Portfolio Inflows Eclipsing Banking Inflows: Alternative Facts?

February 16, 2018

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Format: Chicago

Eugenio M Cerutti, and Gee Hee Hong. Portfolio Inflows Eclipsing Banking Inflows: Alternative Facts?, (USA: International Monetary Fund, 2018) accessed December 24, 2024

Disclaimer: IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.

Summary

Superficial examination of aggregate gross cross-border capital inflow data suggests that there was no substitution between portfolio inflows and bank loans in recent years. However, our novel analysis of disaggregate inflows (both by types of instrument and borrower) shows interesting heterogeneity. There has been substitution of bank loans for portfolio debt securities not only in the case of corporate and sovereign borrowers in advanced countries, but also sovereign borrowers in emerging countries. In the case of corporate borrowers in emerging markets, the relationship corresponds to complementarity across types of gross capital inflows, especially during periods of positive capital gross inflows after the global financial crisis. A large part of these patterns does not seem to be driven by a common phenomenon across countries associated with the global financial cycle, but rather by country-specific factors.

Subject: Balance of payments, Capital flows, Capital inflows, Financial institutions, Loans, Securities, Stocks

Keywords: AE corporate, Bank inflows, Borrower type, Capital flows, Capital inflows, Debt inflow, Debt optimization operation, Factor loading, Global, Global financial cycle, Investment loan, Loan inflow, Loans, Portfolio debt, Portfolio inflows, Securities, Stocks, WP

Publication Details

Pages:

34
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2018/029
Stock No:

WPIEA2018029
ISBN:

9781484341964
ISSN:

1018-5941

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