The IMF Working Papers series is designed to make IMF staff research available to a wide audience. Almost 300 Working Papers are released each year, covering a wide range of theoretical and analytical topics, including balance of payments, monetary and fiscal issues, global liquidity, and national and international economic developments.
This paper documents the evolution of international financial integration since the global
financial crisis using an updated dataset on external assets and liabilities, covering over 210
economies for the period 1970-2015. It finds that the growth in cross-border positions in
relation to world GDP has come to a halt. This reflects much weaker capital flows to and
from advanced economies, with diminished cross-border banking activity, and an increase in
the weight of emerging economies in global GDP, as these economies have lower external
assets and liabilities than advanced economies. Cross-border FDI positions have continued to
expand, unlike positions in portfolio instruments and other investment. This expansion
reflects primarily positions vis-à-vis financial centers, suggesting that the complexity of the
corporate structure of large multinational corporations is playing an important role. The
paper also explores the cross-country drivers of foreign ownership of domestic debt
securities, highlighting in particular the role of the euro debt crisis in explaining its evolution.