0 _ APPENDIX 4

European Banks(n=5) Concentration of Services/Producís 2.8 1.4832 .9583-4.6417 -0.3 0.778 Falling Balance Income 2.8 1.4832 .9583-4.6417 -0.3 0.778 Full Services 2.8 1.6432 .7597-4.8403 -0.27 0.799 Globalisation 1.20** 0.4472 .6447-1.7553 -9 0.001 Less People Intensive Products 2.8 1.4832 .9583-4.6417 -0.3 0.778 Outsourcing 2.6 1.8166 .3444-4.8556 -0.49 0.648 Regulation 1.80* 0.8367 .7611-2.8389 -3.21 0.033 Risk Reduction 1.60** 0.5477 .9199-2.2801 -5.72 0.005 Specialisation 1.8 1.0954 .4398-3.1602 -2,45 0.07 Strategic Alliances 3.6 1.3416 1.9341-5.2659 1 0.374 Technology Advance 1.20** 0.4472 .6447-1.7553 -9 0.001 Notes: Valid Cases:5 and Missing Cases:0 Asian Banks(n=5) Concentration of Services/Products 2.8 1.3038 1.1811-4.4189 -0.34 0,749 Falling Balance Income 4.00* 0.7071 3.1220-4.8780 3.16 0.034 Full Services 3.6 0.8944 2.4894-4.7106 1.5 0.208 Globalisation 2.00* 0.7071 1.1220-2.8780 -3.16 0.034 Less People Intensive Products 3.4 1.1402 1.9843-4.8157 0.78 0,477 Outsourcing 4.00* 0.7071 3.1220-4.8780 3.16 0.034 Regulation 1.60* 0.8944 .4894-2.7106 -3.5 0.025 Risk Reduction 3 1.4142 1.2440-4.7560 0 1 Specialisation 3.4 1.3416 1.7341-5.0659 0.67 0,541 Strategic Alliances 2.8 1.3038 1.1811-4.4189 -0.34 0,749 Technology Advance 1.40** 0.5477 .7199-2.0801 -6.53 0,003 Notes: Valld Cases;5 and Missing Cases;0 APPENDK 4

Table 6.3.1 Hurdles for Developing International Corbanking (Question 6.3) Hurdles of Corbanking Mean SD 95% Cl for Mean t Value 2-Tail Sig All Banks in Australia(n=43) Develop Marketing 2.02 0.9383 1.7345-2.3120 -6.83 0 Develop Services 1.60 0.7603 1.3707-1.8386 -12.03 0 Improve Quality of Services 1.70 0.7726 1.4599-1.9354 -11.05 0 Better Measurement of Performance 2.05 0.95 1.7541-2.3389 -6.58 0 Motivate Human Resources 2.47 0.9599 2.1697-2.7605 -3.65 0.001 Needs for Corbanking Training 2.26 1.0711 1.9262-2.5855 -4.56 0 Nurture Customers' Needs/Services 1.67 0.8083 1.4257-1.9232 -10.75 0 Notes; Valid Cases;43 and Missing Cases:0 Australian Banks(n=15) Develop Marketing 1.87*** 0.7432 1.4551-2.2783 -5.91 0 Develop Services 1.40*** 0.6325 1.0498-1.7502 -9.8 0 Improve Quality of Services 1.53*** 0.8338 1.0716-1.9951 -6.81 0 Better Measurement of Performance 1.87*** 0.8338 1.4049-2.3284 -5.26 0 Motivate Human Resources 2.20** 0.8619 1.7227-2.6773 -3.59 0.003 Needs for Corbanking Training 2.00*** 0.8452 1.5320-2.4680 -4.58 0 Nurture Customers' Needs/Services 1.67*** 0.8997 1.1684-2.1649 -5.74 0 Notes; Valid Cases:15 and Missing Cases;0 Foreign Banks(n=28) Develop Marketing 0 "i A *** 1.0306 1.7075-2.5068 -4.58 0 Develop Services A yAifk-k 0.81 1.4002-2.0284 -8.4 0 Improve Quality of Services 1.79*** 0.7382 1.4995-2.0720 -8.7 0 Better Measurement of Performance 2.14*** 1.0079 1.7520-2.5337 -4.5 0 Motivate Human Resources 2.61* 0.994 2.2217-2.9926 -2.09 0.046 Needs for Corbanking Training 2.39* 1.1655 1.9409-2.8448 -2.76 0.01 Nurture Customers' Needs/Services 1.68*** 0.7724 1.3791-1.9781 -9.05 0 Notes: Valid Cases:28 and Missing Cases:0 Majors(n=4) Develop Marketing 1.75* 0.5 .9544-2.5456 -5 0.015 Develop Services 1.50* 0.5774 ,5813-2,4187 -5.2 0.014 Improve Quality of Services 1.50* 0.5774 .5813-2.4187 -5.2 0.014 Better Measurement of Performance 2.00 0.8165 .7008-3.2992 -2.45 0.092 Motivate Human Resources 2.75 0.5 1.9544-3.5456 -1 0.391 Needs for Corbanking Training 2.50 0.5774 1.5813-3.4187 -1.73 0.182 Nurture Customers' Needs/Services 2.00 0.8165 .7008-3.2992 -2.45 0.092 Notes: Valid Cases;4 and Missing Cases:0 Non-Major(n=11) 1.3507-2.4675 -4.35 0.001 Develop Marketing 1.91** 0.8312 .9107-1.8166 -8.05 0 Develop Services 1.36*** 0.6742 .9179-2.1731 -5.16 0 Improve Quality of Services 1.55*** 0.9342 0.8739 1.2311-2.4053 -4.49 0.001 Better Measurement of Performance 1.82** rt r\r\ Å Motivate Human Resources 2.00** 0.8944 1.3991-2.6009 -3.71 0.004 Needs for Corbanking Training 1.82** 0.8739 1.2311-2.4053 -4.49 0.001 Nurture Customers' Needs/Services 1.55*** 0.9342 .9179-2.1731 -5.16 0 APPENDIX 4

