De-Risking and Other Challenges in the Emerging Market Financial Sector
Recent efforts to strengthen the global financial system will ultimately contribute to greater financial stability and a safer world. However, the resultant de-risking is reportedly having a negative impact on banking in emerging markets. With this 2017 Correspondent Banking in Emerging Markets Survey of over 300 banking clients in 92 countries, IFC brings important new information and data to the de-risking discussion.
Some of the notable findings include:
- More than a quarter of global survey participants claimed reductions in Correspondent Banking Relationships (CBRs).
- Seventy-two percent of participant banks report that they are facing multiple external challenges that reduce their ability to serve customers. Compliance Costs and Correspondent Banking-related difficulties were most frequently identified.
- Survey findings suggest that the drivers and effects of de-risking are subtle, complex and pervasive. Countries of all sizes and income levels are affected, as are most emerging markets,
- Globally, demand for international banking services appears to be outpacing capacity to meet that demand.