December 2018 – The growing footprint of EME banks in the international banking system

Eugenio Cerutti, Catherine Koch and Swapan-Kumar Pradhan, BIS quarterly review, December 16, 2018

Emerging market economies (EMEs) have substantially increased their footprint in the global economy over recent decades. They now produce about 40% of global GDP at market exchange rates, and contributed about two thirds of 2017 global GDP growth.

In this special feature, we document how the growing economic importance of EMEs has gone hand in hand with a rapidly increasing presence of EME banks in global banking. We use the locational data of the BIS international banking statistics (IBS) and focus on banks’ nationality, while distinguishing between the business of banks’ headquarter offices and that of their affiliates abroad. As of mid-2018, the IBS data set comprises data from 47 reporting countries and covers about 95% of total cross-border claims. Recent increases in the number of EMEs that report to the IBS (eg China and Russia starting in 2016, and the Philippines in 2017) and recent statistical enhancements offer unique insights into EME banks’ global activity.