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Pages 1-18

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From page 1... ... At the same time, operations of major financial institutions increasingly have extended beyond national borders and are now carried out on a worldwide basis. Such changes in capital mobility, product innovation, and industry structure have transformed world financial markets and hastened the internationalization of the U.S. Read the entire page →
From page 2... ... international capital transactions have become more important, the developments in international financial markets have made it a more formidable task to collect such data. Although the United States produces as much detailed data on its capital flows as any country in the world, the explosion in such transactions since the early 1980s has outpacec3 improvements in the statistical systems that monitor them. Read the entire page →
From page 3... ... Existing international transactions data are also marred by measurement and collection problems anal significant gaps. For example, the rise in nonbank market participants {in particular, institutional investors like pension funds, mutual funds, insurance companies, and other professional money managers) Read the entire page →
From page 4... ... international capital transactions would be prohibitively costly both for the statistical agencies and for those who would have to supply the raw data. Thus, key recommendations in this report focus on streamlining existing statistical and regulatory reporting and using alternative financial databases to enhance the cost-effectiveness of the existing data collection system. Read the entire page →
From page 5... ... SIGNIFICANT DATA GAPS The altered conditions of world financial markets have implications for U.S. efforts to monitor its international capital transactions. Read the entire page →
From page 6... ... BEA's legal authority for conducting the direct investment survey floes not extend to real estate held exclusively for personal use. Purchases by limited partnerships are considered portfolio investment and are covered in Treasury Department surveys rather than in the BEA direct investment survey. Read the entire page →
From page 7... ... affiliate of a foreign company. The explosive growth in innovative derivative instruments has transformed world financial markets since the 1980s. Read the entire page →
From page 8... ... merchandise trade, international services transactions, investment incomes and payments, and unilateral transfers. Private capital flows include direct and portfolio investment (banking, securities, and other commercial and financial transactionsJ. Read the entire page →
From page 9... ... The panel underscores that, as the international financial environment evolves, the existing data on U.S. international capital transactions will become more deficient if the data collection system continues to lag behind global financial developments. Read the entire page →
From page 10... ... international capital transactions, direct investment data are generally adequate in coverage but require constant and careful attention; improvements are most needed in portfolio investment data. Read the entire page →
From page 11... ... nonbank firms and of investment income flows. BEA should continue its process of working with the BIS, the Federal Reserve, and the statistical authorities of other countries to seek further improvements in BEA's coverage of international transactions through additional use of data collected by international organizations and foreign central banks. Read the entire page →
From page 12... ... Coordinated efforts by regulatory and statistical agencies to streamline reporting requirements, in consultation with filers, are likely to engender cooperation and compliance from them, yielding more accurate and timely (lata. � The Treasury Department and the Federal Reserve Bank of New York should mount a vigorous publicity campaign to bring the existence of the reporting requirements to the attention of all parties active in the international trailing of securities, including pension funds, mutual funds, insurance companies, and individuals or businesses that serve as money managers and investment advisers. Read the entire page →
From page 13... ... {3-20) IMPROVING COVERAGE OF FINANCIAL DERIVATIVES � An interagency group fell by the Federal Reserve and including the Federal Reserve Bank of New York, the Treasury Department, the Bureau of Economic Analysis, the Securities and Exchange Commission, the Commodity Futures Trading Commission, and other financial regulatory bodies, should be established to undertake several tasks. Read the entire page →
From page 14... ... {4-~) USING ALTERNATIVE DATA SOURCES AND METHODS In view of the global nature of transactions and their rapid expansion, improvements in the medium term in coverage and accuracy of data (in particular, those on portfolio transactions that bypass traditional financial intermediaries and those that are conducted directly through computer and telecommunications networks) Read the entire page →
From page 15... ... international capital transactions from the two systems. The Treasury Department and the Bureau of Economic Analysis should conduct a rigorous study to explore such feasibility by undertaking an in-depth analysis of a sample of transactions that pass through Fedwire and CHIPS. Read the entire page →
From page 16... ... (5-3) EXPANDING INTERNATIONAL DATA EXCHANGE AND COORDINATION Because of the internationalization of financial markets, data compilers can no longer rely largely on domestic data sources. Read the entire page →
From page 17... ... The challenge facing data compilers is how to improve the data collection systems to reflect today's needs and to do so in an environment of the growing number and diversity of institutional and private players engaging in international capital transactions, the changing roles of intermediaries and financial instruments, Read the entire page →
From page 18... ... Only when this challenge is met will U.S. analysts, business people, and policy makers be in a position to aclequately understand the impact of international financial activity on the U.S. Read the entire page →

From page 1...

... At the same time, operations of major financial institutions increasingly have extended beyond national borders and are now carried out on a worldwide basis. Such changes in capital mobility, product innovation, and industry structure have transformed world financial markets and hastened the internationalization of the U.S.

SUMMARY Pages 1-18

SUMMARY
Pages 1-18