The full text on this page is automatically extracted from the file linked above and may contain errors and inconsistencies.
FEDERAL press RESERVE release January 16, 1978 For immediate release Country Exposure Lending Survey The results of a survey of foreign lending by large United States banks as of June 30, 1977 were made public today by the Office of the Comptroller of the Currency, the Federal Deposit Insurance Corporation, and the Federal Reserve Board. The survey was made to increase the information available on foreign lending, on a country-by-country basis. The data reported cover claims on foreign residents held at all domestic and foreign offices of 119 U.S. banks with assets of $1 billion or more. Based on the experience of this survey, the bank regulatory agencies have instituted a semi-annual "Country Exposure Report11 to begin with data for December 1977. Results of future reports will be published approximately four months after the reporting date. Types of Loans The information gathered in the survey concentrated on data concerning lending from a bank's offices in one country to residents of another country, or lending in a currency other than that of the borrower. These are known as cross-border or cross-currency loans. Cross-border and cross-currency loans are those most closely associated with country risk. As shown in Table I, these claims totaled $164 billion on the reporting date* About 42 per cent of such foreign lending was accounted for by claims on residents of Switzerland and the Group of Ten (G-10) developed countries. Another 20 per cent represented loans to residents of "other developed countries" and "offshore banking centers. "2/ Cross-border and cross-currency claims on residents of non-oil producing less developed countries amounted to approximately $40 billion, or some 24 per cent of the total. In addition, the banks reported $44 billion in local currency claims that were held by their offices in foreign countries on residents of the country in which the office was located. An example would be Deutsche Mark claims on German residents held by the German branch of the reporting U.S. bank. To a large extent, these local currency claims were matched by $37 billion in local currency liabilities due to local residents. Approximately 75 per cent of these claims were on residents of Switzerland and the G-10 countries. Maturities The survey provided for the first time comprehensive data on the type of customer and the maturity distribution of banks' claims on foreigners (Table 1). About 63 per cent of the reported cross-border and cross-currency claims had a maturity of under one year. Such short- term claims were especially prominent in the G-10 countries and the offshore banking centers where, combined, $64 billion out of $85 billion in claims matured in less than one year. This heavy concentration of short-term claims reflects the large volume of interbank lending in — Countries where multinational banks conduct a large international money market business. -3these countries. Most such placements of deposits are for very short periods• For most other groups of countries, short-term claims accounted for about one-half of total claims although the proportion varied significantly among individual countries. Type of Borrower With regard to type of customer, private nonbank sector lending was the largest, accounting for $63 billion. Other types of lending were placements with banks amounting to $59 billion, and loans to the public sector totaling $42 billion. This last category includes foreign central governments, their political subdivisions and agencies and commercial non-bank enterprises owned