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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 world’s largest banks, published a report on the state of the capital markets, highlighting the fact that spreads of interbank rates over policy rates had started creeping up again, perhaps in a year-end effect; that banks’ credit losses on actual bad loans were beginning to exceed their mark-to-market losses on toxic CDOs and other structured securities and that these loan losses are only likely to get worse in 2009.

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