The Future of Capital
Top quality issuers boost debt capital markets
Even governments face supply constraints
In December 2008, the Bank for International Settlements reported the latest data it compiles assiduously on cross-border bank claims – essentially lending – for the second quarter of 2008. It found that these had shrunk by $1.1 trillion, a number it describes as simply "unprecedented".
The decline in banks lending to other banks accounts for a large proportion of this, fully $812 billion. That overshadows a decline of $286 billion in cross-border bank claims – 80% in the form of loans – to non-financial borrowers.
And that, remember, was in the second quarter of last year – before things got really bad.
Banks are now in the business of reducing risk-weighted assets, not building them up. Also in December 2008, the Institute of International Finance, an industry body for the...