American Banks(n=7) Develop Marketing 1.71** 0.7559 1.0152-2.4134 -4.5 Develop Services 0.004 1.57** 0.9759 .6689-2.4740 -3.87 Improve Quality of Services 0.008 1.43*** 0.5345 .9342-1.9229 -7.78 0 Better Measurement of Performance 1.86** 0.6901 1.2189-2.4953 -4.38 Motivate Human Resources 0.005 2.43 0.9759 1,5260-3.3311 -1.55 0.172 Needs for Corbanking Training 2.29 0.9512 1.4060-3.1654 -1.99 0.094 Nurture Customers' Needs/Services 1.71** 0.7559 1.0152-2.4134 -4,5 0.004 Notes: Valid Cases;7 and Missing Cases;0 British Banks(n=7) Develop Marketing 1.57** 0.7868 .8438-2.2991 -4.8 0.003 Develop Services 1.86** 0.6901 1.2189-2.4953 -4.38 0.005 Improve Quality of Services 1.71*** 0.488 1.2630-2.1656 -6.97 0 Better Measurement of Performance 2.29 1.1127 1.2566-3.3148 -1.7 0.14 Motivate Human Resources 2.71 0.9512 1.8346-3.5940 -0,79 0,457 Needs for Corbanking Training 2.43 1.1339 1.3799-3.4772 -1.33 0,231 Nurture Customers' Needs/Services 1.57** 0.7868 .8438-2.2991 -4.8 0,003 Notes; Valid Cases:7 and Missing Cases:0 Japanese Banks(n=4) Develop Marketing 2.50 0.5774 1.5813-3.4187 -1.73 0.182 Develop Services 2.25 0.9574 .7265-3.7735 -1.57 0.215 Improve Quality of Services 2.00*** 0.005 1.9945-2.0105 -399 0 Better Measurement of Performance 2.75 0.5 1,9544-3,5456 -1 0.391 Motivate Human Resources 3.25 0.9574 1,7265-4.7735 0.52 0.638 Needs for Corbanking Training 2.50 1 .9088-4.0912 -1 0.391 Nurture Customers' Needs/Services 2.50 0.5774 1.5813-3.4187 -1.73 0.182 Notes; Valid Cases;4 and Missing Cases:0 Improve Quality of Services and Products:Asahi Bank Changed to 2.01 European Banks(n=5) Develop Marketing 3.00 1.5811 1.0368-4.9632 0 1 Develop Services 1.40** 0.5477 .7199-2.0801 -6.53 0.003 Improve Quality of Services 2.20 1.3038 .5811-3.8189 -1.37 0,242 Better Measurement of Performance 2.40 1.5166 .5169-4.2831 -0.88 0,426 Motivate Human Resources 2.80 1.3038 1.1811-4.4189 -0.34 0,749 Needs for Corbanking Training 3.00 1.8708 .6771-5.3229 0 1 Nurture Customers' Needs/Services 1.40* 0.8944 .2894-2.5106 -4 0.016 Notes: Valld Cases:5 and Missing Cases:0 Asian Banks(n=5) Develop Marketing 2.20 0.8367 1.1611-3.2389 -2.14 0.099 Develop Services 1.60* 0.8944 .4894-2.7106 -3.5 0.025 Improve Quality of Services 1.80* 0.8367 .7611-2.8389 -3.21 0,033 Better Measurement of Performance 1.60* 0.8944 ,4894-2.7106 -3.5 0.025 Motivate Human Resources 2.00* 0.7071 1.1220-2.8780 -3.16 0,034 Needs for Corbanking Training 1.80* 0.8367 .7611-2.8389 -3.21 0,033 Nurture Customers' Needs/Services 1.40** 0.5477 .7199-2.0801 -6.53 0,003 Notes; Valid Cases:5 and Missing Cases;0 APPENDIX 4 Table 6.4.1 Long Term Strategies of Corbanking (Question 6.4) Long-term Strategy Mean SD 95%ClforMean tValue 2-Tail Sig All Banks in AustraHa(n=43) Cost Leader for at Least One Product 3.07 1.3165 2.6646-3.4749 0.22 0.824 Higti Volume System Focus 2.77 1.2313 2.3885-3.1464 -1.36 0.182 High Value Products System Focus 2 14*** 1.1666 1.7805-2.4986 -5.25 0 Long-term Customer Relationships 1.63*** 0.7567 1.3950-1.8608 -12.51 0 Notes: Valid