Impaired loans climbed by more than 40 per cent at Macquarie Bank over the December 2008 quarter, the bank's quarterly "pillar three" disclosures published on Friday show.Impaired loans increased to $757 million at December 2008 up from $528 million at September 208, the first quarter for which Macquarie published data in this format and in line with new APRA requirements.Most of the rise in impairments emerged in the bank's corporate loan book, where they increased to $589 million from $389 million over three months.Macquarie also reported $43 million in impaired loans classified as "bank", so no doubt Macquarie is facing losses from one of the many bank failures around the world.On the other hand bank's home loan portfolio is showing improving trends. The level of impaired home loans fell 80 per cent to $48 million.Macquarie estimated its credit exposure at December 2008 at $64.8 billion a rise of 11 per cent over three months, and an annualised rise, if its fair to look at it that way, of a whopping 45 per cent.Almost all the rise in credit exposure was due to a recent taste for lending to governments, a category that attracts a low risk weight. Macquarie reported $6.7 billion in credit to sovereigns at December 2008 up from only $730 million three months before.