International Currencies and Capital Allocation / Matteo Maggiori, Brent Neiman, Jesse Schreger.

Format:

Book

Author/Creator:

Maggiori, Matteo.

Contributor:

National Bureau of Economic Research.

Neiman, Brent.

Schreger, Jesse.

Series:

Working Paper Series (National Bureau of Economic Research) no. w24673.

NBER working paper series no. w24673

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 2018.

Summary:

We establish currency as an important factor shaping global portfolios. Using a new security-level dataset, we demonstrate that investor holdings are biased toward their own currencies to such an extent that countries typically hold most of the foreign debt securities denominated in their currency. While large firms issue in foreign currency and borrow from foreigners, most firms issue only in local currency and do not directly access foreign capital. These patterns hold broadly across countries except for the United States, as foreign investors hold significant shares of US dollar bonds. The share of dollar-denominated cross-border holdings surged after 2008.

Notes:

Print version record

May 2018.