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

The tremendous growth in cross-border securities investment in recent years has called attention to the systems used by the United States and other countries to measure international securities flows and holdings. Ideally, the data gathered by the United States could tell us the extent to which foreign investors hold U.S. securities, the types of securities held, and the countries in which the securities are held, for example, and could identify trends in investment. This article looks at how well the data shed light on these topics. Special attention is given to the system's design and the implications of the design for data analysis. Also discussed are anticipated changes to the system and international efforts to improve data collection systems worldwide. Finally, in an appendix we illustrate the technique for estimating holdings using capital flows data