by government. ficantly from country to country. This distribution varied signi- Here also, most of the claims on banks were on those located in the G-10 countries and the offshore banking centers. Guarantees In Table II, information is provided on the cross-border and cross-currency claims that are guaranteed by residents of another country. Claims are reallocated from the country of residence of the borrower to another country on two grounds: First, claims on a bank branch located in one country where the head office is located in another country are allocated to the country of the head office. Since a branch is legally a part of the parent, claims on a branch are treated as being guaranteed by the head office. Second, claims on a borrower in one country which -4are formally guaranteed by a resident of another country are allocated to the latter country. These reallocations are thought to provide a better approximation of country exposure in the banks1 portfolios than the unadjusted figures. The results of the reallocations appear in the last column of Table II. Most of the shifts are accounted for by the transfer of claims on branches (and, where guaranteed, subsidiaries) of banks to their head offices ($25 billion out of $33 billion). In general, the reallocations primarily affected the offshore banking centers and some of the developed countries. For example, claims on the offshore banking centers decreased from $16.8 billion to $4.4 billion and claims on the United Kingdom decreased from $25 billion to $15.8 billion. For most less developed countries, a relatively small portion of claims is externally guaranteed. The total shown for claims on foreigners by country of guarantor is about $150 billion or $14 billion less than the total for claims by country of borrower. This results from U.S. residents guaranteeing about $16.5 billion in claims on foreigners and foreign residents guaranteeing about $2.5 billion of claims on U.S. residents. Commitments to Provide Funds for Foreigners The survey also provided information on commercial letters of credit and other contingent claims on foreigners. The banks were asked to report such contingent claims only where the bank had a legal obligation to provide funds. As shown in Table III, the amounts reported total $42 billion, -5with 75 per cent of that total being on the private sector, including banks. Use of the Data The results of the survey need to be interpreted with some cautiono The survey was experimental in nature, and it was recognized that all banks might not be able to furnish the requested information in the short period of time they were given. As a result, certain deviations from the instructions were permitted and in a limited number of cases, data were estimated for banks that were unable to report all items requested. In particular, some banks were permitted to report claims by "country of the guarantor11 rather than by country of the borrower's residence. Gross claims on some countries (particularly the banking centers) may, as a result, be somewhat understated. In addition, the reported contingent claims may be somewhat overstated, particularly as regards the private sector, because some banks included advised lines (where actual extensions of credit under such lines of credit might not be obligatory). In spite of these difficulties, it is believed that the reported data provide a representative profile of the foreign claims of U.S. banks. - 0 Attachment Table I Cross-border and Non-local Currency Claims by Residence of Borrower: June 1977 (in millions of dollars) Country G-10 and Switzerland Belgium/Luxembourg France Germany Italy Netherlands Sweden