Following the Money U.S. Finance in the World Economy (1995) / Chapter Skim
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A MONITORING CAPITAL TRANSACTIONS IN THE UNITED KINGDOM, GERMANY, AND JAPAN
A MONITORING CAPITAL TRANSACTIONS IN THE UNITED KINGDOM, GERMANY, AND JAPAN
Pages 151-162
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From page 153... ...
Japan he same underlying forces that have affected international capital transactions in the United Statesand made information on such activities increasingly important in recent years have come into play in the economies of the country's major trade partners. In this appendix we consider the reporting systems that three of those partners the United Kingdom, Germany, and lapan use to compile their statistics on international capital transactions en c!
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From page 154... ...
In the United Kingdom, the Bank of England had had a long tradition of producing data for the capital account more than 60 years. In the 1930s the bank monitored U.K.
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From page 155... ...
THE GERMAN SYSTEM: Centralization is also a hallmark of the German reporting system, in which the Bundesbank and its branches are preeminent. At the same time, the German system in some respects resembles that of the United States.
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From page 156... ...
, however, and reports must be filed monthly in Germany, not quarterly as in the United States. German banks also have to submit comprehensive and detailed reports on their external assets and liabilities, also on a monthly basis.
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From page 157... ...
Moreover, the Japanese system, much like the German one, tennis to compile information on all transactions, as opposed to the survey approach user! by the United Kingdom and the United States.
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From page 158... ...
Portfolio investment, as part of the long-term capital account, covers most transactions in foreign and domestic securities that have no contractual maturity or have a maturity of more than 1 year. For outward portfolio investments, the most important sources of data are the reports of designated securities companies, which are required to file monthly statements on the purchase and sale of foreign securities both for their own accounts and those of
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From page 159... ...
dollars are converted to clolIars using basic exchange rates set by the Ministry of Finance. Outward investments in stocks and bonds are geographically allocated into ten major markets: the United States, the United Kingdom, Germany, France, Luxembourg, the NetherIan~ls, Canada, Switzerland, Australia, and "others." Allocation is made according to the location of the market in which the transaction occurred.
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From page 160... ...
A second problem discovered was incomplete reporting by the corporate sector. As in the United States, it was determined that more comprehensive coverage was needled of transactions involving nonbank financial institutions and inclustrial and commercial companies: considerable data clearly were not being collected on overseas transactions of the corporate sector.
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From page 161... ...
In addition, Japan is one of the industrial countries that does not include reinvested earnings from direct investment in investment income. Like their counterparts in the United States, compilers in the United Kingdom, Germany, and Japan have also had to deal with the difficult problems of valuation and geographic allocation.
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From page 162... ...
The German compilers believe that major reporting gaps did not arise from the internationalization of institutional investors' business because the number of such institutions in Germany is generally limited, and they are generally sympathetic to statistical reporting requirements. The German compilers also believe that data gaps attributed to the growing international diversification of private individuals' portfolios can be improved as long as these transactions are handled and reported by the German banking system.
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