Global banks are out to break the chains that prevent them from offering more services in emerging markets. Their customers’ finance executives wish them well.

When Amkor Technology acquired three semiconductor assembly and test factories in Korea last year, the West Chester, Pennsylvania-based semiconductor supplier and tester used three global banks-Citibank, Societe Generale, and Deutsche Bank-to structure the $900 million deal. But because of Korea’s restrictions on foreign banks, Amkor still needed the services of a local bank to transfer securities of the seller, Anam Semiconductor Inc., in which Amkor agreed to increase its investment as part of the transaction. And, says Amkor

CFO Ken Joyce, the local bank’s fees for the service “were high per U.S. standards.”

The deal was a typical example of where U.S. companies turn for financial services as they cross more and more borders. While global banks are doing business throughout the world, they still face obstacles to competition with local banks. Last March, for instance, Malaysia released a 10-year plan to provide for the equal treatment of foreign banking competitors. But only after developing a strong set of domestic banks will the country allow nondiscriminatory treatment of foreign players already operating in the country. And only at that point will the country allow new foreigners in.

Granted, Malaysia is an extreme case. Other emerging-market countries have made great strides in opening their markets to foreign banks. But the remaining hurdles faced by outsiders are so high and widespread that more than a few U.S. companies maintain their own in-house banks to help finance their operations in certain markets.

Consider the results of a recent CFO magazine survey of top finance executives. It found that only 33 percent of those companies doing business abroad said that their major U.S. lenders provided services to them in all foreign countries, while 38 percent said some provided services and 29 percent said none did. And the reason given by those who answered “some” or “none” was that the hanks were not located in those countries.

That’s a situation most CFOs would clearly like to see change. By offering as full a range of products and services as possible–from cash management and custodial services to investment banking and insurance–in as many markets as possible, global banks can enjoy great economies of scope and scale, at least some of which they can be expected to pass along to their clients. Says Steven Meyer, treasurer of Baxter International, a medical products company based near Chicago, “To have to do everything with a local bank is inefficient.”

Some of the limits facing foreign banks involve specific legal restrictions (see table, page 92). Other, less direct means of inhibiting competition with local banks involve everything from red tape to poorly capitalized financial systems, unreliable legal systems, and lack of good accounting procedures.

To be sure, the extra cost such barriers impose on clients may not spell the difference between a deal’s failure and success. It obviously didn’t stop Amkor’s Korean deal. But with profits under pressure, anything that shaves costs is something CEOs welcome. Witness the recent decision by Gateway, the personal-computer maker, to close most of its foreign operations because earnings outside the United States were insufficient. “They are giving up growth opportunities,” notes Donald Young, an analyst for UBS Warburg.

Other companies in much the same boat are looking for ways to improve their global operations’ profitability, and those often involve consolidating their banking relationships. One major U.S. multinational, for example, has started a pilot program to see if it can reduce its use of local banks in Southeast Asia. Most of those relationships were developed when the company, which requested anonymity, operated on a country-by-country basis. But the company has since moved to a regional and then a global approach to doing business abroad, and it would prefer to deal with banks on that basis as well. Under the test program, the company has asked a global bank to see which of the company’s local banks could be replaced by Southeast Asian institutions that are part of the global bank’s network of correspondent banks. Ideally, the global bank could then rationalize the company’s use of local bank products and services within the region by eliminating duplication wherever feasible.