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Banking System Growth Shifts Heavily To Emerging Markets

Five of the world's biggest developing countries have shown increases in the ratio of bank assets to GDP since 2008, while banking systems in the U.S., the U.K., and the eurozone have moved in the opposite direction, according to data collected by S&P Global Market Intelligence.

The assets-to-GDP ratio, seen by regulators as a barometer on the riskiness of an economy, is up more than 100 percentage points in China since 2008, even as assets in the country's banking system have more than tripled over the same span. The ratio has risen by 30 percentage points in Russia and by 26 points in Brazil.

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Meanwhile, in the U.K., bank assets now represent less than 400% of GDP, compared with 531% in 2008. In the eurozone, the figure is down 44 percentage points.

GDP in China has sharply increased as the country begins changing its focus from heavy industry, manufacturing, and commodities to consumption, services, and international trade. Its GDP in 2016 was $11.2 trillion, second only to the U.S.' $18.6 trillion, according to the World Bank. In 1990 China was the world's 11th-largest economy, but by 2007 it had become the third-largest.

Also in 2016, China's banking system surpassed the eurozone's to become the world's largest, with total assets of $33.43 trillion, compared to $31.44 trillion in the eurozone.

Growth in banking assets

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Jun 06, 2017
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May 17, 2017
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