Cases;43 and Missing Cases;0 Australian Banks(n=15) Gost Leader for at Least One Product 2.87 1.3558 2.1159-3.6175 -0.38 0.709 High Volume System Focus 2.47 1.302 1.7456-3.1877 -1.59 0.135 High Value Products System Focus 2.53 1.4075 1.7539-3.3128 -1.28 0.22 Long-term Customer Relationstiips 1.40*** 0.7368 .9920-1.8080 -8.41 0 Notes; Valid Cases:15 and Missing Cases;0 Foreign Banks(n=28) Cost Leader for at Least One Product 3.18 1.3068 2.6719-3.6853 0.72 0.476 High Volume System Focus 2.93 1.1841 2.4694-3.3877 -0,32 0.752 High Value Products System Focus 1.93*** 0.9786 1.5491-2.3080 -5.79 0 Long-term Customer Relationships 1.75*** 0.7515 1.4586-2.0414 -8.8 0 Notes: Valid Cases:28 and Missing Cases:0 Majors(n=4) Cost Leader for at Least One Product 3.00 0.8165 1,7008-4.2992 0 1 High Volume System Focus 2.25 0.5 1.4544-3.0456 -3 0.058 High Value Products System Focus 1.50* 0.5774 .5813-2.4187 -5.2 0.014 Long-term Customer Relationships 1.25** 0.5 .4544-2.0456 -7 0.006 Notes: Valld Cases;4 and Missing Cases:0 Non-Wlajor(n=11) Cost Leader for at Least One Product 2.82 1.5374 1.7853-3.8510 -0.39 0.703 High Volume System Focus 2.55 1.5076 1.5327-3.5582 -1 0.341 High Value Products System Focus 2.91 1.446 1.9377-3.8805 -0.21 0.839 Long-term Customer Relationships 1.45*** 0.8202 .9035-2.0056 -6.25 0 Notes; Valid Cases;11 and Missing Cases;0 American Banks(n=7) Cost Leader for at Least One Product 3.29 1.3801 2.0093-4.5621 0.55 0.604 -0.68 0.522 High Volume System Focus 2.71 1.1127 1,6852-3,7434 -3.58 0.012 High Value Products System Focus 1.71* 0.9512 ,8346-2.5940 -3.36 0.015 Long-term Customer Relationships 1.86* 0.8997 1.0250-2.6893 Notes: Valid Cases:7 and Missing Cases:0 British Banks(n=7) 4.58 0.004 Cost Leader for at Least One Product 4.00** 0.5774 3.4660-4.5340 1.4379-3,9907 -0.55 0.604 High Volume System Focus 2.71 1.3801 .8346-2.5940 -3.58 0.012 High Value Products System Focus 1.71* 0.9512 1.2630-2.1656 -6.97 0 Long-term Customer Relationships 0.488 Notes: Valid Cases;7 and Missing Cases:0 Japanese Banks(n=4) 1.5813-3.4187 -1.73 0.182 Cost Leader for at Least One Productt 2.50 0.5774 1.7265-4.7735 0.52 0.638 High Volume System Focus 3.25 0.9574 .7265-3.7735 -1.57 0.215 High Value Products System Focus 2.25 0.9574 .5813-2.4187 -5.2 0.014 Long-term Customer Relationships 1.50* 0.5774 Notes: Valid Cases:4 and Missing Cases;0 European Banks(n=5) -2.06 0.109 t 1.8 1.3038 .1811-3.4189 Cost Leader for at Least One Product -0.3 0.778 2.8 1.4832 .9583-4.6417 High Volume System Focus -1.58 0.189 2 1.4142 .2440-3.7560 High Value Products System Focus .7583-3.2417 -2,24 0.089 Long-term Customer Relationships 2 1 Notes: Valid Cases:5 and Missing Cases:0 Asian Banks(n=5) 0.242 1.3038 2.1811-5.4189 1.37 Cost Leader for at Least One Product 3.80 0.477 1,1402 1.9843-4.8157 0.78 High Volume System Focus 3.40 0.099 0.8367 1.1611-3.2389 -2.14 High Value Products System Focus 2.20 0.025 0.8944 .4894-2.7106 -3,5 Long-term Customer Relationships 1.60* Notes; Valid Cases;5 and Missing Cases:0 APPENDDC 4

