ATHENS: Lending by international banks to Greece fell by a third, or $22 billion (14 billion pounds), in the three months of the year as concerns about its economy and euro zone membership mounted, according to cross-border lending data released on Friday.
The Bank for International Settlements said cross-border Lending to Greek companies, banks, individuals and other entities had dropped to $45.5 billion at the end of March. Lending to Greek banks slumped to $2.2 billion by the end of March from $31 billion at the end of June 2014, BIS said. Cross-border lending to Greek private sector firms stood at $16 billion at the end of March, and lending to the official sector was down to $600 million.
Greece this month agreed to enact tough reforms in return for urgently needed loans after months of wrangling over how to keep its almost bankrupt economy afloat and stave off the collapse of its banks. The BIS said global cross-border lending rose by $755 billion in the first quarter, led by a $406 billion surge in lending to euro zone countries, the highest quarterly rise to the bloc since early 2008, despite the contraction in Greece. Lending to Germany rose by $153 billion and there was a $120 billion rise in loans to France, the BIS data showed.
International lending to the euro zone rose by 9 percent in the year to end-March. Cross-border lending by banks started to pick up in the second quarter of 2014 and in the year to the end of March it expanded by 6 percent, bouncing back from a 2 percent contraction in the previous 12 months.
