Analysis of developments in EU capital flows in the global context : final report.
Date: 2015-02-25
Institutions: Directorate-General for the Internal Market and Services
Subjects: European integration, bond, capital market, capital movement, econometrics, economic integration, economic policy, economic recession, financial market, outflow of capital, public debt, report

Final Report 
Bruegel 
N° MARKT/2013/50/F 

Analysis of developments in EU 
capital flows in the global 
context 

Zsolt Darvas, Pia Hüttl, Silvia Merler, Carlos de Sousa 
and Thomas Walsh 

mmmll 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 Analysis of developments in EU capital flows in the global context 

The  information  and  views  set  out  in  this  study  are  those  of  the  authors  and  do  not 
necessarily  reflect  the  official  opinion  of  the  Commission.  The  Commission  does  not 
guarantee the accuracy of the data included in this study. Neither the Commission nor any 
person acting on the Commission’s behalf may be held responsible for the use which may 
be made of the information contained therein. 

DOI: 10.2780/2225 
ISBN: 978-92-79-34834-1 

© European Union, 2014. 

Reproduction is authorised provided the source is acknowledged. 

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 Analysis of developments in EU capital flows in the global context 

Table of Contents 

Abstract 
Executive summary 
1. Introduction 
2. Theoretical aspects of capital flows 

2.1 Net capital flows 
2.2 Gross capital flows and valuation effects 
2.3 Stocks 
3. Global trends 

3.1 Major country groups of the world 
3.2 Global trends in the banking sector 
3.3 Ukraine and Russia 
4. A closer look at Europe 

4.1 The special case of the euro area 
4.2 Gross and net financial flows 
4.3 Net financial flows 
4.4 Net international investment positions (NIIPs) 
4.5 Net financial flows by sectors 
4.6 Financial integration and dis-integration 

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Re-domestication of banks’ activity 
Diversified evolution of “home bias” in banks’ assets 
Sovereign over-exposure 
Financial fragmentation in sovereign and private lending rates 

5. Returns on investment 

5.1 External annualized yield 
5.2. Revaluation Effects 
5.3.Total Returns 

6. In-depth analysis: dataset on bilateral capital flows and stocks 

6.1. Setting up the dataset 
6.2. Literature survey 
6.3. Econometric research exploiting the bilateral dataset 

Results for the stocks 
Results for the flows 

6.4. Calculating financially-weighted effective exchange rates 
6.5 Calculating financially-weighted government bond yields and spreads 

7 Appendix 

References 

7.1 Appendix A to Section 4: financial accounts of each EU country 
7.2 Appendix B to Section 4: financial accounts by sector of each EU country 
7.3 Appendix to Revaluation Effects 

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List of Figures 

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Figure 1 Net financial account for different country aggregates (in USD billions) 
Figure 2 Euro-area banks' loans to, and holdings of debt securities issued by, residents 
of the euro area outside their home countries (January 1999 = 100), January 1999 – 
September 2014 
Figure 3 The evolution of gross and net capital flows in the world (percent of GDP) 
Figure 4 Composition of net capital flows in the world (percent of GDP) 
Figure 5 Net international investment positions (in percent of GDP) 
Figure 6 Gross foreign claims of reporting banks on the rest of the world 
Figure 7 Financial account and components (in percent of GDP) of both countries 
Figure 8 Net international investment position and its components (in percent of 
respective country GDP) 
Figure 9 Net position of portfolio investment of Russia vis-à-vis its main partners (in 
bn USD) 
Figure 10 portfolio investment liabilities, Ukraine and Russia (in bn USD) 
Figure 11 Stock exchange indexes, Russia and Ukraine 
Figure 12 Net foreign direct investment inflows to Russia by region (in bn USD) 
Figure 13 Gross financial flows in the three euro-area groups (percent of GDP) 
Figure 14 Gross financial flows in France (percent of GDP) 
Figure 15 Euro area banks foreign claims (percent of GDP) 
Figure 16 A, B, C Foreign claims of euro-area banks for Euro-area Core, Centre and 
Periphery (percent of respective country aggregate GDP) 
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Figure 17 Consolidated foreign claims for each euro area subgroup (percent of GDP)  48 
Figure 18 Gross financial flows in the four euro-periphery countries (percent of GDP)  49 
Figure 19 Gross financial flows in northern Europe, the UK and central and Eastern 
Europe (percent of GDP) 
Figure 20 A, B Northern and UK bank foreign claims (percent of GDP) 
Figure 21 Net financial flows in the three euro-area groups (percent of GDP) 
Figure 22 Net financial flows in the three euro-area groups (percent of GDP) 
Figure 23 Net financial account of the euro-periphery and central and eastern Europe 
(percent of GDP) 
Figure 24 Euro area domestic credit growth vs accumulated net debt flows 
Figure 25 Net international investment position the three euro-area groups (percent of 
GDP) 
Figure 26 Portfolio international investment position the euro-area periphery (percent 
of GDP) 
Figure 27 Portfolio international investment position the euro-area centre (percent of 
GDP) 
Figure 28 Net international investment position of EU north, the UK and central and 
eastern Europe (percent of GDP) 
Figure 29 Capital flows by sector and instrument in the euro-area core countries (in 
percent of GDP) 
Figure 30 Capital flows by sector and instrument in the euro-area centre countries (in 
percent of GDP) 
Figure 31 Capital flows by sector and instrument in the euro-area periphery countries 
(in percent of GDP) 
Figure 32 Capital flows by sector and instrument in northern Europe countries (in 
percent of GDP) 
Figure 33 Capital flows by sector and instrument in central and eastern European 
countries (in percent of GDP) 

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Figure 34 Capital flows by sector and instrument in the United Kingdom (in percent of 
GDP) 
Figure 35 Euro Area banks’ loans and debt holdings – total, domestic and other euro-
area (January 1999=100) 
Figure 36 Debt held by banks in selected countries as assets: domestically vs. foreign 
issued (percent of all debt holdings) and debt as the share of total assets (percent of 
all assets) 
Figure 37 Holdings of domestic general government debt (percent of total assets) 
Figure 38 Share of holding of government bonds by domestic banks vs. non-resident 
investors 
Figure 39 Use of Eurosystem liquidity (in € bn), January 2003 – July 2014 
Figure 40 TARGET2 balances 
Figure 41 Dispersion of lending rates 
Figure 42 Dispersion of lending rates vs. ECB refinancing rate 
Figure 43 Scatter plots of returns on investment against revaluations (in %) 
Source: Bruegel calculations using data from Eurostat and IMF; Figure 44 Evolution of 
revaluation effects for selected countries (in %) 
Figure 45 Trade-weighted and financially-weighted real effective exchange rates 
(based on consumer prices), 1990-2014 
Figure 46 Financially-weighted government bond yields and spreads 

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List of Tables 

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Table 1 Exposure to Ukraine of individual EU countries, in USD billions 
Table 2 Exposure to Russia of individual EU countries, in USD billions 
Table 3 External annualized yields for 24 EU countries and United States, Japan and 
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Switzerland (in %) 
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Table 4 Revaluation Effects by period for selected countries (in %) 
Table 5 Total Return (Return on Investment plus Revaluation) for selected countries  88 
Table 6 Average Returns and Revaluations by New and Old EU member states and 
Non-EU countries 
Table 7 Correlation between returns and revaluations (in %) 
Table 8 Dataset variables 
Table 9 Literature exploiting datasets on bilateral financial flows and stocks 
Table 10 Regression results for stocks 
Table 11 Regression results for flows 
Table 12 The list of the 57 countries included in the bond yield dataset and the lists of 
the 22 and 38 countries which were used to calculate the weighted average foreign 
interest rates 

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 Analysis of developments in EU capital flows in the global context 

Abstract 

This report reviews the key theoretical foundations underlying the benefits and risks of 
net  capital  flows,  in  particular  large,  persistent  inflows  or  outflows,  and  the 
significance  of  gross  flows  and  their  composition.  We  analyse  global  capital  flows 
between  country  groupings.  We  conclude  that  global  flow  patterns  changed 
significantly and Europe has been left behind. The magnitude of capital outflows from 
Russia  and  Ukraine  due  to  geopolitical  developments  have  been  much  smaller  than 
during  the  financial  crisis.  In  Europe,  financial  disintegration,  which  began  with  the 
financial crisis, has not been reversed when considering various indicators of financial 
stocks  and  flows.  Turning  to  foreign  assets  and  liabilities,  we  that  see  central  and 
eastern  European  countries  experienced  large  negative  spreads  on  equity,  and  that 
some  larger  EU  member  states  succeeded  in  somewhat  replicating  the  US’s  privilege 
on equity returns. Correlation between returns and revaluations was small, suggesting 
revaluation  gains  did  not  compensate  low  returns.  Using  bilateral  data  and  panel 
econometric  models  we  examine  determinants  of  capital  flows  and  stocks.  Euro 
membership boosted debt flows, while EU membership increased equity flows. Global 
uncertainty reduces capital flows, but higher financial integration dampens this effect. 
We  calculate  financial  weighted  real  effective  exchange  rates  and  government  bond 
yields and spreads. 

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 Analysis of developments in EU capital flows in the global context 

Executive summary* 

The  purpose  of  our  report  is  to  provide  a  comprehensive  overview  of  capital 
movements in Europe in a global context. 

The  first  chapter  of  the  report  briefly  introduces  the  rationale  for  monitoring  capital 
flows, which are related to welfare-enhancing characteristics of capital flows, but also 
to  the  risks  associated  with  the  vulnerability  that  they  create,  as  exemplified  by 
financial and consequent economic distress throughout the world.  

The  second  chapter  briefly  summarises  theoretical  aspects  of  capital  flows.  The  key 
conclusions are the following:  

  Capital flows are frequently viewed as the financial counterpart to savings and 
investment  decisions  and  thereby  the  focus  is  typically  on  net  capital  flows, 
which  represent  the  key  variable  to  gauge  countries’  net  external  borrowing 
requirements. 

  Current  and  capital  accounts  do  not  have  to  be  balanced,  as  inter-temporal 
consumption smoothing and the consequent external borrowing/lending can be 
beneficial,  especially  if  capital  flows  “downhill”  from  capital-rich  countries  to 
capital-poor countries. 

  However, persistent and excessive current account deficits, which are financed 
by financial account surpluses, expose countries to the risk of sudden stops and 
reversals in capital flows, which can lead to significant financial instability, and 
may lead to painful and prolonged macroeconomic adjustments. 

  Prolonged current account deficits can also lead to distortions in the allocation 
of capital in the economy, whereby booms emerge with relative price changes 
between  sectors,  leading  to  the  expansion  of  non-traded  sectors  and  the 
contraction  of  tradable  sectors,  which  in  turn  can  make  it  difficult  to  service 
external liabilities once the boom is over. 

  Persistent  current  account  surpluses  lead  to  the  accumulation  of  net  foreign 
assets,  which  are  subject  to  valuation  changes  and  can  involve  welfare  costs. 
Current  account  surplus  countries  can  be  indirectly  hit  by  sudden  stops  in  the 
financing of deficit countries, because this implies a loss of export markets and 
the  need  to  invest  capital  elsewhere.  There  is  also  a  macroeconomic 
adjustment  problem  for  countries  with  persistently  large  current  account 
surpluses  (and  consequent  net  capital  outflows)  from  export-oriented  to 
domestically-oriented sectors.  

  Beyond  net  flows,  gross  flows  and  their  instrument  composition  (debt  vs. 
equity),  maturity  structure,  currency  composition,  and  sectoral  composition 
matter  too.  Gross  flows  can  amount  to  several  dozen  percent  of  GDP  even 
when  net  flows  are  small.  Gross  flows  enable  risk  sharing  and  are  subject  to 
contagion in cases of financial turmoil. 

The third chapter analyses global capital flows, by grouping countries of the world into 
ten groups. The key findings are the following: 

  The  financial  crisis  resulted  in  a  collapse  of  both  net  and  gross  financial  flows 
across  the  world.  Figure  1  reports  the  developments  with  new  flows.  The  EU 

*  The  authors  are  thankful  to  several  colleagues  from  the  European  Commission  and  from 
Bruegel for valuable comments and suggestions. 

November 2014  8 

 
 
 
 
 
 
 
 
                                           
 Analysis of developments in EU capital flows in the global context 

 

moved  from  a  stable  and  sizeable  capital  account  surplus  before  the  crisis 
(reflecting  an  overall  EU  current  account  deficit)  to  a  capital  account  deficit 
post crisis, except for a few quarters. 
Interesting observations can be made if we separate the EU into the euro area, 
the  three  Northern  EU  countries  (UK,  Denmark,  and  Sweden)  and  central  and 
eastern  European  (CEE)  member  states.  The  euro  area  had  a  more  or  less 
balanced net financial account both before and during the height of the global 
crisis,  but  since  the  specific  euro-crisis  intensified  in  2011  it  experienced 
sizeable  capital  outflows  (which  were  mirrored  in  increased  current  account 
surpluses). Despite calmer financial markets in 2013-14, capital in net terms is 
still  flowing  out.  Moreover,  there  was  also  a  major  reduction  in  gross  flows 
relative to the pre-crisis period, which have remained subdued in 2013-14 too.  

  Other regions in Europe and the rest of the world show quite different patterns. 
Net  flows  did  not  turn  negative  in  CEE  members  of  the  EU,  in  the  three 
Northern  non-euro  countries  and  in  most  non-European  regions.  Only  in 
countries  in  the  Middle  East  and  North  Africa,  and  in  four  smaller  Asian 
countries (ASEAN-4), were there sudden capital outflows in 2003-14, but not in 
other regions.  

Figure 1 Net financial account for different country aggregates (in USD 
billions) 

Source: Bruegel calculations using IMF Balance of Payments Statistics and Eurostat for the EU, 
which exclude intra-EU flows. 

November 2014  9 

-200-10001002003004005002005Q42006Q22006Q42007Q22007Q42008Q22008Q42009Q22009Q42010Q22010Q42011Q22011Q42012Q22012Q42013Q22013Q4EUBRICSASEAN-4Middle East and North AfricaCIS except RussiaLatin AmericaJPUSNon-EU advanced (excl US and JP)Sum of 75 countries 
 
 
 
 
 
 Analysis of developments in EU capital flows in the global context 

Note:  A  positive  value  indicates  net  capital  inflows  into  the  country/country  group.  We  report 
four-quarter moving averages. The 75 countries included in our country groups account for 92 
percent of GDP of the countries included in the IMF World Economic Outlook. 

  The financial crisis also resulted in a collapse of gross financial flows across all 
country aggregates, while the subsequent recovery of capital flows was uneven 
across regions. By the first quarter of 2010, gross capital flows reached nearly 
pre-crisis  levels  in  Latin  America,  in  the  ASEAN-4,  and  in  Sub-Saharan  Africa. 
The  same  recovery,  albeit  to  a  somewhat  lesser  extent,  can  be  observed  for 
the BRICS and non-EU advanced economies. The euro area, CEE9 and the CIS 
8  (excluding  Russia)  continue  to  display  depressed  levels  of  gross  in-  and 
outflows of capital, even in 2013. 

  The  magnitude  of  gross  flows  relative  to  GDP  is  several  factors  higher  now  in 
every non-European  emerging and developing country region than in the euro 
area,  in  sharp  contrast  to  pre-crisis  developments.  These  developments 
suggest that global capital flow patterns changed significantly and Europe is left 
behind. 

 

In  terms  of  instruments,  portfolio  investment  played  a  major  role  before  the 
financial  crisis  in  the  euro  area,  the  three  Northern  EU  members,  the  non-EU 
advanced economies and the ASEAN-4, whereas the CIS 8 (excl. Russia), Latin 
America,  Middle  East  and  North  Africa,  and  Sub-Saharan  Africa  benefited 
mostly  from  net  direct  investment  flows.  During  the  recovery,  the  euro  area 
experienced  volatile  portfolio  investment  flows  and  mostly  negative  other 
investment  flows,  while  the  other  non-EU  advanced  economies  registered  a 
strong  recovery  starting  in  early  2010,  on  the  back  of  stable  portfolio 
investment and bank inflows. In Latin America and the ASEAN-4, the recovery 
was mostly driven by positive net portfolio debt flows, as well as FDI. 

  Available  data  on  banks  also  suggest  that  a  major  deleveraging  process  is 
ongoing  in  Europe,  but  not  in  the  rest  of  the  world,  though  European  banks 
continue  to  have  much  larger  balance  sheets  relative  to  GDP  than  in  other 
advanced countries.  

  All these and other developments point toward the special situation of Europe, 
and in particular the euro area, which we highlight and analyse in more detail 
in Chapter 4. 

  The net international investment positions (NIIP) of the  euro area and non-EU 
advanced economies has been negative and stable over the past years, mainly 
on the back of negative portfolio investment and positive FDI stocks. However, 
as highlighted by a recent academic article (Zucman, 2013), around 8% of the 
global  financial  wealth  of  households  is  held  in  tax  havens,  three-quarters  of 
which  goes  unrecorded.  Accounting  for  unrecorded  assets  the  Eurozone  turns 
into  a  net  creditor  rather  than  a  net  debtor  to  the  rest  of  the  world,  as 
indicated  by  official  statistics.  This  finding  suggests  that  major  improvements 
are needed in capital flows and stocks statistics. 

 

In the CEE, FDI liabilities are dominant and account for about the same as the 
sum  of  net  portfolio  and  other  investment  liabilities.  CEE  and  the  group  of 
Brazil  and  India,  are  the  only  regions  (among  the  regions  we  considered) 
where  the  net  position  of  all  three  main  categories  (FDI,  portfolio,  other 
investments) are negative, suggesting that these regions relied significantly on 
capital  from  abroad  and,  therefore,  are  prime  examples  of  “downhill”  capital 
flows.  CIS  8  (excl.  Russia)  and  Latin  America also  have  negative  overall  NIIP, 
but they have positive net portfolio and/or other investment positions. 

November 2014  10 

 
 
 
 
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 

Japan  and  Switzerland  exhibit  strong  positive  NIIPs.  Switzerland  accumulated 
sizable  positive  reserve  assets,  stemming  from  interventions  in  the  foreign 
exchange rate market by the Swiss National Bank.  

  The  section  on  Ukraine  and  Russia  highlights  that  while  both  countries  are 
experiencing capital outflows since the start of the geopolitical unrest in 2014, 
their  magnitude  is  in  fact  much  smaller  than  what  was  observed  during  the 
height  of  the  global  crisis  (the  most  recent  data  is  from  September  2014  for 
Ukraine and 2014Q1 for Russia). A look at the exposure of European banks to 
the  two  countries  underlines  that  capital  has  been  withdrawn  by  European 
banks  too,  though  there  are  still  sizeable  claims.  By  the  second  quarter  of 
2014,  claims  of  US  banks  on  Russia  declined  only  moderately,  and  claims  of 
Japanese  banks  on  Russia  hardly  declined.  The  latest  bilateral  portfolio 
investment  data  is  for  the  end  of  2013,  which  in  fact  shows  an  increase  in 
foreign  claims  on  Russia.  Concerning  net  FDI  inflows  to  Russia,  Europeans 
reduced  their  flows  drastically,  while  interestingly,  there  is  an  increase  in  FDI 
inflows from Asia, which, by the first quarter of 2014, compensated about 1/7th 
of the reduction in European FDI inflows. 

The  fourth  chapter  focuses  on  European  capital  flows  and  in  particular  on 
developments in the euro area. 

  Being a currency union, the euro area is a special case for the study of capital 
flows.  The  first  eight  years  after  the  currency  unification  coincided  with 
extraordinary global growth in cross border capital flows that was reinforced by 
the currency unification. Euro-area periphery countries accumulated very large 
financial  account  surpluses  before  the  crisis  (almost  15%  of  the  total  group 
GDP), which was mirrored in the financial account deficit of the euro-area core 
countries.  

 

 

In  terms  of  composition,  the  euro-area  flows  were  dominated  by  portfolio 
instruments  (especially  debt  instruments)  and  other  investments,  while  FDI 
played a marginal role. By contrast, FDI accounted for a larger share  of gross 
flows in the CEE. 

In  2008,  portfolio  net  financial  inflows  into  the  periphery  contracted,  and 
became large and negative between summer 2011 and 2012. This development 
captures  the  intensification  of  the  euro  crisis,  which  saw  foreign  investors 
increasingly  off-load  debt  issued  by  countries  in  the  euro  area  periphery.  This 
development,  however,  seems  to  have  been  neutralized  by  other  investment 
flows of an opposite sign related to financial assistance and the ECB’s liquidity 
provision. 

  A  more  detailed  analysis  of  net  flows  by  sector  shows  that  the  euro  area  was 
indeed characterised by a substitution between private and public flows during 
the financial crisis, particularly in the periphery. 

  Euro  area  banks’  foreign  claims  rose  steadily  in  the  great  moderation  period 
(2000-2006), reaching a peak in 2008 with gross claims at 150 percent of GDP. 
This has subsequently fallen over the next three or so years, before eventually 
flattening at around 100 percent of euro area GDP. 

  The euro area core accumulated gross claims of up to 200 percent of core GDP, 
before halving to approximately 100 percent by 2014. The majority of this fall 
occurred during the period 2008 – 2010. 

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  Net  foreign  claims  were  negative  in  the  euro  area  periphery  from  2000  until 
finally returning to positive levels in 2012, albeit at very low levels. Net banking 
sector claims still remain negative.  

  Euro  area  core  claims  on  the  periphery  rose  from  under  10  percent  of  core 
GDP,  to  almost  20  percent  at  the  peak  in  2008,  before  declining  to  around 
levels similar to the initial values in 2000 by 2014. 

  While  the  core’s  holdings  of  claims  on  the  periphery  grew  the  most  over  the 
period 2000-2008, the largest holdings are on the centre (France and Italy). 

  The majority of core and centre’s claims held are  on the ‘other euro area’ and 
‘non EU advanced’, while the largest share of the periphery’s claims come from 
other  EU  and  proportionately  much  lower  non  EU  advanced  and  other  euro 
area.  

  Special  attention  is  paid  to  the  issue  of  financial  dis-integration,  as  the  deep 
financial  integration  that  had  been  reached  in  the  euro  area  thanks  to  the 
currency  unification  has  in  fact  halted,  and  to  a  significant  extent,  reversed 
during  the  crisis.  For  example,  Figure  2  shows  that  euro  area  banks’  cross-
border,  but  intra-euro,  assets  increased  quite  sharply  till  the  intensification  of 
the euro-area  crisis, but reduced very  significantly by 2013. The home bias in 
banks’ holdings of sovereign and other debt has increased, fuelling a so-called 
doom-loop  between  banks  and  sovereigns  in  financially  vulnerable  countries. 
The share of non-residents in holdings of government debt was reduced during 
the crisis in vulnerable euro-area member states, while it continued to increase 
in Germany and France.  

  The main conclusion we draw is that the financial dis-integration, which started 
with the euro crisis, has not been reversed when considering various indicators 
of  financial  stocks  and  flows.  Some  price  indicators,  such  as  the  spread 
between  government  bonds  yields  of  euro  area  countries,  narrowed 
significantly after the introduction of the ECB’s Outright Monetary Transactions 
(OMT).  Indicators  such  as  capital  flows,  cross-border  loans,  debt  securities 
holdings and the home-bias in government bond holdings stopped deteriorating 
further,  however,  there  are  only  very  limited  signs  of  a  reversal  of  financial 
disintegration in the euro area countries that suffered the most stress. 

November 2014  12 

 
 
 
 
 
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Figure 2 Euro-area banks' loans to, and holdings of debt securities issued by, 
residents  of  the  euro  area  outside  their  home  countries  (January  1999  = 
100), January 1999 – September 2014 

Source: Bruegel calculations using data from the ECB.  
Note:  the  red  line  shows  loans  of  all  euro-area  Monetary  Financial  Institutions  (MFIs)  to 
residents in euro area  countries outside their  home countries, including other MFIs. The green 
line indicates the  holdings of "securities other than  shares” (as reported in the ECB's statistics 
on MFIs' balance sheet) of residents in other euro area countries (outside the home country of 
the  MFI).  Here  all  securities  other  than  shares  are  considered,  without  disaggregating  across 
issuing sectors. 

In  Chapter  5  we  analysed  a  special  topic,  the  current  return  on  foreign  assets  and 
liabilities, and valuation changes. The main conclusions are: 

  There  is  significant  heterogeneity  across  countries  in  spreads  between  current 
returns  on  foreign  assets  and  liabilities.  Countries  from  CEE  have  experienced 
non-negligible  negative  spreads  for  equity,  mostly  due  to  the  large  (over  10 
percent per year) return that foreign investors made on investment in the CEE 
region.  

  The  ‘old’  EU  member  states  had  on  average  close  to  zero  equity  spreads. 
Larger  EU  countries,  such  as  Germany,  France,  Finland,  the  Netherlands, 
Sweden  and  the  United  Kingdom  had  positive  spreads  and  they  thereby 
succeeded in replicating, to a lesser extent, the privileges of the US  on equity 
returns throughout the periods taken into consideration. 

  On  the  debt  side,  the  US  benefited  from  positive  current  return  spreads  in 
2004-2006, which then fell to zero in the latter periods.  In  contrast to equity, 
most  EU countries received positive spreads in all three periods, though these 
spreads  are  typically  small.  Switzerland’s  privilege  on  debt  instruments 
improved  over  EU  countries,  nearly  approaching  the  positive  current  return 
spread of Japan.  

November 2014  13 

501001502002503003504004505001999Jan2000Jan2001Jan2002Jan2003Jan2004Jan2005Jan2006Jan2007Jan2008Jan2009Jan2010Jan2011Jan2012Jan2013Jan2014JanDEBT other EALOANS other EA 
 
 
 
 
 
 Analysis of developments in EU capital flows in the global context 

 

It  is  also  worthwhile  highlighting  that  the  vulnerable  euro-area  periphery 
countries  (with  the  exception  of  Greece)  do  not  display  largely  negative 
tendencies  on current returns  on foreign assets and liabilities relative to  other 
EU countries. 

  Revaluation  effects  were  also  diverse  across  countries.  The  USA,  Switzerland 
and Japan suffered from a relative revaluation loss on equity, thereby providing 
risk-sharing  to  the  rest  of  the  world.  In  contrast,  old  EU  member  states 
benefitted from gains on their net equity holdings, while in the newer member 
states  revaluation  of  equity  was  close  to  zero  in  the  full  period.  The 
‘revaluations  spread’  was  the  opposite  on  net  debt  assets:  USA,  Switzerland 
and  Japan  had  positive  spreads,  while  old  EU  member  states  had  negative 
spreads. 

  The  correlation  between  current  return  and  revaluation  was  typically  small, 
suggesting that revaluation gains did not tend to compensate for low returns. 

Chapter 6 presents the results of our in-depth analysis using bilateral data on capital 
flows.  

  We  estimated  panel  regression  models  for  capital  stocks  and  flows  using  a 
large set of explanatory variables and a number of different specifications.  

  We  found  that  bilateral  holdings  of  debt,  and  to  a  lesser  extent,  portfolio 
equity,  tend  to  be  bigger  when  two  countries  are  both  members  of  the  euro 
area, suggesting that belonging to the euro area does have a significant effect 
on  bilateral  asset  holdings.  However,  the  euro-effect  on  FDI  is  not  always 
significant while the sign is not robust across specifications.  

  EU  membership  of  one  or  both  countries  tends  to  be  negatively  and 
significantly  associated  with  bilateral  asset  holdings  of  debt,  suggesting  that 
membership  in  the  monetary  union  (and  not  merely  in  the  EU)  is  what  really 
boosted  bilateral  debt  holdings.  On  the  other  hand,  EU  membership  positively 
influences FDI, but more in those pairs of EU countries in which at least one of 
the  two  was  not  a  member  of  the  monetary  union,  underlying  that  euro 
membership did not boost cross-border FDI holdings. 

  Trade openness (considering total trade) tends to be positively associated with 
real  bilateral  asset  holdings,  while  the  correlation  with  bilateral  trade  is  very 
strong. 

  Sharing  a  border  tends  to  be  positively  associated  with  bilateral  debt  holdings 
(especially for FDI), while distance is negatively associated with bilateral asset 
holdings.  Size,  proxied  by  population,  is  also  positively  related  to  asset 
holdings. These findings are similar to  those of the gravity literature on trade, 
according  to  which  bilateral  trade  is  expected  to  be  positively  correlated  with 
mass, and negatively correlated with distance. 

  Both bond and stock market capitalisation tend to be significant and positively 

correlated with bilateral asset holdings, which is intuitive. 

 

Interestingly,  the  size  of  a  receiver  country’s  government  debt  to  GDP  tends 
not  to  be  significant  for  debt  and  portfolio  equity  investment,  whereas  it  is 
strongly  and  negatively  correlated  to  bilateral  FDI  asset  holdings.  This  may 
point  to  the  fact  that  FDI  investment,  normally  considered  a  more  stable  and 
long-term  form  of  investment,  tends  to  be  more  susceptible  to  the  potential 
risk coming from high government debt in the receiving country. 

  The  estimation  results  for  flows  largely  confirmed  the  findings  for  stocks.  For 
flows,  we  also  included  the  unemployment  rate,  which  tended  to  have  a 

November 2014  14 

 
 
 
 
 
 Analysis of developments in EU capital flows in the global context 

negative estimated coefficient (suggesting that higher unemployment, which is 
a  reflection  of  weaker  economic  situation,  is  negatively  correlated  with  capital 
flows), but the estimated coefficient is never significant. 

  We  also  included  the  VIX  volatility  index,  which  is  significantly  and  negatively 
related to capital flows across different models and types of capital flows. Since 
the  VIX  index  is  generally  regarded  as  a  measure  of  global  uncertainty,  this 
result  suggests  that  bilateral  capital  flows  are  indeed  negatively  impacted  by 
global  uncertainty.  However,  the  estimated  parameter  of  the  interaction 
between  the  VIX  index  and  the level  of  financial integration  (measured  as  the 
stock of bilateral asset  holdings) is positive and highly significant in almost all 
models.  This  suggests  that  when  financial  integration  is  higher,  the  negative 
impact of an increase in global uncertainty on capital flows is smaller. 

  The  inclusion  of  fixed  effects  (time  and  reporter  country  dummies)  as  well  as 
the exclusion of offshore centres and major financial centres from the sample in 
general does not affect the result significantly. 

  By  calculating  financially-weighted  real  effective  exchange  rates  (REERs),  we 
found that in some, though not all, cases there are major differences between 
trade- and financially-weighted REERs. Also, for a number of  countries, REERs 
derived on the basis of debt-type financial assets differ significantly from REERs 
derived  on  the  basis  of  equity-type  financial  assets  held  worldwide.  These 
findings  suggest  that  a  given  exchange  rate  movement  can  have  a  rather 
different impact on trade flows and on financial wealth. 

  We  also  calculated  financially-weighted  government  bond  yields  and  spreads 
relative  to  these  weighted  yields.  This  new  dataset  will  allow  assessment  of  a 
country’s  borrowing  cost  relative  to  the  group  of  those  countries  with which it 
has financial links. 

November 2014  15 

 
 
 
 
 
 
 
 Analysis of developments in EU capital flows in the global context 

1. Introduction 
The free movement of capital is one of the four fundamental economic freedoms of the 
European  Union.  Free  capital  movements  can  enhance  welfare  if  they  lead  to  better 
allocation of financial and productive resources. However, they can also be a source of 
vulnerability, with far-reaching spillovers. The past decades present several examples 
of  capital  flows  resulting  in  various  excesses,  which  eventually  led  to  financial  and 
economic crises, occasionally spreading to other regions of the world too. 

Monitoring  and  assessing  capital  flows  is  therefore  crucial  for  policymakers,  market 
participants  and  analysts.  The  purpose  of  our  report  is  to  provide  a  comprehensive 
overview  of  capital  movements  in  Europe  in  a  global  context,  which DG  Markt  of  the 
European Commission can consider as a background paper when preparing its annual 
report  on  “The  Free  Movement  of  Capital”  for  the  Economic  and  Financial  Committee 
(EFC) of the European Union. 

For  this  reason,  we  analyse  comprehensively  the  various  issues  connected  to  capital 
flows, going from a more general to a euro-specific perspective. In Chapter 2 we start 
with  a  review  of  the  key  theoretical  aspects  concerning  capital  flows,  which  should 
help in  understanding  the  developments  we  describe  in  later  parts.  A  large  literature 
focuses  on  net  capital  flows  and  the  associated  current  account  balances,  and  we 
highlight the risks associated with both persistently high deficits and surpluses. But it 
is  similarly  important  to  underline  the  significance  of  gross  flows,  including  their 
composition in terms of instruments, maturity structure, and currency, as large gross 
flows  and  accumulated  stocks  can  be  a  major  source  of  vulnerability  even  when  the 
net flows are more or less balanced. 

In Chapter 3 we turn to the analysis of global capital flows. While our main focus is on 
more recent periods, as background we report and discuss developments over a time 
span  covering  the  global  financial  and  economic  crisis  as  well  as  the  run-up  to  the 
crisis.  By  aggregating  countries  into  ten  groups,  we  highlight  different  patterns  of 
capital  flows  throughout  the  world.  Due  to  geopolitical  conflicts  near  the  EU  borders, 
we place a special emphasis on capital flows and stocks in Ukraine and Russia, as well 
as on a bilateral basis. 

Chapter 4 focuses on Europe, and in particular on the euro area. While we do analyse 
all EU countries, the special euro area focus is motivated by its unique characteristics, 
such  as  high  level  of  financial  integration  among  sovereign  states  that  share  a 
common  currency,  and  by  the  euro  area’s  enduring  economic  weaknesses  at  a  time 
when EU countries outside the euro are generally recovering from the global financial 
and economic crisis. After assessing developments in capital flows and stocks, we pay 
particular  attention  to  the  analysis  of  financial  dis-integration  within  the  euro  area. 
This development significantly reversed the extensive financial integration seen in pre-
crisis  years,  which  has  largely  complicated  the  conduct  of  the  common  monetary 
policy. 

In  Chapter  5  we  present  a  special  analysis  of  returns  on,  and  revaluation  of,  foreign 
assets  and  liabilities.  In  particular,  we  examine  whether  European  countries  share 
some  of  the  privileges  that  the  United  States  has  -  low-yielding  liabilities  and  high-
yielding  assets.  Given  the  major  capital  inflows  into  Central  and  Eastern  European 
member  states,  we  focus  our  analysis  on  these  countries.    We  also  explore  potential 
correlations between returns and revaluations. 

Finally,  in  Chapter  6  we  use  bilateral  data  on  capital  flows  and  stocks  to  perform 
various analyses. Using a panel econometric model, we assess the drivers of bilateral 

November 2014  16 

 
 
 
 
 
 
 
 
 
 
 Analysis of developments in EU capital flows in the global context 

capital stocks and flows with an emphasis on the role of membership in the EU and the 
euro  area.  We  also  analyse  the  role  of  global  factors  in  determining  capital 
movements.  Additionally,  we  calculate  financially-weighted  real  effective  exchange 
rates (REERs) for 72 countries, compare them to trade-weighted REERs, and calculate 
financially-weighted government bond yields and spreads for 57 countries. 

2. Theoretical aspects of capital flows 

2.1 Net capital flows 
The  literature  investigating  the  implications  of  net  capital  flows  and  of  their  real 
counterpart,  i.e.  the  underlying  current  account  imbalances,  is  sizable.  Capital  flows 
are in fact traditionally viewed as the financial counterpart to savings and investment 
decisions.  From  this  perspective,  the  focus  is  typically  on  net  capital  flows,  which 
represent the key variable to gauge countries external borrowing requirements. 

From  a  theoretical  perspective,  the  fact  that  a  country’s  current  account  is  not 
balanced can be seen as a way to allow inter-temporal consumption smoothing and in 
this way it can be beneficial. Theory predicts that capital should flow  “downhill” from 
capital-rich countries to capital-poor countries that offer higher returns on capital. This 
view has been challenged (Lucas 1990, among others), but it was still put forward in 
relation  to  the  euro  area  current  account  imbalances,  which  at  first  were  largely 
interpreted (and to some extent welcomed) as a sign of convergence (Blanchard and 
Giavazzi (2002)). 

However,  in  practice,  persistent  current  account  (and,  symmetrically,  financial 
account)  imbalances  expose  countries  to  a  number  of  risks.  Typically,  countries  that 
run  a  large  current  account  deficit  are  exposed  to  the  risk  of  sudden  reversals  in 
capital  flows,  which  can  lead  to  significant  financial  instability.  While  financial 
imbalances can be reversed very quickly, the underlying macroeconomic adjustment is 
significantly  slower,  due  to  nominal  rigidities.  As  a  consequence,  sudden  stops  in 
capital inflows tend to be associated with sharp recessions that can be prolonged and 
accompanied by financial distress (e.g. Obstfeld and Rogoff 2005, Mendoza 2010).  

There is an extensive empirical literature – born also from the IMF’s special experience 
in dealing with balance of payment crises – that investigates current account reversals 
and their macroeconomic effects on the economy.  

Another  important  aspect  of  prolonged  current  account  imbalances  concerns  the 
possible distortion in the allocation of capital in the economy.  Blanchard (2007) shows 
that large imbalances imply significant shifts in economic activity across sectors of the 
economy. During a high-deficit phase, the non-traded sector expands and the tradable 
sector  contracts  in  relative  terms;  conversely,  once  this  phase  is  over,  rebalancing 
requires a relative contraction of the non-traded sector and expansion of the tradable 
sector. Giavazzi and Spaventa (2010) point out that models establishing the optimality 
of  a  succession  of  current  account  deficits in  a catching-up  process  implicitly  assume 
that  the  inter-temporal  budget  constraint  is  satisfied,  so  that  the  accumulation  of 
foreign  liabilities  is  matched  by  future  surpluses.  By  introducing  explicitly  this 
constraint  in  a  simple  two-period,  two-good  model  they  show  that  its  fulfilment 
requires  that  growth  be  driven  by  an  adequate  increase  of  the  country's  production 
capacity of traded goods and services.  

Persistent  current  account  surpluses  are  not  without  risk  either.  While  the 
accumulation of net foreign assets does not  face sustainability constrains, in contrast 
to  the  accumulation  of  net  external  debt,  persistent  and  large  current  account 

November 2014  17 

 
 
 
 
 
 
 
 
 
 Analysis of developments in EU capital flows in the global context 

surpluses  and  ever  growing  net  external  assets  pose  various  risks.  A  large  stock  of 
external  assets  is  subject  to  valuation  changes  and  can  involve  welfare  costs.  A 
country that runs a persistently large surplus faces a symmetric adjustment problem, 
from export to domestic demand and the related reallocation from export-oriented to 
domestically  oriented  sectors  (European  Commission,  2012).  Moreover,  since 
imbalances  are  symmetric,  current  account  surplus  countries  can  be  indirectly  hit  by 
sudden  stops  in  the  financing  of  deficit  countries,  because  this  would  imply  a 
correction of the current account deficit and a  loss in terms of  export  for the current 
account surplus countries. 

2.2 Gross capital flows and valuation effects 
Behind  the  net  capital  flows,  it  is  important  to  understand  the  dynamics  of  gross 
capital  flows.  In  this  respect,  the  literature  highlights  the  importance  of  the  relative 
debt-equity mix in gross flows, of the maturity structure and of currency composition 
(see  e.g.  Lane  2013).  The  breakdowns  of  aggregate  figures  across  sectors  of  the 
economy – in particular the degree of banking intermediation – are also relevant.  

A  special  feature  of  the  last  decade  has  been  a  rapid  and  strong  increase  in  gross 
flows,  which  do  not  always  show  up  in  the  net  capital  flow  statistics.  For  most 
countries,  in  fact,  net  capital  flows  are  small  relative  to  GDP,  whereas  gross  capital 
flows were in the double-digit range as a percent of GDP. The  euro area is a striking 
example of this, as its aggregate financial account position remained mostly balanced 
over the ten years preceding the crisis despite very large gross flows. The main driver 
behind  this  expansion  is  the  growth  of  international  cross-border  banking  activity, 
whose effects are especially evident in the increase  of portfolio and other investment 
flows. Cross-border banking can amplify a domestic credit boom to the extent it allows 
an expansion of domestic lending beyond the domestic deposit base (Borio et al 2011, 
Bruno and Shin 2012, Lane and McQuade 2012).  

The rationale for also monitoring gross capital flows (as well as net flows) is a strong 
one  in  light  of  the  risks  to  which  they  expose  countries,  even  those  that  have  a 
balanced  net  position.  Differently  from  the  net  flows,  gross  flows  do  not  point  to  the 
financing  risk  of  the  country  but  rather  to  the  possible  channels  of  risk  sharing  and 
contagion in case of financial turmoil. As pointed out in Lane (2013), in principle high 
gross  levels  of  capital  outflows  and  capital  inflows  could  be  stabilising  by  supporting 
international risk diversification. Foreign liabilities allow domestic economic risks to be 
shared with foreign investors, while holding foreign assets can provide some insulation 
for  domestic  investors.  This  occurs  through  bilateral  valuation  gains  and  losses  that 
depend  on  the  type  of  capital  flows,  in  particular  by  their  composition  in  terms  of 
instruments. 

Recent  research  by  Gourinchas,  Rey  and  Truempler  (2012)  and  Lane  and  Milesi-
Ferretti (2009) showed how the balance sheet of the United States played  the role of 
insurer during the crisis. This was possible because the US’  external balance sheet is 
short on “safe” or liquid securities and long on “risky” or illiquid ones. This implies that 
in  normal  times  the  US  can  potentially  earn  a  risk  premium  on  its  external  position 
(see Gourinchas, Rey and Govillot 2010). In crisis periods, instead, a country with this 
kind  of  balance  sheet  would  suffer  important  losses  because  the  value  of  its  risky 
external  assets  collapses  with  respect  to  the  value  of  its  safe  external  liabilities.  This 
happened  to  the  US,  as  the  value  of  US  government  bonds,  which  constitute  a  large 
part of the country’s external debt liabilities, remained stable or actually increased at 
the height of the crisis. Meanwhile the value of its external assets (the bulk of which 
was riskier equity and FDI) dropped dramatically. The result was an equally important 

November 2014  18 

 
 
 
 
 
 
 
 
 Analysis of developments in EU capital flows in the global context 

drop in the US net foreign asset position. Gourinchas, Rey and Truempler (2012) find 
that between 2007Q4 and 2009Q1, the US net foreign asset  position deteriorated by 
twenty-one  percent  of  GDP,  of  which  16percent  (2,200  USD  billion)  represented 
valuation losses suffered by the US on their  external net portfolios.   In this way, the 
United  States  provided  insurance  to  the  countries  holding  US  government  bonds  and 
shared in the losses of collapsing equity prices around the world. 
Differences in the foreign currency exposures can also have important consequences. 
Foreign-currency exposures in e.g. emerging Asia, Latin America and emerging Europe 
have  had 
financial  sectors 
(Brunnermeier et al, 2012). During the recent crisis, Asia and Latin America were long 
in  foreign-currency  assets  in  net  terms,  so  that  currency  depreciation  generates  a 
valuation  gain.  Emerging  Europe  on  the  other  hand,  had  net  foreign-currency 
liabilities, so currency depreciation had an adverse impact on balance sheets.  

for  the  stability  of  their 

implications 

important 

2.3 Stocks 
An additional reason to closely monitor capital flows is the legacy they leave behind in 
terms  of  stocks  of  foreign  assets  or  liabilities.  After  a  prolonged  period  of  current 
account deficits, a country is left with a large stock  of net  external debt liabilities for 
which it can face a deleveraging or a rollover challenge. Over the (likely long) period 
required  to  deleverage,  countries  are  exposed  to  the  risk  of  valuation  losses  on  the 
accumulated positions. 

3. Global trends 

3.1 Major country groups of the world 
We  start  our  monitoring  analysis  by  examining  capital  flows  and  stocks  at  the  global 
level,  before  analysing  some  country-specific  developments.  We  group  countries  into 
10 major aggregates: euro area 17, 8 Central and Eastern European countries of the 
European  Union  (CEE8),  the  3  other  EU  countries  (UK,  Denmark  and  Sweden),  11 
non-EU  advanced  economies,  4  Association  of  Southeast  Asian  Nations  (ASEAN-4), 
Latin  America  13,  5  Sub-Sahara  African  countries  (SSA5),  Commonwealth  of 
Independent States not including Russia (CIS 8 (excl. Russia)), Middle East and North 
Africa  5  (MENA5),  and  the  aggregate  of  Brazil,  Russia,  India,  China  and  South  Africa 
(BRICS). The time period we consider is from 2006Q1to the latest data available (end 
of  2013  or  first  quarter  2014):  the  period  for  which  we  have  data  for  all  country 
groups1.  

The evolution of gross and net capital flows for our country groupings is presented in 
Figure  3,  which  shows  a  substantial  heterogeneity  across  country  groups  during  the 
last years. In the run-up to the crisis, data indicates there were net capital inflows into 
most  country  groups  (except  a  few  quarters  during  2006-2007  in  the  euro  area, 

1  “Capital  flows”  are  defined  as  cross-border  financial  transaction  recorded  in  a  country’s 
external financial accounts, which produce a change in the assets and liabilities of residents vis-
á-vis  non-residents.  Inflows  arise  when  external  liabilities  are  incurred  by  the  recipient 
economy, or when external assets are reduced (inflows with a negative sign). Capital outflows 
arise  through  purchases  of  external  assets  from  the  viewpoint  of  the  reporting  economy 
(outflows  with  a  negative  sign),  as  well  as  through  deleveraging  of  the  country’s  assets 
(outflows with a positive sign). A net flow is calculated by summing up gross in- and outflows, 
where outflows are recorded with a negative sign.   

November 2014  19 

 
 
 
 
 
 
 
                                           
 Analysis of developments in EU capital flows in the global context 

MENA5 and SSA52. Figure 3 also shows that the eruption of the financial crisis in 2007 
resulted in a collapse of gross financial flows in all country aggregates. Specifically, in 
the CEE8, the Other EU 3 and the non-EU advanced countries net flows  fell to zero for 
a  few  quarters,  before  rebounding  by  the  end  of  2009.  Sizeable  net  capital  outflows 
were registered in the CIS 8 (EXCL. RUSSIA), the BRICS and Latin America as well as 
in  the  ASEAN-4.  Concerning  the  volatility  of  net  capital  flows,  the  BRICS,  the  CEE8, 
Latin  America,  Middle  East,  Sub-Saharan  Africa,  experienced  much  sharper 
fluctuations  in  net  capital  flows  (of  up  to  +/-  20percent  of  GDP)  than  the  euro  area 
and non-EU advanced countries. The ASEAN-4 as well as the Other EU 3 experienced 
slightly milder fluctuations ranging from -4 to 8percent of GDP. 

Turning to the recovery of capital flows in the post-crisis period, it can be noted that 
the  recovery  towards  pre-crisis  magnitudes  was  uneven  across  regions.  By  the  first 
quarter of 2010, gross  capital flows reached nearly pre-crisis levels in Latin America, 
in  the  ASEAN-4,  and  in  Sub-Saharan  Africa.  The  same,  albeit  to  a  somewhat  lesser 
extent, can be observed for the BRICS and non-EU advanced economies. By contrast, 
the  euro  area,  CEE8  and  the  CIS  8  (EXCL.  RUSSIA)  continue  to  display  depressed 
levels of gross in- and outflows of capital even in 2013. In terms  of net position, the 
euro area stands out, by moving away from its close-to-balanced pre-crisis position of 
net  capital  inflows.  Instead,  the  euro  area  experienced  a  deteriorating  financial 
account  deficit  (mirroring  the  increasing  current  account  surplus)  since  the  end  of 
2012,  which  continued  throughout  2013.  By  the  end  of  2013  and  the  beginning  of 
2014,  capital  inflows  recovered  somewhat  while  capital  outflows  remained  broadly 
stable, contributing to a slightly better net financial account position of -1.2percent of 
GDP in 2014Q1. The Central Eastern European Countries’ net financial account did not 
recover to pre-crisis levels, but remained positive throughout the recovery. In 2013 it 
fell  to  zero  for  a  few  quarters,  but  rebounded  by  the  end  of  2013,  standing  at  4.2 
percent of GDP by the end of 2013. An anaemic and volatile recovery can be observed 
for  the  Other  EU  3,  with  the  financial  account  dropping  below  zero  in  2012  and 
rebounding  in  2013.  Also  the  CIS  8  (EXCL.  RUSSIA)  experienced  volatile  net  capital 
outflows  since  the  outbreak  of  the  financial  crisis.  However,  since  mid-2012  a 
sustained  recovery  is  taking  place,  as  gross  outflows  decrease  while  gross  inflows 
remain constant,  contributing to a stronger positive net financial position of 7percent 
of  GDP  in  2013Q4.  The  Middle  East  and  North  Africa  as  well  as  the  ASEAN-4  display 
deteriorating  net  capital  flows  on  the  back  of  sizeable  gross  capital  outflows.  The 
opposite can be said for Latin America, which experienced a sizeable recovery in both 
gross  and  net  terms,  hitting  pre-crisis  levels  by  the  end  of  2013.  The  BRICS 
experienced  a  slowdown  of  capital  inflows  by  the  beginning  of  2012,  followed  by  a 
sustained  recovery  from  2013Q1  onwards.  Sub-Saharan  Africa  displays  the  strongest 
recovery,  as  capital  flows  turned  positive  by  the  beginning  of  2008  and  stayed 
increasingly  positive  thereafter.  In  the  second  quarter  of  2013,  Sub-Saharan  Africa 
experienced gross inflows of around 21 percent of GDP.  

Figure 3 The evolution of gross and net capital flows in the world (percent of 
GDP) 

2  We  highlight  the  findings  by  Zucman  (2013),  which  show  that  official  statistics  substantially 
underestimate  the  net  foreign  assets  position  (and  consequent  flows)  of  rich  countries,  since 
they fail to capture most of the assets held in offshore tax havens. 

November 2014  20 

 
 
 
 
 
 
                                           
 Analysis of developments in EU capital flows in the global context 

November 2014  21 

-5-4-3-2-1012345-40-30-20-100102030402006Q12006Q32007Q12007Q32008Q12008Q32009Q12009Q32010Q12010Q32011Q12011Q32012Q12012Q32013Q12013Q32014Q1Euro area (in % of GDP)GROSS OUTFLOWSGROSS INFLOWSNET FLOW (rhs)-20-15-10-505101520-40-30-20-100102030402006Q12007Q12008Q12009Q12010Q12011Q12012Q12013Q12014Q1CEE (in % of GDP)GROSS OUTFLOWSGROSS INFLOWSNET FLOW (rhs)-8-6-4-202468-150-100-500501001502006Q12006Q32007Q12007Q32008Q12008Q32009Q12009Q32010Q12010Q32011Q12011Q32012Q12012Q32013Q12013Q32014Q1Other EU 3 (in % of GDP)GROSS OUTFLOWSGROSS INFLOWSNET FLOW (rhs)-4-3-2-101234-25-20-15-10-505101520252006Q12007Q12008Q12009Q12010Q12011Q12012Q12013Q12014Q1Non EU advanced (in % of GDP)GROSS OUTFLOWSGROSS INFLOWSNET FLOW (rhs)-25-20-15-10-50510152025-50-40-30-20-10010203040502006Q12007Q12008Q12009Q12010Q12011Q12012Q12013Q12014Q1CIS 9 EXCL. RUSSIA (in % of GDP)GROSS OUTFLOWSGROSS INFLOWSNET FLOW (rhs)-8-6-4-202468-15-10-50510152006Q12007Q12008Q12009Q12010Q12011Q12012Q12013Q12014Q1Latin America (in % of GDP)GROSS OUTFLOWSGROSS INFLOWSNET FLOW (rhs) 
 
 
 
 
 
  
 
 
 
 
 
 Analysis of developments in EU capital flows in the global context 

Source: IMF IFS (quarterly capital flows), expect for China: Chinese State 
Administration of Foreign Exchange; WEO (annual GDP). Note: The country groups are 
as follows: Euro area = EA 17; other EU 3 = United Kingdom, Sweden, Denmark; 
CEE8 = Bulgaria, Czech Republic, Croatia, Latvia, Lithuania, Hungary, Poland and 
Romania; non-EU advanced = Canada, Japan, United States, Australia, Hong Kong, 
Iceland, Israel, Korea, New Zealand, Norway, Switzerland; BRICS = Brazil, Russia, 
India, China, South Africa; CIS 8 (excl. Russia) = Armenia, Azerbaijan, Belarus, 
Georgia, Kazakhstan, Kyrgyz Republic, Moldova, Tajikistan, Ukraine; Latin America = 
Argentina, Bolivia, Chile, Costa Rica, Ecuador, El Salvador, Guatemala, Panama, 
Venezuela, Mexico, Peru, Uruguay, Middle East and North Africa = Jordan, Lebanon, 
Morocco, Saudi Arabia, Yemen; Sub-Saharan Africa = Cabo Verde, Ethiopia, Lesotho, 
Mozambique, Seychelles (note that data for Sub-Saharan Africa ends in 2013Q2 due 
to data limitations); ASEAN-4 = Indonesia, Philippines, Thailand, Vietnam; Gross 
inflows/outflows is calculated as the sum of the liabilities/assets of the following 
instruments: direct investment, Portfolio investment and Other investment. Net flow is 
the net financial account.  

November 2014  22 

-8-6-4-202468-15-10-50510152006Q12006Q32007Q12007Q32008Q12008Q32009Q12009Q32010Q12010Q32011Q12011Q32012Q12012Q32013Q12013Q32014Q1ASEAN-4 (in % of GDP)GROSS OUTFLOWSGROSS INFLOWSNET FLOW (rhs)-15-10-505101520-15-10-505101520252006Q12006Q32007Q12007Q32008Q12008Q32009Q12009Q32010Q12010Q32011Q12011Q32012Q12012Q32013Q12013Q32014Q1Middle East and North Africa (in % of GDP)GROSS OUTFLOWSGROSS INFLOWSNET FLOW (rhs)-20-15-10-50510152025-20-15-10-505101520252006Q12007Q12008Q12009Q12010Q12011Q12012Q12013Q12014Q1Sub-Saharan Africa (in % of GDP)GROSS OUTFLOWSGROSS INFLOWSNET FLOW (rhs)-15-10-505101520-15-10-5051015202006Q12006Q32007Q12007Q32008Q12008Q32009Q12009Q32010Q12010Q32011Q12011Q32012Q12012Q32013Q12013Q32014Q1BRICS (in % of GDP)GROSS OUTFLOWSGROSS INFLOWSNET FLOW (rhs) 
 
 
 
 
 
 
 
 
 
 Analysis of developments in EU capital flows in the global context 

Figure  4  shows  the  components  of  capital  flows  according  to  different  instruments, 
namely  direct  investment3  (foreign  direct  investment),  portfolio  investment4  (equity 
and  debt  securities,  the  latter  of  which  can  be  broken  down  further  into  bonds  and 
money  market  instruments),  other  investment5  and,  whenever  available,  financial 
derivatives.  

Throughout the run-up to the financial crisis, portfolio investment played a major role 
in the euro area, the other EU 3, the non-EU advanced economies and the ASEAN-4, 
whereas the CIS 8 (EXCL. RUSSIA), Latin America, Middle East and North Africa, Sub-
Saharan  Africa  benefited  mostly  from  net  direct  investment  flows.  The  euro  area  in 
fact made direct investments abroad, in net terms.  Interesting to note is the relative 
importance  of  other  investment  (which  is  largely  composed  of  bank  loans)  on  top  of 
direct investment flows in CEE8 and in the BRICS. 

With the start of the financial crisis in 2008, these flows declined substantially in the 
CEE8  region,  and  contracted  even  below  zero  during  the  recovery  from  end  2011  to 
end 2012. This, combined with a decrease in direct investment inflows, contributed to 
a  net  financial  account  deficit  in  2013.  The  euro  area  experienced  volatile  portfolio 
investment  flows  and  mostly  negative  other  investment  flows  over  the  past  three 
years, both of which contributed to a deteriorating financial account deficit. Especially 
in  2013,  large  other  investment  outflows  could  be  observed,  suggesting  a  surge  in 
bank  loan  activity  abroad.  The  non-EU  advanced  economies  registered  a  strong 
recovery  starting  in  early  2010,  on  the  back  of  stable  portfolio investment  and  other 
investment  inflows.  In  2013,  direct  investment  abroad  picked  up,  contributing  to  a 
slightly less favourable financial account surplus, which however recovered fully in the 
last quarter of 2013. In Latin America and the ASEAN-4, the recovery in capital flows 
was  mostly  driven  by  positive  net  portfolio  debt  flows  as  well  as  positive  foreign 
investment  inflows.  However,  while  Latin  America  experienced  stable  inflows 
throughout  2013,  the  financial  account  balance  dropped  below  zero  in  the  ASEAN-4, 
as  portfolio  and  other  investment  flows  reversed.  The  BRICS  experienced  a  similar 
drop  in  net  capital  flows  throughout  2012,  mostly  on  the  back  of  other  investment 
outflows.  In  2013,  these  flows  turned  positive  again,  contributing  to  a  stronger 
positive financial account.  

In the Middle East and North Africa FDI inflows have receded significantly since 2010, 
stabilizing  at  generally  lower  but  still  positive  levels,  while  portfolio  and  other 
investment  remained  negative  and  volatile.  In  2013,  the  financial  account  turned 
negative  on  the  back  of  substantial  other  investment  outflows  in  all  quarters.  By 

3  “Direct  Investment”  records  financial  flows  between  resident  and  non-resident  firms  that 
are under a direct investment relationship. A direct investment relationship is established when 
a resident firm holds at least 10% in the share capital of a non-resident firm, or vice versa. 
4 “Portfolio Investment” records financial flows related to transactions between residents and 
non-residents that affect their assets and liabilities vis-à-vis each other related to securities and 
derivatives. Securities are distinguished between equities and debt securities, namely bonds and 
money market instruments. Residents’ net investment in securities issued by non-residents are 
recorded  under  ‘Assets’  (where  a  negative  sign  indicates  an  increase  and  a  positive  one  a 
decrease), whereas non-residents’ net investment in securities issued by residents are recorded 
under ‘Liabilities’ (where a negative sign indicates a decrease and a positive one an increase). 
5  “Other  Investment”  records  financial  flows  stemming  from  transactions  between  residents 
and non-residents related mainly to loans and deposits. Financial flows related to loans granted 
by  residents  to  non-residents,  as  well  as  residents’  deposits  with  non-resident  monetary 
financial  institutions  are  recorded  under  “Assets”.  Financial  flows  related  to  loans  granted  by 
non-residents  to  residents,  as  well  as  non-residents’  deposits  with  resident  monetary  financial 
institutions are recorded under “Liabilities”. 

November 2014  23 

 
 
 
 
 
 
 
                                           
 Analysis of developments in EU capital flows in the global context 

contrast,  Sub-Saharan  Africa  benefited  from  increasing  FDI,  and  to  a  lesser  extent 
other investment flows over the past 2 years (2011Q1-2012Q4).  