Switzerland United Kingdom Canada Japan Non G-10 Developed Countries Austria Australia Finland Greece Iceland New Zealand Norway Portugal Spain South Africa Turkey Denmark Ireland Eastern Europe Bulgaria C zechoslovakia East Germany Hungary Poland Romania U.S.S.R. Yugoslavia Total Claims 4,212 6,840 4,048 5,055 2,764 1,749 1,880 25,138 5,117 11,754 68,557 939 Claims on: Banks Public (Placements) borrowers 3,601 4,757 1,661 2,177 1,934 670 1,021 17,363 3,179 1,777 38,140 90 692 232 Other private 521 1,717 1,392 2,155 1,161 117 314 103 765 756 2,475 680 289 6,709 714 5,301 1,258 9,688 23,711 Maturity Distribution of Claims One year Over one and under year 3,848 5,430 2,983 2,812 2,424 908 1,752 19,090 4,152 7,462 50,861 365 1,410 1,065 2,243 341 840 128 6,049 965 4,292 17,698 451 665 144 313 268 1 26 121 16 849 47 410 252 103 17,037 3,215 5,538 8,285 8,094 8,940 416 154 708 663 324 45 592 411 984 81 106 63 252 161 94 464 15 223 105 282 292 350 157 653 171 194 49 427 371 898 59 940 813 5,982 1,236 12 3 54 1 72 36 16 560 754 2,233 3,751 1,355 1,210 1,770 86 417 1,844 525 3,332 2,201 1,473 1,434 1,248 217 1,592 191 26 262 603 38 199 254 352 1,264 1,186 157 775 840 591 592 11 143 605 377 1,219 1,382 84 1,185 635 898 47 193 1,469 448 467 248 968 615 715 100 1,016 87 1,112 409 3,996 937 165 514 619 1,177 74 275 1,238 148 1,950 1,263 651 167 450 783 284 1,023 Page 2 Table I Cross-border and Non-local Currency Claims by Residence of Borrower: June 1977 (in millions of dollars) Country Oil-Exporting Countries Algeria Ecuador Indonesia Iran Iraq Kuwait Libya Nigeria Qatar Saudi Arabia United Arab Emirates Venezuela Total Claims 18 1,129 831 7 392 1,980 1,831 132 208 -0219 1,350 1,470 88 399 128 70 81 336 401 4.548 12,163 Non-Oil Exporting Developing Countries Latin America and Caribbean 1,793 Argentina 371 Bolivia 10,588 Brazil 620 Chile 356 Costa Rica 239 Dominican Republic El Salvador 194 161 Guatemala 181 Honduras 251 Jamaica 11,322 Mexico 433 Nicaragua Paraguay 24 Peru 1,904 Trinidad & Tobago 53 Uruguay 162 28,652 Claims on: Banks Public (Placements) borrowers 42 -06 40 181 101 954 134 80 331 38 10 -025 -020 20 423 14 -033 38 87 1,253 Other private 653 76 37 78 14 68 32 96 322 432 498 970 12 143 9 56 7 264 124 2.452 6,377 Maturity Distribution of Claims One year Over one and under year 340 462 836 1,031 20 360 124 1,130 369 1,144 800 68 39 4 4 66 56 291 249 45 152 1.995 4,832 2.907 6,742 1.640 5,420 946 104 713 187 991 184 802 3,748 6,510 3,321 7,267 300 151 56 62 281 196 401 218 179 128 74 1 154 160 132 77 178 111 121 73 119 74 5,910 4,989 5,459 5,864 187 1 1,328 232 23 543 268 13 922 10 22 5 52 48 76 165 11 982 5 85 13,009 14,391 12,359 16,292 29 184 107 25 187 87 61 177 Page 3 Table I Cross-border and Non-local Currency Claims by Residence of Borrower: June 1977 (in millions of dollars) Country Non-Oil Exporting Developing Countries (continued) Asia China (Taiwan) India Israel Jordan Korea (South) Malaysia Pakistan Philippines Thailand Africa Egypt Ghana Ivory Coast Morocco Sudan Tunisia Zaire Zambia Total Claims 2,319 208 662 24 3,216 596 60 1,861 669 9,615 524 21 Claims on: Banks Public (Placements) borrowers 112 11 112 -0293 82 33 279 80 1,002 78 271 374 174 55 -0-011 1 5 283 1 179 -096 2,351 1,881 40,148 1,198 82 249 14 929 319 16 522 97 3,426 300 -0- 138 286 168 35 275 164 1,366 17,801 Other private 1,009 115 301 10 1,993 194 11 1,060 492 5,185 Maturity Distribution of Claims One year Over one and under year 1,541 778 55 504 153 158 12 12 2,274 224 57 1,055 531 6,253 146 21 133 463 8 77 5 15 7 15 419 128 89 42 74 955 19,995 19,567 51 100 942 372 3 805 138 3,361 62 13 220 246 85 13 208 78 925 20,578 Page 4 Table I Cross-border