Edited by Thorsten Beck - Vox

The changing role of emergingmarket
banks
Neeltje van Horen
De Nederlandsche Bank
The global financial crisis has hurt banks in both advanced and emerging economies,
but this chapter says the turmoil has favored the emerging-market entities in relative
terms. It predicts a growing role for emerging-market banks in the global financial
system, particularly in their own regions.
The global financial crisis has had a major impact on banks worldwide. While some
banks are faced with major restructurings (either voluntary or imposed by governments),
(almost) all banks will have to make adjustments in order to comply with Basel III
and other, country-specific regulatory measures. The changes induced by the crisis,
however, will have a very different impact on advanced country banks compared to
emerging-market banks. How will this shift in balance impact the global financial
system?
Crouching tiger, hidden dragon
Although many in the West are not familiar with emerging-market banks, they are by
no means small. In fact, the world’s biggest bank in market value is China’s ICBC. The
global top 25 includes eight emerging-market banks. Among these, three other Chinese
banks (China Construction Bank, Agricultural Bank of China, and Bank of China),
three Brazilian banks (Itaú Unibanco, Banco do Brasil, and Banco Bradesco) and one
Russian bank (Sberbank). While excess optimism might have inflated these market
values, these banks are large with respect to other measures as well. In terms of assets
all these banks are in the top 75 worldwide, with all four Chinese banks in the top 20.
79