The U.S. System for Measuring Cross-Border Investment in Securities: A Primer with a Discussion of Recent Developments

By Griever, William L.; Lee, Gary A. et al. | Federal Reserve Bulletin, October 2001 | Go to article overview

The U.S. System for Measuring Cross-Border Investment in Securities: A Primer with a Discussion of Recent Developments


Griever, William L., Lee, Gary A., Warnock, Francis E., Cleaver, Chad, Federal Reserve Bulletin


One of the most striking developments in international finance in recent years has been the enormous expansion in cross-border securities transactions and holdings, accompanied by a decline in the relative importance of international bank lending. In the past decade, for example, the share of U.S. equities transactions involving foreign investors rose from less than 1 percent to more than 20 percent. In contrast, over the same period, the share of bank lending in U.S. cross-border positions decreased by half. Cross-border securities flows are now large enough to significantly influence national markets and to affect the overall health of the international financial system.

The shift in the nature of cross-border financing has heightened interest in the quality and timeliness of the systems used by the United States and other countries to measure international securities flows and holdings. Ideally, the U.S. measurement system should provide information on the size of cross-border holdings, the geographic composition of holdings, the types of securities held, the extent of foreign ownership of U.S. companies, and developing trends. It should also help in understanding what drives portfolio flows into and out of the United States and the effect of these flows on exchange rates. As this article will show, the data collected by the United States can address some of these topics better than others.

The article is intended as a primer on the U.S. system for measuring cross-border securities investment. It begins with an overview of the data collection system and a look at some recent trends in cross-border holdings and transactions. It then discusses aspects of the system's design and implications of the design for data interpretation. The article concludes with a discussion of anticipated changes to the U.S. system and of the way those changes are being influenced by international efforts to improve the availability, timeliness, and quality of data on cross-border securities holdings worldwide.

OVERVIEW OF THE U.S. SYSTEM

The United States collects data on cross-border portfolio investment through the Treasury International Capital (TIC) reporting system. (1) The detail of information collected and the frequency of collection vary depending on the type of investment being measured.

Cross-border holdings of long-term securities (original term to maturity of more than one year) are measured at market value through periodic benchmark surveys of custodians, issuers, and investors; data are collected at the security level (that is, information is reported separately for each security).

Cross-border transactions in equities and long-term debt securities are measured at market value through monthly reports filed by transactors (mainly broker-dealers); data are collected at the aggregate level, by country (for simplicity, such data are referred to throughout this article as aggregate data).

Foreign holdings of U.S. short-term securities are measured in the aggregate, at face value, through monthly reports filed by banks and brokers and quarterly reports filed by corporate borrowers. (2) Some categories of short-term holdings are measured separately, while others are included indistinguishably in "catch-all" categories of short-term liabilities. U.S. holdings of foreign short-term securities are measured in the aggregate, at face value, through monthly reports filed by banks and brokers and quarterly reports filed by custodians and investors; all such holdings are commingled with other types of assets, such as time and demand deposits.

Measurement of cross-border activity in long-term securities is the focus of this article. For a description of the measurement of cross-border activity in short-term securities and other types of assets and liabilities, see the box "TIC Reporting System for Portfolio Investment Items Other Than Long-Term Securities."

The monthly aggregate transactions reports and the periodic benchmark surveys form a complementary system. …

The rest of this article is only available to active members of Questia

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items

Items saved from this article

This article has been saved
Highlights (0)
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

Citations (0)
Some of your citations are legacy items.

Any citation created before July 30, 2012 will labeled as a “Cited page.” New citations will be saved as cited passages, pages or articles.

We also added the ability to view new citations from your projects or the book or article where you created them.

Notes (0)
Bookmarks (0)

You have no saved items from this article

Project items include:
  • Saved book/article
  • Highlights
  • Quotes/citations
  • Notes
  • Bookmarks
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Buy instant access to cite pages or passages in MLA, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited article

The U.S. System for Measuring Cross-Border Investment in Securities: A Primer with a Discussion of Recent Developments
Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Help
Full screen

matching results for page

    Questia reader help

    How to highlight and cite specific passages

    1. Click or tap the first word you want to select.
    2. Click or tap the last word you want to select, and you’ll see everything in between get selected.
    3. You’ll then get a menu of options like creating a highlight or a citation from that passage of text.

    OK, got it!

    Cited passage

    Style
    Citations are available only to our active members.
    Buy instant access to cite pages or passages in MLA, APA and Chicago citation styles.

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

    1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

    Cited passage

    Thanks for trying Questia!

    Please continue trying out our research tools, but please note, full functionality is available only to our active members.

    Your work will be lost once you leave this Web page.

    Buy instant access to save your work.

    Already a member? Log in now.

    Oops!

    An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.