Among
the world's top 1000 banks, there are more large and medium-sized domestic banks
from developed countries than from emerging economies. According to The Banker
(2005), out of the top 1000 banks globally, over 200 are located in USA, just
above 100 in Japan, over 80 in Germany, over 40 in Spain and around 40 in the
UK. Even China has as many as 16 banks within the top 1000, out of which, as many
as 14 are in the top 500. India, on the other hand, has 20 banks in the top 1000,
out of which only 6 are in the top 500 banks. This is perhaps reflective of the
differences in the size of economies and the financial sectors.
In
most of the emerging markets, the assets of the banking sector comprise over 80
percent of total financial sector assets, whereas these figures are much lower
in developed economies. Furthermore, deposits, as a share of the total banks'
liabilities, have declined since 1990 in many developed countries; while in developing
countries, public deposits continue to be dominant in banks. In India, the share
of banking assets in the total financial sector assets is around 75 percent, as
of end-March, 2005. no doubt, there is merit in recognizing the importance of
diversification in the institutional and instrument-specific aspects of financial
intermediation in the interests of wide choice, competition, and stability. However,
the dominant role of banks in financial intermediation in emerging economies in
general and India in particular will continue in the medium term and banks will
continue to be special for a long time. In this regard, it is useful to emphasize
on the dominance of banks in developing countries for promoting non-banking financial
intermediaries and services, and for development of debt markets. |
