Makes sense.
I always wondered how that loan demand was accommodated.
Never looked like the kind of lending US regulators would sanction.
Karim writes:
Interesting table from JPM.
Much larger dependence on credit from Eur banks for LATAM economies than from U.S. banks.
Poland/Russia not as surprising but still large!
Overall, domestic bank lending surveys in EM have also been moving towards a net tightening of lending standards.
Could be more severe credit contraction in those economies as a result of ongoing strains in Europe.
Euro area and US bank claims on EM | ||||
---|---|---|---|---|
As of 2Q11 | EUR Banks | US Banks | ||
$ bn | % of dom cred | $ bn | % of dom cred | |
EM | 1980.7 | 12.4 | 811.3 | 5.1 |
EM Asia | 406.7 | 3.2 | 472.0 | 3.8 |
China | 90.6 | 1.0 | 81.7 | 0.9 |
Korea | 68.4 | 6.3 | 95.1 | 8.8 |
Latam | 618.1 | 38.7 | 248.5 | 15.6 |
Brazil | 285.0 | 23.1 | 97.6 | 7.9 |
Russia | 113.5 | 16.1 | 23.8 | 3.4 |
Poland | 249.0 | 95.6 | 14.4 | 5.5 |