and Non-local Currency Claims by Residence of Borrower: June 1977 (in millions of dollars) Country Offshore Banking Centers Bahamas Bahrain Caymans Hong Kong Panama Singapore Liberia Lebanon Miscellaneous Other Western Europe Other Eastern Europe Other Asia/Pacific Other Middle East Other Africa Other Caribbean Other Latin America Other North America Grand Total Total Claims Claims on: Banks Public (Placements) borrowers 5,905 5,762 565 537 2,802 1,286 1,896 2,366 1,889 2,707 443 738 2,166 125 10 6 16,834 12,369 222 1 470 191 370 3,487 68 -0102 82 2 44 107 -0405 164,208 58,670 1,029 1,160 44 12 10 1 53 321 34 15 -0446 Other private Maturity Distribution of Claims One year Over one year and under 130 18 93 789 837 166 5,822 1,864 430 63 1,459 119 4,016 13,945 2,889 69 -0219 67 300 84 367 23 85 1 148 43 68 901 684 21 111 1 277 152 164 461 750 16 111 -0193 39 206 569 409 28 1,129 1,951 1,932 1,555 63,544 554 2,696 958 1,151 2,271 83 11 105 328 746 95 62 60,831 Table II Cross-borcjer and Non-local Currency Claims on Foreigners by Country of Guarantor: June 1977 (in millions of dollars) Claims on residents of other countries Claims guaranteed guaranteed by residents Total claims by residents of Total claims of this country less guaranteed by country of Total claims other countries claims on banks (by residence) on banks on others on others Country guarantor G-10 and Switzerland 2,838 4,212 131 191 314 3,343 Belgium/Luxembourg 1.,243 6,840 270 1,312 France 5,479 577 7,368 1.,091 Germany 4,048 234 3,675 587 6,381 139 2,119 5,055 58 4,870 Italy 127 399 264 5,533 2,562 221 2,970 2,764 93 109 187 Netherlands 1,740 Sweden -09 48 1,749 141 1,929 Switzerland 1,880 79 158 1,643 598 272 2,513 United Kingdom 1,200 25,138 9.,811 14,127 1,047 661 15,835 Canada 212 5,117 42 186 4,889 1,593 6,694 Japan 213 252 2,467 1,083 11,754 11,289 14,839 53,112 2,607 9,995 4,298 67,405 68,557 12:,838 Non-G-10 Developed Countries Austria 35 26 53 878 46 977 939 30 259 1,547 Australia 81 1,244 44 1,355 -072 1,353 Finland 17 1,193 88 1,210 1,766 1,770 Greece 46 80 1,644 5 117 86 Iceland 86 -086 -0-0-01 New Zealand 12 471 417 8 408 51 2 63 83 1,854 1,844 Norway 134 1,708 16 -03 518 Portugal 525 7 537 3,482 30 3,211 240 31 3,332 Spain 91 2,201 26 38 63 34 2,234 South Africa 2,137 1 1,448 -01,426 21 1,473 Turkey 47 90 22 1,448 2 1,342 1,434 84 Denmark 507 72 1 451 Ireland 5 12 434 17,710 910 17,037 631 16,229 177 571 Eastern Europe -0-0-0416 2 Bulgaria 414 414 16 168 2 152 -0-0154 Czechoslovakia 711 1 -02 708 708 -0East Germany 663 -017 7 10 646 663 Hungary 1,217 10 10 20 1,187 51 1,248 Poland 1 208 -07 3 207 Romania 217 1,646 1,552 89 7 33 5 1,592 U.S.S.R. -0-0877 89 18 Yugoslavia 895 984 33 135 5,940 188 5,761 44 5,982 Page 2 Table II Cross-border and Noja-locsl Currency Claims on Foreigners by Country of Guarantor: June 1977 (in millions of dollars) Claims on residents Claims guaranteed of other countries Total claims by residents of guaranteed by residents Total claims other countries Total claims less guaranteed of this country by country of Country (by residence) on banks on others claims on banks guarantor on others Oil-Exporting Countries -0Algeria 1,470 162 1,308 -01,373 65 Ecuador 831 18 48 765 -0-0765 Indonesia 49 143 1,788 59 1,855 1,980 8 1,770 Iran 1,831 1 60 141 24 1,935 Iraq 88 -0-088 -0-088 Kuwait 399 3 24 372 15 10 397 128 -0128 -0Libya 2 -0130 Nigeria 70 -03 67 -07 74 Qatar 81 -0-081 -02 83 336 16 Saudi Arabia 50 270 29 60 359 United Arab Emirates 401 68 2 331 9 18 358 Venezuela 4,548 7 109 4,432 79 12 4,523 11,400 11,940 12,163 162 601 334 206 Non-Oil Exporting Developing Countries Latin America and Caribbean Argentina 8 182 15 1,793 1,603 