The material on this site is for financial institutions, professional investors and their professional advisers. It is for information only. Please read our Terms & Conditions, Privacy Policy and Cookies before using this site. Please see our Subscription Terms and Conditions.

All material subject to strictly enforced copyright laws. © 2022 Euromoney, a part of the Euromoney Institutional Investor PLC.

Latin America banking: Risk pendulum swings back to locals

New rules to boost risk-weighted assets at G-Sibs are ramping up the pressure on those banks to change their business model, and become less global. Latin American markets, until recently a battleground for global banks, could now see several of them retreat. Are local banks about to benefit from a less competitive environment?

by Rob Dwyer


Illustration: Kevin February

When UBS’s global banks strategist and Latin America financials analyst, Philip Finch, listened to HSBC chief executive Stuart Gulliver’s comments after disappointing 2014 fourth quarter results on February 23 this year, he realized just how far the risk equation for global banks had shifted. 

A decade previously, he had been involved with writing reports about how global banks were well-positioned to enter new emerging market banking markets and leverage their global platforms, scale economies and IT capabilities at the expense of the locals. Then, these market dynamics were seen favourably by international banking regulators, who subscribed to a view that greater geographical diversification provided less concentrated risk and strengthened banks through a business mix that spread risk exposures and earnings. 

Now, here was the CEO of HSBC saying that the bank was looking at disposing of its businesses in Brazil, Mexico Turkey and the US. For Finch, the addition of these previously key markets to the list of divestments marks “a new, significant phase” in the de-globalization of what the Financial Standards Board has called Global Systemically Important Banks, or G-Sibs.

You have reached premium content. Please log in to continue reading.

Read beyond the headlines with Euromoney

For over 50 years, our readers have looked to Euromoney to stay informed about the issues that matter in the international banking and financial markets. Find out more about our different levels of access below.


Unlimited access to and

Expert comment, long reads and in-depth analysis interviews with senior finance professionals

Access the results of our market-leading annual surveys across core financial services

Access the results of our annual awards, including the world-renowned Awards for Excellence

Your print copy of Euromoney magazine delivered monthly

£73.75 per month

Billed Annually


Unlimited access to and, including our top stories, long reads, expert analysis, and the results of our annual surveys and awards

Sign up to any of our newsletters, curated by our editors


Already a user?

We use cookies to provide a personalized site experience.
By continuing to use & browse the site you agree to our Privacy Policy.
I agree