Playing the Shadowy World of Emerging Market Shadow Banking
While regulators around the world look to fight shadow banking, many lenders can profit from it. In our recent report, Playing the Shadowy World of Emerging Market Shadow Banking, IEMS Senior Research Fellow Dr. Bryane Michaeldescribes how family and institutional lenders can take advantage of shadow banking opportunities in emerging markets.
The report – mining data from 12 emerging countries – highlights sectors which current and aspiring lenders cannot ignore. Some of the conclusions include:
The likely unexploited potential of shadow banking in the 12 emerging markets the author refers to as “The Emerging Dozen” comes to about $1 trillion;
Tradition “non-bank financing” can complement rather than substitute for a bank’s traditional lending book;
Shadow banking activities can decrease losses from non-performing loans in places like Chile, Russia and South Africa;
Booming stock markets can fuel shadow banking needs in places like Russia and Singapore;
Russia and Turkey represent blooming markets for lending by insurance companies and pension funds;
Trade credit and leasing related shadow banking opportunities probably best in Argentina and China.