Banking activity around the globe fell by hundreds of billions of dollars in the last three months of 2016 as lending to businesses and governments fell sharply.
Cross-border claims fell by $280bn in the last quarter of the year, according to the Bank for International Settlements (BIS).
Lending to non-banks was the biggest contributor to the declines, with claims from hedge funds, pension funds, and insurance companies, amongst others, falling by $120bn.
Lending to advanced economies accounted for the majority of the decline, with lending to emerging markets remaining relatively stable.
Total claims outstanding at the end of December across the world totaled $26.97 trillion, said the Basel-based BIS, often known as the central bankers' central bank.
Amongst emerging markets China saw lending increase, with claims on borrowers rising by $16bn, as the build-up of credit in the world’s second-largest economy continues.
Turkey saw the biggest contraction in lending, as the country struggled economically. Turkish inflation soared in the second half of the year as the lira plummeted, prompting a mass exodus of money from the country in anticipation of further economic woes.
The fall comes after three consecutive quarters of growth in lending. Cross-border bank lending increased by $504bn during the whole year, despite the end-of-year dip.
Part of the decline in the fourth quarter was driven by a contraction in holdings of debt securities, which fell by $105bn. In November the prices of bonds around the world plummeted as investors rushed to move money to growth assets, which were expected to be boosted by the policies of US President Donald Trump.