Emerging Markets Continue Impressive Growth While Developed Markets Continue Recovery

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Wall Street Journal reports today that “Fed to Hit Biggest U.S. Banks With Tougher Capital Surcharge, Extra Padding in Case of a Financial Crisis Would Surpass That Required by International Regulators” and is based on prepared testimony from Fed Governor Daniel Tarullo for today’s Senate Banking Committee hearing. This goes beyond the Basel III, a global regulatory standard on bank capital adequacy among other requirements. This arguably is the most transparent way to protect taxpayers by building a cushion against losses while banks will complain that it puts them at a competitive disadvantage to global banks. Well, if every few years banks need a bailout maybe more shareholder capital will prevent government bailouts. Let’s look at a few: Continental Illinois National Bank & Trust in 1984; Savings & Loan bailout in 1989; and almost every mega bank in the U.S. in 2008’s Great Financial Crisis. Meanwhile, Financial Times reports that “Dubai unveils vision for mega-hub” and adds “Dubai plans to invest $32 billion in a desert project to create what should be one of the world’s largest airline mega-hubs.” It looks like the emerging markets are becoming the center of global growth and a welcome respite from developed countries’ tired drama of recovery. Please see Voya Global Perspectives page 4 "World Economy – GDP"for Emerging Markets increasing share of the global pie.

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