Table 6.5.1 Number of Banks in Australia with Strategic Alliances (Question 6.5) Strategic Alliances No. of Banks % Banks without Strategic Alliances 32 74.4 Banks with Strategic Alliances 11 25.6 Total 43 100 Notes: Valid cases: 43, Missing cases: 0

Table 6.5.2 Reasons for Having Strategic Alliances (Question 6.5) Reasons Mean SD 95% Cl for Mean t Value 2-Tail Sig All Banks in Australia(n=43) Cope with Complexities/Cost of Banking 2.35** 0.9881 1.8876-2.8124 -2,94 0,008 Cut Exit Cost 3.75* 1.1642 3.2052-4.2948 2.88 0,01 Build Global Market Capabilities 2.40 1.429 1.7312-3,0688 -1,88 0,076 Jump Market Barriers 2.80 1.5079 2,0943-3,5057 -0.59 0.56 Rrovide Economies, e.g.R&D, Marketing 2.70 1.0809 2.1941-3.2059 -1.24 0,23 Share Costs 2.45 1.4681 1.7629-3.1371 -1.68 0.11 Share Information, e.g.Data Base 2.45* 1.099 1.9356-2.9644 -2.24 0.037 Share Knowledge and Experience 2.35** 0.9881 1.8876-2.8124 -2.94 0.008 Share Risk 2.85 1.0894 2.3401-3.3599 -0.62 0.545 Rapid Innovation and Product Introductior 2.30* 1.1286 1.7718-2.8282 -2.77 0.012 Structure Competition 2.80 1.1965 2.2400-3.3600 -0,75 0.464 Notes: Valid Cases:20 and Missing Cases:23 Personal Views of Interviewees: 9 Cases

