Moody’s: Large quantity of bank debt maturing into uncertain environment

New York, June 16, 2011 — Over the past year, the global banking system has modestly reduced its reliance on wholesale funding and lengthened the maturity of new debt securities, according to Moody’s Investors Service’s latest bank debt maturity profiles report. Nevertheless, the rating agency notes that the favorable market conditions supporting low-cost deposits and low-cost bank debt will not continue indefinitely, leaving the global banking system exposed to refinancing risk at a time when an usually large amount of debt is coming due. Of the $11 trillion of the long-term wholesale debt outstanding from Moody’s-rated banks globally, $3.4 trillion (33%) will mature by the end of 2012, and $4.9 trillion (45%) by the end of 2013.