Financial sector foreign direct investment key to bringing emerging economies into global financial system, says CGFS

The Committee on the Global Financial System (CGFS) is today releasing a report entitled Foreign direct investment in the financial sector of emerging market economies.

The report shows that the surge in financial sector foreign direct investment over the past decade has been instrumental in integrating emerging economies into the global financial system. This integration has brought substantial benefits to host countries’ financial systems in terms of efficiency and stability.

Strong foreign bank presence has also brought to the forefront issues related to the management of country risk and the assessment of conditions in host country financial systems. The report looks at risk management issues for investing financial institutions as well as for authorities in charge of financial stability and public policy in general.

This and more than 20 central bank papers considered by the Working Group that prepared the report are available on the BIS website at www.bis.org.

Notes for editors

The Committee on the Global Financial System is a central bank forum established in 1971 by the Governors of the G10 central banks to monitor and examine broad issues relating to financial markets and systems. The Committee’s mandate is to elaborate appropriate policy recommendations to support central banks in the fulfilment of their responsibilities with regard to monetary and financial stability. In carrying out these tasks, the CGFS places particular emphasis on assisting central bank Governors to recognise, analyse and respond to threats to the stability of financial markets and the global financial system.

The Working Group that prepared the report was chaired by Christine Cumming, First Vice President of the Federal Reserve Bank of New York. The Working Group's members are listed in the report.