Banks with Strategic Alliances(n=11) Cope with Complexities/Cost of Banking 2.45 1,0357 1.7587-3.1504 -1.75 0.111 2.65 0.024 Cut Exit Cost 3.91* 1,1362 3.1458-4.6724 Build Global Market Capabilities 2.18 1.4013 1.2404-3.1232 -1.94 0.082 0.58 0.574 Jump Market Barriers 3.27 1.5551 2.2280-4.3174 -0.76 0.465 Provide Economies, e.g.R&D, Marketing 2.73 1.1909 1.9272-3.5273 1.5418-3.7309 -0.74 0.476 Share Costs 2.64 1,6293 1.4181-3,1273 -1,9 0,087 Share Information, e.g.Data Base 2.27 1,2721 1.7426-2.9847 -2.28 0.046 Share Knowledge and Experience 2.36* 0.9244 2,0888-3.7294 -0,25 0,81 Share Risk 2.91 1.221 1,4995-3.2278 -1,64 0.132 Rapid Innovation and Product Introductior 2.36 1.2863 1.8727-3.5819 -0,71 0.493 Structure Competition 2.73 1.2721 Notes: Valld Cases:11 and Missing Cases:0 APPENDIX 5 Factor Analysis for Confirmation and Exploration of Determinant Factors

Table 8.3.1 Factor Analysis Table for Determinant Factors of All Banks in Australia Variables Factor 1 Factor 2 Factor 3 Communality 13 0.8259 -0.0833 0.2624 0.7018 110 0.7853 0.0256 0.0194 0.6432 12 0.6445 -0.5060 0.1483 0.5995 113 -0.2288 -0.8111 -0.0751 0.7730 11 ^ -0.3429 0.5854 -0.0775 0,4159 115 -0.0643 0.0563 0.8089 0.6935 19 0.3439 -0.0928 0.7869 0.6723

Eigenvalue 2.1322 1.2415 1.1256 % of Variance Explained 30.5 17.7 16.1 64.3 Notes: Oblimin rotation and factor loadings from the structure matrix, 11 is confirmed

Table 8.3.2 Factor Analysis Table for Determinant Factors of Australian Banks Variables Factor 1 Factor 2 Factor 3 Communalíty 19 0.9239 0.0487 0.0064 0.8557 115 0.8613 -0.0692 -0.0968 0,7546 12 -0.1532 0.8252 0.2360 0,7680 13 -0.1165 0.7857 -0.4351 0.8176 11 X -0.4022 -0.6430 -0.0318 0.5690 113-^ -0.0764 0.0291 0.9635 0.9327

Eigenvalue 1.8093 1.7282 1.1599 % of Variance Explained 30.2 28.8 19.3 78.3 Notes: Oblimin rotation and factor loadings from the structure matrix, His not confirmed and 113 is confirmed.

Table 8.3.3 Factor Analysis Table for Determinant Factors of Foreign Banks Variables Factor 1 Factor 2 Factor 3 Communality 110 0.8108 0.0546 -0.1502 0.7323 12 0.7595 -0.2344 0.2512 0.6296 11 X -0.1100 -0.8769 0.0560 0.8283 19 0.3883 -0.7843 -0.1548 0.7323 113 -0.0386 0.1279 0.8730 0.7935 115 0.4755 -0.2189 0.4874 0.4514

Eigenvalue 1.7687 1,3494 1.0478 % of Variance Explained 29.5 22,5 17.5 69.4 APPENDDC 5

Table 8.3.4 Factor Analysis Table for Determinant Factors of Majors Variables Factor 1 Factor 2 Factor 3 Communality 13 -0.9714 0.1227 -0.0795 1.0000 113^ 0.9714 -0.1227 0.0795 1.0000 11 0.9015 0.5163 -0.1055 1.0000 19 -0.1258 0.9671 0.0717 1.0000 14 0.3325 0.3068 0.8851 1.0000 12 -0.5131 -0.5375 0.7339 1.0000

Eigenvalue 3.1077 1.5589 1.3333 % of Variance Expiained 51.8 26.0 22.2 100.0 Notes: Oblimin rotation and factor loadings from the structure matrix, 113 is confirmed

Table 8.3.5 Factor Analysis Table for Determinant Factors of Non-Majors Variables Factor 1 Factor 2 Communality 12 0.9550 0.1028 0.9483 116 0.9260 -0.3132 0.9104 113^ 0.0340 0.9078 0.8379 II -0.2036 0.8573 0.7509

Eigenvalue 1.9164 1.5310 % of Variance Explained 47.9 38.3 86.2 Notes: Oblimin rotation and factor loadings from the structure matrix, 113 is confirmed,

Table 8.3.6 Factor Analysís Table for Determinant Factors of American Banks Variables Factor 1 Factor 2 Communality 12 0.9005 -0.0381 0.8243 115 0.8400 -0,2374 0.7149 11 X 0.3725 -0,8877 0.8389 110 0.1625 0.7621 0.6681 113 -0.5976 0.7348 0.7706

