De-Risking by Banks in Emerging Markets : Effects and Responses for Trade
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...
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| Language: | English |
| Published: |
International Finance Corporation, Washington, DC
2018
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| Online Access: | http://documents.worldbank.org/curated/en/580351481271839569/De-risking-by-Banks-in-emerging-markets-Effects-and-responses-for-trade http://hdl.handle.net/10986/30350 |
| 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. |
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