Banks maintain international credit exposure, says BIS

Dow Jones, London

Despite the worsening global economic outlook, banks' credit exposure to international corporations in the second quarter remained around the same level as in the first quarter, the Bank for International Settlements said Sunday.

In its quarterly international consolidated banking statistics, the BIS said, however, that some signs of risk aversion began to emerge, with the share of claims guaranteed by a third party or backed by collateral rising in several countries.

Claims on emerging economies continued to decline in the second quarter, falling 3 percent on the quarter, particularly claims on Asia and on countries facing specific problems, such as Argentina and Turkey, the BIS said.

Banks in the BIS reporting area took on modest amounts of additional exposure to U.S. credits in the second quarter, after a sharp rise in the first quarter.

Despite a worsening earnings outlook, the share of non-bank private-sector borrowers was virtually steady, at 56.7 percent of claims outstanding in the second quarter, compared with 57.1 percent in the first quarter.

European banks, too, continued to lend to the corporate sector. German, Japanese and Swiss banks all increased their share of the international banking market in Europe, while the share of Dutch and French banks declined.

The BIS reporting area is made up of the Group of Ten leading industrial nations - the G7 and Belgium, the Netherlands, Sweden and Switzerland - plus Austria, Denmark, Finland, Hong Kong, Ireland, Luxembourg, Norway, Portugal, Singapore, Spain, Taiwan and Turkey.