Macroeconomic developments, heightened regulation, and pressure on margins and profitability are moving risk management to the top of the agenda for CEOs and their boards.
The past decade saw an unprecedented rise in the fortunes of emerging-market banks. Less affected by the global financial crisis than their developed-world peers, their collective revenue surged to $1,400 trillion in 2012 from $268 trillion in 2002 (exhibit). The future, however, may be a different story. Historically strong capital and liquidity positions have eroded, and operating pressures are mounting from a combination of factors including tighter US monetary policy, stronger growth in developed markets, a changing regulatory landscape, and increasing competition. Read more