Figure 4 Composition of net capital flows in the world (percent of GDP) 

November 2014  24 

-10-8-6-4-2024682006Q12006Q32007Q12007Q32008Q12008Q32009Q12009Q32010Q12010Q32011Q12011Q32012Q12012Q32013Q12013Q32014Q1Euro area (in % of GDP)DIRECT INVESTMENTPORTFOLIO INVESTMENTFINANCIAL DERIVATIVESOTHER INVESTMENTFINANCIAL ACCOUNT-8-32712172006Q12006Q32007Q12007Q32008Q12008Q32009Q12009Q32010Q12010Q32011Q12011Q32012Q12012Q32013Q12013Q32014Q1CEE (in % of GDP)DIRECT INVESTMENTPORTFOLIO INVESTMENTFINANCIAL DERIVATIVESOTHER INVESTMENTFINANCIAL ACCOUNT-30-20-100102030402006Q12006Q32007Q12007Q32008Q12008Q32009Q12009Q32010Q12010Q32011Q12011Q32012Q12012Q32013Q12013Q32014Q1Other EU 3 (in % of GDP)DIRECT INVESTMENTPORTFOLIO INVESTMENTFINANCIAL DERIVATIVESOTHER INVESTMENTFINANCIAL ACCOUNT-8-6-4-2024682006Q12007Q12008Q12009Q12010Q12011Q12012Q12013Q12014Q1Non EU advanced (in % of GDP)DIRECT INVESTMENTPORTFOLIO INVESTMENTFINANCIAL DERIVATIVESOTHER INVESTMENTFINANCIAL ACCOUNT-15-10-5051015202006Q12007Q12008Q12009Q12010Q12011Q12012Q12013Q12014Q1CIS 9 EXCL. RUSSIA(in % of GDP)DIRECT INVESTMENTPORTFOLIO INVESTMENTFINANCIAL DERIVATIVESOTHER INVESTMENTFINANCIAL ACCOUNT-8-6-4-2024682006Q12007Q12008Q12009Q12010Q12011Q12012Q12013Q12014Q1Latin America (in % of GDP)DIRECT INVESTMENTPORTFOLIO INVESTMENTFINANCIAL DERIVATIVESOTHER INVESTMENTFINANCIAL ACCOUNT 
 
 
 
 
 
 
 
 
 
 
 Analysis of developments in EU capital flows in the global context 

Source:  IMF  IFS  (quarterly  capital  flows)  and  WEO  (annual  GDP);  Note:  see  the 
definition of the country groups in the note to Figure 3.  

The  net  international  investment  position  (NIIP)6  reflects  the  accumulated  stock  of 
capital flows and valuation changes of the earlier stock whenever the price of different 
assets and liabilities change and, is relevant for monitoring the external wealth of an 
economy.  On  the  other  hand,  gross  positions  matter  in  terms  of  exposure  and  risk 
(Brunnermeier et al., 2012). It is important to note that large gross stocks are prone 
to  major  valuation  changes,  which  can  lead  to  significant  shifts  in  the  net  stock 
position even if net flows are small. 

As shown in of Switzerland as a safe haven. 

Figure 5, the net position of the euro area has been negative and stable over the past 
years  (around  -13  percent  of  GDP  in  the  fourth  quarter  of  2013).  Similarly,  CEE8  (-
70percent of GDP) and non-EU advanced economies (-21 percent of GDP) also exhibit 

6  The international investment position is a measure of  the assets that a country owns abroad 
and the assets that foreigners own in the country in question. In the graphs, the negative bars 
indicate  an  increase  in  the  claim  of  non-residents  on  a  country  in  question,  while  the  positive 
bars indicate an increase in the claims of the country in question on non-residents. 

November 2014  25 

-8-6-4-202468102006Q12006Q32007Q12007Q32008Q12008Q32009Q12009Q32010Q12010Q32011Q12011Q32012Q12012Q32013Q12013Q32014Q1ASEAN-4 (in % of GDP)DIRECT INVESTMENTPORTFOLIO INVESTMENTFINANCIAL DERIVATIVESOTHER INVESTMENTFINANCIAL ACCOUNT-15-10-5051015202006Q12006Q32007Q12007Q32008Q12008Q32009Q12009Q32010Q12010Q32011Q12011Q32012Q12012Q32013Q12013Q32014Q1Middle East and North Africa (in % of GDP)DIRECT INVESTMENTPORTFOLIO INVESTMENTFINANCIAL DERIVATIVESOTHER INVESTMENTFINANCIAL ACCOUNT-10-505101520252007Q12008Q12009Q12010Q12011Q12012Q12013Q12014Q1Sub-Saharan Africa (in % of GDP)DIRECT INVESTMENTPORTFOLIO INVESTMENTFINANCIAL DERIVATIVESOTHER INVESTMENTFINANCIAL ACCOUNT-12-10-8-6-4-20246810122006Q12006Q32007Q12007Q32008Q12008Q32009Q12009Q32010Q12010Q32011Q12011Q32012Q12012Q32013Q12013Q32014Q1BRICS (in % of GDP)DIRECT INVESTMENTPORTFOLIO INVESTMENTFINANCIAL DERIVATIVESOTHER INVESTMENTFINANCIAL ACCOUNT 
 
 
 
 
 
 
 
 
 
 
 
                                           
 Analysis of developments in EU capital flows in the global context 

negative net positions. The NIIP position of the Other EU 3 turned positive only during 
2013,  staying  at  1.5  percent  of  GPD  in  2013  Q4.  By  contrast,  both  Japan  and 
Switzerland exhibit strong positive net positions of 60 percent of GDP and 150 percent 
of  GDP,  respectively,  and  can  be  seen  as  outliers  (therefore,  we  separate  Japan  and 
Switzerland out of the non-EU advanced county group). The CIS 9 (EXCL. RUSSIA), as 
well  as  Brazil  and  India  (data  not  available  for  Russia,  China  and  South  Africa  and 
Latin America), also have negative NIIP positions.  

The  components  of the NIIP  suggest major differences across the  country groups.  In 
the  euro  area,  the  negative  net  position  is  largely  due  to  accumulated  negative 
portfolio  investment  stocks.  However,  according  to  the  estimates  of  Zucman  (2013), 
around  8  percent  of  the  global  financial  wealth  of  households  is  held  in  tax  havens, 
three-quarters  of  which  goes  unrecorded.  Accounting  for  unrecorded  assets  the 
Eurozone  turns  into  a  net  creditor  and  not  a  net  debtor  to  the  rest  of  the  world  as 
indicated by official statistics. Foreign direct investment (FDI) abroad exceeds FDI by 
foreign investors in the euro area, resulting in a positive net claim on the rest  of the 
world. Net FDI claims exhibit an increasing trend since the mid-2000s, suggesting that 
euro  area  firms  use  FDI  to  penetrate  new  markets  or  to  achieve  efficiency  gains 
through  splitting  the  value  chain  of  the  production  (European  Commission,  2012). 
Non-EU advanced  economies shows a similar pattern in terms of components.  In the 
CEE8,  other  investment  liabilities  play  a  significantly  greater  role  than  in  euro  area 
countries  and  non-EU  advanced  economies,  suggesting  that  this  region  relied 
significantly on borrowing from abroad. The components of the CIS 9 (EXCL. RUSSIA) 
follow a similar pattern, with the difference that the region has a net claim in portfolio 
investment,  whereas  CEE8  accumulated  portfolio  investment  liabilities  in  the  period 
taken  into  consideration.  The  NIIP  of  Latin  America  is  negative  at  present,  having 
accumulated  a  significant  negative  direct  investment  stock.  Accumulated  reserve 
assets, and to a lesser extent other investment, result in a positive net claim over the 
rest  of  the  world  throughout  the  period  taken  into  consideration.  By  contrast,  the 
stock  of  portfolio  investment  turned  negative  in  2012  and  remained  a  net  liability 
thereafter,  suggesting  a  rising  attractiveness  of  the  region  for  portfolio  flows. 
Interestingly,  in  Brazil  and  India,  accumulated  negative  portfolio  investment  stocks 
are  slightly  more  important  than  direct  investment  stocks.  Turning  to  Japan  and 
Switzerland,  their  positive  NIIPs  are  mainly  due  to  accumulated  positive  direct  and 
portfolio investment as well as reserve assets. Most notably, Switzerland accumulated 
sizeable  positive  reserve  asset  stocks,  stemming  from  intensified interventions in  the 
foreign exchange rate market by the Swiss National Bank since the decision to peg the 
Swiss  Franc  to  the  Euro  in  September  2011.  Moreover,  since  the  beginning  of  2009, 
other  investment  by  foreign  investors  in  Switzerland  exceeds  other  investment 
abroad, suggesting an increasing importance of Switzerland as a safe haven. 

Figure 5 Net international investment positions (in percent of GDP) 

November 2014  26 

 
 
 
 
 
 
 Analysis of developments in EU capital flows in the global context 

November 2014  27 

-60-50-40-30-20-1001020302006Q12007Q12008Q12009Q12010Q12011Q12012Q12013Q12014Q1Euro area (in % of GDP)RESERVE ASSETSOTHER INVESTMENTPORTFOLIO INVESTMENTDIRECT INVESTMENTNIIP-120-100-80-60-40-20020402006Q12007Q12008Q12009Q12010Q12011Q12012Q12013Q12014Q1CEE (in % of GDP)DIRECT INVESTMENTPORTFOLIO INVESTMENTOTHER INVESTMENTRESERVE ASSETSNIIP-60-50-40-30-20-100102030402006Q12007Q12008Q12009Q12010Q12011Q12012Q12013Q12014Q1Other EU 3  (in % of GDP)DIRECT INVESTMENTPORTFOLIO INVESTMENTOTHER INVESTMENTRESERVE ASSETSNIIP-40-30-20-10010202006Q12007Q12008Q12009Q12010Q12011Q12012Q12013Q12014Q1Non EU advanced (in % of GDP)DIRECT INVESTMENTPORTFOLIO INVESTMENTOTHER INVESTMENTRESERVE ASSETSNIIP-80-60-40-20020402006Q12007Q12008Q12009Q12010Q12011Q12012Q12013Q12014Q1CIS EXCL. RUSSIA  (in % of GDP)DIRECT INVESTMENTPORTFOLIO INVESTMENTOTHER INVESTMENTRESERVE ASSETSNIIP-40-30-20-1001020302006Q12007Q12008Q12009Q12010Q12011Q12012Q12013Q12014Q1Latin America  (in % of GDP)DIRECT INVESTMENTPORTFOLIO INVESTMENTOTHER INVESTMENTRESERVE ASSETSNIIP 
 
 
 
 
 
 
 
 
 
 
 Analysis of developments in EU capital flows in the global context 

Source:  IMF  IFS  (quarterly  IIP)  and  WEO  (annual  GDP).  Note:  country  groups  are 
defined  in  the  note  to  Figure  3,  but  due  to  data  limitations,  the  following  changes 
occur:  non-EU  advanced:    Hong  Kong  is  included  only  since  2010;  CEE8:  Bulgaria  is 
included only since 2007; Latin America: without Argentina, Bolivia, Ecuador, Mexico, 
Uruguay; CIS 8 (EXCL. RUSSIA): without Azerbaijan, Kyrgyz Republic, Tajikistan and 
Ukraine;  No  data  availability  for  ASEAN-4,  Middle  East  and  North  Africa  and  Sub-
Saharan Africa. 

3.2 Global trends in the banking sector 
Given  the  importance  of  the  banking  system  in  Europe,  we  also  look  at  the  capital 
flows  from  the  perspective  of  international  banking  claims  as  reported  by  the  BIS 
banking  statistics.  It  allows  us  to  analyse  cross-border  bank  integration  (or 
deleveraging) of banks headquartered in different regions of the world  as well as the 
analysis of the changes in the geographical composition of bank claims.  

One disadvantage of using the BIS banking statistics is that most emerging economies 
and  even  some  advanced  economies  (including  some  in  the  EU)  are  not  reporting 
countries.  Thus,  we  can  only  see  a  partial  view  of  the  global  trends  from  the 
perspective  of  the  reporting  countries,  although  the  most  important  financial  and 
banking  centres  are  included  and  nearly  all  countries  in  the  world  are  included  as 
counterparties. For  example, foreign claims of  banks  established in new EU Members 
States (non-reporting) on the rest of the world are not available, but foreign claims of 
a reporting country over a new EU Member State or over almost every country in the 
world are available. 

November 2014  28 

-60-50-40-30-20-1001020302006Q12007Q12008Q12009Q12010Q12011Q12012Q12013Q12014Q1Brazil and India (in % of GDP)DIRECT INVESTMENTPORTFOLIO INVESTMENTOTHER INVESTMENTRESERVE ASSETSNIIP-10010203040506070802010Q22010Q32010Q42011Q12011Q22011Q32011Q42012Q12012Q22012Q32012Q42013Q12013Q22013Q32013Q42014Q1Japan (in % of GDP)DIRECT INVESTMENTPORTFOLIO INVESTMENTOTHER INVESTMENTRESERVE ASSETSNIIP-100-500501001502002502005Q12006Q12007Q12008Q12009Q12010Q12011Q12012Q12013Q12014Q1Switzerland (in % of GDP)DIRECT INVESTMENTPORTFOLIO INVESTMENTOTHER INVESTMENTRESERVE ASSETSNIIP 
 
 
 
 
 
 
 
 
 
 
 Analysis of developments in EU capital flows in the global context 

Figure 6 shows the consolidated foreign claims of BIS reporting countries over the rest 
of  the  world.  According  to  the  BIS  definition,  the  consolidated  statistics  provide 
information  about  banks'  risk  exposures,  in  particular  country  risk.  They  capture  the 
worldwide consolidated claims of banks headquartered in the BIS reporting countries, 
including claims of their own foreign affiliates, but excluding positions between related 
offices.  They  build  on  measures  used  by  banks  in  their  internal  risk  management 
systems7. 

Figure 6 Gross foreign claims of reporting banks on the rest of the world 

A:  Claims  of  banks  headquartered  in  ten  euro-area  countries  (percent  of  euro  area 
GDP) 

Note:  claims  are  shown  from  the  reporting  country  perspective.  Due  to  data 
limitations,  the  euro-area  group  is  made  of  ten  countries:  Austria,  Belgium,  Finland, 
France,  Germany,  Ireland,  Italy,  the  Netherlands,  Portugal  and  Spain.  Not  enough 
data  was  available  for  Greece  despite  being  a  BIS  reporting  country.  In  the  case  of 
France,  data  for  the  fourth  quarter  2013  was  not  yet  available  so  it  is  assumed  to 
remain  unchanged  from  the  third  quarter.  The  counterparties  are  grouped  as  “Other 
non EU advanced” (15  countries classified as advanced by the IMF WEO), “Other EU” 
(11  countries),  “Emerging”  (172  countries  classified  as  emerging  markets  or 
developing  economies  by  the  IMF  WEO)  “Rest  of  the  world”  (residual  amount 
calculated to sum up to the foreign claims on “all countries” reported by the BIS) can 
be interpreted as the amount of missing or non-classified data. As a counterparty the 
euro area is composed of the euro area 18, and thus it represents the intra-euro area 
claims, while everything bellow the “euro  area” area in the graphs is netted out from 
intra-group claims. 

B:  Claims  of  banks  headquartered  in  Denmark,  Sweden  and  the  United 
Kingdom, (percent of their combined GDP) 

7 For additional information check http://www.bis.org/statistics/about_banking_stats.htm  

November 2014  29 

 
 
 
 
 
 
  
 
                                           
 Analysis of developments in EU capital flows in the global context 

Note: among the non-euro area EU countries, only Denmark, the United Kingdom and 
Sweden  are  BIS  reporting  countries.  The  euro  area,  from  the  perspective  of 
counterparty, is made of the first seventeen euro countries, “other EU” includes and is 
mostly  composed  of  intra  (Denmark,  United  Kingdom  and  Sweden)  claims  as  claims 
over the resting 8 non euro area EU countries are not very significant in this particular 
case. 

C: Claims of banks headquartered in six non-EU advanced countries (percent 
of their combined GDP) 

Note:  The  six  countries  are:  Australia,  Canada,  Japan,  South  Korea,  Switzerland  and 
the United states. The euro area, from the perspective of counterparty, is made of the 
first  seventeen  euro  countries,  and  “other  EU”  is  the  aggregate  of  eleven  countries 
(the  ten  countries  currently  outside  the  euro  area  plus  Latvia).  The  other  “non  EU 
advanced”  economies  corresponds  to  the  other  9  non  EU  advanced  economies  as 
classified  by  the  IMF  WEO,  the  “intragroup”  subset  corresponds  to  the  six  non  EU 
advanced  reporting  countries  and  “Rest  of  the  world”  (residual  amount  calculated  to 
sum up to the foreign claims on “all countries” reported by the BIS)can be once again 
interpreted as the amount of missing or non-classified data. 
Source:  BIS  consolidated  banking  statistics  on  immediate  borrowing  basis,  OECD 
(exchange rates and quarterly GDP) and Bruegel calculations 

November 2014  30 

 
 
 
 
 
 
 
 
 Analysis of developments in EU capital flows in the global context 

Among  our  three  reporting  country  samples  euro-area  banks  reduced  their  foreign 
claims most dramatically. As  regards the geographical composition of  claims of euro-
area  banks,  claims  on  emerging  countries  have  not  declined,  but  claims  on  all  other 
counterparty  groups  (within  euro-area,  non-euro-area  EU,  and  non-EU  advanced) 
have  declined  quite  substantially.  In  the  group  of  Denmark,  Sweden  and  United 
Kingdom  a  gradual  deleveraging  process  started  in  2010,  mostly  by  reducing  the 
claims on the euro area. On the contrary, in the six non-EU advanced economies the 
abrupt  decrease  in  the  value  of  their  foreign  claims  observed  in  the  last  quarter  of 
2008 was quickly reversed, as it was partly due to exchange rate volatility, for which 
the consolidated data (unlike the locational statistics) are not adjusted.  

3.3 Ukraine and Russia 
Given the  recent geopolitical events that  have  unfolded between Ukraine and Russia, 
this section tries to track the impact of the crisis on the external financial situation of 
the  two  countries  and  their  bilateral  relationships  in  terms  of  FDI,  banking  and 
portfolio investments8.  

To start with, Panel A of Figure 7 reports the financial account and its components for 
Ukraine, capturing the latest developments of capital flows up to September 2014, the 
latest  month  available.  After  facing  major  difficulties  in  financing  the  balance  of 
payments on the back of the global financial crisis and applying for financial assistance 
from the IMF in late 2008, in 2009, Ukraine was still experiencing a drought of capital 
flows of up to -22 percent of GDP. Large negative net flows of portfolio debt and bank 
loans (proxied by other investment) played a major role, as foreign banks engaged in 
a  process  of  cross-border  deleveraging.  Only  by  the  first  quarter  of  2010  capital 
started  pouring  again  cautiously  into  the  country.  Both  portfolio  investment  in  loans 
and  bonds,  as  well  as  bank  loans  were  volatile  throughout  the  recovery,  while  FDI 
inflows remained stable. Portfolio equity flows started to play a minor role in 2012 and 
2013.  By  the  start  of  2014,  when  the  geopolitical  tensions  between  Russia  and 
Ukraine escalated, Ukraine experienced capital outflows of approximately  -10 percent 
of  GDP,  reflecting  negative  net  flows  of  bank  loans  and  portfolio  investment  in  loans 
and bonds. Also, FDI flows turned negative throughout the first four months of 2014. 
Nevertheless,  the  magnitude  of  capital  outflows  remained  well  below  the  outflows 
observed in 2009. In March 2014, the outflows receded and the net financial account 
turned  positive  again,  as  portfolio  debt  flows  recovered  somewhat.  FDI  flows 
recovered from June to September 2014, while portfolio investment in debt and loans 
remained  volatile.  In  September  2014  the  financial  account  stood  at  0.11  percent  of 
GDP. 

8 The data has been collected from the Central Bank of the Russian Federation and the National 
Bank  of  Ukraine, 
Investment  Survey, 
http://cpis.imf.org/) and from BIS consolidated banking statistics. 

IMF  CPIS  (Coordinated  Portfolio 

from 

the 

November 2014  31 

 
 
 
 
 
 
 
 
                                           
 Analysis of developments in EU capital flows in the global context 

Figure 7 Financial account and components (in percent of GDP) of both 
countries 

Panel A: Ukraine 

Panel B: Russia 

Source: National Bank of Ukraine (for 
BoP  data)  and  IMF  WEO  October 
2014  (for  GDP  data).  Note:    July  to 
September  2014  are  preliminary 
data;  monthly  capital  flows  data 
were divided by 1/12th of the annual 
GDP;  monthly 
01/2009-
09/2014 

data: 

of 

balance 

Source: Central Bank of the Russian 
Federation  (for  BoP  data)  and  IMF 
WEO (for GDP data). Note: quarterly 
capital  flows  data  were  divided  by 
1/4th  of  the  annual  GDP.  The 
Russian 
payments 
statistics include the accumulation of 
reserve  assets 
financial 
account,  while  IMF  and  EU  sources 
treat reserves separately. In order to 
report 
concepts 
throughout  our  paper,  we  do  not 
include  the  changes  in  reserves  in 
the 
financial  account;  quarterly 
data: 2005Q1-2014Q1 

consistent 

the 

in 

Turning  to  the  Russian  balance  of  payments,  Panel  B  of  Figure  7  shows  that  after  a 
period  of  volatile  capital  inflows  in  the  pre-crisis  period  (2006Q1-  2008Q2),  Russia 
experienced  large  capital  outflows  of  about  30percent  of  GDP  with  the  start  of  the 
financial  crisis  in  2008Q3,  on  the  back  of  receding  portfolio  and  other  investment 
flows.  Over  2009-10,  capital  flows  recovered  somewhat  as  other  investment  flows 
stabilised.  However,  FDI  inflows  remained  weak  or  even  reversed  over  the  same 
period  taken  into  consideration.  By  the  end  of  2010,  the  financial  account  turned 
negative again, reflecting mainly outflows of other investment, and to a lesser extent 
of  portfolio  and  FDI.  With  the  start  of  the  Ukraine  crisis  at  the  end  of  2013  and 
beginning of 2014, capital outflows intensified again. Specifically, in the first quarter of 
2014  the  Russian  financial  account  deficit  increased  to  -9.2percent  of  GDP,  on  the 
back of outflows in bank loans and in portfolio investments amounting to  -4.7percent 
and -3.3percent of GDP, respectively.  

November 2014  32 

-30-20-1001020304001/200907/200901/201007/201001/201107/201101/201207/201201/201307/201301/201407/2014Other investmentPortfolio investment, loans and bondsPortfolio investment, equityDirect investmentFinancial account-35-30-25-20-15-10-505101520251Q20051Q20061Q20071Q20081Q20091Q20101Q20111Q20121Q20131Q2014Other investmentPortfolio investmentDirect investmentFinancial derivativesFinancial account 
 
 
 
 
 
 
 
 
 Analysis of developments in EU capital flows in the global context 

With  regards  to  the  accumulated  capital  flows  and  valuation  changes,  Panel  A  of 
Figure 8  shows the net international investment position for Ukraine. It is interesting 
to note the depletion of foreign exchange reserves, which fell from about 20 percent of 
GDP in late 2011 to about 10 percent of GPD by April 2014. FDI continues to dominate 
the  net  external  liabilities  of  Ukraine,  while  the  balance  of  portfolio  debt  securities  is 
also significantly negative. Interestingly, the net stock of other investments has turned 
positive in mid-2012, increasing to about 10percent of GDP by April 2014.  

Figure 8 Net international investment position and its components (in 
percent of respective country GDP) 

Panel A: Ukraine 

Panel B: Russia 

Source:  National  Bank  of  Ukraine  (for 
IIP data) and IMF  WEO (for GDP data). 
annual  data:  2001-2009,  quarterly 
data: Jan 2010 – Apr 2014. 

the  Russian 
Source:  Central  Bank  of 
Federation  (for  IIP  data)  and  IMF  WEO  (for 
GDP data). 

By  contrast,  the  Russian  net  international  investment  position  has  become  positive 
since  2008,  when  the  global  financial  crisis  intensified,  mostly  due  to  the  sudden 
collapse of portfolio equity liabilities (see Panel B of  Figure 8). Portfolio investment in 
equity  has  played  a  major  role  before  and  after  the  crisis,  being  by  far  the  most 
important  liability,  while  portfolio  investment  in  debt  never  returned  to  pre-crisis-
levels.  Although  the  stock  of  reserve  assets  was  gradually  depleted  over  the  later 
years (2009-2013), by end 2013 reserve assets still significantly outweighed the total 
stock of liabilities, contributing to a positive NIIP of 6 percent of GDP.  

BIS consolidated banking data, as well as FDI and Portfolio investment data allows the 
bilateral  relationships  of  Russia  and  the  Ukraine  with  their  respective  partners  to  be 
revealed and examined. 

First,  we  scrutinize  in  more  detail  the  exposure  of  the  European  banking  sector  to 
Ukraine  and  Russia  (which  amounts  to  8.2  bn  USD  and  134.7  bn  USD  in  Q2  2014, 
respectively9). Within the EU, Table 1 shows that Austrian banks have been the most 
exposed  to  Ukraine  over  the  period  taken  into  consideration,  with  claims  averaging 
USD 9.2 bn from 2008Q3 to 2013Q1. While French banks  still played a major  role in 

9 Note that reporting EU aggregate for Russia includes: BE, DE, FR, IT, ND, PT, GR, SW, UK up 
to 2014-Q2 and AT up to 2012-Q4; for Ukraine it includes: BE, DE, IT, PT, GR, UK up to 2014-
Q2, FR up to 2011-Q4 and AT up to 2013-Q1, no data is available for the Netherlands. 

November 2014  33 

-100-80-60-40-2002040200120022003200420052006200720082009Jan-10Apr-10Jul-10Oct-10Jan-11Apr-11Jul-11Oct-11Jan-12Apr-12Jul-12Oct-12Jan-13Apr-13Jul-13Oct-13Jan-14Apr-14Reserve assetsDirect investmentPortfolio investment, Equity securitiesPortfolio investment, Debt securitiesOther investmentNIIP-50-40-30-20-100102030405020002001200220032004200520062007200820092010201120122013Reserve assetsDirect investmentPortfolio investment, Equity securitiesPortfolio investment, Debt securitiesOther investmentNIIP 
 
 
 
 
 
 
 
 
 
 
                                           
 Analysis of developments in EU capital flows in the global context 

the run-up to the crisis, they reduced their exposure significantly afterwards, from 9.5 
bn  in  2008Q3  to  3.8  bn  in  2011Q4  (latest  data  available  for  France).  By  contrast, 
Italian bank’s exposure to Ukraine grew constantly over the last years, with a peak of 
6.6 bn in 4Q 2010, before declining to 4.9 bn in 2Q 2014. Over the last year and the 
first half of 2014, all countries for which data is available have reduced their exposure 
to Ukraine, with the exceptions of Belgium and the UK, which, however, hold positions 
of minor relevance (0.1 bn USD and 0.9 bn USD, respectively). Outside the EU, the US 
holds claims vis-a-vis Ukraine amounting to USD 1.1 bn USD in 2014Q2, which have 
remained  more  or  less  constant  over  2010-2014.  By  contrast,  Switzerland  reports  a 
major  reduction  of  claims,  from  7.3  bn  in  2007  to  1  bn  in  2013Q1  (latest  data 
available for Switzerland). 

Table 1 Exposure to Ukraine of individual EU countries, in USD billions  

2005 

2006 

2007 

2008  2009 

2010 

2011 

2012 

2013-
Q1 

2013-
Q4 

2014-
Q1 

2014-
Q2 

Austria 

5.03 

5.88 

11.43 

10.70 

9.03 

8.84 

8.94 

7.53 

7.45 

n.a. 

n.a. 

n.a. 

Belgium 

0.03 

0.16 

0.48 

0.40 

0.06 

0.03 

0.07 

0.08 

0.08 

0.11 

0.11 

0.11 

Germany 

1.38 

2.52 

3.82 

4.73 

1.94 

1.69 

1.24 

1.53 

1.51 

1.04 

1.07 

0.94 

France 

0.34 

4.62 

7.91 

8.24 

7.04 

6.05 

3.76 

n.a. 

n.a. 

n.a. 

n.a. 

n.a. 

Italy 

0.11 

0.15 

2.55 

4.85 

2.37 

6.46 

6.40 

6.06 

6.24 

6.28 

5.44 

4.92 

Portugal 

0.04 

0.10 

0.17 

0.16 

0.14 

0.08 

0.06 

0.04 

0.04 

0.04 

0.04 

0.04 

Greece 

0.11 

0.19 

0.68 

0.77 

2.03 

1.77 

1.93 

1.79 

1.87 

1.43 

1.43 

1.20 

Sweden 

0.08 

0.25 

3.96 

5.48 

3.12 

2.77 

1.84 

0.87 

0.75 

0.13 

0.08 

0.07 

UK 

0.18 

0.19 

0.58 

0.59 

0.40 

0.56 

0.35 

0.41 

0.51 

0.33 

0.95 

0.90 

Switzerland 

0.75 

3.27 

7.31 

5.07 

2.73 

2.30 

1.39 

1.49 

0.99 

n.a. 

n.a. 

n.a. 

US 

0.48 

0.56 

1.21 

0.75 

0.79 

1.34 

1.18 

1.22 

1.30 

0.98 

1.21 

1.13 

Japan 

0.18 

0.37 

0.83 

0.67 

0.43 

0.59 

0.57 

0.36 

0.42 

0.14 

0.09 

0.11 

Reporting EU 
(changing 
composition) 

7.30 

14.06 

31.61 

35.98 

26.13 

22.20 

24.61 

18.57 

18.33 

9.36 

9.12 

8.17 

Source:  BIS  consolidated  banking  statistics,  ultimate  risk  basis.  Note:  years  refer  to 
fourth  quarter  data  of  the  same  year;  interpolation  has  been  used  to  account  for 
missing  data  points  for  France;  data  for  Austria  is  available  only  up  to    2013Q2,  for 
Switzerland  up  to    2013Q3,  for  France  up  to    2012Q1.  Reporting  EU  (changing 
composition)  refers  to  the  countries  for  which  data  is  available  (see  the  footnote  on 
page  33).  For  example,  the  large  fall  from  2013Q1  to  2013Q4  is  mostly  the  results 
that data is not available for Austria after 2013Q1. 

For Russia, individual European country claims are less concentrated.  Table 2 reveals 
that  French  and  German  and  to  some  extent  Austrian,  Italian  and  Dutch  banks  have 
been  the  most  prominent,  since  at  least  2007Q4.  In  2014Q1,  France,  with  claims 
amounting to 47 bn USD, is certainly the most exposed, followed by Italy at 25.8 bn 
USD. The United Kingdom, the Netherlands and Germany  exhibit exposure  of around 
15  to  17  bn  USD  in  2014Q1.  The  US  reduced  its  claims  of  over  USD  43.5  bn  in 
2013Q1 to USD 26.1 bn in 2014Q2, while Japan’s claims remained constant over the 
last year and a half, averaging USD 20 bn.  

November 2014  34 

 
 
 
 
 
 
 
 
 Analysis of developments in EU capital flows in the global context 

Table 2 Exposure to Russia of individual EU countries, in USD billions 

2005 

2006 

2007 

2008 

2009 

2010 

2011 

2012-
Q3 

2012-
Q4 

2013-
Q4 

2014-
Q1 

Austria 

6.44 

12.72 

19.59 

21.66 

13.56 

n.a. 

n.a. 

16.95 

n.a. 

n.a. 

n.a. 

Belgium 

1.12 

1.09 

8.31 

8.18 

5.04 

4.15 

4.04 

4.07 

3.79 

0.75 

0.57 

Germany 

11.16 

16.53 

33.25 

40.78 

27.49 

25.30 

22.88 

26.28 

24.88 

19.34 

17.41 

France 

6.12 

6.63 

27.29 

40.05 

33.24 

37.94 

39.43 

39.87 

41.13 

49.20 

47.32 

Italy 

2.00 

2.57 

19.70 

22.27 

18.56 

25.21 

22.96 

22.87 

25.71 

29.20 

25.75 

Netherlands 

7.15 

11.83 

18.83 

20.19 

13.82 

11.64 

13.97 

13.38 

15.01 

17.21 

16.61 

Portugal 

0.22 

0.32 

0.72 

0.73 

0.46 

0.11 

0.10 

0.10 

0.14 

0.19 

0.26 

Greece 

0.70 

1.04 

1.18 

1.36 

1.09 

0.57 

0.39 

0.46 

0.38 

0.41 

0.41 

Sweden 

0.82 

1.51 

6.30 

10.49 

9.11 

8.54 

9.19 

15.03 

14.57 

8.52 

8.70 

UK 

2.55 

6.62 

11.01 

7.79 

7.68 

12.29 

13.68 

20.24 

17.76 

17.10 

15.94 

2014-
Q2 
n.a. 

0.70 

17.68 

47.75 

27.67 

15.70 

0.29 

0.36 

9.08 

14.26 

Switzerland 

9.49 

15.13 

19.55 

10.40 

6.15 

7.50 

6.75 

10.50 

10.41 

n.a. 

n.a. 

n.a. 

United 
States 

Japan 

Reporting EU 
(changing 
composition) 

8.09 

10.32 

16.55 

8.03 

18.48 

21.17 

19.25 

25.80 

33.88 

32.36 

27.20 

26.08 

5.89 

6.95 

12.09 

13.92 

11.68 

9.88 

12.20 

13.74 

14.01 

20.47 

19.45 

18.40 

38.74 

61.54 

147.84 

176.44 

132.29 

127.31 

127.85 

160.25 

144.29  143.20  134.27  134.66 

Source:  BIS  consolidated  banking  statistics,  ultimate  risk  basis.  Note:  years  refer  to 
fourth quarter data of the same year; data for Austria is available only up to 2012Q3 
and for Switzerland up to 20133Q. For reporting EU composition, see  the footnote on 
page 33. 

Turning  to  bilateral  portfolio  investments  with  respect  to  Russia  vis-à-vis  other 
countries,  Figure  9  confirms  the  overall  picture  of  the  negative  net  portfolio 
investment position of Russia as shown in  Figure 8. The most important negative net 
positions  are  held  with  the  US,  the  UK,  the  Euro  area  9  and  Luxembourg  - 
interestingly  enough,  the  net  positions  with  Luxembourg  are  as  big  as  the  ones  with 
the rest of the euro area 9, suggesting an important role of Luxembourg as a money 
hub  for  Russia.  Over  the  last  year,  the  negative  net  positions  vis-à-vis  the  UK 
increased from -14 bn to -37 bn and from -10 to -21 bn for the euro area, while net 
positions  with  other  countries  remained  somewhat  stable.  This  suggests  that  foreign 
investors  purchased  significant  amounts  of  Russian  securities.  Also,  valuation  effects 
might play a role, since the Russian stock exchange increased somewhat from June to 
December 2013 (see Figure 11). 

November 2014  35 

 
 
 
 
 
 
 
 Analysis of developments in EU capital flows in the global context 

Figure 9 Net position of portfolio investment of Russia vis-à-vis its main 
partners (in bn USD) 

Source:  IMF  CPIS;  Note:  reported  portfolio  net  position  for  Russia  vis-à-vis  other 
countries  is  calculated  by  subtracting  Table  8  Derived  Portfolio  Investment  Liabilities 
from  Table  1  Reported  Portfolio  Investment  Assets;  the  data  is  collected  on  a  semi-
annual basis from 2013 onwards. 

A  similar  analysis  is  not  possible  for  Ukraine,  since  it  is  not  a  reporting  country. 
However, a simple method of mirror positions10 allows reconstructing the claims of the 
most important countries on Ukraine as shown in Panel A of  Figure 10, while Panel B 
reports Russian liabilities.  

Due  to  crumbling  stock  prices  (see  Figure  11),  the  value  of  euro  area  portfolio 
investment  decreased  significantly  in  Ukraine  during  the  financial  crisis  in  07/08, 
remaining  at  around  1.5  bn  in  the  subsequent  periods.  A  similar  pattern  can  be 
observed  for  the  UK,  while  Luxembourg  increased  its  portfolio  investments  towards 
Ukraine  from  0.5  bn  in  2008  to  -4  bn  in  2013,  more  than  double  the  position  of  the 
whole Euro area in 2013. The spike in Russian liabilities in Ukraine in end-2013 of 3 bn 
USD reflects the first instalment of the USD 15bn financial assistance package agreed 
between  Russia  and  Ukraine  in  December  201311,  before  the  geopolitical  relations 
started to escalate. 

In  Russia,  the  value  of  portfolio  investment  of  all  countries  taken  into  consideration 
suffered  from  falling  stock  prices  during  the  financial  crisis  (see  Figure  11),  a  trend 
which  was  reversed  slightly  afterwards.  Interestingly,  the  US  has  recovered  its  pre-
crisis  levels  of  nearly  USD  80  bn,  while  the  Euro  area,  UK  and  Luxembourg  stand  at 
around USD 30 to 40 bn by the end of 2013.  

10  Portfolio  investment  assets  of  a  reporting  country  on  Ukraine  are  portfolio  investment 
liabilities for Ukraine. 
11 
See 
00144feabdc0.html#axzz3INVL02UU 

http://www.ft.com/intl/cms/s/0/75db4726-6727-11e3-8d3e-

November 2014  36 

-175-150-125-100-75-50-25020012002200320042005200620072008200920102011201206/201312/2013EA9 (excl GR, PT, ES,LU)LUCHUKUS 
 
 
 
 
 
 
 
 
                                           
 Analysis of developments in EU capital flows in the global context 

Figure 10 portfolio investment liabilities, Ukraine and Russia (in bn USD) 

Panel A: Ukraine 

Panel B: Russia 

Source: IMF CPIS and Bruegel calculations; Note: the data is semi-annual from 2013 
onwards. euro area 8 is defined as AT, BE, FI, FR, DE, IT, IR, ND, EE (data is missing 
for FI in Ukraine, so it is euro area 8 excluding LUX)  

Figure 11 Stock exchange indexes, Russia and Ukraine 

Source: Datastream, Thomson Reuters. 
Figure  12  reports  quarterly  data  on  foreign  direct  investments  (FDI)  in  Russia  from 
2007 till the first quarter of 2014, broken down by investing countries. The upper-left 
panel  shows  FDI  coming  from  European  countries,  both  EU  and  non-EU.  The  other 
three panels show FDI coming from Asian, American and Caribbean countries. 

Over  time  (if  we  disregard  possibly  dubious  flows  from  the  Caribbean)  Europe  has 
played a crucial role in providing FDI to Russia, with the largest share of European FDI 
coming  from  euro  area  countries  (in  particular  Ireland  and  the  Netherlands,  followed 
by  France  and  Germany).  Cyprus  and  Luxembourg  are  clear  outliers  in  Europe  and 
their  abnormal  flows  are  more  similar  to  those  from  the  Caribbean  countries,  with 

November 2014  37 

-5-4-3-2-1020012002200320042005200620072008200920102011201206/201312/2013Russian FederationUKEA 9 (excl LUX)LUX-90-80-70-60-50-40-30-20-10020012002200320042005200620072008200920102011201206/201312/2013US0250500750100012501500175020002005200620072008200920102011201220132014Russia MICEXUkraine UR PFTS 
 
 
 
 
 
 
 
 Analysis of developments in EU capital flows in the global context 

which they are represented12. FDI flows from Europe have been shrinking significantly 
in the last three quarters up to March 2014. This  probably occurred in anticipation of 
escalating tensions, and sped up during the first quarter of 2014, when agreement on 
the  first  wave  of  sanctions  was  reached.  More  interestingly,  FDI  flows  from  Asia  - 
mostly  China  -  picked  up  during  the  same  period.  During  the  first  three  months  of 
2014,  European  net  FDI  inflows  to  Russia  amounted  to  2.9  USD  billion  (2  billion  of 
which coming from the euro area), while Asian net FDI flows to Russia were 1.2 USD 
billion (1 billion of which coming from China). However, as the last panel of  Figure 12 
reports, its magnitude is still limited compared to the FDI flows of other regions. 

Whether  or  not  the  first  signs  of  a  geographical  reshuffling  of  capital  flows  can  be 
seen,  with  China  possibly  starting  to  substitute  for  the  withdrawals  by  European 
countries,  is  a  question  that  might  be  answered  by  future  data  releases. 
Unfortunately, a similar analysis cannot be done for Ukraine as the available bilateral 
FDI data from the OECD is outdated and not available from national sources. 

12  See  this  article  for  a  wider  discussion  of  Cypriot  FDI  flows  to  and  from  Russia 
http://www.ft.com/intl/cms/s/0/3ac3f02a-6962-11e2-b254-
00144feab49a.html?siteedition=intl#axzz3EhEOZW2p 

November 2014  38 

 
 
 
 
 
 
 
                                           
 Analysis of developments in EU capital flows in the global context 

Figure 12 Net foreign direct investment inflows to Russia by region (in bn 
USD) 

November 2014  39 

-2024681012142008Q12009Q12010Q12011Q12012Q12013Q12014Q1Europe non-EUEU non-EA (ex. UK)Euro Area (ex. LUX & CY)Total-0.6-0.20.20.611.42008Q12009Q12010Q12011Q12012Q12013Q12014Q1ChinaJapanKoreaRest of AsiaTotal-1-0.500.511.52008Q12009Q12010Q12011Q12012Q12013Q12014Q1USRest of North A.Central & South A.Total-10-5051015202530352008Q12009Q12010Q12011Q12012Q12013Q12014Q1CaribbeanLUX & CYUKTotal-505101520253035402008Q12009Q12010Q12011Q12012Q12013Q12014Q1net foreign direct investment inflows in Russia by region (in USD bn)EuropeAsiaAfrica and North AmericaCaribbean, UK, LUX and CY 
 
 
 
 
 Analysis of developments in EU capital flows in the global context 

Source:  National  bank  of  Russia;  Note:  data  is  provided  already  in  net  terms  (i.e. 
inflows minus outflows). Note: the last panel shows the totals of the first four panels 
to allow a better comparison. 

Overall, the analysis shows that both the Ukraine and Russia have experienced capital 
outflows in the recent past due to the geopolitical unrest, but to a much smaller extent 
than during the turmoil of the  financial crisis. It is also worthwhile to note that while 
Russia  displays  persistent  net  capital  outflows,  Ukraine  managed  to  attract  some 
capital  inflows  in  the  aftermath  of  the  financial  crisis.  On  a  bilateral  basis,  we  found 
that  Austrian  banks  played  a  significant  role  in  Ukraine  up  until  recently  (data  is 
missing  from  2012Q4  onwards);  while  for  Russia  individual  European  country  claims 
are less concentrated, with French, German, and to some extent Austrian, Italian and 
Dutch banks being most prominent since the beginning of the financial crisis. Turning 
to portfolio investment in Russia, negative net positions are held with the US, the UK, 
the  Euro  area  9  and  Luxembourg,  suggesting  an  important  rolefor  Luxembourg  as  a 
hub of international finance. Also, an analysis of investment portfolio liabilities shows 
the prominent role of the Euro area, Luxembourg and the UK. The US plays and even 
more  important  role  in  Russia.  More  interestingly,  as  European  FDI  flows  receded 
somewhat,  flows from  Asia  - mostly China  - picked up over the most recent periods. 
Their magnitude compared to other regions’ FDI flows, however, still remains small. 

Looking  ahead,  Ukraine  faces  major  economic  challenges,  which  should  be  met  with 
appropriate  economic  reforms,  as  outlined  by  Giucci  and  Zachmann  (2014),  the  IMF 
Standby agreement (IMF 2014) and Dabrowski (2014). 

4. A closer look at Europe 
The  previous  section  assessed  capital  flows  and  stock  from  a  global  perspective, 
presenting data on the euro area and non-euro area EU countries. In this section, we 
take  a  closer  look  at  the  European  Union  by  considering  the  following  six  country 
groups: 

  Euro area (EA) Core: Austria, Belgium, Finland, Germany, Luxemburg and 

the Netherlands. 

  Euro area (EA) Periphery13: Cyprus, Greece, Portugal and Spain. 
  Euro area (EA) Centre: France and Italy. 
  North: Denmark and Sweden. 
  Central and Eastern Europe: Bulgaria, Czech Republic, Croatia, Estonia, 

Hungary, Latvia, Lithuania, Poland, Romania, Slovenia and the Slovak Republic. 

  The UK is considered individually in light of its special role for financial 

intermediation and capital flows. 

While countries included in a particular group have major similarities, there is certainly 
a  large  degree  of  heterogeneity  within  most  of  the  groups.  However,  increasing  the 
number  of groups further would greatly complicate the analysis. We present data  for 
each  country  in  the  Annex  of  this  report,  enabling  the  analysis  of  country-specific 
data. 

The  data  source  for  all  the  charts  presented  in  this  section  is  Eurostat  balance  of 
payments  and  international  investment  statistics,  unless  stated  otherwise.  All 
aggregate  group  figures  are  obtained  by  dividing  the  group’s  totals  for  each  of  the 

13 Ireland is excluded from the EA periphery, given its outstanding role as an offshore financial 
sector. 

November 2014  40 

 
 
 
 
 
 
 
 
 
 
                                           
 Analysis of developments in EU capital flows in the global context 

instrument presented by the group’s GDP (as an annualised amount, that is, the sum 
of the present and previous three quarters).  

In some cases, the group has a changing composition, as countries are added starting 
from  the  years  in  which  their  data  becomes  available.  This  is  done  to  ensure  the 
longest  possible  time  series.  The  changes  in  compositions  do  not  have  major  effects 
on  the  results,  because  typically  countries  are  small  in  proportion  to  the  group  to 
which they are added (e.g. Cyprus).  

4.1 The special case of the euro area 
Being a currency union, the euro area is a special case for the study of capital flows. 
The  first  decade  after  the  currency  unification  coincided  with  extraordinary  global 
growth in cross border capital flows. The introduction of the currency union reinforced 
this global trend in the euro area, thanks to the elimination of the intra-area exchange 
rate risk (Lane and Milesi-Ferretti 2008).  

The  surge  in  capital  flows  started  in  the  early  2000s  and  occurred  mostly  through 
portfolio  debt  flows.  At  the  individual  level,  countries  within  the  Euro  area  ran 
persistently  large  and  divergent  current  account  and  financial  account  positions.  This 
was not evident in the aggregate euro area position, which was largely balanced over 
the whole period. Even when they were first spotted, the persistent imbalances did not 
raise  much  concern.  One  reason  for  this  was  the  prevailing  view  that  balance  of 
payment crises would be impossible in a currency union. In one of the earliest papers 
on European monetary  union, Ingram (1973) pointed out that  “payments imbalances 
among  member  nations  can  be  financed  in  the  short  run  through  the  financial 
markets,  without  need  for  interventions  by  a  monetary  authority.  Intra-community 
payments become analogous to interregional  payments  within a single country”. This 
view was not challenged in the debate of the 1980s and the 1990s on the economics 
of Economic and Monetary Union (EMU). It quickly became conventional wisdom. The 
European Commission’s One Market, One Money report (1990) similarly posits that “a 
major effect of EMU is that balance-of-payments constraints will disappear [..]. Private 
markets will finance all viable borrowers, and savings and investment balances will no 
longer  be  constraints  at  the  national  level”.  Consistently  with  this  view,  in  the  early 
1990s  the  Maastricht  negotiators  decided  to  exclude  members  of  the  common 
currency  from  the  benefit  of  EU  balance-of-payments  assistance  under  Article  143  of 
the Treaty.  

However,  Merler  and  Pisani-Ferry  (2012)  show  that  during  the  recent  financial  crisis, 
countries  in  the  South  of  the  euro  area  experienced  massive  capital  outflows  that 
qualify  as  “sudden  stops”,  according  to  the  methodology  traditionally  used  for 
emerging countries. Euro-area sudden-stop episodes were clustered in three periods: 
the  global  financial  crisis,  a  period  following  the  agreement  of  the  Greek  programme 
and  summer  2011.  The  timeline  suggests  contagion  effects  were  present.  However, 
private  capital  outflows  were  significantly  mitigated  by  the  ECB’s  provision  of  central 
bank liquidity, which was taken up particularly by weak banks in distressed countries, 
as  mirrored  in  the  divergence  of  TARGET2  (Trans-European  Automated  Real-time 
Gross settlement Express Transfer) balances.  This mitigated the effect of what would 
have  otherwise  been  a  disruptive  sudden  stop.  Darvas  (2012a)  and  Gros  and  Alcidi 
(2013) for example compared the “sudden stops” in the euro area with those in newer 
EU  Member  States  in  Central  and  Eastern  Europe,  finding  that  adjustment  was  much 
quicker  outside  EMU  than  inside.  Ex  post,  large  external  imbalances  left  a  difficult 
legacy.  In  the  absence  of  the  exchange  rate  mechanism  –  due  to  the  currency 
unification or the fixed exchange rate in the case of the Baltic countries and Bulgaria – 
unwinding imbalances is difficult and painful because the adjustment needs to be done 

November 2014  41 

 
 
 
 
 
 
 
 Analysis of developments in EU capital flows in the global context 

through prices, wages, employment and productivity. Moreover, the stocks of external 
asset and liabilities accumulated in a decade  of large current account  imbalances are 
very  large,  exposing  the  countries  to  valuation  risks  and/or  to  long  deleveraging 
efforts.  

4.2 Gross and net financial flows 
Figure  13  reports  gross  capital  flows  (both  assets  and  liabilities)  for  the  three  euro-
area  groups,  broken  down  by  instruments,  i.e.  foreign  direct  investment,  portfolio 
investments and other investments, which, most importantly, includes bank loans. The 
black line represents the net financial account as percent of the group GDP. Being the 
counterpart of the current account, this has been  in deficit in the countries that have 
had  current  account  surpluses  (the  euro  area  core);  in  surplus  (expect  some  recent 
quarters) in the current account deficit countries (euro area periphery) and oscillating 
around  balance,  although  with  significant  amplitude,  in  the  intermediate  group  (euro 
area centre). Figure  13 shows that gross flows increased significantly in the first half 
of  the  2000s,  dropping  with  the  crisis.  This  is  not  specific  to  the  euro  area,  but  it  is 
more  pronounced  there  than  in  the  other  European  country  groups.  A  problem  with 
the analysis of gross flows is, however, that in the absence of bilateral statistics, the 
intragroup positions cannot be netted out, thus inflating the numbers when countries 
are grouped. To allow comparison, we report all countries’ charts in the appendix. 

The  effect  of  the  rise  and  contraction in  gross  flows  is  most  evident in  the  euro  area 
centre  and  periphery  –  where  flows  have  nevertheless  resumed  somewhat  during 
2013. In the euro area core, flows have remained more stable over the entire period. 
The  dynamics  however  vary  across  groups  and  even  more  across  countries.  In  the 
euro-area core, quarterly gross flows increased in the period 2004-2007 to an average 
of more than 20 percent of the group GDP.  

The gross quarterly flows are also sizable for the centre – which is composed of France 
and  Italy  –  where  they  often  reached  20  percent  of  GDP  in  the  years  immediately 
before the crisis. Within the centre, France is a case that deserves particular attention. 
There  is  indeed  some  evidence  that  France  played  a  special  role  in  intermediating 
capital flows from the North to the South of the euro area. Hobza and Zeugner (2014) 
show  that  France’s  financial  system  received  inflows  from  the  euro-area  northern 
countries as well as from the rest of the world and channelled them towards the euro-
area south. In this context, the financial account net components of France are shown 
in Figure 14. The solid black line shows the net financial account positon.  

November 2014  42 

 
 
 
 
 
 
 
 
 Analysis of developments in EU capital flows in the global context 

Figure 13 Gross financial flows in the three euro-area groups (percent of 
GDP) 

Source: Eurostat and Bruegel calculations. 

November 2014  43 

-12-9-6-3036912-40-30-20-100102030401999Q12000Q12001Q12002Q12003Q12004Q12005Q12006Q12007Q12008Q12009Q12010Q12011Q12012Q12013Q12014Q1EZ Centre -Financial Account items (%GDP)-20-16-12-8-4048121620-100-80-60-40-200204060801001999Q12000Q12001Q12002Q12003Q12004Q12005Q12006Q12007Q12008Q12009Q12010Q12011Q12012Q12013Q12014Q1EZ Core -Financial Account items (%GDP)-20-16-12-8-4048121620-50-40-30-20-10010203040501999Q12000Q12001Q12002Q12003Q12004Q12005Q12006Q12007Q12008Q12009Q12010Q12011Q12012Q12013Q12014Q1EZ Periphery -Financial Account items (%GDP) Direct investment, Abroad Portfolio investment, Assets Other investment, Assets Direct investment, In the reporting economy Portfolio investment, Liabilities Other investment, LiabilitiesFinancial Account (rhs) 
 
 
 
 
 Analysis of developments in EU capital flows in the global context 

Figure 14 Gross financial flows in France (percent of GDP) 

Source: Eurostat and Bruegel calculations. 

Similar  patterns  can  be  observed  when  looking  at  the  stocks  and  flows  of  foreign 
claims  (including  both  gross  and  net)  as  reported  by  the  BIS  locational  banking 
statistics by nationality after exchange rate adjustments14. 

Figure  15  shows  the  gross  and  net  aggregate  asset  position  of  euro  area  banks  over 
the rest of the world as well as the quarter to quarter changes in the stocks (quarterly 
flows) as a share of GDP as provided by the BIS locational banking data. The reasons 
to choose the locational rather than the consolidated banking data are twofold: first, it 
allows  us  to  see  both  gross  and  net  claims  (and  flows)  and  second,  it  allows  us  to 
disaggregate bank flows between a banking group and its related foreign offices from 
those flows between a banking group and other non-related banks. 

14 The locational statistics provide information about the currency and geographical composition 
of  banks'  balance  sheets.  They  capture  outstanding  claims  and  liabilities  of  banking  offices 
located in the BIS reporting countries, including positions between related offices. The locational 
statistics  are  compiled  using  principles  that  are  consistent  with  balance  of  payments.  The 
availability  of  a  currency  breakdown  facilitates  the  calculation  of  exchange-rate  adjusted 
changes in amounts outstanding, as an approximation for flows. For additional information, see 
http://www.bis.org/statistics/about_banking_stats.htm   

November 2014  44 

 
 
 
 
 
 
 
 
 
                                           
 Analysis of developments in EU capital flows in the global context 

Figure 15 Euro area banks foreign claims (percent of GDP) 

Sources:  BIS  locational  banking  statistics  by  nationality,  Eurostat,  OECD  and  Bruegel 
calculations.  Note:  For  missing  data  reasons,  ‘euro  area’  is  defined  as  Austria, 
Belgium, Germany, Spain, France, Ireland, Italy,  the Netherlands, and Portugal. Data 
available 2000Q1-2014Q2. 

The net foreign claims of euro-area banks show a moderate accumulation, developing 
positively from 2000 until levelling off in late 2008 and into 2009, reaching a peak of 
just  over  15  percent  of  GDP,  before  falling  to  approximately  5  percent  in  2011  and 
experiencing  a  rebound  in  late  2012.  In  more  recent  periods,  the  net  position  has 
again moved towards a more balanced position. 

Furthermore,  we  see  that  there  was  a  progressive  and  continuous  integration  of  the 
euro area financial system since the introduction of the euro until the third quarter of 
2008,  which  saw  an increase  of  the  gross  foreign  claims  from  around  100  percent  of 
the  euro  area  GDP  in  2000  to  over  150  percent  in  2008.  This  was  followed  by  a 
process of deleveraging, reducing the claims back down to 100 percent of GDP by the 
end of 2013. Gross flows appear to have stabilised at this magnitude. 

Figure 16 separates these developments for the euro area core, centre and periphery, 
though  we  highlight  that  a  major  flaw  of  such  groups  (similarly  to  such  groupings 
based  on  Eurostat  statistics)  is  that  the  intragroup  positions  cannot  be  netted  out, 
given  the  absence  of  bilateral  data.  Hence  gross  flows  are  overestimated  when 
grouping countries together.  

November 2014  45 

-20.0-15.0-10.0-5.00.05.010.015.020.0-200-150-100-500501001502002000Q12001Q12002Q12003Q12004Q12005Q12006Q12007Q12008Q12009Q12010Q12011Q12012Q12013Q12014Q1Euro AreaClaims on banksClaims on non-banksLiabilities to banksLiabilities to non-banksNet Foreign Claims-15.0-10.0-5.00.05.010.015.0-150.0-100.0-50.00.050.0100.0150.02000Q12001Q12002Q12003Q12004Q12005Q12006Q12007Q12008Q12009Q12010Q12011Q12012Q12013Q12014Q1Euro AreaLiabilities to official monetary authoritiesClaims on official monetary authoritiesLiabilities to other banks-40.0-30.0-20.0-10.00.010.020.030.02000Q12001Q12002Q12003Q12004Q12005Q12006Q12007Q12008Q12009Q12010Q12011Q12012Q12013Q12014Q1Euro AreaNet Flows - BanksNet Flows - Non BanksNet Flows - All Sectors-30.0-25.0-20.0-15.0-10.0-5.00.05.010.015.020.02000Q12001Q12002Q12003Q12004Q12005Q12006Q12007Q12008Q12009Q12010Q12011Q12012Q12013Q12014Q1Euro AreaNet Flows - Other BanksNet Flows - Official Monetary AuthoritiesNet Flows - Related Foreign OfficesNet Flows - Banks 
 
 
 
 
 
 
 
 
 
 
 
 
 Analysis of developments in EU capital flows in the global context 

To overcome this problem we present in Figure 17 the consolidated foreign claims for 
each  euro  area  subgroup,  as  these  statistics  are  disaggregated  by  individual 
counterparty and thus allow us to net out for each country group. 

The banks from the euro-area periphery were the only ones that kept a negative net 
position  with  respect  to  the  rest  of  the  world  during  the  build-up  of  the  crisis. 
Nevertheless, in the post-crisis period, euro area periphery banks have also improved 
their net external position from -8 percent of GDP at the end of the second quarter of 
2011  to  a  balanced  position  at the  end  of  2013.  While  the  net  position  of  core  euro-
area  banks  has  deteriorated  from  above  30  to  10  percent  of  GDP  during  the  same 
period.  

Figure 16 A, B, C Foreign claims of euro-area banks for Euro-area Core, 
Centre and Periphery (percent of respective country aggregate GDP) 

A: Euro-area Core banks’ foreign claims and banking claims 

Foreign claims 

Banking claims 

November 2014  46 

-40-30-20-1001020304050-200-150-100-500501001502002502000Q12001Q12002Q12003Q12004Q12005Q12006Q12007Q12008Q12009Q12010Q12011Q12012Q12013Q12014Q1CoreClaims on banksClaims on non-banksLiabilities to banksLiabilities to non-banksNet Foreign Claims-15-10-5051015-150-100-500501001502000Q12001Q12002Q12003Q12004Q12005Q12006Q12007Q12008Q12009Q12010Q12011Q12012Q12013Q12014Q1CoreClaims on related foreign officesClaims on other banksClaims on official monetary authoritiesLiabilities to related foreign officesLiabilities to other banksLiabilities to official monetary authorities-40-30-20-10010202000Q12000Q32001Q12001Q32002Q12002Q32003Q12003Q32004Q12004Q32005Q12005Q32006Q12006Q32007Q12007Q32008Q12008Q32009Q12009Q32010Q12010Q32011Q12011Q32012Q12012Q32013Q12013Q32014Q1CoreNet Flows - BanksNet Flows - Non BanksNet Flows - All Sectors-35-30-25-20-15-10-5051015202000Q12001Q12002Q12003Q12004Q12005Q12006Q12007Q12008Q12009Q12010Q12011Q12012Q12013Q12014Q1CoreNet Flows - Related Foreign OfficesNet Flows - Official Monetary AuthoritiesNet Flows - Other BanksNet Flows - Banks 
 
 
 
 
 
 
 
 
 
 
 Analysis of developments in EU capital flows in the global context 

B: Euro-area Centre banks’ foreign claims and banking claims.  

Foreign claims 

Banking claims 

C: Euro-area Periphery banks’ foreign claims (L) and banking claims (R).  

