International debt issuance has been hit by the subprime crisis, reports the Bank for International Settlements.

The BIS’s latest quarterly review, released on Monday, finds that international debt securities issuance retreated sharply during the turmoil in financial markets in the third quarter. Borrowing in euro-denominated bonds and notes was hit hardest, it says, adding that the U.S. dollar and British pound sterling segments slowed as well, although less appreciably.

The slowdown in borrowing was also evident in the emerging markets as issuance fell dramatically in emerging Asia and Europe, the BIS notes: “This may have stemmed from a retreat in risk appetite, since issuance of lower-rated bonds and notes in developed countries plummeted as well.”

The turbulence in financial markets also led to the busiest trading on record on the international derivatives exchanges. “Activity was particularly strong in derivatives on short-term interest rates, perhaps because traders shifted some trading from the spot market or the OTC derivatives market onto exchanges,” the BIS says. “Rapid growth was also recorded in contracts on stock indices and on foreign exchange.”

Combined turnover in listed interest rate, currency and stock index derivatives rose by 27% to $681 trillion between July and September, after remaining stable in the previous quarter.