Key facts
- Cross-border bank credit increased by $1.7 trillion in the first quarter.
- This is the largest increase in cross-border credit since the Covid-19 pandemic.
- Non-bank financial institutions were the primary drivers of the credit increase.
- European Ucits funds increased their use of foreign exchange derivatives in late 2025.
- European Ucits funds increased their use of interest rate derivatives in late 2025.
- Credit derivative positions within European Ucits funds shifted towards broader index exposures.
- Credit derivative positions within European Ucits funds shifted towards more bullish index exposures.
Cross-border bank credit saw its most substantial increase since the Covid-19 pandemic, rising by $1.7 trillion in the first quarter. Non-bank financial institutions (NBFIs) were the principal contributors to this significant growth. This surge indicates a renewed flow of capital across borders, potentially reflecting increased global economic activity or a shift in investment strategies. The scale of the increase suggests a notable recovery or expansion in international lending and borrowing activities.
In a related development, European Ucits funds significantly ramped up their use of foreign exchange and interest rate derivatives during the latter half of 2025. Data also reveals a shift in credit derivative positions within these funds, moving towards broader, more bullish index exposures. This indicates a growing appetite for risk and a more optimistic outlook among European fund managers regarding global financial markets. The increased derivative usage points to active portfolio management and a strategy to capitalize on anticipated market movements.