International syndicated lending reached a record $194.5 billion in the second quarter, but competition and pressure on profits are pushing banks into "more complex or riskier areas such as project financing, merger and acquisition financing, and lending to borrowers from transition and emerging market countries," Bank for International Settlements noted in its quarterly review of financial markets.

The bank noted that although commercial banks in North America and the United Kingdom continued to post strong profits, competition for loans has increased as investment banks, mutual funds, and insurance companies move into the syndicated lending market.

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