The economies of the Asian Pacific countries are growing. Their infrastructures are not up to Western standards, but improving. The future potential is enormous. The Asian Pacific countries have markets with little credit experience. There are no credit agencies where customer payment profiles are maintained. So it is hard to get information if customers pay their

Country managers were not comfortable with an unsecured credit product such as credit cards and did not want to take the large losses of a card business, in the initial years, that their projections seemed to indicate. We have got to resolve this via organizational architecture solution (decision rights, reward system and performance measurement).

d. USA experience of credit card business is not always useful since the Asian Pacific environment is totally different.

Citibank must decide to launch the credit card in Asia Pacific (probably with the exemption of Korea since this country doesn’t permit banks to issue cards with revolving credit, also Korea has strict foreign exchange control measures, experience has shown financial losses and labor problems) as our break even analyses shows. However risks should be managed thorough to prevent major losses. The risks involved with the credit card operation are: systematic risks (foreign exchange risk and interest rate risk), country risks (the risk that a sovereign power will interfere, because of political instability or economic risk), credit risk (non-performance of a debtor), liquidity risk (the inability to trade position at current prices), counterparty (non-performance of a trading partner or default risks of customers), operational (system failures and see other business risks) and legal risks (new laws and regulations can make old practices invalid).

The Asian Pacific countries have limited distribution capabilities. Direct mail is therefore more difficult than in the United States. Also telephone li

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