During the fourth quarter of 2011, BIS reporting banks recorded their largest fall in aggregate cross-border claims since the drop following the Lehman Brothers collapse three years earlier. The decline was worldwide, although it was driven by the deleveraging of banks headquartered in the euro area. Cross-border lending to non-banks also fell, but the drop in claims on banks was sharper.
Cross-border lending fell around the globe. BIS reporters' cross-border claims on both banks and non-banks in developed economies shrank by $630 billion. Euro area banks accounted for most of this decline. Cross-border claims on emerging market economies fell by $75 billion, or 2.4%. The decline was concentrated on Asia-Pacific in general and on banks in China in particular. For China, this was the first overall decrease since the opening quarter of 2009. Among all developing countries, only those in Latin America and the Caribbean saw an increase in cross-border claims.
The notional amount of outstanding over-the-counter (OTC) derivatives fell by 8% in the second half of 2011, while a rise in price volatility drove up the market value by 40%. Gross credit exposures rose 32%. After accounting for netting and posted collateral and adjusting for the double-counting of collateral in the industry data, the BIS estimates that credit exposures between counterparties in the bilateral OTC derivatives market increased slightly, to at least $2.1 trillion.