8 1,626 Bolivia 371 24 32 -0315 16 331 Brazil 10,588 526 97 579 9,912 63 10,501 -0620 Chile 16 1 -0604 605 356 -0Costa Rica 24 332 -03 335 -0-0Dominican Republic 239 234 -05 234 194 -010 184 -0-0El Salvador 184 20 20 10 161 121 -0Guatemala 131 -09 3 181 172 -0Honduras 175 -016 251 8 Jamaica 243 9 268 Mexico 32 89 150 10,759 U.322 474 10,941 -0426 1 Nicaragua 7 2 433 429 -0-024 -0Paraguay -024 24 1,857 Peru 1,904 17 30 7 78 1,942 -053 -053 -0-0Trinidad & Tobago 53 162 -010 152 13 15 180 Uruguay 1,406 26,991 255 28,652 723 245 27,959 Page 3 Table II Cross-border and Non-local Currency Claims on Foreigners by Country of Guarantor: June 1977 (in millions of dollars) Country Non-Oil Exporting Developing Countries (continued Asia China (Taiwan) India Israel Jordan Korea (South) Malaysia Pakistan Philippines Thailand Africa Egypt Ghana Ivory Coast Morocco Sudan Tunisia Zaire Zambia Total claims (by residence) 2,319 208 662 24 3,216 596 60 Claims guaranteed by residents q>f other countries on banks on others 27 -0- 2 -08 50 -0- 669 5 11 9,615 103 524 21 -0-0-0-0-0-0- 1,861 271 374 174 55 283 179 106 17 22 2 102 32 9 53 23 366 27 3 22 20 1,881 -0-0- 75 13 112 3 275 40,148 358 2,047 -0- Total claims less guaranteed claims Claims on residents of other countries guaranteed by residents of this country on banks on others Total claims by country of guarantor 2,186 14 5 2,205 191 19 108 32 62 15 5 25 86 366 3 6 213 752 61 638 22 3,106 514 51 1,803 635 9,146 497 18 249 354 2 8 -011 -0- 7 58 37 14 16 17 163 1 -0-0- 19 3,226 566 70 1,844 738 9,675 500 26 249 384 99 -0- -0-0-0- 1, 606 3 29 17 37 1,672 37,743 1,118 445 39,308 99 42 171 176 5 47 171 196 Page 4 Table II Cross-border and Nprvlocal Currency Claims on Foreigners by Country of Guarantor: June 1977 (in millions of dollars) Country Offshore Banking Centers Bahamas Bahrain C aymans Hong Kong Panama Singapore Liberia Lebanon Miscellaneous Other Western Europe Other Eastern Europe Other Asia/Pacific Other Middle East Other Africa Other Caribbean Other Latin America Other North America Grand Total Total claims (by residence) Claims guaranteed by residents of other countries on banks on others 5,279 41 439 1,799 -021 293 404 57 -0- 1,167 Total claims less guaranteed claims 125 17 41 585 126 223 632 959 510 722 67 16,834 10,986 2,024 3,824 222 1 470 191 370 68 -0- 41 -0- 24 27 10 -0- -015 1,029 1,160 14 37 274 113 1 419 181 355 741 -0- 23 -0- 1,100 44 3,487 153 380 164,208 24,707 8,478 5,905 .565 2,802 1,286 1,896 2,366 1,889 2,558 361 533 Claims on residents of other countries guaranteed by residents of this country on banks on others 34 4 2 91 5 33 -02 171 71 6 45 4 256 54 7 63 13 448 Total claims by country of guarantor 625 175 229 979 1,018 550 785 82 4,443 2,954 -029 -0120 105 3 33 -02 56 20 3 222 3,296 131,023 12,781 6^234 150^040 44 -05 8 7 289 4 457 189 364 797 1,149 47 Table III Contingent Cross-border and Non-local Currency Claims by Country of Residence: June 1977 (in millions of dollars) Country G-10 and Switzerland Belgium/Luxembourg France Germany Italy Netherlands Sweden Switzerland United Kingdom Canada Japan Commitments under letters of credit to: Banks and Public other private borrowers borrowers -0- 113 41 222 183 22 676 54 174 1 151 95 275 49 38 489 146 48 332 783 177 1 87 306 2,799 1,535 16 103 441 42 131 305 174 355 Public borrowers 9 12 -0-02 22 -0- Non-G-10 Developed Countries -0Austria Australia «fl35 Finland 112 Greece 14 Iceland 10 New Zealand 1 Norway Portugal 16 37 Spain South Africa 1 79 Turkey Denmark -050 Ireland Eastern Europe Bulgaria Czechoslovakia East Germany Hungary Poland Romania U.S.S.R. Yugoslavia Other Commitments to: 16 2 25 -0- 58 8 1 6 116 252 