A prime bank is one of the 50 largest banks in the world. Prime banks trade a number of financial instruments with each other and play a key role in global commerce. Unfortunately, the term "prime bank" has become tainted by fraudulent activities, and thus it is important to be extremely careful when this term is used to find out how someone is using it.
A true prime bank is a major banking entity such as the World Bank. Prime banks can trade a variety of financial instruments, especially things like government securities such as bonds. The movement of monies between prime banks facilitates trade between companies, allows nations to extend loans to each other, and provides a mechanism for global commerce. Prime banks move substantial sums of money globally on a daily basis and may have branch offices and personnel all over the world.
Determination of which banks are prime banks can be made by looking at the accounts a bank handles and its role in the global business climate. Banks that handle high account volume, work with high profile clients such as global corporations, and are involved in international transactions are examples of prime banks. The United States, Switzerland, and Great Britain are common sites for the headquarters of prime banks, although worldwide offices ensure that banking services are available wherever and whenever they are needed.
In certain types of fraud schemes, a con artist may approach someone with a promise of a low risk, high return investment. The target of the con is assured that funds will be invested in "prime banks," and the con artist usually provides ample documentation. This can includes brochures, prospectuses, and other documents that are intended to convey the legitimacy of the operation. Fraudsters may arrange accounts at banks with "prime" in their names that are not actually prime banks to enhance the illusion.
Once the target gives up the money, the fraudster vanishes. Some signs that a proposed prime bank investment may be a fraud include unbelievable promises, such as a promise that investments will double in a month, along with secrecy. Real prime banks have open and transparent operations. In a fraud, someone may be told not to tell anyone or miss out on a deal or may be advised not to consult financial advisors or lawyers about the deal. Insistence on secrecy in the transaction is a sign that the transaction may not be on the level, even if someone claims that a prime bank is involved.