Cross border bank lending fell by $405bn (£345bn) in the final quarter while lending by bank to other institutions, like governments and institutions in the public sector, increased by $132bn, as the two trends pulled in opposite directions.
The retreat in interbank lending was led by institutions in the US, with cross border lending between banks shrinking 16 per cent, the figures from the Bank for International Settlements (Bis) show. In the UK it shrank five per cent.
“Owing to this divergence, the share of outstanding international claims on a consolidated basis accounted for by interbank claims declined to a historical low of 38 per cent at the end of December 2012,” Bis said.
“This is down from 40 per cent at the end of 2011 and 46 per cent at the end of 2007.”
The contraction in interbank lending across Europe accelerated in 2012, with cross border claims falling eight per cent versus a four per cent drop in 2011.