4 7 45 9 140 74 81 36 77 50 2 Banks and other private borrowers 594 1,808 1,754 119 776 815 803 2,968 282 2,385 12,304 17 1,143 1,166 3,421 5 40 6 136 94 145 5 10 -0-03 29 -0-025 62 139 282 53 895 22 717 63 186 1 151 97 297 49 39 168 381 154 518 3 31 486 35 895 84 8 10 118 68 15 Total Contingent Claims on: Banks and Public other private borrowers borrowers 154 52 442 102 60 29 20 2 76 100 302 1,521 707 2,030 1,937 608 922 863 1,135 3,751 459 2,691 15,103 184 822 196 770 7 38 531 44 1,035 228 133 457 119 4,564 10 10 60 32 49 2 76 125 364 Page 2 Table III Contingent Cross-border and Non-local Currency Claims by Country of Residence: June 1977 (in millions of dollars) Commitments under letters of credit to: Banks and Public other private Country borrowers borrowers Oil-Exporting Countries Algeria Ecuador Indonesia Iran Iraq Kuwait Libya Nigeria Qatar Saudi Arabia United Arab Emirates Venezuela Non-Oil Exporting Developing Countries Latin America and Caribbean Argentina Bolivia Brazi1 Chile Costa Rica Dominican Republic El Salvador Guatemala Honduras Jamaica Mexico Nicaragua Paraguay Peru Trinidad & Tobago Uruguay 99 ?8 108 69 15 56 14 4 20 -0100 10 7 37 2 11 580 Other Commitments to: Banks and Public other private borrowers borrowers Total Contingent Claims on: Banks and Public other private borrowers borrowers 95 89 149 93 119 3 7 64 27 13 76 251 986 25 71 229 322 105 44 36 34 6 179 87 787 1,925 186 161 163 192 177 13 122 146 35 52 114 444 1,805 69 173 291 386 133 101 53 76 40 478 172 1,032 3,004 139 330 97 421 220 429 69 248 47 139 13 24 73 10 45 31 125 529 116 28 189 30 145 135 47 215 70 10 30 5 39 28 133 16 141 2 115 10 228 4 698 16 10 10 30 25 43 43 938 3 12 2,092 64 62 10 798 26 17 67 5 62 1,398 23 2,672 6 329 6 10 Page 3 Table III Contingent Cross-border and Non-local Currency Claims by Country of Residence: June 1977 (in millions of dollars) Country Commitments under letters of credit to: Banks and Public other private borrowers borrowers Non-Oil Exporting Developing Countries (continued) Asia 238 China (Taiwan) 70 India Israel 4 42 Jordan 56 Korea (South) 40 Malaysia Pakistan 41 76 Philippines 11 Thailand 20 8 244 19 43 135 116 787 131 18 12 58 18 14 578 Africa Egypt Ghana Ivory Coast Morocco Sudan Tunisia Zaire Zambia 158 44 Other Commitments to: Banks and Public other private borrowers borrowers 344 -050 19 122 53 3 23 582 70 54 61 178 636 68 127 206 621 19 31 715 141 158 423 322 1,144 1,834 1,722 2,621 160 47 15 25 100 20 260 35 20 28 47 25 61 5 18 8 -0-0- 178 43 59 119 23 4 32 18 1 19 29 28 1 25 6 31 .,,.5,01 —A3J. 1 545 471 122 115 288 8 28 8 2 12 289 246 212 1,327 1,613 2,294 10 478 24 107 Total Contingent Claims on: Banks and Public other private borrowers borrowers 17 185 4,111 93 44 3,621 45 5,724 Page 4 Table III Contingent Cross-border and Non-local Currency Claims by Country of Residence: June 1977 (in millions of dollars) Country Commitments under letters of credit to: Banks and Public other private borrowers borrowers Offshore Banking Centers Bahamas Bahrain Caymans Hong Kong Panama Singapore Liberia Lebanon Miscellaneous Other Western Europe Other Eastern Europe Other Asia/Pacific Other Middle East Other Africa Other Caribbean Other Latin America Other North America Grand Total 1 -0-01 Other Commitments to: Banks and Public other private borrowers borrowers Total Contingent Claims on: Banks and Public other private borrowers borrowers 22 3 -0- 6 27 -0- 157 155 88 42 49 114 1 62 413 516 344 1,594 15 -0- 11 -0105 314 48 9 247 -0-069 56 19 18 60 -0222 47 66 173 116 61 579 536 3,034 7,459 7,442 24,236 10,476 4 2 8 -016 8 -072 97 110 11 16 -0- 41 44 20 70 50 84 144 114 2 315 136 268 202 31,695
@FedFRASER