BIS Quarterly Review, March 2014

BIS Quarterly Review  | 
09 March 2014
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 |  102 pages  |  ePub

The BIS Quarterly Review for March 2014 says emerging economies adjust under market pressure.

Remarks by Mr Claudio Borio, Head of the Monetary and Economic Department, at the media briefing on 7 March 2014.

Note about the Quarterly Review June issue
The BIS has decided to discontinue the June issue of the Quarterly Review in its current format, owing to its close proximity to the Annual Report.
The June issue will now contain only information on BIS statistics, notably the statistical annexes; relevant material about financial developments will be included in the Annual Report.
The next full issue of the Quarterly Review will be published in September 2014.

International banking and financial market developments

Investors resumed and accelerated their retreat from emerging market economies around the turn of the year as the subdued growth outlook continued to diverge from the generally upbeat sentiment in mature markets and as US policymakers reduced the flow of easy money. Signs of economic weakening and the growing financial risks in China also unsettled investors. More...
BIS reporting banks reduced their cross-border claims in the third quarter of 2013, especially claims on banks, which contracted the most since the second quarter of 2012. Adjustments of inter-office positions accounted for most of the retreat in interbank lending. More...

Special features

Up to a point, banks and markets both foster economic growth. Beyond that limit, expanded bank lending or market-based financing no longer adds to real growth.


Four major central banks have adopted new approaches to policy rate forward guidance with the aim of increasing monetary policy stimulus at the zero lower bound. In this special feature, we examine these approaches and assess their impact.


Basel III uses the gap between the credit-to-GDP ratio and its long-term trend as a guide for setting countercyclical capital buffers. Criticism of this choice centres on three areas: (i) the suitability of the guide given the objective of the buffer; (ii) the


Non-deliverable forwards (NDFs) allow investors and borrowers to take positions in currencies that are subject to official controls. Turnover in NDFs has risen in recent years as non-residents use them to hedge increasing investment in local currency bonds.


Non-US banks' affiliates in the United States took on about half of the claims on the Fed that it created to pay for its large-scale bond purchases. They did so largely through uninsured branches that were not subject a new FDIC charge on wholesale funding payable by US-chartered banks.