Emerging Market Bank Ratings 1997: Rating good and bad banks

Taiwan's Shanghai Commercial & Savings Bank is an unknown name in global finance. But this private-sector bank is very special. It gets a top ααα in Euromoney's new emerging market bank (Emba) ratings, covering 450 lesser-known banks. Pakistan's state-owned United Bank came bottom. The ratings go where others have feared to tread. Brian Caplen explains their use as a vital tool for counterparty risk.

Suddenly, the world is awash with banks that most investors and counterparties have never heard of. Hailing from emerging markets, these banks could be tomorrow’s global players or they could be future BCCIs. Evaluating them is a nightmare. Data quality is poor, accounting practices vary between countries and many new banks do not have international credit ratings. What can investors and potential counterparties do to avoid disaster?

The answer is the Euromoneyemerging market bank (Emba) rating, which is a key starting point for deeper analysis of emerging market banks.

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