World banking activity grows: BIS

The international banking market expanded in the fourth quarter of 2007, as new credit to Asian, African and Middle Eastern emerging markets offset impact of the financial turmoil in mature markets, the Bank for International Settlements said Sunday.

"Activity in the international banking market continued to expand in the fourth quarter of 2007, despite the ongoing tensions in the interbank market.

"A significant portion of this increase was accounted for by new credit to emerging markets," said a new report by the bank (BIS).

Inter-bank borrowing in mature markets, particularly the United States, hit a snag in the same period as banks were wary of lending to each other due to the unravelling subprime crisis.

The US Federal Reserve and key European central banks have had on several occasions to pump billions of dollars of liquidity into the system to ease gridlocked lending.

However, the BIS report indicates that credit to borrowers in emerging economies "surged in the fourth quarter".

In fact, record claims were posted for the period on borrowers in the Asia-Pacific region, Africa and the Middle East. This powered total claims on these borrowers to 2.6 trillion dollars (1.6 trillion euros).

Credit to borrowers in Africa and the Middle East grew by 70 billion dollars, the largest quarterly expansion for this region on record, with much of the money lent by banks in the euro area and Britain.

Meanwhile, credit to borrowers in the Asia-Pacific region grew 82 billion dollars, also a quarterly record.

But in Asia and the Pacific, ...