For the first time since 2011, before the European Debt Crisis reached its zenith, banks have begun to increase international lending. According to the Bank for International Settlements (BIS), cross-border lending increased $580 bn in the first quarter of 2014. The news of the uptick is an important indicator of financial health and outlook as banks have tended to only increase cross-border lending when they are growing increasingly bullish about the economy. China was the most favoured destination for lending, borrowers there have been lent over $1 tn by foreign banks. Eurozone lending has also increased, but the growth there, and worldwide, was not enough to stop the downward momentum in lending, just enough to halve its annual pace of decline from 4% to 2%. The BIS also warned that many companies have been issuing foreign currency bonds under the name of foreign subsidiaries, a fact that has masked a massive rise in risky debt issuance by companies.
Posted on: Mon, 15 Sep 2014 13:44:51 +0000
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