If one was going to wire funds into a foreign account in GBP where would the money be stored:
In Beneficiary Bank in say the Eurozone. Or in its Intermediary Bank for example Barclays Bank Plc. 54 Lombard St. London UK.
And presumably one would wire funds to the beneficiary, and they would actually be stored in the intermediary bank.
TIA.
In message , Qintin writes
Not sure what the question really is here, but if you meaning that "what happens if I send some sterling dosh to a bank abroad" then :
You tell UrUKbank to send £1 to AnEurobank a/c in Flagesternbergen no.
12345678.UrUkbank then send £1 to AnEurobank's branch in London, but if AnEurobank dot have a London Branch the £1 is sent a UK Bank Branch in London at which AnEurobank maintain an account.
UrUKbank tell AnEurobank in London that it has just sent them a quid into their London a/c and asks them to pass it on to account 12345678 at their Flagesternbergen branch.
AnEurobank in London send a message to the branch of AnEurobank somewhere in Euroland at which UrUkBank maintains an account in Euros that a quid has just been sent to AnEurobank in London and gets the AnEurobank branch in Euroland to transfer an equivalent amount in Euros, from UrUkBanks account at that branch to AnEurobank. It is AnEurobank in Euroland who set the exchange rate.
AnEurobank then send the Euros to a/c no 12345678 at their Flagesternbergen Branch (less a wodge of charges).
It all appears to happen directly, with simultaneous transactions, but this describes the basic underlying accounting transactions involved.
If you send Euros from UK instead of Sterling Dosh, then the transactions are different.
This is the bit I don't understand. Since UK bank has sent quid to Eurobank in the UK, now Eurobank has to send the same amout to the destination but in Euros.
What I don't get is why this 1 (in euros) would come from the UK bank's account in the AnEurobank. This seems to suggest that UKBank is paying 2X
I know this is not the case, but obviously I can't see to get this part.
In message , Qintin writes
I see what you mean. I'll try another way.
UUB Has a pound coin.
UUB pay the quid into their UK A/C with AEB. This is just the same as you paying a quid into your own bank account. Whilst you no longer have the pound coin, your account has another pound in it, so your own position hasnt changed. So by doing this, UUB hasnt paid any money away at all 'cos its in their own account.
UUB then withdraw the equivalent number of Euros, in cash, from their account in Euroland with AEB.
The same thing happens in reverse. UUB now has less in its account than it had, but has some cash in its hands. So it hasnt changed its position at all. It started with a Pound Coin, now it has the equivalent amount in Euros in cash. It has exactly the same amount of cash now as it had before, but in a different currency. (I've obviously ignored exchange rate spreads).
It then gives those euros to the beneficiary of the transaction. Its only at this point that UUB actually parts with any dosh.
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