These are the 14 countries with the safest banks in the world
Your support helps us to tell the story
From reproductive rights to climate change to Big Tech, The Independent is on the ground when the story is developing. Whether it's investigating the financials of Elon Musk's pro-Trump PAC or producing our latest documentary, 'The A Word', which shines a light on the American women fighting for reproductive rights, we know how important it is to parse out the facts from the messaging.
At such a critical moment in US history, we need reporters on the ground. Your donation allows us to keep sending journalists to speak to both sides of the story.
The Independent is trusted by Americans across the entire political spectrum. And unlike many other quality news outlets, we choose not to lock Americans out of our reporting and analysis with paywalls. We believe quality journalism should be available to everyone, paid for by those who can afford it.
Your support makes all the difference.With speculation rife that Deutsche Bank may be on the brink of collapse under the weight of a massive fine from the US Department of Justice, the safety and security of financial institutions is once again under the spotlight.
As a result, we decided to take a look into the countries around the world with the safest banks, using the World Economic Forum's recently-released Global Competitiveness Survey, which offers a bundle of indicators to show the health of a country's institutions.
One of those is the perceived safeness of banks.
WEF used its executive opinion survey to ask "in general, how do you perceive the soundness of banks?"
So the measure isn't based on any objective economic or accounting measure, but rather by the perceptions of the population. The countries are ranked from 1 (banks need more money) to 7 (banks are generally sound).
The survey showed that people in the UK and US really don’t trust their banking systems after the 2008 financial crisis. The UK was ranked 62nd and the US came in at 36th, below Guatemala, Colombia, and Honduras.
Check out the countries with the safest banks below.
14. Czech Republic
The Czech banking sector is unusual in that foreign-owned lenders dominate the industry, but consumers don't seem to mind, ranking them the 14th safest in the world.
13. Guatemala
The densely populated Central American nation of 15.5 million people has three key players in its banking system — Banco Industrial, Banco G&T Continental, and Banco de Desarrollo Rural. All three are seen as being fairly sound, according to the WEF's survey.
12. Luxembourg
It's no surprise Luxembourg scores highly, as the country is famous for its financial sector. Its Banque et Caisse d’Épargne de l’État is often cited as one of the safest on earth.
11. Panama
As the country has no central bank, Panamanian lenders are run conservatively, with capital ratios almost twice the required minimum on average. Traditionally seen as a tax haven, the country has made substantial strides to shake off that reputation since the financial crisis.
10. Sweden
Although Swedish lenders are being squeezed by the Riksbank's negative interest rate policy, Swedish banks are still among the safest in the world, according to the WEF.
9. Chile
In July, ratings agency Fitch cut the outlook of the country's banking system to negative, based on "weakening asset quality and profitability," but that hasn't spooked Chileans, according to the WEF.
8. Singapore
Singapore is renowned as one of the world's great financial centres, and the soundness of its banking sector reflects that.
7. Norway
As an oil-reliant economy, Norway has faced serious issues in recent years, and in August, its banking system had its outlook cut to negative by Moody's. However, the country's banks remain very sound, the WEF's survey suggests.
6. Hong Kong
Another global financial centre, Hong Kong is home to arms of most of the world's biggest banks, and some of the world's safest financial institutions.
5. Australia
A small group of four major banks divide up most of Australia's banking sector, while foreign banks are tightly regulated, making sure the system is sturdy.
4. New Zealand
New Zealand's banking sector is dominated by a group of five financial players. Decent profits and growth without too much competition has seen the sector thrive, although it slips from second last year to fourth in 2016.
3. Canada
Canadian banks have long been a byword for stability. The country has had only two small regional bank failures in almost 100 years, and had zero failures during the Great Depression of the 1930s. Last year, the country's banks were seen as the safest on earth, so confidence has clearly slipped a little.
2. South Africa
South Africa's so-called 'Big Four' — Standard Bank, FirstRand Bank, Nedbank, and Barclays Africa — dominate the country's consumer sector, and are widely seen to be pretty safe, with only one other nation scoring higher.
1. Finland
Finland's banking sector is dominated by co-operative and savings banks, which take little risk. The country's central bank governor, Erkki Liikanen, below, has led the way on proposals to split investment banking and deposit-taking activities at European lenders. Ranked fourth in 2015's list, Finland's banks have got even safer this year.
Read more:
• TOM HAYES: 'Traders like me should not be in prison' for the Bank of England's 'involvement' in Libor rigging
• The UK's chronic productivity crisis is worsening
• Apple and Google are now copying Samsung's design
Read the original article on Business Insider UK. © 2016. Follow Business Insider UK on Twitter.
Join our commenting forum
Join thought-provoking conversations, follow other Independent readers and see their replies
Comments