 "Jain says some emerging markets are a 'worry'")
Anshu Jain, the former co-chief executive officer of Deutsche Bank AG, said some emerging markets that have been hurt by plunging commodity prices and outflow of funds are a "worry." "In certain parts of ex-Japan, ex-China, ex-India Asia we could have some bad news," he said in an interview at the Bloomberg Markets Most Influential Summit 2015 in London on Tuesday. He pointed to Brazil, South Africa, Russia, Turkey as others that harbor risks.
"Look towards emerging market corporates if you really want an area of concern. They borrowed a lot of money," Jain said. "Some of these firms have hedged it, they have dollar inflows and that's completely fine. Others may well be playing a carry game, we've seen that done. You borrow in dollars, invest domestically, typically back into the banking system, and I think we're going to get some stress in those areas," he added.
Jain, an Indian-born British citizen, stepped down as co-CEO of Frankfurt-based Deutsche Bank at the end of June. He is a consultant with the bank. The situation in emerging markets isn't as bad as during the Asian crisis of the late 1990s, Jain said.
There are "fundamentally different dynamics. Foreign exchange reserves
look a lot better, sovereign indebtedness a lot lower," he said.
"Look towards emerging market corporates if you really want an area of concern. They borrowed a lot of money," Jain said. "Some of these firms have hedged it, they have dollar inflows and that's completely fine. Others may well be playing a carry game, we've seen that done. You borrow in dollars, invest domestically, typically back into the banking system, and I think we're going to get some stress in those areas," he added.
Jain, an Indian-born British citizen, stepped down as co-CEO of Frankfurt-based Deutsche Bank at the end of June. He is a consultant with the bank. The situation in emerging markets isn't as bad as during the Asian crisis of the late 1990s, Jain said.
There are "fundamentally different dynamics. Foreign exchange reserves
look a lot better, sovereign indebtedness a lot lower," he said.