Foreign claims 

Banking claims 

Source: BIS locational banking statistics; Note: Gross and net stocks (top); net flows 
(bottom); Net position (black line) on RHS scale. Core is defined as: AT, BE, DE, NL; 

November 2014  47 

-12-10-8-6-4-2024681012-150-100-500501001502000Q12001Q12002Q12003Q12004Q12005Q12006Q12007Q12008Q12009Q12010Q12011Q12012Q12013Q12014Q1CentreClaims on banksClaims on non-banksLiabilities to banksLiabilities to non-banksNet Foreign Claims-20-15-10-505101520-100-500501002000Q12001Q12002Q12003Q12004Q12005Q12006Q12007Q12008Q12009Q12010Q12011Q12012Q12013Q12014Q1CentreClaims on related foreign officesClaims on other banksClaims on official monetary authoritiesLiabilities to related foreign officesLiabilities to other banksLiabilities to official monetary authorities-30-20-1001020302000Q12001Q12002Q12003Q12004Q12005Q12006Q12007Q12008Q12009Q12010Q12011Q12012Q12013Q12014Q1CentreNet Flows - BanksNet Flows - Non BanksNet Flows - All Sectors-25-20-15-10-5051015202000Q12001Q12002Q12003Q12004Q12005Q12006Q12007Q12008Q12009Q12010Q12011Q12012Q12013Q12014Q1CentreNet Flows - Related Foreign OfficesNet Flows - Official Monetary AuthoritiesNet Flows - Other BanksNet Flows - Banks-25-20-15-10-50510152025-100-80-60-40-200204060801002000Q12001Q12002Q12003Q12004Q12005Q12006Q12007Q12008Q12009Q12010Q12011Q12012Q12013Q12014Q1PeripheryClaims on banksClaims on non-banksLiabilities to banksLiabilities to non-banksNet Foreign Claims-12-7-2381318-80-60-40-2002040602000Q12001Q12002Q12003Q12004Q12005Q12006Q12007Q12008Q12009Q12010Q12011Q12012Q12013Q12014Q1PeripheryClaims on related foreign officesClaims on other banksClaims on official monetary authoritiesLiabilities to related foreign officesLiabilities to other banksLiabilities to official monetary authorities-15-10-5051015202000Q12000Q32001Q12001Q32002Q12002Q32003Q12003Q32004Q12004Q32005Q12005Q32006Q12006Q32007Q12007Q32008Q12008Q32009Q12009Q32010Q12010Q32011Q12011Q32012Q12012Q32013Q12013Q32014Q1PeripheryNet Flows - BanksNet Flows - Non BanksNet Flows - All Sectors-10-50510152000Q12001Q12002Q12003Q12004Q12005Q12006Q12007Q12008Q12009Q12010Q12011Q12012Q12013Q12014Q1PeripheryNet Flows - Related Foreign OfficesNet Flows - Official Monetary AuthoritiesNet Flows - Other BanksNet Flows - Banks 
 
 
 
 
 
 
 
 
 
 
 
 
 Analysis of developments in EU capital flows in the global context 

Centre:  FR,  IT;  Periphery:  ES,  PT;  data  available  from  2000Q1  to  2014Q2,  however 
frequently country level data is missing, so actual series may not extend this far. 

Figure 17 Consolidated foreign claims for each euro area subgroup (percent 
of GDP) 

Sources:  BIS  consolidated  banking  statistics,  OECD  and  Bruegel  calculations.  Note: 
Due to data availability the subgroups are formed as follows: Core: Austria, Belgium, 
Finland,  Germany  and  the  Netherlands;  Centre:  France  and  Italy;  Periphery  Ireland, 
Portugal and Spain. Data is available from 1999Q1 to 2014Q2. 

Moreover, Figure 17 allows us to observe the capital flow reversal experienced by the 
periphery from core euro-area banks: at its peak in the first quarter of 2008 the core 
euro-area  bank  exposure  to  the  periphery  (as  defined  in  our  restricted  sub-sample: 
Ireland,  Portugal  and  Spain)  reached  19.8  percent  of  the  core  GDP.  At  the  end  of 
2013, this share stood at just 6.5 percent. 

As discussed before, increases in gross flows seem to be even more pronounced in the 
euro area periphery during the run-up to the financial crisis. Ireland in this context is a 
special case, as it is home to large and internationally active banks, making it a clear 
outlier  (see  Figure  18).  Quarterly  gross  flows  have  been  well  above  100  percent  of 
GDP  for  a  prolonged  period  of  time  and  reached  peaks  of  200  percent  in  the  years 
immediately  before  the  crisis,  dropping  abruptly  in  2009-2010.  Gross  flows  in  the 

November 2014  48 

0204060801001201401601802001999-Q42000-Q22000-Q42001-Q22001-Q42002-Q22002-Q42003-Q22003-Q42004-Q22004-Q42005-Q22005-Q42006-Q22006-Q42007-Q22007-Q42008-Q22008-Q42009-Q22009-Q42010-Q22010-Q42011-Q22011-Q42012-Q22012-Q42013-Q22013-Q42014-Q2Euro area core (in % of GDP)PeripheryOther non EU advancedOther EURest of the world01020304050601999-Q42000-Q22000-Q42001-Q22001-Q42002-Q22002-Q42003-Q22003-Q42004-Q22004-Q42005-Q22005-Q42006-Q22006-Q42007-Q22007-Q42008-Q22008-Q42009-Q22009-Q42010-Q22010-Q42011-Q22011-Q42012-Q22012-Q42013-Q22013-Q42014-Q2Euro area core (in % of GDP)PeripheryCentreNorthEastern EuropeBaltics0204060801001201999-Q42000-Q22000-Q42001-Q22001-Q42002-Q22002-Q42003-Q22003-Q42004-Q22004-Q42005-Q22005-Q42006-Q22006-Q42007-Q22007-Q42008-Q22008-Q42009-Q22009-Q42010-Q22010-Q42011-Q22011-Q42012-Q22012-Q42013-Q22013-Q4Euro area centre (in % of GDP)PeripheryOther non EU advancedOther EURest of the world051015202530354045501999-Q42000-Q22000-Q42001-Q22001-Q42002-Q22002-Q42003-Q22003-Q42004-Q22004-Q42005-Q22005-Q42006-Q22006-Q42007-Q22007-Q42008-Q22008-Q42009-Q22009-Q42010-Q22010-Q42011-Q22011-Q42012-Q22012-Q42013-Q22013-Q42014-Q2Euro area centre (in % of GDP)PeripheryCoreNorthEastern EuropeBaltics0204060801001201401999-Q42000-Q22000-Q42001-Q22001-Q42002-Q22002-Q42003-Q22003-Q42004-Q22004-Q42005-Q22005-Q42006-Q22006-Q42007-Q22007-Q42008-Q22008-Q42009-Q22009-Q42010-Q22010-Q42011-Q22011-Q42012-Q22012-Q42013-Q22013-Q4Euro area periphery (in % of GDP)PeripheryOther non EU advancedOther EURest of the world051015202530351999-Q42000-Q22000-Q42001-Q22001-Q42002-Q22002-Q42003-Q22003-Q42004-Q22004-Q42005-Q22005-Q42006-Q22006-Q42007-Q22007-Q42008-Q22008-Q42009-Q22009-Q42010-Q22010-Q42011-Q22011-Q42012-Q22012-Q42013-Q22013-Q42014-Q2Euro area periphery (in % of GDP)CentreCoreNorthEastern EuropeBaltics 
 
 
 
 
 
 
 
 
 
 
 
 
 Analysis of developments in EU capital flows in the global context 

other  members  of  the  periphery  are  significantly  smaller  and  more  in  line  with  the 
aggregate figure. 

Figure 18 Gross financial flows in the four euro-periphery countries (percent 
of GDP) 

Source: Eurostat and Bruegel calculations. 

In terms of composition, Figure 13 and  
Figure  19  show  that  flows  in  the  three  euro  area  groupings  were  overwhelmingly 
dominated by portfolio and other investments, two sources of financing that tend to be 
relatively  more  volatile  than  FDI.  Foreign  direct  investment  played  a  very  marginal 
role, even in the euro area periphery. From an economic standpoint it is important to 
distinguish  within  the  portfolio  category  between  fixed  income  instrument  such  as 
bonds  and  equity,  whose  remuneration  is  far  more  sensitive  to  the  economic 
developments,  through  valuation  effects.  This  is  what  we  do  in  the  appendix  at  the 
level of the individual countries. Since the split between debt and equity is not always 
available,  while  the  aggregate  portfolio  figure  is,  we  prefer  to  represent  only  the 

November 2014  49 

-7.5-5-2.502.557.510-30-20-100102030402001Q12002Q12003Q12004Q12005Q12006Q12007Q12008Q12009Q12010Q12011Q12012Q12013Q12014Q1Spain -Financial Account items (%GDP)-20-12-441220-100-80-60-40-200204060801002001Q12002Q12003Q12004Q12005Q12006Q12007Q12008Q12009Q12010Q12011Q12012Q12013Q12014Q1Greece -Financial Account items (%GDP)-15-10-5051015-60-40-2002040602001Q12002Q12003Q12004Q12005Q12006Q12007Q12008Q12009Q12010Q12011Q12012Q12013Q12014Q1Portugal -Financial Account items (%GDP) Direct investment, Abroad Portfolio investment, Assets Other investment, Assets Direct investment, In the reporting economy Portfolio investment, Liabilities Other investment, LiabilitiesFinancial account (rhs)-30-20-10010203040-300-200-10001002003004002001Q12002Q12003Q12004Q12005Q12006Q12007Q12008Q12009Q12010Q12011Q12012Q12013Q12014Q1Ireland -Financial Account items (%GDP) 
 
 
 
 
 
 
 
 Analysis of developments in EU capital flows in the global context 

aggregate  at  the  group  level  to  avoid  introducing  any  bias  in  the  results.  Within 
portfolio, debt instrument normally played the major role.  

Figure  19,  which  reports  the  other  three  groups,  allows  a  comparison  with  non-euro 
European countries. The magnitude of gross  flows in the non-euro group tends to be 
smaller than in the euro area, especially in the CEE aggregate. As a share of GDP, the 
UK,  which  plays  a  special  role  as  financial  centre,  experienced  gross  flows  that  are 
significantly smaller than those experienced by Ireland. In terms of compositions, the 
three  non-euro  groups  differ  significantly  from  the  euro  area.  For  the  UK,  the  other 
flows,  whereas  portfolio 
investment  component  massively  dominates  capital 
investments are minor. Differently from the euro area, FDIs account for a larger share 
of  the  gross  flows  in  these  groups,  especially  for  the  CEE  where  they  constitute  the 
bulk of inflows together with other investments (which includes bank loans).  

In  the  case  of  banks’  foreign  claims  for  Denmark,  Sweden  and  the  United  Kingdom, 
the  stock  accumulation  on  the  build-up  to  the  crisis  was  much  steeper  than  in  euro-
area  banks,  but  the  deleveraging  process  has  been  less  dramatic  than  for  euro-area 
banks.  
Figure 19 shows the respective claims of banks for the three countries in question. 

November 2014  50 

 
 
 
 
 
 
 
 
 Analysis of developments in EU capital flows in the global context 

Figure 19 Gross financial flows in northern Europe, the UK and central and 
Eastern Europe (percent of GDP)

Source: Eurostat and Bruegel calculations. 

November 2014  51 

-20-15-10-505101520-80-60-40-200204060801999Q12000Q12001Q12002Q12003Q12004Q12005Q12006Q12007Q12008Q12009Q12010Q12011Q12012Q12013Q12014Q1Northern Europe -Financial Account items (%GDP)-20-15-10-505101520-200-150-100-500501001502001999Q12000Q12001Q12002Q12003Q12004Q12005Q12006Q12007Q12008Q12009Q12010Q12011Q12012Q12013Q12014Q1UK -Financial Account items (%GDP)-6-4-202468101214-6-4-2024681012141999Q12000Q12001Q12002Q12003Q12004Q12005Q12006Q12007Q12008Q12009Q12010Q12011Q12012Q12013Q12014Q1CEE -Financial Account items (%GDP) Direct investment, Abroad Portfolio investment, Assets Other investment, Assets Direct investment, In the reporting economy Portfolio investment, Liabilities Other investment, LiabilitiesFinancial Account (rhs) 
 
 
 
 
 Analysis of developments in EU capital flows in the global context 

Figure 20 A, B Northern and UK bank foreign claims (percent of GDP) 

A: Danish and Swedish (North) banks’ foreign (L) and banking (R) claims 

Foreign claims 

Banking claims 

B: British banks’ foreign claims 

Foreign claims 

Banking claims 

November 2014  52 

-50-40-30-20-10010203040-250-200-150-100-500501001502002000Q12001Q12002Q12003Q12004Q12005Q12006Q12007Q12008Q12009Q12010Q12011Q12012Q12013Q12014Q1NorthClaims on banksClaims on non-banksLiabilities to banksLiabilities to non-banksNet Foreign Claims-15-10-5051015-150-100-500501001502000Q12001Q12002Q12003Q12004Q12005Q12006Q12007Q12008Q12009Q12010Q12011Q12012Q12013Q12014Q1NorthLiabilities to official monetary authoritiesLiabilities to related foreign officesLiabilities to other banksClaims on official monetary authoritiesClaims on other banksClaims on related foreign officesNet Banking Claims-40-30-20-10010203040502000Q12001Q12002Q12003Q12004Q12005Q12006Q12007Q12008Q12009Q12010Q12011Q12012Q12013Q12014Q1NorthNet Flows - BanksNet Flows - Non BanksNet Flows - All Sectors-30-20-100102030402000Q12001Q12002Q12003Q12004Q12005Q12006Q12007Q12008Q12009Q12010Q12011Q12012Q12013Q12014Q1NorthNet Flows - Other BanksNet Flows - Official Monetary AuthoritiesNet Flows - Related Foreign OfficesNet Flows - Banks-16-12-8-40481216-300-200-10001002003002000Q12001Q12002Q12003Q12004Q12005Q12006Q12007Q12008Q12009Q12010Q12011Q12012Q12013Q12014Q1United KingdomClaims on banksClaims on non-banksLiabilities to banksLiabilities to non-banksNet Foreign Claims-25-20-15-10-50510152025-200-10001002002000Q12001Q12002Q12003Q12004Q12005Q12006Q12007Q12008Q12009Q12010Q12011Q12012Q12013Q12014Q1United KingdomLiabilities to related foreign officesLiabilities to official monetary authoritiesLiabilities to other banksClaims on related foreign officesClaims on official monetary authoritiesClaims on other banks 
 
 
 
 
 
 
 
 
 
 
 
 Analysis of developments in EU capital flows in the global context 

Source: Eurostat and Bruegel calculations. 

4.3 Net financial flows 
Figure 21 and  
Figure  22  show  the  net  position  of  groups’  financial  account  according  to  the 
underlying components, offering a simpler picture of the composition of countries’ and 
groups’  net  balances  vis-à-vis  the  rest  of  the  world.  As  recalled  previously,  the  net 
financial account is an important variable to look at in order to understand countries’ 
external  borrowing  requirements.  The  net  flows  for  each  of  the  financial  account 
components  can  give  an indication  of  where  potential  financing  problems  could  come 
from.  

Figure  21  shows  that  the  persistent  financial  account  surplus  of  the  euro  area 
periphery  was  largely  accounted  for  by  portfolio  and  other  investment,  whereas  the 
contribution  of  direct  investment  was  negative  but  very  small.  From  2003  till  2008, 
portfolio  net  financial  inflows  were  the  most  important  component  of  the  financial 
surplus,  but  the  massively  contracted  in  2008  and  became  largely  negative  between 
summer  2011  and  summer  2012.  This  captures  the  intensifying  of  the  euro  crisis, 
when  foreign  investors  increasingly  off-loaded  debt  issued  by  countries  in  the  euro 
area  periphery.  Interestingly,  the  effect  of  the  disappearing  (or  negative)  portfolio 
flows on the total net financial account appears to be neutralised by other investment 
flows of an opposite sign. This captures the flows related to financial assistance and to 
the  ECB’s  liquidity  provision,  which  provided  a  cushion  against  the  withdrawal  of 
private external funds. In order to clearly understand how this happened, we need to 
look more in detail at the position of individual sectors of the economy, which we do in 
the  next  section.  The  persistent  financial  account  deficit  of  the  euro  area  core  was 
instead mostly driven by other investment outflows. These outflows intensified during 
the last phase of the  crisis, but again the aggregate view does not allow singling out 
the  public  component  of  these  flows.  Portfolio  investment  instead  shows  net  inflows 
for  the  euro  area  core,  most  likely  driven  by  the  presence  of  Germany  and 
international appeal of the Bund. 

November 2014  53 

-60-50-40-30-20-10010203040502000Q12001Q12002Q12003Q12004Q12005Q12006Q12007Q12008Q12009Q12010Q12011Q12012Q12013Q12014Q1Net Flows - BanksNet Flows - Non BanksNet Flows - All Sectors-40-30-20-10010203040502000Q12001Q12002Q12003Q12004Q12005Q12006Q12007Q12008Q12009Q12010Q12011Q12012Q12013Q12014Q1Net Flows - Related Foreign OfficesNet Flows - Official Monetary AuthoritiesNet Flows - Other BanksNet Flows - Banks 
 
 
 
 
 
 
 
 
 
 Analysis of developments in EU capital flows in the global context 

Figure 21 Net financial flows in the three euro-area groups (percent of GDP) 

Source: Eurostat and Bruegel calculations 

The more or less balanced financial account surplus of the euro area centre is instead 
the  outcome  of  portfolio  and  other  investment  flows  going  in  the  opposite  direction, 
but  with  higher  volatility.  Both  France  and  Italy  had  positive  and  more  volatile  other 
investment inflows in the second half of the 2000s, which reverted in 2008 and were 

November 2014  54 

-12-8-404812-15-10-50510151999Q12000Q12001Q12002Q12003Q12004Q12005Q12006Q12007Q12008Q12009Q12010Q12011Q12012Q12013Q12014Q1EZ Centre -Net Financial Account items (%GDP)-12-9-6-3036912-40-30-20-100102030401999Q12000Q12001Q12002Q12003Q12004Q12005Q12006Q12007Q12008Q12009Q12010Q12011Q12012Q12013Q12014Q1EZ Core -Net Financial Account items (%GDP)-12-8-40481216-30-20-100102030401999Q12000Q12001Q12002Q12003Q12004Q12005Q12006Q12007Q12008Q12009Q12010Q12011Q12012Q12013Q12014Q1EZ Periphery -Net Financial Account items (%GDP) Direct investment Portfolio investment Other investmentFinancial Account (rhs) 
 
 
 
 
 
 Analysis of developments in EU capital flows in the global context 

substituted  by  equally  large  portfolio  inflows.  Other  investment  flows  then  continued 
to  remain  negative  for  almost  the  entire  period  after  2008.  The  north  of  Europe  has 
been  a  financial  account  deficit  group  up  until  the  end  of  2007  (reflecting  current 
account  surpluses),  but  in  2008-2009  their  financial  account  turned  to  surplus, 
signalling  most  likely  the  presence  of  important  inflows  of  capitals  leaving  the  euro 
area  in  search  of  safety.  This  was  particularly  pressing  for  Denmark  that  eventually 
adopted  monetary  policy  measures  such  as  the  negative  rate  on  central  banks 
deposits to curb the inflows it was undergoing (Hüttl, 2014).  

The UK ( 
Figure  22)  experienced  spiking  inflows  in  2007-2008,  mostly  in  terms  of  portfolios, 
which  were  then  abruptly  reversed  in  2009.  Portfolio  (and  other)  flows  then 
disappeared  for  more  than  one  year,  finally  coming  back  with  the  opposite  sign.  
Central and Eastern Europe countries stand out once again as a different world. They 
experienced  prolonged  inflows  of  mainly  direct  investment,  with  capital  moving 
‘downhill’, mostly from  rich EU15 countries to  poorer  CEE  countries as highlighted by 
Becker  et  al.  (2010).  Parallel  to  this  development,  credit  to  the  private  sector 
increased rapidly before the crisis in the region too, fuelling a credit boom in the three 
Baltic States, Bulgaria and Romania (Darvas and Szapáry (2008). This resulted into a 
sustained  financial  account  surplus  that  was  reversed  back  to  balance  in  2009.  The 
comparison with what happened in the euro area periphery (Figure 23) is striking.  

November 2014  55 

 
 
 
 
 
 
 
 Analysis of developments in EU capital flows in the global context 

Figure 22 Net financial flows in the three euro-area groups (percent of GDP) 

November 2014  56 

-20-15-10-50510152025-40-30-20-10010203040501999Q12000Q12001Q12002Q12003Q12004Q12005Q12006Q12007Q12008Q12009Q12010Q12011Q12012Q12013Q12014Q1Northern Europe -Net Financial Account items (%GDP)-30-20-100102030-60-40-2002040601999Q12000Q12001Q12002Q12003Q12004Q12005Q12006Q12007Q12008Q12009Q12010Q12011Q12012Q12013Q12014Q1UK -Net Financial Account items (%GDP)-6-4-2024681012-6-4-20246810121999Q12000Q12001Q12002Q12003Q12004Q12005Q12006Q12007Q12008Q12009Q12010Q12011Q12012Q12013Q12014Q1CEE -Net Financial Account items (%GDP) Direct investment Portfolio investment Other investmentFinancial Account (rhs) 
 
 
 
 
 Analysis of developments in EU capital flows in the global context 

Source: Eurostat and Bruegel calculations. 

The  euro  area  periphery  accumulated  a  significantly  larger  financial  account  surplus 
before  the  crisis  (almost  15  percent  of  the  total  group  GDP),  which  then  dropped 
during the crisis, though remained positive until late 2012. This was made possible by 
the  provision  of  financial  assistance  and  especially  by  ECB  liquidity,  which  allowed  a 
smoother  adjustment  on  the  external  position  than  that  which  occurred  in  CEE 
countries, especially in the Baltics (Darvas, 2012a).  

Figure 23 Net financial account of the euro-periphery and central and eastern 
Europe (percent of GDP) 

Source: Eurostat and Bruegel calculations. Data is available from 1999Q1 to 2014Q1. 

A  major  issue  that  arises    is  the  composition  of  economic  sectors  in  which  debt-type 
capital  inflows  were  actually  unutilised  in  the  euro-area  periphery  and  in  the  new 
member states of the EU. Unfortunately, this issue is not a well-researched topic. The 
relationship between capital inflows and credit booms  is already well established (see 
Figure 24 and among others Mendoza Terrones (2012), Bruno and Shin (2012), Lane 
and  Milesi-Ferretti  (2008),  Lane  and  McQuade  (2012)),  suggesting  that  credit-
intensive  sectors,  like  the  housing  sector,  was  a  major  destination  of  capital  inflows. 
But the nature of the economic sectors into which capital actually flows is an area little 
explored  in  the  literature,  even  though  it  has  a  crucial  importance.  For  example, 
capital flows that support investment in the tradable sector may promote sustainable 
long-term growth and improve capacity of the country to repay the external loans. 

Mitra (2011) argues that it is the destination, not the form of capital inflows, that most 
influences  GDP  growth.  Reis  (2013)  highlights  that  credit  frictions  in  the  financial 
system suggest a misallocation of capital inflows, with non-productive firms surviving 
through  an  increase  in  their  debt  levels,  limiting  the  expansion  of  more  productive 
firms. This contributes to the expansion of the non-traded sector vis-à-vis the traded 
sector.  Lane  (2013)  discusses  the  growth  differentials  between  the  traded  and  non-
traded  sector  and  finds  striking  differences  across  countries,  with  the  non-traded 
sector  expanding  strongly  in  Greece,  Ireland  and  Spain  during  2003-2007.  Finally, 
another  body  of  research  examines  the  connections  between  house  prices  and 

November 2014  57 

-10-50510151999Q12000Q12001Q12002Q12003Q12004Q12005Q12006Q12007Q12008Q12009Q12010Q12011Q12012Q12013Q12014Q1CEE vs. EZ Periphery -Net Financial Account items (%GDP)CEEEZ Periphery 
 
 
 
 
 
 
 
 
 Analysis of developments in EU capital flows in the global context 

international  capital  flows,  with  an  emphasis  on  the  current  account  (see  among 
others Adams et al (2011), Aizenman and Jinjarak (2009), Favilukis et al (2012)). 

Figure 24 Euro area domestic credit growth vs accumulated net debt flows 

Source:  Eurostat,  ECB  and  Bruegel  calculations.  Note:  accumulated  net  debt  flows 
consist  of  the  sum  of  net  flows  in  portfolio  debt  and  other  investment;  data  for  Italy 
starts only in 2004Q1;  

4.4 Net international investment positions (NIIPs) 
As explained previously, the analysis of the stock of external assets and liabilities is an 
important  complement  to  the  analysis  of  financial  flows.  This  section  therefore 
investigates  the  groups’  stocks  of  net  international  investment  position  (NIIP)  and 
their components. It is important to remind that the statistical accounting of financial 
flows and stock is different, as flows are recorded at the nominal value while stock are 
valued  at  market  priced.  The  accumulated  flows  can  differ  significantly  from  the 
stocks, due to valuation effects. The comparison of flows and stocks,therefore, allows 
one to investigate of the existence and magnitude of valuation effects.  

The  prolonged  period  of  current  (and  financial)  account  imbalances  resulted  in  the 
accumulation  of  large  stock  of  external  assets  and  liabilities  for  all  the  euro  area 
groups as well as the CEE countries. The UK had a negative NIIP position of around 36 
percent of GDP until 2010, but this has been considerably reduced over the last three 
years.  Northern  Europe  moved  closer  to  a  balanced  position  by  2013.  Central  and 
Eastern European countries stand out for the large negative NIIP, which has surpassed 
80 percent of GDP in 2009 and has remained constant at that level since then.  

In terms  of composition, the euro area core surplus is mostly accounted for by other 
investment  (the  most  important  part  of  it  is  cross-border  bank  loans)  and  direct 

November 2014  58 

ATBEDEGRESFIFRITPTy = 1.567x + 47.325R² = 0.6706020406080100120140160180-30-20-10010203040506070Domestic credit growth (i% change over 1Q2003 -3Q2008) Accumulated  net  debt flows  (in % of GDP, 1Q2003 -3Q2008) 
 
 
 
 
 
 
 
 
 Analysis of developments in EU capital flows in the global context 

investment,  especially  starting  in  2012.  Portfolio  equity  and  debt  instead  contributed 
negatively. The contribution of portfolio investment is large and negative also for euro 
area  periphery’s,  where  also  the  balance  on  other  investment  is  positive  (that  is, 
liabilities  exceed  claims),  signalling  that  these  countries  were  net  receivers  of 
international  bank  loans.  The  euro  area  centre  also  has  a  negative  position  but  here 
the  most  important  component  is  portfolio  debt  liabilities  outstanding,  followed  by 
other  investment  liabilities  and  a  larger  (although  still  very  small)  share  of  financial 
derivatives.  Unfortunately,  data  on  direct  investment  are  missing  for  many  years  for 
France, so we do not have a clear picture of the group aggregate, which seems to be 
positive and relatively large.  

November 2014  59 

 
 
 
 
 
 
 Analysis of developments in EU capital flows in the global context 

Figure 25 Net international investment position the three euro-area groups 
(percent of GDP) 

November 2014  60 

-40-200204060802006Q12007Q12008Q12009Q12010Q12011Q12012Q12013Q12014Q1EA Core -NIIP components (% GDP)-120-100-80-60-40-200202006Q12007Q12008Q12009Q12010Q12011Q12012Q12013Q12014Q1EA Periphery -NIIP components (% GDP)-60-50-40-30-20-10010202006Q12007Q12008Q12009Q12010Q12011Q12012Q12013Q12014Q1EA Centre -NIIP components (% GDP)Financial derivatives: TotalOther investment: TotalPortfolio investment, debt instrument: TotalPortfolio investment: Equity, securities: TotalDirect investment: TotalInternational investment position: Total 
 
 
 
 
 Analysis of developments in EU capital flows in the global context 

Source: Eurostat and Bruegel calculations. 

The  comparison  of  the  three  euro  area  groups  raises  an  interesting  question.  The 
country  level  charts  collected  in  the  annex  in  fact  show  that  in  terms  of  flows,  the 
largest  share  of  portfolio  investments  is  accounted  for  by  debt  instruments  whereas 
equity plays a relatively minor role. In light of this evidence, one would expect that a 
large  share  of  the  outstanding  NIIP  be  accounted  for  by  stock  of  portfolio  debt. 
However, the NIIP figures tell a different story. The outstanding net portfolio debt is in 
fact very small compared to the outstanding equity, in both the euro area core and the 
euro  area  periphery.  For  the  euro-area  centre,  instead,  the  stock  of  portfolio  debt  is 
significantly more important than portfolio equity in explaining the NIIP position.  

To  reconcile  these  two  apparently  contradictory  facts,  one  needs  to  factor  valuation 
effect  into  the  picture.  Figure  26  is  an  illustration  of  how  important  such  effects  can 
be15.  It  plots  the  stock  of  assets  and liabilities  separately,  for  both  portfolio  debt  and 
equity, in the euro area periphery and core.  

Figure 26 Portfolio international investment position the euro-area periphery 
(percent of GDP) 

Source: Eurostat and Bruegel calculations. 

The left panel shows that the market price valuation of debt liabilities dropped in the 
euro area periphery during the crisis, until end 2012. This is not surprising, as during 
the  crisis  the  government  bonds  issued  by  these  countries  came  under  significant 
stress,  bond  yields  surged  and  prices  fell  sharply.  The  fall  pictured  in  the  chart  then 
stopped  in  2012,  consistent  with  the  introduction  of  the  ECB’s  outright  monetary 
transactions  (OMT),  which  eased  tensions  on  the  sovereign  bond  markets.  Portfolio 
debt assets also dropped in market value, but the drop was not as pronounced as the 
one  on  the  liability  side.  At  the  same  time,  the  value  of  equity  liabilities  increased 
significantly  more  than  the  value  of  equity  assets  and  the  combination  of  these  two 

15  For  more  detail,  see  the  section  5  on  revaluation  and  external  yields  across  various 
instruments and countries.   

November 2014  61 

0204060801001202006Q12007Q12008Q12009Q12010Q12011Q12012Q12013Q12014Q1EZ Periphery -Portfolio Assets and Liabilities (% GDP)PTF debt AssetsPTF Equity AssetsPTF debt Liab.PTF equity Liab.0204060801001202006Q12007Q12008Q12009Q12010Q12011Q12012Q12013Q12014Q1EZ Core -Portfolio Assets and Liabilities (% GDP) 
 
 
 
 
 
 
 
 
                                           
 Analysis of developments in EU capital flows in the global context 

dynamics  explains  the  relatively  larger  role  of  equity  in  explaining  the  dynamics 
observed  in  the  aggregate  NIIP.  A  similar  development  is  visible  for  the  euro  area 
core,  where  portfolio  assets  and  liabilities  net  out  almost  entirely,  while  equity 
liabilities are larger in value than equity assets, although the gap is not widening as in 
the  Periphery.  The  opposite  situation  happened  in  the  Centre  (Figure  27)  where  the 
valuation  gap  was  significantly larger  on  the  debt  side  than  and  almost  inexistent  on 
the equity side. 

Figure 27 Portfolio international investment position the euro-area centre 
(percent of GDP) 

Source: Eurostat and Bruegel calculations. 

Concerning  the  other  groups  of  countries  (Figure  28),  the  North  of  Europe’s  external 
negative NIIP is driven by portfolio debt, whereas the contribution of other investment 
stocks  has  been  shrinking  over  time,  and  direct  investments  and  portfolio  equity 
investments are positive. The UK was in deficit in terms of all NIIP components apart 
from  direct  investment,  which  has  recently  almost  rebalanced  through  a  reduction  of 
both  assets  and  liabilities,  suggesting  a  sizeable  cross-border  deleveraging.  CEE 
instead  is  again  a  special  case,  as  these  countries  have  net  liabilities  in  all 
instruments.  More  than  one-half  of  their  NIIP  liabilities  are  direct  investment,  while 
portfolio debt and other investment (including bank loans) share the remaining part. It 
is  noteworthy  that  their  net  other  investment  liabilities  decreased  from  about  30 
percent of GDP in 2009 to about 20 percent of GDP by 2013, suggesting that foreign 
banks decreased their exposure to the region. 

November 2014  62 

01020304050607080901002006Q12007Q12008Q12009Q12010Q12011Q12012Q12013Q12014Q1EZ Centre -Portfolio Assets and Liabilities (% GDP)PTF debt AssetsPTF Equity AssetsPTF debt Liab.PTF equity Liab. 
 
 
 
 
 
 
 
 
 Analysis of developments in EU capital flows in the global context 

Figure 28 Net international investment position of EU north, the UK and 
central and eastern Europe (percent of GDP) 

November 2014  63 

-80-60-40-2002040602006Q12007Q12008Q12009Q12010Q12011Q12012Q12013Q12014Q1North -NIIP components (% GDP)-80-60-40-2002040602006Q12007Q12008Q12009Q12010Q12011Q12012Q12013Q12014Q1UK -NIIP components (% GDP)-100-80-60-40-200202006Q12007Q12008Q12009Q12010Q12011Q12012Q12013Q12014Q1CEE -NIIP components (% GDP)Direct investment: TotalPortfolio investment: Equity, securities: TotalPortfolio investment, debt instrument: TotalOther investment: TotalFinancial derivatives: TotalIIP 
 
 
 
 
 Analysis of developments in EU capital flows in the global context 

Source: Eurostat and Bruegel calculations. 

4.5 Net financial flows by sectors 
Finally, we take a look at an even more detailed breakdown of financial flows, isolating 
the  position  of  the  different  sectors  in  the  economy.  This  is  useful  to  understand  in 
which  sector  the  external  surplus  or  deficit  originate  and  it  allows  separating  private 
capital  flows  from  the  public  ones,  such  as  ECB  liquidity  or  financial  assistance.  The 
economy  is  divided  into  four  sectors:  general  government;  monetary  authorities; 
monetary  financial  institutions  and  other  sectors  (including  firms  and  households). 
Here, we present the net flows for several country groupings (Figure 29 to Figure 34), 
whereas gross flows are reported in the appendix. Notice that no data is available at 
the sector level for  Ireland and the Netherlands so unfortunately these two countries 
had to be excluded from their respective groups. 

The  euro-area  was  characterised  by  a  substitution  between  private  and  public  flows 
during  the  financial  crisis,  particularly  in  the  periphery,  which  was  mirrored  in  the 
corresponding  flows  of  the  core  and  centre.  This is  especially  evident in  the  size  and 
relative  sign  of  the  changes  in  the  external  positions  of  monetary  authorities.  Since 
the beginning of the crisis, monetary authorities in the euro area core had shown large 
increases  in  external  assets  that  only  reverted  in  2012.  This  was  matched  by  large 
increases  in  external  liabilities  recorded  by  the  monetary  authorities  of  euro  area 
periphery.  These  imbalances  arose  in  the  Eurosystem’s  TARGET2  system.  Cross-
border  transfers  of  central  bank  money  (deposits)  through  the  TARGET2  system 
generate  counter-balancing  credit  claims  (intra-Eurosystem  balances)  between  each 
national central bank and the ECB, which are automatically aggregated and netted out 
at the end of each day resulting in a single net bilateral position. If a national central 
bank is a net claimant from these transfers, the claim appears as an asset on its own 
balance  sheet  under  the  entry  “Intra-Eurosystem  claims”  and  vice  versa.  The  euro 
area centre is, also in this case, in an intermediate position. This is due to the fact that 
the  Centre  aggregates  a  country  where  banks  borrowed  extensively  from  the  ECB 
(Italy) with a country where reliance on the ECB facilities was instead more marginal 
(France).  The  monetary  authorities  of  Northern  Europe  and  CEE  also  recorded  net 
inflows  in  2008,  probably  associated  to  the  swaps  that  were  put  in  place  across  the 
world’s central banks. 

The General Government is typically a net external debtor to the rest of the world and 
the  bulk  of  inflows  are  directed  to  portfolio  debt  instruments,  mostly  bonds.  This  is 
true  for  all  the  country  groups  and  is  due  to  the  internationalisation  of  government 
bond markets, which implies that a fairly sizable share of government debt is held by 
foreigners.  This  is  a  common  feature  across  the  groups  and  it  is  evident  also  in  the 
case of the non-euro countries. 

November 2014  64 

 
 
 
 
 
 
 
 Analysis of developments in EU capital flows in the global context 

Figure 29 Capital flows by sector and instrument in the euro-area core 
countries (in percent of GDP) 

Source: Eurostat and Bruegel calculations. 

Two  things  are  particularly  interesting  with  respect  to  this  sector.  First,  in  the  euro 
area  centre,  we  can  observe  that  money  market  instruments  (a  subcategory  of 
portfolio  debt)  account  for  an  important  share  of  the  pre-crisis  inflows  and  then  of 
crisis  outflows.  It  is  a  peculiar  feature  of  this  group,  as  the  role  of  money  market 
instrument is minor in the other two regions (there has been some inflows in the euro 
area  core  before  the  crisis  but it is  not  a  regularity).  This is  mostly  accounted  for  by 
France,  the  Euro-area  countries  traditionally  more  exposed  to  money  market  funds, 
especially US ones. The outflows observable in 2011 probably correspond to the point 
in  time  when  US  money  market  funds  decided  to  reduce  their  exposure  to  the  euro 
crisis,  which  then  triggered  also  the  recourse  by  French  banks  to  the  ECB’s  lending 
facilities.   

November 2014  65 

-10-8-6-4-2024682006Q12006Q32007Q12007Q32008Q12008Q32009Q12009Q32010Q12010Q32011Q12011Q32012Q12012Q32013Q12013Q32014Q1EZ Core -General Governmernt -Net Flows (% GDP)Other investmentPTF Debt, bondsPTF Debt, money mkt inst.PTF Equity-25-20-15-10-505102006Q12006Q32007Q12007Q32008Q12008Q32009Q12009Q32010Q12010Q32011Q12011Q32012Q12012Q32013Q12013Q32014Q1EZ Core -Monetary Authority -Net Flows (% GDP)Other investmentPTF Debt, bondsPTF Debt, money mkt inst.PTF Equity-50-40-30-20-1001020302006Q12006Q32007Q12007Q32008Q12008Q32009Q12009Q32010Q12010Q32011Q12011Q32012Q12012Q32013Q12013Q32014Q1EZ Core -MFIs -Net Flows (% GDP)Other investmentPTF Debt, bondsPTF Debt, money mkt inst.PTF Equity-15-10-50510152006Q12006Q32007Q12007Q32008Q12008Q32009Q12009Q32010Q12010Q32011Q12011Q32012Q12012Q32013Q12013Q32014Q1EZ Core -Other Sectors -Net Flows (% GDP)Other investmentPTF Debt, bondsPTF Debt, money mkt inst.PTF Equity 
 
 
 
 
 
 
 
 Analysis of developments in EU capital flows in the global context 

Figure 30 Capital flows by sector and instrument in the euro-area centre 
countries (in percent of GDP) 

Source: Eurostat and Bruegel calculations. 

The  second  interesting  development  is  the  sudden  appearance  of  quite  large  other 
investment  inflows  in  the  general  government  sectors  of  the  euro  area  periphery, 
starting  from  2010.  This  represents  the  flows  associated  to  the  disbursement  of 
financial assistance under the EU/IMF macroeconomic adjustment programmes. These 
flows generally have a comparable size and the opposite sign of the outflows recorded 
on  the  portfolio  side.  A  similar inflow  is  also  evident in the  CEE  countries,  starting  in 
2008-09 and then reverting back to zero. 

Concerning  the  other  sectors  of  the  economy,  banks  (MFIs)  tend  to  have  relatively 
larger  (compared  to  the  other  components)  flows  of  equity,  which  tend  to  be  quite 
volatile. This is true everywhere. Within the euro area, it is especially accentuated  in 
the Periphery and Centre, whereas outside the monetary union it is especially evident 
in the CEE and UK banking sectors. The pattern is largely the same across the regions, 
showing  equity  inflows  in  the  banking  sector  up  to  2007,  outflows  during  2008-2010 
and  some  revival  of  inflows  afterwards.  The  euro  area  periphery  is  an  exception,  as 
there  the  largest  equity  outflow  came  only  in  2011,  later  than  in  the  rest  of  Europe. 
This suggest that the equity movements observed in the euro area centre and core, as 
well as those in the UK are related to the global financial crisis, whereas the outflows 
from euro area periphery are more specifically related to the euro crisis.  

November 2014  66 

-10-50510152006Q12006Q32007Q12007Q32008Q12008Q32009Q12009Q32010Q12010Q32011Q12011Q32012Q12012Q32013Q12013Q32014Q41EZ Centre -General Governmernt -Net Flows (% GDP)Other investmentPTF Debt, bondsPTF Debt, money mkt inst.PTF Equity-15-10-50510152025302006Q12006Q32007Q12007Q32008Q12008Q32009Q12009Q32010Q12010Q32011Q12011Q32012Q12012Q32013Q12013Q32014Q41EZ Centre -Monetary Authority -Net Flows (% GDP)Other investmentPTF Debt, bondsPTF Debt, money mkt inst.PTF Equity-30-20-1001020302006Q12006Q32007Q12007Q32008Q12008Q32009Q12009Q32010Q12010Q32011Q12011Q32012Q12012Q32013Q12013Q32014Q41EZ Centre -MFIs -Net Flows (% GDP)Other investmentPTF Debt, bondsPTF Debt, money mkt inst.PTF Equity-15-10-505102006Q12006Q32007Q12007Q32008Q12008Q32009Q12009Q32010Q12010Q32011Q12011Q32012Q12012Q32013Q12013Q32014Q41EZ Centre -Other Sectors -Net Flows (% GDP)Other investmentPTF Debt, bondsPTF Debt, money mkt inst.PTF Equity 
 
 
 
 
 
 
 
 
 Analysis of developments in EU capital flows in the global context 

Figure 31 Capital flows by sector and instrument in the euro-area periphery 
countries (in percent of GDP) 

Source: Eurostat and Bruegel calculations. 

The other sectors normally alternate periods of net financial inflows (before the crisis) 
with  periods  of  net  financial  outflows  (during  the  crisis).  In  the  euro  area  periphery, 
flows  for  these  sectors  have  been  completely  squeezed  after  the  crisis  and  the  other 
sectors  are  now  in  a  balanced  position.  The  nature  of  inflows  also  differs  cross  the 
euro area.  Inflows into  euro area core’s  other  sector are dominated by portfolio debt 
and equity whereas inflows into euro area periphery’s other sectors are dominated by 
other investments. This is probably consistent with the fact that firms in the South of 
Europe tend to be smaller and therefore financed more by loans than with equity. The 
Centre  gives  a  mixed  picture,  but  that  may  be  due  to  the  fact  that  the  group 
aggregates  two  very  different  countries  in  terms  of  firms’  structure,  such  as  France 
and Italy.  

November 2014  67 

-20-15-10-505101520252006Q12006Q32007Q12007Q32008Q12008Q32009Q12009Q32010Q12010Q32011Q12011Q32012Q12012Q32013Q12013Q32014Q41EZ Periphery -General Governmernt -Net Flows (% GDP)Other investmentPTF Debt, bondsPTF Debt, money mkt inst.PTF Equity-30-20-10010203040502006Q12006Q32007Q12007Q32008Q12008Q32009Q12009Q32010Q12010Q32011Q12011Q32012Q12012Q32013Q12013Q32014Q41EZ Periphery -Monetary Authority -Net Flows (% GDP)Other investmentPTF Debt, bondsPTF Debt, money mkt inst.PTF Equity-30-25-20-15-10-505101520252006Q12006Q32007Q12007Q32008Q12008Q32009Q12009Q32010Q12010Q32011Q12011Q32012Q12012Q32013Q12013Q32014Q41EZ Periphery -MFIs -Net Flows (% GDP)Other investmentPTF Debt, bondsPTF Debt, money mkt inst.PTF Equity-10-5051015202006Q12006Q32007Q12007Q32008Q12008Q32009Q12009Q32010Q12010Q32011Q12011Q32012Q12012Q32013Q12013Q32014Q41EZ Periphery -Other Sectors -Net Flows (% GDP)Other investmentPTF Debt, bondsPTF Debt, money mkt inst.PTF Equity 
 
 
 
 
 
 
 
 Analysis of developments in EU capital flows in the global context 

Figure 32 Capital flows by sector and instrument in northern Europe 
countries (in percent of GDP) 

Source: Eurostat and Bruegel calculations. 

Money  market  instruments  also  tend  to  play  a  more  important  role  in  this  sector, 
although  their  weight  varies  across  countries.  They  are  for  example,  especially 
important in the euro area core and almost absent in the Central and Eastern Europe 
countries, where other investments play the most important role. 

Figure 33 Capital flows by sector and instrument in central and eastern 
European countries (in percent of GDP) 

November 2014  68 

-8-6-4-20246810122006Q12006Q22006Q32006Q42007Q12007Q22007Q32007Q42008Q12008Q22008Q32008Q42009Q12009Q22009Q32009Q42010Q12010Q22010Q32010Q42011Q12011Q22011Q32011Q42012Q12012Q22012Q32012Q42013Q12013Q22013Q32013Q42014Q41Northern Europe -General Governmernt -Net Flows (% GDP)Other investmentPTF Debt, bondsPTF Debt, money mkt inst.PTF Equity-15-10-505101520252006Q12006Q22006Q32006Q42007Q12007Q22007Q32007Q42008Q12008Q22008Q32008Q42009Q12009Q22009Q32009Q42010Q12010Q22010Q32010Q42011Q12011Q22011Q32011Q42012Q12012Q22012Q32012Q42013Q12013Q22013Q32013Q42014Q41Northern Europe -Monetary Authority -Net Flows (% GDP)Other investmentPTF Debt, bondsPTF Debt, money mkt inst.PTF Equity-50-40-30-20-10010203040502006Q12006Q22006Q32006Q42007Q12007Q22007Q32007Q42008Q12008Q22008Q32008Q42009Q12009Q22009Q32009Q42010Q12010Q22010Q32010Q42011Q12011Q22011Q32011Q42012Q12012Q22012Q32012Q42013Q12013Q22013Q32013Q42014Q41Northern Europe -MFIs -Net Flows (% GDP)Other investmentPTF Debt, bondsPTF Debt, money mkt inst.PTF Equity-15-10-5051015202006Q12006Q22006Q32006Q42007Q12007Q22007Q32007Q42008Q12008Q22008Q32008Q42009Q12009Q22009Q32009Q42010Q12010Q22010Q32010Q42011Q12011Q22011Q32011Q42012Q12012Q22012Q32012Q42013Q12013Q22013Q32013Q42014Q41Northern Europe -Other Sectors -Net Flows (% GDP)Other investmentPTF Debt, bondsPTF Debt, money mkt inst.PTF Equity-4-202468102006Q12006Q22006Q32006Q42007Q12007Q22007Q32007Q42008Q12008Q22008Q32008Q42009Q12009Q22009Q32009Q42010Q12010Q22010Q32010Q42011Q12011Q22011Q32011Q42012Q12012Q22012Q32012Q42013Q12013Q22013Q32013Q42014Q1CEE -General Governmernt -Net Flows (% GDP)Other investmentPTF Debt, bondsPTF Debt, money mkt inst.PTF Equity-6-4-2024682006Q12006Q22006Q32006Q42007Q12007Q22007Q32007Q42008Q12008Q22008Q32008Q42009Q12009Q22009Q32009Q42010Q12010Q22010Q32010Q42011Q12011Q22011Q32011Q42012Q12012Q22012Q32012Q42013Q12013Q22013Q32013Q42014Q1CEE -Monetary Authority -Net Flows (% GDP)Other investmentPTF Debt, bondsPTF Debt, money mkt inst.PTF Equity 
 
 
 
 
 
 
 
 
 Analysis of developments in EU capital flows in the global context 

Source: Eurostat and Bruegel calculations. 

flows  experienced  by 

The special role of the UK as a financial centre is evident in the huge magnitude of the 
financial 
institutions. 
Unfortunately,  there  is  no  data  on  financial  flows  at  the  sector  level  for  the  UK 
Monetary  authority,  so  we  are  not  able  to  assess    the  impact  of  quantitative  easing 
(QE) implemented by the Bank of England in terms of external flows, for example. The 
large debt portfolio inflows in the government sector during the crisis point instead to 
the  safe  haven  role  that  the  gilt  had  (together  with  the  German  bund  and  the  US 
treasuries) during the financial crisis.  

the  English  monetary 

financial 

Figure 34 Capital flows by sector and instrument in the United Kingdom (in 
percent of GDP) 

Source: Eurostat and Bruegel calculations. 

November 2014  69 

-6-4-202468102006Q12006Q22006Q32006Q42007Q12007Q22007Q32007Q42008Q12008Q22008Q32008Q42009Q12009Q22009Q32009Q42010Q12010Q22010Q32010Q42011Q12011Q22011Q32011Q42012Q12012Q22012Q32012Q42013Q12013Q22013Q32013Q42014Q1CEE -MFIs -Net Flows (% GDP)Other investmentPTF Debt, bondsPTF Debt, money mkt inst.PTF Equity-0.6-0.4-0.200.20.40.60.811.22006Q12006Q22006Q32006Q42007Q12007Q22007Q32007Q42008Q12008Q22008Q32008Q42009Q12009Q22009Q32009Q42010Q12010Q22010Q32010Q42011Q12011Q22011Q32011Q42012Q12012Q22012Q32012Q42013Q12013Q22013Q32013Q42014Q1CEE -Other Sectors -Net Flows (% GDP)Other investmentPTF Debt, bondsPTF Debt, bondsPTF Debt, bonds-4-202468102006Q12006Q22006Q32006Q42007Q12007Q22007Q32007Q42008Q12008Q22008Q32008Q42009Q12009Q22009Q32009Q42010Q12010Q22010Q32010Q42011Q12011Q22011Q32011Q42012Q12012Q22012Q32012Q42013Q12013Q22013Q32013Q42014Q41UK -General Governmernt -Net Flows (% GDP)Other investmentPTF Debt, bondsPTF Debt, money mkt inst.PTF Equity-150-100-500501001502006Q12006Q22006Q32006Q42007Q12007Q22007Q32007Q42008Q12008Q22008Q32008Q42009Q12009Q22009Q32009Q42010Q12010Q22010Q32010Q42011Q12011Q22011Q32011Q42012Q12012Q22012Q32012Q42013Q12013Q22013Q32013Q42014Q41UK -MFIs -Net Flows (% GDP)Other investmentPTF Debt, bondsPTF Debt, money mkt inst.PTF Equity-50-40-30-20-100102030402006Q12006Q22006Q32006Q42007Q12007Q22007Q32007Q42008Q12008Q22008Q32008Q42009Q12009Q22009Q32009Q42010Q12010Q22010Q32010Q42011Q12011Q22011Q32011Q42012Q12012Q22012Q32012Q42013Q12013Q22013Q32013Q42014Q41UK -Other Sectors -Net Flows (% GDP)Other investmentPTF Debt, bondsPTF Debt, money mkt inst.PTF Equity 
 
 
 
 
 
 
 
 Analysis of developments in EU capital flows in the global context 

4.6 Financial integration and dis-integration 
Several  developments  reviewed  so  far  suggest  that  over  the  last  five  years,  Europe 
has been undergoing a progressive financial disintegration. We therefore analyse this 
issue  in  greater  detail  in  this  section.  Behind  financial  disintegration  there  is,  in  the 
euro area, the negative feedback loop between the banking sector and sovereigns that 
has  emerged  as  a  characteristic  feature  of  the  euro  crisis.  There  are  mainly  two 
reasons for this phenomenon.  

First,  during  the  initial  phases  of  the  crisis,  EMU  Member  States  were  individually 
responsible for rescuing banks in their jurisdictions16 . Given the huge size of banking 
sectors  relative  to  GDP,  the  potential  cost  of  bank  rescues  was  high  and  sovereigns 
were  vulnerable  owing  to  the  anticipation  of  markets  that  such  high  costs  of  bank 
bailouts could cast doubts on the future sustainability of the sovereign’s public finance 
position and on its creditworthiness. The consequences of this became apparent when 
Ireland had to rescue its banking system in the early days of the crisis. At the end of 
2007  Ireland  had  a  debt-to-GDP  as  low  as  25  percent.  At  the  end  of  2010,  after 
extending public support to the financial system, its debt ratio jumped to 108 percent 
and  the  country  needed  an  IMF/EU  programme  (the  portion  of  debt  increase  directly 
related to the banking support is evaluated at around 40 per cent of GDP by the IMF). 
The  nationalisation  of  Anglo-Irish  led  financial  markets  to  become  familiarised  to  the 
idea that important banks would be bailed out by government if needed, while at the 
same time clearly highlighting the fiscal implications of such rescues.  

Second,  domestic  banks  are  heavily  exposed  to  sovereign  debt,  often  with  a  strong 
home  bias.  This  is  to  some  extent  a  pattern  inherited  from  the  pre-crisis  era,  but  it 
contributed  to  the  vulnerability  of  European  banks,  when  debt  issued  by  some  euro 
area sovereigns was not considered a safe asset anymore and its value dropped, thus 
damaging the balance sheet positions of the affected banks. 

The  divergence  of  sovereign  yields  in  a  context  of  strong  connection  between  banks 
and sovereigns has resulted in financial fragmentation and segmentation of risks along 
national  borders.  Banks  located  in  weaker  countries  found  increasing  difficulty  in 
refinancing  on  the  market,  due  to  the  perceived  poorer  quality  of  the  collateral  they 
were  holding.  Cross  border  activity  has  dropped  across  the  board.  And  the 
segmentation in the cost of banks’ funding has been passed on to the retail borrowers, 
with lending rates (and deposit rates) markedly diverging across euro area countries. 
After the ECB introduced its Outright Monetary Transactions in 2012, the government 
bonds  yields  in  the  periphery  countries  dropped  and  the  spreads  narrowed. 
Nevertheless, the gap in interest rates charged by banks on loans to the private sector 
was  not  re-absorbed  equally  fast  and  a  significant  gap  still  remains,  despite  the 
significant  reduction  (if  not  elimination)  of  the  “sovereign  surcharge”.  At  the  same 
time,  several  indicators  suggest  that  financial  integration  was  fast  to  unravel  during 
the  crisis,  whereas  it  has  not  yet  significantly  recovered.  This  is  very  important 
especially  in  light  of  the  many  initiatives  –  most  notably  banking  union  –  introduced 
since the crisis. The next sections review these indicators of financial integration. 

Re-domestication of banks’ activity 

16 The situation will remain the same until the recently agreed Single Resolution Fund will not be 
completed. 

November 2014  70 

 
 
 
 
 
 
 
 
 
 
                                           
 Analysis of developments in EU capital flows in the global context 

During  the  financial  crisis,  Eurozone  banks  have  been  massively  retrenching  within 
domestic  borders.  The  phenomenon  started  in  2009  but  significantly  accelerated  in 
2010/2011,  when  the  euro  sovereign  crisis  intensified.  Especially  in  those  countries 
that were under high pressure from the financial markets, the crisis led to a sizable re-
domestication of banks’ assets, in genera,l and of banks’ debt holdings in particular.  

Figure  35  gives  an  idea  of  the  magnitude  of  this  effect.  The  upper  panel  reports  the 
outstanding  amount  of  loans  extended  to  all  euro  area  private  sectors  by  euro  area 
banks, as well as the securities other than shares issued by euro area sectors and held 
by  euro  area  banks  as  assets.  This  data  is  aggregated  without  distinguishing  across 
sectors (such as households or corporations) nor between domestic loans  or loans to 
other euro area countries. The numbers are indexed in 1999, showing that both series 
more  than  doubled  over  the  last  decade,  after  the  currency  unification.  The  start  of 
the crisis in 2008 coincided with a halt in the growing trend but the reversal  – at the 
aggregate euro area level – is not dramatic. 

The middle and lower panel instead show a breakdown of both loans and banks’ debt 
holdings between “domestic” and vis-à-vis “other euro area”. Domestic loans are loans 
extended by banks to domestic borrowers, and domestic debt holdings are holdings by 
banks  of  debt  issued  by  other  domestic  sectors  (public  and  private).  These  are 
compared with the corresponding measures vis-à-vis sectors of other countries within 
the euro area. This breakdown allows one to understand whether or not the pre-crisis 
growth  observed  in  the  euro-area  aggregate  shown  in  the  upper  panel  was  driven 
more by within-country growth or by between-country growth. 

The  answer  is  that  the  aggregate  growth  in  loans  and  banks’  debt  holdings  that 
occurred prior to the crisis was mostly due to an explosion in cross border activity, in 
particular  intra-euro  area17  .  Loans  granted  by  euro  area  banks  to  residents  of  other 
euro  area  countries  almost  tripled  over  10  years  whereas  loans  granted  to  domestic 
borrowers doubled18 .  

The  difference  is  even  more  striking  if  we  look  at  the  composition  of  debt  portfolios 
held  on  banks’  assets  side.  Holdings  of  debt  issued  in  other  euro  area  countries 
increased  by  4.5  times  between  1999  and  2009  while  holdings  of  debt  issued  by 
domestic resident sectors remained constant, starting to increase only when the crisis 
broke out in 2009. This latter development was most likely due to the fact that, as a 
response  to  the  US-led  financial  turmoil,  banks  were  rebalancing  their  portfolios  in  a 
direction  that  was  perceived  to  be  safer,  but  also  pressure  from  their  domestic 
regulators  to  concentrate  their  activities  in  the  home  countries  may  have  played  a 
role,  as  several  unilateral  actions  were  adopted  by  national  supervisors  to  ring-fence 
banking  activities19.  Since  the  outbreak  of  the  crisis  in  2008,  the  drop  in  intra-area 

17 The Eurosystem provides statistics on cross-border loans and securities holdings of euro area 
banks,  but  these  only  distinguish  between  “domestic”  and  “other  Euro  Area”.  Loans  and 
holdings  vis-à-vis  the  rest  of  the  world  are  aggregated  in  a  single  category  called  “external 
assets”. Some of the  National  Central Banks do provide a disaggregation by instrument of the 
assets vis-à-vis the rest of the world (which are used later in the analysis) but not all of them 
do.  So  for  comparability  purposes  in  this  paragraph  the  analysis  is  restricted  to  ECB  data, 
looking only at “domestic” versus “other euro area” positions. 
18 It’s important to point out that these figures also include bank loans. 
19  For  example,  the  European  Commission  even  had  to  issue  a  statement  in  February  2013 
trying to limit such activities, including intra-EU capital controls and other restrictions. According 
to Bloomberg (2013), “The Commission took this action because it had been made aware that, 
on  several  occasions,  national  bank  supervisors  acted  independently  to  impose  allegedly 
disproportionate  prudential  measures  on  national  banking  subsidiaries  of  cross-border  EU 
banking groups. The alleged measures in question include capital controls, restrictions on intra-

November 2014  71 

 
 
 
 
 
 
 
 
                                           
 Analysis of developments in EU capital flows in the global context 

cross-border loans and debt holdings has been as  large as the previous increase had 
been, whereas the domestic component has remained more constant.  

It  is  important  to  highlight  that  in  2013,  when  financial  market  stresses  abated,  the 
process  of  financial  disintegration  has  not  been  reserved  and  instead  cross-border 
bank  loans  continued  to  fall,  while  cross-border  debt  holdings  remain  broadly 
unchanged. In 2014 (our latest data is for September 2014) a slight increase in cross-
border  holdings  started,  yet  the  September  2014  levels  are  at,  or  even  below,  the 
January 2013 levels and well below the levels observed in 2008 and 2009.  

group transfers and lending, limiting activities of branches or prohibiting expatriation of profits. 
These  would  have  the  effect  of  ‘ring-fencing’  assets,  which  could,  in  practice,  restrict  cross-
border  transfers  of  banks’  capital  and  potentially  constrain  the  free  flow  of  capital  throughout 
the  EU.”  See  at:  http://www.bloomberg.com/news/2013-02-04/eu-warns-of-disproportionate-
crackdown-on-cross-border-banking.html  

November 2014  72 

 
 
 
 
 
 
 
                                                                                                                                
 Analysis of developments in EU capital flows in the global context 

Figure 35 Euro Area banks’ loans and debt holdings – total, domestic and 
other euro-area (January 1999=100) 

Source: Bruegel calculations using data from the ECB.  
Note:  “Loans”  =  loans  to  all  (upper  panel),  domestic  (middle  panel)  or  other  (lower 
panel) euro area resident sectors (both public and private issuers). This includes loans 
to  other  Monetary  Financial  Institutions;  “Debt”  =  the  item  "securities  other  than 
shares” reported in the ECB's statistics on MFIs' balance sheet (further disaggregation 

November 2014  73 

501001502002503001999Jan2000Jan2001Jan2002Jan2003Jan2004Jan2005Jan2006Jan2007Jan2008Jan2009Jan2010Jan2011Jan2012Jan2013Jan2014JanLOANS domesticLOANS other EA501001502002503003504004505001999Jan2000Jan2001Jan2002Jan2003Jan2004Jan2005Jan2006Jan2007Jan2008Jan2009Jan2010Jan2011Jan2012Jan2013Jan2014JanDEBT domesticDEBT other EA501001502002501999Jan2000Jan2001Jan2002Jan2003Jan2004Jan2005Jan2006Jan2007Jan2008Jan2009Jan2010Jan2011Jan2012Jan2013Jan2014JanLOANS to EA residentDEBT of EA residents 
 
 
 
 
 Analysis of developments in EU capital flows in the global context 

by specific instruments is not possible at the cross border level using ECB comparable 
data).  Here  all  securities  other  than  shares  are  considered,  without  disaggregating 
across issuing sectors. Data is available from January 1999 to September 2014. 