Eigenvalue 2.4665 1,3503 % of Variance Explained 49.3 27.0 76.3 Notes: Oblimin rotation and factor loadings from the structure matrix, II is not confirmed. APPENDIX 5

\^of oBritis 1^.1''^h Bank? *°'s ' '^"^'^^'^ "^^'"^ ^°'' Determinant Factors Variables Factorl Ifi^i^ Communalitv 11 "^ 0.9589 0.2580 0.9290 '''2 -0-9128 -0,4789 0 8580 12 0.2690 0.9316 0 8734 '15 0.4167 0.8664 0.7625

Eigenvalue 2.3867 1.0362 % of Variance Explained 59.7 25.9 85 f, Notes: Oblimin rotation and factor loadings from the structure matrix, '— II is confirmed, Table 8.3.8 Factor Analysis Table for Determinant Factors of Japanese Banks Variables Factor 1 Communality 13^ 0.9947 0.9894 11 0.8831 0.7798 113 -0.6444 0.4152

Eigenvalue 2.1844 % of Variance Explained 72.8 72.8 Notes:1. Only one factor, solution cannot be rotated by Oblimin rotation, 2. Loading factors from factor matrix. 3,13 Is confirmed.

Table 8.3.9 Factor Analysis Table for Determinant Factors of European Banks Variables Factor 1 Communality 19 0.9914 0.9828 11 ^ 0.9914 0.9828 115 0.9628 0.9269

Eigenvalue 2.8925 % of Variance Explained 96.4 96.4 Notes:1. Only one factor, solution cannot be rotated by Oblimin rotation 2. Loading factors from factor matrix. 3. 11 is confirmed.

Table 8.3.10 Factor Analysis Table for Determinant Factors of Asian Banks Variables Factor 1 Communality 11 X -0.9441 0.8913 115 0.7527 0.5661 113 0.7524 0.5666

Eigenvalue 2.0240 % of Variance Explained 67.5 67.5 Notes:1. Only one factor, solution cannot be rotated by Oblimin rotation 2, Loading factors from factor matrix, 3, 11 is not confírmed. APPENDEX 6 Factor Analysis for Confirmation and Exploration of Selection Criteria Table 8.4.1 Factor Analysis Table for Selection Criteria of All Banks in Australia " Variables Factor 1 Factor 2 Factor 3 Factor 4 Communality " J12 0.8038 0.2145 0.0215 0.2320 0.7464 J18 0.7251 0.0611 0.4166 0.2714 0.7767 J2 0.6238 -0.0366 0.4246 0.2684 0.6428 J5 0.5982 0.2732 0.4237 0.4196 0.7880 J19 0.5575 0.2436 0.4133 0.4164 0.7144 J16 0.0564 0.8392 0.1656 -0.0973 0.7444 J9 -0.2420 0.7130 0.2549 0.2655 0.7023 J3 0.3095 0.6795 0.0069 0.3174 0.6583 JIO 0.5707 0.5779 0.2488 -0.0479 0.7239 Jl 0.3680 0.5394 -0.0741 0.0721 0.4370 J17 0.0403 0.0392 0.7895 -0.0805 0.6330 J14 0.2418 0.1570 0.7336 0.3840 0.7688 J4^ 0.2847 0.2661 0.6562 0.3249 0.6880 Jll 0.2492 0.0492 0.1441 0.8263 0.7681 J8 0.1730 0.2337 0.3633 0.7419 0.7669 J13 0.4636 -0.0080 -0.1306 0.5265 0.5092

Eigenvalue 6.8988 1.7924 1.3623 1.0145 "/o fVariance Explained 43.1 11.2 8.5 6.3 69.2 Notes: Varimax rotation and factor loadings from the rotated factor matrix, J4 is confirmed.

