Identifying Failing Banks in Emerging Markets

Fitch Learning
Course summary
Professional Training
2 days
2,695 USD excl. VAT
Online courses

Course description

Identifying Failing Banks in Emerging Markets

The failure rate of banks in emerging markets over any five-year period can be greater than one in five and often more. This course identifies the classic causes of emerging market failures and how to identify the warning signs of those most likely to fail by studying a broad range of examples.

Live Online Training

Since 2003, Fitch Learning’s industry experts have been delivering world-renowned virtual training programs to learners across the globe. Benefits include:

  • World-class video conferencing technology
  • Fully interactive, engage and network with peers using break out rooms, quizzes and polls
  • On-hand technical support team throughout
  • Attend from anywhere, across four time zones
  • Save time and costs on travel

Suitability - Who should attend?

This case study intensive workshop is ideal for Bank Analysts and Client Relationship Managers in commercial banks, trade finance banks, development banks, export credit agencies, as well as bond and equity Investors with at least two years’ experience in lending or investing in emerging and frontier markets.

Outcome / Qualification etc.

Credits: 16 CPD pts.

Key Learning Outcomes:

  • The interconnectedness of the economy and the banking system and symptoms of both systemic and individual bank failures in emerging markets
  • The effectiveness of financial analysis and challenges in emerging markets
  • The quality of regulation and the impact this has in failure rates
  • What forensic analysis is required to identify bank failures

Training Course Content

Day One

Analytic Overview

Signs of distress

  • Common themes in troubled financial institutions: excessive growth, over-concentration, volatile earnings sources, asset and liability mismatches, dependence on unstable funding
  • Symptoms of banks’ credit standing: financial, non-financial and market indicators
  • Exercise: identify failed and viable banks

Operating Environment

This section will identify the key macro-economic trends which can erode credit worthiness and the interconnectedness of the economy and banking system.

  • How emerging market banks strengths and weaknesses correlate with sovereign strengths and weaknesses especially during country or global recessions
  • Key macroeconomic policies and the implications of COVID-19 which affect:
    • Banking sector activity
    • The erosion of creditworthiness
  • Systemic risks within a financial system: Macro variables, competitive pressures
  • Sophistication of the local market and volume of banking products and activity
  • Distribution of income: GDP per capita, savings rates, disposable income
  • Improving economic prospects of the country and population
  • Depositor protection schemes: Existing, not available, effectiveness?
  • Independence of the legal system and rule of law

Key Financial, Political and Regulatory Issues

Asset Quality

  • Asset quality in the loan book:
    • Excessive growth and concentrations
    • What constitutes an non-performing loan (NPL) or impaired loan in different countries
    • Hidden impaired loans
    • Related party lending
    • Expected NPL levels geographically and between middle and low income countries


  • Companies in crisis: recognizing weak management and lack of integrity
  • Quality of risk management
  • Disclosure and corporate governance concerns
  • Inter-group support: ability of a stressed parent company to support subsidiaries

Day Two


  • Assessing earnings: quality and volatility
  • Control of costs
  • Adequacy of earnings to fund bank strategy

Liquidity and Funding Risks in Emerging Markets

  • Local funding options when there is limited disposable income
  • Assessing funding: diversity of funding sources
  • Opportunities and flexibility to refinance
  • Asset and liability management concerns: mismatches in FX, interest rates and maturities
  • Use of derivatives and lack of derivatives to manage FX and interest rate risk
  • Liquidity risk management: transaction and funding stability, access to emergency funding

Capital Adequacy

  • Amount of capital
  • Quality of capital
  • Capital buffer: stress testing quality and adequacy of capital to withstand write-downs and ensure continued solvency
  • Ability to raise capital

Forensic Analysis of Major Bank Failures in Various Countries

  • Case Study: analysis of weak and failing banks and key ratios
  • Exercise: effectiveness of ratios in predicting failing banks in less-developed markets

Regulatory Environment

This section will focus on the quality of regulation

  • Quality of regulation and supervision
  • Sophistication of regulations: the adoption of Basel I, II or III?
  • Regulatory forbearance

Rescue Options When Banks Fail

This section will focus on the support and rescue options open to regulatory bodies.

  • Solvency and liquidity problems
  • Lender of last resort: safety net from shareholders and/or government
  • Bail out versus bail in options
  • Does size matter?
  • Political factors in bank defaults, rescues, critical timing issues
  • Developed market solutions versus emerging market solutions
  • Illustration case study: Thai bank privatization – using a bad bank to dispose of problem loans

Why choose Fitch Learning

9 in 10 would recommend us to a colleague

Over 1,300 clients worldwide

CPD recognized


  • Tuition fee (Singapore): 2695 USD
  • Tuition fee (London): 1195 GBP

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About provider

Fitch Learning

Live Online Training Since 2003, Fitch Learning’s industry experts have been delivering world-renowned virtual training programs to learners across the globe. Benefits include: World-class video conferencing technology  Fully interactive, engage and network with peers using break out rooms, quizzes and...

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E14 5LQ Canary Wharf London

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