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Highlights of the BIS international statistics

by Stefan Avdjiev, Andreas Schrimpf and Christian Upper

12 December 2011

BIS reporting banks reduced their cross-border claims on residents in developed economies in the second quarter of 2011 but increased cross-border lending to  emerging markets for the ninth quarter in a row. In absolute terms, lending to residents of the United States shrank the most (by $155 billion or 2.8%). Claims on the United Kingdom and Japan also fell (by $52 billion or 1.1% and by $32 billion or 4.1%, respectively), whereas claims on residents of the euro area remained virtually unchanged, inching up by a mere $7.5 billion (0.1%).

Among the emerging market regions, increased cross-border lending to China ($68 billion or 16%) drove up claims on borrowers in Asia-Pacific (up $108 billion or 9%). Cross-border claims on residents of Latin America and the Caribbean and of emerging Europe also increased (by $33 billion or 5.9% and $10 billion or 1.2%, respectively), whereas claims on residents of Africa and the Middle East shrank by $6.3 billion or 1.2%.

High shares of cross-border claims and short-term international claims in their debt to BIS reporting banks could make Asia-Pacific economies more vulnerable to sudden capital flight through the banking system. That said, the risk of a withdrawal of lending triggered by a possible deleveraging by euro area banks is highest in emerging Europe.

Issuance of international debt securities dropped in the third quarter of 2011. Deteriorating market conditions compounded the usual summer slowdown in the northern hemisphere. This resulted in a 16% decline in completed global gross issuance. At $1,663 billion, this was the lowest since end-2005. Net issuance of international debt securities slid to $142 billion, the second lowest level since end-1998.