Introduction to UNITED STATES OF AMERICA

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3 Introduction to UNITED STATES OF AMERICA The USA remains the world s largest economy. After almost twenty years of leading world economic growth, the worst economic and financial crisis of the past eighty years was initiated there through the combination of overindebtedness and insufficient supervision of non-bank financial institutions. The recession officially ended in June Since then, the recovery has been both limited and uneven. GDP growth has averaged 2.2% compared with 2.8% over the six years preceding the slump. This means that the current level of activity remains below its potential, i.e. what could be produced given the available labour and capital. After years of disappointing developments in the labour market, some strength is now unquestionable, with an unemployment rate just slightly above 4%. Still, wage increases remain tepid, supporting the hypothesis that slack remain in the US economy. Since late 2015, the Fed began normalising its monetary policy, with four rate increases. In mid-2017, the US central bank also published the details of how it intends to proceed with the normalisation of its balance sheet. It will slow down, before ending reinvestment of maturing debt securities, although the timing of these developments are as yet unclear, and could be later should the economy show signs of cooling. The development in prices is, more particularly, to be closely monitored. Despite the rebound in oil prices and the fading effects from past appreciation of the dollar, inflation has been decelerating, a reason for the Fed to opt for the status quo. Expectations of monetary tightening fading away together with the prospects from a fiscal boost partly explains the recent depreciation of the dollar. This is another element to be monitored, even if the value of the dollar is less a concern for the US than for the rest of the world. Summary BNP Paribas presence BNP Paribas has been doing business in the United States for over 140 years. Headquartered in New York, with five business centres, the bank relies on its strong and well-established franchises to provide full-service institutional corporate and investment banking, including cash management and international trade finance, and to offer a broad range of advisory services and corporate finance capabilities to key industry sectors. In addition to BNP Paribas' corporate & investment business, the bank provides a broad range of banking services through its wholly-owned subsidiary, Bank of the West, including a robust cash management and international trade finance offering. Founded in 1874, Bank of the West offers a wide range of personal, commercial, wealth management and international banking products and services. The bank operates nearly 700 retail and commercial banking locations in 19 Western and Midwestern US states. Its cash management and international trade finance platforms provide convenient, reliable, and secure access for domestic and international small businesses, middle market and large corporate enterprises across all industries. Working with BNP Paribas BNP Paribas has structured its business to support the high-volume demands of its clients in both cash management and international trade finance, both businesses headquartered in the United States and foreign corporations doing business in the country. Currency

4 Currency US dollar (USD) Bank accounts Resident / non-resident status A company is considered resident in the USA if it is created or organised under the laws of any US state or the District of Columbia. Bank accounts for resident entities Within USA Outside USA Local Currency Foreign Currency Bank accounts for non-resident entities Within USA Outside USA Local Currency Foreign Currency Not applicable Payments & Collections Credit transfers Credit transfers are used by companies to pay salaries and suppliers, to make tax payments and for pensions, social security and treasury transfers. High-value and urgent credit transfers, known as wire payments, can be settled on a same-day basis via Fedwire (domestic USD payments) or via CHIPS (cross-border USD payments). Low-value credit transfers can be settled via the ACH with ACH credits. These should be initiated one day prior to the settlement date.

5 FedACH's SameDay Service enables the settlement of ACH transactions on a same-day basis. Direct debits Direct debits are used for regular payments, such as utility bills. ACH debits are used to process direct debits. These should be initiated one day prior to the settlement date. FedACH's SameDay Service enables the settlement of ACH debit transactions on a same-day basis. Liquidity management Domestic: notional pooling The repeal of Regulation Q (which prevented the payment of interest on corporate demand deposit accounts) in 2011 technically opened up the possibility of banks offering notional pooling services. However, notional cash pools are still not widely offered. Domestic: cash concentration Domestic cash concentration structures are widely available. Zero balancing is the most a commonly used structure. Resident and non-resident bank accounts can participate in the same cash concentration structures. Single and cross-currency structures are available. Cross-border notional pooling Cross-border notional cash pools are not available. Cross-border cash concentration Cross-border cash concentration is available but not widely used. International trade General trade rules As a member of the North American Free Trade Association (NAFTA), the USA has free trade agreements (FTAs) with Canada and Mexico. As a member of the Dominican Republic-Central America FTA (DR-CAFTA), the USA has FTAs with DR-CAFTA member states (Costa Rica, Dominican Republic, El Salvador, Guatemala, Honduras and Nicaragua). Imports / exports

6 Imports Industrial supplies Consumer goods Capital goods Agricultural products Primary Import sources China (21.5%) Canada (13.2%) Mexico (13.2%) Japan (5.9%) Exports Capital goods Industrial supplies Consumer goods Agricultural products Export markets Canada (18.6%) Mexico (15.7%) China (7.7%) Japan (4.2%) Germany (5.5%) Import / export volumes Exports Imports ,563 1,592 1,633 1,510 1,460 - services USD bn goods 2,304 2,294 2,385 2,273 2, goods USD bn USD bn - services USD bn Current account as % GDP Source: IMF, International Financial Statistics, June Market data updated as of 01/08/2017

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