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Rise in BIS consolidated claims

Our Bureau

NEW DELHI, May 6

INTERNATIONAL consolidated bank claims stood at $7,859 billion at the end of the fourth quarter of 2000, showing an increase of $245 billion, after adjusting for exchange rate movements and claims reported by three countries newly participating in the Ba nk for International Settlements (BIS) consolidated banking statistics.

Giving advance information about international banking and financial market developments to be issued on June 18, 2001, the Basle-based central bankers' central bank said that on the borrowers' side, developed countries slightly increased their share of international bank claims relative to offshore centres and developing countries.

Claims on developed countries rose by $220 billion (on an adjusted basis), while positions on offshore centres expanded by $16 billion and those on developing countries by $5 billion. On the lending side, German and Japanese banks were the most active in the quarter, each group accounting for about one-third of the adjusted increase in consolidated international claims.

Alongside, international banks also extended their activity in local financial systems by purchasing local banks and providing larger amounts of locally-funded credit in local currency. The local currency lending expanded by $155 billion during the quart er.

Banks from the US, the UK and Germany contributed most to the expansion in these positions, which amounted to $2959 billion at the end of last year.

Outstanding international positions on developing countries in Asia declined by an adjusted $6 billion to $280 billion as borrowers in Asia continued to reduce their international liabilities to banks.

The only country which added substantially to the international borrowing was Malaysia ($0.9 billion of long-term funds). Following reforms and buoyant export revenues in many countries, the supply of domestic funds increased during the year and this ena bled borrowers in Asia to replace international credit by $8 billion of locally-funded domestic currency borrowing from the UK, the US and Japanese banks.

BIS said in the fourth quarter, however, this locally-funded credit expansion petered out, with only Japanese banks increasing position slightly.

BIS said the main purpose of the consolidated statistics since their introduction in 1983 has been to measure the risk exposure of lenders' national banking systems.

Given the ongoing nature of financial and technical innovation, the content, coverage and scope of these statistics are revised from time to time to ensure their relevance in providing adequate measures of international banks' risk exposures.

Such a restructuring is currently in progress, it said, adding that from the end of 2004, it is intended to provide more exhaustive data on banks' lending and derivatives exposures on an ultimate risk basis, i.e., contractual lending adjusted for guarant ees and collateral.

At the same time, BIS would continue to collect and report data on a contractual (immediate borrower) basis, it said.