Final answer:
An international bank can achieve boosting origination fee income without expanding the balance sheet, reducing liquidity risk, and scaling down international operations through a loan sale. The comprehensive answer is d. All of the above.
Step-by-step explanation:
Which of the following can be achieved by an international bank through a loan sale? The options being considered are boosting the origination fee income without expanding the balance sheet, reducing liquidity risk, and scaling down international operations. The answer to this question is d. All of the above.
By selling a loan, a bank can indeed boost its origination fee income without expanding its balance sheet. The bank earns a fee for originating the loan but does not have to carry the loan as an asset, thus not expanding its balance sheet. Additionally, selling loans can help in reducing liquidity risk as the bank converts a loan (an illiquid asset) into cash, which enhances its liquidity position. Finally, if an international bank wishes to scale down its international operations, selling off loans can be a part of the strategy to reduce its presence and risks associated with those operations.Such a strategy reflects a broader trend of integrating finance through international trade, where financial institutions can optimize their operations and balance sheets. It also aligns with the financial market principle that a rise in supply can lead to an increase in the quantity of loans made and received, as well as providing the benefit that a local bank does not need significant extra funds to make a loan if it plans to sell it shortly thereafter.