Diversified evolution of “home bias” in banks’ assets 

The previous section  introduced the issue  of financial disintegration by looking at the 
euro area level. However, developments are even more striking if we look at the level 
of individual countries.  

Figure  36  shows  that  the  debt  portfolios  held  by  banks  among  their  assets  are 
geographically biased, and dominated by debt instruments issued by domestic entities 
(both  public  and  private).  The  existence  of  long-lived  forms  of  “home-bias” in  banks’ 
government debt portfolios has been a leitmotif in the European policy discussion over 
the  last  four  years,  because  of  its  dangerous  consequences  for  the  banks.  Despite 
being  particularly  pronounced  in  sovereign  holdings,  the  home  bias  is  however  not 
necessarily  an  exclusive  feature  of  this  particular  portfolio.  Figure  36  shows  for 
selected  countries  the  total  debt  that  is  held  by  the  banks  as  assets,  disaggregating 
between external and domestic. 

In  Spain  and  Portugal,  banks’  debt  portfolio  became  more  and  more  diversified 
geographically  between  1999  and  2006,  when  the  share  accounted  for  by  domestic 
debt reached a minimum of 40 percent of the total portfolio in Portugal and 55 percent 
in Spain. However, already in late 2006 the share of domestic sectors in debt holdings 
increased  and  during  the  intensification  of  the  global  financial  crisis,  this  process 
accelerated. By the end of summer 2013, almost 90 percent of banks’ debt securities 
holdings  were  accounted  for  by  domestic  instruments.  In  both  countries,  these 
numbers are close to where they were before the introduction of the euro, suggesting 
that the international diversification achieved during the first seven years of currency 
unification  was  almost  completely  reversed.  More  recently  (2013-14),  there  was  a 
small reduction in the share of domestic sectors in holdings of debt  instruments, but 
this was very minor relative to the reversal between 2006 and 2011. 

Ireland and Italy are instead extreme cases in two diametrically opposed directions. In 
Italy, banks’ debt securities holdings never really internationalised in the first place, as 
the  share  accounted  for  by  domestic  securities  never  fell  below  80  percent,  even  in 
the  years  of  financial  integration.  In  Ireland,  instead,  domestic  debt  holdings  were 
almost  non-existent  (below  10  percent)  until  2008.  The  euro  crisis  led  to 
renationalisation even in Ireland, where the share of domestic holdings is now around 
30 percent, an unprecedentedly high value for this country. 

The  timing  is  also  very  interesting,  as  it  gives  insights  as  to  the  possible  underlying 
drivers of these developments. The increase in domestic debt holdings in the Southern 
countries  started  in  2006  in  Portugal  and  Spain  and  in  late  2008  in  Ireland.  The 
process has accelerated in Portugal in late 2009 and the peak was reached in all three 
countries in 2011-12, along with the intensification of the sovereign debt crisis.  

November 2014  74 

 
 
 
 
 
 
 
 
 
 
 
 Analysis of developments in EU capital flows in the global context 

Figure 36 Debt held by banks in selected countries as assets: domestically vs. 
foreign issued (percent of all debt holdings) and debt as the share of total 
assets (percent of all assets) 

Source:  Bruegel  calculations  using  data  from  the  ECB  and  national  central  banks. 
Note: Data is available from January 1999 to September 2014. 

Sovereign over-exposure 

The  previous  section  showed  evidence  that,  especially in  the  South  of  the  euro  area, 
the weight of debt instruments on banks’ balance sheet has as a share of banks' total 
assets  and  it  has  been  progressively  renationalising.  A  pertinent  question  is  whether 
or not this debt was issued by public or private sectors. The answer is that domestic 
public  sector  debt  appears  to  be  the  most  important  component  in  explaining  the 
increase  of  banks’  debt  holdings  in  the  South.  For  example,  public  debt  securities 
increased from 20 percent to almost 50 percent of the domestic debt portfolio held by 
Spanish  banks;  in  Ireland,  they  grew  from  almost  zero  to  about  20  percent.  As  a 
result,  banks'  holdings  of  domestic  debt  have  reached  everywhere  new  heights  in 
terms of banks’ total assets (Figure 37). On the other hand, this was not the case in 
France and Germany. 

November 2014  75 

0%5%10%15%20%25%30%0%10%20%30%40%50%60%70%80%90%100%1997Sep1998Sep1999Sep2000Sep2001Sep2002Sep2003Sep2004Sep2005Sep2006Sep2007Sep2008Sep2009Sep2010Sep2011Sep2012Sep2013SepITALYDomesticOther EARoWDebt %TA (RHS)0%5%10%15%20%25%30%35%0%10%20%30%40%50%60%70%80%90%100%2003Jan2004Jan2005Jan2006Jan2007Jan2008Jan2009Jan2010Jan2011Jan2012Jan2013Jan2014JanIRELANDDomesticOther EARoWDebt %TA (RHS) 
 
 
 
 
 
 
 
 
 
 Analysis of developments in EU capital flows in the global context 

Figure 37 Holdings of domestic general government debt (percent of total 
assets) 

Source:  Bruegel  calculations  using  data  from  the  ECB.  Note:  Data  is  available  from 
January 1999 to September 2014. 

The sovereign bond market is probably where the financial integration induced by the 
euro  and  successive  disintegration  induced  by  the  crisis  are  more  strikingly  evident. 
The run up to the introduction of the single currency coincided with the convergence of 
government  bonds  yields  across  the  euro  area  and  with  the  internationalisation  of 
sovereign  bond  markets.  Before  the  crisis,  in  2007,  euro-area  countries  appeared  to 
be  characterised  by  large  foreign  holdings  of  sovereign  debt.  The  share  of  non-
residents in total holdings had been growing significantly since the introduction of the 
euro (Figure 38). 

In  general  it  is  not  possible  to  have  a  disaggregation  between  other  euro-area 
residents  and  non-euro  area  residents,  but  Lane  (2006)  showed  that  after  the 
introduction  of  the  single  currency,  cross-border  debt  portfolios  became  more  ‘EMU-
oriented’ across the euro area. This means that the proportion of cross-border security 
holdings accounted for by Economic and Monetary Union partners increased. 

November 2014  76 

0.0%2.0%4.0%6.0%8.0%10.0%12.0%14.0%1997Sep1998Sep1999Sep2000Sep2001Sep2002Sep2003Sep2004Sep2005Sep2006Sep2007Sep2008Sep2009Sep2010Sep2011Sep2012Sep2013SepFranceGermany0.0%2.0%4.0%6.0%8.0%10.0%12.0%14.0%1997Sep1998Sep1999Sep2000Sep2001Sep2002Sep2003Sep2004Sep2005Sep2006Sep2007Sep2008Sep2009Sep2010Sep2011Sep2012Sep2013SepItalySpainPortugal 
 
 
 
 
 
 
 
 
 
 Analysis of developments in EU capital flows in the global context 

Figure 38 Share of holding of government bonds by domestic banks vs. non-
resident investors 

Source: Bruegel database of sovereign bonds holding (http://www.bruegel.org/datasets/) 
Note:  “non-residents”  include  all  investors  that  are  not  resident  in  the  country; 
“domestic banks” include all banks incorporated in the country (including subsidiaries 
of foreign banks, but not branches);  

Since  the  beginning  of  the  crisis  this  trend  has  reversed  concerning  bonds  issued  by 
the  governments  of  the  Southern  euro  area  countries,  while  the  share  of  non-
residents  in  the  holdings  of  German  and  French  debt  continued  to  increase.  This 
suggests  that  non-residents  shifted  their  portfolios  toward  safer  investments.  The 
share  that  was  being  off  loaded  by  non-resident  investors  has  instead  increasingly 
been taken up by domestic banks, in  an attempt to moderate the  rise in yields. In a 
historical  perspective,  domestic  banks  in  continental  Europe  used  to  hold  significant 
shares of domestic public debt even before the crisis, but the share sky-rocketed over 
the last 5 years, reinforcing the sovereign-banking vicious circle.  

The existence of long-lived forms of “home-bias” in banks’ government debt portfolios 
is  long  known.  The  reason  why  banks  in  Europe  hold  so  much  government  debt  is 
possibly  twofold  (Merler  and  Pisani-Ferry  2012).  Government  bonds  are  appealing 
because  they  can  be  easily  used  as  collateral  (both  on  the  interbank  markets  in 
normal times and for central banks’ emergency lending in troubled times) and because 
the Basel regulatory framework allows for the  zero-risk weighting of bonds issued by 
euro-area governments. This might explain why banks’ balance sheets are loaded with 
government  debt,  but  they  are  not  sufficient  to  explain  the  “home  bias”  in  debt 
holdings.  Governments  may  have  exercised  some  (more  or  less  implicit)  form  of 

November 2014  77 

 
 
 
 
 
 
 
 
 Analysis of developments in EU capital flows in the global context 

pressure  on  banks.  The  introduction  of  the  euro  and  the  consequent  convergence  of 
interest  rates  to  the  German  levels  removed  the  rationale  for  such  ‘financial 
repression’  and  coincided  with  a  decline  in  banks’  holding  of  domestic  government 
debt.  But  the  temptation  to  resort  to  some  form  of  ‘financial  repression’  might  have 
returned in crisis time. 

Financial fragmentation in sovereign and private lending rates 

The divergence of sovereign yields in the context of strong connections between banks 
and sovereigns has resulted in financial fragmentation and segmentation of risks along 
national  borders.  Banks  located  in  weaker  countries  found  increasing  difficulty  in 
refinancing  on  the  market,  due  to  the  perceived  poorer  quality  of  the  collateral  they 
were holding. As a consequence of market segmentation along national borders, banks 
in  weaker  countries  became  increasingly  dependent  on  the  Eurosystem  liquidity, 
(Figure  39).  The  extensive  reliance  on  ECB  liquidity  may  have  set  in  motion  and 
vicious  circle,  because  (according  to  our  discussion  with  various  representatives  of 
credit rating agencies) credit rating agencies considered high reliance on central bank 
support a negative factor. 

We also highlight that while German banks, which were the main users of Eurosystem 
liquidity  before  the  crisis,  reduced  their  usage  to  a  very  small level  after  2010,  most 
likely due to the inflow of deposits and the willingness of other banks to fund German 
banks. 

Figure 39 Use of Eurosystem liquidity (in € bn), January 2003 – July 2014 

Source: national central banks. 

November 2014  78 

020040060080010001200Jan-03Jan-04Jan-05Jan-06Jan-07Jan-08Jan-09Jan-10Jan-11Jan-12Jan-13Jan-14SpainGreeceIrelandItalyPortugalBelgiumGermanyFinlandFranceCyprusLuxembourgSlovenia and MaltaAustria 
 
 
 
 
 
 
 
 
 
 Analysis of developments in EU capital flows in the global context 

These  divergences  have  been  reflected  in  the  widening  TARGET2  balances,  widely 
discussed  during  2011-12.  TARGET2    is  the  Eurosystem's  payment  and  settlement 
system  which  enables  commercial  banks  to  settle  payment  transactions  in  central 
bank  money  by  crediting/debiting  their  current  accounts  at  the  respective  national 
central banks (as explained at page 64, cross-border transfers of central bank money 
affect  TARGET2  balances  of  national  central  banks  vis-à-vis  the  ECB).  Until  2007, 
TARGET2  positions  remained  close  to  balance  (Figure  40).  From  2007  (and  more  so 
with  the  intensifying  of  the  sovereign  debt  crisis  in  2010)  the  balances  started  to 
diverge,  with  Germany  becoming  the  largest  creditor.  The  huge  divergence  in 
TARGET2 claims and liabilities mirrors the increase in Eurosystem liquidity provision to 
banks in some euro-area countries. 

Figure 40 TARGET2 balances 

Source: national central banks and Euro crisis Monitor. 

Banks  have  been  said  to  use  part  of  the  funds  borrowed  by  the  ECB  to  buy  more 
government bonds.  Indeed, we do see a  correlation (see  figures above) between the 
peak  in  the  TARGET2  imbalances  and  the  underlying  borrowing  of  ECB  liquidity  with 
the  increase  in  banks’  shares  in  total  domestic  debt  holdings,  but  more  investigation 
would  be  needed  to  clarify  the  matter.  What  is  certain  is  that  at  the  height  of  the 
crisis,  given  the  very  low  interest  rate  at  which  banks  were  able  to  borrow  from  the 
ECB, investing in government bonds would ensure a considerable return on this carry 
trade. Target balances have narrowed significantly after the ECB introduced its OMT in 
late  2012,  which  eased    tensions  in  government  bond  markets    but  did  not  pass 
through  equally  rapidly  tointerest  rates  in  the  private  sectors.  In  early  2013  banks 

November 2014  79 

 
 
 
 
 
 
 
 Analysis of developments in EU capital flows in the global context 

were  given  the  possibility  to  reimburse  earlier  the  funds  borrowed  under  the  LTRO, 
and they used it, especially Spanish banks. This probably points to the effectiveness of 
the ECB’s OMT in dispelling the concerns about the possible break-up of the euro and 
therefore  easing  the  pressure  for  banks  to  hoard  excess  liquidity.  As  we  already 
pointed  out,  this  does  not  imply  that  financial  disintegration  toward  the  euro-area 
periphery reversed to any meaningful degree. 

Figure 41 Dispersion of lending rates 

Source: ECB. 

Figure 42 Dispersion of lending rates vs. ECB refinancing rate 

Source: ECB. 

At the same time, and given the importance of banking intermediation in the European 
financial  market,  financial  fragmentation  and  heightened  uncertainty  have  had  a 
strong negative impact on the private sector and the real economy. Distressed banks 
in  the  weaker  countries  have  been  cutting  their  lending  considerably  to  the  real 
economy, thus contributing to the worsening of growth prospects. Lending rates in the 

November 2014  80 

 
 
 
 
 
 
 
 
 
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Periphery are significantly higher than in the core, partly due to fact that lending risk 
is  higher  in  these  countries.  The  divergence  in  bank  funding  conditions  is  also  an 
important factor in the differences in MFI loan interest rates that banks charge to non-
financial  corporations  and  households  while  at  the  same  time  financial  fragmentation 
hinders the pass-through of monetary policy to lending rates, where it would be more 
warranted.  Since  late  2010,  retail-lending  rates  have  increased  till  mid-2012  (Figure 
41 and Figure 42); even though policy rates have remained extremely low and this is 
partly related to the fact that banks’ wholesale funding and lending rates are priced off 
(domestic)  sovereign  yields.  However,  the  gap  in  lending  rates  persisted  even  after 
the  ECB’s  OMT  programme  greatly  re-absorbed  the  wedge  in  sovereign  yields, 
suggesting that other factors were at play behind this divergence.  

All  the  evidence  presented  in  this  section  shows  that  the  intensification  of  financial 
disintegration in 2010 was extremely rapid, but it has hardly shown signs of reversing 
even  after  the  2012  OMT  considerably  reduced  the  sovereign  yield  differentials.  This 
may be the sign of a generalised lack  of  confidence, due both to the bleak economic 
outlook and uncertainty still remaining on the health of European banks. To the extent 
that this is the case, the ECB’s comprehensive assessments and stress test of banks’ 
balance sheets, as well as the ECB’s assumptions of its new supervisory competences 
in  the  context  of  banking  union,  could  be  the  most  effective  factor  in  meaningfully 
reverting  the  course  of  financial  fragmentation.  The  slight  recent  improvements  in 
cross-border  lending  and  debt  holdings  during  the  first  nine  months  of  2014  may 
already be the results of these ECB actions, but there is still a very long way to go to 
reverse financial disintegration. 

November 2014  81 

 
 
 
 
 
 
 
 
 Analysis of developments in EU capital flows in the global context 

5. Returns on investment  

5.1 External annualized yield 
In this section we assess returns on cross-border financial investments. We calculated 
the  external  annualized  yield20  by  dividing  the income  flows  (interest  or  dividend)  by 
the  stock  of  outstanding  assets  or  liabilities.  For  the  United  States,  for  example,  it is 
found  that  the  cost  of  servicing  its  liabilities  (which  to  a  large  extent  comprise  fixed 
income assets, partly reflecting the dominant role of the US dollar in the international 
monetary  system)  is  much  lower  than  the  return  on  US  investment  abroad  (which 
typically takes the form of various equity-type investments). Therefore, some authors 
have named the US the ‘World Venture Capitalist’ (Gourinchas and Rey, 2005)21..Table 
3 below allows one to assess if some European countries share similar privileges.  

The table reveals a significant country-heterogeneity in spreads between total returns 
on foreign assets and liabilities. In the pre-crisis period (2004-06), countries from CEE 
(Bulgaria,  Czech  Republic,  Latvia,  Lithuania,  Poland,  Romania  and  Slovenia)  have 
experienced non-negligible negative spreads  for equity. The  reason is that the return 
foreign  investors  made  on  investment  in  the  CEE  region  yielded  unusually  large 
returns,  mostly  well  over  10  percent  per  year.  By  contrast,  return  on  equity  assets 
rarely  exceeded  10  percent  per  year  (only  in  the  cases  of  Estonia  and  Hungary  in 
2004-06).  

It  is  interesting  to  note  that  in  2004-06,  only  six  of  the  nineteen  EU  countries  for 
which  we  have  data  recorded  positive  spreads  on  equity,  while  the  number  of  EU 
countries with positive spreads on equity is seven out of twenty-three in 2007-10 and 
nine out of twenty-three in 2010-13. These results suggest that most EU countries are 
either excellent places offering high returns on equity investments, or investors of EU 
countries  made  poor  investments  abroad.  However,  the  largest  ‘core’  EU  countries, 
Germany,  the  Netherlands,  Sweden  and  the  United  Kingdom,  maintained  positive 
investment spreads throughout the periods taken into consideration, while France had 
similarly positive spreads in the latest two periods for which data is available (2007-10 
and  2011-14)22.  These  countries,  therefore,  tend  to  share  the  privileges  that  the  US 
benefits  from,  though  the  table  highlights  that  the  positive  equity  spreads  in  the  US 
are well above the positive spreads in these EU countries. Japan benefited from even 
larger  positive  equity  investment  spread  than  the  US  in  2011-14.  Unfortunately 
Japanese data is not available for earlier periods. Also, when calculating a simple un-
weighted  average  of  “new”  EU  member  states  (countries  that  joined  the  EU  between 
2004-2013) and “old” member states (members before 2004), it turns out that for old 
member  states  the  average  spread  is  slightly  positive  (0.2  percent  per  year)  in  all 
three  sample  periods  indicated  (Table  6).  For  new  member  states,  the  spread  on 
equity is consistently negative at about 4 percent per year.  

On the debt side, the US benefited from positive spreads in 2004-2006, which then fell 
to  zero  in  the  latter  two  periods.  In  contrast  to  equity,  most  EU  countries  received 
positive spreads in all three periods, though these spreads are typically small except in 

20  The  external  annualized  yield  is  derived  on  a  quarterly  basis  by  dividing  receipts  for 
payments  on  the  income  balance  in  quarter  T  by  the  market  value  of  external  assets  or 
liabilities from the NIIP in quarter T-1, which is then factorized in order to express the returns at 
the annual level. 
21  Gourinchas,  Pierre-Olivier  and  Hélène  Rey  (2005)  ‘From  World  Banker  to  World  Venture 
Capitalist:  US  External  Adjustment  and  the  Exorbitant  Privilege’,  NBER  Working  Paper  No. 
11563 
22  There  was  also  a  sizeable  positive  spread  in  Greece,  but  it  resulted  in  negative  returns  on 
equity liabilities in 2011-14. 

November 2014  82 

 
 
 
 
 
 
 
                                           
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central  and  eastern  European  countries.  Interestingly,  the  Czech  Republic,  Hungary, 
Poland  and  Romania  had  rather  high  returns  on  debt-type  foreign  assets  relative  to 
other countries, while the returns on their debt-type liabilities were broadly similar to 
other countries.  

Overall, larger ‘core’ EU countries such as Germany, France, Finland, the Netherlands, 
Sweden  and  the  United  Kingdom  succeeded  in  replicating  to  some  extent  the 
privileges of the US on equity returns throughout the periods taken into consideration. 
In contrast, the CEE region experienced large negative spreads on equity due to very 
high  returns  on  their  liabilities,  although  they  had  the  remarkable  privilege  of  large 
positive spreads on debt type foreign assets. At the same time, the USA’s privilege on 
debt  instruments  was  eliminated,  while  Switzerland’s  privilege  improved  over  EU 
countries,  nearly  approaching  the  positive  spread  of  Japan.  It  is  also  worthwhile 
highlighting  that  the  vulnerable  euro-area  periphery  countries  (with  the  exception  of 
Greece)  do  not  display  largely  negative  tendencies  for  returns  on  foreign  assets  and 
liabilities relative to other EU countries. 

5.2. Revaluation Effects 
We present the developments in the valuation of assets and liabilities from 2007Q1 to 
2013Q4 that arose from changes in market value or from exchange rate movements23. 
The calculations of the accumulated revaluation effects are made in the following way. 
At any point in time the current stock can be decomposed into the initial stock at some 
earlier  period,  0,  the  accumulated  sum  of  flows,  and  the  accumulated  sum  of 
revaluations.  A  counterfactual  series  of  the  initial  stock  and  the  accumulated  flows  is 
created,  and  the  percentage  difference  between  the  actual  series  (which  includes  all 
revaluation effects) and counterfactual (which by construction ignores revaluations) is 
taken to be the accumulated revaluation effect. 

Table  4  presents  the  accumulated  revaluation  effects  in  a  similar  structure  to  the 
above  table  of  investment  performance,  with  breakdowns  by  instrument  type  –  debt 
(sum of debt instruments and other investment) and equity (sum of equity and FDI) – 
and  by  time  period  (2007Q1-2010Q4  and  2011Q1-2013Q4).  Revaluation  effects  also 
show  sizeable  heterogeneity  both  across  countries,  and  through  time  (when 
considering  the  break-down  into  two  sub-periods  2007Q1-2010Q4  and  2011Q1-
2013Q4).  

Revaluation  effects  were  diverse  across  countries.  The  USA,  Switzerland  and  Japan 
suffered  from  a  relative  revaluation  loss  on  equity,  thereby  providing  risk-sharing  to 
the rest of the world. In contrast, old EU member states benefitted from gains on their 
net equity holdings, while in the newer member states revaluation of equity was close 
to  zero  in  the  full  period.  The  ‘revaluations  spread’  was  the  opposite  on  net  debt 
assets: USA, Switzerland and Japan had positive spread, while old EU member states 
had negative spreads. 

Taking a closer look at  country level results, we see that  Germany  suffered  from the 
worst  euro  area  revaluation  spreads  (revaluation  of  assets  minus  revaluation  of 
liabilities)  in  equity  of  -11.2%  and  joint  worst  revaluation,  alongside  Spain,  in  debt 
instruments of -8.7%. Over the two sub-periods, we see these losses are largely due 
to  events  in  the  period  2007-10.  Due  to  the  high  variation  over  time,  the  panels  of 
Figure  44  show  the  evolution  of  these  revaluation  effects  through  time  for  select 
economies  (Germany,  France,  Spain,  Italy,  Portugal  and  the  United  States).  A 

23 Missing data does not allow the calculation for earlier periods. 

November 2014  83 

 
 
 
 
 
 
 
 
 
                                           
 Analysis of developments in EU capital flows in the global context 

comprehensive collection of these revaluation graphs can be found in the chart annex 
at the end of the document. 

For  instance,  while  the  United  States  reported  significant  gains  in  debt  assets, 
revaluation of debt liabilities were minor. We can see that US equity asset holdings as 
well  as  liabilities  actually  suffered  large  losses  of  up  to  20%  in  late  2008  and  into 
2009, before experiencing a reversal from 2010 onwards.  

5.3.Total Returns 
Total  returns  are  calculated  as  the  simple  addition  of  revaluation  effects  and  returns 
on 
(see  
investments 
Table  5).  Of  the  larger  economies  in  Europe,  Germany  and  Italy  suffered  negative 
total returns on their equity asset holdings in the 2007-10 period of -7.4% and -4.4% 
respectively. The Baltic countries showed large dispersion with total returns of -17.5% 
for  Estonia,  +0.7%  for  Lithuania  and  +23.1%  for  Latvia.  The  vast  majority  of  these 
effects for Latvia and Estonia arose from revaluation effects as opposed to extremely 
outsized returns. 

For  CEE  countries,  the  picture  is  somewhat  mixed.  While  Romania  and  Poland  have 
asset  holdings  that  performed  relatively  poorly,  this  is  compensated  for  by  stronger 
revaluations  (Poland:  15.4%  revaluation  and  1.4%  return,  19.8%  and  2.1%  for 
Romania).  For  the  Czech  Republic  returns  of  9.2%  are  nearly  completely  undone  by 
revaluation losses of 8.7%. For Bulgaria and Slovenia the revaluation losses outweigh 
the returns (-3.1% versus 1.3%, -11.6% versus 1.2%). 

When  turning  attention  towards  spreads,  as  opposed  to  purely  focusing  on  asset 
holdings, we see a similar picture – Germany’s revaluation losses of -6.7% more than 
outweigh the gains of +0.4% in 2007-10 when considering the spread. This continues 
into  the  period  2011-2013,  where  revaluation  losses  of  -3.0%  outpace  investment 
returns of just 0.4 in terms of spreads.  

One  should  note  that  those  countries  showing  extremely  large  positive  total  returns 
(in  spreads)  have  typically  benefited  from  a  collapse  in  value  of  their  liabilities  (For 
example, in the latter period Greek liabilities fell in value by approximately 38 percent 
and the return on investment, -4.2% is proportionately much smaller).  

Figure 43 presents scatter plots of returns against revaluation effects. In the 2007-10 
period,  there  appears  to  be  no  discernible  pattern  between  returns  and  revaluations. 
In the  second period, 2011-2014, there appears to be less dispersion and a stronger 
correlation  for  assets  and  liabilities  individually.  The  correlation  between  returns  and 
revaluation effects remains small for spreads in both periods (Table 7), which suggests 
that revaluation gains did not tend to compensate for low returns. 

November 2014  84 

 
 
 
 
 
 
 
 
 
 
 
 
Table 3 External annualized yields for 24 EU countries and United States, Japan and Switzerland (in %) 

 Analysis of developments in EU capital flows in the global context 

S 

S 

0.3 

0.1 

Countries 

2007-2010 
L 
A 

2011-2014 
A 
L 
2.4  2.8  -

Debt 
2004-2006 
L 
A 

0.3 
3.4  3.4  0.0  3.3  3.0  0.3  2.4  1.7  0.7 
4.7  3.8  0.9  4.5  3.2  1.3  3.8  2.6  1.2 
3.0  2.5  0.5  2.9  2.2  0.7  2.7  2.1  0.6 
9.7  6.0  3.7  7.0  4.5  2.5  4.1  3.1  1.0 
2.4  2.7  -
2.8  3.0  -
1.4  1.4  0.0 
1.2  1.6  -
3.5  3.4  0.1  2.8  3.0  -

Equity 
2011-2014 
2007-2010 
2004-2006 
S 
S 
S 
L 
A 
L 
S 
L 
A 
A 
0.4  3.5  3.5  0.0  3.4  3.5  -
0.9  4.9  4.4 
5.8 
-0.3  4.4  3.5 
5.5 
Austria 
-
-
2.0  3.2 
-0.8  3.6  4.5 
5.3 
4.5 
Belgium* 
1.2 
0.9 
-
-
0.8  4.3 
10.1  -7.9  1.3  6.8 
2.1 
Bulgaria 
3.5 
5.5 
17.0  -8.3  7.2  12.9  -
-
2.5  4.0 
Cyprus** 
8.6 
1.5 
5.7 
6.7  11.4  -
12.5  -3.5  9.2  12.7  -
Czech Republic*  9.1 
4.7 
3.5 
7.0  10.3  -
8.6  10.6  -
13.1  10.4  2.7 
Estonia 
3.4 
2.0 
-
0.3  4.5  5.9 
5.8  5.4 
1.3 
5.2 
6.5 
Finland 
0.4 
1.4 
1.5  2.3  2.1  0.2  3.7  3.2  0.5  2.3  2.0  0.3 
1.1  4.1  2.7 
3.6  2.5 
0.8 
1.4 
2.2 
France** 
0.8  3.8  3.5  0.3  3.6  3.1  0.5  2.5  1.7  0.8 
0.4  5.6  4.8 
4.9  4.5 
1.0 
4.7 
5.7 
Germany 
0.2  1.5 
1.9  1.7 
- 
- 
- 
Greece*** 
-
6.4  7.6 
2.9 
12.4  9.5 
8.1  8.4 
Hungary 
0.4 
-
3.1  4.2 
-3.5  3.1  5.7 
6.8 
3.2 
Ireland 
2.6 
-
3.2  3.9 
4.7  5.0 
- 
- 
- 
Italy*** 
0.3 
-
3.2  6.9 
15.1  -9.2  0.6  1.5 
5.9 
Latvia 
0.9 
-
3.1  9.0 
10.8  -6.7  0.6  4.0 
4.1 
Lithuania 
3.4 
-
4.2  4.1 
-0.5  2.9  3.4 
3.5 
3.0 
Luxembourg 
0.5 
0.0  4.5  3.8 
4.7 
5.9 
4.6  4.6 
1.2 
Netherlands 
-
3.0  7.9 
11.9  -7.2  1.4  9.0 
4.6 
Poland 
7.6 
-
4.7  4.9 
-0.1  5.7  6.3 
5.1 
5.2 
Portugal 
0.6 
-
-6.3  15.6  -
4.0  3.4 
2.1  5.4 
Romania 
3.3 
21.9 
-
-
-4.8  1.2  5.4 
2.9 
2.2 
Slovenia 
2.2 
4.3 
1.8  6.8  5.2 
8.3  6.5 
1.2 
Sweden 
8.2 
2.3  5.5  4.2 
6.0  3.7 
2.2 
United Kingdom  7.6 
- 
6.9  2.7 
- 
- 
- 
Japan 
-
4.2  4.5 
3.2 
Switzerland* 
3.9  3.3 
8.0 
0.3 
United States**  6.2 
2.9  5.7  3.2 
6.4  3.5 
2.0 
Source: Bruegel calculations using data from Eurostat and IMF. Note: ‘Equity’ groups together ‘Direct Investment’ and ‘Portfolio 
investment – equity’, while ‘Debt’ consists of ‘Other investments’ and ‘Portfolio investment – debt’; A = Assets, L = Liabilities, S = Spread 

-
1.2 
-
1.1 
-
0.7 
-
3.6 
-
0.5 
5.9 
0.2  2.8  1.8  1.0  2.9  2.1  0.8  2.4  2.0  0.3 
0.6  3.2  3.3  -
2.0  1.9  0.1 
-
6.2  3.5  2.6  7.6  3.7  3.9  7.6  3.5  4.2 
4.9 
-
3.0  3.0  0.0  3.2  3.4  -
0.5 
0.2 
0.6  8.2  4.9  3.3  9.6  4.3  5.3  5.1  3.5  1.7 
2.0  2.5  -
-
4.5 
0.6 
3.5  3.2  0.3  1.8  1.9  -
1.6  3.5  3.6  -
0.1 
1.3  3.1  3.1  0.0  2.8  2.8  0.0  1.2  1.5  -
0.3 
2.2  0.6  1.7 
4.1 
0.5  3.0  3.1  0.0  2.9  2.8  0.1  2.3  1.3  1.0 
2.5  5.4  4.7  0.7  3.2  3.3  -
1.7  1.8  0.0 

- 
0.4 
5.3  4.0  1.3  6.3  4.0  2.3  6.0  3.8  2.3 
3.3  3.2  0.1  3.1  3.2  -
1.7  1.9  -
0.1 
2.9  3.1  -
1.8  1.8  0.0 
- 
5.7  2.9  2.8  5.2  3.5  1.8  2.3  1.9  0.4 
6.5  3.5  3.0  5.9  4.2  1.8  3.2  3.7  -

7.6 
7.0 
5.4 
- 
4.8 
4.2 

3.7  3.1  0.7  2.6  3.1  -

1.3  1.7  -

1.9  2.4  -

3.0  3.1  -

2.0  3.4  -

-4.2  5.7 

0.2 
0.3 

0.1 
0.2 

0.2 

0.1 

0.1 

0.1 

0.5 

0.1 

1.3 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

November 2014  85 

 
 
 
 
 
between assets and liabilities, Data up to 2014Q1, and up to 2013Q4 for Ireland, France, US, Japan and Switzerland; no data for 
Slovakia, Malta, Denmark and Spain; *data starts in 2005 **data starts in 2006 ***data starts in 2008; 

 Analysis of developments in EU capital flows in the global context 

November 2014  86 

 
 
 
Table 4 Revaluation Effects by period for selected countries (in %) 

 Analysis of developments in EU capital flows in the global context 

Countries 

-4.6 
31.5 

5.4 
29.9 

-3.9 
-11.2 
5.4 
-1.1 

-
12.6 
-9.3 
-
26.9 

-4.9 
-8.7 
-0.8  2.2 
0.9 
7.3 

2007Q1-10Q4 
S 
L 
A 
1.8 
-
-
-8.3  11.7 
3.4 
11.8 
10.0 
-2.7 
-0.4 
-3.1 

Debt 
2007Q1-13Q4 
S 
L 
A 
-3.0 
4.3 
1.3 
-0.8 
-
-
-9.1 
-5.1 
-
11.8 
11.1 
14.1 
-0.5  4.4 
-2.1  6.6 
1.4 
8.2 

Equity 
2007Q1-13Q4 
S 
L 
A 
7.0 
-
-6.0 
-9.7  11.2 
1.4 
13.1 
-13.8 
-4.4 
-
18.2 
6.0 
2.1 
-9.6  1.7 
11.7  6.3 
-
13.7 
-
4.6 
13.9 

2011Q1-13Q4 
L 
A 
S 
-1.5  4.8 
3.3 
-0.6 
-1.0 
-1.6 
-9.8 
-5.6 
-
-22.3 
-
-
15.3 
-17.2  12.4  -1.7  14.1 
-8.7  8.6 
20.2 
42.5 
-3.0 
6.1 
3.1 
-5.6 
-
-6.7 
1.0 
7.3 
8.4 
-1.8  7.4 
5.7 
12.3 
2.3 
6.3 
8.6 
-6.0 
-
-
29.1 
-
-9.1 
20.1 
26.1 
-5.1 
-5.0  0.1 
-
-7.8 
38.2 
1.2 
4.9 
6.1 
-
0.2 
13.3 
29.7 
6.3 
-
-
-1.8 
7.9 
6.1 
28.1 
21.8 
12.3  11.3  1.0 
22.9 
-9.1 
-
19.3 
0.2 
-
32.0 
-3.0 
-0.1  2.9 
19.2 
22.5  -7.4  29.9 
-8.3  63.6  -71.9 
0.4 
25.5 
-
15.4  12.4  3.0 
25.0 
-1.7  2.7 
0.9 
19.8  10.3  9.5 
1.9 
0.3 
2.2 
-11.0 
-0.6 
-
11.6 
3.5 

Austria 
Belgium 
Bulgaria 
Cyprus 
Czech 
Germany 
Republic 
Denmark 
Estonia 
Greece 
Spain 
Finland 
France 
Croatia 
Hungary 
Ireland 
Italy 
Lithuania 
Luxembourg 
Latvia 
Malta 
Netherlands  9.4 
Poland 
Portugal 
Romania 
Sweden 
Slovenia 
Slovakia 
United 
Japan 
Kingdom 
Switzerland  42.7  52.2  -9.4 
United 
14.0  22.1  -8.2 
States 
Source: Bruegel calculations using data from Eurostat and IMF, for definitions see footnote in previous table. 

1.9 
7.6 
9.5 
6.1 
2.3 
8.5 
-8.4  5.5 
-3.0 
14.7  10.7  4.0 
-7.1 
-0.6  6.5 
-2.1 
-4.9 
-2.8 
-1.6  11.4 
9.8 
10.3  12.4  -2.1 
8.3 
13.0  -4.7 
14.1  21.7  -7.6 
14.0  29.3  -15.4  29.0  3.4 

-
25.5  19.0  6.5 
17.4 
-8.9  6.6 
-2.3 
27.1  19.7  7.4 
-6.0 
-0.6  5.4 
-12.7 
-2.7 
-
15.4 
15.2  14.1  1.1 

13.0  -8.9 
4.1 
-24.0 
9.8 
-
-8.1 
-2.4 
-
14.2 
50.3  37.2  13.1 
10.5 
-8.8 
-1.9 
-
-21.2 
2.9 
-
10.7 
18.4 
31.0  15.5  15.5 

15.5  16.5  -1.0 
25.6 

27.4  26.2  1.1 
-6.1  6.2 
0.0 

-3.2  7.7 
4.5 
20.0  14.8  5.1 

3.0 
2.6 
5.6 
32.9  24.0  8.9 

17.0  -31.7 
10.2  -3.0 

-3.3 
-
8.3 
10.3 

-
-9.9 
12.1 
8.7 

-8.7 
0.5 
0.4 

-
14.6 

-
7.2 
14.7 

-
14.9 

-4.0  2.6 

-21.4 

26.8 

11.4 

-1.4 

-3.2 

-6.5 

4.9 

6.5 

2007Q1-10Q4 
S 
L 
A 
-2.8 
3.1 
0.4 
-2.8 
-0.2  2.6 
-3.8  1.6 
-2.1 

-2.4 
-
-2.4  4.2 
10.3 
1.5 
8.2 

-7.9 
-6.6 
-0.9  2.4 
2.2 
5.9 

2011Q1-13Q4 
S 
L 
A 
-1.4 
3.0 
1.6 
1.8 
-
-
-11.3 
-0.9 
-
12.4 
10.6 
-1.2 
-
-
12.2 
1.5 
8.0 
9.5 
11.0 
12.2 
-3.5 
4.9 
1.4 
2.0 
1.8 
-0.2 
-1.5  3.9 
2.4 
-6.5  0.5 
-5.9 
-1.3 
-0.4  0.9 
-1.0 
-7.0 
-8.1 
1.4 
7.2 
8.5 

-14.9 

2.1 

5.7 

-6.9 
-3.1 
-
-2.2  1.0 
-1.2 
10.0 
-1.7 
3.1 
1.4 
-12.7 
2.0 
-
-20.2  12.8  17.2  -4.3 
4.1 
-
10.7 
6.0 
3.6 
-2.4 
3.6 
16.1 
-7.2  1.1 
-6.1 
-7.5 
-4.8  2.7 
10.7 
-6.3 
-
-2.2 
2.6 
0.3 
17.0 
19.1 
20.6  1.6 
12.5  -12.4  5.3 
0.1 
-26.0  7.2 
5.4 
-
-3.0 
-2.7 
-5.8 
20.6 
32.0  30.0  2.1 
-7.7 
-9.5 
-1.7 
-14.5 
-8.6  5.9 

-
10.4 

4.5 

1.0 
5.7 
-2.6  2.8 
17.4  9.8 
-1.6  1.0 
-
-1.6 
-3.1  0.6 
11.7 
2.4 
-
6.4 
11.4 
5.4 

4.3 
1.5 
-5.4 
7.5 
-2.6 
-10.1 
-3.7 
-4.7  7.2 
-2.8 
-8.7 
2.9 
3.5 
3.6 
1.8 

8.9 
22.0  1.7 

14.6  -5.7 
20.4 

26.8  21.8  4.9 

November 2014  87 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Table 5 Total Return (Return on Investment plus Revaluation) for selected countries 

 Analysis of developments in EU capital flows in the global context 

Countries 

S 
L 
5.8 
-1.8 
-10.7  2.5 

L 
3.0 
2.2 
-1.3 
-16.2 
9.7 
16.6 
10.8 

Equity 
2007-2010 
A 
-5.6 
7.0 
-1.8 
7.2 
0.5 
-17.5 
6.0 
3.6 
-7.4 
1.9 
14.2 
15.4 
-4.4 
23.1 
0.7 
2.8 
5.0 
16.8 
6.6 
21.8 
-10.5  4.8 
6.8 
10.5 
8.6 
9.5 

2011-2014 
A 
S 
L 
8.2 
2.7 
-8.3 
0.4 
10.8 
-3.8 
-14.6 
-8.3 
6.5 
-40.0 
-5.7 
12.9 
-20.7  19.1 
21.3 
15.5 
-9.5 
-8.0 
-24.2  30.2 
10.5 
1.1 
2.5 
-6.3 
-1.1 
0.2 
1.7 
-2.2 
16.3 
17.0 
-1.6 
-27.0  22.6 
-5.8 
29.0 
-15.2  15.9 
6.3 
-3.5 
-20.5  25.5 
-4.7 
21.4 
2.1 
4.6 
6.2 
15.6 
-15.3 
3.7 
0.9 

Austria 
Belgium 
Bulgaria 
Cyprus 
Czech 
Estonia 
Republic 
Finland 
France 
Germany 
Greece 
Hungary 
Ireland 
Italy 
Latvia 
Lithuania 
Luxembourg 
Netherlands 
Poland 
Portugal 
Romania 
Slovenia 
Sweden 
United 
Japan  
Kingdom 
Switzerland  
United States  6.4 
Source: Bruegel calculations using data from Eurostat and IMF; Note: The calculations for the second period treats the revaluations as 
2011-2014, even though actual data ends in 2013Q4, not 2014Q1. 

2011-2014 
A 
S 
L 
4.0 
-2.9 
6.6 
-8.2 
-2.5 
5.6 
-8.4  1.7 
2.9 
-0.5 
-8.9 
-9.5 
0.7 
2.2 
13.7  11.1 
-5.4 
2.1 
-0.1 
3.8 
2.0 
9.0 
-6.9 
-5.5 
0.7 
0.9 
10.8  9.2 
-1.2 
6.3 
6.6 
3.8 
-6.1 
7.2 
-1.3 
-4.8 
-4.7 
3.4 
-17.9  18.9  20.9 
8.1 
4.0 
7.5 
-2.5 
9.2 
1.8 
1.8 
1.0 
-4.1 
2.3 
-0.5 
1.9 
6.1 
-7.2  8.3 
6.9 
-5.7 
2.0 
-14.9  11.5 
2.4 
-12.5  7.3 
3.0 
15.6 
-22.0  14.8  9.2 
-0.7  5.2 
-3.2 
22.5  13.3 
7.4 
-9.8  0.9 
-15.0 
2.9 
0.3 
-7.5 
-3.2 
3.6 
4.9 
-8.1 
-9.2 
4.8 
8.7 
3.6 
7.1 

Debt 
2007-2010 
A 
S 
3.7 
5.2 
-1.8 
3.1 
-13.3  2.4 
-23.8  2.9 
-3.3 
9.4 
11.0 
-1.1 
1.5 
-0.2 
5.1 
1.5 
1.2 
-2.2 
10.9 
2.0 
-42.4  34.8 
-9.8 
4.4 
6.5 
6.7 
19.1 
4.0 
-3.1 
-0.7 
-3.6 
5.6 
-12.4  1.1 
-3.4 
0.2 
3.1 
2.6 
-13.0  9.0 
-2.6 
0.6 
-2.6 
5.3 
34.2 
41.6 
4.6 
9.0 
-6.0 
-7.3 
1.5 
-6.0 
-5.5 
-0.9 
24.6 
29.5 
-0.6 
-7.0 
11.8 
-12.9  25.3 

-10.1 
-0.6 
2.5 
3.9 
-1.4 
1.6 
-2.7 
0.1 
-2.1 
3.5 
0.0 
0.4 
-15.5 
0.3 
4.3 
5.7 
-5.9 
9.2 
-10.7 
-2.7 
6.8 
-1.1 
3.9 
3.5 

14.0 
11.4 
1.7 
18.7 
-7.1 
6.2 
15.8 
15.2 
18.0 
19.6 

11.4 
14.0 
-3.5 
14.1 
0.2 
11.7 
16.7 
15.7 
25.0 
32.5 

8.7 
-7.6 
10.9 
23.1 

17.4 
5.0 

30.8 
-2.7 

-5.6 
20.3 

0.8 
9.1 

31.6 

11.6 

-0.9 

November 2014  88 

 
 
 
 
  
  
  
  
  
 
  
  
  
  
  
  
  
  
  
  
 
 
 
Table 6 Average Returns and Revaluations by New and Old EU member states and Non-EU countries 

Returns: Equity 

Returns: Debt 

2004-06 

2007-10 

2011-14 

2004-06 

2007-10 

2011-14 

 Analysis of developments in EU capital flows in the global context 

 Countries  A 

L 

NMS 

OMS 

Non EU 

7.6 

4.5 

7.1 

11.9 

4.2 

4.5 

A 

S 
-
4.3  4.6 

0.2  4.1 

2.6  5.3 

L 

8.1 

3.9 

4.0 

A 

S 
-
3.5  3.7 

0.2  3.8 

1.3  5.5 

L 

7.4 

3.6 

3.1 

A 

S 
-
3.7  5.3 

3.5  1.8 

0.2  2.7 

2.6  0.1 

2.4  4.2 

3.9  0.3 

5.1 

2.7 

3.1 

3.5  1.5 

3.7  2.8  0.9 

2.6  0.1 

1.7  1.6  0.0 

3.1  0.0 

2.1  1.2  0.9 

L 

S 

A 

L 

S 

A 

L 

S 

Revaluations: Equity 

Revaluations: Debt 

2007-2013 

2007-10 

2011-13 

2007-2013 

2007-10 

2011-13 

Countries  A 

L 

S 

A 

L 

NMS 

0.2 

-0.4  0.5 

-4.1 

-1.8 

A 

S 
-
2.3  4.2 

L 

S 

A 

L 

1.3 

2.9 

-9.1  8.0 

L 

A 

S 
-
17.1  -8.7  3.6 

L 

A 

S 
-
12.3  1.6  5.4 

S 
-
3.7 

OMS 

5.0 

-3.4  8.4  0.1 

-7.3  7.4  5.2 

4.6 

Non EU 

28.3  37.1 

-
8.8  13.7  10.1  3.6  12.1  21.3 

-0.1  2.7  -2.8  1.3 

0.6 
-
9.2  22.2  9.9  12.3  15.5  8.1  7.3 

4.8  -3.5 

-
0.7 

0.1 

-
1.0  0.3 
-
1.1  1.2 

Source: Bruegel calculations using data from Eurostat and IMF; Note: NMS: New Member States: CY, CZ, EE, HU, LV, LT, PL, SV; OMS: 
Old Member States:  AT, BE, DE, ES, FR, IT, NL, PT, SE, UK; the first columns vary between Returns (2004-06) and Revaluations 
(2007-2013). 

November 2014  89 

 
 
 
  
 
 
  
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  
  
 
 
 Analysis of developments in EU capital flows in the global context 

Figure 43 Scatter plots of returns on investment against revaluations (in %) 

Source: Bruegel calculations using data from Eurostat and IMF; 

Table 7 Correlation between returns and revaluations (in %) 

Correlation 

Equity 

   Debt 

A 

L 

S 

   A 

L 

S 

-0.380  0.146  0.184 

2007-
2010 
2011-
2014 
Source: Bruegel calculations using data from Eurostat and IMF; 

   -0.015  0.265 

0.297  0.161 

   0.405 

0.438 

0.666  0.118 

-0.320 

November 2014  90 

-40.0-30.0-20.0-10.00.010.020.030.040.0051015202530RevaluationReturn on InvestmentEquity 07-10ALS-50.0-40.0-30.0-20.0-10.00.010.020.030.040.0-10.0-5.00.05.010.015.0RevaluationReturn on InvestmentEquity 11-14ALS-30.0-20.0-10.00.010.020.030.040.00.05.010.015.020.025.030.0RevaluationReturn on InvestmentDebt 07-10ALS-20.0-15.0-10.0-5.00.05.010.015.020.0-2.00.02.04.06.08.010.0RevaluationReturn on InvestmentDebt 11-14ALS 
 
 
 
 
 
 
   
  
  
 Analysis of developments in EU capital flows in the global context 

Figure 44 Evolution of revaluation effects for selected countries (in %) 

United States 

40

30

20

10

0

-10

-20

-30

Source: Bruegel calculations using data from Eurostat and IMF; 

Assets - Equity

Assets - Debt

Liabilities - Equity

Liabilities - Debt

November 2014  91 

-25-20-15-10-5051015RevaluationEffect (%)GermanyAssets - EquityAssets - DebtLiabilities - EquityLiabilities - Debt-25-20-15-10-505RevaluationEffect (%)SpainAssets - EquityAssets - DebtLiabilities - EquityLiabilities - Debt-6-4-202468101214RevaluationEffect (%)FranceAssets - EquityAssets - DebtLiabilities - EquityLiabilities - Debt-45-40-35-30-25-20-15-10-505RevaluationEffect (%)ItalyAssets - EquityAssets - DebtLiabilities - EquityLiabilities - Debt-20-15-10-5051015RevaluationEffect (%)PortugalAssets - EquityAssets - DebtLiabilities - EquityLiabilities - Debt 
 
 
 
 
 
 
 
 Analysis of developments in EU capital flows in the global context 

6.  In-depth  analysis:  dataset  on  bilateral  capital  flows 
and stocks 
The in-depth analysis focusing on a bilateral capital flows and stocks dataset covers five 
main areas.  

6.1. Setting up the dataset 
There  are  limited  statistics  available  on  cross-border  capital  flows  and  stocks  on  a 
bilateral basis, and the most comprehensive work has been completed by Waysand, Ross 
and de Guzman (2010), which included data for 2001-2008. Hobza and Zeugner (2014) 
updated  the  bilateral  dataset  of  Waysand,  Ross  and  de  Guzman  (2010)  for  2001-2012. 
They also introduced two methodological improvements for constructing the dataset: (1) 
they  adopted  a  simple  but  straightforward  approach  to  account  for  valuation  effects 
when deriving capital flows data from the available stock data and (2) they proposed a 
methodology to make bilateral claims consistent, because the reported bilateral data by 
the  two  countries  considered  are  in  many  cases  not  consistent  (i.e.  country  A’s  asset 
from  country  B,  as  reported  by  country  A,  differs  from  the  liability  of  country  B  to 
country A, as reported by country B). 

An  update  of  Hobza  and  Zeugner  (2014)  could  serve  two  main  goals.  First,  adding  one 
more  year  and  extending  the  dataset  till  the  end  of  2013  can  bring new  insights,  since 
financial stresses in Europe have eased significantly throughout 2013 compared to 2012. 
Second, an update can serve as a cross check, since Hobza and Zeugner (2014) honestly 
report  that  in  some  cases  when  dealing  with  data  of  financial  centres,  they  adjusted 
several estimated flows through visual inspection and scaling.  

We  planned  to  update  the  dataset  and  obtained  the  necessary  confidential  date  till  the 
end  of  2013  from  the  BIS  and  downloaded  the  portfolio  investment  survey  of  the  IMF, 
but  unfortunately  the  OECD’s  bilateral  FDI  database  is  available  only  till  2012.  We 
therefore could not update the dataset  of  Hobza and Zeugner (2014),  but instead used 
the confidential version of their dataset for our calculations. 

We converted this dataset into STATA files and collected several other relevant indictors: 

Table 8 Dataset variables 

Variable 

Description 

Reporter country 
Partner country 
ID reporter_partner_year   

id_rep_year  

id_pt_year  

Bilateral trade 

debt 
equity           

of 

of 

pair 

pair 

String, country name 
String, country name 
Unique 
a 
identifier 
reporter/partner in each year 
Unique 
a 
identifier 
reporter/year 
Unique 
partner/year 
The  sum  of  exports  of  country  A  to 
country  B  and  imports  of  country  A 
from 
IMF 
country  B 
Direction of trade statistic)  
Capital  flows/stocks  variables  from 
the ECFIN dataset 

identifier 

(source: 

pair 

of 

a 

November 2014  92 

 
 
 
 
 
 
 
 
 
 Analysis of developments in EU capital flows in the global context 

Fdi 
official         
othinv           
pidebt           
piequity         
programme        
smp_ecb          
target_ecb       
value            

Macro variables 

We  added  a  set  of  basic  macroeconomic  variables  taken  from  IMF  World 
Economic  Outlook  and  World  Bank  World  Development  Indicators  (since 
we aim at also including in the dataset, countries for which Eurostat does 
not provide data). 

Net 

Government 

ggnlbgdp_r/p  

Each  observation  of  bilateral  capital  flows  has  been  matched  with  the 
following variables for both the reporting and the partner country.  
Current Account percent GDP 
cagdp_r/p 
GDP USD billions 
gdpusdbn_r/p 
General  Government  Debt  percent 
ggdebtgdp_r/p 
GDP 
General 
Lending/Borrowing percent GDP 
Unemployment percent Labour Force 
Population, millions 
CPI (average) Index 
CPI (average) percent 
GDP deflator index 
Export percent GDP 
Import percent GDP 
HHs' 
growth 
Trade percent GDP 
T-Bill rate 
GG bond yields 
Money Market rate 
VIX  index,  the  implied  volatility  of 
S&P 500 index options 

Unemployment_r/p 
popmillions_r/p 
cpiavgindex_r/p 
cpiavg_ r/p 
gdpdeflator_r/p 
exportgdp_r/p 
importgdp_r/p 
Hhconsumptionexp_r/p 

tradegdp_r/p 
tbill_r/p 
ggbondyield_r/p 
mmktrate_r/p 
vix 

consumption 

expenditure 

Financial Structure variables 

These variables have been added from the World Bank Dataset compiled by Beck et al (updated 2013) and available at: 
http://econ.worldbank.org/WBSITE/EXTERNAL/EXTDEC/EXTRESEARCH/0,,contentMDK:20696167~pagePK:6421482
5~piPK:64214943~theSitePK:469382,00.html  

November 2014  93 

 
 
 
 
 
 
 
 
 
 
 
 Analysis of developments in EU capital flows in the global context 

Again,  each  observation  of  bilateral  capital  flows  has  been  matched  with 
the following variables for both the reporting and the partner country. 
LiquidLiabGDP_r/p 

CBassetsGDP_r/p 

DMBankAssetsGDP_r/p 

OFIassets_r/p    

PrivateCreditDMB_r/p 

PrivateCreditDMBandOFI_r/p 

the 

using 

Ratio  of  liquid  liabilities  to  GDP, 
following 
calculated 
deflation  method:  {(0.5)*[Ft/P_et  + 
Ft-1/P_et-1]}/[GDPt/P_at]  where  F 
is  liquid  liabilities,  P_e  is  end-of 
period  CPI,  and  P_a  is  average 
annual CPI. 
Claims on domestic real nonfinancial 
sector  by  the  Central  Bank  as  a 
share  of  GDP,  calculated  using  the 
deflation 
following 
method:  
Ft-1/P_et-
+ 
{(0.5)*[Ft/P_et 
1]}/[GDPt/P_at]  where  F  is  Central 
Bank  claims,  P_e  is  end-of  period 
CPI, and P_a is average annual CPI. 
Claims on domestic real nonfinancial 
sector  by  deposit  money  banks  as  a 
share  of  GDP,  calculated  using  the 
method:  
deflation 
following 
{(0.5)*[Ft/P_et 
Ft-1/P_et-
+ 
1]}/[GDPt/P_at]  where  F  is  deposit 
money  bank  claims,  P_e  is  end-of 
period  CPI,  and  P_a  is  average 
annual CPI. 
Claims on domestic real nonfinancial 
sector  by  other  financial  institutions 
as  a  share  of  GDP,  calculated  using 
following  deflation  method: 
the 
{(0.5)*[Ft/P_et 
Ft-1/P_et-
+ 
1]}/[GDPt/P_at]    where  F  is  other 
financial  institutions'  claims,  P_e  is 
end-of  period  CPI,  and  P_a 
is 
average annual CPI. 
Private  credit  by  deposit  money 
banks  to  GDP,  calculated  using  the 
method:  
deflation 
following 
{(0.5)*[Ft/P_et 
Ft-1/P_et-
+ 
1]}/[GDPt/P_at] where F is credit to 
the  private  sector,  P_e  is  end-of 
period  CPI,  and  P_a  is  average 
annual CPI. 
Private  credit  by  deposit  money 
banks and other financial institutions 
to  GDP, 
the 
method:  
following 

calculated  using 

deflation 

November 2014  94 

 
 
 
BankDepositsGDP_r/p 

FSepositsGDP_r/p 

BankCreditToDeposits_r/p 

LiquidLiab2000usd_r/p 

OverheadCosts_r/p 

NetInterestMargin_r/p 

BankConcentration_r/p   

BankROA_r/p 

BankROE_r/p 

BankCosttoIncome_r/p 

StockMktCapGDP_r/p 

 Analysis of developments in EU capital flows in the global context 

+ 

Ft-1/P_et-
{(0.5)*[Ft/P_et 
1]}/[GDPt/P_at] where F is credit to 
the  private  sector,  P_e  is  end-of 
period  CPI,  and  P_a  is  average 
annual CPI. 
Demand, time and saving deposits in 
deposit  money  banks  as  a  share  of 
GDP,  calculated  using  the  following 
deflation  method:  {(0.5)*[Ft/P_et  + 
Ft-1/P_et-1]}/[GDPt/P_at]  where  F 
is  demand  and  time  and  saving 
deposits,  P_e  is  end-of  period  CPI, 
and P_a is average annual CPI. 
Demand, time and saving deposits in 
deposit  money  banks  and  other 
financial  institutions  as  a  share  of 
GDP,  calculated  using  the  following 
deflation method:  {(0.5)*[Ft/P_et + 
Ft-1/P_et-1]}/[GDPt/P_at]  where  F 
is  demand  and  time  and  saving 
deposits,  P_e  is  end-of  period  CPI, 
and P_a is average annual CPI. 
Private  credit  by  deposit  money 
banks  as  a  share  of  demand,  time 
in  deposit 
and  saving  deposits 
money banks. 
Absolute  value  of  liquid  liabilities  in 
2000 US dollars. 
Accounting  value  of  a  bank's 
overhead costs as a share of its total 
assets. 
Accounting  value  of  bank's  net 
interest  revenue  as  a  share  of  its 
interest-bearing 
earning) 
assets. 
Assets  of  three  largest  banks  as  a 
share  of  assets  of  all  commercial 
banks. 
Average  Return  on  Assets  (Net 
Income/Total Assets) 
Average  Return  on  Assets  (Net 
Income/Total Equity) 
Total  costs  as  a  share  of  total 
income of all commercial banks 
listed  shares  to  GDP, 
Value  of 
calculated 
following 
deflation    method:    {(0.5)*[Ft/P_et 

(total 

using 

the 

November 2014  95 

 
 
 
Nlistedcomp_r/p 

PrivatebondMkt_r/p 

PublicbondMkt_r/p 

 Analysis of developments in EU capital flows in the global context 

the 

using 

+  Ft-1/P_et-1]}/[GDPt/P_at]  where 
F  is  stock  market  capitalization,  P_e 
is  end-of  period  CPI,  and  P_a    is 
average annual CPI. 
Number  of  publicly  listed  companies 
per 10K population. 
Private  domestic  debt  securities 
issued  by  financial  institutions  and  
corporations  as  a  share  of  GDP, 
calculated 
following 
deflation method:  {(0.5)*[Ft/P_et + 
Ft-1/P_et-1]}/[GDPt/P_at]  where  F 
is  amount  outstanding  of  private 
domestic debt securities, P_e is end-
of  period    CPI,  and  P_a    is  average 
annual CPI. 
Public  domestic  debt 
securities 
issued  by  government  as  a  share  of 
GDP,  calculated  using  the  following 
deflation  method:  {(0.5)*[Ft/P_et  + 
Ft-1/P_et-1]}/[GDPt/P_at]  where  F 
is  amount  outstanding  of  public 
domestic debt securities, P_e is end-
of  period    CPI,  and  P_a    is  average 
annual CPI. 

