International Financial Markets as Viewed from BIS Statistics:Changes in the International Flow of Funds in the 1990s

The volume of international capital flows has surged since the 1980s, in line with the progress of globalization in financial markets. For example, the gross international capital flows of the G-7 countries as a percentage of GDP remained around 2-3 percent from the 1970s through the mid-1980s, but then briskly accelerated and has recently been above the 10 percent level. It is estimated that, if international risk transfers employing derivatives trading are also included, the volume of international capital flows and risk transfers is growing exponentially. Given these developments, an accurate understanding of the international capital flows and risk transfers is becoming essential to the consideration of each country's macroeconomic and financial system and the stable development of the global economy and financial system. While various types of information are required for this purpose, these may be broadly divided into information on the volume and the pricing of international capital flows and risk transfers. In recent years, there has been a growing recognition of the necessity for comprehensive analyses of international financial markets that cover both categories of information, and the importance of such analyses will continue to increase in the future.