Foreign claims of banks up by 4 percent: central bank

CHANGE IN FLOW::Last quarter’s increase came after the nation’s foreign claims contracted for the first time since the 2008 financial crisis, the central bank said

By Kevin Chen  /  Staff reporter

Sat, Dec 14, 2013 - Page 13

With continued loans to foreign markets and increased interbank call loans, domestic banks’ foreign claims increased by 4 percent to US$235.46 billion during the quarter from July to September from the previous quarter, the central bank said in a statement yesterday.

The sequential increase of US$9.06 billion over the quarter in foreign claims, also known as international claims, was mainly driven by the addition of US$8.64 billion in claims on non-bank foreign private sector in the quarter, the bank said.

Foreign claims are comprised of claims on non-residents in all currency units as well as foreign currency claims on residents.

Last quarter’s increase came after the nation’s foreign claims contracted for the first time since the global financial crisis in 2008, showing a 2.31 percent decline to US$226.39 billion.

Given the difference in location of ultimate borrowers and debtors in terms of cross-border claims, the central bank released the latest net risk transfers for domestic banks, showing that the figure increased 7.38 percent to US$244.23 billion last quarter from the previous quarter.

The data indicated that domestic banks’ largest foreign claims continued to be on Luxembourg last quarter, with US$41.66 billion, followed by China’s US$35.13 billion and US$26.83 billion on the US.

However, in terms of net transfer risk, claims on China became the largest among all countries, with US$51.01 billion, ahead of the US$40.64 billion on claims on Luxembourg and the US$40.1 billion on the US at the end of September.