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Recent developments in cross-border investment in securities

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Abstract

Securities have replaced bank lending in recent years as the primary means through which funds are invested internationally, and in the process, the share of U.S. securities owned by foreigners has grown markedly. Between 1974 and 2002, the proportion of the value of outstanding U.S. long-term securities (equities and long-term debt) that was foreign-owned increased from about 5 percent to about 12 percent. At the same time, U.S. holdings of foreign long-term securities also increased, although their growth did not match the rapid growth in foreign holdings of U.S. securities. At $1.8 trillion, the value of U.S. holdings of foreign long-term securities at the end of 2002 was less than half the value of foreign holdings of U.S. securities; this difference resulted in a negative net international position in long-term securities of $2.3 trillion. ; The U.S. system for measuring cross-border securities activity consists of annual surveys measuring holdings of securities and monthly reports measuring transactions in securities. This article reports the latest survey data on holdings as well as the more-recent transactions data. The discussion focuses on U.S. cross-border securities activity, but it also addresses the investment patterns of some other countries and describes the initiatives to improve the measurement of cross-border securities investments.

Suggested Citation

  • Carol C. Bertaut & William L. Griever, 2004. "Recent developments in cross-border investment in securities," Federal Reserve Bulletin, Board of Governors of the Federal Reserve System (U.S.), vol. 90(Win), pages 19-31.
    • Handle: RePEc:fip:fedgrb:y:2004:i:win:p:19-31:n:v.90no.1
    DOI: 10.17016/bulletin.2004.90-1-2
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    File URL: http://www.federalreserve.gov/pubs/bulletin/2004/winter04_if.pdf
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    Citations

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    Cited by:

    1. Mr. Andrew J Swiston, 2005. "A Global View of the U.S. Investment Position," IMF Working Papers 2005/181, International Monetary Fund.
    2. Enders, Almira & Enders, Zeno & Hoffmann, Mathias, 2018. "International financial market integration, asset compositions, and the falling exchange rate pass-through," Journal of International Economics, Elsevier, vol. 110(C), pages 151-175.
    3. Marcela Meirelles Aurelio, 2006. "Going global : the changing pattern of U.S. investment abroad," Economic Review, Federal Reserve Bank of Kansas City, vol. 91(Q III), pages 5-32.
    4. Mr. Ravi Balakrishnan & Mr. Volodymyr Tulin & Mr. Tamim Bayoumi, 2007. "Globalization, Gluts, Innovation or Irrationality: What Explains the Easy Financing of the U.S. Current Account Deficit?," IMF Working Papers 2007/160, International Monetary Fund.
    5. Carol C. Bertaut & Steven B. Kamin & Charles P. Thomas, 2008. "How long can the unsustainable U.S. current account deficit be sustained?," International Finance Discussion Papers 935, Board of Governors of the Federal Reserve System (U.S.).
    6. John Kitchen, 2007. "Sharecroppers or Shrewd Capitalists? Projections of the US Current Account, International Income Flows, and Net International Debt," Review of International Economics, Wiley Blackwell, vol. 15(5), pages 1036-1061, November.
    7. Lizardo, Radhamés A. & Mollick, André V., 2009. "Do foreign purchases of U.S. stocks help the U.S. stock market?," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 19(5), pages 969-986, December.

    More about this item

    Keywords

    Securities; Investments; Foreign;
    All these keywords.

    JEL classification:

    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
    • F32 - International Economics - - International Finance - - - Current Account Adjustment; Short-term Capital Movements
    • F34 - International Economics - - International Finance - - - International Lending and Debt Problems
    • G15 - Financial Economics - - General Financial Markets - - - International Financial Markets

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