This article continues the annual series on international banking developments.
Debt servicing problems of a number of countries continued to preoccupy international banking markets in 1983. These problems were helped by favourable developments in the world economy-output began to grow and interest rates remained stable-and the adjustment by some debtor countries was impressive; but the strength of the dollar added to debt burdens. Some twenty countries rescheduled debt, with most arrangements made in conjunction with IMF programmes.
The marked slowdown in the growth of international bank lending continued in 1983, and the market became more segmented; some previously creditworthy borrowers were unable to obtain new loans. The interbank market continued to grow- but only modestly.
Gross issues of bonds and floating rate notes were a little higher than in 1982, largely the result of issues by OECD countries and international organisations. Banks increasingly purchased floating rate notes in an attempt to increase the liquidity of their international assets.
The United States ceased to be the dominant net supplier of new funds to the euromarkets. On the other hand the US share of the international market continued to grow, although London remained the largest centre for international business.