The Bank for International Settlements (BIS) is a financial institution owned by 60 member central banks from around the world, representing countries that make up 95% of the global GDP. Headquartered in Basel, Switzerland, the BIS “fosters international monetary and financial cooperation and serves as a bank for central banks.” The release of Q3, 2017 Liquidity indicators sheds light on the current conditions and state of the global economic spectrum.
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The BIS report shows that the total USD credit issued to non-bank borrowers located outside the US increased to $11.045 trillion during Q3, ending September 2017, signifying a rise of 5.2% relative to Q3 of the previous year.
Emerging markets are one of the factors contributing to this trend, posting a rise of 6.7%, to surpass the $3.5 trillion level. The aforementioned total of $11.045 trillion was dispersed in 2 underlying categories. $5.46 trillion were distributed as bank loans, while 5.585 trillion were issued as debt securities.
Moreover, the credit issued in US to non-financial borrowers located within the US climbed by 3.5% to reach $47.987 trillion. The US government is responsible for borrowing $19.506 trillion, which also illustrated a rise of 3.0% from the same period in 2016.
Meanwhile, EUR based credit issued to non-bank borrowers located outside the Eurozone posted an even more dramatic climb than that of the USD. The data illustrates a rise of 10.5% from Q3 2016 levels, reaching €2.919 trillion. While not as profound as the EUR or USD figures, JPY-denominated credit issued to non-bank borrowers outside of Japan recorded a rise of 3.3%, reaching 43.84 trillion JPY during Q3 2017.
The BIS also conducts analyses of financial markets across the globe. In 2016, its assessment of the state of the global FX industry led to the establishment of an FX market Global Code of Conduct, intended to induce an industry-wide change in approach and reduction of breaches of ethical standards.
