BIS Quarterly Review March 2022

The March 2022 Quarterly Review highlights research that relates lending patterns to financial intermediaries’ funding sources and examines long-term growth prospects.
 

Overview: Markets jolted

Before the sharp escalation of geopolitical tensions ushered in a new wave of uncertainty, financial markets had been jolted by signals of a global shift towards a quicker pace of monetary policy tightening.

Special Features

Non-bank lenders in the syndicated loan market
by Iñaki Aldasoro, Sebastian Doerr and Haonan Zhou

In this feature, the authors discuss the important role of non-bank financial firms in syndicated lending to non-financial firms. They find that lending by non-banks is more concentrated, more volatile and - being riskier - carries higher spreads than that by banks. In domestic crises, non-banks curtail lending to foreign borrowers, thereby transmitting shocks across countries. 

Global banks' local presence: a new lens
by Iñaki Aldasoro, John Caparusso and Yingyuan Chen

In this feature, the authors examine a new dataset on global banks' foreign branches and subsidiaries. They find that branches, which facilitate especially international corporate banking, have grown relative to locally focused subsidiaries. Branches are riskier for host countries, and authorities, particularly in advanced economies, seem to have tightened control over them.

Global growth: drivers and post-pandemic prospects
by Gabriela Nodari, Daniel Rees and Phurichai Rungcharoenkitkul

In this feature, the authors analyse potential global GDP paths following the Covid-19 crisis. Without policy intervention, growth could be slower than in the 2010s. While pandemic-induced shifts in technology use and resource reallocation could provide a modest boost, a housing bust and a disorderly climate transition represent disruptive scenarios.

Press release: BIS Quarterly Review analyses lending patterns, long-term growth prospects