European banks pull more funding from Australia
(24 July 2012 – Australia) Figures released by Swiss-based Bank for International Settlements (BIS) have shown European banks pulled a further A$9.6 billion out of Australia’s economy in the first few months of 2012.
The preliminary figures showed the pace at which funds were cut by Europe's banks during the March quarter began to slow from the end of last year, but this still amounts to more than A$32 billion in loans pulled over the past six months.
The figures come as renewed strains emerged in Europe over the weekend as Spain's borrowing costs soared to within inches of a record high for the eurozone.
In Australia, much of the pullback by European-owned banks has been in commercial property lending, where their aggregate exposures have declined by about 60 percent since the peak in 2009, according to Reserve Bank of Australia figures.
The BIS figures, which cover January to the end of March, show German banks pulled US$6.6 billion (A$6.3 billion) worth of loans from Australia compared with the December quarter.
French banks, which have been among the least aggressive in cutting back their lending book, curbed their exposure by just US$1.5 billion. Banks from the United Kingdom cut US$5.3 billion during the period.
United States banks on the other hand, increased exposure to Australia by more than US$4.2 billion and Japanese banks pumped up their exposure here by almost US$2 billion.
The figures come as renewed strains emerged in Europe over the weekend as Spain's borrowing costs soared to within inches of a record high for the eurozone.
In Australia, much of the pullback by European-owned banks has been in commercial property lending, where their aggregate exposures have declined by about 60 percent since the peak in 2009, according to Reserve Bank of Australia figures.
The BIS figures, which cover January to the end of March, show German banks pulled US$6.6 billion (A$6.3 billion) worth of loans from Australia compared with the December quarter.
French banks, which have been among the least aggressive in cutting back their lending book, curbed their exposure by just US$1.5 billion. Banks from the United Kingdom cut US$5.3 billion during the period.
United States banks on the other hand, increased exposure to Australia by more than US$4.2 billion and Japanese banks pumped up their exposure here by almost US$2 billion.
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