In a 2005 speech to the Virginia Association of Economics, Federal Reserve Chairman Ben Bernanke coined the term ‘global savings glut’ to describe the phenomenon of rising national current account surpluses in both industrialized and emerging economies.

Although the US and its citizens can hardly be described as thrifty, households in other countries have exhibited a propensity to put excess earnings aside for a rainy day or to ensure a more comfortable retirement.

This inclination to sock money away was problematic, slowing investment and hampering growth in many parts of the world. It also created a huge reliance on foreign investment to develop local markets.

But these attitudes are shifting. Data from supranational organizations such as the Organisation for Economic Co-operation and Development shows that although the savings rates in many nations continue to rise, a growing portion of that money is finding its way into productive investments rather than mattresses.

The rise of the sovereign wealth fund is emblematic of global governments’ willingness to deploy currency reserves. Rather than leaving current account surpluses sitting on a ledger sheet, these funds are deployed in both international investment and domestic development to buffer against tough economic circumstances.

This phenomenon has also translated to the consumer side; savings are being deposited into a plethora of international banking institutions, as well as mutual funds and other investment vehicles.

This creates a huge opportunity in exchange-traded funds (ETF) that focus on the global financial sector, which is enjoying rapid growth from both the growing international middle class as well as a growing distrust of the Western financial sector.

Global Financial ETFs

Two funds that will benefit are Claymore/Beacon Global Exchanges, Brokers and Asset Managers Index (NYSE: EXB) and iShares MSCI Emerging Markets Financials Sector Index (NasdaqGM: EMFN).

Claymore/Beacon Global Exchanges, Brokers and Asset Managers Index is made up of about 100 global companies that operate security exchanges, brokerages or asset management firms. Although they’ll be affected by many of the same factors that determine the destiny of the major Wall Street players, the macro situation is working in the favor of international operators.

All brokers benefit from high switching costs. And it’s tough to make a switch once you set up your investment account and build a relationship with your broker. In addition to all of the paperwork, you have to once again build up a history with your new broker to gain access to favorable rates. That makes brokerage assets extremely sticky.

And not only has consolidation sharply reduced the number of brokerages, but many nations already lacked a wide range of options. The brokerage business is extremely lucrative.

The exchange operators enjoy an almost bulletproof monopoly in most countries. In the US, the New York Stock Exchange and the NASDAQ control most of the listings. And huge amounts of money are pouring into developing exchanges in the Gulf States and Southeast Asia.

There’s long been consumer demand for investment products. Recall, for example, the huge capital flows to Chinese stocks when the national government allowed broad access to individual investors. The demand is there–all that’s needed is a fair and transparent mechanism to translate that demand into action.

Claymore/Beacon Global Exchanges, Brokers and Asset Managers Index is heavily weighted towards the US, which accounts for more than 63 percent of assets, though that’s hardly surprising given that much of the global financial power remains concentrated here. That a third of assets are devoted to international operators makes the fund unique.

The fund’s US exchange holdings include NYSE Euronext (NYSE: NYX), which has made a point of acquiring stakes in other global exchanges. The fund also holds substantial stakes in the NASDAQ OMX Group (NasdaqGS: NDAQ) and Intercontinental Exchange (NYSE: ICE), the top dog in futures and over-the-counter markets.

Major international holdings include stakes in both the Australia and Singapore exchanges, as well as Deutsche Boerse (ETR: DB1) and London Stock Exchange Group (LSE: LSE). London has benefited from the globalization of financial markets, finding itself the market of choice for European companies that want to list without having to run two sets of books–one for US standards and one for international accounting requirements.

I won’t go through the litany of the fund’s international asset managers, but suffice it to say that they’re benefiting from global demand for mutual funds and ETFs.

Note that volume on this ETF can be light, though I suspect that will change in the next few months. June marks the ETF’s three-year anniversary, at which point it will qualify for a Morningstar rating, a service that many ETF investors rely upon for ETF data. Generating superior performance with a low 0.65 percent expense ratio, the fund should receive a solid rating from mornings star.

iShares MSCI Emerging Markets Financials Sector Index offers exposure to a similar story.

Although most Western banks have stagnated in the wake of the credit crisis, banks in developing markets are well capitalized and eager to move into the markets abdicated by Western players. After the massive market realignment, developing market banks now account for about half of the global banking industry.

Domestic players in emerging markets also have home-field advantage as the ranks of the middle class–the traditional bread and butter of bankers–swell, particularly in India and China. And the middle class in developing economies traditionally have been underserved.

That sets the stage for explosive long-term growth as maturing financial institutions gain the confidence of the banking public. They’ll also have an advantage because banking regulation operates differently abroad. In the US, bank regulation is rigid and rule-based; most regulations in developing nations are policy-based, affording a degree of flexibility.

That’s particularly true in India, which accounts for 7.6 percent of the ETF’s investable assets. The fund’s two major Indian holdings are HDFC Bank (NYSE: HDB) and ICICI Bank (NYSE: IBN). Both banks offer retail banking services to a growing segment of the population and do a robust corporate business, in addition to trading their own accounts.

Unlike in the US, where strict limits are likely to be imposed on proprietary (prop) trading, the prop desks at international banks aren’t in danger and offer large profit centers.

The fund also has substantial exposure to Brazil, South Africa and South Korea.

The fund’s single largest national exposure–and greatest risk factor–is China, which accounts for more than 30 percent of assets. On the one hand, holdings such as China Construction Bank (HK: 939), Industrial and Commercial Bank of China (HK: 1389) and Bank of China (HK: 3988) are the nation’s leading banks and enjoy clear governmental support.

On the other hand, the Chinese government sets lending targets that the banks must meet. Although a high degree of government involvement hasn’t led to any major blowups, it’s widely believed that it could lead to a sharp deterioration of lending standards. Still, China represents one of the fastest-growing markets for banks.