The international banking markets in 1980-81

Quarterly Bulletin 1982 Q1
Published on 01 March 1982

This article, intended as the first of a regular series, describes recent developments in the international banking markets. It concentrates on 1980-81, but also includes some data for earlier-years.

  • The growth of cross-border bank lending has been remarkably steady in recent years. The international bond market has grown less fast than international bank lending.

  • The rise in the deposits of the oil exporters slackened sharply in the first part of 1981, and the United States was the main supplier of funds during much of 1980-81. The non-oil developing countries (particularly those in Latin America) have continued to be large borrowers.

  • In the medium-term syndicated credit market, maturities have generally shortened and spreads for developing country borrowers have risen, but spreads for borrowers from major industrial countries have remained fine.

  • London, and centres in the Middle and Far East, have increased their share of international banking business.

  • The US dollar is still the medium for three quarters of international banking business. Despite some growth after exchange control abolition, eurosterling business remains small.

  • Non-bank participation in the euromarkets is generally modest, but transactions in certain periods have been sizable in relation to changes in domestic aggregates.

  • The degree of maturity transformation carried out by UK banks in their eurocurrency business has changed little over recent years.

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