Table 8.4.2 Factor Anaiysís Table for Selection Criteria of Australian Banks Variables Factor 1 Factor 2 Factor 3 Factor 4 Communality Jll*^ 0.8622 0.0808 0.0750 0.2912 0.8404 J2 0.8121 0.3288 -0.0553 0.2477 0.8321 J19 0.8067 0.2174 0.3070 0.2541 0.8568 J18"^ 0.7495 0.3280 -0.1668 0.2583 0.7638 J17 0.7261 0.2134 0.1782 -0.2425 0.6632 J8 0.6630 0.1600 0.0753 0.5914 0.8205 J3 0,1505 0.8060 0.3546 0.0544 0.8010 J4 0.4414 0.7656 -0.0546 0.1900 0.8201 J5 0.5369 0.7106 -0.1395 0.0899 0.8207 JIO 0.0836 0.6970 0.1313 0.5946 0.8636 J14 0.5446 0.5756 -0.0574 0.4328 0.8184 J6 0.0271 -0.0487 0.8961 0.1279 0.8225 J16 0.0157 0.2970 0.8940 -0.2548 0.9527 J19 0.0918 -0.0185 0.8242 0.1951 0.7262 J13 0.3222 0.2363 0.1161 0.7391 0.7195

Eigenvalue 7.2051 2.5571 1.3350 1.0241 "/oofVarianceExpiained 48.0 17.0 8.9 6.8 80.8 Notes: Varimax rotation and factor loadings from the rotated factor matrix, J11&J18 are conf rmed APPENDIX 6

Table 8.4.3 Factor Analysis Table for Selection Criteria ofForeignBanks Variablies Factor 2 Factor 1 Factor 3 Factor 4 Factor 5 Communality 0.2012 J18 0.8463 0.1740 0.0454 0.0762 0.7949 J19 0.7730 0.3912 0.1343 0.0778 0.0616 0.7784 J5 0.7534 0.3656 0.3508 0.1123 0.2070 0.8798 J2 0.7329 -0.0240 0.1363 0.1404 0.1725 0.6057 J8 0.3908 0.7479 0.0729 0.1054 0.1388 0.5918 Jll 0.1759 0.6900 0.0676 -0.0859 0.4533 0.7807 J9^ 0.0063 0.6899 0.3727 0.2314 -0.2300 0.7214 J4 0.5262 0.5991 0.1024 0.3183 -0.2307 0.8008 J16 0.4049 0.1217 0.7600 0.1311 -0.0189 0,7740 JIO 0.4462 0.0484 0.7219 0.2365 0.0467 0,7807 J3 0.0885 0.3830 0.7085 0.0143 0.4020 0.8183 J17 0.0349 0.0236 0.1530 0.8881 -0.0841 0.8210 J14 0.3886 0.3830 0.0465 0.7601 0.2061 0.9200 J13 0.1015 0.0657 0.1928 -0.0561 0.8277 0.7401 J6 -0.2743 0.0560 0.4220 -0.2523 -0.5213 0,5918

Eigenvalue 6.2607 1.5789 1.4183 1.1972 1.0438

% f Variance Explained 41.7 10.5 9.5 8.0 7.0 76.7 N tes: Varimax rotation and factor loadings from the rotated factor matrix, J9 is confirmed.

Table 8.4.4 Factor Analysis Table for Selection Criteria of Majors Variables Factor 1 Factor 2 Factor 3 Communality J14 0.9976 0.0656 -0.0216 1.0000 J19 0.9976 0.0656 -0.0216 1.0000 J2 0.7085 -0.5232 0.4737 1.0000 J7 -0.0684 0.9804 -0.1847 1.0000 J8 0.2809 0.9099 0.3052 1.0000 J3"^ 0.3927 -0.6911 0.6068 1.0000 Jll 0.3240 -0.1533 -0.9336 1.0000 Jl 0.5568 -0.2466 0.7932 1.0000

Eigenvalue 4.0042 2.3362 1.6597 % of Variance Explained 50.1 29.2 20.7 100.0 Notes: Varimax rotation and factor loadings from the rotated factor matrix, J3 is confirmed APPENDIX 6

Table 8.4.5 Factor Analysis Table for Selection Criteria of Non-Majors Variables Factor 1 Factor 2 Factor 3 Communality ^ J2 0.9410 0.3004 -0.0617 0.9795 Jll 0.9410 0.3004 -0.0617 0.9795 J18 0.9293 0.2808 0.0426 0.9443 J8 0.9162 0.2611 0.0736 0.9130 J19 0.8260 0.3337 -0.1167 0.8072 J14 0.6204 0.6198 0.3447 0.8879 J13 0.5593 0.5094 0.0812 0.5789 J12 0.2115 0.9138 -0.0577 0.8831 J4 0.4091 0.8136 -0.0970 0.8387 JIO 0.2768 0.7905 0.4562 0.9096 J5 0.5025 0.6948 0.1834 0.7689 Jl-^ 0.0595 0.2203 0.9049 0.8708 J17 0.3754 0.5102 -0.6265 0.7937

