Banks Reduce French, Italian Lending, Pile Into Bunds, BIS Says

International banks cut their loans to fellow lenders and governments in Italy, France and Spain in the third quarter, hoarding German, Japanese and U.S. bonds instead, data from the Bank for International Settlements show.

Cross-border claims on the Italian state, mainly bonds and loans, declined by 23 percent, or $67.7 billion, in the quarter ended Sept. 30 at banks in the 24 countries for which the Basel, Switzerland-based BIS reports those data. The same measure dropped 21 percent for France and 10 percent for Spain. It also fell for emerging economies including Brazil, Mexico and Poland, while $65.3 billion went into German government debt and $77.2 billion into U.S. Treasuries, the BIS said in a statement.