Certified Anti-Money Laundering Specialist Certification (CAMS) Practice Exam

What describes a Corporate Bank?

1. A bank that operates only in its home country.

2. A bank incorporated in the host country but owned by a foreign parent bank.

3. A bank that provides loans to only corporate clients.

4. A bank that operates under its own regulations.

The correct answer is: A bank incorporated in the host country but owned by a foreign parent bank.

The correct choice accurately describes a Corporate Bank as one that is incorporated in a host country but is owned by a foreign parent bank. This definition captures the essence of how corporate banks typically function in the international finance landscape. A corporate bank often engages in various activities that can include lending to corporate clients, facilitating business transactions, and offering investment services. However, its incorporation in the local jurisdiction combined with foreign ownership highlights its operational structure, implying a local presence while maintaining ties with its parent entity in another country. The other options lack the nuance needed to effectively describe a corporate bank. Although they may mention aspects such as geographic operations or client types, they do not encompass the combination of local incorporation and foreign ownership, which is a fundamental characteristic distinguishing corporate banks within the global banking system.