Gravity dummies 

Some  typical  dummies  and  distance  variables  used  in  the  trade-related 
gravity  analysis  have  been  added  from  Zucman  (2013)  and  from  Mayer 
and Zignago (2011).  

Again,  each  observation  of  bilateral  capital  flows  has  been  matched  with 
the following variables for both the reporting and the partner country. 
Contig 
comlang_off      

col45 

landlocked_source 

lat_source       
lon_host         
Abs_dist 

1 for contiguity 
1  for  common  official  of  primary 
language 
1  for  pairs  in  colonial  relationship 
post 1945 
1 
the 
if 
landlocked 
Latitude reporter 
Longitude reporter 
Absolute distance between country A 
and  country  B,  as  measured  by 
Mayer and Zignago (2011) 

reporting  country 

is 

November 2014  96 

 
 
 
 
 
 
 
 
 Analysis of developments in EU capital flows in the global context 

6.2. Literature survey 
As preliminary work for our in-depth analysis, we have conducted a literature survey to 
gain insights from the  academic work  conducted in related topics, highlighting the uses 
of different databases from  various sources in the modelling for financial flows.  Table 9 
presents  a  literature  review  grid  to  allow  for  easy  comparisons  between  the  various 
papers.  

Many papers in the literature that aim to model international financial flows use a gravity 
model,  as  is  already  common  in  the  international  trade  literature.  Taking  logs  of  all 
variables allows the form to become a simple linear function of the regressors.  
One  such  example  of  the  gravity  model  used  can  be  found  in  the  paper  by  Portes  and 
Rey (2005) which regresses the log of the sum of purchases of country i from country j 
on  the  log  of  the  size  of  equity  market  capitalisations  in  the  two  countries  (the  “mass” 
component  of  gravity),  and  a  measure  of  "informational  distance"  as  captured  by  the 
variables telephone calls between i and j, number of bank branch subsidiaries, degree of 
overlap in trading hours, and an index of insider trading. 

Some  of  the  papers  constructed  bespoke  databases  from  multiple  sources  in  order  to 
create  a  richer  picture  of  international  capital  flows.  One  common  dataset  used  in  the 
literature  is  that  found  in  Waysand  et  al  (2010)  which  combines  FDI  data  from  the 
OECD,  portfolio  investment  data  from  IMF’s  Coordinated  Portfolio  Investment  Survey 
(CPIS)  and  other  investment  data  from  the  Bank  for  International  Settlements’  (BIS) 
Locational Banking Statistics. 

With regards to the aims of the papers, there exists a broad range: from understanding 
the  channels  through  which  joining  the  euro  increased  capital  flows  between  two  euro 
area  countries,  to  exploring  the  importance  of  history  and  path  dependency  in  asset 
holdings. 

November 2014  97 

 
 
 
 
 
 
Table 9 Literature exploiting datasets on bilateral financial flows and stocks  

 Analysis of developments in EU capital flows in the global context 

Authors  

1 

2 

R. 
Rey, 

Portes, 
H. 
2005, 
Journal 
of 
International 
Economics. 

P.R. 

Lane, 
and 
Shambaugh, 
J.C. 
2010, 
American 
Economic 

show 

Purpose  related  to 
capital 
bilateral 
flows/stock 
dataset 
that 
To 
models 
gravity 
(where  the  size  of 
trading  economies 
and 
distance 
between  them  are 
the  key  variables) 
explain 
international 
in 
transactions 
financial  assets  at 
least  as  well  as 
traded, 
goods 
however 
is 
it 
"informational 
distance", 
not 
physical  distance 
that 
per 
se 
for 
matters 
financial 
flows 
(although  the  two 
are correlated). 
an 
gain 
To 
understanding  of 
international 
the 
financial 
impact 
from 
arising 
valuation effects of 

Bilateral 
used 

data 

Period/country 
coverage  

Models 

Estimation 
technique 

Source of Equity 
Cross-
data: 
Border  Capital 
(London).  

Banking  data: 
Bankers 
Almanac.  

Other:  World 
Competitiveness 
Report, 
1996, 
1998, 2000.  

data 
US 

1989–1996. 
Annual 
for 
bilateral 
transactions 
with 
4 
developed and 
16  emerging 
market 
countries. 

of 

size 

Standard  Gravity  model  regressing 
the  log  of  the  sum  of  purchases  of 
country i from country j on the log of 
the 
equity  market 
capitalisations  in  the  two  countries, 
and  a  measure  of  "informational 
the 
distance"  as 
variables: 
telephone 
calls,  number  of  bank  branch 
subsidiaries,  degree  of  overlap  in 
trading hours, and an index of insider 
trading.  

captured  by 

estimation 
The 
procedure 
(here 
and  below)  gives 
White-corrected 
(heteroskedasticity-
consistent) 
standard errors. 

Composite 
dataset 
composed 
(type/source): 

of 

equity  holdings: 

117  countries 
from  1990  - 
2004 

Model  is  not  estimated  for  bilateral 
capital flows/stock data 

N/A 

November 2014  98 

 
 
 
 
 
 
 
Review 

movements 
exchange rates 

in 

IMF 

CPIS 

 Analysis of developments in EU capital flows in the global context 

UNCTAD 

FDI: 
international 
securities:  BIS 
currency 
composition  of 
reserves  COFER 
(Currency 
Composition  of 
Official  Foreign 
Exchange 
Reserves) IMF. 
A  dataset  of 
gross  and  net 
bilateral 
external 
financial 
positions  which 
combines 
different 
sources. 

data 

2001 - 2008 

Model  is  not  estimated  for  bilateral 
capital flows/stock data 

N/A 

For 
direct 
investment,  the 
data 
main 
source 
the 
OECD. 

is 

For 
portfolio 
investment,  the 
data 
main 
the 
source 
IMF’s 

is 

November 2014  99 

3 

Waysand,  C. 
Ross, 
K. 
de  Guzman, 
J.  2010,  IMF 
WP  

Provide  a  detailed 
picture  of  financial 
linkages  within  the 
euro area.  

 
 
 
 
 
 
 Analysis of developments in EU capital flows in the global context 

Coordinated 
Portfolio 
Investment 
Survey  (CPIS).  

Other 
investment 
is 
taken  from  the 
Bank 
for 
International 
Settlements 
(BIS)  Locational 
Banking 
Statistics. 

Milesi-
Ferretti,  G.M  
and  C.  Tille, 
2011,  Hong 
Kong 
Institute  for 
Monetary 
Research 
WP 

To  document  the 
retrenchment  and 
of 
heterogeneity 
flows 
capital 
following 
the 
collapse of Lehman 
bros. 

of 

Bank 
International 
Settlements 
(BIS)  
consolidated 
banking data. 

2006 - 2008 

flows 
and 

in  gross 
between 
2008Q4-

The  annualized  change 
in/out/banking 
2006Q1-2007Q2 
2009Q1, 
scaled  by  2007  GDP  
is  regressed  on  control  variables 
covering  debt  situation,  growth,  oil 
exporter  dummy  and  trading  partner 
situation.  This 
for 
is 
"collapse"  and  "recovery"  stages  of 
the  crisis,  for  bank  flows  and  capital 
in- and outflows. 

repeated 

Not 
Presumed 
OLS. 

stated. 
to  be 

Kubelec,  C., 
F.  Sa,  2012, 
International 
Journal 
of 
Central 
Banking 

To  present  stylised 
facts  about 
the 
interconnectedness 
of nations via their 
financial  markets 
by  way  of  network 
analysis. 

The 
main 
source  of  data 
on FDI assets is 
OECD 
the 
International 
Direct 
Investment  by 
data 
Country 

1980–2005, 
Australia 
Argentina 
Canada  Brazil 
France  Mexico 
Germany 
China 
Italy 

Hong 

A  standard  gravity  model  is  initially 
estimated  to  overcome  a  missing 
problem.  
data 
Gravity  model  estimates  are  used  to 
create  fitted  values  which  complete 
the  dataset  that  is  used  for  network 
analysis. 

on 
OLS 
transformed model. 

November 2014  100 

4 

5 

 
 
 
 
which 
FDI 

set, 
contains 
data 
at  book  value 
reported 
by 
OECD  members 
starting 
in 
There 
1981. 
are 
many 
missing  values 
in the data. 

India 

Kong 
Japan 
Portugal 
Korea 
Spain 
Singapore 
United 
Kingdom 
United States 

The  dataset  of 
Waysand  et  al 
(2010). 

(see 
below) 

entry 

2001-2008, 
same 
as 
Waysand  et  al 
(2010). 

To  show  charts  on 
the NFA position of 
the  euro  area  and 
selected 
some 
countries  vis-à-vis 
other 
country 
groups and discuss 
relevant 
the 
conclusions. 

To analyse the role 
of  "history  effect" 
in 
of 
patterns 
bilateral 
financial 
investment  using 
data 
US 
on 
holdings  of  foreign 
bonds. 

main 
The 
sources  are  the 
1945  survey  of 
assets 
foreign 
conducted 
by 
the US Treasury 
Department 
in 
1943  and  more 
recently, 
the 
Report  on  US 

and 
US 
88 

1943 
2010, 
versus 
destination 
countries. 

of 

Chen, 
Milesi-
Ferretti  and 
Tressel, 
2013, 
External 
Imbalances 
in  the  Euro 
Area, 
Journal 
Economic 
Policy 
Chitu, 
Eichengreen 
and  Mehl, 
2014, 
'History, 
Gravity, 
International 
Finance', 
Journal 
of 
International 

6 

7 

 Analysis of developments in EU capital flows in the global context 

Model  is  not  estimated  for  bilateral 
capital flows/stock data. 

N/A 

standard 

gravity  model 

is 
A 
estimated,  regressing  the  log  of  US 
investors'  holdings  of  foreign  bonds 
on a number of regressors, such as a 
vector  of  regional  effects  dummies, 
the  country's  share  of  world  GDP,  a 
measure  of 
financial 
market 
frictions  (calculated  using 
trade  links,  distance,  and  dummies 
for  English  law,  English  language, 

international 

with 

OLS 
heteroskedastic-
robust 
errors, 
instrumenting 
foreign 
tackle endogeneity 

standard 
later 

trade 

to 

November 2014  101 

 
 
 
 
 Analysis of developments in EU capital flows in the global context 

former  US 

and 
colonies),  and 
additionally  the  1943  value  of  the 
dependent variable.  

1997  -  2007, 
euro area plus 
UK and US 

Model  is  not  estimated  for  bilateral 
capital flows/stock data. 

N/A 

2001 - 2012 

Model  is  not  estimated  for  bilateral 
capital flows/stock data. 

N/A 

Money  and 
Finance 

8 

G. 
Hale, 
Obstfeld,  M. 
2014,  NBER 
WP 

provide 
To 
evidence that after 
the 
Euro’s 
introduction,  Core 
area 
euro 
countries 
their 
increased 
borrowing 
from 
outside  of  euro 
area 
their 
and 
lending to the euro 
area periphery.  

9 

Hobza,  A., 
Zeugner,  S. 
European 
Commision 
Economic 
Paper  520, 
July 2014 

To  analyse  cross-
border 
financial 
spillovers  between 
European 
economies.  

Portfolio 
Holdings 
Foreign 
Securities 
conducted 
the 
Treasury. 

of 

by 
US 

of 

Bank 
International 
Settlements 
(BIS)  locational 
and 
consolidated 
banking data 

A  dataset  of 
gross  and  net 
bilateral 
external 
financial 
positions  which 
combines 
different 
data 
sources 
to 
similarly 
Milesi-Ferretti et 
al. 
(2010)  or 
Waysand  et  al. 
(2010). 

November 2014  102 

 
 
 
 Analysis of developments in EU capital flows in the global context 

(sources: 
IMF 
CPIS,  banking 
statistics 
compiled  by  the 
BIS,  FDI  stocks 
and  flows  from 
the OECD). 

November 2014  103 

 
 
 
 
 
 
 Analysis of developments in EU capital flows in the global context 

6.3. Econometric research exploiting the bilateral dataset 

Bilateral  foreign  trade  datasets  have  been  extensively  explored  in  the  academic 
literature,  mostly  using  gravity  models.  An  excellent  literature  review  of  gravity 
equations is presented in Heada and Mayer (2015), which considers, among other 
topic,  the  microfoundations  of  gravity  equations  and  discusses  theory-consistent 
estimation.  The  use  of  gravity  models  for  bilateral  financial  flows  is  much  less 
advanced.  An  early  application  was  presented  in  Portes  and  Rey  (2005)  for 
portfolio  equity  flows,  by  considering  the  sample  of  14  countries  between  1989-
1996.  In  a  more  recent  paper  Kalemli-Ozcan,  Papaioannou  and  Peydró  (2010) 
studied  bilateral  banking  flows  among  20  industrial  countries  during  1977-2007. 
On the theoretical foundations, Okawa and van Wincoop (2012) specified the two 
key  conditions  which  are  needed  to  generate  a  gravity  specification  for  asset 
trade,  though  their  model  may  not  apply  to  FDI  and  they  do  not  exclude  that 
other theories could also support a gravity specification. 

The  main  research  question  we  wish  to  consider  is  the  impact  of  the  euro  on 
intra-euro trade and financial integration. There is an extensive literature on the 
euro’s  impact  on  trade  using  data  on  bilateral  trade  flows,  originated  from  the 
seminal  work  of  Rose  (2000).  A  more  recent  estimate  in  Santos  Silva  and 
Tenreyro  (2010)  claims  that  the  effect  was  close  to  zero,  partly  because  before 
the  introduction  of  the  Euro,  there  was  already  a  very  high  level  of  trade 
integration  among  the  first  12  euro-countries.  On  the  other  hand,  while  the 
impact  of  the  euro  on  financial  integration  using  aggregate  (not  bilateral) 
datasets  has  been  documented,  bilateral  datasets  have  not  yet  been  used  to 
address the question. 

In our model we also account for the determinants of bilateral flows and stocks. 
The  existing  levels  of  integration  as  well  as  global  trends  with  integration  (or 
disintegration)  are  incorporated.  Global  pull  and  push  factors  are  included  too, 
and  we  analyse  if  the  degree  of  trade  and/or  financial  integration  has  an 
implication  on  the  strength  of  global  factors.  We  use  the  same  sample  both  in 
terms  of  countries  and  time  period  for  all  five  types  of  flows,  in  order  to  obtain 
comparable results. 

Considering  the  country  sample,  we  first  estimate  the  models  for  all  countries, 
but  we  also  estimate  them  for  a  restricted  sample  in  which  we  exclude  offshore 
centres  and  the  six  other  major  financial  centres  (Cyprus,  Luxembourg,  Ireland, 
Netherlands, Hong Kong and Singapore).  

We  first  estimate  models  for  the  stock  of  bilateral  asset  holdings  and  then  for 
flows. In one variant of the model we include the lagged residual from the stock 
equation  as  an  explanatory  variable  in  the  flow  equation  in  order  to  check  if  an 
error correction mechanism is present. 

The  data  cover  70  reporting  countries  and  85  partners  over  the  period  2002-
2012. 

The  general  framework  of  our  analysis  builds on  the  literature  that  assesses  the 
importance  of  membership  in  the  EMU  for  capital  flows  (and  consequently 
bilateral asset holdings) of countries. We follow in particular, Kalemli-Ozcan et al 
(2010), but study other specifications too. 

We  test  several  specifications  for  each  of  the  asset  instruments  we  have 
available,  using  two  different  versions  of  the  dependent  variable  and  different 

November 2014  104 

 
 
 
 Analysis of developments in EU capital flows in the global context 

regressors.  Our  dependent  variable is  the  log of  real  asset  (debt,  equity  or  FDI) 
holdings of country X (the “reporter”) in country Y (the “partner”). As an addition, 
we  also  replicate  the  analysis  using  as  dependent  variable  the  log  of  bilateral 
asset  holding  standardized  by  the  sum  of  the  two  countries’  population,  as  in 
Kalemli Ozcan (2014). In order to obtain real values for capital stocks, we deflate 
them using the GDP deflator. 

In  choosing  the  regressors,  the  basic  idea  was  to  identify  characteristic  features 
of the partner country that may play a role in explaining the asset holding of the 
reporter.  Our  basic  specification,  therefore,  includes  the  logs  of  macroeconomic 
variables  that  may  influence  investors’  decisions  to  invest  in  a  country,  such  as 
government  debt  (and  the  corresponding  yields),  openness  of  the  receiving 
country,  public  and  private  bond  market  capitalization,  and  stock  market 
capitalization. In addition we also include two indicators of distance: one dummy 
variable taking value 1 if the two countries are contiguous and another one based 
on  the  absolute  distance  as  measured  by  Mayer  and  Zignago  (2011).  The  two 
countries’  populations  as  a  measure  of  “mass”  is  also  considered  when  the  first 
version of the dependent variable is used, but not when the analysis is replicated 
for the standardized real debt holdings, as these are already divided by the sum 
of the two countries’ populations. 

Particularly important for our analysis is the coefficient on the dummy identifying 
euro area and EU membership. We include one variable that takes a value of one 
if both countries in each pair belong to the EU, and another variable that takes a 
value  of  one  if  only  one  of  the  two  belongs  to  the  EU.  This  variable  is  not  time 
varying  because  in  the  case  of  EU  accession,  it  was  known  well  which  counties 
would  join,  leading  to  anticipation  effects.    Significant  investment  arrived  in 
Central  and  Eastern  Europe  a  few  years  before  they  entered  the  EU.  This  is  not 
the  case  for  the  euro  Area.  For  countries  such  as  Slovenia,  Cyprus,  Malta, 
Slovakia and Estonia, it was uncertain when they would join the euro area, even 
after  they  joined  the  EU  in  2004.  For  this  reason,  we  allow  the  dummies 
identifying  euro  area  membership  to  vary  according  to  time  and  we  assign  a 
value  of  one  starting  in  the  year  preceding  euro  accession  (to  allow  for  limited 
anticipation  effects).  We  therefore  have  one  dummy  that  takes  a  value  of  one 
when both countries in a pair belong to the euro area in a given year and another 
variable that takes a value of one when only one of the two countries in each pair 
belongs to the euro area in a given year. 

Results for the stocks 

The  first  set  of  tables  collects  the  results  for  the  regressions  run  on  stocks  of 
(
bilateral 

asset 

November 2014  105 

 
 
 
 Analysis of developments in EU capital flows in the global context 

Table  10).  Each  table  reports  six  different  regressions  run  for  each  of  the  six 
different instruments that we have in the database, which differ by the regressors 
and the fixed effects included. Some interesting results emerge.  

First, our euro area dummies tend to be positive and significantly correlated with 
bilateral  asset  holdings  –  except  for  FDI  holdings.  This  means  that  bilateral 
holdings  tend  to  be  bigger  when  two  countries  are  both  members  of  the  euro 
area,  suggesting  that  belonging  to  the  same  monetary  union  does  have  a 
significant effect on bilateral asset holdings. Interestingly, the magnitude and the 
significance  of  this  effect  vary  across  asset  types.  The  effect  is  largest  for  debt 
holdings  and  slightly  smaller,  but  still  strongly  significant,  for  portfolio  equity 
holdings. This supports the remark, which is based on the data presented in the 
monitoring report, that the currency unification gave an especially strong boost to 
debt and banking flows (which here are both considered in the variable “debt”) as 
compared to equity. 

For  FDI,  things  are  very  different.  The  coefficient  is  not  always  significant  while 
the  sign  is  not  robust  across  specifications,  and  there  are  some  cases  of  a  very 
significant negative coefficient. This, together with the sign and significance of the 
EU membership dummies that are explained in the next paragraph, suggest that 
the  geography  of  bilateral  FDI  holdings  is  quite  different  from  that  of  other 
assets.  

The dummy indicating membership in the EU alone also yields interesting insight, 
as its sign and significance vary across asset classes with debt and FDI being on 
two  opposite  extremes,  and  portfolio  equity  in  an  intermediate  position. 
Membership of only one country in the EU tends to be negatively and significantly 
associated with bilateral asset holdings of debt, while this coefficient for equity is 
positive and significant, suggesting that equity-type relations are more important 
than  debt-type  relations  with  extra-EU  partners.  EU  membership  of  both 
countries  is  not  significant  for  debt  and  the  point  estimate  is  close  to  zero, 
suggesting that membership in the monetary union (and not merely in the EU) is 
what  really  boosted  bilateral  debt  holdings.  EU  membership  of  both  countries  is 
instead  positive  and  significant  for  FDI,  a  result  which  is  robust  to  different 
specifications. This suggests that FDI holdings are bigger in pairs of EU countries 
in  which  at  least  one  of  the  two  was  not  a  member  of  the  monetary  union, 
underlying that euro membership did not boost cross-border FDI holdings. Yet the 
sum  of  the  “both  in  EU”  dummy  (point  estimate:  2.275)  and  either  of  the  two 
euro-area  dummies  (point  estimates:  -1.016  or  -1.358)  is  still  positive, 
suggesting  that  FDI  holdings  across  euro-area  members  is  larger  than  FDI 
holdings among non-EU countries, confirming that EU membership had a positive 
impact on FDI developments throughout the EU. 

Being  contiguous  also  tends  to  be  positively  associated  with  bilateral  debt 
holdings, and the effect is especially strong for FDI, where the coefficient is larger 
and  the  variable is  always  significant in  all  specifications.  Distance,  on  the  other 
hand,  is  always  negatively  associated  with  bilateral  asset  holdings  –  similar  to 
what  would  be  expected  in  the  case  of  a  typical  trade  gravity  model  –  and  it 
remains significant across specifications. 

Openness of the partner, measured as total trade to GDP, tends to be positively 
associated with real bilateral asset holdings, although not always significant.  

We  also  estimated  a  version  of  the  model  in  which  instead  of  total  trade,  we 
included  bilateral  trade  between  the  country  pair.  The  estimated  parameter  for 
bilateral  trade  became  positive  and  highly  significant  in  all  specifications, 

November 2014  106 

 
 
 
 Analysis of developments in EU capital flows in the global context 

suggesting  that  trade  and  financial  flows  (and  stocks)  are  interlinked.  However, 
since bilateral trade itself depends on a similar set of gravity variables as bilateral 
asset  flows  and  stocks,  some  of  the  gravity  variables  became  insignificant  while 
the  distance  parameter  even  changed  sign.  This  is  not  surprising  given  that 
bilateral  trade  is  highly  correlated  with  distance  and  multicollinearity  among 
explanatory variables can have such impacts on estimated parameters.  

Size,  proxied  by  population,  is  also  positively  related  to  asset  holdings.  This  is 
consistent  with  the  traditional  gravity  framework  for  trade,  according  to  which 
bilateral  trade  is  expected  to  be  positively  correlated  with  mass,  and  negatively 
correlated with distance. 

We  also  included  a  measure  of  both  countries’  “financial  size”,  by  introducing 
public  and  private  bond  market  capitalization  of  both  the  reporter  and  the 
partner. We first included these four variables separately to see whether we could 
spot  any  meaningful  differences  in  size,  sign  and  significance  of  the  coefficients. 
We then ran an additional specification in which we aggregated private and public 
bond  market  capitalisation into  a  single  measure  of  “bond  market  capitalisation” 
to GDP and add stock market capitalisation of the two countries on top of it. Both 
bond  and  stock  market  capitalisation  tend  to  be  significant  and  positively 
correlated  with  bilateral  asset  holdings,  although  we  reasonably  see  that  bond 
market  capitalisation  is  more  important  when  the  dependent  variable  is  debt 
holdings,  whereas  stock  market  capitalisation  is  more  important  in  explaining 
portfolio equity and FDI holdings. 

Interestingly, the size of receiver country’s government debt to GDP tends to not 
be significant for debt and portfolio equity investment, whereas it is strongly and 
negatively  correlated  to  bilateral  FDI  asset  holdings.  This  may  point  to  the  fact 
that  FDI  investment  –normally  considered  a  more  stable  and  long-term  form  of 
investment – tends to be more susceptible to the potential risk coming from high 
government debt in the receiving country.  

The  inclusion  of  fixed  effects  (time  and  reporter  country  dummies)  in  general 
does  not  affect  the  result  significantly.  Excluding  offshore  centres  and  the  six 
main financial centre countries of our sample does not change our results much.  

Results for the flows 

Hobza and Zeugner’s database also provides an estimate of gross financial flows 
from  a  reporting  country  to  a  partner  country  (i.e.  the  gross  financial  asset 
acquisition  of  the  reporting  country  in  the  partner  country).  We  estimated  two 
model  variants  for  the  flows:  a  version  with  the  lagged  residuals  of  the 
corresponding regression for the stocks and a version without.  

As  Table  11  indicates,  results  for  the  flows  largely  confirm  our  findings  for  the 
stocks and therefore we do not repeat all findings here.  

As  was  the  case  for  the  total  debt  asset  stocks,  the  sign  and  significance  of  the 
euro  area  and  EU  membership  are  very  clear.  Euro  area  membership  of  both 
countries  has  a  positive,  large  and  significant  effect  on  bilateral  asset  flows,  for 
both portfolio debt instruments and bank loans.  

Interestingly,  the  sign and  significance  of  openness  (trade  to  GDP)  and  distance 
vary  greatly  between  portfolio  debt  and  bank  loans.  Openness  is  irrelevant  for 
bilateral  portfolio  debt  holdings,  whereas  it  has  a  positive  and  significant 

November 2014  107 

 
 
 
 Analysis of developments in EU capital flows in the global context 

coefficient  for  other  investment  flows,  suggesting  trade  openness  matters  for 
bank  flows  between  countries  while  it  is  irrelevant  for  investment  decisions  in 
portfolio  assets.  Distance  is  negative  and  significantly  correlated  with  bilateral 
bank  flows  while  it  is  not  significant  for  portfolio  debt  holdings,  although 
contiguity seems to have a positive effect on both kinds of flows. The combination 
of these two findings suggests that bank flows tend to behave more as would be 
prescribed  by  a  traditional  gravity  model  for  trade  flows  than  for  portfolio  debt 
flows.  

Another  interesting  result  concerns  the  yield  on  government  bonds  in  the 
reporting  country,  which  is  not  significantly  correlated  with  other  investment 
flows,  but  is  positively  and  significantly  correlated  with  portfolio  debt  holdings, 
which  is  reasonable  as  the  yield  represents  a  benchmark  for  the  return  on  this 
kind of investment. 

We  also  add,  as  explanatory  variables,  the  VIX  index,  an  indicator  of  global 
financial  volatility,  as  well  as  the interaction  between  the  VIX  and  the real  stock 
of  the  dependent  variable,  to  see  if  global  factors  matter  more  when  financial 
integration is high. We also add the unemployment rate of the partner country as 
an explanatory variable, to see if this indicator of the economic cycle matters. 

We also tried an error-correction type specification. We first ran the regression for 
the  stocks  that  we  presented  in  the  previous  section  and  saved  the  residuals  of 
each regression (which gives us the difference between the actual and estimated 
stock). We then ran the regression for the flows, adding the lagged values of the 
residuals  as  an  error  correction  term  (for  each  regression  we  use  the  residual 
computed from the corresponding regression run on stocks).  

The results show that the error correction terms tend to have positive estimated 
parameters, which is not significant in any specification. From an error-correction 
perspective  the  estimated  positive  sign  is  incorrect.  The  estimated  positive 
coefficient  implies  that  for  countries  with  higher  assets  than  estimated  by  the 
model, the disequilibrium is magnified by further increase their asset holdings.  

The  unemployment  rate  tends  to  have  a  negative  estimated  coefficient 
(suggesting that higher unemployment, which is a reflection of weaker economic 
situation, is negatively correlated with capital flows), but the estimated coefficient 
is never significant. 

The  VIX  index  is  significantly  and  negatively  related  to  capital  flows,  which  is  a 
robust  result  across  different  models  and  types  of  capital  flows.  Since  the  VIX 
index  is  generally  regarded  as  a  measure  of  global  uncertainty,  this  result 
suggests  that  bilateral  capital  flows  are  indeed  negatively  impacted  by  global 
uncertainty.  However,  the  estimated  parameter  of  the  interaction  between  the 
VIX index and the level of financial integration (measured as the stock of bilateral 
asset  holdings),  is  positive  and  highly  significant  in  almost  all  models.  This 
suggests  that  when  financial  integration  is  higher,  the  negative  impact  of  an 
increase in global uncertainty on capital flows is smaller. 

November 2014  108 

 
 
 
 
 
 Analysis of developments in EU capital flows in the global context 

Table 10 Regression results for stocks 

       STOCKS Full sample                        

Real  Debt  - 
Model 1 

Real  debt  - 
Model 2 

Real  debt  - 
Model 3 

Real  debt  - 
Model 4 

Real  debt  - 
Model 5 

Real  debt  - 
Model 6 

dummy (1 if only one of the 
two in EA in year t) 

dummy  (1  if  both  in  EA  in 
year t) 

dummy (1 if only one of the 
two in EU) 

-1.090*** 
(0.146) 

dummy (1 if both in EU)         -1.145*** 

Log(General  Govt.  Debt  to 
GDP, partner) 

(0.165) 

-0.158*** 
(0.048) 

Log(Trade to GDP, partner)     0.630*** 

dummy (1 if contiguous)         1.445*** 

(0.080) 

log_abs_dist                   

(0.100) 
-0.220*** 
(0.031) 

log(population, reporter)       0.599*** 

log(population, partner)        0.417*** 

(0.027) 

(0.022) 

log_ggbondyield_pt             

2.369*** 
(0.106) 

2.148*** 
(0.151) 

2.439*** 
(0.153) 

1.277*** 
(0.131) 

2.242*** 
(0.147) 

1.348*** 
(0.130) 

4.896*** 
(0.137) 

4.044*** 
(0.187) 

4.566*** 
(0.189) 

2.243*** 
(0.194) 

4.213*** 
(0.181) 

2.378*** 
(0.195) 

-1.493*** 
(0.228) 
-1.068*** 
(0.268) 

-1.673*** 
(0.217) 
-1.500*** 
(0.263) 

-0.834*** 
(0.202) 
0.294 
(0.256) 

-1.610*** 
(0.222) 
-1.286*** 
(0.262) 

-0.913*** 
(0.202) 
0.140 
(0.258) 

-0.025 
(0.055) 
1.183*** 
(0.081) 
0.952*** 
(0.086) 
-0.156*** 
(0.034) 
0.648*** 
(0.048) 
0.499*** 
(0.036) 
0.369* 

-0.200*** 
(0.054) 
1.075*** 
(0.087) 
1.442*** 
(0.102) 
-0.198*** 
(0.038) 
0.489*** 
(0.046) 
0.434*** 
(0.031) 
0.682*** 

-0.090 
(0.046) 
0.220 
(0.400) 
0.675*** 
(0.082) 
-0.207*** 
(0.033) 
-0.304 
(1.334) 
0.574*** 
(0.031) 
0.230* 

-0.111 
(0.057) 
1.258*** 
(0.080) 
0.920*** 
(0.092) 
-0.129*** 
(0.033) 
0.648*** 
(0.048) 
0.488*** 
(0.035) 
0.508*** 

-0.074 
(0.047) 
-0.862 
(0.604) 
0.685*** 
(0.082) 
-0.209*** 
(0.033) 
-2.777 
(1.858) 
0.570*** 
(0.032) 
0.292* 

November 2014  109 

 
 
 
 
 
 
 
 
 
 
                               
                               
                               
                               
                               
                               
                               
                               
                               
                               
 
 Analysis of developments in EU capital flows in the global context 

mkt. 
GDP, 

mkt. 
GDP, 

mkt. 
GDP, 

mkt. 
GDP, 

(0.147) 

(0.140) 

(0.114) 

(0.145) 

(0.120) 

0.114 
(0.087) 

0.543*** 
(0.041) 

-0.107 
(0.070) 

0.864*** 
(0.040) 

0.007 
(0.067) 

0.250** 
(0.085) 

0.041 
(0.070) 

0.578*** 
(0.035) 

0.599*** 
(0.040) 

0.582*** 
(0.036) 

-0.231 
(0.157) 

0.004 
(0.072) 

0.038 
(0.188) 

-0.050 
(0.068) 

0.918*** 
(0.039) 

-0.112 
(0.071) 

bond 

Public 
Capitalisation 
partner 

to 

Private 
Capitalisation 
partner 

bond 

to 

bond 

Public 
Capitalisation 
reporter 

to 

Private 
Capitalisation 
reporter 

bond 

to 

Public  +  Private  Bond  Mkt 
Cap. %GDP, Partner 

Public  +  Private  Bond  Mkt 
Cap. %GDP, Reporter 

Stock  mkt.  capitalisation  to 
GDP, partner 

Stock  mkt.  capitalisation  to 
GDP, reporter 

Constant                       

0.766 
(0.474) 

-6.894*** 
(0.718) 

1.026*** 
(0.084) 

1.361*** 
(0.071) 

0.413*** 
(0.069) 

0.670*** 
(0.058) 
-15.503***  1.815 
(0.809) 

(2.104) 

-7.974*** 
(0.722) 

4.616 
(2.666) 

November 2014  110 

 
 
 
                               
 
 
 
                               
 
 
 
 
                               
 
 
 
 
                               
 
 
 
 
                               
 
 
 
 
 
 
 
                               
 
 
 
 
 
 
 
 
 
 
                               
 
 
 
 
 
 
 
 
 
 
                               
 
 
 
 
 
 
 
 
 
 
                               
 
 
 
 
 
                               
 
 
 
 
 
 
 
 Analysis of developments in EU capital flows in the global context 

R-squared                      
N                              

0.450 
4706 

0.647 
1931 

0.635 
1931 

Country dummies 
time dummies 

0.757 
1931 

y 

0.661 
1931 

0.759 
1931 

y 

y 
y 

STOCKS Full sample                               

Real 
Debt 
Model 1 

Ptf. 
- 

Real 
Debt 
Model 2 

Ptf. 
- 

Real 
Ptf. 
debt  -  Model 
3 

Real 
debt 
Model 4 

Ptf. 
- 

Real 
debt 
Model 5 

Ptf. 
- 

Real 
debt 
Model 6 

Ptf. 
- 

dummy (1 if only one of the two in EA in year t)  1.906*** 

dummy (1 if both in EA in year t) 

dummy (1 if only one of the two in EU) 

dummy (1 if both in EU)        

Log(General Govt. Debt to GDP, partner) 

Log(Trade to GDP, partner)     

dummy (1 if contiguous)        

log_abs_dist                   

log(population, reporter)      

(0.122) 
4.998*** 
(0.162) 
-0.944*** 
(0.155) 
-0.797*** 
(0.180) 
-0.040 
(0.053) 
0.600*** 
(0.086) 
1.428*** 
(0.135) 
-0.008 
(0.037) 
0.573*** 
(0.028) 

2.677*** 
(0.210) 
5.222*** 
(0.264) 
-2.006*** 
(0.298) 
-2.012*** 
(0.365) 
-0.108 
(0.063) 
0.853*** 
(0.092) 
0.930*** 
(0.098) 
0.015 
(0.041) 
0.534*** 
(0.058) 

3.035*** 
(0.215) 
5.871*** 
(0.273) 
-2.225*** 
(0.292) 
-2.553*** 
(0.369) 
-0.276*** 
(0.064) 
0.713*** 
(0.101) 
1.528*** 
(0.118) 
-0.026 
(0.047) 
0.313*** 
(0.057) 

1.319*** 
(0.157) 
2.482*** 
(0.216) 
-0.920*** 
(0.239) 
0.187 
(0.288) 
-0.174*** 
(0.049) 
0.310 
(0.424) 
0.543*** 
(0.084) 
-0.063 
(0.040) 
-1.175 
(1.363) 

2.762*** 
(0.204) 
5.398*** 
(0.257) 
-2.134*** 
(0.289) 
-2.251*** 
(0.355) 
-0.215*** 
(0.064) 
0.927*** 
(0.090) 
0.882*** 
(0.103) 
0.036 
(0.041) 
0.533*** 
(0.057) 

1.408*** 
(0.154) 
2.660*** 
(0.213) 
-1.015*** 
(0.235) 
-0.011 
(0.285) 
-0.159** 
(0.048) 
-0.922 
(0.674) 
0.550*** 
(0.084) 
-0.065 
(0.040) 
-3.563 
(2.039) 

November 2014  111 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                               
                               
                               
                               
                               
                               
                               
                               
                               
 Analysis of developments in EU capital flows in the global context 

log(population, partner)       

log_ggbondyield_pt             

0.536*** 
(0.027) 

Public bond mkt. Capitalisation to GDP, partner 

Private bond mkt. Capitalisation to GDP, partner 

Public bond mkt. Capitalisation to GDP, reporter 

Private bond mkt. Capitalisation to GDP, reporter 

Public + Private Bond Mkt Cap. %GDP, Partner 

Public + Private Bond Mkt Cap. %GDP, Reporter 

Stock mkt. capitalisation to GDP, partner 

Stock mkt. capitalisation to GDP, reporter 

Constant                       

R-squared                      
N                              

Country dummies 
time dummies 

0.507*** 
(0.038) 
0.889*** 
(0.169) 
0.080 
(0.097) 
0.552*** 
(0.048) 
-0.271*** 
(0.078) 
1.138*** 
(0.050) 

0.428*** 
(0.033) 
1.220*** 
(0.171) 

1.120*** 
(0.098) 
1.674*** 
(0.092) 
0.293*** 
(0.078) 
0.917*** 
(0.074) 
-17.369*** 
(0.990) 

-1.384** 
(0.522) 

-6.983*** 
(0.858) 

0.450 
4108 

0.616 
1883 

0.581 
1883 

0.633*** 
(0.030) 
0.641*** 
(0.132) 
-0.135 
(0.072) 
0.591*** 
(0.040) 
-0.019 
(0.163) 
0.069 
(0.068) 

0.501*** 
(0.037) 
1.072*** 
(0.171) 
0.206* 
(0.097) 
0.611*** 
(0.047) 
-0.172* 
(0.080) 
1.196*** 
(0.049) 

0.632*** 
(0.030) 
0.740*** 
(0.138) 
-0.097 
(0.074) 
0.596*** 
(0.041) 
0.189 
(0.202) 
-0.028 
(0.071) 

-0.875 
(2.323) 

-7.975*** 
(0.879) 

2.693 
(2.901) 

0.770 
1883 

y 

0.629 
1883 

0.772 
1883 

y 

y 
y 

November 2014  112 

 
 
 
                               
 
                               
 
 
 
                               
 
 
 
 
                               
 
 
 
 
                               
 
 
 
 
                               
 
 
 
 
 
 
 
                               
 
 
 
 
 
 
 
 
 
 
                               
 
 
 
 
 
 
 
 
 
 
                               
 
 
 
 
 
 
 
 
 
 
                               
 
 
 
 
 
                               
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 Analysis of developments in EU capital flows in the global context 

STOCKS Full sample                               

Real  Other 
Inv. - Model 
1 

Real  
Other  Inv.  - 
Model 2 

Real  Other 
Inv.  -  Model 
3 

Real  Other 
Inv. - Model 
4 

Real  Other 
Inv.  -  Model 
5 

Real  Other 
Inv. - Model 
6 

dummy (1 if only one of the two in EA in year t)  1.771*** 

1.837*** 

2.100*** 

1.181*** 

1.954*** 

1.252*** 

dummy (1 if both in EA in year t) 

3.959*** 

3.502*** 

3.957*** 

2.097*** 

3.692*** 

2.229*** 

(0.105) 

(0.125) 

(0.123) 

(0.136) 

(0.123) 

(0.136) 

(0.140) 

(0.178) 

(0.174) 

(0.224) 

(0.176) 

(0.225) 

dummy (1 if only one of the two in EU) 

-1.093*** 

-1.373*** 

-1.522*** 

-0.902*** 

-1.508*** 

-0.980*** 

dummy (1 if both in EU)        

-1.630*** 

-1.003*** 

-1.349*** 

-0.022 

-1.243*** 

-0.172 

(0.155) 

(0.233) 

(0.217) 

(0.220) 

(0.229) 

(0.220) 

Log(General Govt. Debt to GDP, partner) 

(0.173) 

-0.122* 

(0.050) 

(0.273) 

-0.071 

(0.065) 

(0.265) 

-0.187** 

(0.065) 

(0.292) 

-0.099 

(0.061) 

(0.272) 

-0.132 

(0.068) 

Log(Trade to GDP, partner)     

1.055*** 

1.727*** 

1.658*** 

0.377 

1.790*** 

(0.084) 

(0.090) 

(0.096) 

(0.451) 

(0.089) 

(0.295) 

-0.076 

(0.061) 

-1.107 

(0.696) 

dummy (1 if contiguous)        

1.690*** 

1.276*** 

1.676*** 

1.044*** 

1.261*** 

1.059*** 

(0.095) 

(0.095) 

(0.107) 

(0.098) 

(0.100) 

(0.097) 

log_abs_dist                   

-0.474*** 

-0.239*** 

-0.297*** 

-0.372*** 

-0.209*** 

-0.374*** 

log(population, reporter)      

0.613*** 

0.786*** 

0.669*** 

1.524 

0.786*** 

(0.032) 

(0.038) 

(0.041) 

(0.039) 

(0.037) 

(0.030) 

(0.052) 

(0.049) 

(1.658) 

(0.051) 

(0.038) 

-2.212 

(2.132) 

log(population, partner)       

0.261*** 

0.314*** 

0.306*** 

0.404*** 

0.301*** 

0.399*** 

log_ggbondyield_pt             

(0.023) 

(0.036) 

0.195 

(0.159) 

(0.029) 

0.385* 

(0.151) 

(0.034) 

0.144 

(0.130) 

(0.035) 

0.320* 

(0.157) 

(0.034) 

0.197 

(0.135) 

November 2014  113 

 
 
 
 
 
 
 
 
 
 
 
 
                               
                               
                               
                               
                               
                               
                               
                               
                               
                               
 
                               
 
Public bond mkt. Capitalisation to GDP, partner 

Private bond mkt. Capitalisation to GDP, partner 

Public bond mkt. Capitalisation to GDP, reporter 

Private bond mkt. Capitalisation to GDP, reporter 

Public + Private Bond Mkt Cap. %GDP, Partner 

Public + Private Bond Mkt Cap. %GDP, Reporter 

Stock mkt. capitalisation to GDP, partner 

Stock mkt. capitalisation to GDP, reporter 

 Analysis of developments in EU capital flows in the global context 

0.400*** 

(0.097) 

0.563*** 

(0.046) 

0.078 

(0.083) 

0.737*** 

(0.045) 

0.299*** 

0.543*** 

0.336*** 

(0.085) 

(0.097) 

(0.088) 

0.603*** 

0.621*** 

0.608*** 

(0.042) 

(0.046) 

-0.517** 

0.199* 

(0.186) 

-0.094 

(0.106) 

(0.085) 

0.789*** 

(0.044) 

(0.043) 

-0.144 

(0.224) 

-0.169 

(0.109) 

1.167*** 

(0.094) 

1.298*** 

(0.080) 

0.283*** 

(0.072) 

0.599*** 

(0.064) 

Constant                       

R-squared                      

N                              

Country dummies 
time dummies 

-0.124 

(0.493) 

-10.653*** 

-17.919*** 

1.580 

-11.917*** 

5.461 

(0.828) 

(0.915) 

(2.406) 

(0.850) 

(3.056) 

0.405 

4185 

0.593 

1850 

0.598 

1850 

0.693 

1850 

y 

0.606 

1850 

0.695 

1850 

y 

y 
y 

November 2014  114 

 
 
 
 
 
                               
 
 
 
 
                               
 
 
 
 
                               
 
 
 
 
                               
 
 
 
 
 
 
 
                               
 
 
 
 
 
 
 
 
 
 
                               
 
 
 
 
 
 
 
 
 
 
                               
 
 
 
 
 
 
 
 
 
 
                               
 
 
 
 
 
                               
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 Analysis of developments in EU capital flows in the global context 

               STOCKS Full sample                

Real  Equity 
- Model 1 

Real  Equity 
- Model 2 

Real  Equity  - 
Model 3 

Real  Equity 
- Model 4 

Real  Equity 
- Model 5 

Real  Equity 
- Model 6 

dummy (1 if only one of the two in EA in year t)  1.721*** 

dummy (1 if both in EA in year t) 

dummy (1 if only one of the two in EU) 

dummy (1 if both in EU)        

Log(General Govt. Debt to GDP, partner) 

Log(Trade to GDP, partner)     

dummy (1 if contiguous)        

log_abs_dist                   

log(population, reporter)      

log(population, partner)       

log_ggbondyield_pt             

Public bond mkt. Capitalisation to GDP, partner 

Private bond mkt. Capitalisation to GDP, partner 

(0.139) 
3.425*** 
(0.177) 
-0.671*** 
(0.179) 
-0.280 
(0.200) 
-0.352*** 
(0.068) 
0.171 
(0.089) 
1.392*** 
(0.146) 
-0.155*** 
(0.043) 
0.937*** 
(0.035) 
0.591*** 
(0.030) 

0.738*** 
(0.179) 
1.591*** 
(0.228) 
0.329 
(0.254) 
1.092*** 
(0.313) 
-0.277*** 
(0.064) 
0.224* 
(0.109) 
1.447*** 
(0.132) 
-0.266*** 
(0.050) 
0.545*** 
(0.058) 
0.807*** 
(0.041) 
0.291 
(0.152) 

0.516** 
(0.185) 
1.209*** 
(0.226) 
0.383 
(0.290) 
1.293*** 
(0.334) 
-0.260*** 
(0.068) 
0.472*** 
(0.101) 
0.736*** 
(0.124) 
-0.193*** 
(0.044) 
0.787*** 
(0.063) 
0.993*** 
(0.050) 
0.187 
(0.147) 
-0.449*** 
(0.091) 
0.249*** 
(0.051) 

-0.029 
(0.182) 
0.093 
(0.263) 
0.968*** 
(0.253) 
2.456*** 
(0.340) 
-0.182** 
(0.063) 
1.794*** 
(0.520) 
0.776*** 
(0.122) 
-0.352*** 
(0.053) 
4.388** 
(1.657) 
1.046*** 
(0.048) 
-0.037 
(0.127) 
-0.621*** 
(0.079) 
0.256*** 
(0.046) 

0.570** 
(0.183) 
1.309*** 
(0.223) 
0.315 
(0.290) 
1.163*** 
(0.334) 
-0.271*** 
(0.069) 
0.496*** 
(0.103) 
0.734*** 
(0.125) 
-0.184*** 
(0.043) 
0.787*** 
(0.063) 
0.987*** 
(0.051) 
0.256 
(0.150) 
-0.389*** 
(0.090) 
0.271*** 
(0.052) 

0.013 
(0.179) 
0.176 
(0.256) 
0.916*** 
(0.251) 
2.353*** 
(0.337) 
-0.155* 
(0.062) 
0.915 
(0.734) 
0.790*** 
(0.122) 
-0.356*** 
(0.052) 
-0.410 
(2.354) 
1.046*** 
(0.049) 
-0.004 
(0.131) 
-0.615*** 
(0.081) 
0.250*** 
(0.046) 

November 2014  115 

 
 
 
 
 
 
 
 
 
 
                               
                               
                               
                               
                               
                               
                               
                               
                               
                               
 
                               
 
 
 
                               
 
 
 
 
                               
 
 
Public bond mkt. Capitalisation to GDP, reporter 

Private bond mkt. Capitalisation to GDP, reporter 

Public + Private Bond Mkt Cap. %GDP, Partner 

Public + Private Bond Mkt Cap. %GDP, Reporter 

Stock mkt. capitalisation to GDP, partner 

Stock mkt. capitalisation to GDP, reporter 

Constant                       

R-squared                      
N                              

Country dummies 
time dummies 

 Analysis of developments in EU capital flows in the global context 

-0.187* 
(0.090) 
1.162*** 
(0.045) 

0.337 
(0.187) 
0.180* 
(0.082) 

-0.137 
(0.093) 
1.180*** 
(0.045) 

0.477* 
(0.233) 
0.068 
(0.085) 

0.030 
(0.103) 
1.711*** 
(0.092) 
0.376*** 
(0.082) 
1.194*** 
(0.073) 
-12.142*** 
(1.070) 

1.325* 
(0.570) 

-2.864** 
(0.901) 

0.378 
4696 

0.560 
1898 

0.543 
1898 

-5.324 
(2.842) 

-3.432*** 
(0.918) 

-3.427 
(3.335) 

0.676 
1898 

y 

0.561 
1898 

0.678 
1898 

y 

y 
y 

STOCKS Full sample                               

Real 
Ptf.Equity  - 
Model 1 

Real 
Ptf.Equity  - 
Model 2 

Real 
Ptf.Equity 
Model 3 

- 

Real 
Ptf.Equity  - 
Model 4 

Real 
Ptf.Equity  - 
Model 5 

Real 
Ptf.Equity  - 
Model 6 

dummy (1 if only one of the two in EA in year t)  1.732*** 

0.901*** 

1.351*** 

(0.153) 

(0.178) 

(0.187) 

0.540** 

(0.194) 

0.956*** 

0.638*** 

(0.178) 

(0.191) 

November 2014  116 

 
 
 
 
 
                               
 
 
 
 
                               
 
 
 
 
 
 
 
                               
 
 
 
 
 
 
 
 
 
 
                               
 
 
 
 
 
 
 
 
 
 
                               
 
 
 
 
 
 
 
 
 
 
                               
 
 
 
 
 
                               
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                               
dummy (1 if both in EA in year t) 

4.263*** 

2.228*** 

3.081*** 

1.564*** 

2.345*** 

1.762*** 

 Analysis of developments in EU capital flows in the global context 

dummy (1 if only one of the two in EU) 

-0.632*** 

-0.018 

(0.203) 

(0.216) 

(0.239) 

-0.424 

(0.254) 

-0.619* 

(0.314) 

-0.156* 

(0.078) 

(0.278) 

0.830** 

(0.274) 

(0.216) 

-0.082 

(0.280) 

(0.270) 

0.711** 

(0.269) 

1.945*** 

0.158 

1.719*** 

(0.359) 

0.117 

(0.069) 

(0.318) 

-0.029 

(0.072) 

(0.352) 

0.144* 

(0.068) 

0.488*** 

0.431*** 

0.772 

0.538*** 

-0.389 

(0.100) 

(0.115) 

(0.504) 

(0.101) 

(0.728) 

(0.187) 

(0.279) 

-1.306*** 

0.286 

(0.316) 

0.039 

(0.072) 

(0.215) 

0.006 

(0.070) 

0.280** 

(0.100) 

dummy (1 if both in EU)        

Log(General Govt. Debt to GDP, partner) 

Log(Trade to GDP, partner)     

dummy (1 if contiguous)        

1.056*** 

0.155 

1.007*** 

0.463*** 

0.116 

0.477*** 

log_abs_dist                   

(0.142) 

-0.109* 

(0.045) 

(0.126) 

(0.131) 

(0.128) 

(0.123) 

(0.127) 

-0.183*** 

-0.125* 

-0.273*** 

-0.176*** 

-0.276*** 

(0.046) 

(0.051) 

(0.048) 

(0.046) 

(0.048) 

log(population, reporter)      

0.960*** 

1.063*** 

0.715*** 

2.530 

1.066*** 

-0.656 

(0.037) 

(0.051) 

(0.057) 

(1.606) 

(0.051) 

(2.386) 

log(population, partner)       

0.710*** 

1.042*** 

0.772*** 

1.083*** 

1.036*** 

1.077*** 

(0.033) 

(0.049) 

(0.045) 

(0.047) 

(0.049) 

(0.047) 

log_ggbondyield_pt             

-0.519*** 

-0.127 

-0.870*** 

-0.438** 

-0.797*** 

(0.146) 

(0.157) 

(0.126) 

(0.148) 

(0.129) 

Public bond mkt. Capitalisation to GDP, partner 

Private bond mkt. Capitalisation to GDP, partner 

Public bond mkt. Capitalisation to GDP, reporter 

Private bond mkt. Capitalisation to GDP, reporter 

-0.706*** 

(0.089) 

0.443*** 

(0.050) 

-0.615*** 

(0.092) 

1.295*** 

-0.904*** 

-0.647*** 

-0.866*** 

(0.078) 

(0.090) 

(0.080) 

0.449*** 

0.486*** 

0.453*** 

(0.047) 

0.161 

(0.216) 

0.139 

(0.051) 

(0.047) 

-0.583*** 

0.448 

(0.097) 

(0.269) 

1.332*** 

0.043 

November 2014  117 

 
 
 
                               
                               
                               
                               
                               
                               
                               
                               
                               
 
                               
 
 
 
                               
 
 
 
 
                               
 
 
 
 
                               
 
 
 
 
 Analysis of developments in EU capital flows in the global context 

(0.049) 

(0.092) 

(0.048) 

(0.097) 

Public + Private Bond Mkt Cap. %GDP, Partner 

Public + Private Bond Mkt Cap. %GDP, Reporter 

Stock mkt. capitalisation to GDP, partner 

Stock mkt. capitalisation to GDP, reporter 

0.372** 

(0.114) 

1.984*** 

(0.100) 

0.421*** 

(0.088) 

1.069*** 

(0.074) 

Constant                       

-2.174*** 

-3.716*** 

-16.809*** 

-5.145 

-3.954*** 

-2.258 

(0.607) 

(0.934) 

(1.153) 

(2.840) 

(0.997) 

(3.277) 

R-squared                      

N                              

Country dummies 
time dummies 

0.379 

3954 

0.609 

1836 

0.535 

1836 

0.687 

1836 

y 

0.617 

1836 

0.693 

1836 

y 

y 
y 

STOCKS Full sample                               

Real  FDI  - 
Model 1 

Real  FDI  - 
Model 2 

Real  FDI  - 
Model 3 

Real  FDI  - 
Model 4 

Real  FDI  - 
Model 5 

Real  FDI  - 
Model 6 

dummy (1 if only one of the two in EA in year t)  0.958*** 

dummy (1 if both in EA in year t) 

(0.140) 
2.136*** 
(0.180) 

-0.181 
(0.211) 
0.358 
(0.268) 

-0.066 
(0.201) 
0.560* 
(0.263) 

-0.998*** 
(0.209) 
-1.315*** 
(0.293) 

-0.165 
(0.211) 
0.384 
(0.269) 

-1.016*** 
(0.209) 
-1.358*** 
(0.290) 

November 2014  118 

 
 
 
                               
 
 
 
 
 
 
 
                               
 
 
 
 
 
 
 
 
 
 
                               
 
 
 
 
 
 
 
 
 
 
                               
 
 
 
 
 
 
 
 
 
 
                               
 
 
 
 
 
                               
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                               
                               
 Analysis of developments in EU capital flows in the global context 

dummy (1 if only one of the two in EU) 

dummy (1 if both in EU)        

Log(General Govt. Debt to GDP, partner) 

Log(Trade to GDP, partner)     

dummy (1 if contiguous)        

log_abs_dist                   

log(population, reporter)      

log(population, partner)       

log_ggbondyield_pt             

-0.736*** 
(0.196) 
0.043 
(0.219) 
-0.454*** 
(0.071) 
0.012 
(0.094) 
1.694*** 
(0.170) 
-0.085 
(0.046) 
0.809*** 
(0.037) 
0.554*** 
(0.031) 

Public bond mkt. Capitalisation to GDP, partner 

Private bond mkt. Capitalisation to GDP, partner 

Public bond mkt. Capitalisation to GDP, reporter 

Private bond mkt. Capitalisation to GDP, reporter 

Public + Private Bond Mkt Cap. %GDP, Partner 

Public + Private Bond Mkt Cap. %GDP, Reporter 

-0.040 
(0.318) 
1.247** 
(0.388) 
-0.443*** 
(0.083) 
0.430*** 
(0.122) 
1.086*** 
(0.164) 
-0.154** 
(0.056) 
0.695*** 
(0.076) 
1.004*** 
(0.059) 
0.735*** 
(0.170) 
-0.404*** 
(0.108) 
0.254*** 
(0.061) 
0.194 
(0.108) 
1.081*** 
(0.056) 

0.322 
(0.283) 
1.613*** 
(0.365) 
-0.420*** 
(0.081) 
0.105 
(0.128) 
1.755*** 
(0.164) 
-0.284*** 
(0.060) 
0.519*** 
(0.069) 
0.811*** 
(0.045) 
0.755*** 
(0.176) 

-0.079 
(0.114) 
1.619*** 

0.622* 
(0.273) 
2.229*** 
(0.363) 
-0.380*** 
(0.073) 
1.123 
(0.596) 
0.914*** 
(0.130) 
-0.427*** 
(0.058) 
5.956** 
(1.835) 
1.078*** 
(0.058) 
0.567*** 
(0.146) 
-0.590*** 
(0.097) 
0.253*** 
(0.055) 
0.484* 
(0.214) 
0.207* 
(0.096) 

-0.062 
(0.319) 
1.203** 
(0.391) 
-0.447*** 
(0.086) 
0.454*** 
(0.123) 
1.087*** 
(0.166) 
-0.147** 
(0.056) 
0.700*** 
(0.076) 
1.002*** 
(0.060) 
0.769*** 
(0.170) 
-0.365*** 
(0.109) 
0.265*** 
(0.062) 
0.228* 
(0.112) 
1.090*** 
(0.057) 

0.644* 
(0.274) 
2.275*** 
(0.365) 
-0.368*** 
(0.073) 
1.050 
(0.919) 
0.923*** 
(0.131) 
-0.427*** 
(0.057) 
1.974 
(2.523) 
1.082*** 
(0.059) 
0.549*** 
(0.150) 
-0.607*** 
(0.099) 
0.242*** 
(0.055) 
0.472 
(0.254) 
0.146 
(0.104) 

November 2014  119 

 
 
 
                               
                               
                               
                               
                               
                               
                               
                               
 
                               
 
 
 
                               
 
 
 
 
                               
 
 
 
 
                               
 
 
 
 
                               
 
 
 
 
 
 
 
                               
 
 
 
 
 
 
 
 
 
 
 Analysis of developments in EU capital flows in the global context 

Stock mkt. capitalisation to GDP, partner 

Stock mkt. capitalisation to GDP, reporter 

Constant                       

(0.107) 
0.551*** 
(0.093) 
1.152*** 
(0.091) 
-11.609*** 
(1.237) 

2.892*** 
(0.596) 

-3.891*** 
(1.089) 

R-squared                      
N                              

0.323 
3946 

0.469 
1750 

0.467 
1750 

Country dummies 
time dummies 

-25.742** 
(7.890) 

-4.269*** 
(1.093) 

-7.769 
(12.784) 

0.623 
1750 

y 

0.468 
1750 

0.623 
1750 

y 

y 
y 

STOCKS  Without  offshore  centres  and  without 
LUX/IE/NL/CY/SG/HK                               

Real  Debt  - 
Model 1 

Real  debt  - 
Model 2 

Real  debt  - 
Model 3 

Real  debt  - 
Model 4 

Real  debt  - 
Model 5 

Real  debt  - 
Model 6 

dummy (1 if only one of the two in EA in year t) 

dummy (1 if both in EA in year t) 

dummy (1 if only one of the two in EU) 

dummy (1 if both in EU)        

Log(General Govt. Debt to GDP, partner) 

2.060*** 
(0.128) 
4.120*** 
(0.169) 
-0.376* 
(0.179) 
0.116 
(0.210) 
-0.086 

2.173*** 
(0.150) 
4.089*** 
(0.190) 
-1.346*** 
(0.228) 
-0.936*** 
(0.276) 
-0.049 

2.520*** 
(0.167) 
4.638*** 
(0.217) 
-1.723*** 
(0.234) 
-1.670*** 
(0.303) 
-0.295*** 

1.352*** 
(0.157) 
2.469*** 
(0.239) 
-0.796*** 
(0.233) 
0.211 
(0.303) 
-0.147** 

2.190*** 
(0.149) 
4.110*** 
(0.189) 
-1.363*** 
(0.226) 
-0.964*** 
(0.276) 
-0.123 

1.382*** 
(0.156) 
2.524*** 
(0.240) 
-0.834*** 
(0.233) 
0.139 
(0.306) 
-0.137* 

November 2014  120 

 
 
 
                               
 
 
 
 
 
 
 
 
 
 
                               
 
 
 
 
 
