Euro-denominated cross-border activity again shrank, albeit by only 0.4 per cent compared with a fall of 4.3 per cent in the fourth quarter of 2010. Lending to US residents (+$304 billion), mainly banks in the United States, accounted for most of the increase in cross-border claims on developed countries. Claims also expanded, for the eighth consecutive quarter, on developing countries (+$172 billion). Contractions were recorded vis-à-vis the euro area and the United Kingdom - by $77 billion and $58 billion respectively. Local claims in foreign currencies on residents in reporting countries grew by 1.2 per cent, after a decline in the previous quarter.

Reporting banks' consolidated international claims adjusted for exchange rate movements increased by about 1 per cent in the first quarter of 2011, after a decline of almost 3 per cent in the previous quarter. Local claims in local currency rose by an adjusted 4.6 per cent. On an ultimate risk basis, which adjusts for net risk transfers across borrowing countries, banks' consolidated foreign claims (including local claims in all currencies) increased vis-à-vis all sectors, of which claims on the public sector rose from 18.8 per cent to 19.6 per cent of total claims driven mainly by claims on the US and Germany. With respect to other potential exposures, guarantees extended and credit commitments went up by 8 per cent and 6 per cent respectively, more than reversing the declines seen in the previous quarter.

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