International cross-border bank lending shrank for a seventh consecutive quarter between the end of September and the end of December 2013.
Statistics released by the Bank for International Settlements (BIS) show that the cross-border claims of BIS reporting banks contracted by $93 (0.3%) in the last quarter of 2013. But the pace of decline was slower than in the preceding two quarters.
Cross-border lending to non-banks, which mainly include non-bank financial institutions, governments and corporations, also recorded a modest drop ($14bn or 0.1%) during the last three months of the year.
Euro-denominated claims contracted by $325bn (3.3%) between the end of September and the end of December 2013. By contrast, claims in US dollars and in Japanese yen grew by $49bn (0.4%) and by $62bn (5.3%), respectively.
The sharp fall in euro-denominated cross-border claims during Q4 2013 is part of a broader trend observed over the past few years. The outstanding stock of euro cross-border bank lending – including intra-euro area lending – has shrunk by €1.8 trillion (21%) since March 2008, when it peaked at €8.8 trillion. The contraction in euro-denominated cross-border lending accounted for nearly two-thirds of the overall reduction in the stock of cross-border claims (measured in US dollars) during the same period.
Cross-border lending to emerging-market economies rose by $95bn (2.7%) in Q4 2013. The expansion was mainly concentrated in emerging Asia, and China in particular ($85bn or 11%). Cross-border credit to Latin America and the Caribbean also expanded, but at a much slower pace ($5.5bn or 0.9%). By contrast, claims on emerging Europe and on Africa and the Middle East declined (by $12bn, or 1.7%, and by $20bn, or 4%, respectively).
Sally Percy is editor of The Treasurer