Banks transferred funds out of the US and into Europe in the first quarter of 2008 as they turned to safer assets amid the global credit crunch, the Bank for International Settlements said in its latest quarterly review of financial markets and banking activity, reports Reuters. European banks cut dollar loans booked by their US offices, resulting in a net outflow from those offices of $259bn in Q1, after a net outflow of $238bn in the 2007 second-half. The WSJ adds that the BIS also highlights a plunge in the ABX index, a key gauge of banks’ subprime-related losses, on declining risk appetite and rising concerns about market illiquidity.

This entry was posted by Gwen Robinson on Monday, September 1st, 2008 at 5:36 and is filed under Capital markets. Tagged with bis. Edit this entry.