BIS Quarterly Review, March 2006

Total cross-border claims continued to expand in the third quarter of 2005, although at a somewhat slower pace than in the previous two quarters.

Global gross issuance of international bonds and notes increased by 25% in the fourth quarter of 2005, and was 4% higher than the average during the previous nine months.

Trading on the international derivatives exchanges declined during the fourth quarter of 2005.

The BIS effective exchange rate (EER) indices have been expanded and updated. The new indices cover 52 economies based on a consistent methodology, and reflect recent developments in global trade by using time-varying weighting patterns. 

Significant US house price appreciation in the last few years has greatly helped to enlarge the size and scope of secondary markets for securities backed by non-prime mortgage loans.

ECU-denominated international bonds owed much of their limited success in the 1980s and 1990s to restrictions on the internationalisation of the Deutsche mark and to speculative investment, rather than simply to the benefits of diversification. 

A measure of risk premium is derived from the comparison of spot and option prices across the US equity and eurodollar markets.