Global banks scaled back cross-border lending to companies, governments and each other at the fastest rate since 2008 in the final quarter of last year, with lenders based in the euro area leading the way.
Lenders reporting to the Bank for International Settlements, the record-keeper of the world’s central banks, shrank their cross-border assets by $799 billion, or 2.5 percent, in the three months ended Dec. 31, data released by the BIS show. The decline was the sharpest since the fourth quarter of 2008, when interbank lending markets froze worldwide following the collapse of Lehman Brothers Holdings Inc.
Lending to Greek borrowers continued to shrink in the quarter. At $96.3 billion by the end of 2011, it was less than half the level two years earlier, when it stood at $217.2 billion.