External loans and deposits of reporting banks vis-à-vis the banking sector (% of domestic bank deposits)

This indicator measures the proportion of external loans and deposits held by reporting banks in relation to the total domestic bank deposits, illustrating the interconnectedness of domestic banks with their external funding sources. Derived from the Bank for International Settlements (BIS) Statistical Appendix, it subtracts data concerning nonbanking sectors to hone in specifically on banking sector interactions. Utilizing end-of-year data, this metric serves as a vital barometer for assessing liquidity risk and the dependency of domestic banks on external financing, offering insights into the stability and resilience of the banking sector against global economic fluctuations. A high percentage may signal increased reliance on foreign funds, potentially impacting regulatory scrutiny and monetary policy considerations. Source: