text: Banking and Disbursing Support
  3-6. In order to strengthen host nation banking within the combatant commander’s AOR, Army financial
  managers must:
  * Develop a working knowledge of Army banking policies and procedures.
  * Understand the relationships among the Treasury, DOD, FRB, DOS, and other governmental
  agencies as they relate to FM.
  * Acquire knowledge of the global banking system and attain the financial tools available to the
  Department of Defense for global finance and banking engagement.
  * Understand the regulatory, legal and cultural differences in host nation banking systems.
  ECONOMIC IMPACT
  3-7. FM units analyze the economic impact of the use of currency (U.S. and foreign) on the local
  economy. The analysis includes, but is not limited to, the cost of acquisition of foreign currency, the cost-
  benefit of using ITS.gov versus an LDA, the availability of banking services and banking infrastructure,
  acceptance of local currency by vendors, the impact of U.S. currency on the local economy, and review of
  Treasury and other U.S. Government agencies reports on the local economy. Close coordination with CA,
  U.S. Embassy, Treasury and DOS officials will ensure accurate assessments.
  3-8. Economic analysis is a detailed report provided to a commander in order to make decisions on
  applying the economic instrument of power, identifying all the financial aspects of a specific
  geographical area and the effect that United States forces’ presence will have on that area.
  REDUCTION OF CASH ON THE BATTLEFIELD
  3-9. A stable and growing economy requires low inflation and stabilization of purchasing power.
  Conflict, large budgetary deficits, lack of public confidence in the government, and other factors may add
  to inflation instability, and may cause a host nation’s residents to resist the national currency and convert
  their funds to U.S. Dollars, Euros, or other currencies. The mere presence of U.S. forces and unified action
  partners will also directly and immediately affect the local economy. Without careful planning, U.S. forces
  and unified action partners’ demand on local resources may create inflationary pressure. To minimize the
  potential for inflationary pressure, FM units should make all payments for goods and services in the local
  currency, pay wages for local services at an appropriate wage-rate and determine appropriate pricing levels
  for local goods and services. Using the local currency helps put cash in the hands of the local populace,
  stimulates the economy and demonstrates confidence in the host nation’s government.
  MILITARY BANKING PROGRAM
  3-10. Theater Financial Management will leverage existing programs and technology to identify and
  implement new technologies and other resources to reduce U.S. Dollars off the battlefield, improving the
  FMSU’s disbursing mission, improving the local banking system, and strengthening the economy across
  the theater of operations to create an overall exit strategy. The various initiatives propose methods to
  strengthen the host nation banking system and fortify the local economies throughout the theater of
  operations. The banking team supports the FMSC in forging a strong partnership between the U.S. Army
  and the U. S. Treasury, the Department of State, and the Federal Reserve Bank network. This effort should
  promote the identification and elimination of capability gaps in the U. S. Army’s support of the Department
  of State’s economic goals within the theater pertaining to banking and E-commerce.
  3-11. The MBF main function during contingency operations is to provide cash management/currency
  support. Overseas and domestic MBFs can provide foreign and U.S. currency to directly assist disbursing
  operations on payments other than electronic funds or checks payments (exchange, cash transactions, etc.).
  All compliance and regulatory guidance on proper procedures process thoroughly in accordance with
  DODFMR Vol. 5, Chapter 34, and all corporate compliance rules (such as that of the Office of the
  Comptroller of the Currency and Federal Deposit Insurance Corporation) that apply with the MBFs.
  Banking liaison officers should have all proper points of contacts and operating agreements in place so that
  they can properly provide guidance to the DO on the MBF’s capabilities.