Highlights of the international banking statistics
banks rose by $580 billion. This marked the first substantial quarterly increase since late 2011.
The overall increase was broadly spread across countries and sectors.
The largest increase in the first quarter of 2014 was reported in claims vis-à-vis borrowers in
China. This increase took the outstanding stock of cross-border claims on China above
$1 trillion at end-March 2014, including inter-office transactions by Chinese and other banks.
Claims on the rest of Asia, Latin America and Africa and the Middle East also increased, albeit at
a more modest pace. By contrast, claims on emerging Europe fell for a fourth consecutive
1. Recent developments in the international banking market
The contraction in overall international banking activity which began in late 2011 came to an end in the
first quarter of 2014. The cross-border claims of BIS reporting banks rose by $580 billion between end-
December 2013 and end-March 2014. While not enough to offset the preceding quarterly declines, the
rise in Q1 2014 caused the annual rate of contraction in cross-border claims to slow from –3.7% as of
end-2013 to –2.0% as of end-March 2014.1
The upturn in overall activity in the first quarter of 2014 was boosted by the first quarterly
increase in cross-border claims on banks since late 2011 (Table A1). Interbank claims, which in the
locational banking statistics2 capture positions with related offices as well as unrelated banks, rose by
$306 billion. As a result, the annual rate of contraction of cross-border interbank activity slowed from
–5.3% at end-December 2013 to –2.9% at end-March 2014. As usual, the expansion in interbank claims
consisted almost entirely of loans (Graph 1, left-hand panel). Claims on other banks and related offices in
the euro area, including intra-euro area activity, increased by $111 billion in Q1 2014.
Matching the rise in cross-border interbank lending to the euro area, overall euro-denominated
claims also grew during the first quarter of 2014. The $158 billion quarterly increase was the first since
early 2012 . It reduced the annual rate of contraction in euro-denominated cross-border claims
from –11% at end-2013 to –8.4% at end-March 2014.
1 Annual percentage changes are calculated as the sum of exchange rate- and break-adjusted changes over the preceding four quarters divided by the amount outstanding one year earlier.
2 The locational banking statistics are structured according to the location of banking offices and capture the activity of all internationally active banking offices in the reporting country regardless of the nationality of the parent bank. Banks record their positions on an unconsolidated basis, including those vis-à-vis their own offices in other countries.
Cross-border claims of BIS reporting banks
By type of instrument and sector of counterparty Graph 1
Annual growth rate1 Share of outstanding claims Per cent Per cent
1 Calculated as the sum of exchange rate- and break-adjusted changes over the preceding four quarters divided by the amount outstanding one year earlier. 2 Other claims include equities, derivatives and other financial claims not classified as loans, deposits or debt securities.
Overall cross-border claims on non-banks – mainly non-bank financial institutions, governments and non-financial corporations – also grew between end-December 2013 and end-March
2014. The $274 billion rise was the largest since late 2010. While loans accounted for the bulk of the
increase in Q1 2014 ($196 billion), BIS reporting banks continued to increase their holdings of nonbanks’
securities as well ($78 billion). However, the pace of their securities purchases slowed from the
growth rates seen in 2012 and 2013 (Graph 1, left-hand panel, purple line). Cross-border lending to non-banks in the United States was especially strong, expanding by $73 billion in Q1 2014. The BIS consolidated banking statistics3 on an immediate borrower basis suggest that the majority of this rise was due to increased lending to the US non-bank private sector, whose share of all international claims on the United States rose by a full percentage point (from 52.0% to 53.0%) between end-December 2013 and end-March 2014. By contrast, the share of claims on the US public sector declined by 0.7 percentage points (from 23.5% to 22.8%) during the same period. Notwithstanding the latest quarterly upturn in cross-border interbank loans, their share of overall cross-border claims has gradually declined from roughly two thirds at end-1995 to 46% at end- March 2014 (Graph 1, right-hand panel, red line). By contrast, the share of cross-border loans to nonbanks, which remained stable at around 20% between end-1995 and end-2005, has grown over the past few years, and reached 24% at the end of Q1 2014 (blue line). In the meantime, the share of banks’ cross-border holdings of securities issued by non-banks more than doubled between end-1995 and end-2005 (from 8% to 19%) before retreating to 17% as of end-March 2014 (purple line). Finally, the share of banks’ cross-border holdings of securities issued by other banks increased from 3% at the end of 1995 to 13% at the end of March 2014 (yellow line).
3 The consolidated banking statistics are structured according to the nationality of reporting banks and are reported on a worldwide consolidated basis, ie excluding positions between affiliates of the same banking group. Banks consolidate their inter-office positions and report only their claims on unrelated borrowers.
Credit to emerging market economies
Cross-border lending to emerging market economies continued to grow in the first quarter of 2014. The
$165 billion increase in Q1 2014 brought the annual growth of claims on emerging markets to 10% at
Just as in the preceding several quarters, the overall expansion in cross-border claims on
emerging markets during Q1 2014 was driven primarily by lending to China, which rose by $133 billion.
This took the annual growth rate of claims on China to 49%. At end-March 2014, the outstanding stock
of cross-border claims on China stood at just over $1 trillion, with interbank claims accounting for almost
three quarters ($726 billion) of that amount. The consolidated banking statistics indicate that a
significant share of the reported cross-border claims on China – over $400 billion – is booked by banks
headquartered outside the BIS reporting area through their offices in BIS reporting countries: for
example, through Chinese banks located in Hong Kong SAR.4, 5 By comparison, the consolidated foreign
claims of banks headquartered inside the BIS reporting area on Chinese residents totalled $796 billion
on an ultimate risk basis at end-March 2014.Claims on the rest of emerging Asia also grew (by $21 billion) during Q1 2014, but at a much more moderate pace than those vis-à-vis China (7.8% on an annual basis).
Just as in the preceding quarter, claims on Latin America and the Caribbean grew at a very modest pace during Q1 2014. Claims on the region rose, but only by $8.0 billion. Internationally active
banks increased their claims on Brazil by $7.2 billion. By contrast, cross-border lending to the residents
of Mexico contracted by $3.8 billion.
Cross-border lending to emerging Europe fell for a fourth consecutive quarter. The $14 billion
contraction, which was larger than any of the three that preceded it, caused claims on the region to fall
by 1.9% on an annual basis. Among individual countries, claims on Turkey and Poland shrank the most
(by $5.3 billion and $4.8 billion, respectively). By contrast, claims on Hungary rose by $1.3 billion in
As the geopolitical uncertainty surrounding Russia and Ukraine increased in the first quarter of
2014, internationally active banks reported declines in (the US dollar value of) their consolidated foreign
claims on both countries. The consolidated banking statistics on an ultimate risk basis reveal that the
outstanding stock of foreign claims on Russia declined from $225 billion at end-December 2013 to
$209 billion at end-March 2014, while those on Ukraine dropped from $25 billion to $22 billion.
However, the reported reductions in foreign claims were amplified by the sharp depreciation in the value
of these countries’ currencies against the US dollar during the first quarter of 2014, which reduced the
US dollar value of claims booked in local currencies through local affiliates. The locational banking
statistics indicate that, on an exchange rate-adjusted basis, cross-border claims on residents of Russia
remained virtually unchanged in Q1 2014 (–$0.3 billion), while those on Ukraine declined by $1.5 billion
(–15% on an annual basis).