Why the directors remittance rate is the most misleading statistic on the website

A few weeks ago, I had a conversation with a senior executive at a major US bank who told me that the remittance to its US bank clients was about 60% of the fee it charges for its international clients.

I asked if the bank actually had to pay its international partners that much money to operate in the US and he replied that they had no idea.

But the remunerative breakdown on the US site for banks in the United States suggests otherwise. 

The remittance breakdown in the UK (top) shows that the average fee for US banks is around 30% of its average remittance for all clients.

The remittance ratio for the UK is around 60%, which makes it the second most remunerated bank in the world, behind only the International Finance Corporation (IFC).

And it’s not just international banks paying those fees.

The International Monetary Fund (IMF) has said it pays its staff and contractors a remunerable wage of about $1,600 (£1,220) a month.

So a lot of remittances go to international banks, but that remittance is far less than what a UK bank would normally pay its employees or contractors. 

Why do the remittence rates matter? 

This chart shows the remitting rates of banks in different regions of the world.

You can see that the UK has the highest remittance rates, at 60% – and this is mainly because of how the UK’s bank tax regime affects banks’ ability to borrow money.

For instance, banks in London and its surrounding areas get a tax break on their international lending because the UK tax code requires them to pay at least 60% on the amount of foreign cash they hold abroad. 

So the UK bank tax rate has an enormous impact on the rate at which its banks can borrow money from overseas and therefore pay their employees and contractors more.

The UK is a major exporter of remittance money, and it is an exporter that has also become a major supplier of foreign currency to its international banks. 

But the British bank tax system has also helped to create a financial bubble that is a direct result of this bubble.

Banks in the rest of the EU, for instance, are exempt from British taxes on their foreign income because they don’t have to pay a tax on that money.

But if a bank in another EU country is doing business in the British market, the tax system could see that bank paying less on its money than it should.

The EU has a long history of encouraging financial transactions by its banks, and the UK now has the biggest bank tax in Europe. 

It seems clear that there are major consequences to the way in which bank remittance rates affect global financial markets.

The global financial system is a very complex one and it’s very hard to predict which banks will benefit the most from the current situation.

But it seems clear to me that a lot more needs to be done to make sure that financial markets operate in a more transparent way, that people’s money is treated fairly and that the rules around who can and cannot use their money have more teeth. 

This article was written by Paul Ryan (@paulryanchr) for The Conversation.

You may find Paul’s other posts on the topic here and here.