Impact of Foreign Banks on Banking in Emerging Economies Essay

Increased applied science and diversityInternational banking in acclivitous foodstuff prolong some advantages from the technology and innovation. The advanced technology and innovation system could even surpass the conventional technology and innovation. For example, they could improve productivity, increase in market and increase the emulation and so on . Innovations in client experience and superior customer service delivery, network integration. (Infosys 2000). For example, the internet and computer system have a useful conversation system to connect the consumer and bank. In daily life, customer often use the mobile phone, computer transfer the money. At the alike(p) time, innovation and technology is a lower cost of the banking system in the emerging market. The increased technology and innovation in emerging market may help the banking system make a clear communication for their employee, shargonholder and consumer. As a result, banks in emerging markets are leapfroggi ng their rich-world rivals in efficiency, technology and innovation (special report international banking 2011).Increased liquidness and solvency canvass with the local banking system, the foreign banks on banking in emerging market have different kind of comparative advantage. The reason is emerging market tolerate foreign bank entry to local market. This is lead to the higher liquidity and solvency. Foreign direct investment is a useful fund source for local market. At the same time, the foreign banks also have all-important(prenominal) roles which represent a borrower. For example, foreign banks have an enough capital origination and asset. Foreign banks have played a major role in financing emerging market (EMEs) in recent year. Increased liquidity and solvency has helped emerging markets to develop their economies and allocate capital and financial know-how efficiently crossways countries (Agustn Villar )Disadvantage Complex global policies and challenges international b anking There are some negative factors occur in global banks in emerging economies. One of the important factors is complex global policies. For example, the foreign banks are an propagation of parent bank which sent to managers to overseas. Different banking system has different policies. Meanwhile, the establishment also comes up with stricter policies. As a result, foreign banks should face a lot of complicated policies in emerging market. The collapse of Barings was a materialisation of how different countries supervisors are failing to communicate with each other.( the economist 1997). This aspect shows that the international banking in emerging market should have a juxtaposed supervisor.