MILAN, Oct. 27 (Class Editori) -- Today the Bank for International Settlements (BIS) has published statistics on global liquidity indicators at end-June 2021. The research showed that banks' cross-border activities declined by 308 billion dollars during the second quarter of 2021, settling at 36 trillion dollars, while their y-o-y growth rate edged up to 2%.
In contrast, cross-border claims on emerging market and developing economies expanded in the second quarter by 7 billion dollars, driven by greater credit to the APAC, as well as to Africa and the Middle East. Banks' consolidated foreign claims on China alone stood at more than 970 billion dollars at end of the second quarter of 2021, representing almost 18% of foreign claims on emerging countries.
On the borrowing side, global banks have increasingly channeled funds to the non-financial private sector in China. Their activities in this field reached almost 450 billion dollars, up some 40% since early 2020.
Over the same period, their exposures to non-bank financial institutions and to the official sector — which includes general government and the central bank — have grown by 31% and 12%, respectively.
By contrast, banks' foreign claims on unrelated banks in China have trended down, dropping to less than 30% of total foreign claims in the second quarter, from 40% at end-2017.
According to BIS, banks also have other potential exposures to China, and these amounted to more than 180 billion dollars at end of the second quarter of 2021. Such exposures include guarantees extended, undisbursed credit commitments and derivatives with positive market value. Combined, these potential exposures amounted to nearly 20% of banks' total foreign activities in China.
Exposures to China were concentrated in a handful of banking systems, BSI added. UK banks, the largest creditors to the PRC, had exposures of 258 billion dollars by last June, up by more than 20% since end-2019. Including their other potential exposures to China added another 40 billion dollars, equal to 16% to the UK banks' total foreign activities.
US banks and, to a lesser extent, Japanese banks also reported elevated exposures, amounting to 139 billion dollars and 99 billion dollars respectively in on-balance sheet claims alone. Banks headquartered in Korea held 68 billion dollars in foreign claims, while French banks reported 54 billion dollars in foreign ones.
(Source:Class Editori)
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