Growing restrictions imposed on foreign banks operating in developing countries since the 2007/9 global financial crisis are hampering growth prospects by limiting the flow of much-needed financing to companies. This according to the World Bank Global Financial Development Report 2017/2018: Bankers without Borders released this month. Asli Demirgüç-Kunt, director of research for the World Bank, warned that international banking could have important benefits for development, but was no panacea, and carried risks. “Developing economy policymakers would do well to consider how to maximise the benefits of cross-border banking while minimising its costs,” she said. The 2007-2009 crisis and economic downturn prompted an extensive re-evaluation of the benefits and costs of international banking and led to restrictions that brought to a halt a decade-long surge in financial services globalisation and crossborder lending. However, international bank lending remains a vital source of finance for developing countries, although its composition has been changing since the crisis.
