The international banking markets in 1982

Quarterly Bulletin 1983 Q1
Published on 01 March 1983

This article is the second of an annual series. The main developments during 1982 in the international banking markets were:

  • In aggregate, bank lending grew at a slower rate in nominal terms. On the other hand, international bond issues maintained the high rate established at the end of 1981.
  • The banks concentrated their lending increasingly on developed countries and there was  all in lending to non-oil developing countries in the second half of the year. Spreads on lending rose.
  • As oil exporters' surpluses were eliminated, they continued to draw down their deposits.
  • The United States was the largest provider of new funds to the market. The share of business placed in the United States increased rapidly with the establishment of International Banking Facilities (lBFs). Nevertheless, London remained the largest centre.
  • Sterling business of UK banks with overseas customers continued to expand, while the eurosterling market stagnated.

The main themes of the article are drawn out in the opening section which describes international financial developments over the past year. The world economy continued to be weak, although payments imbalances narrowed somewhat; high interest rates and weak commodity (particularly oil) prices exacerbated the debt service problems of some developing countries, leading to rescheduling of debt and a reassessment of risks associated with sovereign borrowers; and there were some failures among large financial and corporate borrowers. All this created a more cautious attitude towards international lending.

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