 
 
 
 
 
                               
 
 
 
 
 
                               
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                               
                               
                               
                               
 Analysis of developments in EU capital flows in the global context 

Log(Trade to GDP, partner)     

dummy (1 if contiguous)        

log_abs_dist                   

log(population, reporter)      

log(population, partner)       

log_ggbondyield_pt             

Public bond mkt. Capitalisation to GDP, partner 

Private bond mkt. Capitalisation to GDP, partner 

Public bond mkt. Capitalisation to GDP, reporter 

Private bond mkt. Capitalisation to GDP, reporter 

Public + Private Bond Mkt Cap. %GDP, Partner 

Public + Private Bond Mkt Cap. %GDP, Reporter 

Stock mkt. capitalisation to GDP, partner 

Stock mkt. capitalisation to GDP, reporter 

(0.054) 
0.343** 
(0.132) 
1.392*** 
(0.104) 
-0.275*** 
(0.035) 
1.206*** 
(0.044) 
0.523*** 
(0.035) 

(0.060) 
0.776*** 
(0.138) 
0.881*** 
(0.099) 
-0.236*** 
(0.046) 
0.990*** 
(0.052) 
0.517*** 
(0.043) 
0.548** 
(0.166) 
0.171 
(0.099) 
0.587*** 
(0.051) 
-0.043 
(0.091) 
1.001*** 
(0.052) 

(0.061) 
0.946*** 
(0.143) 
1.494*** 
(0.107) 
-0.159*** 
(0.045) 
0.820*** 
(0.051) 
0.461*** 
(0.038) 
0.873*** 
(0.163) 

1.153*** 
(0.105) 
1.605*** 
(0.099) 
0.304*** 
(0.078) 
0.535*** 
(0.086) 

(0.056) 
0.872 
(0.505) 
0.698*** 
(0.091) 
-0.217*** 
(0.042) 
1.880 
(2.155) 
0.574*** 
(0.039) 
0.374** 
(0.143) 
0.101 
(0.082) 
0.585*** 
(0.045) 
-0.029 
(0.248) 
-0.159* 
(0.070) 

(0.063) 
0.884*** 
(0.139) 
0.845*** 
(0.103) 
-0.215*** 
(0.046) 
1.014*** 
(0.053) 
0.507*** 
(0.042) 
0.586*** 
(0.166) 
0.250* 
(0.098) 
0.614*** 
(0.050) 
-0.046 
(0.093) 
1.039*** 
(0.051) 

(0.056) 
-0.126 
(0.946) 
0.710*** 
(0.091) 
-0.215*** 
(0.042) 
-2.672 
(3.849) 
0.569*** 
(0.040) 
0.415** 
(0.149) 
0.127 
(0.085) 
0.585*** 
(0.047) 
0.273 
(0.295) 
-0.223** 
(0.079) 

November 2014  121 

 
 
 
                               
                               
                               
                               
                               
                               
 
                               
 
 
 
                               
 
 
 
 
                               
 
 
 
 
                               
 
 
 
 
                               
 
 
 
 
 
 
 
                               
 
 
 
 
 
 
 
 
 
 
                               
 
 
 
 
 
 
 
 
 
 
                               
 
 
 
 
 
 
 
 
 
 
                               
 
 
 
 
 
 Analysis of developments in EU capital flows in the global context 

Constant                       

R-squared                      
N                              

Country dummies 
time dummies 

-0.861 
(0.738) 

-7.457*** 
(0.916) 

-16.688*** 
(1.099) 

-3.178 
(4.835) 

-7.990*** 
(0.934) 

5.916 
(12.140) 

0.563 
2800 

0.713 
1402 

0.684 
1402 

0.780 
1402 

y 

0.719 
1402 

0.781 
1402 

y 

y 
y 

STOCKS  Without  offshore  centres  and  without 
LUX/IE/NL/CY/SG/HK                                                             

Real 
Debt 
Model 1 

Ptf. 
- 

Real 
Debt 
Model 2 

Ptf. 
- 

Real 
Ptf. 
debt  -  Model 
3 

Real 
debt 
Model 4 

Ptf. 
- 

Real 
debt 
Model 5 

Ptf. 
- 

Real 
debt 
Model 6 

Ptf. 
- 

dummy (1 if only one of the two in EA in year t) 

dummy (1 if both in EA in year t) 

dummy (1 if only one of the two in EU) 

dummy (1 if both in EU)        

Log(General Govt. Debt to GDP, partner) 

Log(Trade to GDP, partner)     

dummy (1 if contiguous)        

2.002*** 
(0.147) 
4.763*** 
(0.198) 
-0.422* 
(0.212) 
-0.107 
(0.248) 
-0.051 
(0.064) 
-0.597*** 
(0.159) 
1.585*** 
(0.141) 

3.010*** 
(0.200) 
5.739*** 
(0.260) 
-1.951*** 
(0.301) 
-2.091*** 
(0.366) 
-0.190** 
(0.071) 
0.138 
(0.164) 
0.800*** 
(0.105) 

3.443*** 
(0.234) 
6.430*** 
(0.311) 
-2.432*** 
(0.328) 
-3.036*** 
(0.424) 
-0.438*** 
(0.075) 
0.412* 
(0.167) 
1.538*** 
(0.122) 

1.673*** 
(0.184) 
3.139*** 
(0.258) 
-0.925** 
(0.289) 
-0.014 
(0.347) 
-0.321*** 
(0.059) 
1.040 
(0.560) 
0.562*** 
(0.091) 

3.009*** 
(0.198) 
5.744*** 
(0.258) 
-1.968*** 
(0.296) 
-2.115*** 
(0.363) 
-0.273*** 
(0.072) 
0.259 
(0.165) 
0.749*** 
(0.108) 

1.713*** 
(0.181) 
3.216*** 
(0.256) 
-0.967*** 
(0.288) 
-0.108 
(0.346) 
-0.309*** 
(0.058) 
-0.145 
(1.086) 
0.575*** 
(0.092) 

November 2014  122 

 
 
 
                               
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                               
                               
                               
                               
                               
                               
                               
 Analysis of developments in EU capital flows in the global context 

log_abs_dist                   

log(population, reporter)      

log(population, partner)       

log_ggbondyield_pt             

Public bond mkt. Capitalisation to GDP, partner 

Private bond mkt. Capitalisation to GDP, partner 

Public bond mkt. Capitalisation to GDP, reporter 

Private bond mkt. Capitalisation to GDP, reporter 

Public + Private Bond Mkt Cap. %GDP, Partner 

Public + Private Bond Mkt Cap. %GDP, Reporter 

Stock mkt. capitalisation to GDP, partner 

Stock mkt. capitalisation to GDP, reporter 

Constant                       

-0.053 
(0.044) 
0.799*** 
(0.054) 
0.448*** 
(0.038) 

-0.075 
(0.052) 
0.829*** 
(0.062) 
0.510*** 
(0.041) 
1.194*** 
(0.185) 
0.183 
(0.108) 
0.599*** 
(0.059) 
-0.067 
(0.105) 
1.350*** 
(0.063) 

3.007*** 
(0.909) 

-7.027*** 
(1.065) 

0.042 
(0.053) 
0.626*** 
(0.063) 
0.454*** 
(0.039) 
1.552*** 
(0.196) 

1.300*** 
(0.123) 
2.075*** 
(0.127) 
0.146 
(0.090) 
0.696*** 
(0.102) 
-18.250*** 
(1.280) 

-0.011 
(0.050) 
2.397 
(2.060) 
0.599*** 
(0.034) 
0.881*** 
(0.160) 
0.044 
(0.086) 
0.575*** 
(0.051) 
0.432 
(0.253) 
-0.022 
(0.074) 

-0.059 
(0.052) 
0.862*** 
(0.063) 
0.507*** 
(0.040) 
1.261*** 
(0.189) 
0.245* 
(0.110) 
0.629*** 
(0.058) 
-0.088 
(0.109) 
1.393*** 
(0.063) 

-0.009 
(0.050) 
-3.086 
(3.963) 
0.596*** 
(0.034) 
0.955*** 
(0.167) 
0.078 
(0.089) 
0.577*** 
(0.052) 
0.756* 
(0.318) 
-0.112 
(0.082) 

-8.134 
(4.582) 

-7.577*** 
(1.105) 

3.032 
(12.505) 

R-squared                      
N                              

0.504 
2513 

0.701 
1370 

0.642 
1370 

0.798 
1370 

0.706 
1370 

0.800 
1370 

November 2014  123 

 
 
 
                               
                               
                               
 
                               
 
 
 
                               
 
 
 
 
                               
 
 
 
 
                               
 
 
 
 
                               
 
 
 
 
 
 
 
                               
 
 
 
 
 
 
 
 
 
 
                               
 
 
 
 
 
 
 
 
 
 
                               
 
 
 
 
 
 
 
 
 
 
                               
 
 
 
 
 
                               
 
 
 
 
 
 
 
 Analysis of developments in EU capital flows in the global context 

Country dummies 
time dummies 

y 

y 

y 
y 

STOCKS  Without  offshore  centres  and  without 
LUX/IE/NL/CY/SG/HK                                                                                           

Real  Other 
Inv. 
- 
Model 1 

Real  Other 
Inv.  -  Model 
2 

Real  Other 
Inv.  -  Model 
3 

Real  Other 
Inv. 
- 
Model 4 

Real  Other 
Inv.  -  Model 
5 

Real  Other 
Inv. 
- 
Model 6 

dummy (1 if only one of the two in EA in year t) 

1.436*** 

1.712*** 

2.080*** 

1.156*** 

1.749*** 

1.181*** 

(0.132) 

(0.127) 

(0.134) 

(0.172) 

(0.128) 

(0.172) 

dummy (1 if both in EA in year t) 

3.114*** 

3.312*** 

3.903*** 

2.236*** 

3.364*** 

2.282*** 

(0.172) 

(0.185) 

(0.198) 

(0.281) 

(0.186) 

(0.283) 

dummy (1 if only one of the two in EU) 

dummy (1 if both in EU)        

0.019 

(0.182) 

0.148 

(0.206) 

(0.236) 

-0.566* 

(0.286) 

(0.235) 

(0.263) 

-1.274*** 

0.013 

(0.300) 

(0.352) 

Log(General Govt. Debt to GDP, partner) 

-0.162** 

-0.032 

-0.250*** 

-0.044 

(0.053) 

(0.072) 

(0.070) 

(0.072) 

(0.235) 

-0.636* 

(0.289) 

-0.071 

(0.076) 

(0.264) 

-0.049 

(0.356) 

-0.035 

(0.073) 

-0.915*** 

-1.273*** 

-0.646* 

-0.956*** 

-0.678* 

Log(Trade to GDP, partner)     

0.874*** 

1.173*** 

1.321*** 

0.867 

1.202*** 

-0.569 

(0.131) 

(0.149) 

(0.148) 

(0.542) 

(0.151) 

(1.057) 

dummy (1 if contiguous)        

1.598*** 

1.282*** 

1.753*** 

1.025*** 

1.282*** 

1.035*** 

(0.100) 

(0.114) 

(0.115) 

(0.111) 

(0.117) 

(0.110) 

log_abs_dist                   

-0.465*** 

-0.335*** 

-0.290*** 

-0.460*** 

-0.315*** 

-0.458*** 

log(population, reporter)      

1.316*** 

1.125*** 

1.018*** 

3.924 

1.119*** 

-1.502 

(0.035) 

(0.049) 

(0.046) 

(0.050) 

(0.049) 

(0.051) 

November 2014  124 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                               
                               
                               
                               
                               
                               
                               
                               
log(population, partner)       

0.432*** 

0.399*** 

0.357*** 

0.486*** 

0.384*** 

0.481*** 

(0.046) 

(0.059) 

(0.055) 

(2.516) 

(0.061) 

(4.253) 

 Analysis of developments in EU capital flows in the global context 

(0.037) 

(0.042) 

(0.034) 

(0.044) 

log_ggbondyield_pt             

Public bond mkt. Capitalisation to GDP, partner 

Private bond mkt. Capitalisation to GDP, partner 

Public bond mkt. Capitalisation to GDP, reporter 

Private bond mkt. Capitalisation to GDP, reporter 

Public + Private Bond Mkt Cap. %GDP, Partner 

Public + Private Bond Mkt Cap. %GDP, Reporter 

Stock mkt. capitalisation to GDP, partner 

Stock mkt. capitalisation to GDP, reporter 

0.318 

(0.170) 

0.346** 

(0.109) 

0.661*** 

(0.059) 

0.200 

(0.105) 

0.842*** 

(0.054) 

0.574*** 

0.252 

(0.167) 

(0.155) 

0.229* 

(0.101) 

(0.042) 

0.357* 

(0.173) 

0.425*** 

(0.112) 

(0.045) 

0.292 

(0.162) 

0.253* 

(0.104) 

0.686*** 

0.682*** 

0.687*** 

(0.058) 

-0.324 

(0.301) 

-0.097 

(0.118) 

(0.059) 

0.242* 

(0.109) 

(0.060) 

-0.042 

(0.360) 

0.867*** 

-0.165 

(0.054) 

(0.131) 

1.317*** 

(0.112) 

1.545*** 

(0.106) 

0.275*** 

(0.080) 

0.340*** 

(0.090) 

Constant                       

-2.794*** 

-10.955*** 

-18.583*** 

-7.315 

-11.438*** 

5.186 

(0.719) 

(1.023) 

(1.171) 

(5.301) 

(1.057) 

(13.425) 

R-squared                      

N                              

0.536 

2495 

0.662 

1354 

0.652 

1354 

0.707 

1354 

0.665 

1354 

0.707 

1354 

November 2014  125 

 
 
 
                               
                               
 
                               
 
 
 
                               
 
 
 
 
                               
 
 
 
 
                               
 
 
 
 
                               
 
 
 
 
 
 
 
                               
 
 
 
 
 
 
 
 
 
 
                               
 
 
 
 
 
 
 
 
 
 
                               
 
 
 
 
 
 
 
 
 
 
                               
 
 
 
 
 
                               
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Country dummies 
time dummies 

y 

y 

y 
y 

 Analysis of developments in EU capital flows in the global context 

STOCKS  Without  offshore  centres  and  without 
LUX/IE/NL/CY/SG/HK                                                                                                                         

Real Equity - 
Model 3 

Real  Equity 
- Model 2 

Real  Equity 
- Model 1 

Real  Equity 
- Model 4 

Real  Equity 
- Model 5 

Real  Equity 
- Model 6 

dummy (1 if only one of the two in EA in year t) 

dummy (1 if both in EA in year t) 

dummy (1 if only one of the two in EU) 

dummy (1 if both in EU)        

Log(General Govt. Debt to GDP, partner) 

Log(Trade to GDP, partner)     

dummy (1 if contiguous)        

log_abs_dist                   

log(population, reporter)      

log(population, partner)       

log_ggbondyield_pt             

1.095*** 
(0.172) 
2.009*** 
(0.212) 
0.540* 
(0.228) 
1.338*** 
(0.244) 
-0.317*** 
(0.074) 
-0.798*** 
(0.153) 
1.655*** 
(0.156) 
-0.295*** 
(0.053) 
1.279*** 
(0.051) 
0.811*** 
(0.042) 

0.209 
(0.174) 
0.528* 
(0.219) 
0.917*** 
(0.274) 
1.940*** 
(0.310) 
-0.280*** 
(0.068) 
-0.209 
(0.162) 
0.680*** 
(0.134) 
-0.404*** 
(0.052) 
1.182*** 
(0.062) 
1.244*** 
(0.050) 
0.128 

0.424* 
(0.191) 
0.763** 
(0.251) 
0.787** 
(0.266) 
1.635*** 
(0.328) 
-0.389*** 
(0.070) 
0.487** 
(0.176) 
1.738*** 
(0.139) 
-0.233*** 
(0.054) 
0.953*** 
(0.062) 
0.985*** 
(0.042) 
0.120 

-0.468* 
(0.182) 
-0.813** 
(0.261) 
1.357*** 
(0.257) 
2.840*** 
(0.334) 
-0.262*** 
(0.066) 
1.661** 
(0.510) 
0.870*** 
(0.134) 
-0.450*** 
(0.052) 
5.455** 
(2.022) 
1.294*** 
(0.046) 
-0.070 

0.206 
(0.176) 
0.520* 
(0.222) 
0.919*** 
(0.276) 
1.951*** 
(0.314) 
-0.328*** 
(0.070) 
-0.126 
(0.168) 
0.636*** 
(0.136) 
-0.399*** 
(0.053) 
1.209*** 
(0.065) 
1.246*** 
(0.050) 
0.147 

-0.460* 
(0.182) 
-0.789** 
(0.262) 
1.337*** 
(0.257) 
2.797*** 
(0.335) 
-0.249*** 
(0.066) 
1.231 
(0.861) 
0.870*** 
(0.134) 
-0.455*** 
(0.051) 
0.554 
(3.542) 
1.300*** 
(0.046) 
-0.039 

November 2014  126 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                               
                               
                               
                               
                               
                               
                               
                               
                               
                               
 
Public bond mkt. Capitalisation to GDP, partner 

Private bond mkt. Capitalisation to GDP, partner 

Public bond mkt. Capitalisation to GDP, reporter 

Private bond mkt. Capitalisation to GDP, reporter 

Public + Private Bond Mkt Cap. %GDP, Partner 

Public + Private Bond Mkt Cap. %GDP, Reporter 

Stock mkt. capitalisation to GDP, partner 

Stock mkt. capitalisation to GDP, reporter 

Constant                       

R-squared                      
N                              

Country dummies 
time dummies 

 Analysis of developments in EU capital flows in the global context 

(0.153) 

(0.140) 
-0.606*** 
(0.090) 
0.230*** 
(0.050) 
-0.212 
(0.112) 
1.423*** 
(0.057) 

(0.110) 
-0.716*** 
(0.074) 
0.221*** 
(0.042) 
0.484* 
(0.233) 
0.128 
(0.077) 

(0.143) 
-0.584*** 
(0.089) 
0.254*** 
(0.050) 
-0.244* 
(0.118) 
1.452*** 
(0.056) 

(0.115) 
-0.732*** 
(0.074) 
0.219*** 
(0.042) 
0.412 
(0.290) 
0.030 
(0.086) 

-0.191 
(0.101) 
1.860*** 
(0.114) 
0.364*** 
(0.085) 
1.420*** 
(0.105) 
-15.250*** 
(1.306) 

3.227*** 
(0.860) 

-1.683 
(0.990) 

0.440 
2801 

0.715 
1379 

0.668 
1379 

-13.474** 
(4.564) 

-1.756 
(1.035) 

-6.417 
(10.944) 

0.807 
1379 

y 

0.718 
1379 

0.808 
1379 

y 

y 
y 

November 2014  127 

 
 
 
                               
 
 
 
                               
 
 
 
 
                               
 
 
 
 
                               
 
 
 
 
                               
 
 
 
 
 
 
 
                               
 
 
 
 
 
 
 
 
 
 
                               
 
 
 
 
 
 
 
 
 
 
                               
 
 
 
 
 
 
 
 
 
 
                               
 
 
 
 
 
                               
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 Analysis of developments in EU capital flows in the global context 

STOCKS  Without  offshore  centres  and  without 
LUX/IE/NL/CY/SG/HK                                                                                                                                                       

- 

Real 
Ptf.Equity  - 
Model 1 

Real 
Ptf.Equity  - 
Model 2 

Real 
Ptf.Equity 
Model 3 

Real 
Ptf.Equity  - 
Model 4 

Real 
Ptf.Equity  - 
Model 5 

Real 
Ptf.Equity  - 
Model 6 

dummy (1 if only one of the two in EA in year t) 

1.028*** 

0.438* 

(0.178) 

(0.174) 

0.586** 

(0.194) 

0.133 

0.467** 

0.183 

(0.191) 

(0.177) 

(0.190) 

dummy (1 if both in EA in year t) 

2.811*** 

1.320*** 

1.487*** 

0.733** 

1.376*** 

0.829** 

dummy (1 if only one of the two in EU) 

dummy (1 if both in EU)        

(0.237) 

0.332 

(0.234) 

0.153 

(0.216) 

0.575* 

(0.278) 

(0.252) 

0.510 

(0.268) 

(0.264) 

(0.219) 

(0.263) 

1.447*** 

0.525 

1.383*** 

(0.279) 

(0.283) 

(0.276) 

1.059*** 

0.865** 

2.701*** 

0.974** 

2.582*** 

(0.263) 

(0.310) 

(0.329) 

(0.359) 

(0.315) 

(0.356) 

Log(General Govt. Debt to GDP, partner) 

-0.226** 

-0.294*** 

-0.431*** 

-0.246*** 

-0.349*** 

-0.228** 

Log(Trade to GDP, partner)     

(0.078) 

(0.076) 

-1.460*** 

-0.353* 

(0.161) 

(0.162) 

(0.076) 

0.370* 

(0.177) 

(0.071) 

0.880 

(0.529) 

(0.078) 

-0.261 

(0.170) 

(0.070) 

0.274 

(0.947) 

dummy (1 if contiguous)        

1.659*** 

0.614*** 

1.654*** 

0.729*** 

0.576*** 

0.745*** 

log_abs_dist                   

-0.200*** 

-0.143** 

-0.005 

-0.142** 

-0.131* 

-0.141** 

(0.151) 

(0.135) 

(0.132) 

(0.131) 

(0.133) 

(0.130) 

log(population, reporter)      

(0.055) 

(0.055) 

(0.057) 

0.747*** 

1.049*** 

0.831*** 

(0.060) 

(0.062) 

(0.060) 

(0.054) 

4.393* 

(1.921) 

(0.055) 

(0.053) 

1.069*** 

0.986 

(0.067) 

(3.642) 

log(population, partner)       

0.931*** 

1.200*** 

0.970*** 

1.250*** 

1.192*** 

1.240*** 

log_ggbondyield_pt             

Public bond mkt. Capitalisation to GDP, partner 

(0.046) 

(0.048) 

(0.046) 

(0.046) 

(0.049) 

(0.046) 

-0.480*** 

-0.451** 

-0.871*** 

-0.438** 

-0.826*** 

(0.141) 

(0.150) 

(0.105) 

(0.143) 

(0.106) 

-0.527*** 

(0.092) 

-0.689*** 

-0.458*** 

-0.653*** 

(0.076) 

(0.095) 

(0.077) 

November 2014  128 

 
 
 
 
 
 
 
 
 
 
                               
                               
                               
                               
                               
                               
                               
                               
                               
                               
 
                               
 
 
 
                               
 
 
Private bond mkt. Capitalisation to GDP, partner 

Public bond mkt. Capitalisation to GDP, reporter 

Private bond mkt. Capitalisation to GDP, reporter 

Public + Private Bond Mkt Cap. %GDP, Partner 

Public + Private Bond Mkt Cap. %GDP, Reporter 

Stock mkt. capitalisation to GDP, partner 

Stock mkt. capitalisation to GDP, reporter 

 Analysis of developments in EU capital flows in the global context 

0.294*** 

(0.050) 

-0.226* 

(0.115) 

1.283*** 

(0.054) 

0.289*** 

0.332*** 

0.294*** 

(0.045) 

0.279 

(0.231) 

-0.054 

(0.079) 

(0.050) 

-0.220 

(0.122) 

(0.045) 

0.696* 

(0.311) 

1.327*** 

-0.095 

(0.054) 

(0.092) 

-0.020 

(0.112) 

1.627*** 

(0.111) 

0.472*** 

(0.090) 

1.472*** 

(0.103) 

Constant                       

5.778*** 

-1.252 

-15.343*** 

-18.933* 

-1.746 

-3.277 

(0.906) 

(1.024) 

(1.389) 

(8.916) 

(1.074) 

(18.654) 

R-squared                      

N                              

Country dummies 
time dummies 

0.415 

2518 

0.681 

1339 

0.651 

1339 

0.777 

1339 

y 

0.690 

1339 

0.782 

1339 

y 

y 
y 

STOCKS  Without  offshore  centres  and  without 
LUX/IE/NL/CY/SG/HK                                                                                                                                                                                     

Real  FDI  - 
Model 3 

Real  FDI  - 
Model 5 

Real  FDI  - 
Model 2 

Real  FDI  - 
Model 1 

Real  FDI  - 
Model 4 

Real  FDI  - 
Model 6 

November 2014  129 

 
 
 
 
 
                               
 
 
 
 
                               
 
 
 
 
                               
 
 
 
 
 
 
 
                               
 
 
 
 
 
 
 
 
 
 
                               
 
 
 
 
 
 
 
 
 
 
                               
 
 
 
 
 
 
 
 
 
 
                               
 
 
 
 
 
                               
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 Analysis of developments in EU capital flows in the global context 

dummy (1 if only one of the two in EA in year t) 

dummy (1 if both in EA in year t) 

dummy (1 if only one of the two in EU) 

dummy (1 if both in EU)        

Log(General Govt. Debt to GDP, partner) 

Log(Trade to GDP, partner)     

dummy (1 if contiguous)        

log_abs_dist                   

log(population, reporter)      

log(population, partner)       

log_ggbondyield_pt             

Public bond mkt. Capitalisation to GDP, partner 

Private bond mkt. Capitalisation to GDP, partner 

Public bond mkt. Capitalisation to GDP, reporter 

Private bond mkt. Capitalisation to GDP, reporter 

0.283 
(0.171) 
0.881*** 
(0.216) 
0.783** 
(0.248) 
2.150*** 
(0.272) 
-0.295*** 
(0.077) 
-0.195 
(0.166) 
1.642*** 
(0.176) 
-0.173** 
(0.055) 
1.407*** 
(0.056) 
0.781*** 
(0.042) 

-0.093 
(0.225) 
0.356 
(0.305) 
0.699* 
(0.311) 
2.022*** 
(0.402) 
-0.548*** 
(0.090) 
0.594** 
(0.206) 
1.709*** 
(0.167) 
-0.183** 
(0.068) 
1.039*** 
(0.078) 
0.957*** 
(0.049) 
0.883*** 
(0.193) 

-0.344 
(0.208) 
0.036 
(0.265) 
0.644* 
(0.310) 
2.177*** 
(0.374) 
-0.333*** 
(0.081) 
0.086 
(0.196) 
0.593*** 
(0.166) 
-0.434*** 
(0.066) 
1.253*** 
(0.075) 
1.306*** 
(0.058) 
0.854*** 
(0.175) 
-0.755*** 
(0.112) 
0.394*** 
(0.060) 
-0.078 
(0.138) 
1.526*** 

-1.393*** 
(0.227) 
-2.037*** 
(0.323) 
0.931** 
(0.302) 
2.671*** 
(0.397) 
-0.344*** 
(0.076) 
1.013 
(0.632) 
0.745*** 
(0.151) 
-0.577*** 
(0.065) 
5.065* 
(2.526) 
1.400*** 
(0.058) 
0.837*** 
(0.163) 
-0.899*** 
(0.106) 
0.396*** 
(0.052) 
0.707* 
(0.286) 
0.310** 

-0.385 
(0.209) 
-0.033 
(0.268) 
0.674* 
(0.311) 
2.246*** 
(0.377) 
-0.387*** 
(0.084) 
0.224 
(0.203) 
0.523** 
(0.171) 
-0.440*** 
(0.067) 
1.311*** 
(0.078) 
1.327*** 
(0.059) 
0.879*** 
(0.179) 
-0.786*** 
(0.113) 
0.411*** 
(0.061) 
-0.181 
(0.147) 
1.547*** 

-1.407*** 
(0.227) 
-2.054*** 
(0.325) 
0.937** 
(0.302) 
2.673*** 
(0.399) 
-0.345*** 
(0.077) 
1.390 
(1.121) 
0.735*** 
(0.152) 
-0.583*** 
(0.064) 
1.459 
(4.012) 
1.417*** 
(0.058) 
0.868*** 
(0.169) 
-0.944*** 
(0.107) 
0.391*** 
(0.052) 
0.292 
(0.326) 
0.206 

November 2014  130 

 
 
 
                               
                               
                               
                               
                               
                               
                               
                               
                               
                               
 
                               
 
 
 
                               
 
 
 
 
                               
 
 
 
 
                               
 
 
 
 
 Analysis of developments in EU capital flows in the global context 

(0.071) 

(0.103) 

(0.070) 

(0.112) 

Public + Private Bond Mkt Cap. %GDP, Partner 

Public + Private Bond Mkt Cap. %GDP, Reporter 

Stock mkt. capitalisation to GDP, partner 

Stock mkt. capitalisation to GDP, reporter 

Constant                       

R-squared                      
N                              

Country dummies 
time dummies 

Table 11 Regression results for flows  

-0.094 
(0.122) 
2.074*** 
(0.136) 
0.417*** 
(0.101) 
1.132*** 
(0.125) 
-17.316*** 
(1.544) 

-0.177 
(0.927) 

-5.234*** 
(1.206) 

0.424 
2431 

0.645 
1280 

0.575 
1280 

-22.704 
(11.580) 

-5.122*** 
(1.239) 

-6.526 
(20.906) 

0.734 
1280 

y 

0.647 
1280 

0.735 
1280 

y 

y 
y 

FLOWS                          

Real  Debt  - 
Model 1 

Real  debt 
Model 2 

- 

Real  debt 
Model 3 

- 

Real  debt 
Model 4 

- 

Real  debt 
Model 5 

- 

Real  debt 
Model 6 

- 

dummy  (1  if  only  one  of  the  two  in 
EA in year t) 

dummy (1 if both in EA in year t) 

dummy  (1  if  only  one  of  the  two  in 
EU) 

2.063*** 

2.220*** 

2.425*** 

1.344*** 

2.242*** 

1.369*** 

(0.134) 
4.115*** 
(0.182) 

(0.217) 
3.688*** 
(0.266) 

(0.214) 
4.073*** 
(0.262) 

(0.201) 
1.933*** 
(0.295) 

(0.211) 
3.743*** 
(0.260) 

(0.202) 
1.976*** 
(0.300) 

-0.779*** 

-1.557*** 

-1.647*** 

-0.812** 

-1.626*** 

-0.886** 

November 2014  131 

 
 
 
                               
 
 
 
 
 
 
 
                               
 
 
 
 
 
 
 
 
 
 
                               
 
 
 
 
 
 
 
 
 
 
                               
 
 
 
 
 
 
 
 
 
 
                               
 
 
 
 
 
                               
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                               
                               
 Analysis of developments in EU capital flows in the global context 

dummy (1 if both in EU)        

Log(General  Govt.  Debt  to  GDP, 
partner) 

(0.183) 
-0.643** 
(0.211) 

(0.306) 
-0.960** 
(0.366) 

(0.294) 
-1.270*** 
(0.355) 

-0.018 

0.066 

-0.059 

(0.081) 
0.585*** 
(0.121) 
1.174*** 
(0.139) 
-0.100 
(0.052) 
0.371*** 
(0.059) 
0.256*** 
(0.041) 
0.356 
(0.195) 

(0.065) 
0.492*** 
(0.100) 
1.069*** 
(0.139) 
-0.156*** 
(0.040) 
0.493*** 
(0.037) 
0.364*** 
(0.030) 

Log(Trade to GDP, partner)     

dummy (1 if contiguous)        

log_abs_dist                   

log(population, reporter)      

log(population, partner)       

log_ggbondyield_pt             

Public  bond  mkt.  Capitalisation  to 
GDP, partner 

Private  bond  mkt.  Capitalisation  to 
GDP, partner 

Public  bond  mkt.  Capitalisation  to 
GDP, reporter 

Private  bond  mkt.  Capitalisation  to 
GDP, reporter 

(0.082) 
0.710*** 
(0.116) 
0.777*** 
(0.135) 
-0.035 
(0.048) 
0.511*** 
(0.062) 
0.291*** 
(0.047) 
0.209 
(0.202) 

0.178 

(0.114) 

0.445*** 

(0.054) 

-0.133 

(0.100) 

0.697*** 

(0.055) 

(0.291) 
0.527 
(0.383) 

0.068 

(0.075) 
0.523 
(0.630) 
0.658*** 
(0.137) 
-0.094 
(0.050) 
0.397 
(2.095) 
0.356*** 
(0.046) 
-0.137 
(0.175) 

0.020 

(0.105) 

(0.301) 
-1.072** 
(0.360) 

0.002 

(0.085) 
0.737*** 
(0.115) 
0.763*** 
(0.135) 
-0.022 
(0.048) 
0.509*** 
(0.061) 
0.298*** 
(0.047) 
0.236 
(0.201) 

0.230* 

(0.113) 

(0.293) 
0.423 
(0.390) 

0.077 

(0.076) 
0.043 
(0.903) 
0.679*** 
(0.138) 
-0.094 
(0.050) 
-0.922 
(2.814) 
0.357*** 
(0.046) 
-0.109 
(0.184) 

0.024 

(0.107) 

0.443*** 

0.476*** 

0.448*** 

(0.050) 

(0.053) 

(0.050) 

-0.246 

-0.082 

-0.056 

(0.239) 

(0.103) 

(0.286) 

-0.097 

0.733*** 

-0.105 

(0.106) 

(0.054) 

(0.114) 

November 2014  132 

 
 
 
                               
                               
                               
                               
                               
                               
                               
                               
 
                               
 
 
 
                               
 
 
 
 
                               
 
 
 
 
                               
 
 
 
 
                               
 
 
 Analysis of developments in EU capital flows in the global context 

Public  +  Private  Bond  Mkt  Cap. 
%GDP, Partner 

Public  +  Private  Bond  Mkt  Cap. 
%GDP, Reporter 

Stock  mkt.  capitalisation  to  GDP, 
partner 

Stock  mkt.  capitalisation  to  GDP, 
reporter 

0.914*** 

(0.117) 

1.067*** 

(0.105) 

0.229* 

(0.090) 

0.710*** 

(0.084) 

Constant                       

R-squared                      
N                              

-0.362 
(0.612) 
0.381 
2886 

-4.988*** 
(1.029) 
0.512 
1237 

-11.998*** 
(1.136) 
0.508 
1237 

0.511 
(6.001) 
0.606 
1237 

-5.038*** 
(1.045) 
0.522 
1237 

5.693 
(9.701) 
0.607 
1237 

FLOWS              

Real Ptf. Debt - 
Model 1 

Real Ptf. debt - 
Model 2 

Real Ptf. debt - 
Model 3 

Real Ptf. debt - 
Model 4 

Real Ptf. debt - 
Model 5 

Real Ptf. debt - 
Model 6 

dummy  (1  if  only  one  of  the 
two in EA in year t) 

dummy (1 if both in EA in year 
t) 

1.712*** 

2.106*** 

2.397*** 

0.736** 

2.114*** 

0.818*** 

(0.161) 

(0.265) 

(0.264) 

(0.226) 

(0.260) 

(0.232) 

4.200*** 

4.283*** 

4.765*** 

1.554*** 

4.306*** 

1.697*** 

dummy  (1  if  only  one  of  the  -0.778*** 

(0.213) 

(0.347) 
-1.859*** 

(0.343) 
-1.993*** 

(0.333) 
-0.694* 

(0.343) 
-1.904*** 

(0.349) 
-0.795* 

November 2014  133 

 
 
 
 
 
 
 
 
                               
 
 
 
 
 
 
 
 
 
 
                               
 
 
 
 
 
 
 
 
 
 
                               
 
 
 
 
 
 
 
 
 
 
                               
 
 
 
 
 
 
 
 
 
 
 
 
                               
 
 
 
 
 
 
 
 
 
 
 
                               
                               
 Analysis of developments in EU capital flows in the global context 

(0.206) 
-0.593* 
(0.240) 

0.057 

(0.075) 
0.239* 
(0.120) 
1.130*** 
(0.162) 
-0.002 
(0.045) 
0.425*** 
(0.039) 
0.463*** 
(0.037) 

two in EU) 

dummy (1 if both in EU)        

Log(General  Govt.  Debt 
GDP, partner) 

to 

Log(Trade to GDP, partner)     

dummy (1 if contiguous)        

log_abs_dist                   

log(population, reporter)      

log(population, partner)       

log_ggbondyield_pt             

Public  bond  mkt.  Capitalisation 
to GDP, partner 

Private bond mkt. Capitalisation 
to GDP, partner 

Public  bond  mkt.  Capitalisation 
to GDP, reporter 

Private bond mkt. Capitalisation 
to GDP, reporter 

(0.371) 
-1.954*** 
(0.467) 

(0.361) 
-2.363*** 
(0.458) 

-0.039 

-0.139 

(0.092) 
0.350* 
(0.141) 
0.996*** 
(0.166) 
-0.051 
(0.057) 
0.178* 
(0.072) 
0.332*** 
(0.047) 
1.029*** 
(0.248) 

(0.090) 
0.442** 
(0.136) 
0.542*** 
(0.151) 
0.024 
(0.052) 
0.339*** 
(0.074) 
0.348*** 
(0.057) 
0.815** 
(0.252) 

0.263 

(0.136) 

0.437*** 

(0.060) 

-0.118 

(0.112) 

0.914*** 

(0.328) 
0.292 
(0.424) 

-0.081 

(0.080) 
-1.148 
(0.673) 
0.428** 
(0.153) 
-0.040 
(0.054) 
-1.618 
(2.093) 
0.461*** 
(0.050) 
0.373 
(0.215) 

-0.014 

(0.115) 

(0.367) 
-2.050*** 
(0.464) 

-0.176 

(0.091) 
0.515*** 
(0.131) 
0.483** 
(0.152) 
0.031 
(0.051) 
0.349*** 
(0.072) 
0.368*** 
(0.055) 
0.886*** 
(0.258) 

0.314* 

(0.133) 

(0.325) 
0.123 
(0.432) 

-0.087 

(0.080) 
-0.862 
(0.916) 
0.440** 
(0.154) 
-0.045 
(0.054) 
2.085 
(3.117) 
0.459*** 
(0.050) 
0.447 
(0.233) 

0.021 

(0.116) 

0.439*** 

0.483*** 

0.451*** 

(0.052) 

-0.011 

(0.253) 

-0.046 

(0.058) 

-0.040 

(0.117) 

(0.053) 

0.170 

(0.321) 

0.988*** 

0.012 

November 2014  134 

 
 
 
                               
                               
                               
                               
                               
                               
                               
                               
 
                               
 
 
 
                               
 
 
 
 
                               
 
 
 
 
                               
 
 
 
 
 Analysis of developments in EU capital flows in the global context 

(0.065) 

(0.105) 

(0.063) 

(0.112) 

Public  +  Private  Bond  Mkt  Cap. 
%GDP, Partner 

Public  +  Private  Bond  Mkt  Cap. 
%GDP, Reporter 

Stock  mkt.  capitalisation 
GDP, partner 

to 

Stock  mkt.  capitalisation 
GDP, reporter 

to 

Constant                       

R-squared                      
N                              

-0.675 
(0.731) 
0.368 
2457 

-5.246*** 
(1.189) 
0.472 
1165 

1.070*** 

(0.136) 

1.431*** 

(0.124) 

0.119 

(0.112) 

0.842*** 

(0.107) 
-13.894*** 
(1.340) 
0.459 
1165 

11.554 
(6.012) 
0.622 
1165 

-5.258*** 
(1.205) 
0.495 
1165 

-1.481 
(10.506) 
0.624 
1165 

FLOWS      

Real Other Inv. 
- Model 1 

Real  Other  Inv.  
- Model 2 

Real Other Inv. 
- Model 3 

Real Other Inv. 
- Model 4 

Real Other Inv. 
- Model 5 

Real  Other  Inv. 
-- Model 6 

dummy  (1  if  only  one  of  the 
two in EA in year t) 

dummy  (1  if  both  in  EA  in 
year t) 

dummy  (1  if  only  one  of  the 
two in EU) 

1.668*** 

2.006*** 

2.203*** 

1.694*** 

2.023*** 

1.678*** 

(0.134) 

(0.187) 

(0.187) 

(0.208) 

(0.186) 

(0.210) 

3.667*** 

3.425*** 

3.803*** 

2.758*** 

3.535*** 

2.771*** 

(0.186) 

(0.267) 

(0.262) 

(0.344) 

(0.264) 

(0.346) 

-0.909*** 

-1.587*** 

-1.726*** 

-1.186*** 

-1.632*** 

-1.180*** 

November 2014  135 

 
 
 
                               
 
 
 
 
 
 
 
                               
 
 
 
 
 
 
 
 
 
 
                               
 
 
 
 
 
 
 
 
 
 
                               
 
 
 
 
 
 
 
 
 
 
                               
 
 
 
 
 
                               
 
 
 
 
 
 
 
 
 
 
                               
                               
 Analysis of developments in EU capital flows in the global context 

dummy (1 if both in EU)        

-1.132*** 

(0.195) 

Log(General  Govt.  Debt  to 
GDP, partner) 

(0.223) 

-0.054 

(0.069) 

Log(Trade to GDP, partner)      0.794*** 

(0.112) 

dummy (1 if contiguous)         1.182*** 

(0.154) 

(0.304) 

-0.896* 

(0.375) 

0.058 

(0.101) 

1.174*** 

(0.142) 

0.873*** 

(0.166) 

(0.294) 

-1.225*** 

(0.364) 

-0.097 

(0.101) 

1.077*** 

(0.148) 

1.202*** 

(0.175) 

(0.307) 

-0.107 

(0.421) 

0.032 

(0.102) 

0.009 

(0.775) 

0.649*** 

(0.175) 

(0.298) 

-1.043** 

(0.368) 

0.012 

(0.103) 

1.190*** 

(0.141) 

0.851*** 

(0.168) 

(0.312) 

-0.129 

(0.428) 

0.047 

(0.101) 

-1.289 

(1.247) 

0.672*** 

(0.176) 

log_abs_dist                   

-0.379*** 

-0.176** 

-0.223*** 

-0.249*** 

-0.155** 

-0.245*** 

(0.044) 

0.533*** 

(0.040) 

0.206*** 

(0.031) 

log(population, reporter)      

log(population, partner)       

log_ggbondyield_pt             

Public 
mkt. 
bond 
Capitalisation to GDP, partner 

Private 
mkt. 
Capitalisation to GDP, partner 

bond 

Public 
Capitalisation 
reporter 

bond 

to 

mkt. 
GDP, 

Private 

bond 

mkt. 

(0.059) 

0.726*** 

(0.071) 

0.191*** 

(0.051) 

-0.083 

(0.207) 

0.275* 

(0.136) 

0.609*** 

(0.065) 

-0.141 

(0.124) 

0.607*** 

(0.062) 

0.609*** 

(0.067) 

0.164*** 

(0.043) 

0.094 

(0.203) 

(0.064) 

0.171 

(2.747) 

0.232*** 

(0.052) 

-0.245 

(0.190) 

0.221 

(0.058) 

0.724*** 

(0.070) 

0.178*** 

(0.051) 

-0.049 

(0.204) 

(0.064) 

-2.213 

(4.066) 

0.224*** 

(0.053) 

-0.252 

(0.197) 

0.379** 

0.236 

(0.127) 

(0.135) 

(0.128) 

0.632*** 

0.647*** 

0.641*** 

(0.062) 

(0.064) 

(0.062) 

-1.139*** 

-0.035 

-0.721 

(0.333) 

-0.060 

(0.128) 

0.641*** 

(0.388) 

-0.092 

November 2014  136 

 
 
 
                               
                               
                               
                               
                               
                               
                               
                               
 
                               
 
 
 
                               
 
 
 
 
                               
 
 
 
 
                               
 
 
 
 
Capitalisation 
reporter 

to 

GDP, 

Public  +  Private  Bond  Mkt 
Cap. %GDP, Partner 

Public  +  Private  Bond  Mkt 
Cap. %GDP, Reporter 

Stock  mkt.  capitalisation  to 
GDP, partner 

Stock  mkt.  capitalisation  to 
GDP, reporter 

 Analysis of developments in EU capital flows in the global context 

(0.065) 

(0.154) 

(0.063) 

(0.163) 

1.134*** 

(0.128) 

0.929*** 

(0.124) 

0.359*** 

(0.102) 

0.540*** 

(0.095) 

Constant                       

R-squared                      

N                              

-0.669 

(0.654) 

0.342 

2547 

-7.889*** 

-14.632*** 

4.262 

-8.390*** 

15.060 

(1.251) 

0.480 

1139 

(1.377) 

0.476 

1139 

(8.337) 

0.533 

1139 

(1.243) 

0.493 

1139 

(14.802) 

0.536 

1139 

FLOWS      

Real  Equity  - 
Model 1 

Real  Equity  - 
Model 2 

Real  Equity  - 
Model 3 

Real  Equity  - 
Model 4 

Real  Equity  - 
Model 5 

Real  Equity  - 
Model 6 

dummy  (1  if  only  one  of  the  two 
in EA in year t) 

dummy (1 if both in EA in year t) 

1.680*** 
(0.151) 
3.070*** 
(0.201) 

0.577* 
(0.239) 
1.327*** 
(0.294) 

0.778*** 
(0.229) 
1.641*** 
(0.293) 

0.302 
(0.236) 
0.635 
(0.346) 

0.614** 
(0.237) 
1.396*** 
(0.291) 

0.305 
(0.233) 
0.632 
(0.343) 

November 2014  137 

 
 
 
                               
 
 
 
 
 
 
 
                               
 
 
 
 
 
 
 
 
 
 
                               
 
 
 
 
 
 
 
 
 
 
                               
 
 
 
 
 
 
 
 
 
 
                               
 
 
 
 
 
                               
 
 
 
 
 
 
 
 
 
 
                               
                               
 Analysis of developments in EU capital flows in the global context 

-0.704*** 
(0.200) 
-0.300 
(0.223) 

-0.299*** 
(0.077) 
0.382*** 
(0.096) 
1.109*** 
(0.162) 
-0.080 
(0.045) 
0.814*** 
(0.040) 
0.524*** 
(0.035) 

dummy  (1  if  only  one  of  the  two 
in EU) 

dummy (1 if both in EU)        

Log(General  Govt.  Debt  to  GDP, 
partner) 

Log(Trade to GDP, partner)     

dummy (1 if contiguous)        

log_abs_dist                   

log(population, reporter)      

log(population, partner)       

log_ggbondyield_pt             

Public  bond  mkt.  Capitalisation  to 
GDP, partner 

Private  bond  mkt.  Capitalisation 
to GDP, partner 

Public  bond  mkt.  Capitalisation  to 
GDP, reporter 

Private  bond  mkt.  Capitalisation 
to GDP, reporter 

0.347 
(0.359) 
1.075** 
(0.415) 

-0.103 
(0.093) 
0.486*** 
(0.120) 
0.401* 
(0.166) 
-0.199*** 
(0.053) 
0.696*** 
(0.077) 
0.793*** 
(0.066) 
-0.187 
(0.199) 

-0.557*** 
(0.129) 

0.108 
(0.060) 

-0.435*** 
(0.122) 

0.849*** 

0.261 
(0.327) 
0.825* 
(0.400) 

-0.077 
(0.089) 
0.220 
(0.132) 
1.066*** 
(0.164) 
-0.272*** 
(0.059) 
0.437*** 
(0.068) 
0.609*** 
(0.055) 
-0.119 
(0.200) 

0.597 
(0.332) 
1.705*** 
(0.458) 

-0.021 
(0.087) 
1.665* 
(0.653) 
0.530** 
(0.161) 
-0.328*** 
(0.062) 
3.900 
(2.303) 
0.799*** 
(0.063) 
-0.382* 
(0.184) 

0.281 
(0.358) 
0.914* 
(0.418) 

-0.076 
(0.093) 
0.535*** 
(0.122) 
0.430* 
(0.168) 
-0.181*** 
(0.053) 
0.688*** 
(0.076) 
0.772*** 
(0.066) 
-0.177 
(0.200) 

0.576 
(0.332) 
1.641*** 
(0.461) 

0.028 
(0.086) 
0.145 
(0.971) 
0.556*** 
(0.164) 
-0.333*** 
(0.062) 
-0.823 
(3.169) 
0.795*** 
(0.062) 
-0.410* 
(0.190) 

-0.653*** 
(0.123) 

-0.440*** 
(0.127) 

-0.627*** 
(0.123) 

0.137* 
(0.056) 

-0.198 
(0.242) 

0.125* 
(0.062) 

-0.316* 
(0.124) 

0.133* 
(0.056) 

0.311 
(0.291) 

-0.025 

0.869*** 

-0.077 

November 2014  138 

 
 
 
                               
                               
                               
                               
                               
                               
                               
                               
 
                               
 
 
 
                               
 
 
 
 
                               
 
 
 
 
                               
 
 
 
 
 Analysis of developments in EU capital flows in the global context 

(0.057) 

(0.113) 

(0.057) 

(0.119) 

Public  +  Private  Bond  Mkt  Cap. 
%GDP, Partner 

Public  +  Private  Bond  Mkt  Cap. 
%GDP, Reporter 

Stock  mkt.  capitalisation  to  GDP, 
partner 

Stock  mkt.  capitalisation  to  GDP, 
reporter 

Constant                       

R-squared                      
N                              

-0.992 
(0.629) 
0.351 
3138 

-1.110 
(1.150) 
0.429 
1268 

-0.303* 
(0.137) 

1.103*** 
(0.120) 

0.532*** 
(0.105) 

1.045*** 
(0.088) 
-9.072*** 
(1.290) 
0.429 
1268 

-11.205 
(6.909) 
0.534 
1268 

-2.021 
(1.193) 
0.440 
1268 

7.204 
(11.106) 
0.540 
1268 

FLOWS   

Real  Ptf.Equity 
- Model 1 

Real  Ptf.Equity 
- Model 2 

Real  Ptf.Equity 
- Model 3 

Real  Ptf.Equity 
- Model 4 

Real  Ptf.Equity 
- Model 5 

Real  Ptf.Equity 
- Model 6 

dummy  (1  if  only  one  of  the 
two in EA in year t) 

dummy (1 if both in EA in year 
t) 

dummy  (1  if  only  one  of  the 
two in EU) 

1.734*** 

0.806*** 

1.267*** 

0.773** 

0.838*** 

0.789** 

(0.179) 

(0.243) 

(0.259) 

(0.264) 

(0.241) 

(0.263) 

3.970*** 

2.068*** 

2.955*** 

2.027*** 

2.123*** 

2.073*** 

(0.242) 

(0.312) 

-0.732** 

0.122 

(0.333) 

-0.350 

(0.403) 

(0.316) 

(0.404) 

0.538 

0.036 

0.484 

November 2014  139 

 
 
 
                               
 
 
 
 
 
 
 
                               
 
 
 
 
 
 
 
 
 
 
                               
 
 
 
 
 
 
 
 
 
 
                               
 
 
 
 
 
 
 
 
 
 
                               
 
 
 
 
 
                               
 
 
 
 
 
 
 
 
 
 
                               
                               
dummy (1 if both in EU)        

(0.224) 

-1.325*** 

(0.265) 

Log(General  Govt.  Debt  to 
GDP, partner) 

-0.030 

(0.085) 
Log(Trade to GDP, partner)      0.251* 
(0.119) 

0.568** 

(0.178) 

-0.065 

(0.054) 

0.792*** 

(0.048) 

0.538*** 

(0.040) 

dummy (1 if contiguous)        

log_abs_dist                   

log(population, reporter)      

log(population, partner)       

log_ggbondyield_pt             

Public bond mkt. Capitalisation 
to GDP, partner 

Private 
Capitalisation to GDP, partner 

bond 

mkt. 

