Liquidity in global financial markets improved in the third quarter of 2024, as total credit expanded, according to new data from the Bank for International Settlements (BIS).
The bank’s global liquidity indicators, which include both loan activity and international bond markets, found that credit denominated in the three major currencies (U.S. dollars, euros and Japanese yen) all recorded increases in the third quarter.
Overall, banks’ cross-border claims expanded by US$629 billion in the quarter, and were up 3.4% on a year-over-year basis to US$41 trillion, the BIS reported.
“The expansion in claims was primarily driven by cross-border bank credit to non-bank financial institutions in advanced economies,” it said, which rose at a 7.1% annual rate.
The rise in lending to non-banks “extended a trend that originated at the beginning of 2023,” the BIS said.
Additionally, cross-border bank credit to emerging markets and developing economies also expanded in the third quarter, despite a contraction in credit to China, it noted.
“Credit to the rest of the emerging Asia-Pacific region grew by US$54 billion, which brought its annual growth rate back into positive territory for the first time since [third quarter] 2022,” the BIS said.