BIS Quarterly Review, September 2003

Lending to non-bank borrowers drove claim flows in the international banking market in the first quarter of 2003, largely in the form of repo activity, intragroup lending and lending to governments.

The second quarter of 2003 witnessed continued strength in fund-raising through the international debt securities market.

The aggregate turnover of exchange-traded financial derivatives contracts monitored by the BIS grew further in the second quarter of 2003.

Emerging and mature financial markets are more integrated today than at any time since the First World War.

Over the past decade, it has become common practice for rating agencies to assign a domestic currency rating to the debt of sovereign nationals in addition to a foreign currency one.

Managers of official foreign exchange reserves have been facing historically low yields on highly rated government securities, the instruments to which they have traditionally devoted the bulk of their investment portfolios.

In recent years, investors have increasingly delegated the management of their investment portfolios to institutional asset managers.