Public bond mkt. Capitalisation 
to GDP, reporter 

mkt. 
Private 
Capitalisation to GDP, reporter 

bond 

 Analysis of developments in EU capital flows in the global context 

(0.365) 

0.340 

(0.436) 

0.142 

(0.094) 

0.395** 

(0.132) 

-0.278 

(0.210) 

(0.345) 

-0.737 

(0.434) 

0.009 

(0.100) 

0.326* 

(0.150) 

0.530* 

(0.207) 

(0.361) 

1.251* 

(0.507) 

0.242* 

(0.095) 

0.975 

(0.761) 

0.086 

(0.210) 

(0.372) 

0.174 

(0.449) 

0.106 

(0.095) 

0.439** 

(0.134) 

-0.263 

(0.208) 

(0.360) 

1.119* 

(0.511) 

0.291** 

(0.094) 

-0.445 

(1.042) 

0.127 

(0.210) 

-0.228*** 

-0.216** 

-0.329*** 

-0.215** 

-0.336*** 

(0.068) 

0.567*** 

(0.076) 

0.547*** 

(0.059) 

-0.361 

(0.214) 

(0.066) 

0.958*** 

(0.076) 

0.794*** 

(0.069) 

-0.648** 

(0.208) 

-0.573*** 

(0.142) 

0.346*** 

(0.059) 

-0.642*** 

(0.131) 

0.991*** 

(0.074) 

-0.202 

(2.251) 

0.779*** 

(0.067) 

(0.066) 

0.934*** 

(0.076) 

0.765*** 

(0.068) 

(0.073) 

-3.532 

(3.339) 

0.765*** 

(0.067) 

-0.954*** 

-0.626** 

-0.969*** 

(0.194) 

(0.219) 

(0.204) 

-0.713*** 

-0.420** 

-0.655*** 

(0.136) 

(0.143) 

(0.140) 

0.380*** 

0.402*** 

0.386*** 

(0.057) 

-0.156 

(0.301) 

0.056 

(0.062) 

(0.059) 

-0.526*** 

0.524 

(0.135) 

(0.382) 

1.035*** 

0.029 

November 2014  140 

 
 
 
                               
                               
                               
                               
                               
                               
                               
                               
 
                               
 
 
 
                               
 
 
 
 
                               
 
 
 
 
                               
 
 
 
 
 Analysis of developments in EU capital flows in the global context 

(0.064) 

(0.133) 

(0.063) 

(0.142) 

Public  +  Private  Bond  Mkt 
Cap. %GDP, Partner 

Public  +  Private  Bond  Mkt 
Cap. %GDP, Reporter 

Stock  mkt.  capitalisation  to 
GDP, partner 

Stock  mkt.  capitalisation  to 
GDP, reporter 

0.379* 

(0.150) 

1.478*** 

(0.134) 

0.408*** 

(0.116) 

1.003*** 

(0.098) 

Constant                       

R-squared                      

N                              

-2.216** 

(0.748) 

0.322 

2372 

-2.930* 

(1.275) 

0.465 

1099 

-14.312*** 

1.917 

(1.465) 

0.420 

1099 

(6.830) 

0.539 

1099 

-3.469* 

(1.396) 

0.475 

1099 

15.069 

(11.604) 

0.544 

1099 

FLOWS                              

Real  FDI 
Model 1 

- 

Real  FDI 
Model 2 

- 

Real  FDI 
Model 3 

- 

Real  FDI 
Model 4 

- 

Real  FDI 
Model 5 

- 

Real  FDI 
Model 6 

- 

dummy  (1  if  only  one  of  the  two  in 
EA in year t) 

dummy (1 if both in EA in year t) 

dummy  (1  if  only  one  of  the  two  in 
EU) 

1.121*** 
(0.151) 
2.306*** 
(0.204) 

-0.819*** 
(0.210) 

0.178 
(0.243) 
0.731* 
(0.311) 

-0.215 
(0.385) 

0.287 
(0.235) 
0.902** 
(0.309) 

-0.007 
(0.361) 

-0.401 
(0.247) 
-0.444 
(0.370) 

0.331 
(0.357) 

0.230 
(0.242) 
0.820** 
(0.308) 

-0.308 
(0.382) 

-0.399 
(0.246) 
-0.436 
(0.368) 

0.309 
(0.359) 

November 2014  141 

 
 
 
                               
 
 
 
 
 
 
 
                               
 
 
 
 
 
 
 
 
 
 
                               
 
 
 
 
 
 
 
 
 
 
                               
 
 
 
 
 
 
 
 
 
 
                               
 
 
 
 
 
                               
 
 
 
 
 
 
 
 
 
                               
                               
                               
 Analysis of developments in EU capital flows in the global context 

-0.265 
(0.233) 

-0.443*** 
(0.082) 
0.443*** 
(0.099) 
1.456*** 
(0.184) 
-0.015 
(0.047) 
0.772*** 
(0.042) 
0.479*** 
(0.036) 

dummy (1 if both in EU)        

Log(General  Govt.  Debt  to  GDP, 
partner) 

Log(Trade to GDP, partner)     

dummy (1 if contiguous)        

log_abs_dist                   

log(population, reporter)      

log(population, partner)       

log_ggbondyield_pt             

Public  bond  mkt.  Capitalisation  to 
GDP, partner 

Private  bond  mkt.  Capitalisation  to 
GDP, partner 

Public  bond  mkt.  Capitalisation  to 
GDP, reporter 

Private  bond  mkt.  Capitalisation  to 
GDP, reporter 

Public  +  Private  Bond  Mkt  Cap. 
%GDP, Partner 

0.952* 
(0.452) 

-0.334** 
(0.106) 
0.786*** 
(0.133) 
0.850*** 
(0.188) 
-0.154** 
(0.059) 
0.674*** 
(0.089) 
0.876*** 
(0.074) 
0.292 
(0.203) 

-0.706*** 
(0.132) 

0.096 
(0.079) 

-0.141 
(0.134) 

0.878*** 
(0.064) 

1.117* 
(0.445) 

1.884*** 
(0.483) 

0.770 
(0.453) 

-0.378*** 
(0.102) 
0.535*** 
(0.148) 
1.511*** 
(0.183) 
-0.209** 
(0.065) 
0.499*** 
(0.080) 
0.656*** 
(0.061) 
0.428* 
(0.214) 

-0.304** 
(0.095) 
1.965* 
(0.786) 
0.750*** 
(0.175) 
-0.283*** 
(0.066) 
3.638 
(2.561) 
0.928*** 
(0.073) 
0.146 
(0.184) 

-0.338** 
(0.109) 
0.841*** 
(0.135) 
0.897*** 
(0.188) 
-0.128* 
(0.059) 
0.674*** 
(0.087) 
0.857*** 
(0.075) 
0.374 
(0.204) 

1.849*** 
(0.487) 

-0.283** 
(0.095) 
1.301 
(1.218) 
0.788*** 
(0.175) 
-0.282*** 
(0.066) 
1.271 
(3.570) 
0.927*** 
(0.073) 
0.165 
(0.191) 

-0.863*** 
(0.127) 

-0.588*** 
(0.133) 

-0.835*** 
(0.129) 

0.103 
(0.071) 

-0.100 
(0.259) 

0.216 
(0.132) 

0.126 
(0.080) 

-0.024 
(0.137) 

0.899*** 
(0.066) 

0.107 
(0.073) 

0.268 
(0.302) 

0.205 
(0.141) 

-0.484** 

November 2014  142 

 
 
 
                               
                               
                               
                               
                               
                               
                               
 
                               
 
 
 
                               
 
 
 
 
                               
 
 
 
 
                               
 
 
 
 
                               
 
 
 
 
 
 
 
 Analysis of developments in EU capital flows in the global context 

Public  +  Private  Bond  Mkt  Cap. 
%GDP, Reporter 

Stock  mkt.  capitalisation  to  GDP, 
partner 

Stock  mkt.  capitalisation  to  GDP, 
reporter 

Constant                       

R-squared                      
N                              

-0.629 
(0.631) 
0.308 
2816 

-3.184* 
(1.285) 
0.404 
1234 

(0.152) 

1.229*** 
(0.135) 

0.663*** 
(0.123) 

0.933*** 
(0.100) 
-10.714*** 
(1.512) 
0.400 
1234 

-12.554 
(7.855) 
0.533 
1234 

-4.388** 
(1.336) 
0.410 
1234 

-4.236 
(13.160) 
0.533 
1234 

Tables with ECM 

FLOWS, ECM Full sample                               

Real  FDI  - 
Model 1 

Real  FDI  - 
Model 2 

Real  FDI  - 
Model 3 

Real  FDI  - 
Model 4 

Real  FDI  - 
Model 5 

Real  FDI  - 
Model 6 

dummy (1 if only one of the two in EA in year t)  0.114*** 

0.004 

dummy (1 if both in EA in year t) 

dummy (1 if only one of the two in EU) 

dummy (1 if both in EU)        

Log(General Govt. Debt to GDP, partner) 

(0.029) 

0.102* 

(0.042) 

-0.082* 

(0.037) 

0.001 

(0.044) 

-0.016 

(0.050) 

-0.020 

(0.068) 

0.015 

(0.065) 

0.105 

(0.085) 

-0.019 

-0.000 

(0.048) 

-0.027 

(0.064) 

0.043 

(0.064) 

0.148 

(0.085) 

-0.028 

0.031 

(0.069) 

0.025 

(0.116) 

-0.016 

(0.081) 

0.027 

(0.125) 

-0.011 

0.009 

(0.051) 

-0.009 

(0.070) 

0.007 

(0.065) 

0.093 

(0.087) 

-0.020 

0.018 

(0.072) 

0.003 

(0.123) 

-0.015 

(0.083) 

0.032 

(0.130) 

-0.012 

November 2014  143 

 
 
 
                               
 
 
 
 
 
 
 
 
 
 
                               
 
 
 
 
 
 
 
 
 
 
                               
 
 
 
 
 
 
 
 
 
 
                               
 
 
 
 
 
                               
 
 
 
 
                               
                               
                               
                               
 Analysis of developments in EU capital flows in the global context 

Log(Trade to GDP, partner)     

dummy (1 if contiguous)        

log_abs_dist                   

log(population, reporter)      

log(population, partner)       

log_unempl_P                   

L.Residuals                    

(0.016) 

-0.011 

(0.017) 

0.143** 

(0.048) 

0.012 

(0.007) 

(0.026) 

0.024 

(0.024) 

0.098 

(0.050) 

0.016 

(0.013) 

0.032*** 

0.031* 

(0.008) 

(0.015) 

0.026*** 

0.027 

(0.008) 

0.009 

(0.023) 

(0.021) 

0.009 

(0.037) 

0.040*** 

0.019* 

(0.006) 

(0.009) 

(0.027) 

0.003 

(0.025) 

0.123* 

(0.053) 

0.012 

(0.013) 

0.022 

(0.014) 

0.026 

(0.021) 

0.013 

(0.038) 

0.022* 

(0.009) 

(0.027) 

0.156 

(0.173) 

0.101 

(0.058) 

0.007 

(0.014) 

0.095 

(0.505) 

0.024 

(0.024) 

0.005 

(0.040) 

0.019 

(0.010) 

(0.026) 

0.025 

(0.025) 

0.103* 

(0.052) 

0.016 

(0.013) 

0.033* 

(0.015) 

0.031 

(0.021) 

0.020 

(0.038) 

0.020* 

(0.009) 

Log(VIX index)                 

-1.008*** 

-1.372*** 

-1.329*** 

-1.403*** 

0.000 

(0.037) 

(0.047) 

(0.055) 

(0.051) 

(0.000) 

(0.027) 

0.227 

(0.245) 

0.106 

(0.059) 

0.003 

(0.014) 

0.621 

(0.686) 

0.027 

(0.024) 

0.019 

(0.043) 

0.020* 

(0.010) 

0.000 

(0.000) 

Interaction VIX * real FDI stock 

0.316*** 

0.320*** 

0.320*** 

0.319*** 

0.319*** 

0.318*** 

log_ggbondyield_pt             

(0.002) 

Public bond mkt. Capitalisation to GDP, partner 

Private bond mkt. Capitalisation to GDP, partner 

Public bond mkt. Capitalisation to GDP, reporter 

(0.003) 

-0.016 

(0.037) 

-0.032 

(0.024) 

-0.000 

(0.018) 

0.004 

(0.024) 

(0.003) 

0.004 

(0.039) 

(0.003) 

-0.015 

(0.038) 

-0.032 

(0.027) 

-0.007 

(0.021) 

0.024 

(0.042) 

(0.003) 

-0.015 

(0.036) 

-0.039 

(0.025) 

-0.003 

(0.019) 

0.008 

(0.024) 

(0.004) 

-0.007 

(0.038) 

-0.037 

(0.028) 

-0.004 

(0.021) 

0.068 

(0.052) 

November 2014  144 

 
 
 
                               
                               
                               
                               
                               
                               
                               
                               
                               
                               
 
                               
 
 
 
                               
 
 
 
 
                               
 
 
 
 
                               
 
 
Private bond mkt. Capitalisation to GDP, reporter 

Public + Private Bond Mkt Cap. %GDP, Partner 

Public + Private Bond Mkt Cap. %GDP, Reporter 

Stock mkt. capitalisation to GDP, partner 

Stock mkt. capitalisation to GDP, reporter 

 Analysis of developments in EU capital flows in the global context 

0.062*** 

(0.016) 

0.156*** 

0.064*** 

0.174*** 

(0.039) 

(0.015) 

(0.036) 

-0.028 

(0.030) 

0.069** 

(0.027) 

0.042 

(0.024) 

0.043* 

(0.021) 

Constant                       

3.072*** 

3.896*** 

3.451*** 

2.898* 

(0.152) 

(0.252) 

(0.302) 

(1.354) 

-0.344 

(0.213) 

-3.408 

(2.412) 

R-squared                      

N                              

0.989 

1417 

0.987 

620 

0.987 

620 

0.988 

620 

0.987 

620 

0.988 

620 

FLOWS, ECM Full sample 

Real  Equity  - 
Model 1 

Real  Equity  - 
Model 2 

Real  Equity  - 
Model 3 

Real  Equity  - 
Model 4 

Real  Equity  - 
Model 5 

Real  Equity  - 
Model 6 

dummy  (1  if  only  one  of  the  two 
in EA in year t) 

0.099*** 

(0.027) 

dummy (1 if both in EA in year t) 

0.158*** 

dummy  (1  if  only  one  of  the  two 
in EU) 

(0.041) 

-0.013 

(0.034) 

-0.002 

(0.045) 

-0.009 

(0.056) 

0.081 

(0.060) 

0.018 

(0.044) 

0.029 

(0.058) 

0.066 

(0.061) 

0.020 

(0.067) 

0.038 

(0.108) 

0.026 

(0.075) 

-0.003 

(0.045) 

-0.010 

(0.056) 

0.083 

(0.060) 

0.003 

(0.069) 

0.004 

(0.113) 

0.040 

(0.077) 

November 2014  145 

 
 
 
 
 
                               
 
 
 
 
 
 
 
                               
 
 
 
 
 
 
 
 
 
 
                               
 
 
 
 
 
 
 
 
 
 
                               
 
 
 
 
 
 
 
 
 
 
                               
 
 
 
 
 
                               
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                               
                               
                               
 Analysis of developments in EU capital flows in the global context 

dummy (1 if both in EU)        

Log(General  Govt.  Debt  to  GDP, 
partner) 

0.020 

(0.040) 

-0.021 

(0.014) 

Log(Trade to GDP, partner)     

0.017 

dummy (1 if contiguous)        

log_abs_dist                   

log(population, reporter)      

log(population, partner)       

log_unempl_P                   

L.Residuals                    

(0.016) 

0.061 

(0.045) 

-0.013 

(0.007) 

0.044*** 

(0.008) 

0.033*** 

(0.008) 

0.001 

(0.021) 

0.043*** 

(0.005) 

0.136 

(0.072) 

0.003 

(0.020) 

0.015 

(0.020) 

0.023 

(0.039) 

-0.013 

(0.010) 

0.035* 

(0.015) 

0.020 

(0.017) 

-0.018 

(0.031) 

0.016 

(0.010) 

0.108 

(0.076) 

-0.006 

(0.020) 

0.007 

(0.022) 

0.041 

(0.041) 

-0.005 

(0.011) 

0.021 

(0.013) 

0.010 

(0.016) 

-0.009 

(0.031) 

0.021* 

(0.009) 

0.031 

(0.111) 

-0.000 

(0.021) 

0.116 

(0.144) 

-0.003 

(0.046) 

-0.019 

(0.012) 

0.219 

(0.476) 

0.019 

(0.020) 

-0.006 

(0.035) 

0.022* 

(0.010) 

Log(VIX index)                 

-1.080*** 

-1.659*** 

-1.645*** 

-1.687*** 

Interaction VIX * real equity stock  0.315*** 

(0.002) 

log_ggbondyield_pt             

(0.036) 

Public  bond  mkt.  Capitalisation  to 
GDP, partner 

(0.042) 

0.324*** 

(0.004) 

-0.107** 

(0.033) 

-0.020 

(0.021) 

(0.050) 

(0.046) 

0.324*** 

0.324*** 

(0.004) 

-0.082* 

(0.035) 

(0.004) 

-0.078* 

(0.035) 

-0.013 

(0.023) 

0.139 

(0.074) 

0.004 

(0.020) 

0.010 

(0.020) 

0.020 

(0.041) 

-0.013 

(0.010) 

0.035* 

(0.015) 

0.021 

(0.017) 

-0.007 

(0.032) 

0.016 

(0.009) 

0.000 

(0.000) 

0.323*** 

(0.004) 

-0.109** 

(0.033) 

-0.025 

(0.022) 

0.057 

(0.115) 

-0.001 

(0.022) 

0.008 

(0.215) 

-0.002 

(0.046) 

-0.020 

(0.012) 

0.523 

(0.626) 

0.019 

(0.020) 

0.006 

(0.037) 

0.022* 

(0.010) 

0.000 

(0.000) 

0.323*** 

(0.004) 

-0.076* 

(0.037) 

-0.015 

(0.023) 

November 2014  146 

 
 
 
                               
                               
                               
                               
                               
                               
                               
                               
                               
                               
                               
 
                               
 
 
 
                               
 
 
Private  bond  mkt.  Capitalisation 
to GDP, partner 

Public  bond  mkt.  Capitalisation  to 
GDP, reporter 

Private  bond  mkt.  Capitalisation 
to GDP, reporter 

Public  +  Private  Bond  Mkt  Cap. 
%GDP, Partner 

Public  +  Private  Bond  Mkt  Cap. 
%GDP, Reporter 

Stock  mkt.  capitalisation  to  GDP, 
partner 

Stock  mkt.  capitalisation  to  GDP, 
reporter 

 Analysis of developments in EU capital flows in the global context 

0.034* 

(0.015) 

-0.038 

(0.021) 

0.043** 

(0.014) 

0.028 

(0.020) 

-0.060 

(0.040) 

0.086** 

(0.029) 

0.034* 

(0.016) 

-0.039 

(0.021) 

0.043** 

(0.014) 

0.032 

(0.020) 

-0.043 

(0.050) 

0.092** 

(0.030) 

0.035 

(0.026) 

0.031 

(0.021) 

0.019 

(0.021) 

0.024 

(0.019) 

Constant                       

3.218*** 

4.959*** 

4.569*** 

(0.149) 

(0.205) 

(0.268) 

4.004** 

(1.246) 

-0.270 

(0.186) 

R-squared                      

N                              

0.989 

1692 

0.988 

675 

0.988 

675 

0.988 

675 

0.988 

675 

-1.984 

(2.289) 

0.988 

675 

FLOWS, ECM  Full sample 

Real  Ptf.Equity  Real  Ptf.Equity  Real  Ptf.Equity  Real  Ptf.Equity  Real  Ptf.Equity  Real  Ptf.Equity 

November 2014  147 

 
 
 
 
 
                               
 
 
 
 
                               
 
 
 
 
                               
 
 
 
 
 
 
 
                               
 
 
 
 
 
 
 
 
 
 
                               
 
 
 
 
 
 
 
 
 
 
                               
 
 
 
 
 
 
 
 
 
 
                               
 
 
 
 
 
                               
 
 
 
 
 
 
 
 
 
 
 Analysis of developments in EU capital flows in the global context 

- Model 1 

- Model 2 

- Model 3 

- Model 4 

- Model 5 

- Model 6 

dummy  (1  if  only  one  of  the 
two in EA in year t) 

dummy (1 if both in EA in year 
t) 

dummy  (1  if  only  one  of  the 
two in EU) 

0.032 

(0.033) 

0.205*** 

(0.053) 

0.073* 

(0.036) 

dummy (1 if both in EU)        

0.027 

Log(General  Govt.  Debt  to 
GDP, partner) 

(0.048) 

0.010 

(0.016) 

Log(Trade to GDP, partner)      0.028 

dummy (1 if contiguous)        

-0.018 

(0.020) 

log_abs_dist                   

(0.040) 

-0.020* 

(0.008) 

log(population, reporter)      

0.032** 

(0.011) 

log(population, partner)       

0.032*** 

log_unempl_P                   

0.024 

(0.009) 

L.Residuals                    

(0.028) 

0.040*** 

-0.031 

(0.053) 

0.036 

(0.076) 

0.108 

(0.067) 

0.159 

(0.092) 

0.043 

(0.022) 

0.044 

(0.028) 

-0.009 

(0.041) 

-0.016 

(0.013) 

0.047* 

(0.023) 

-0.006 

(0.021) 

-0.007 

(0.040) 

0.019* 

-0.002 

(0.051) 

0.085 

(0.078) 

0.095 

(0.068) 

0.130 

(0.097) 

0.018 

(0.023) 

0.033 

(0.031) 

0.021 

(0.043) 

0.000 

(0.013) 

0.016 

(0.021) 

-0.013 

(0.021) 

0.021 

0.071 

(0.093) 

0.233 

(0.171) 

-0.031 

(0.096) 

-0.129 

(0.164) 

0.040 

(0.025) 

0.124 

(0.165) 

-0.040 

(0.047) 

-0.014 

(0.016) 

-0.232 

(0.625) 

-0.024 

(0.022) 

0.006 

(0.040) 

0.023** 

(0.051) 

0.026** 

-0.036 

(0.053) 

0.051 

(0.078) 

0.110 

(0.068) 

0.145 

(0.095) 

0.048* 

(0.022) 

0.041 

(0.029) 

-0.000 

(0.043) 

-0.015 

(0.013) 

0.044 

(0.023) 

-0.011 

(0.021) 

0.007 

(0.041) 

0.019* 

0.082 

(0.097) 

0.267 

(0.180) 

-0.032 

(0.099) 

-0.139 

(0.170) 

0.044 

(0.025) 

-0.296 

(0.227) 

-0.041 

(0.048) 

-0.014 

(0.016) 

-0.532 

(0.770) 

-0.025 

(0.022) 

0.004 

(0.054) 

0.027** 

November 2014  148 

 
 
 
 
 
 
 
 
 
 
                               
                               
                               
                               
                               
                               
                               
                               
                               
                               
                               
 Analysis of developments in EU capital flows in the global context 

Log(VIX index)                 

-0.832*** 

-1.310*** 

-1.292*** 

-1.328*** 

(0.005) 

(0.008) 

(0.008) 

(0.009) 

(0.041) 

(0.051) 

(0.058) 

(0.053) 

Interaction  VIX  *  real  ptf. 
equity stock 

log_ggbondyield_pt             

Public bond mkt. Capitalisation 
to GDP, partner 

Private 
Capitalisation to GDP, partner 

bond 

mkt. 

Public bond mkt. Capitalisation 
to GDP, reporter 

mkt. 
Private 
Capitalisation to GDP, reporter 

bond 

Public  +  Private  Bond  Mkt 
Cap. %GDP, Partner 

Public  +  Private  Bond  Mkt 
Cap. %GDP, Reporter 

Stock  mkt.  capitalisation  to 
GDP, partner 

Stock  mkt.  capitalisation  to 
GDP, reporter 

0.316*** 

(0.004) 

-0.113* 

(0.044) 

0.022 

(0.029) 

0.047* 

(0.024) 

-0.184** 

(0.063) 

0.047 

(0.035) 

0.315*** 

(0.002) 

0.316*** 

(0.004) 

0.319*** 

(0.004) 

-0.162*** 

-0.115** 

(0.041) 

(0.044) 

-0.017 

(0.026) 

0.063** 

(0.021) 

-0.081** 

(0.027) 

0.053*** 

(0.016) 

0.050 

(0.033) 

0.015 

(0.027) 

0.034 

(0.024) 

0.029 

(0.009) 

0.000 

(0.000) 

(0.009) 

0.000 

(0.000) 

0.316*** 

(0.004) 

0.316*** 

(0.004) 

-0.172*** 

-0.127** 

(0.042) 

(0.047) 

-0.017 

(0.027) 

0.065** 

(0.022) 

-0.072** 

(0.027) 

0.059*** 

(0.017) 

0.018 

(0.030) 

0.047 

(0.025) 

-0.141 

(0.082) 

0.028 

(0.037) 

November 2014  149 

 
 
 
                               
                               
                               
 
                               
 
 
 
                               
 
 
 
 
                               
 
 
 
 
                               
 
 
 
 
                               
 
 
 
 
 
 
 
                               
 
 
 
 
 
 
 
 
 
 
                               
 
 
 
 
 
 
 
 
 
 
                               
 
 
 
 
 
 
 
 
 
 
 Analysis of developments in EU capital flows in the global context 

Constant                       

2.248*** 

(0.175) 

3.782*** 

(0.263) 

(0.022) 

3.297*** 

(0.335) 

R-squared                      

N                              

0.989 

1258 

0.988 

560 

0.988 

560 

4.614** 

(1.562) 

0.989 

560 

-0.420 

(0.256) 

0.988 

560 

2.926 

(2.492) 

0.989 

560 

FLOWS, ECM Full sample                               

Real  Debt  - 
Model 1 

Real  debt  - 
Model 2 

Real  debt  - 
Model 3 

Real  debt  - 
Model 4 

Real  debt  - 
Model 5 

Real  debt  - 
Model 6 

dummy (1 if only one of the two in EA in year t)  0.158*** 

0.170** 

0.189*** 

0.124 

(0.025) 

(0.055) 

(0.055) 

(0.072) 

0.174** 

(0.055) 

0.111 

(0.074) 

dummy (1 if both in EA in year t) 

0.196*** 

0.254*** 

0.290*** 

0.151 

0.258*** 

0.124 

(0.041) 

(0.072) 

(0.074) 

(0.115) 

(0.074) 

(0.121) 

dummy (1 if only one of the two in EU) 

-0.107** 

-0.179** 

-0.188** 

-0.157 

-0.182** 

-0.149 

dummy (1 if both in EU)        

Log(General Govt. Debt to GDP, partner) 

Log(Trade to GDP, partner)     

dummy (1 if contiguous)        

log_abs_dist                   

(0.033) 

-0.075* 

(0.037) 

0.008 

(0.013) 

0.010 

(0.017) 

0.015 

(0.051) 

-0.007 

(0.007) 

(0.069) 

-0.204* 

(0.088) 

0.033 

(0.020) 

0.033 

(0.025) 

0.038 

(0.045) 

-0.001 

(0.011) 

(0.071) 

-0.222* 

(0.090) 

0.031 

(0.020) 

0.031 

(0.027) 

0.057 

(0.047) 

-0.004 

(0.011) 

(0.084) 

-0.147 

(0.123) 

0.031 

(0.021) 

-0.079 

(0.159) 

0.047 

(0.052) 

-0.001 

(0.013) 

(0.069) 

-0.209* 

(0.090) 

0.032 

(0.020) 

0.034 

(0.026) 

0.038 

(0.045) 

-0.001 

(0.011) 

(0.085) 

-0.130 

(0.127) 

0.029 

(0.022) 

-0.152 

(0.235) 

0.050 

(0.052) 

-0.001 

(0.013) 

November 2014  150 

 
 
 
                               
 
 
 
 
 
                               
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                               
                               
                               
                               
                               
                               
                               
                               
 Analysis of developments in EU capital flows in the global context 

log(population, reporter)      

log(population, partner)       

log_unempl_P                   

L.Residuals                    

0.014* 

(0.006) 

0.013 

(0.007) 

-0.001 

(0.015) 

0.007 

(0.016) 

-0.016 

(0.018) 

-0.034 

(0.035) 

0.031*** 

0.014 

(0.005) 

(0.009) 

0.006 

(0.015) 

-0.018 

(0.016) 

-0.033 

(0.033) 

0.014 

(0.009) 

0.751 

(0.501) 

-0.021 

(0.020) 

-0.016 

(0.040) 

0.015 

(0.011) 

0.006 

(0.016) 

-0.016 

(0.018) 

-0.031 

(0.035) 

0.016 

(0.009) 

Log(VIX index)                 

-1.436*** 

-1.918*** 

-1.904*** 

-1.929*** 

0.000 

(0.033) 

(0.046) 

(0.051) 

(0.051) 

(0.000) 

0.584 

(0.787) 

-0.021 

(0.020) 

-0.005 

(0.040) 

0.015 

(0.011) 

0.000 

(0.000) 

Interaction VIX * real debt stock 

0.326*** 

0.324*** 

0.324*** 

0.323*** 

0.324*** 

0.322*** 

log_ggbondyield_pt             

(0.002) 

Public bond mkt. Capitalisation to GDP, partner 

Private bond mkt. Capitalisation to GDP, partner 

Public bond mkt. Capitalisation to GDP, reporter 

Private bond mkt. Capitalisation to GDP, reporter 

Public + Private Bond Mkt Cap. %GDP, Partner 

Public + Private Bond Mkt Cap. %GDP, Reporter 

Stock mkt. capitalisation to GDP, partner 

(0.003) 

0.030 

(0.039) 

0.042 

(0.024) 

0.044* 

(0.018) 

0.035 

(0.023) 

0.048*** 

(0.012) 

(0.003) 

0.029 

(0.037) 

0.096** 

(0.029) 

0.091*** 

(0.023) 

-0.000 

(0.004) 

0.033 

(0.040) 

0.043 

(0.025) 

0.054** 

(0.021) 

0.014 

(0.047) 

0.027 

(0.022) 

(0.004) 

0.036 

(0.040) 

0.043 

(0.024) 

0.045* 

(0.018) 

0.038 

(0.023) 

(0.004) 

0.039 

(0.040) 

0.041 

(0.025) 

0.055** 

(0.021) 

0.031 

(0.058) 

0.050*** 

0.025 

(0.012) 

(0.024) 

November 2014  151 

 
 
 
                               
                               
                               
                               
                               
                               
 
                               
 
 
 
                               
 
 
 
 
                               
 
 
 
 
                               
 
 
 
 
                               
 
 
 
 
 
 
 
                               
 
 
 
 
 
 
 
 
 
 
                               
 
 
 
 
 
 
 
 
 
 
 Analysis of developments in EU capital flows in the global context 

Stock mkt. capitalisation to GDP, reporter 

(0.020) 

0.026 

(0.019) 

Constant                       

4.251*** 

5.112*** 

4.766*** 

3.370* 

-0.893*** 

-1.923 

(0.140) 

(0.231) 

(0.290) 

(1.404) 

(0.212) 

(2.826) 

R-squared                      

N                              

0.989 

1552 

0.988 

647 

0.988 

647 

Reporter dummies 

time dummies 

0.988 

647 

y 

0.988 

647 

0.987 

647 

y 

y 

y 

FLOWS, ECM  Full sample                     

Real 
Debt 
Model 1 

Ptf. 
- 

Real 
Ptf. 
debt - Model 
2 

Real 
Ptf. 
debt - Model 
3 

Real 
Ptf. 
debt - Model 
4 

Real 
Ptf. 
debt - Model 
5 

Real 
debt 
Model 6 

Ptf. 
- 

dummy (1 if only one of the two in EA in year t)  0.109*** 

0.161** 

0.184*** 

0.083 

(0.028) 

(0.053) 

(0.052) 

(0.076) 

0.155** 

(0.054) 

0.064 

(0.080) 

dummy (1 if both in EA in year t) 

0.162*** 

0.309*** 

0.351*** 

0.150 

0.305*** 

0.116 

dummy (1 if only one of the two in EU) 

dummy (1 if both in EU)        

Log(General Govt. Debt to GDP, partner) 

Log(Trade to GDP, partner)     

(0.042) 

-0.082* 

(0.036) 

-0.051 

(0.045) 

0.006 

(0.016) 

0.000 

(0.084) 

(0.084) 

(0.134) 

(0.085) 

(0.142) 

-0.210** 

-0.206** 

-0.111 

-0.205** 

-0.097 

(0.077) 

-0.245* 

(0.111) 

0.013 

(0.022) 

0.067* 

(0.077) 

-0.253* 

(0.108) 

0.019 

(0.023) 

0.050 

(0.092) 

-0.059 

(0.143) 

0.008 

(0.023) 

0.081 

(0.078) 

-0.249* 

(0.112) 

0.006 

(0.022) 

0.066* 

(0.094) 

-0.038 

(0.147) 

0.004 

(0.024) 

-0.031 

November 2014  152 

 
 
 
                               
 
 
 
 
 
 
 
 
 
 
                               
 
 
 
 
 
                               
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                               
                               
                               
                               
                               
 Analysis of developments in EU capital flows in the global context 

dummy (1 if contiguous)        

log_abs_dist                   

log(population, reporter)      

log(population, partner)       

log_unempl_P                   

L.Residuals                    

(0.020) 

-0.004 

(0.050) 

0.004 

(0.008) 

0.022** 

(0.007) 

0.008 

(0.008) 

-0.007 

(0.017) 

(0.027) 

-0.004 

(0.045) 

-0.001 

(0.011) 

0.032 

(0.018) 

0.019 

(0.022) 

-0.012 

(0.034) 

(0.029) 

0.033 

(0.048) 

-0.001 

(0.011) 

0.016 

(0.017) 

0.010 

(0.019) 

-0.031 

(0.033) 

0.030*** 

0.033** 

(0.006) 

(0.011) 

0.032** 

(0.010) 

(0.173) 

-0.000 

(0.054) 

-0.005 

(0.014) 

-0.510 

(0.540) 

0.029 

(0.024) 

-0.006 

(0.039) 

0.033* 

(0.013) 

(0.027) 

-0.011 

(0.046) 

0.000 

(0.011) 

0.032 

(0.017) 

0.017 

(0.021) 

-0.002 

(0.036) 

0.033** 

(0.011) 

Log(VIX index)                 

-1.222*** 

-1.654*** 

-1.638*** 

-1.635*** 

0.000 

(0.038) 

(0.050) 

(0.055) 

(0.057) 

(0.000) 

(0.241) 

-0.003 

(0.055) 

-0.005 

(0.014) 

-0.276 

(0.782) 

0.029 

(0.024) 

0.009 

(0.042) 

0.033* 

(0.013) 

0.000 

(0.000) 

Interaction VIX * real ptf. debt stock 

0.326*** 

0.317*** 

0.317*** 

0.315*** 

0.317*** 

0.315*** 

log_ggbondyield_pt             

(0.003) 

Public bond mkt. Capitalisation to GDP, partner 

Private bond mkt. Capitalisation to GDP, partner 

Public bond mkt. Capitalisation to GDP, reporter 

Private bond mkt. Capitalisation to GDP, reporter 

(0.004) 

0.077 

(0.042) 

(0.004) 

0.090* 

(0.044) 

0.008 

(0.030) 

0.026 

(0.019) 

-0.016 

(0.022) 

0.073*** 

(0.017) 

(0.004) 

0.064 

(0.043) 

-0.010 

(0.032) 

0.032 

(0.023) 

-0.034 

(0.048) 

0.032 

(0.025) 

(0.004) 

0.105* 

(0.045) 

0.014 

(0.030) 

0.031 

(0.020) 

-0.011 

(0.023) 

(0.004) 

0.074 

(0.044) 

-0.010 

(0.032) 

0.037 

(0.024) 

-0.021 

(0.060) 

0.077*** 

0.035 

(0.018) 

(0.027) 

November 2014  153 

 
 
 
                               
                               
                               
                               
                               
                               
                               
                               
                               
 
                               
 
 
 
                               
 
 
 
 
                               
 
 
 
 
                               
 
 
 
 
                               
 
 
 Analysis of developments in EU capital flows in the global context 

Public + Private Bond Mkt Cap. %GDP, Partner 

Public + Private Bond Mkt Cap. %GDP, Reporter 

Stock mkt. capitalisation to GDP, partner 

Stock mkt. capitalisation to GDP, reporter 

0.060 

(0.035) 

0.097** 

(0.030) 

-0.006 

(0.023) 

0.066*** 

(0.020) 

Constant                       

3.658*** 

4.375*** 

3.853*** 

6.192*** 

-1.388*** 

0.179 

(0.171) 

(0.279) 

(0.336) 

(1.458) 

(0.241) 

(2.774) 

R-squared                      

N                              

0.989 

1289 

0.988 

613 

0.988 

613 

Reporter dummies 

time dummies 

0.988 

613 

y 

0.988 

613 

0.988 

613 

y 

y 

y 

FLOWS, ECM  Full sample 

Real  Other 
inv.  -  Model 
1 

Real  Other 
inv.  -  Model 
2 

Real  Other 
inv.  -  Model 
3 

Real  Other 
inv.  -  Model 
4 

Real  Other 
inv.  -  Model 
5 

Real  Other 
inv. - Model 
6 

dummy (1 if only one of the two in EA in year t)  1.121*** 

1.135*** 

1.160*** 

1.290*** 

1.126*** 

1.190** 

(0.122) 

(0.270) 

(0.276) 

(0.357) 

(0.282) 

(0.374) 

dummy (1 if both in EA in year t) 

1.940*** 

1.686*** 

1.759*** 

2.073*** 

1.725*** 

1.912** 

dummy (1 if only one of the two in EU) 

-0.803*** 

-1.113** 

-1.038** 

(0.147) 

(0.342) 

(0.357) 

(0.194) 

(0.357) 

(0.385) 

(0.580) 

-1.065* 

(0.471) 

(0.375) 

-1.122** 

(0.348) 

(0.600) 

-0.980* 

(0.486) 

November 2014  154 

 
 
 
 
 
 
 
 
                               
 
 
 
 
 
 
 
 
 
 
                               
 
 
 
 
 
 
 
 
 
 
                               
 
 
 
 
 
 
 
 
 
 
                               
 
 
 
 
 
                               
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                               
                               
                               
 Analysis of developments in EU capital flows in the global context 

dummy (1 if both in EU)        

-1.051*** 

-0.953* 

Log(General Govt. Debt to GDP, partner) 

(0.175) 

-0.087 

(0.059) 

(0.416) 

0.189 

(0.114) 

-0.845 

(0.441) 

0.047 

(0.122) 

-0.994 

(0.739) 

0.183 

(0.114) 

-1.059* 

(0.435) 

0.178 

(0.117) 

-0.909 

(0.767) 

0.205 

(0.116) 

Log(Trade to GDP, partner)     

0.432*** 

0.688*** 

0.581*** 

0.023 

0.682*** 

-2.119 

dummy (1 if contiguous)        

log_abs_dist                   

(0.099) 

0.398** 

(0.148) 

(0.161) 

0.457** 

(0.169) 

-0.160*** 

-0.076 

(0.031) 

(0.051) 

(0.162) 

0.565** 

(0.178) 

-0.134* 

(0.055) 

(0.748) 

0.315 

(0.187) 

-0.101 

(0.052) 

log(population, reporter)      

0.222*** 

0.239*** 

0.212*** 

-2.065 

log(population, partner)       

log_unempl_P                   

(0.039) 

0.022 

(0.028) 

0.221** 

(0.070) 

(0.071) 

-0.177 

(0.096) 

-0.208 

(0.170) 

(0.060) 

-0.076 

(0.083) 

-0.037 

(0.164) 

(3.855) 

-0.088 

(0.112) 

-0.295 

(0.203) 

(0.161) 

0.481** 

(0.169) 

-0.068 

(0.051) 

0.227** 

(0.071) 

-0.178 

(0.095) 

-0.071 

(0.178) 

(1.701) 

0.360 

(0.190) 

-0.107* 

(0.053) 

-7.002 

(6.248) 

-0.095 

(0.113) 

-0.202 

(0.213) 

L.Residuals                    

0.355*** 

0.274*** 

0.286*** 

0.303*** 

0.272*** 

0.298*** 

Log(VIX index)                 

-0.912*** 

-1.411*** 

-1.142*** 

-1.467*** 

0.000 

(0.032) 

(0.052) 

(0.052) 

(0.063) 

(0.051) 

(0.126) 

(0.215) 

(0.242) 

(0.226) 

(0.000) 

(0.062) 

0.000 

(0.000) 

Interaction VIX * real debt stock 

0.208*** 

0.212*** 

0.211*** 

0.218*** 

0.210*** 

0.216*** 

log_ggbondyield_pt             

(0.011) 

Public bond mkt. Capitalisation to GDP, partner 

Private bond mkt. Capitalisation to GDP, partner 

(0.017) 

0.132 

(0.238) 

(0.017) 

-0.003 

(0.229) 

0.504*** 

(0.147) 

0.485*** 

(0.018) 

-0.008 

(0.283) 

0.463** 

(0.169) 

(0.017) 

0.101 

(0.244) 

(0.018) 

0.056 

(0.307) 

0.523*** 

0.452** 

(0.143) 

(0.166) 

0.377*** 

0.480*** 

0.394*** 

November 2014  155 

 
 
 
                               
                               
                               
                               
                               
                               
                               
                               
                               
                               
                               
 
                               
 
 
 
                               
 
 
 
 
Public bond mkt. Capitalisation to GDP, reporter 

Private bond mkt. Capitalisation to GDP, reporter 

Public + Private Bond Mkt Cap. %GDP, Partner 

Public + Private Bond Mkt Cap. %GDP, Reporter 

Stock mkt. capitalisation to GDP, partner 

Stock mkt. capitalisation to GDP, reporter 

Constant                       

 Analysis of developments in EU capital flows in the global context 

(0.102) 

0.118 

(0.138) 

0.296*** 

(0.080) 

(0.101) 

-0.519 

(0.433) 

0.296 

(0.187) 

(0.102) 

0.216 

(0.137) 

(0.100) 

0.015 

(0.469) 

0.329*** 

0.238 

(0.080) 

(0.206) 

0.818*** 

(0.169) 

0.414** 

(0.153) 

0.283* 

(0.125) 

0.155 

(0.124) 

1.637* 

(0.742) 

-2.814 

(1.455) 

-5.471** 

9.149 

-8.543*** 

25.623 

(1.929) 

(12.660) 

(1.322) 

(24.098) 

R-squared                      

N                              

0.839 

1177 

0.799 

494 

0.797 

494 

Reporter dummies 

time dummies 

0.801 

494 

y 

0.801 

494 

0.802 

494 

y 

y 

y 

FLOWS, ECM  Without offshore centres  
and without LUX/IE/NL/CY/SG/HK                                                       

Real  FDI  - 
Model 1 

Real  FDI  - 
Model 2 

Real  FDI  - 
Model 3 

Real  FDI  - 
Model 4 

Real  FDI  - 
Model 5 

Real  FDI  - 
Model 6 

dummy (1 if only one of the two in EA in year t)  0.029 

0.033 

-0.034 

0.087 

0.036 

0.049 

November 2014  156 

 
 
 
                               
 
 
 
 
                               
 
 
 
 
                               
 
 
 
 
 
 
 
                               
 
 
 
 
 
 
 
 
 
 
                               
 
 
 
 
 
 
 
 
 
 
                               
 
 
 
 
 
 
 
 
 
 
                               
 
 
 
 
 
                               
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 Analysis of developments in EU capital flows in the global context 

dummy (1 if both in EA in year t) 

dummy (1 if only one of the two in EU) 

dummy (1 if both in EU)        

Log(General Govt. Debt to GDP, partner) 

Log(Trade to GDP, partner)     

dummy (1 if contiguous)        

log_abs_dist                   

(0.034) 

-0.010 

(0.052) 

0.046 

(0.046) 

0.163** 

(0.059) 

-0.024 

(0.020) 

-0.047 

(0.032) 

0.125** 

(0.047) 

0.010 

(0.008) 

(0.063) 

0.058 

(0.094) 

0.000 

(0.076) 

0.086 

(0.111) 

-0.032 

(0.038) 

0.060 

(0.056) 

0.105* 

(0.053) 

0.030 

(0.018) 

log(population, reporter)      

0.067*** 

0.058* 

log(population, partner)       

log_unempl_P                   

L.Residuals                    

(0.017) 

0.025 

(0.014) 

0.044 

(0.030) 

(0.027) 

0.024 

(0.041) 

0.022 

(0.049) 

0.035*** 

0.008 

(0.008) 

(0.013) 

(0.061) 

-0.082 

(0.088) 

0.088 

(0.074) 

0.250* 

(0.112) 

-0.041 

(0.041) 

0.012 

(0.053) 

0.139* 

(0.056) 

0.022 

(0.015) 

0.048* 

(0.023) 

0.054 

(0.043) 

0.028 

(0.051) 

0.020 

(0.012) 

(0.107) 

0.138 

(0.186) 

-0.089 

(0.113) 

-0.085 

(0.189) 

-0.026 

(0.040) 

0.349 

(0.239) 

0.141* 

(0.061) 

0.042 

(0.024) 

1.181 

(0.688) 

-0.002 

(0.050) 

0.028 

(0.050) 

0.008 

(0.014) 

(0.063) 

0.063 

(0.094) 

-0.004 

(0.075) 

0.080 

(0.110) 

-0.033 

(0.039) 

0.054 

(0.057) 

0.113* 

(0.055) 

0.033 

(0.018) 

0.057* 

(0.028) 

0.016 

(0.043) 

0.037 

(0.050) 

0.009 

(0.013) 

(0.107) 

0.060 

(0.188) 

-0.076 

(0.113) 

-0.051 

(0.190) 

-0.026 

(0.040) 

0.771* 

(0.335) 

0.149* 

(0.062) 

0.041 

(0.024) 

2.981** 

(1.109) 

-0.019 

(0.051) 

0.056 

(0.051) 

0.010 

(0.014) 

Log(VIX index)                 

-1.103*** 

-1.354*** 

-1.306*** 

-1.423*** 

-1.425*** 

-1.520*** 

Interaction VIX * real FDI stock 

0.318*** 

0.318*** 

0.319*** 

0.315*** 

0.317*** 

0.314*** 

(0.003) 

(0.004) 

(0.004) 

(0.005) 

(0.004) 

(0.005) 

(0.046) 

(0.060) 

(0.071) 

(0.069) 

(0.089) 

(0.097) 

November 2014  157 

 
 
 
                               
                               
                               
                               
                               
                               
                               
                               
                               
                               
                               
                               
                               
                               
 Analysis of developments in EU capital flows in the global context 

log_ggbondyield_pt             

Public bond mkt. Capitalisation to GDP, partner 

Private bond mkt. Capitalisation to GDP, partner 

Public bond mkt. Capitalisation to GDP, reporter 

Private bond mkt. Capitalisation to GDP, reporter 

Public + Private Bond Mkt Cap. %GDP, Partner 

Public + Private Bond Mkt Cap. %GDP, Reporter 

Stock mkt. capitalisation to GDP, partner 

Stock mkt. capitalisation to GDP, reporter 

-0.053 

(0.047) 

-0.022 

(0.039) 

-0.059 

(0.031) 

0.015 

(0.038) 

0.088*** 

(0.023) 

-0.038 

(0.050) 

-0.103 

(0.059) 

0.070 

(0.038) 

0.038 

(0.030) 

0.043 

(0.032) 

-0.034 

(0.049) 

0.006 

(0.053) 

-0.070 

(0.043) 

0.034 

(0.091) 

-0.058 

(0.047) 

-0.018 

(0.041) 

-0.063* 

(0.031) 

0.028 

(0.039) 

-0.035 

(0.049) 

0.015 

(0.053) 

-0.062 

(0.044) 

0.168 

(0.118) 

0.224*** 

0.089*** 

0.277*** 

(0.052) 

(0.023) 

(0.054) 

Constant                       

3.296*** 

3.673*** 

3.555*** 

-1.334 

3.894*** 

-8.716* 

(0.222) 

(0.384) 

(0.486) 

(1.965) 

(0.461) 

(3.827) 

R-squared                      

N                              

0.989 

818 

0.988 

430 

0.987 

430 

Reporter dummies 

time dummies 

0.988 

430 

y 

0.988 

430 

0.988 

430 

y 

y 

y 

November 2014  158 

 
 
 
 
                               
 
 
 
                               
 
 
 
 
                               
 
 
 
 
                               
 
 
 
 
                               
 
 
 
 
 
 
 
                               
 
 
 
 
 
 
 
 
 
 
                               
 
 
 
 
 
 
 
 
 
 
                               
 
 
 
 
 
 
 
 
 
 
                               
 
 
 
 
 
                               
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 Analysis of developments in EU capital flows in the global context 

FLOWS, ECM Without offshore centres  
and without LUX/IE/NL/CY/SG/HK                                                                                               

Real 
Ptf.Equity  - 
Model 1 

Real 
Ptf.Equity  - 
Model 2 

Real 
Ptf.Equity  - 
Model 3 

Real 
Ptf.Equity  - 
Model 4 

dummy (1 if only one of the two in EA in year t) 

-0.055 

dummy (1 if both in EA in year t) 

dummy (1 if only one of the two in EU) 

dummy (1 if both in EU)        

Log(General Govt. Debt to GDP, partner) 

Log(Trade to GDP, partner)     

dummy (1 if contiguous)        

log_abs_dist                   

log(population, reporter)      

(0.035) 

-0.008 

(0.058) 

0.138** 

(0.045) 

0.167** 

(0.061) 

-0.036* 

(0.017) 

-0.026 

(0.030) 

0.004 

(0.041) 

-0.021* 

(0.009) 

0.044** 

(0.014) 

log(population, partner)       

0.064*** 

0.033 

log_unempl_P                   

(0.014) 

0.051 

(0.030) 

(0.031) 

0.075 

(0.045) 

-0.061 

(0.058) 

-0.122 

(0.090) 

0.140* 

(0.071) 

0.235* 

(0.104) 

-0.024 

(0.025) 

0.114* 

(0.046) 

-0.033 

(0.042) 

-0.005 

(0.016) 

-0.067 

(0.053) 

-0.142 

(0.089) 

0.156* 

(0.073) 

0.268* 

(0.114) 

-0.053 

(0.027) 

0.041 

(0.052) 

-0.004 

(0.045) 

0.011 

(0.013) 

0.085*** 

0.050* 

(0.024) 

(0.019) 

0.050 

(0.033) 

0.112* 

(0.049) 

-0.123 

(0.091) 

-0.250 

(0.171) 

0.088 

(0.091) 

0.157 

(0.155) 

-0.023 

(0.028) 

0.260 

(0.195) 

-0.056 

(0.050) 

-0.019 

(0.023) 

-0.747 

(0.651) 

0.007 

(0.035) 

0.118* 

(0.048) 

Real 
Ptf.Equity  - 
Model 5 

Real 
Ptf.Equity  - 
Model 6 

-0.074 

(0.059) 

-0.130 

(0.091) 

0.154* 

(0.073) 

0.256* 

(0.108) 

-0.019 

(0.027) 

0.104* 

(0.047) 

-0.035 

(0.045) 

-0.006 

(0.016) 

0.080** 

(0.026) 

0.030 

(0.030) 

0.074 

(0.047) 

-0.162 

(0.090) 

-0.314 

(0.171) 

0.123 

(0.092) 

0.222 

(0.158) 

-0.017 

(0.029) 

0.041 

(0.318) 

-0.050 

(0.053) 

-0.020 

(0.023) 

-0.431 

(1.003) 

0.001 

(0.035) 

0.131** 

(0.048) 

November 2014  159 

 
 
 
 
 
 
 
 
 
 
 
 
                               
                               
                               
                               
                               
                               
                               
                               
                               
                               
                               
 Analysis of developments in EU capital flows in the global context 

L.Residuals                    

0.034*** 

0.011 

(0.006) 

(0.010) 

0.016 

(0.010) 

0.019 

(0.012) 

0.010 

(0.010) 

Log(VIX index)                 

-0.832*** 

-1.277*** 

-1.267*** 

-1.285*** 

0.000 

(0.049) 

(0.056) 

(0.067) 

(0.063) 

(0.000) 

0.019 

(0.012) 

0.000 

(0.000) 

Interaction VIX * real ptf. equity stock 

0.318*** 

0.322*** 

0.325*** 

0.323*** 

0.323*** 

0.322*** 

log_ggbondyield_pt             

(0.003) 

Public bond mkt. Capitalisation to GDP, partner 

Private bond mkt. Capitalisation to GDP, partner 

Public bond mkt. Capitalisation to GDP, reporter 

Private bond mkt. Capitalisation to GDP, reporter 

Public + Private Bond Mkt Cap. %GDP, Partner 

Public + Private Bond Mkt Cap. %GDP, Reporter 

Stock mkt. capitalisation to GDP, partner 

Stock mkt. capitalisation to GDP, reporter 

(0.004) 

-0.061 

(0.044) 

-0.009 

(0.034) 

0.020 

(0.028) 

-0.083* 

(0.034) 

0.059** 

(0.020) 

(0.004) 

-0.031 

(0.051) 

-0.038 

(0.046) 

0.011 

(0.033) 

0.031 

(0.025) 

-0.005 

(0.033) 

(0.004) 

-0.006 

(0.046) 

0.006 

(0.040) 

0.042 

(0.038) 

-0.013 

(0.065) 

0.100* 

(0.041) 

(0.004) 

-0.071 

(0.048) 

-0.015 

(0.034) 

0.021 

(0.028) 

-0.086* 

(0.036) 

0.058** 

(0.020) 

(0.004) 

-0.015 

(0.049) 

0.005 

(0.040) 

0.050 

(0.038) 

0.037 

(0.084) 

0.110* 

(0.045) 

Constant                       

2.451*** 

3.135*** 

3.340*** 

4.706* 

-1.210*** 

-0.082 

(0.200) 

(0.315) 

(0.477) 

(1.877) 

(0.306) 

(3.913) 

November 2014  160 

 
 
 
                               
                               
                               
 
                               
 
 
 
                               
 
 
 
 
                               
 
 
 
 
                               
 
 
 
 
                               
 
 
 
 
 
 
 
                               
 
 
 
 
 
 
 
 
 
 
                               
 
 
 
 
 
 
 
 
 
 
                               
 
 
 
 
 
 
 
 
 
 
                               
 
 
 
 
 
                               
 
 
 
 
 
 
 
 Analysis of developments in EU capital flows in the global context 

R-squared                      

N                              

0.990 

734 

0.990 

379 

0.989 

379 

Reporter dummies 

time dummies 

0.990 

379 

y 

0.990 

379 

0.990 

379 

y 

y 

y 

 FLOWS,  ECM  Without  offshore  centres    and 
without LUX/IE/NL/CY/SG/HK                                                                                                   

Real Equity - 
Model 2 

Real Equity - 
Model 1 

Real Equity - 
Model 3 

Real Equity - 
Model 4 

Real Equity - 
Model 5 

Real Equity - 
Model 6 

dummy (1 if only one of the two in EA in year 
t) 

dummy (1 if both in EA in year t) 

dummy (1 if only one of the two in EU) 

0.004 

(0.031) 

-0.009 

(0.049) 

0.106* 

(0.043) 

0.019 

(0.048) 

0.006 

(0.067) 

0.086 

(0.066) 

-0.026 

(0.046) 

-0.087 

(0.064) 

0.144* 

(0.069) 

dummy (1 if both in EU)        

0.182*** 

0.144 

0.262** 

Log(General Govt. Debt to GDP, partner) 

-0.049** 

(0.054) 

Log(Trade to GDP, partner)     

dummy (1 if contiguous)        

log_abs_dist                   

(0.015) 

-0.027 

(0.027) 

0.094* 

(0.043) 

-0.012 

(0.008) 

(0.084) 

-0.026 

(0.029) 

0.076 

(0.041) 

0.055 

(0.041) 

0.010 

(0.014) 

(0.091) 

-0.038 

(0.031) 

0.021 

(0.040) 

0.087 

(0.044) 

0.005 

(0.011) 

-0.029 

(0.089) 

-0.085 

(0.153) 

0.066 

(0.092) 

0.114 

(0.142) 

-0.023 

(0.031) 

0.193 

(0.193) 

0.057 

(0.048) 

0.003 

(0.020) 

0.015 

(0.049) 

-0.003 

(0.068) 

0.094 

(0.068) 

0.158 

(0.086) 

-0.025 

(0.030) 

0.064 

(0.043) 

0.058 

(0.043) 

0.010 

(0.014) 

-0.079 

(0.089) 

-0.188 

(0.155) 

0.099 

(0.093) 

0.183 

(0.144) 

-0.022 

(0.031) 

0.283 

(0.302) 

0.065 

(0.050) 

0.002 

(0.020) 

November 2014  161 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                               
                               
                               
                               
                               
                               
                               
                               
 Analysis of developments in EU capital flows in the global context 

log(population, reporter)      

log(population, partner)       

log_unempl_P                   

L.Residuals                    

0.071*** 

0.061** 

(0.015) 

(0.023) 

0.058*** 

0.014 

(0.013) 

0.043 

(0.025) 

(0.032) 

0.015 

(0.039) 

0.041*** 

0.007 

(0.007) 

(0.011) 

0.046* 

(0.018) 

0.047 

(0.035) 

0.028 

(0.040) 

0.021* 

(0.010) 

0.549 

(0.564) 

0.004 

(0.037) 

0.033 

(0.039) 

0.013 

(0.011) 

0.059* 

(0.024) 

0.015 

(0.033) 

0.025 

(0.038) 

0.007 

(0.011) 

Log(VIX index)                 

-1.157*** 

-1.594*** 

-1.544*** 

-1.637*** 

0.000 

(0.044) 

(0.051) 

(0.062) 

(0.057) 

(0.000) 

1.698 

(0.942) 

-0.003 

(0.038) 

0.062 

(0.040) 

0.014 

(0.011) 

0.000 

(0.000) 

Interaction VIX * real equity stock 

0.315*** 

0.320*** 

0.320*** 

0.320*** 

0.320*** 

0.319*** 

(0.003) 

log_ggbondyield_pt             

Public  bond  mkt.  Capitalisation  to  GDP, 
partner 

Private  bond  mkt.  Capitalisation  to  GDP, 
partner 

Public  bond  mkt.  Capitalisation  to  GDP, 
reporter 

Private  bond  mkt.  Capitalisation  to  GDP, 
reporter 

Public  +  Private  Bond  Mkt  Cap.  %GDP, 
Partner 

(0.004) 

-0.098* 

(0.039) 

0.011 

(0.033) 

-0.015 

(0.026) 

-0.021 

(0.032) 

0.072*** 

(0.017) 

(0.004) 

-0.085 

(0.045) 

-0.041 

(0.045) 

(0.004) 

-0.077 

(0.041) 

0.014 

(0.040) 

-0.001 

(0.040) 

0.008 

(0.076) 

(0.004) 

-0.104* 

(0.041) 

0.007 

(0.034) 

-0.016 

(0.027) 

-0.016 

(0.034) 

(0.004) 

-0.079 

(0.043) 

0.013 

(0.041) 

0.008 

(0.041) 

0.080 

(0.094) 

0.125*** 

0.071*** 

0.161*** 

(0.037) 

(0.017) 

(0.041) 

November 2014  162 

 
 
 
                               
                               
                               
                               
                               
                               
 
                               
 
 
 
                               
 
 
 
 
                               
 
 
 
 
                               
 
 
 
 
                               
 
 
 
 
 
 
 
                               
 
 
 
 
 
 Analysis of developments in EU capital flows in the global context 

Public  +  Private  Bond  Mkt  Cap.  %GDP, 
Reporter 

Stock mkt. capitalisation to GDP, partner 

Stock mkt. capitalisation to GDP, reporter 

0.046 

(0.027) 

0.036 

(0.026) 

0.036 

(0.027) 

Constant                       

3.469*** 

4.331*** 

4.209*** 

2.188 

-1.176*** 

-7.740* 

(0.195) 

(0.277) 

(0.381) 

(1.555) 

(0.258) 

(3.607) 

R-squared                      

N                              

0.990 

939 

0.989 

452 

0.989 

452 

Reporter dummies 

time dummies 

0.989 

452 

y 

0.989 

452 

0.989 

452 

y 

y 

y 

Real 
Other 
FLOWS,  ECM  Without  offshore  centres 
inv. - Model 5 
and without LUX/IE/NL/CY/SG/HK                                                                                                               

Real 
Other 
inv. - Model 3 

Real 
Other 
inv. - Model 1 

Real 
Other 
inv. - Model 2 

Real 
Other 
inv. - Model 4 

Real 
Other 
inv. - Model 6 

dummy  (1  if  only  one  of  the  two  in  EA 
in year t) 

dummy (1 if both in EA in year t) 

0.908*** 

(0.191) 

1.617*** 

(0.301) 

dummy (1 if only one of the two in EU) 

-0.511* 

(0.198) 

0.837** 

(0.311) 

1.276** 

(0.435) 

-0.941* 

(0.372) 

0.970** 

(0.318) 

0.584 

(0.553) 

1.553*** 

0.939 

(0.460) 

-1.020** 

(0.385) 

(0.985) 

-0.552 

(0.615) 

0.795* 

(0.328) 

1.257** 

(0.452) 

-0.924* 

(0.377) 

0.366 

(0.552) 

0.571 

(0.981) 

-0.388 

(0.611) 

November 2014  163 

 
 
 
 
 
 
 
 
                               
 
 
 
 
 
 
 
 
 
 
                               
 
 
 
 
 
 
 
 
 
 
                               
 
 
 
 
 
                               
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                               
                               
                               
 Analysis of developments in EU capital flows in the global context 

dummy (1 if both in EU)        

Log(General  Govt.  Debt 
partner) 

to  GDP, 

Log(Trade to GDP, partner)     

dummy (1 if contiguous)        

log_abs_dist                   

-0.434 

(0.260) 

-0.074 

(0.074) 

0.642*** 

(0.162) 

0.371* 

(0.165) 

-0.174*** 

(0.040) 

-0.705 

(0.469) 

0.413** 

(0.140) 

0.707** 

(0.232) 

0.399* 

(0.192) 

-0.180* 

(0.087) 

-0.893 

(0.505) 

0.204 

(0.153) 

0.601* 

(0.251) 

0.546** 

(0.209) 

-0.158* 

(0.072) 

log(population, reporter)      

0.454*** 

0.376*** 

0.308*** 

log(population, partner)       

log_unempl_P                   

(0.068) 

0.163** 

(0.057) 

0.150 

(0.114) 

(0.107) 

-0.270 

(0.141) 

-0.298 

(0.205) 

(0.088) 

-0.274 

(0.153) 

-0.107 

(0.191) 

-0.086 

(1.030) 

0.393** 

(0.147) 

0.860 

(0.886) 

0.293 

(0.217) 

-0.248* 

(0.104) 

-1.619 

(4.647) 

-0.109 

(0.158) 

-0.295 

(0.257) 

-0.792 

(0.491) 

0.455** 

(0.141) 

0.639** 

(0.237) 

0.437* 

(0.195) 

-0.173 

(0.090) 

0.334** 

(0.112) 

-0.360* 

(0.140) 

-0.231 

(0.204) 

0.116 

(1.031) 

0.457** 

(0.150) 

-0.074 

(1.326) 

0.352 

(0.222) 

-0.261* 

(0.110) 

-3.149 

(6.200) 

-0.185 

(0.159) 

-0.216 

(0.255) 

L.Residuals                    

0.365*** 

0.284*** 

0.305*** 

0.324*** 

0.280*** 

0.322*** 

Log(VIX index)                 

-0.892*** 

-1.514*** 

-1.282*** 

-1.496*** 

0.000 

(0.041) 

(0.065) 

(0.068) 

(0.073) 

(0.064) 

(0.169) 

(0.236) 

(0.301) 

(0.272) 

(0.000) 

(0.070) 

0.000 

(0.000) 

Interaction VIX * real debt stock 

0.206*** 

0.214*** 

0.216*** 

0.218*** 

0.213*** 

0.216*** 

log_ggbondyield_pt             

Public  bond  mkt.  Capitalisation  to  GDP, 
partner 

(0.013) 

(0.019) 

0.043 

(0.286) 

(0.020) 

-0.145 

(0.255) 

0.428** 

(0.154) 

(0.022) 

-0.215 

(0.290) 

0.252 

(0.196) 

(0.021) 

-0.151 

(0.266) 

0.489** 

(0.153) 

(0.022) 

-0.241 

(0.302) 

0.262 

(0.201) 

November 2014  164 

 
 
 
                               
                               
                               
                               
                               
                               
                               
                               
                               
                               
                               
 
                               
 
 
 
                               
 
 
Private bond mkt. Capitalisation to GDP, 
partner 

Public  bond  mkt.  Capitalisation  to  GDP, 
reporter 

Private bond mkt. Capitalisation to GDP, 
reporter 

Public  +  Private  Bond  Mkt  Cap.  %GDP, 
Partner 

Public  +  Private  Bond  Mkt  Cap.  %GDP, 
Reporter 

Stock  mkt.  capitalisation 
partner 

to  GDP, 

Stock  mkt.  capitalisation 
reporter 

to  GDP, 

Constant                       

-0.542 

(1.068) 

-3.238 

(1.732) 

R-squared                      

N                              

0.838 

646 

0.815 

348 

Reporter dummies 

time dummies 

 Analysis of developments in EU capital flows in the global context 

0.675*** 

(0.160) 

0.045 

(0.189) 

0.350*** 

(0.099) 

0.645** 

(0.201) 

-0.191 

(0.599) 

0.232 

(0.212) 

0.697*** 

0.705*** 

(0.163) 

(0.205) 

0.165 

(0.197) 

0.581 

(0.681) 

0.368*** 

0.277 

(0.101) 

(0.226) 

1.055*** 

(0.227) 

0.482* 

(0.194) 

0.288 

(0.167) 

0.032 

(0.171) 

-5.940* 

(2.428) 

0.815 

348 

4.160 

-9.026*** 

4.736 

(15.278) 

(1.609) 

(21.992) 

0.814 

348 

y 

0.818 

348 

0.816 

348 

y 

y 

y 

November 2014  165 

 
 
 
 
 
                               
 
 
 
 
                               
 
 
 
 
                               
 
 
 
 
 
 
 
                               
 
 
 
 
 
 
 
 
 
 
                               
 
 
 
 
 
 
 
 
 
 
                               
 
 
 
 
 
 
 
 
 
 
                               
 
 
 
 
 
                               
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 Analysis of developments in EU capital flows in the global context 

FLOWS,  ECM    Without  offshore  centres 
and without LUX/IE/NL/CY/SG/HK                                                                                                                           

Real Ptf. Debt 
- Model 1 

Real Ptf. debt 
- Model 2 

Real Ptf. debt 
- Model 4 

Real Ptf. debt 
- Model 3 

Real Ptf. debt 
- Model 5 

Real Ptf. debt 
- Model 6 

dummy (1 if only one  of the two in EA in 
year t) 

dummy (1 if both in EA in year t) 

0.063 

(0.032) 

0.107 

(0.056) 

dummy (1 if only one of the two in EU) 

0.020 

dummy (1 if both in EU)        

(0.046) 

0.092 

(0.063) 

Log(General Govt. Debt to GDP, partner) 

0.004 

Log(Trade to GDP, partner)     

dummy (1 if contiguous)        

log_abs_dist                   

log(population, reporter)      

log(population, partner)       

log_unempl_P                   

(0.018) 

-0.044 

(0.036) 

0.021 

(0.050) 

0.001 

(0.009) 

0.046** 

(0.016) 

0.027* 

(0.013) 

-0.020 

(0.022) 

0.154** 

(0.058) 

0.297** 

(0.106) 

-0.162 

(0.089) 

-0.200 

(0.134) 

-0.028 

(0.029) 

0.067 

(0.049) 

-0.009 

(0.050) 

0.009 

(0.014) 

0.067** 

(0.024) 

0.030 

(0.033) 

0.021 

(0.039) 

0.143* 

(0.057) 

0.279** 

(0.107) 

-0.148 

(0.087) 

-0.181 

(0.136) 

-0.020 

(0.033) 

0.038 

(0.048) 

0.024 

(0.052) 

0.003 

(0.013) 

0.052* 

(0.023) 

0.035 

(0.036) 

0.001 

(0.043) 

0.025 

(0.101) 

0.033 

(0.196) 

-0.005 

(0.119) 

0.106 

(0.196) 

-0.045 

(0.031) 

0.325 

(0.225) 

-0.004 

(0.060) 

0.012 

(0.020) 

-0.388 

(0.678) 

0.058 

(0.040) 

0.047 

(0.045) 

0.134* 

(0.057) 

0.269* 

(0.104) 

-0.139 

(0.087) 

-0.168 

(0.132) 

-0.030 

(0.030) 

