Managers of official dollar reserves are bound to pay attention to the debate over safe assets: their investment portfolios operationally define such assets. This chapter argues that reserve managers need not worry about a shortage of safe assets. The debate turns first on whether demand for...

This paper describes the international flow of funds associated with calm and volatile global equity markets. During calm periods, portfolio investment by real money and leveraged investors in advanced countries flows into emerging markets. When central banks in the receiving countries resist...