The Bank for International Settlements has released provisional data for the end of the second quarter.

It notes that banks’ consolidated foreign claims increased by 6% in the second quarter of 2006, including valuation effects, to stand at US$24.7 trillion. International claims and local currency lending by reporting banks’ foreign offices expanded to US$17 trillion and US$8 trillion respectively.

Dutch and French banks reported the largest increases in foreign claims, followed by banks with head offices in Germany, the United Kingdom and Switzerland. About 80% of the total expansion reflected larger claims on borrowers in developed countries, the BIS said.

Borrowers in the UK and the U.S. received about 45% of the funds channeled to the group of developed countries. Foreign claims on Italy and Japan also showed notable increases. Among emerging market countries, those in Europe and Asia-Pacific were the main recipients. German and UK banks continued to lend to emerging markets, while U.S. banks pared back their activity slightly.

Banks’ derivatives positions increased significantly by US$315 billion to US$2.3 trillion, mainly on developed countries. Contingent liabilities arising from guarantees increased to US$3.1 trillion (+16%), with banks in the U.S. showing the largest growth (US$207 billion), followed by those in the UK (US$87 billion), to reach outstanding totals of US$1,224 billion and US$469 billion respectively.

Credit commitments rose by only 3% to US$3.5 trillion. Swiss, UK and U.S. banks each accounted for around 40% of the total increase, offsetting reductions reported by banks of other nationalities.