Eigenvalue 8.1885 1.7696 1.1969 %ofVariance Explained 63.0 13.6 9.2 85.8 Notes: Varimax rotation and factor loadings from the rotated factor matrix, J1 is confirmed,

Table 8.4.6 Factor Analysis Tabie for Selection Criteria of American Banks Variables Factor 1 Communality J5 0.9519 0.9060 J10 0.9308 0.8665 J16 0.9308 0.8665 J18 0.9095 0.8271 J^"^ 0.8681 0.7536 J2 0.7675 0.5890 Eigenvalue 4.8086 3.9212 %ofVariance Explained 80.1 80.1

N tes: 1, Only one factor, solution cannot be rotated by Varimax rotation, 2, Loading factors from factor matrix, 3, J4 is confirmed. APPENDLX 6

Table 8.4.7 Factor Analysis Table for Selection Criteria of British Banks •^ Variables Factor 1 Factor 2 Factor 3 Communality ^ J9 0.9588 0.0847 0.2211 0.9754 J3 0.9552 0.0739 -0.1544 0.9418 J16 0.8461 0.2798 -0.3924 0.9482 J5 0.8342 0.0834 0.5344 0.9884 J4 0.8013 0.2987 0.4100 0.8993 J10 0.7043 0.6164 0.0145 0.8761 J8 0.3229 -0.9308 0.1627 0.9970 J14 0.5239 0.8365 0.0481 0.9765 J13 -0.5239 -0.8365 -0.0481 0.9765 J18 0.0099 -0.0736 0.9873 0.9804

Eigenvalue 6.0288 2.1527 1.3782 % of Variance Explained 60.3 21.5 13,8 95.6 N tes: Varimax rotation and factor loadings from the rotated factor matrix, Wo significant criterion is derived from multiple regression and confirmed by the factor analysis.

Table 8.4.8 Factor Analysis Table for Selection Criteria of Japanese Banks Variables Factor 1 Factor 2 Factor 3 Communality J4 0.9923 -0.0121 -0.1231 1,0000 J9 0.9923 -0.0121 -0.1231 1.0000 J2^ 0.0079 0.9994 -0.0346 1.0000 Jll -0.5350 0.7897 0.3003 1.0000 J8 0.6109 0.7758 0.1582 1.0000 J6 -0.1139 -0.4768 -0,8716 1.0000 J15 -0.4794 -0.2252 0.8482 1.0000

Eigenvalue 3.1264 2.7502 1,1234 %ofVariance Explained 44.7 39.3 16,0 100.0

N tes: Varimax rotation and factor loadings from the rotated factor matrix and using D1 as the dependent variable, J2 is significant in the Japanese regression model & conflrmed by thefactor analysis. No significant criterion is derivedfrom multiple regression ifDI is the dependent variable. APPE.NDIX 6

Table 8.4.9 Factor Analysis Table for Selection Criteria of European Banks Variables Factor 1 Factor 2 Communalitv J8 0.9497 0.1996 0.9418 J^*' 0.9497 0.1996 0.9418 J5 0.8858 0.1519 0.8076 J14 0.7423 -0.0070 0.5510 Jll -0.0275 0.9109 0.8305 J7 0.2789 0.7070 0.5776 Eigenvalue 3.4477 1.2025 % of Variance Explained 57.5 20.0 77.5 Notes: Varimax rotation and factor loadings from the rotated factor matrix, J4isconfirmed,

Table 8.4.10 Factor Analysis Table for Selection Criteria of Asian Banks Variables Factor 1 Factor 2 Communality J17 1.0000 0.0000 1.0000 J14 1.0000 0.0000 1.0000 Jll'^ 0.0000 1.0000 1.0000

Eigenvalue 2.0000 1.0000 % of Variance Explained 66.7 33.3 100.0

H' '^câí^i'ffl^ rotation and factor loadlngs from the rotated factor matrix.