International banks as leaders or followers of international business : An historical perspective

International banking and international trade have been partners since the beginning of world trade and world finance. Indeed, the distinction between international trade and international finance as two separate functions and institutions is relatively recent. Banks and business firms are two parts of a world network. Therefore there is no easy answer to the question as to whether banks follow or lead international business. It is probable that where banks are aggressive in building world networks, and industries focus on single projects, banks lead and industry follows. But under the opposite conditions, the roles will reverse. There is no way to determine which of the two processes is dominant.