Record fall in cross-border claims
Cross-border claims at the major banks fell a record 5.4% in the last three months of 2008, according to figures released today by the Bank for International Settlements (BIS).
The BIS said external claims fell to $31 trillion in the quarter, with US dollar claims down 6% and yen claims down 5%. On an ultimate risk basis (after risk transfers involved in credit derivatives trades, for example) claims fell from $29 trillion to $26.1 trillion. Lending to developing nations fell for the first time since the start of 2006, down $281 billion, as the credit crisis - which initially affected major banks in developed economies - turned into a global economic crisis.
The $887 billion fall in cross-border claims on banks included a $315 billion fall in claims by banks on their own offices in other countries - highlighting the difficulty, raised recently by several regulators, of ensuring adequate capital levels in multinational banks. However, continuing activity in the swaps and interest rate markets, as well as large movements in credit spreads, meant the volume of remaining derivatives contracts between banks and developed-world investors rose by 52% to $6.5 trillion.
In both absolute and percentage terms, the biggest fall by instrument was in loans - total loan claims fell $1.7 trillion to $22.5 trillion, with securities and other stocks falling far less sharply.
The Bank of England said last month UK bank foreign claims had fallen $724 billion over the same period to $3.68 billion on an ultimate risk basis, driven mainly by a fall in claims on developed countries.
See also: G20 fires starting gun on global systemic risk regime
Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.
To access these options, along with all other subscription benefits, please contact info@risk.net or view our subscription options here: http://subscriptions.risk.net/subscribe
You are currently unable to print this content. Please contact info@risk.net to find out more.
You are currently unable to copy this content. Please contact info@risk.net to find out more.
Copyright Infopro Digital Limited. All rights reserved.
You may share this content using our article tools. Printing this content is for the sole use of the Authorised User (named subscriber), as outlined in our terms and conditions - https://www.infopro-insight.com/terms-conditions/insight-subscriptions/
If you would like to purchase additional rights please email info@risk.net
Copyright Infopro Digital Limited. All rights reserved.
You may share this content using our article tools. Copying this content is for the sole use of the Authorised User (named subscriber), as outlined in our terms and conditions - https://www.infopro-insight.com/terms-conditions/insight-subscriptions/
If you would like to purchase additional rights please email info@risk.net
More on Regulation
Risk, portfolio margin, regulation: regtech to the rescue
A white paper outlining the complexity of setting the course for risk, margin and regulation
Prop shops recoil from EU’s ‘ill-fitting’ capital regime
Large proprietary trading firms complain they are subject to hand-me-down rules originally designed for banks
Revealed: the three EU banks applying for IMA approval
BNP Paribas, Deutsche Bank and Intesa Sanpaolo ask ECB to use internal models for FRTB
FCA presses UK non-banks to put their affairs in order
Greater scrutiny of wind-down plans by regulator could alter capital and liquidity requirements
Industry calls for major rethink of Basel III rules
Isda AGM: Divergence on implementation suggests rules could be flawed, bankers say
Saudi Arabia poised to become clean netting jurisdiction
Isda AGM: Netting regulation awaiting final approvals from regulators
Japanese megabanks shun internal models as FRTB bites
Isda AGM: All in-scope banks opt for standardised approach to market risk; Nomura eyes IMA in 2025
CFTC chair backs easing of G-Sib surcharge in Basel endgame
Isda AGM: Fed’s proposed surcharge changes could hike client clearing cost by 80%
Most read
- Industry urges focus on initial margin instead of intraday VM
- For a growing number of banks, synthetics are the real deal
- Did Fed’s stress capital buffer blunt CCAR?