Cross-border inter-bank loans and cross-border holdings of securities have, in relative terms, experienced substantial growth. Cross-border loans of euro area monetary financial institutions (MFI) to other euro area countries have increased from 15% at the end of 1997 to 23% in the middle of 2005.
At the end of 1997, 15% of securities held by euro area MFIs were issued by non-MFIs of another euro area country. This share has now reached almost 40%. In contrast, the level of banks’ cross-border retail lending activity within the euro area increased only slightly from a mere 2% at the end of 1997 to around 3.5% today.