Coping with disasters : two centuries of international official lending

Official lending is much larger than commonly known, often surpassing total private cross-border capital flows, especially during wars, financial crises and natural catastrophes. This paper assembles the first comprehensive long-run dataset of official international loans, covering 230,000 loans, grants and guarantees extended by governments, central banks, and multilateral institutions in the period 1790–2015. Since the 2000s, official finance has made a sharp comeback, largely due to the rise of China as an international creditor and the return of central bank cross-border lending in times of stress, this time through swap lines.

This report demonstrates that official cross-border loans and bailouts have become much more institutionalized and that official lending increases with the degree of economic integration. While their character may morph over time, this report concludes that official capital flows will remain a central element of the international financial system for decades to come.