The international activity of banks has grown by more than 2% during the first three months of the year. This improvement follows two consecutive quarters of decline. According to data from the Bank for International Settlements (BIS), a significant portion of the increase in international bank lending was absorbed by non-bank financial institutions, such as investment funds, insurance companies, and hedge funds, among others. These are the main counterparties of shadow banking and asset demanders within the wholesale market. Furthermore, most of the new bank lending has been materialized through loans.
BIS statistics also show that interbank lending has recovered during the first quarter of the year. The improvement in international interbank activity in the early months of the year contrasts with the downward trend observed since mid-2015. This is good news globally, but especially in Europe where the banking union in practice remains far from evident. Naturally, it is also an indication of the return to normality in the interbank market.
Lending by international banks to emerging economies has also increased, with annual growth of 8%. Bank lending to developed economies has grown marginally, as most are immersed in a private deleveraging process that has not yet concluded. In turn, the improvement in international financial flows has been consolidated, with greater strength than in the past, thanks to the support provided by banks.
