Since the 2008 financial meltdown, US banks have adopted risk management practices to better manage and hedge against exposure to market movement. While recent turmoil in the emerging markets in countries such as Argentina, Turkey and the Ukraine have signaled potential dangers, the US banking system appears solid.
"Our banks are far more well-capitalized and one assumes they've learned their lessons from the past in terms of risk management and exposure per country," said Ernie Patrikis, former general counsel of the New York Federal Reserve and now a banking partner at White & Case. "The risk management techniques have been improved by a huge amount over the last number of years."
Still, Patrikis said if he were at the Fed, he would instruct bank examiners to calculate each bank's exposure to emerging markets and what they are doing to manage that risk. "If anyone isn’t awake, this should be a wake-up call. But I assume people are awake."