According to this article, Europe has lent a total of USD 3.4 trillion to developing nations, triple that of the US and Japan institutions combined. In other words, approximately 80% of total loans to emerging markets come from Europe.
These charts show that foreign, and especially European banks, have a considerable presence in emerging markets. You can find other interesting graphs that further illustrate this concentration, here and here.
The data makes it clear that a crisis of any degree in Europe will have devastating consequences for emerging markets in terms of funding. Profits repatriation will also increase considerably as European banks try to maintain some kind of profitability.
Yet another reason for emerging market underperformance year to date.
For more detailed information go to the BIS quarterly review.
Caveat Emptor
Source: BIS, RBCCM
The data makes it clear that a crisis of any degree in Europe will have devastating consequences for emerging markets in terms of funding. Profits repatriation will also increase considerably as European banks try to maintain some kind of profitability.
Yet another reason for emerging market underperformance year to date.
For more detailed information go to the BIS quarterly review.
Caveat Emptor
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