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Cross-border credit growth slowed over the first quarter of 2023, but deposit activity remained stable despite stresses in the global banking sector, according to new data from the Bank for International Settlements (BIS).

On a year-over-year basis, the growth of cross-border credit slowed to 2% in Q1 amid rising interest rates, the BIS said.

“Credit to advanced economies expanded,” it reported, but credit to emerging markets and developing economies contracted by about 7% in the period.

The first quarter also saw strains appear in certain banking systems, as the effects of rapidly rising interest rates exposed vulnerabilities that built up during the years of exceptionally low rates.

Most notably, several large U.S. banks failed in the first quarter. And, at the same time, the Swiss market was grappling with the imminent demise of Credit Suisse, which was ultimately acquired by rival UBS AG, following government intervention.

According to the BIS data, these strains had a “limited impact” on cross-border deposits.

Smaller U.S. banks saw deposit outflows in the first quarter as confidence concerns arose, but the BIS noted that large banks experienced outflows too, “likely reflecting the pull from higher returns offered by money market funds.”

Additionally, banks in Switzerland and the U.K. faced outsized outflows in the first quarter, it said, with deposits declining 20% and 4% respectively.

“The loss of deposits was counterbalanced by forceful liquidity measures by the Swiss National Bank in support of an orderly takeover of Credit Suisse,” the BIS said.

Apart from these isolated issues, banks in other major economies generally experienced deposit inflows over the past year, including banks in the Euro area, it noted.

Most of these inflows came from other banks, while the deposit outflows in the U.K. and Switzerland were driven by households and non-bank financial institutions, the report said.