Economics Homework Help

This case analyzes the problems facing a bank in a foreign country and the reasons for deciding to stay or to close its operation. Royal Bank of Canada is the bank involved in this real-life situation. After closing its representative office in Thailand in the 1980s Royal Bank of Canada re-entered the country in 1997. “Now” Royal Bank of Canada needs to decide if it feels comfortable enough with the decisions made by the government of Thailand and the IMF and the future outlook to stay in the country or if on the other hand, it should cut its losses and focus its efforts elsewhere. In your presentation, you must be sure to provide answers to all these questions or issues:

1. What were RBC’s ultimate goals in opening a representative office in Thailand?

2. How large is the initial staff for the office and what is the estimated pretax profit?

3. What are RBC’s four major business lines in its Asia Pacific network?

4. What are the limitations of BIBF licenses?

5. What are the advantages of the possible upgrading of RBC’s operations in Thailand to a branch status?

6. What are Thailand’s most important exports?

7. What is the “current” (1997) situation in Thailand?

8. What are the highlights of the IMF’s bailout of Thailand?

9. As RBC’s representative in Thailand you need to prepare a detailed recommendation for senior management to either:

a. Stay in the country and “weather the storm”, which perhaps means to take losses for an extended period of time
b. Cut your losses now and have the bank focus on its efforts elsewhere, which means forgetting about getting back in the country in the foreseeable future

10. What Have I Learned From This Case?

(the answer should be at least a paragraph for each question)