The big news of the last few weeks is Donald Trump’s victory in the US presidential election, accompanied by a clear Republican majority in the US House of Representatives and the Senate. We know the results, but the new administration will only start working as of next month.

We also know the new administration’s announced programs, priorities, and key nominations for the new cabinet. However, other big questions remain: How quickly or slowly will the new administration implement key parts of Trump’s agenda? We are talking about tariffs, the US debt ceiling, the deportation plans for undocumented immigrants, and the future of NATO, to name a few.

It is too early to answer all these questions, as it is too early to guess if the appointments that require Senate confirmation votes will be conducted quickly and smoothly. In addition, many of the key appointees have different opinions on key policy issues: Will they get along? Is the new administration capable of working together and meeting its goals without adding to major international tensions?

We will cover the issues extensively in the new year. These questions are at the top of every boardroom and on the agenda of every executive worldwide. In some cases, they require anticipatory moves, like the ones of food importers in the US who decided to buy extra products in the last few months to avoid possible future tariffs.

The focus on supply chain and the role of artificial intelligence, the topic of this month’s cover story, is our contribution to analyze one of the key areas that could be affected in the coming months by new policies in the US. They are also an area that underwent dramatic changes due to the post-pandemic economic climate. Finally, in this issue, among other features, we present our annual private banking awards and the global winners of our Best Digital Banks Awards.

Andrea Fiano | Editor at Large
afiano@gfmag.com

The ranking of the world’s Safest Banks—which is at the center of this issue at all its different global, regional and country levels—is the result of a significant effort at Global Finance, not only through the dedicated work of David Sanders, who coordinates the project, but also through the thorough internal checks on the data conducted by our editorial team. For us, and hopefully, for the readers, it represents an annual check-up on the stability of the banks and the banking system worldwide. Our cover story by Craig Mellow also explores the state of global banking, highlighting challenges, opportunities, and the prospects for AI in the sector. This year’s rankings feature both familiar names and new entries, with the consistent presence of top banks underscoring the stability of many institutions and the wider banking system. The results of the “check-up” are presented here in great detail.

Andrea Fiano | Editor at Large
afiano@gfmag.com

For central banks worldwide, the past 12 months have been very challenging. They are not only fighting inflation and trying to avoid a recession, often supporting their local job market, but they are also dealing with and trying to anticipate the moves of other—and frequently bigger—central banks around the world, while trying to protect their own currency and often while working to prepare for a new monetary policy based on expectations of lower growth and lower (but still historically high) inflation. They usually react in real time to other central bank moves, including the possibility and risk of taking an independent stand with their interest rates based on a different assessment of economic conditions. So it has been a complicated balancing act between growth and inflation for most governors, with the additional need for intense scrutiny—and real-time reactions—for what their peers globally are doing, often to protect their currencies.

Inflation control, economic growth and related short- and medium-term targets, currency stability, and monetary policy are the main criteria we applied in judging central banks in nearly 100 countries, territories, and districts, as well as regional central banks like the European Central Bank (ECB), the Bank of Central African States, and the Central Bank of West African States. Our scores reflect not just pure economic performance, often in a regional context, but also—wherever possible—adherence to the stated mandate of each specific central bank. That is why high and low scores often appear within the same region and do not differentiate in any way between large and small economies.

And yet, in the 30 years since this annual report was launched, we have rarely found ourselves in a situation like the one of the last couple of months: The report cards are based on the performance of central banks from July 1, 2023, to the end of June this year; but since then, a lot has happened in monetary policy around the world, including the first cut in interest rates in over four years by the US Federal Reserve, the second one in a few months by the ECB, a significant monetary stimulus by the People’s Bank of China, and many others cuts with a sort of cascade effect. This would probably not have changed any of the scores received by the governors, but it forced us to update the related commentaries.

While we previously announced the top-rated governors, this report presents all other scores for the first time. As much as we strive for diversity in scores and regions, some scores inevitably cluster closely. The final grades reflect intense and often stimulating internal discussions at Global Finance.

Global Finance editors, with input from financial industry sources, grade the world’s leading central bankers from A to F, with A+ being the highest grade and F the lowest, based on objective and subjective metrics. These judgments are based on performance from July 1, 2023, to June 30, 2024. A governor must have held office for at least a year to receive a letter grade. Central bankers in countries that are in deep conflicts are not included due to incomplete information.

An algorithm supports consistency of grading across geographies. The proprietary formula factors in monetary policy, financial system supervision, asset-purchase and bond-sale programs, forecasting and guidance, transparency, political independence, and success in meeting the national mandate (which differs from country to country).

At Global Finance, generating the report cards for central bank governors has always been a complex and thorough project. Scoring more than 100 governors from very different economies and with such different mandates for their central banks is a complex task. However, our commitment to applying similar analytical criteria for all ensures that our analysis is comprehensive and reliable, carrying important implications for the global economy.

