Banks’ cross-border claims increased in Q2 2022 by $782 billion, raising the year-on-year growth rate to 8%.1 Derivatives valuations drove this increase, while new credit through loans and bond holdings rose a modest $100 billion. Credit to emerging market and developing economies expanded by $28 billion, despite the drops in credit to Brazil, China and Russia. Cross-border credit to Russia continued to fall, by more than $4 billion, while liabilities to Russia saw the largest increase on record (+$74 billion) as a result of blocked coupon and principal repayments following western sanctions. Credit denominated in euros and yen expanded, while credit in US dollars fell for the first time in a year (–$332 billion), partly due to seasonal factors. Against the backdrop of rising interest rates, dollar borrowing by non-banks outside the United States via syndicated loans and bonds contracted in both Q2 and Q3, foreshadowing weaker growth in credit overall.