Global banks scaled back cross-border lending to companies,governments and each other at the fastest rate since 2008 in thefinal quarter of last year, with lenders based in the euro arealeading the way.

Lenders reporting to the Bank for International Settlements, therecord-keeper of the world's central banks, shrank theircross-border assets by $799 billion, or 2.5 percent, in the threemonths ended Dec. 31, data released by the BIS show. The declinewas the sharpest since the fourth quarter of 2008, when interbanklending markets froze worldwide following the collapse of LehmanBrothers Holdings Inc.

“The decline was led by a significant drop in interbank lendingarising from the spillover of the euro-area sovereign debt crisisto bank funding markets,” BIS said in its quarterly report. “Thereduction was especially marked for cross-border claims onresidents of the euro area and was mostly attributable to euro-areabanks.”