Article at a glance:

Treasury management in emerging-market banks

Bankers in emerging markets often view treasury activities that are common in the developed world—securities trading or the development of derivatives contracts, for example—as casino finance. As a result, these banks have lagged behind developed-market competitors in managing risk and creating profitable treasury units.

The take-away

High-performing treasuries seek out and profit from market risk. Emerging-market banks can transform their treasury organizations to generate more income, but board members and top executives must understand the risks and commit themselves to a more aggressive posture.