Data for 1998:IIIQ reveal a continuing decline in U.S. banks’ exposure to countries that have recently experienced significant economic and financial turmoil. Pullbacks from Thailand and South Korea began in 1997, before the worst of the Asian crises. The pullback from Mexico is surprising, given that country’s strong economic growth, but is consistent with the depreciation of the peso. These declines are troublesome in light of prescriptions for recovery that emphasize the need for increased foreign- bank involvement to enhance overseas banks’ risk management.
Suggested citation: "International Developments," Federal Reserve Bank of Cleveland, Economic Trends, no. 99-04, pp. 18, 04.01.1999.