World's banks tighten up lending levels, says BIS

THE world&rsquo;s banks lent $6 trillion (&pound;3.6 trillion) less in the year to March than they did in the previous year, the Bank of International Settlements (BIS) said yesterday.<br /><br />Total lending worldwide shrank by $1.5 trillion, or over 4 per cent, in the first quarter of this year at current exchange rates, BIS said.<br /><br />However, the pace of contraction began to slow after a record $1.9 trillion fall in the availability of lending in the fourth quarter of last year, and was attributed largely to currency fluctuations.<br /><br />Excluding the weakening of currencies such as the euro against the US dollar, lending fell by $700bn in the first quarter, bringing the total contraction for the year to the end of March to $3.3 trillion.<br /><br />Cross-border lending fell to $29.4 trillion at the end of March, down from $35.8 trillion at the end of March 2008, also largely due to the strength of the dollar.