De-Risking by Banks in Emerging Markets
Emerging evidence suggests that de-risking is a reality. Increased capital requirements, coupled with rising Know-Your-Customer, Anti-Money-Laundering, and Combating-the-Financing-of-Terrorism compliance costs have resulted in the exit of several global banks from cross-border relationships with many emerging market clients and markets, particularly in the correspondent banking business. A subset of this business, trade finance, is also at risk, with potential consequences for segments of emerging market trade. The emerging market trade finance gap was significant before the crisis and has since likely expanded. Those involved in addressing the de-risking challenge must focus on compliance consistency and effective adaptation of technological innovations.
| Main Authors: | , , |
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| Format: | Brief biblioteca |
| Language: | English |
| Published: |
International Finance Corporation, Washington, DC
2016-11
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| Subjects: | EMERGING MARKET ECONOMIES, BANKING RISK, TRADE FINANCE, RISK MANAGEMENT, ANTI-MONEY LAUNDERING, COMBATING THE FINANCING OF TERRORISM, AML-CFT, CORRESPONDENT BANKING, COMPLIANCE COSTS, SME FINANCE, FINANCIAL REGULATION, |
| Online Access: | http://documents.worldbank.org/curated/en/580351481271839569/De-risking-by-Banks-in-emerging-markets-Effects-and-responses-for-trade https://hdl.handle.net/10986/30350 |
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| Summary: | Emerging evidence suggests that
de-risking is a reality. Increased capital requirements,
coupled with rising Know-Your-Customer,
Anti-Money-Laundering, and
Combating-the-Financing-of-Terrorism compliance costs have
resulted in the exit of several global banks from
cross-border relationships with many emerging market clients
and markets, particularly in the correspondent banking
business. A subset of this business, trade finance, is also
at risk, with potential consequences for segments of
emerging market trade. The emerging market trade finance gap
was significant before the crisis and has since likely
expanded. Those involved in addressing the de-risking
challenge must focus on compliance consistency and effective
adaptation of technological innovations. |
|---|