-6 percent range. As discussed earlier, the portfolio equitycategory includes shares in collective investment schemes, such that the ‘ultimate claims’ represented by these equity assets may be debt or equity assets that most likely are located in other destinations.
Figure 6. Hong Kong S.A.R. of China: FDI assets and liabilities, 2007 (billions US$)
Source: Hong Kong Statistics.
Figure 7A. Share of SIFC Group in Global Cross-Border Portfolio Holdings
Note: Share of total portfolio assets vis-à-vis SIFCs reported by countries participating in the IMF
and equitycategories. It will be necessary to decide in advance (even if such decisions seem arbitrary) what the treatment should be for each major type of derivative, in line with the findings of the Fund’s Manual .
—For banks dealing on their own account, or holding items in custody, the instructions on the Treasury reporting form may require expansion. For instance, the expiration of an option may have the appearance of a transaction but probably should not be reported as such for balance of payments purposes. The proper treatment of such cases needs to
euro area has a negative net position in portfolio debt, this contributed to aggregate capital losses. Capital gains on FDI liabilities also exceeded capital gains on FDI assets, although the impact of this differential was attenuated by the small positive net FDI position of the euro area. Finally, capital gains on portfolio equity assets exceeded capital gains on portfolio equity liabilities. However, the euro area has a substantial negative net position in the portfolio equitycategory (about 7 percent of GDP), so that the net impact was negative on the overall
Mr. G. Terrier, Mr. Rodrigo O. Valdes, Mr. Camilo E Tovar Mora, Mr. Jorge A Chan-Lau, Carlos Fernandez Valdovinos, Ms. Mercedes Garcia-Escribano, Mr. Carlos I. Medeiros, Man-Keung Tang, Miss Mercedes Vera Martin, and W. Christopher Walker
securities listed on a major exchange and included in a large capital market index and unencumbered corporate bonds rated AA- to A- with maturities of more than one year which are traded in deep, active and liquid markets. vi) Loans to non-financial corporate clients having a residual maturity of less than one year.
vii) All other liabilities and equitycategories.
vii) Unencumbered residential mortgages (of any maturity) and other loans on more than a year qualifying for the 35 percent or lower risk weight in Basel II standardized approach
We construct estimates of external assets and liabilities for 145 countries for the period 1970-2004. We describe our estimation methods and present key features of the data at the country and the global level. We focus on trends in net and gross external positions, and the composition of international portfolios, distinguishing between foreign direct investment, portfolio equity investment, official reserves, and external debt. We document the increasing importance of equity financing and the improvement in the external position for emerging markets, and the differing pace of financial integration between advanced and developing economies. We also show the existence of a global discrepancy between estimated foreign assets and liabilities, and identify the asset categories that account for this discrepancy.
rapid growth in U.S. prominence in the foreign portfolios of the rest of the world, growing from 19.3 percent in 1980 to 28.3 percent in 1985. There was a subsequent reversal during 1986-1990, with the 1985 peak only being surpassed in 1996. The late 1990s saw a rapid increase in the U.S. share, peaking at 34.9 percent in 1999. Recent years have seen a substantial decline: the share of the U.S. in the total foreign assets held by the rest of the world had decreased to 26.2 percent in 2003. The decline has been even more spectacular for the equitycategory: the U
This paper highlights the increased dispersion in net external positions in recent years, particularly among industrial countries. It provides a simple accounting framework that disentangles the factors driving the accumulation of external assets and liabilities (such as trade imbalances, investment income flows, and capital gains) for major external creditors and debtors. It also examines the factors driving the foreign asset portfolio of international investors, with a special focus on the weight of U.S. liabilities in the rest of the world's stock of external assets. Finally, it relates the empirical evidence to the current debate about the roles of portfolio balance effects and exchange rate adjustment in shaping the external adjustment process.
, short equity.” In contrast, emerging markets and developing countries are typically “short equity,” with those countries with overall negative net liability positions having net liabilities in both debt and equitycategories. Finally, we emphasize the importance of the valuation channel—innovations to the net foreign asset position are significantly more volatile than the current account. Differences between changes in net foreign assets and the current account balance are quite persistent in many countries and represent an important source of long-term shifts in net
Mahir Binici, Michael M. Hutchison, and Mr. Martin Schindler
How effective are capital account restrictions? We provide new answers based on a novel panel data set of capital controls, disaggregated by asset class and by inflows/outflows, covering 74 countries during 1995-2005. We find the estimated effects of capital controls to vary markedly across the types of capital controls, both by asset categories, by the direction of flows, and across countries' income levels. In particular, both debt and equity controls can substantially reduce outflows, with little effect on capital inflows, but only high-income countries appear able to effectively impose debt (outflow) controls. The results imply that capital controls can affect both the volume and the composition of capital flows.
Mahir Binici, Michael M. Hutchison, and Mr. Martin Schindler
inflows and outflows) of Debt, FDI and Equity and the associated aggregate measures of capital controls, calculated as the average of restrictions across the Debt, FDI and Equitycategories and across inflows and outflows.
Table 2: Aggregate Capital Flows and Controls
GDP Per Capita