Following the Money U.S. Finance in the World Economy (1995) / Chapter Skim
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B VIEWS OF DATA COMPILERS, FILERS, AND USERS
B VIEWS OF DATA COMPILERS, FILERS, AND USERS
Pages 163-185
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From page 163... ...
The last section presents the results of the panel's literature search of studies using data on international capital transactions.
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From page 164... ...
Likewise, Treasury Department and FRBNY staff, who have primary responsibility for portfolio investment data on banking, nonbanking, and securities transactions, expressed confidence in the Treasury International Capital (TIC) data, in particular, the banI |
From page 165... ...
Treasury Department staff noted that the burden associated with TIC reporting is reasonable, but FRBNY staff said that the current system may ask too much of smaller institutions. The latter suggested consideration be given to raising exemption levels when it would reduce the reporting burden without substantially degrading coverage.
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From page 166... ...
Both BEA and FRBNY staff maintained that corporations and financial institutions need to be held responsible for reporting through legal fines and greater efforts to ensure that they are aware of their reporting obligations. DATA FILERS: TIC REPORTING SYSTEM The panel received detailed responses to its canvass from six internationally active banks and securities firms that file reports in the TIC system.
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Methods used to complete the forms include consolidating information from different departments and areas, such as the general ledger and demand deposit system, into a final spreadsheet report; having each submitting department utilize its own system to accumulate necessary fiats; and using automation involving computer mainframe anal personal computer applications.
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On another front, the operating systems of financial institutions may use country codes for purposes that conflict with the
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Another problem with U.S. branches of foreign banks arises because operating systems of reporting financial institutions may have limited information, which requires manual identification and verification.
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head office on behalf of its foreign branches is unclear. Because the foreign office has the claim on the foreign customer, some banks treat the head office claim as a claim on its own foreign office.
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Filers suggest that references to foreign public borrowers be eliminate~l and that the entities covered under foreign official institutions be expanded to include additional entities currently included in foreign public borrowers. · Claims on form BC exclude long-term securities.
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broker would be reported as a purchase from (sale bye the United Kingdom. REPORTING BURDEN Generally, respondents indicated that the 1 5-calendar-day period for filing reports is inadequate.
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Reporting by financial institutions on these transactions should be eliminated, since it poses an unnecessary reporting burden on filers to report ~luplicative information. Differences between data on copies of the tickets the FRBNY receives on foreign official purchases and sales of long-term securities and information on such transactions submitted by filers on the S form at times can be attributed to the inclusion of financing charges in the total amounts of transactions by filers.
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Respondents suggest that a system could be established whereby financial institutions under such circumstances would provide the FRBNY with a computer run or tape of all such transactions into which they have entered. The FRBNY would compare its information captured from the cluplicate tickets to the computer run and question the financial institutions about differences between the two information sources.
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The corporation estimated that the periodic (i.e., 5-7 years) BE-10 form requires approximately 3 employeeyears to complete the inclividual forms for its several hundred foreign affiliates and to consolidate data from the numerous domestic affiliates that qualify.
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Respondents' suggestions on how to reduce the reporting burden without sacrificing data were both general and specific. General suggestions included requesting information in a manner consistent with accounting systems, being able to answer questions by referring to annual reports, and extending the time allowed for filing.
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From page 177... ...
higher exemption levels for reporting; they asserted that this would reduce the reporting burden and cut errors. DATA FILERS: BEA'S SURVEYS OF FOREIGN DIRECT INVESTMENT IN THE UNITED STATES Substantive responses about BEA's surveys of foreign direct investment in the United States were received from four large U.S.
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From page 178... ...
Some also recommended categorizing securities data along the format used by large financial institutions, which group data by country; region; security type (bonds versus stocks) ; maturity, and indices of volume en cl price; and purposes of investments, differentiating corporate acquisitions (such as in mergers ant!
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. Consistent with users' familiarity with direct investment data, the most frequently cited data source was the Survey of Current Business and elated Commerce Department publications, followed by the Treasury BuJ7etin.
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providing up-to-date market valuations for data on securities ho:[clings. USERS IN FINANCIAL INSTITUTIONS Replies from individuals in financial organizations banks, securities dealers, ant!
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USE OF DATA IN PUBLISHED STUDIES Our literature search revealed that there are more published studies using BEA's information on direct investment than the Treasury Department's TIC data on portfolio investment. Although most of these studies appear in the References and Bibliography, the selected list below (Figures B-1 and B-2)
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Net International Investment Position: The Numbers Are Misstated and Misunderstood. Washington, D.C.: U.S.
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Stein 1989 Exchange Rates and Foreign Direct Investment: An Imperfect Capital Markets Approach. NBER Working Paper No.
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Musgrave, P.B. 1975 Direct Investment Abroad and the Multinationals: Effects on the United States Economy.
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Stevens of the staff of the Federal Reserve Board for his assistance in preparing this table. FIGURE B-2 Selected Published Studies Using TIC Data Cooper, I.A., and Kaplanis, E
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