This year, we had to deal with some additional and late-breaking developments: the Federal Reserve cut its interest rates by 50 basis points in September for the first time in more than four years. This move had a cascade effect involving many other central banks worldwide. The European Central Bank had cut its interest rates earlier this year and announced a new cut a week before the Fed’s cut. The Bank of Japan, on the other hand, raised its interest rates in July, and the People’s Bank of China announced recently to cut its rates in late September.

These monetary actions seem to bring the world economies into a new phase. Surely, the IMF and World Bank annual meetings in Washington this year will focus extensively on that. Our report cards are based on the governors’ performance from June 2023 to June 2024. In the write-ups and interviews of governors, we updated as much as possible with the most recent monetary policy actions, but the “grades” have not been updated and probably would not have been different in any case.

Our cover story examines a soft-landing scenario for the global economy, which is quite different from the serious concerns about high inflation and the risk of a recession we had just a year ago.

In this issue, we also present other important features, including our annual selection of the best banks in the world in several sectors. We also add our annual supplements on Africa and Latin America, including Central America and the Caribbean. We cover many economic and financial developments in these regions with an eye on innovation and economic vibrancy in general. There is always so much to report.

Andrea Fiano | Editor at Large
afiano@gfmag.com

The end of the summer in the Northern Hemisphere coincides this year with heightened expectations related to two major upcoming events. Both have been announced, but their outcome and potential consequences are uncertain: the November elections in the US and the Federal Reserve’s cut in interest rates.

The Fed and chairman Jerome Powell have recently been pretty clear: the cut—or cuts—are coming. The remaining questions are, how much and when?

The winner of the US presidential contest is hard to predict, but both major parties have generated plenty of surprises in the last few months concerning the candidates and their agendas. In a year when many major democracies are running elections and several key central banks have already lowered their interest rates, what happens in the US has consequences worldwide. Recent turbulence in the global financial markets signals precisely the magnitude of what is at stake and its potential repercussions.

In this issue, together with the announcement of this year’s Best Digital Banks and the annual Best Innovation Labs selections, we are focusing on another vital issue. Our cover story on the US-China confrontation over artificial intelligence examines the critical and very current duel between the two superpowers, detailing the specific areas of confrontation and the different approaches the two nations are taking.

Our focus is also on the potential consequences of this AI competition; we offer potential scenarios for both the near-term and long-term future. Predicting a winner is of course more difficult, but clearly the issue will become more and more relevant worldwide. Overall, we offer a rare insight into what is often—and wrongly—considered primarily a commercial war between tech giants in the US. This duel has a global nature beyond ChatGPT and its competitors.

Andrea Fiano | Editor at Large
afiano@gfmag.com

This summer issue of the magazine coincides in many parts of the world with very high temperatures and the consequences of a long season of political elections that has touched India, many countries in Europe and the European Parliament, and in November will reach the United States. The political tension continues to rise in the US, especially since President Joe Biden’s withdrawal from the presidential race and his endorsement of Vice President Kamala Harris. All this, in turn, affects decision-making at every level. Major decisions in companies and financial institutions are on hold, awaiting election results. Needless to say, corporate life goes on.

This month’s cover story focuses on the future of banks, with an eye, as is our style, to the global picture, not just the regional one. Commercial banks’ traditional role faces challenges resulting from strict regulation and changing technologies, but this also represents an opportunity. The increasing role of nonbanks, digital-only banks, and different nonbanking intermediaries has forced many banks to change their priorities. And yet, this offers some of them, particularly in advanced economies, an opportunity to shine in different market segments.

In this issue, we also present two of our key awards: Treasury and Cash Management and Sub-Custody. There are some repeat winners and, as often is the case, some new names. There are winners for some categories reflecting recent trends and developments in a sector that deals with major developments in payments, supply chain diversification, inflation, and geopolitical risks.  

In addition, the sub-custody awards allowed us to look deeper into the changing role of corporates in dealing with their sub-custodians. The result of Anthony Noto’s research on the subject is quite surprising and interesting.

Andrea Fiano | Editor at Large
afiano@gfmag.com

Is there a link between freelancing or outsourcing and the world of innovation? This question came to mind after reviewing the two key topics in this month’s issue. And the answer is definitively “Yes.”

Freelancing and talent outsourcing—the topic of this month’s cover story—are growing, becoming increasingly global, affecting different sectors, occupations, and ranks. The growth of freelancing is happening in advanced and developing economies, small and large countries, and new and traditional jobs, and has attracted increasing attention from regulators. This trend, which is not new but has expanded enormously in the last few years, has been made possible by multiple innovations. It applies to traditional and nontraditional companies, even virtual ones, so much so that many of us will be surprised by some of the details and statistics offered in the story by Bill Hinchberger.

