Official holdings of US dollar reserves are partly invested outside the United States. These offshore investments do not strictly speaking finance the US current account, but do support the US dollar. Offshore holdings grow fast when intervention is large.

Banks in the Asian economies most affected by the Asian financial crisis generally continue to enjoy comfortable liquidity in the international interbank market. The apparent international illiquidity of banks in Korea is concentrated in foreign banks. Foreign banks’ offshore funding of local...

Interest rate differentials have been a driving force behind exchange rate movements in recent years. This has focused market attention on the role of currency carry trade positions, and on the possibility that a sudden unwinding might adversely affect financial stability. However, carry trades...

Globalisation has affected the relationship between the trade balance and the real exchange rate in two ways. On the one hand, the growth of trade taking place within industries makes the trade balance more sensitive to real exchange movements. On the other hand, a higher degree of vertical...

Trading in the FX market reached an all-time high of $5.3 trillion per day in April 2013, a 35% increase relative to 2010. Non-dealer financial institutions, including smaller banks, institutional investors and hedge funds, have grown into the largest and most active counterparty segment. The...

n-deliverable forwards (NDFs) allow investors and borrowers to take positions in currencies that are subject to official controls. Turnover in NDFs has risen in recent years as non-residents use them to hedge increasing investment in local currency bonds. Pricing in deliverable forward and NDF...

In response to the financial crisis, the authorities in a number of countries used public funds to recapitalise their banks. Did a reduction of risk in banks' lending follow these rescue operations? To help answer this question, we analyse the balance sheets and syndicated loan signings of 87...

This special feature looks at trading activity in the foreign exchange market between the Triennial Surveys conducted in 2010 and 2013 and in the months following. We estimate that the $5.3 trillion per day reported for April 2013 was a peak, with activity falling subsequently by $300 billion to...

Cross-border bank lending to emerging markets dropped sharply in the second half of 2011 as the euro area crisis intensified. Stefan Avdjiev (BIS), Zsolt Kuti (Magyar Nemzeti Bank) and Elod Takáts (BIS) use the BIS international banking statistics to identify the key drivers of this decline....

The BIS has revised its debt securities statistics to enhance their comparability across different markets. This feature by Branimir Gruic and Philip Wooldridge (BIS) sketches the main changes and the reasoning behind them. International issues have been redefined as debt securities issued...