This paper focuses on emerging markets government bonds issued in local currency with different maturities. Foreign investors face interest rate, currency, and credit risks. We consider the entire term structure of carry trade returns and find that, while the default premium does not contribute...

We analyze how global and local factors affect portfolio allocation by euro area investors in emerging markets at the bond-level. First, cross-sectional analysis reveals a strong preference for home (Euro) currency bonds. Second, panel regressions, whether at the bond or aggregate flows level,...

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

This paper applies the Diebold-Yilmaz connectedness methodology on sovereign credit default swaps (SCDSs) to estimate the global network structure of sovereign credit risk. The level of credit risk connectedness among sovereigns, which is quite high, is comparable to the connected- ness among...

This book chapter looks at the law governing sovereign bonds in the context of the historical shift from an implied domestic governing law for all sovereign debt and in light of the traditional distinction between domestic and external bonds based on the place of issuance. Instead, it proposes...

We examine global integration in the market for asset management, as indicated by the correlation of mutual fund flows across domiciles. We observe no leading role for the US relative to flows in other domiciles. We do observe a strong global factor in MF flows, and global integration is linked...