Our annual Innovation Awards, which we present in this issue, offer a preview of financial services’ present and future. We celebrate banks and fintech companies for their specific innovations, but also their comprehensive effort on innovation, and we also recognize the best in these areas region by region. Artificial intelligence (AI) is now and, for the time being, the dominating theme for all involved. However, the offerings presented here are all focused on solving specific problems, not potential ones. As a result, our awards selection presents some applications for AI in the supply chain, logistics, data science, machine learning, marketing and talent outsourcing. And solve specific issues related to cash flow, liquidity management, and supply chain efficiency.

Again, as in the case of freelancing, innovation is global in scope, but the winning solutions come from very different regions of the world and financial institutions or fintech companies of all sizes. It is worth repeating: innovation is key to growth.

Andrea Fiano | Editor at Large
afiano@gfmag.com

Foreign Direct Investments (FDI), the topic of this month’s cover story, is often an unreliable economic indicator. Data about FDI is reported usually with delay, and it is hard, if not impossible, to understand which specific sectors are receiving the investments in a given country. Add to that the distortions of investments moving from one country to the other, while the funds originally come from a third country that has initially invested— or “parked” the money— in the first country.

Having said all that, one wonders why these data are still interesting and offer many indications of economic trends worldwide. In the cover story written by Deborah Ritchie, for example, we see how nearshoring and friendshoring have caused some sizeble direct investments moves within Asia, from China to the Americas, and to Mexico. We can also see why there are some signs of recovery in certain countries and regions based on the recent global trend of decreased FDI. Or, in other words, we are offered some indications of economic trends that have just started to show concrete signs of relevance. FDI data often also reflects the effect of global geopolitical tensions better than many others and can become an early indicator of major economic transformations.

In this issue, we also recognize the Best Banks in the world with our annual awards. As usual, we celebrate big and small banks that outperformed their competitors in all countries and regions, no matter the economic conditions. This year, the global banking sector managed to overcome major contagion risks due to the failure of banks in Europe and the US, presenting record profits in many regions.  As a result, banks’ resilience and some significant M&A activity became one of the year’s key trends in the banking sector.

Andrea Fiano | Editor at Large
afiano@gfmag.com

One of the advantages of  being a journalist is the unique opportunity of spotting trends, even potential ones, before they become mainstream. In this issue, we bring to light two clear examples of often unnoticed trends. One pertains to the investment banking sector, and the other to the future of environmental, social and governance (ESG) regulations and new financial instruments.

A simple look at the situation around the world would miss significant details in each case. For investment banking, the analysis we did to assign our annual awards in the sector, according to different geographies and financial instruments, shows that while the market overall has a tough 2023, there are segments and countries where growth was significant. And there are—no surprise—outperformers among the banks. Add to that the emergence of some new players on the advisory side, and the strengthening of some existing players, and you understand that summarizing 2023 as simply “a poor year for equity issuance and M&A” is entirely inaccurate and incomplete.

In the case of ESG, the surprise presented in our cover story is different. We looked at Asia to understand whether the trends around ESG follow the political backlash registered in the US with a drop in issuance of specific sustainability financial products or follow the European lead,  where ESG criteria still top the agenda for many corporates. In Europe, specific sustainability product issuances are at record levels and keeps growing. And in Asia? Issuance is at record levels and grows probably more than in the rest of the world, and regulation is also growing fast in most Asian markets. Environmental, social, and governance issues are still at the center of corporate life worldwide, and there is no sign of political backlash outside the US.

Andrea Fiano | Editor at Large
afiano@gfmag.com

One of the not-so-secret dreams of journalists is to report trends before they become public knowledge. Our cover story on Silver Power this month may not represent a revelation, but it does offer an unusual look at an often-discussed social issue. The author, Charles Wallace, explores the demographic issue of aging populations around the world not just as a growing source of problems for many countries—as it certainly is—but also as representing new markets, new wealth, and an underutilized talent pool. This inescapable trend is forcing many corporate executives to revise their long-term strategies. Many companies around the world have already redirected production with the aging population in mind.

 After all, the members of the Silver Set hold huge spending power. The population over 60 will nearly double its size between 2015 and 2050, according to the World Health Organization, and some countries are already experiencing the over-80 cohort as the fastest growing population segment.

This issue presents a wealth of stories, starting with a rich supplement focused on Latin America that touches on the varying realities of South America, Central America and The Caribbean, along with a country report on Kuwait and one on Nigeria.

Many of this month’s stories can be seen through the “filter” of demographics: Nigeria has significant growth prospects, as do many Latin American countries, due to the relative young age of many of their citizens. Our report on private banking also touches on generations, the great transfer of wealth from the Baby Boomers to their progeny. What will it mean for the private banking industry? Last, but not least, in this issue we present our annual Sustainability Awards: a topic which tops interegenerational agendas worldwide.

Andrea Fiano | Editor at Large
afiano@gfmag.com