In the past decade, Germany has been the world champion in exporting capital ("Exportweltmeister"). No other country invested larger amounts of savings outside its borders. However, we find that Germany plays in the third division when it comes to investment performance. To show this, we...

The EU has recently entered accession talks with five transition economies of eastern Europe. Membership in the EU would require inter alia the full liberalization of capital flows. This paper provides empirical evidence on the openness towards foreign capital that the accession states have...

Similar to Chile in the 1990s, Slovenia has introduced an unremunerated reserve requirement (URR) on financial credits in 1995. We find that the URR has not been effective in reducing overall inflows of foreign capital. Hence, the gain in monetary autonomy has been limited. While the overall...

During the last two decades, the degree of openness of national financial systems has increased substantially. At the same time, asymmetries in information and other financial market frictions have remain prevalent. We study both empirically and theoretically the implications of the opening up...

Developing countries are constrained in financing current account deficits as real capital mobility is still far from perfect. At the same time, capital flows to these countries proved to be extremely volatile. The paper argues that the long-term problem of "too little" should not be confused...

U.S. equity outperformance and sustained dollar appreciation have led to large valuation gains for the rest of the world on the U.S. external position. The author constructs their global distribution, carefully accounting for the role of tax havens. Valuation gains are concentrated and large in...

We draw on a new data set on the use of Swiss francs and other currencies by European banks to assess the patterns of foreign currency bank lending. We show that the patterns differ sharply across foreign currencies. The Swiss franc is used predominantly for lending to residents, especially...

The literature on drivers of capital flows stresses the prominent role of global financial factors. Recent empirical work, however, highlights how this role varies across countries and time, and this heterogeneity is not well understood. We revisit this question by focusing on financial...

Financial globalization has led to a large increase in international asset holdings. While the rise of associated dividend and interest flows has until now been muted by the decreasing trend in interest rates, this pattern could change, leading to a larger role of investment income flows in the...

The world runs a trade surplus with itself: Exporters report larger values of exports than what importers report as imports. This is a logically impossible but well known empirical fact. Less well known, in recent years, more than 80 percent of the global surplus is a trade surplus that the EU...