Follow the Money

Brad Setser tracks cross-border flows, with a bit of macroeconomics thrown in.

Latest Post

Monitors displaying the stock index prices and Japanese yen exchange rate against the U.S. dollar at the Tokyo Stock Exchange Issei Kato/Reuters

Three Steps to Strengthen the U.S. Treasury's Foreign Exchange Report

The analytics used in the U.S. Treasury's Foreign Exchange Report should be updated to better capture the significant state flows that no longer appear as part of many country's disclosed foreign exchange reserves. Read More

The Disappearing Japanese Bid for Global Bonds
The rise in Japanese holdings of foreign bonds had an enormous impact on global markets between 2011 and 2020. The markets will now have to adapt to a sustained reduction in Japanese demand.
China's Balance of Payments Data Does Not Add Up
China's current balance of payments data doesn't quite make sense. Significant and poorly explained gaps exist between the reported BoP data and the underlying source data. China's economy is so big that data gaps really matter.
The New Geopolitics of Global Finance
The global balance of payments only adds up if the G-7's geopolitical rivals are also its bankers.
  • Economics
    I am stepping down from my position at the Council of Foreign Relations to take a new job. That, among other things, means that I will not be blogging here for the foreseeable future. I am enormou…
  • Currency Reserves
    It Is Time To Scrap the IMF's Reserve Adequacy Metric
    The IMF reserve metric isn't working: it is failing to differentiate between obviously under-reserved countries like Turkey and Argentina and adequately reserved countries like China.
  • Turkey
    The Changing Nature of Turkey’s Balance Sheet Risks
    Pay attention to banking system's foreign currency exposure to the government ...
  • Trade
    China’s Surplus is Rising Rapidly. So is the U.S. Deficit. The IMF Cannot Turn a Blind Eye.
    Do not use the IMF’s current account forecast in the Fall 2020 World Economic Outlook (WEO). It is already out of date.     
  • Emerging Economies
    Reframing the Collective Action Problem in Sovereign Bond Restructuring
    A recent white paper from Lazard points out that emerging market sovereign bond holdings are often fairly concentrated among a handful of big players.  The main impediment to collective action may be less that bond holders are dispersed, and more that a handful of big holders all compete against each other and the benchmark.
  • China
    Record Chinese Bilateral Surpluses With the United States Are Not Mirrored in the U.S. Trade Data
    Is China’s surplus with the United States back at a record level? It depends. In China’s data, China’s exports to the United States and its surplus with the United States are at all-time highs. The United States’ import data, however, shows fewer imports from China than China reports exports—which is interesting, because the norm has long been the other way around.
  • China
    Chasing Shadows in China’s Balance of Payments Data
    China’s second quarter balance of payments data points to a significant increase in the foreign asset accumulation of the state banking system. That at least raises the question of whether China’s authorities are resisting pressure on the yuan to appreciate.