DEAR READER: MAY 2014 | VOL. 28 NO. 5

Over the past few years, thanks in large part to quantitative easing, we have witnessed the enormous effect that monetary policies have on the world economy. The ongoing tapering of quantitative easing by the US Fed has had consequences worldwide—even before it started. It is therefore no surprise that the European Central Bank’s recent announcement of a “unanimous commitment to using also unconventional instruments within the ECB’s mandate in order to cope effectively with risks of a too prolonged period of low inflation” has prompted a lot of questions on the future moves of the central bank.

Our cover story—on the impact of the Federal Reserve’s new regulation of large foreign banks active in the US—highlights how the power of central banks is growing beyond monetary policy oversight and into regulatory authority.  It is unclear whether such regulation will result in similar measures toward US banks operating in other jurisdictions (particularly Europe) or will force some European and Asian banks to downsize their US presence. But regardless, it is likely to have consequences for corporate and retail clients of any banks that are affected. It represents an added element of uncertainty in a geopolitical climate that is already showing strong signs of instability and risk.

In this issue we also present our annual awards for the best banks in every region of the world. This year we have added winners in a few new countries—and, for the first time, for different regions in the US. For us at Global Finance, assigning these awards is a monumental task. Large numbers of banks must be taken into consideration, and it is often quite hard to choose a single winner among financial institutions in a country. The lack of common disclosure rules for banks in different markets adds to the complexity of the task. Nevertheless, the list of winners proves once again the vitality of global banks, notwithstanding economic uncertainties and regulatory issues.

Andrea Fiano