0.061 

(0.049) 

-0.020 

(0.051) 

0.007 

(0.015) 

0.069** 

(0.024) 

0.029 

(0.033) 

0.023 

(0.042) 

-0.013 

(0.098) 

-0.028 

(0.194) 

0.023 

(0.114) 

0.155 

(0.193) 

-0.042 

(0.032) 

0.531 

(0.301) 

-0.008 

(0.060) 

0.006 

(0.021) 

1.440 

(1.139) 

0.054 

(0.040) 

0.056 

(0.049) 

November 2014  166 

 
 
 
 
 
 
 
 
 
 
 
 
                               
                               
                               
                               
                               
                               
                               
                               
                               
                               
                               
 Analysis of developments in EU capital flows in the global context 

L.Residuals                    

0.035*** 

(0.008) 

0.034** 

(0.012) 

0.038** 

(0.012) 

0.038* 

(0.015) 

0.033** 

(0.012) 

Log(VIX index)                 

-1.252*** 

-1.576*** 

-1.565*** 

-1.563*** 

0.000 

(0.050) 

(0.065) 

(0.075) 

(0.073) 

(0.000) 

0.039* 

(0.015) 

0.000 

(0.000) 

Interaction VIX * real ptf. debt stock 

0.322*** 

0.316*** 

0.317*** 

0.315*** 

0.317*** 

0.315*** 

(0.004) 

log_ggbondyield_pt             

Public  bond  mkt.  Capitalisation  to  GDP, 
partner 

Private  bond  mkt.  Capitalisation  to  GDP, 
partner 

Public  bond  mkt.  Capitalisation  to  GDP, 
reporter 

Private  bond  mkt.  Capitalisation  to  GDP, 
reporter 

Public  +  Private  Bond  Mkt  Cap.  %GDP, 
Partner 

Public  +  Private  Bond  Mkt  Cap.  %GDP, 
Reporter 

Stock mkt. capitalisation to GDP, partner 

Stock mkt. capitalisation to GDP, reporter 

(0.005) 

0.140** 

(0.051) 

0.034 

(0.039) 

-0.007 

(0.029) 

0.007 

(0.025) 

0.081*** 

(0.020) 

(0.005) 

0.127* 

(0.051) 

0.047 

(0.060) 

0.099** 

(0.035) 

-0.002 

(0.029) 

0.031 

(0.005) 

0.106* 

(0.050) 

-0.008 

(0.047) 

-0.005 

(0.039) 

0.135 

(0.076) 

0.051 

(0.027) 

(0.005) 

0.137** 

(0.052) 

0.034 

(0.039) 

0.000 

(0.030) 

-0.006 

(0.028) 

0.081*** 

(0.020) 

(0.005) 

0.101* 

(0.051) 

-0.012 

(0.047) 

0.007 

(0.039) 

0.084 

(0.096) 

0.077* 

(0.032) 

November 2014  167 

 
 
 
                               
                               
                               
 
                               
 
 
 
                               
 
 
 
 
                               
 
 
 
 
                               
 
 
 
 
                               
 
 
 
 
 
 
 
                               
 
 
 
 
 
 
 
 
 
 
                               
 
 
 
 
 
 
 
 
 
 
                               
 
 
 
 
 
 
 
 
 
 
 Analysis of developments in EU capital flows in the global context 

Constant                       

3.831*** 

3.890*** 

3.689*** 

(0.266) 

(0.384) 

(0.453) 

4.114* 

(1.870) 

-1.493*** 

-7.600 

(0.313) 

(3.985) 

(0.025) 

R-squared                      

N                              

0.990 

759 

0.988 

430 

0.988 

430 

Reporter dummies 

time dummies 

0.988 

430 

y 

0.988 

430 

0.988 

430 

y 

y 

y 

FLOWS,  ECM    Without  offshore  centres  and 
without LUX/IE/NL/CY/SG/HK                                                                                                                                    

Real  Debt  - 
Model 1 

Real  debt  - 
Model 2 

Real  debt  - 
Model 4 

Real  debt  - 
Model 3 

Real  debt  - 
Model 5 

Real  debt  - 
Model 6 

dummy  (1  if  only  one  of  the  two  in  EA in  year 
t) 

dummy (1 if both in EA in year t) 

dummy (1 if only one of the two in EU) 

dummy (1 if both in EU)        

Log(General Govt. Debt to GDP, partner) 

Log(Trade to GDP, partner)     

0.107*** 

0.165** 

(0.031) 

(0.057) 

0.179*** 

0.277** 

(0.052) 

-0.002 

(0.044) 

0.035 

(0.053) 

-0.000 

(0.016) 

-0.017 

(0.032) 

(0.085) 

-0.150* 

(0.074) 

-0.190 

(0.102) 

-0.001 

(0.027) 

0.012 

(0.044) 

0.160** 

(0.059) 

0.273** 

(0.088) 

-0.152 

(0.079) 

-0.188 

(0.108) 

-0.004 

(0.029) 

-0.020 

(0.046) 

0.149 

(0.095) 

0.225 

(0.178) 

-0.162 

(0.098) 

-0.190 

(0.165) 

-0.013 

(0.029) 

0.122 

(0.194) 

0.171** 

(0.057) 

0.133 

(0.094) 

0.287*** 

0.206 

(0.086) 

-0.151* 

(0.074) 

-0.193 

(0.102) 

-0.000 

(0.028) 

0.011 

(0.046) 

(0.177) 

-0.154 

(0.098) 

-0.173 

(0.167) 

-0.011 

(0.029) 

0.448 

(0.280) 

November 2014  168 

 
 
 
                               
 
 
 
 
 
                               
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                               
                               
                               
                               
                               
                               
 Analysis of developments in EU capital flows in the global context 

dummy (1 if contiguous)        

log_abs_dist                   

log(population, reporter)      

log(population, partner)       

log_unempl_P                   

L.Residuals                    

0.022 

(0.051) 

-0.014 

(0.008) 

0.041** 

(0.014) 

0.029* 

(0.011) 

-0.007 

(0.022) 

0.041 

(0.049) 

0.004 

(0.015) 

0.016 

(0.023) 

-0.002 

(0.028) 

-0.014 

(0.040) 

0.039*** 

0.020 

(0.006) 

(0.011) 

0.044 

(0.051) 

-0.011 

(0.013) 

0.017 

(0.020) 

0.011 

(0.032) 

-0.020 

(0.039) 

0.025* 

(0.012) 

0.024 

(0.058) 

0.014 

(0.018) 

1.605** 

(0.582) 

-0.013 

(0.033) 

0.011 

(0.046) 

0.026* 

(0.013) 

0.043 

(0.050) 

0.004 

(0.015) 

0.016 

(0.024) 

-0.002 

(0.028) 

-0.016 

(0.039) 

0.021 

(0.012) 

Log(VIX index)                 

-1.405*** 

-1.814*** 

-1.798*** 

-1.863*** 

0.000 

(0.045) 

(0.057) 

(0.066) 

(0.063) 

(0.000) 

0.029 

(0.058) 

0.010 

(0.019) 

3.038** 

(1.035) 

-0.012 

(0.033) 

0.011 

(0.044) 

0.028* 

(0.013) 

0.000 

(0.000) 

Interaction VIX * real debt stock 

0.322*** 

0.322*** 

0.322*** 

0.322*** 

0.322*** 

0.321*** 

log_ggbondyield_pt             

(0.003) 

Public bond mkt. Capitalisation to GDP, partner 

Private  bond  mkt.  Capitalisation  to  GDP, 
partner 

Public  bond  mkt.  Capitalisation 
reporter 

to  GDP, 

Private  bond  mkt.  Capitalisation  to  GDP, 
reporter 

(0.004) 

0.071 

(0.045) 

(0.004) 

0.064 

(0.045) 

0.058 

(0.030) 

0.014 

(0.028) 

0.049 

(0.029) 

(0.004) 

0.084 

(0.046) 

0.071* 

(0.035) 

0.009 

(0.037) 

0.122 

(0.074) 

(0.004) 

0.065 

(0.046) 

0.057 

(0.030) 

0.016 

(0.029) 

0.051 

(0.032) 

(0.004) 

0.076 

(0.045) 

0.065 

(0.035) 

0.013 

(0.038) 

0.128 

(0.091) 

0.048*** 

0.053* 

0.051*** 

0.083** 

November 2014  169 

 
 
 
                               
                               
                               
                               
                               
                               
                               
                               
 
                               
 
 
 
                               
 
 
 
 
                               
 
 
 
 
                               
 
 
 
 
 Analysis of developments in EU capital flows in the global context 

(0.013) 

(0.024) 

(0.014) 

(0.027) 

Public + Private Bond Mkt Cap. %GDP, Partner 

Public  +  Private  Bond  Mkt  Cap.  %GDP, 
Reporter 

Stock mkt. capitalisation to GDP, partner 

Stock mkt. capitalisation to GDP, reporter 

0.075 

(0.047) 

0.089*** 

(0.027) 

0.018 

(0.025) 

-0.007 

(0.025) 

Constant                       

4.209*** 

4.859*** 

4.820*** 

-0.560 

-0.778** 

-11.919** 

(0.231) 

(0.307) 

(0.390) 

(1.701) 

(0.263) 

(3.625) 

R-squared                      

N                              

0.990 

876 

0.988 

453 

0.988 

453 

Reporter dummies 

time dummies 

0.988 

453 

y 

0.988 

453 

0.988 

453 

y 

y 

y 

November 2014  170 

 
 
 
                               
 
 
 
 
 
 
 
                               
 
 
 
 
 
 
 
 
 
 
                               
 
 
 
 
 
 
 
 
 
 
                               
 
 
 
 
 
 
 
 
 
 
                               
 
 
 
 
 
                               
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 Analysis of developments in EU capital flows in the global context 

6.4. Calculating financially-weighted effective exchange rates 

Lane  and  Shambaugh  (2010)  demonstrated  that  trade-weighted  exchange  rates 
are  an  inadequate  guide  to  understanding  the  wealth  effects  of  currency 
movements.  They  proposed  considering  the  dual  role  of  exchange  rates  in  the 
international  adjustment  process:  the  trade-weighted  index  influences  net 
exports,  while  the  financially-weighted  index  operates  through  the  valuation 
channel.  

Using the dataset of Hobza and Zeugner (2014), we derived four sets of  weights 
for  calculating  financially  weighted  exchange  rates.  Following  the  aggregates 
included  in  their  dataset,  we  derived  weights  for  debt-type  assets  (which  are 
composed  of  debt  portfolio  investment  securities  and  other  investments)  and 
equity-type  assets  (composed  of  foreign  direct  investment  and  equity  portfolio 
securities). We derived weights based on the bilateral assets held by each country 
(this  could  be  easily  complemented  by  considering liabilities  or  a  combination  of 
assets  and  liabilities).  For  both  debt  and  equity  we  derived  weights  for  the  pre-
crisis  period  (using  the  average  of  2002-2007)  and  the  crisis  period  (average  of 
2008-2012).  In  all  cases  we  use  fixed  weights  throughout.  The  time  span  for 
which we calculated the REERs is 1990-2014 using annual data24. 

We  calculated  nominal  effective  exchange  rates  (NEERs)  and  consumer  price-
based  real  effective  exchange  rates  (REERs).  The  exchange  rates  and  consumer 
price  indices  are  taken  from  Bruegel’s  dataset  on  trade-weighted  nominal  and 
real effective exchange rates25. 

Among  the  85  entities,  which  are  included  in  the  dataset  of  Hobza  and  Zeugner 
(2014),  we  calculated  NEERs  and  REERs  for  72  countries.  The  following  13 
entities  were  left  out  due  to  insufficient  data:  Andorra,  Bermuda,  'British  West 
Indies'  (BIS  definition),  Cayman  Islands,  Guernsey,  Gibraltar,  Isle  of  Man, 
International  Organizations  &  Non-Euro  Central  Banks,  Jersey,  Liechtenstein, 
Macao  (China),  the  Netherlands,  Antilles  and  Serbia.  In  most  cases,  consumer 
prices were missing for a sufficiently long period. 

Assets held in the 72 countries comprise, on average, 92 percent of debt assets 
and 94 percent of equity assets held in the 85 countries that are included in the 
dataset of Hobza and Zeugner (2014). Therefore, leaving out the 13 entities only 
slightly reduces the comprehensiveness of our calculations.  

24  The  2014  exchange  rate  data  is  approximated  using  two  data  sources:  1.  For  32 
countries plus the 18 members of the euro area, we used the daily exchange rates of the 
ECB up to 7 November 2014, assumed that the 7 November rate will be unchanged for the 
rest  of  the  year  and  calculated  the  annual  average  for  2014.  2.  For  other  countries,  we 
used  monthly  data  from  the  World  Bank  Global  Economic  Monitor,  which  is  available  till 
August  2014:  we  assumed  that  the  August  rates  are  unchanged  for  the  rest  of  the  year 
and calculated the annual average for 2014.  
For  the  CPI,  we  use  the  IMF's  October  2014  World  Economic  Outlook.  For  Argentina  the 
WEO  includes  data  till  2013.  For  2014,  we  downloaded  monthly  data  from  the  World 
Bank's  Global  Economic  Monitor,  which  is  available  till  August  2014:  for  the  rest  of  the 
year,  we  assumed  that  the  rate  of  12-month  inflation  will  be  unchanged  and  thereby 
calculated the average annual  inflation (which  became  17.6%). Therefore, both the 2014 
CPI and exchange rate figures (and consequently the REER and NEER figures too) will be 
revised, though we do not expect major revisions. 
25 
at: 
countries-a-new-database/  

http://www.bruegel.org/datasets/real-effective-exchange-rates-for-178-

See 

November 2014  171 

 
 
 
                                           
 Analysis of developments in EU capital flows in the global context 

We  compare  the  four  series  of  financially-weighted  exchange  rates  with  a  trade 
weighted  REER,  which  are  calculated  using  the  same  group  of  72  countries.  We 
note  that  trade-weights  were  derived  on  the  basis  of  Bayoumi,  Lee  and  Jaewoo 
(2006), who use a basket that is representative of foreign trade in 1998-2003, a 
somewhat earlier period than the time period we use for deriving the weights for 
the financially weighted exchange rates.  

Figure 45 shows the times series of the 5 REERs for the 72 countries. There are 
numerous cases when trade-weighted and financially-weighted REERs differ quite 
substantially.  In  Austria,  for  example,  financially-weighted  REERs  show  a 
remarkable  appreciation  relative  to  the  trade-weighted  rates  in  1992  and  more 
depreciation  in  recent  years.  There  also  exist  cases,  such  as  in  Australia  or 
Canada, where the differences are minor. With regards to the debt versus equity 
weighted  series,  there  are  some  notable  differences,  such  as  in  China  and  the 
Czech  Republic,  where  equity-weighted  REERs  were  less  volatile  than  the  debt-
weighted  REERs,  and  showed  smaller  real  appreciations.  REERs  typically  do  not 
differ much whether the weights were derived from 2002-2007 or the 2008-2012 
stocks, though there are some exceptions, such as Cyprus. 

Figure  45  Trade-weighted  and  financially-weighted  real  effective 
exchange rates (based on consumer prices), 1990-2014 

November 2014  172 

901101301501701990199219941996199820002002200420062008201020122014United Arab EmiratesTradeDebt, Pre CrisisEquity, Pre CrisisEquity CrisisDebt, Crisis40901401901990199219941996199820002002200420062008201020122014ArgentinaTradeDebt, Pre CrisisEquity, Pre CrisisEquity CrisisDebt, Crisis70901101301990199219941996199820002002200420062008201020122014AustriaTradeDebt, Pre CrisisEquity, Pre CrisisEquity CrisisDebt, Crisis60801001201401990199219941996199820002002200420062008201020122014AustraliaTradeDebt, Pre CrisisEquity, Pre CrisisEquity CrisisDebt, Crisis 
 
 
 Analysis of developments in EU capital flows in the global context 

November 2014  173 

901101301990199219941996199820002002200420062008201020122014BarbadosTradeDebt, Pre CrisisEquity, Pre CrisisEquity CrisisDebt, Crisis80901001101201990199219941996199820002002200420062008201020122014BelgiumTradeDebt, Pre CrisisEquity, Pre CrisisEquity CrisisDebt, Crisis401402401990199219941996199820002002200420062008201020122014BulgariaTradeDebt, Pre CrisisEquity, Pre CrisisEquity CrisisDebt, Crisis60801001201990199219941996199820002002200420062008201020122014BahrainTradeDebt, Pre CrisisEquity, Pre CrisisEquity CrisisDebt, Crisis601101601990199219941996199820002002200420062008201020122014BrazilTradeDebt, Pre CrisisEquity, Pre CrisisEquity CrisisDebt, Crisis801301802301990199219941996199820002002200420062008201020122014BahamasTradeDebt, Pre CrisisEquity, Pre CrisisEquity CrisisDebt, Crisis60801001990199219941996199820002002200420062008201020122014CanadaTradeDebt, Pre CrisisEquity, Pre CrisisEquity CrisisDebt, Crisis801001201990199219941996199820002002200420062008201020122014SwitzerlandTradeDebt, Pre CrisisEquity, Pre CrisisEquity CrisisDebt, Crisis 
 
 
 Analysis of developments in EU capital flows in the global context 

November 2014  174 

801001201401990199219941996199820002002200420062008201020122014ChileTradeDebt, Pre CrisisEquity, Pre CrisisEquity CrisisDebt, Crisis501001501990199219941996199820002002200420062008201020122014ChinaTradeDebt, Pre CrisisEquity, Pre CrisisEquity CrisisDebt, Crisis901401901990199219941996199820002002200420062008201020122014ColombiaTradeDebt, Pre CrisisEquity, Pre CrisisEquity CrisisDebt, Crisis801001201401990199219941996199820002002200420062008201020122014Costa RicaTradeDebt, Pre CrisisEquity, Pre CrisisEquity CrisisDebt, Crisis901401902401990199219941996199820002002200420062008201020122014CyprusTradeDebt, Pre CrisisEquity, Pre CrisisEquity CrisisDebt, Crisis801301802301990199219941996199820002002200420062008201020122014Czech RepublicTradeDebt, Pre CrisisEquity, Pre CrisisEquity CrisisDebt, Crisis801001201990199219941996199820002002200420062008201020122014GermanyTradeDebt, Pre CrisisEquity, Pre CrisisEquity CrisisDebt, Crisis80901001101201990199219941996199820002002200420062008201020122014DenmarkTradeDebt, Pre CrisisEquity, Pre CrisisEquity CrisisDebt, Crisis 
 
 
 Analysis of developments in EU capital flows in the global context 

November 2014  175 

10601101990199219941996199820002002200420062008201020122014EstoniaTradeDebt, Pre CrisisEquity, Pre CrisisEquity CrisisDebt, Crisis4060801001201990199219941996199820002002200420062008201020122014EgyptTradeDebt, Pre CrisisEquity, Pre CrisisEquity CrisisDebt, Crisis60801001990199219941996199820002002200420062008201020122014SpainTradeDebt, Pre CrisisEquity, Pre CrisisEquity CrisisDebt, Crisis60801001990199219941996199820002002200420062008201020122014FinlandTradeDebt, Pre CrisisEquity, Pre CrisisEquity CrisisDebt, Crisis80901001101990199219941996199820002002200420062008201020122014FranceTradeDebt, Pre CrisisEquity, Pre CrisisEquity CrisisDebt, Crisis70901101990199219941996199820002002200420062008201020122014United KingdomTradeDebt, Pre CrisisEquity, Pre CrisisEquity CrisisDebt, Crisis901101301990199219941996199820002002200420062008201020122014GreeceTradeDebt, Pre CrisisEquity, Pre CrisisEquity CrisisDebt, Crisis901401990199219941996199820002002200420062008201020122014Hong Kong, ChinaTradeDebt, Pre CrisisEquity, Pre CrisisEquity CrisisDebt, Crisis 
 
 
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November 2014  176 

501001990199219941996199820002002200420062008201020122014CroatiaTradeDebt, Pre CrisisEquity, Pre CrisisEquity CrisisDebt, Crisis901401901990199219941996199820002002200420062008201020122014HungaryTradeDebt, Pre CrisisEquity, Pre CrisisEquity CrisisDebt, Crisis305070901101990199219941996199820002002200420062008201020122014IndonesiaTradeDebt, Pre CrisisEquity, Pre CrisisEquity CrisisDebt, Crisis70901101990199219941996199820002002200420062008201020122014IrelandTradeDebt, Pre CrisisEquity, Pre CrisisEquity CrisisDebt, Crisis70901101301990199219941996199820002002200420062008201020122014IsraelTradeDebt, Pre CrisisEquity, Pre CrisisEquity CrisisDebt, Crisis60801001201990199219941996199820002002200420062008201020122014IndiaTradeDebt, Pre CrisisEquity, Pre CrisisEquity CrisisDebt, Crisis60801001201990199219941996199820002002200420062008201020122014IcelandTradeDebt, Pre CrisisEquity, Pre CrisisEquity CrisisDebt, Crisis7080901001101990199219941996199820002002200420062008201020122014ItalyTradeDebt, Pre CrisisEquity, Pre CrisisEquity CrisisDebt, Crisis 
 
 
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November 2014  177 

70901101301501990199219941996199820002002200420062008201020122014JapanTradeDebt, Pre CrisisEquity, Pre CrisisEquity CrisisDebt, Crisis60801001201990199219941996199820002002200420062008201020122014KoreaTradeDebt, Pre CrisisEquity, Pre CrisisEquity CrisisDebt, Crisis801001201990199219941996199820002002200420062008201020122014KuwaitTradeDebt, Pre CrisisEquity, Pre CrisisEquity CrisisDebt, Crisis901401902401990199219941996199820002002200420062008201020122014LebanonTradeDebt, Pre CrisisEquity, Pre CrisisEquity CrisisDebt, Crisis0501001501990199219941996199820002002200420062008201020122014LithuaniaTradeDebt, Pre CrisisEquity, Pre CrisisEquity CrisisDebt, Crisis80901001101201990199219941996199820002002200420062008201020122014LuxembourgTradeDebt, Pre CrisisEquity, Pre CrisisEquity CrisisDebt, Crisis0501001990199219941996199820002002200420062008201020122014LatviaTradeDebt, Pre CrisisEquity, Pre CrisisEquity CrisisDebt, Crisis901101301990199219941996199820002002200420062008201020122014MoroccoTradeDebt, Pre CrisisEquity, Pre CrisisEquity CrisisDebt, Crisis 
 
 
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November 2014  178 

70901101990199219941996199820002002200420062008201020122014MaltaTradeDebt, Pre CrisisEquity, Pre CrisisEquity CrisisDebt, Crisis901101301990199219941996199820002002200420062008201020122014MauritiusTradeDebt, Pre CrisisEquity, Pre CrisisEquity CrisisDebt, Crisis701201701990199219941996199820002002200420062008201020122014MexicoTradeDebt, Pre CrisisEquity, Pre CrisisEquity CrisisDebt, Crisis70901101990199219941996199820002002200420062008201020122014MalaysiaTradeDebt, Pre CrisisEquity, Pre CrisisEquity CrisisDebt, Crisis80901001101201990199219941996199820002002200420062008201020122014NetherlandsTradeDebt, Pre CrisisEquity, Pre CrisisEquity CrisisDebt, Crisis7080901001101990199219941996199820002002200420062008201020122014NorwayTradeDebt, Pre CrisisEquity, Pre CrisisEquity CrisisDebt, Crisis70901101301990199219941996199820002002200420062008201020122014New ZealandTradeDebt, Pre CrisisEquity, Pre CrisisEquity CrisisDebt, Crisis60801001201990199219941996199820002002200420062008201020122014OmanTradeDebt, Pre CrisisEquity, Pre CrisisEquity CrisisDebt, Crisis 
 
 
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November 2014  179 

60801001990199219941996199820002002200420062008201020122014PanamaTradeDebt, Pre CrisisEquity, Pre CrisisEquity CrisisDebt, Crisis70901101301501990199219941996199820002002200420062008201020122014PhilippinesTradeDebt, Pre CrisisEquity, Pre CrisisEquity CrisisDebt, Crisis901902901990199219941996199820002002200420062008201020122014PolandTradeDebt, Pre CrisisEquity, Pre CrisisEquity CrisisDebt, Crisis901001101201301990199219941996199820002002200420062008201020122014PortugalTradeDebt, Pre CrisisEquity, Pre CrisisEquity CrisisDebt, Crisis801001201401601990199219941996199820002002200420062008201020122014QatarTradeDebt, Pre CrisisEquity, Pre CrisisEquity CrisisDebt, Crisis40901401990199219941996199820002002200420062008201020122014RomaniaTradeDebt, Pre CrisisEquity, Pre CrisisEquity CrisisDebt, Crisis0501001990199219941996199820002002200420062008201020122014RussiaTradeDebt, Pre CrisisEquity, Pre CrisisEquity CrisisDebt, Crisis60801001990199219941996199820002002200420062008201020122014Saudi ArabiaTradeDebt, Pre CrisisEquity, Pre CrisisEquity CrisisDebt, Crisis 
 
 
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November 2014  180 

60801001201990199219941996199820002002200420062008201020122014SwedenTradeDebt, Pre CrisisEquity, Pre CrisisEquity CrisisDebt, Crisis901101301990199219941996199820002002200420062008201020122014SingaporeTradeDebt, Pre CrisisEquity, Pre CrisisEquity CrisisDebt, Crisis70901101301990199219941996199820002002200420062008201020122014SloveniaTradeDebt, Pre CrisisEquity, Pre CrisisEquity CrisisDebt, Crisis801802801990199219941996199820002002200420062008201020122014SlovakiaTradeDebt, Pre CrisisEquity, Pre CrisisEquity CrisisDebt, Crisis60801001201990199219941996199820002002200420062008201020122014ThailandTradeDebt, Pre CrisisEquity, Pre CrisisEquity CrisisDebt, Crisis701201701990199219941996199820002002200420062008201020122014TurkeyTradeDebt, Pre CrisisEquity, Pre CrisisEquity CrisisDebt, Crisis60801001201990199219941996199820002002200420062008201020122014TaiwanTradeDebt, Pre CrisisEquity, Pre CrisisEquity CrisisDebt, Crisis0501001990199219941996199820002002200420062008201020122014UkraineTradeDebt, Pre CrisisEquity, Pre CrisisEquity CrisisDebt, Crisis 
 
 
 Analysis of developments in EU capital flows in the global context 

6.5  Calculating  financially-weighted  government  bond  yields  and 
spreads 

We  calculated  financially  weighted  government  bonds  yields  and  spreads  for  57 
countries for which we could find data on government bond yields. 

The  first  step  was  the  collection  of  comparable  government  bonds  yields  at  the 
monthly frequency. We used four major sources: 

  Eurostat’s 

‘EMU 

criterion 

convergence 

-  monthly  data 
[irt_lt_mcby_m]’  includes  10-year  government  bond  yields  for  27  EU 
member states (there is no data for Estonia, given its low public debt and 
the  lack  of  10-year  maturity  government  bonds).  The  most  recent 
observation is August 2014. The first observation of the dataset is January 
1980, but for many countries the time series start much later26. 

series 

  Eurostat’s  ‘Government  bond  yields,  10  years'  maturity  -  monthly  data 
[irt_lt_gby10_m]’,  which  includes  data  for  the  US  (January  1974-August 
2014),  Japan  (January  1980-August  2014)  and  Turkey  (January  2005-
April 2014).  

  From  Datastream  we  collected  average  monthly  10-year  maturity  yields 
for January 1990 (or the first available observation) - August 2014 for the 

26  We  note  that  the  Cypriot  government  bond  yield  data  from  Eurostat  is  suspicious, 
because  after  2008  it  is  constant  for  several  years  with  two  step-wise  changes.  Interest 
rates  for  all  other  countries  change  in  every  month.  Also,  for  Cyprus  there  is  no  major 
spike during the Cypriot crisis (the interest  rate  is recorded as staying constantly at 7%, 
and  more  recently  at  6%).  Since  a  large  share  of  Cypriot  assets  are  held  in  Greece,  the 
data suggests that Cyprus had a negative spread. The constant 7% and 6% bond yields for 
Cyprus is suspicious in our view, yet for the time being we kept Cyprus in the database.  

November 2014  181 

801001201401990199219941996199820002002200420062008201020122014United StatesTradeDebt, Pre CrisisEquity, Pre CrisisEquity CrisisDebt, Crisis901902903901990199219941996199820002002200420062008201020122014VenezuelaTradeDebt, Pre CrisisEquity, Pre CrisisEquity CrisisDebt, Crisis701201701990199219941996199820002002200420062008201020122014Western SamoaTradeDebt, Pre CrisisEquity, Pre CrisisEquity CrisisDebt, Crisis 
 
 
 
 
                                           
 Analysis of developments in EU capital flows in the global context 

following countries: Argentina, Brazil, Chile, China, Colombia, Egypt, Hong 
Kong,  Indonesia,  Israel,  India,  Korea,  Mexico,  Malaysia,  Norway,  New 
Zealand,  Philippines,  Russia,  Singapore,  Thailand,  Turkey,  Taiwan,  South 
Africa. 

  The  August  2014  version  of  the  IMF’s  International  Financial  Statistics 
includes “long-term government bond yields” for 74 countries. The longest 
possible range is January 1957 - June 2014. For many countries the most 
recent data point is April 2014. 

We combined these four datasets, giving primary preference to Eurostat data and 
then to Datastream, as both of these datasets are available till August 2014. For 
earlier  periods  we  merged  IMF  data  to  our  database  after  carefully  checking  the 
comparability  of  Eurostat/Datastream/IMF  data  for  the  periods  when  two  or  all 
three sources include data. For European countries the IMF data was identical to 
Eurostat data. 

Altogether, we were able to collect 10-year government bond yields for 57 of 85 
countries/territories  which  are  included  in  the  bilateral  capital  flows  dataset  of 
Hobza and Zeugner (2014). Of these 57 countries, data is available from 1978 for 
22 countries27 and from 2001 for 38 countries. We therefore calculated weighted 
average  interest  rates  for  22  partner  countries  from  1978  and  for  38  partner 
countries  from  2001.  We  derived  the  weights  from  the  dataset  of  Hobza  and 
Zeugner (2014) concerning debt-type assets (which is composed of debt portfolio 
investment  securities  and  other  investments).  On  average  across  the  57 
countries, the group of 22 countries comprise 78% of the debt assets held in the 
85 countries included in Hobza and Zeugner (2014), while the average coverage 
rate for the group of 38 countries is 86%.  

Table 12 lists the countries included in our dataset. 

27 If we were to drop Spain from the group of 22 countries, the average for the remaining 
21  countries  could  be  calculated  from  May  1973,  while  further  dropping  Korea  form  the 
group, the average for the remaining 20 countries could be calculated from January 1971. 

November 2014  182 

 
 
 
                                           
 Analysis of developments in EU capital flows in the global context 

Table 12 The list of the 57 countries included in the bond yield dataset 
and the lists of the 22 and 38 countries which were used to calculate the 
weighted average foreign interest rates  

The left-hand panels of Figure 46 show the domestic interest rates and the weighted average foreign 
interest rates, while the right-hand panels show the spreads.  

November 2014  183 

include in 22 basket?include in 38 basket?include in 22 basket?include in 38 basket?1Argentina0030Latvia012Australia1131Lithuania013Austria1132Luxembourg114Belgium1133Malaysia005Brazil0034Malta016Bulgaria0035Mauritius007Canada1136Mexico008Chile0037Morocco009China0038Netherlands1110Colombia0039New Zealand1111Croatia0040Norway1112Cyprus0141Philippines0113Czech Republic0142Poland0114Denmark1143Portugal1115Egypt0044Romania0016Finland0145Russia0017France1146Singapore0118Germany1147Slovakia0119Greece0148Slovenia0120Hong Kong0149South Africa1121Hungary0150Spain1122Iceland0051Sweden1123India0152Switzerland1124Indonesia0053Taiwan0125Ireland1154Thailand0126Israel0055Turkey0027Italy1156United Kingdom1128Japan1157United States1129Korea11 
 
 
 
 
 
 Analysis of developments in EU capital flows in the global context 

Figure 46 Financially-weighted government bond yields and spreads 

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01020304050607001020304050607019701980199020002010Domestic interest rateAverage interest rate of 22 partnersAverage interest rate of 38 partners-100102030405060-10010203040506019701980199020002010Spread wrt 22 partnersAverage wrt 38 partnersArgentina0246810121416024681012141619701980199020002010Domestic interest rateAverage interest rate of 22 partnersAverage interest rate of 38 partners-4.0-3.5-3.0-2.5-2.0-1.5-1.0-0.50.00.51.0-4.0-3.5-3.0-2.5-2.0-1.5-1.0-0.50.00.51.019701980199020002010Spread wrt 22 partnersAverage wrt 38 partnersAustria02468101214161802468101214161819701980199020002010Domestic interest rateAverage interest rate of 22 partnersAverage interest rate of 38 partners-2-10123456-2-1012345619701980199020002010Spread wrt 22 partnersAverage wrt 38 partnersAustralia 
 
 
 
 
 
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0246810121416024681012141619701980199020002010Domestic interest rateAverage interest rate of 22 partnersAverage interest rate of 38 partners-2.0-1.6-1.2-0.8-0.40.00.40.81.2-2.0-1.6-1.2-0.8-0.40.00.40.81.219701980199020002010Spread wrt 22 partnersAverage wrt 38 partnersBelgium05010015020025030035040045050005010015020025030035040045050019701980199020002010Domestic interest rateAverage interest rate of 22 partnersAverage interest rate of 38 partners-50050100150200250300350400450-5005010015020025030035040045019701980199020002010Spread wrt 22 partnersAverage wrt 38 partnersBulgaria02468101214161802468101214161819701980199020002010Domestic interest rateAverage interest rate of 22 partnersAverage interest rate of 38 partners56789101112131456789101112131419701980199020002010Spread wrt 22 partnersAverage wrt 38 partnersBrazil 
 
 
 
 
 
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02468101214161802468101214161819701980199020002010Domestic interest rateAverage interest rate of 22 partnersAverage interest rate of 38 partners-1.0-0.50.00.51.01.52.02.53.03.54.0-1.0-0.50.00.51.01.52.02.53.03.54.019701980199020002010Spread wrt 22 partnersAverage wrt 38 partnersCanada0246810121416024681012141619701980199020002010Domestic interest rateAverage interest rate of 22 partnersAverage interest rate of 38 partners-9-8-7-6-5-4-3-2-10-9-8-7-6-5-4-3-2-1019701980199020002010Spread wrt 22 partnersAverage wrt 38 partnersSwitzerland024681012140246810121419701980199020002010Domestic interest rateAverage interest rate of 22 partnersAverage interest rate of 38 partners0.81.21.62.02.42.83.23.64.00.81.21.62.02.42.83.23.64.019701980199020002010Spread wrt 22 partnersAverage wrt 38 partnersChile 
 
 
 
 
 
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12345678910111212345678910111219701980199020002010Domestic interest rateAverage interest rate of 22 partnersAverage interest rate of 38 partners-0.8-0.40.00.40.81.21.62.02.42.83.2-0.8-0.40.00.40.81.21.62.02.42.83.219701980199020002010Spread wrt 22 partnersAverage wrt 38 partnersChina024681012141618200246810121416182019701980199020002010Domestic interest rateAverage interest rate of 22 partnersAverage interest rate of 38 partners24681012141624681012141619701980199020002010Spread wrt 22 partnersAverage wrt 38 partnersColombia024681012140246810121419701980199020002010Domestic interest rateAverage interest rate of 22 partnersAverage interest rate of 38 partners-5-4-3-2-10123456-5-4-3-2-1012345619701980199020002010Spread wrt 22 partnersAverage wrt 38 partnersCyprus 
 
 
 
 
 
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024681012140246810121419701980199020002010Domestic interest rateAverage interest rate of 22 partnersAverage interest rate of 38 partners-0.50.00.51.01.52.02.5-0.50.00.51.01.52.02.519701980199020002010Spread wrt 22 partnersAverage wrt 38 partnersCzech Republic0246810121416024681012141619701980199020002010Domestic interest rateAverage interest rate of 22 partnersAverage interest rate of 38 partners-6-5-4-3-2-101-6-5-4-3-2-10119701980199020002010Spread wrt 22 partnersAverage wrt 38 partnersGermany0246810121416182022024681012141618202219701980199020002010Domestic interest rateAverage interest rate of 22 partnersAverage interest rate of 38 partners-2-1012345678910-2-101234567891019701980199020002010Spread wrt 22 partnersAverage wrt 38 partnersDenmark 
 
 
 
 
 
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024681012141618200246810121416182019701980199020002010Domestic interest rateAverage interest rate of 22 partnersAverage interest rate of 38 partners910111213141516179101112131415161719701980199020002010Spread wrt 22 partnersAverage wrt 38 partnersEgypt024681012141618200246810121416182019701980199020002010Domestic interest rateAverage interest rate of 22 partnersAverage interest rate of 38 partners-10123456-1012345619701980199020002010Spread wrt 22 partnersAverage wrt 38 partnersSpain0246810121416024681012141619701980199020002010Domestic interest rateAverage interest rate of 22 partnersAverage interest rate of 38 partners-1.5-1.0-0.50.00.51.01.52.02.53.03.54.0-1.5-1.0-0.50.00.51.01.52.02.53.03.54.019701980199020002010Spread wrt 22 partnersAverage wrt 38 partnersFinland 
 
 
 
 
 
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02468101214161802468101214161819701980199020002010Domestic interest rateAverage interest rate of 22 partnersAverage interest rate of 38 partners-3-2-101234-3-2-10123419701980199020002010Spread wrt 22 partnersAverage wrt 38 partnersFrance02468101214161802468101214161819701980199020002010Domestic interest rateAverage interest rate of 22 partnersAverage interest rate of 38 partners-2-10123456-2-1012345619701980199020002010Spread wrt 22 partnersAverage wrt 38 partnersUnited Kingdom 
 
 
 
 
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November 2014  191 

05101520253005101520253019701980199020002010Domestic interest rateAverage interest rate of 22 partnersAverage interest rate of 38 partners-40481216202428-4048121620242819701980199020002010Spread wrt 22 partnersAverage wrt 38 partnersGreece0246810121416024681012141619701980199020002010Domestic interest rateAverage interest rate of 22 partnersAverage interest rate of 38 partners-2-1012345-2-101234519701980199020002010Spread wrt 22 partnersAverage wrt 38 partnersHong Kong 
 
 
 
 
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November 2014  192 

123456789101112131234567891011121319701980199020002010Domestic interest rateAverage interest rate of 22 partnersAverage interest rate of 38 partners0123456012345619701980199020002010Spread wrt 22 partnersAverage wrt 38 partnersCroatia024681012140246810121419701980199020002010Domestic interest rateAverage interest rate of 22 partnersAverage interest rate of 38 partners12345678912345678919701980199020002010Spread wrt 22 partnersAverage wrt 38 partnersHungary02468101214161802468101214161819701980199020002010Domestic interest rateAverage interest rate of 22 partnersAverage interest rate of 38 partners34567891011121334567891011121319701980199020002010Spread wrt 22 partnersAverage wrt 38 partnersIndonesia 
 
 
 
 
 
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0246810121416182022024681012141618202219701980199020002010Domestic interest rateAverage interest rate of 22 partnersAverage interest rate of 38 partners-2-1012345678910-2-101234567891019701980199020002010Spread wrt 22 partnersAverage wrt 38 partnersIreland123456789101112131234567891011121319701980199020002010Domestic interest rateAverage interest rate of 22 partnersAverage interest rate of 38 partners01234567801234567819701980199020002010Spread wrt 22 partnersAverage wrt 38 partnersIsrael0246810121416024681012141619701980199020002010Domestic interest rateAverage interest rate of 22 partnersAverage interest rate of 38 partners0123456789012345678919701980199020002010Spread wrt 22 partnersAverage wrt 38 partnersIndia 
 
 
 
 
 
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0246810121416024681012141619701980199020002010Domestic interest rateAverage interest rate of 22 partnersAverage interest rate of 38 partners-5-4-3-2-1012-5-4-3-2-101219701980199020002010Spread wrt 22 partnersAverage wrt 38 partnersIceland0246810121416182022024681012141618202219701980199020002010Domestic interest rateAverage interest rate of 22 partnersAverage interest rate of 38 partners-1012345678-101234567819701980199020002010Spread wrt 22 partnersAverage wrt 38 partnersItaly0246810121416024681012141619701980199020002010Domestic interest rateAverage interest rate of 22 partnersAverage interest rate of 38 partners-6.5-6.0-5.5-5.0-4.5-4.0-3.5-3.0-2.5-2.0-1.5-1.0-6.5-6.0-5.5-5.0-4.5-4.0-3.5-3.0-2.5-2.0-1.5-1.019701980199020002010Spread wrt 22 partnersAverage wrt 38 partnersJapan 
 
 
 
 
 
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048121620242832360481216202428323619701980199020002010Domestic interest rateAverage interest rate of 22 partnersAverage interest rate of 38 partners-20246810121416182022-2024681012141618202219701980199020002010Spread wrt 22 partnersAverage wrt 38 partnersKorea0246810121416024681012141619701980199020002010Domestic interest rateAverage interest rate of 22 partnersAverage interest rate of 38 partners-2024681012-202468101219701980199020002010Spread wrt 22 partnersAverage wrt 38 partnersLithuania 
 
 
 
 
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0246810121416024681012141619701980199020002010Domestic interest rateAverage interest rate of 22 partnersAverage interest rate of 38 partners-6-5-4-3-2-1012-6-5-4-3-2-101219701980199020002010Spread wrt 22 partnersAverage wrt 38 partnersLuxembourg024681012140246810121419701980199020002010Domestic interest rateAverage interest rate of 22 partnersAverage interest rate of 38 partners-101234567891011-10123456789101119701980199020002010Spread wrt 22 partnersAverage wrt 38 partnersLatvia 
 
 
 
 
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0246810121416024681012141619701980199020002010Domestic interest rateAverage interest rate of 22 partnersAverage interest rate of 38 partners-1012345-101234519701980199020002010Spread wrt 22 partnersAverage wrt 38 partnersMorocco0246810121416024681012141619701980199020002010Domestic interest rateAverage interest rate of 22 partnersAverage interest rate of 38 partners-0.20.00.20.40.60.81.01.21.41.61.8-0.20.00.20.40.60.81.01.21.41.61.819701980199020002010Spread wrt 22 partnersAverage wrt 38 partnersMalta024681012140246810121419701980199020002010Domestic interest rateAverage interest rate of 22 partnersAverage interest rate of 38 partners-10123456789-1012345678919701980199020002010Spread wrt 22 partnersAverage wrt 38 partnersMauritius 
 
 
 
 
 
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010203040506070800102030405060708019701980199020002010Domestic interest rateAverage interest rate of 22 partnersAverage interest rate of 38 partners010203040506070800102030405060708019701980199020002010Spread wrt 22 partnersAverage wrt 38 partnersMexico0246810121416024681012141619701980199020002010Domestic interest rateAverage interest rate of 22 partnersAverage interest rate of 38 partners-1.5-1.0-0.50.00.51.01.52.0-1.5-1.0-0.50.00.51.01.52.019701980199020002010Spread wrt 22 partnersAverage wrt 38 partnersMalaysia0246810121416024681012141619701980199020002010Domestic interest rateAverage interest rate of 22 partnersAverage interest rate of 38 partners-4.5-4.0-3.5-3.0-2.5-2.0-1.5-1.0-0.50.00.5-4.5-4.0-3.5-3.0-2.5-2.0-1.5-1.0-0.50.00.519701980199020002010Spread wrt 22 partnersAverage wrt 38 partnersNetherlands 
 
 
 
 
 
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0246810121416024681012141619701980199020002010Domestic interest rateAverage interest rate of 22 partnersAverage interest rate of 38 partners-3-2-10123456-3-2-1012345619701980199020002010Spread wrt 22 partnersAverage wrt 38 partnersNorway2468101214161820246810121416182019701980199020002010Domestic interest rateAverage interest rate of 22 partnersAverage interest rate of 38 partners-6-4-20246810-6-4-2024681019701980199020002010Spread wrt 22 partnersAverage wrt 38 partnersNew Zealand 
 
 
 
 
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02468101214161802468101214161819701980199020002010Domestic interest rateAverage interest rate of 22 partnersAverage interest rate of 38 partners024681012140246810121419701980199020002010Spread wrt 22 partnersAverage wrt 38 partnersPhilippines024681012140246810121419701980199020002010Domestic interest rateAverage interest rate of 22 partnersAverage interest rate of 38 partners012345670123456719701980199020002010Spread wrt 22 partnersAverage wrt 38 partnersPoland02468101214161820222402468101214161820222419701980199020002010Domestic interest rateAverage interest rate of 22 partnersAverage interest rate of 38 partners-101234567891011-10123456789101119701980199020002010Spread wrt 22 partnersAverage wrt 38 partnersPortugal 
 
 
 
 
 
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024681012140246810121419701980199020002010Domestic interest rateAverage interest rate of 22 partnersAverage interest rate of 38 partners123456781234567819701980199020002010Spread wrt 22 partnersAverage wrt 38 partnersRomania0246810121416024681012141619701980199020002010Domestic interest rateAverage interest rate of 22 partnersAverage interest rate of 38 partners12345678910111212345678910111219701980199020002010Spread wrt 22 partnersAverage wrt 38 partnersRussia 
 
 
 
 
 Analysis of developments in EU capital flows in the global context 

November 2014  202 

0246810121416024681012141619701980199020002010Domestic interest rateAverage interest rate of 22 partnersAverage interest rate of 38 partners-2-101234-2-10123419701980199020002010Spread wrt 22 partnersAverage wrt 38 partnersSweden0246810121416024681012141619701980199020002010Domestic interest rateAverage interest rate of 22 partnersAverage interest rate of 38 partners-2.0-1.6-1.2-0.8-0.40.00.40.81.2-2.0-1.6-1.2-0.8-0.40.00.40.81.219701980199020002010Spread wrt 22 partnersAverage wrt 38 partnersSingapore0246810121416024681012141619701980199020002010Domestic interest rateAverage interest rate of 22 partnersAverage interest rate of 38 partners-0.50.00.51.01.52.02.53.03.54.04.5-0.50.00.51.01.52.02.53.03.54.04.519701980199020002010Spread wrt 22 partnersAverage wrt 38 partnersSlovenia 
 
 
 
 
 
 Analysis of developments in EU capital flows in the global context 

November 2014  203 

0246810121416024681012141619701980199020002010Domestic interest rateAverage interest rate of 22 partnersAverage interest rate of 38 partners-1.5-1.0-0.50.00.51.01.52.02.53.03.5-1.5-1.0-0.50.00.51.01.52.02.53.03.519701980199020002010Spread wrt 22 partnersAverage wrt 38 partnersSlovakia024681012141618200246810121416182019701980199020002010Domestic interest rateAverage interest rate of 22 partnersAverage interest rate of 38 partners-2.0-1.5-1.0-0.50.00.51.01.52.02.5-2.0-1.5-1.0-0.50.00.51.01.52.02.519701980199020002010Spread wrt 22 partnersAverage wrt 38 partnersThailand12345678910111212345678910111219701980199020002010Domestic interest rateAverage interest rate of 22 partnersAverage interest rate of 38 partners4.44.85.25.66.06.46.87.27.68.08.48.84.44.85.25.66.06.46.87.27.68.08.48.819701980199020002010Spread wrt 22 partnersAverage wrt 38 partnersTurkey 
 
 
 
 
 
 Analysis of developments in EU capital flows in the global context 

November 2014  204 

024681012140246810121419701980199020002010Domestic interest rateAverage interest rate of 22 partnersAverage interest rate of 38 partners-2.5-2.0-1.5-1.0-0.50.00.51.01.5-2.5-2.0-1.5-1.0-0.50.00.51.01.519701980199020002010Spread wrt 22 partnersAverage wrt 38 partnersTaiwan0246810121416024681012141619701980199020002010Domestic interest rateAverage interest rate of 22 partnersAverage interest rate of 38 partners-3.0-2.5-2.0-1.5-1.0-0.50.00.51.01.52.0-3.0-2.5-2.0-1.5-1.0-0.50.00.51.01.52.019701980199020002010Spread wrt 22 partnersAverage wrt 38 partnersUnited States024681012141618200246810121416182019701980199020002010Domestic interest rateAverage interest rate of 22 partnersAverage interest rate of 38 partners-4-202468101214-4-20246810121419701980199020002010Spread wrt 22 partnersAverage wrt 38 partnersSouth Africa 
 
 
 
 
 
 Analysis of developments in EU capital flows in the global context 

Note:  countries  are  ordered  alphabetically  according  to  their  2-digit  codes;  e.g. 
Switzerland (code: CH) comes at C and Spain (code: ES) comes at E. 

November 2014  205 

 
 
 
 
 Analysis of developments in EU capital flows in the global context 

7 Appendix  

7.1 Appendix A to Section 4: financial accounts of each EU country 

Austria - Financial Account net componets (%GDP) 

30

20

10

0

-10

-20

-30

-40

40

30

20

10

0

-10

-20

-30

-40

1
Q
1
0
0
2

3
Q
1
0
0
2

1
Q
2
0
0
2

3
Q
2
0
0
2

1
Q
3
0
0
2

3
Q
3
0
0
2

1
Q
4
0
0
2

3
Q
4
0
0
2

1
Q
5
0
0
2

3
Q
5
0
0
2

1
Q
6
0
0
2

3
Q
6
0
0
2

1
Q
7
0
0
2

3
Q
7
0
0
2

1
Q
8
0
0
2

3
Q
8
0
0
2

1
Q
9
0
0
2

3
Q
9
0
0
2

1
Q
0
1
0
2

3
Q
0
1
0
2

1
Q
1
1
0
2

3
Q
1
1
0
2

1
Q
2
1
0
2

3
Q
2
1
0
2

1
Q
3
1
0
2

 Direct investment

 Other investment

Portfolio equity

Portfolio debt

1
Q
4
1
0
2

3
Q
3
1
0
2

FA

Belgium - Financial Account net componets (%GDP) 

1
Q
1
0
0
2

3
Q
1
0
0
2

1
Q
2
0
0
2

3
Q
2
0
0
2

1
Q
3
0
0
2

3
Q
3
0
0
2

1
Q
4
0
0
2

3
Q
4
0
0
2

1
Q
5
0
0
2

3
Q
5
0
0
2

1
Q
6
0
0
2

3
Q
6
0
0
2

1
Q
7
0
0
2

3
Q
7
0
0
2

1
Q
8
0
0
2

3
Q
8
0
0
2

1
Q
9
0
0
2

3
Q
9
0
0
2

1
Q
0
1
0
2

3
Q
0
1
0
2

1
Q
1
1
0
2

3
Q
1
1
0
2

1
Q
2
1
0
2

3
Q
2
1
0
2

1
Q
3
1
0
2

 Direct investment

 Other investment

Portfolio equity

Portfolio debt

1
Q
4
1
0
2

3
Q
3
1
0
2

FA

November 2014  206 

 
 
 
 
 Analysis of developments in EU capital flows in the global context 

Bulgaria - Financial Account net componets (%GDP) 

70

60

50

40

30

20

10

0

-10

-20

-30

300

200

100

0

-100

-200

-300

1
Q
1
0
0
2

3
Q
1
0
0
2

1
Q
2
0
0
2

3
Q
2
0
0
2

1
Q
3
0
0
2

3
Q
3
0
0
2

1
Q
4
0
0
2

3
Q
4
0
0
2

1
Q
5
0
0
2

3
Q
5
0
0
2

1
Q
6
0
0
2

3
Q
6
0
0
2

1
Q
7
0
0
2

3
Q
7
0
0
2

1
Q
8
0
0
2

3
Q
8
0
0
2

1
Q
9
0
0
2

3
Q
9
0
0
2

1
Q
0
1
0
2

3
Q
0
1
0
2

1
Q
1
1
0
2

3
Q
1
1
0
2

1
Q
2
1
0
2

3
Q
2
1
0
2

1
Q
3
1
0
2

 Direct investment

 Other investment

Portfolio equity

Portfolio debt

1
Q
4
1
0
2

3
Q
3
1
0
2

FA

Cyprus - Financial Account net componets (%GDP) 

1
Q
1
0
0
2

3
Q
1
0
0
2

1
Q
2
0
0
2

3
Q
2
0
0
2

1
Q
3
0
0
2

3
Q
3
0
0
2

1
Q
4
0
0
2

3
Q
4
0
0
2

1
Q
5
0
0
2

3
Q
5
0
0
2

1
Q
6
0
0
2

3
Q
6
0
0
2

1
Q
7
0
0
2

3
Q
7
0
0
2

1
Q
8
0
0
2

3
Q
8
0
0
2

1
Q
9
0
0
2

3
Q
9
0
0
2

1
Q
0
1
0
2

3
Q
0
1
0
2

1
Q
1
1
0
2

3
Q
1
1
0
2

1
Q
2
1
0
2

3
Q
2
1
0
2

1
Q
3
1
0
2

 Direct investment

 Other investment

Portfolio equity

Portfolio debt

1
Q
4
1
0
2

3
Q
3
1
0
2

FA

November 2014  207 

 
 
 
 
 
35

30

25

20

15

10

5

0

-5

-10

-15

15

10

5

0

-5

-10

-15

-20

-25

 Analysis of developments in EU capital flows in the global context 

Czech Republic - Financial Account net componets 
(%GDP) 

1
Q
1
0
0
2

3
Q
1
0
0
2

1
Q
2
0
0
2

3
Q
2
0
0
2

1
Q
3
0
0
2

3
Q
3
0
0
2

1
Q
4
0
0
2

3
Q
4
0
0
2

1
Q
5
0
0
2

3
Q
5
0
0
2

1
Q
6
0
0
2

3
Q
6
0
0
2

1
Q
7
0
0
2

3
Q
7
0
0
2

1
Q
8
0
0
2

3
Q
8
0
0
2

1
Q
9
0
0
2

3
Q
9
0
0
2

1
Q
0
1
0
2

3
Q
0
1
0
2

1
Q
1
1
0
2

3
Q
1
1
0
2

1
Q
2
1
0
2

3
Q
2
1
0
2

1
Q
3
1
0
2

 Direct investment

 Other investment

Portfolio equity

Portfolio debt

1
Q
4
1
0
2

3
Q
3
1
0
2

FA

Germany - Financial Account net componets (%GDP) 

1
Q
1
0
0
2

3
Q
1
0
0
2

1
Q
2
0
0
2

3
Q
2
0
0
2

1
Q
3
0
0
2

3
Q
3
0
0
2

1
Q
4
0
0
2

3
Q
4
0
0
2

1
Q
5
0
0
2

3
Q
5
0
0
2

1
Q
6
0
0
2

3
Q
6
0
0
2

1
Q
7
0
0
2

3
Q
7
0
0
2

1
Q
8
0
0
2

3
Q
8
0
0
2

1
Q
9
0
0
2

3
Q
9
0
0
2

1
Q
0
1
0
2

3
Q
0
1
0
2

1
Q
1
1
0
2

3
Q
1
1
0
2

1
Q
2
1
0
2

3
Q
2
1
0
2

1
Q
3
1
0
2

 Direct investment

 Other investment

Portfolio equity

Portfolio debt

1
Q
4
1
0
2

3
Q
3
1
0
2

FA

November 2014  208 

 
 
 
 
 
40

30

20

10

0

-10

-20

-30

-40

80

60

40

20

0

-20

-40

-60

-80

 Analysis of developments in EU capital flows in the global context 

Denmark - Financial Account net componets (%GDP) 

1
Q
1
0
0
2

3
Q
1
0
0
2

1
Q
2
0
0
2

3
Q
2
0
0
2

1
Q
3
0
0
2

3
Q
3
0
0
2

1
Q
4
0
0
2

3
Q
4
0
0
2

1
Q
5
0
0
2

3
Q
5
0
0
2

1
Q
6
0
0
2

3
Q
6
0
0
2

1
Q
7
0
0
2

3
Q
7
0
0
2

1
Q
8
0
0
2

3
Q
8
0
0
2

1
Q
9
0
0
2

3
Q
9
0
0
2

1
Q
0
1
0
2

3
Q
0
1
0
2

1
Q
1
1
0
2

3
Q
1
1
0
2

1
Q
2
1
0
2

3
Q
2
1
0
2

1
Q
3
1
0
2

 Direct investment

 Other investment

Portfolio equity

Portfolio debt

1
Q
4
1
0
2

3
Q
3
1
0
2

FA

Estonia - Financial Account net componets (%GDP) 

1
Q
1
0
0
2

3
Q
1
0
0
2

1
Q
2
0
0
2

3
Q
2
0
0
2

1
Q
3
0
0
2

3
Q
3
0
0
2

1
Q
4
0
0
2

3
Q
4
0
0
2

1
Q
5
0
0
2

3
Q
5
0
0
2

1
Q
6
0
0
2

3
Q
6
0
0
2

1
Q
7
0
0
2

3
Q
7
0
0
2

1
Q
8
0
0
2

3
Q
8
0
0
2

1
Q
9
0
0
2

3
Q
9
0
0
2

1
Q
0
1
0
2

3
Q
0
1
0
2

1
Q
1
1
0
2

3
Q
1
1
0
2

1
Q
2
1
0
2

3
Q
2
1
0
2

1
Q
3
1
0
2

 Direct investment

 Other investment

Portfolio equity

Portfolio debt

1
Q
4
1
0
2

3
Q
3
1
0
2

FA

November 2014  209 

 
 
 
 
 
 Analysis of developments in EU capital flows in the global context 

Greece - Financial Account net componets (%GDP) 

100

80

60

40

20

0

-20

-40

-60

-80

-100

50

40

30

20

10

0

-10

-20

-30

-40

1
Q
1
0
0
2

3
Q
1
0
0
2

1
Q
2
0
0
2

3
Q
2
0
0
2

1
Q
3
0
0
2

3
Q
3
0
0
2

1
Q
4
0
0
2

3
Q
4
0
0
2

1
Q
5
0
0
2

3
Q
5
0
0
2

1
Q
6
0
0
2

3
Q
6
0
0
2

1
Q
7
0
0
2

3
Q
7
0
0
2

1
Q
8
0
0
2

3
Q
8
0
0
2

1
Q
9
0
0
2

3
Q
9
0
0
2

1
Q
0
1
0
2

3
Q
0
1
0
2

1
Q
1
1
0
2

3
Q
1
1
0
2

1
Q
2
1
0
2

3
Q
2
1
0
2

1
Q
3
1
0
2

 Direct investment

 Other investment

Portfolio equity

Portfolio debt

1
Q
4
1
0
2

3
Q
3
1
0
2

FA

Spain - Financial Account net componets (%GDP) 

1
Q
1
0
0
2

3
Q
1
0
0
2

1
Q
2
0
0
2

3
Q
2
0
0
2

1
Q
3
0
0
2

3
Q
3
0
0
2

1
Q
4
0
0
2

3
Q
4
0
0
2

1
Q
5
0
0
2

3
Q
5
0
0
2

1
Q
6
0
0
2

3
Q
6
0
0
2

1
Q
7
0
0
2

3
Q
7
0
0
2

1
Q
8
0
0
2

3
Q
8
0
0
2

1
Q
9
0
0
2

3
Q
9
0
0
2

1
Q
0
1
0
2

3
Q
0
1
0
2

1
Q
1
1
0
2

3
Q
1
1
0
2

1
Q
2
1
0
2

3
Q
2
1
0
2

1
Q
3
1
0
2

 Direct investment

 Other investment

Portfolio equity

Portfolio debt

1
Q
4
1
0
2

3
Q
3
1
0
2

FA

November 2014  210 

 
 
 
 
 
 Analysis of developments in EU capital flows in the global context 

Ireland - Financial Account net componets (%GDP) 

300

200

100

0

-100

-200

-300

50

40

30

20

10

0

-10

-20

-30

-40

1
Q
1
0
0
2

3
Q
1
0
0
2

1
Q
2
0
0
2

3
Q
2
0
0
2

1
Q
3
0
0
2

3
Q
3
0
0
2

1
Q
4
0
0
2

3
Q
4
0
0
2

1
Q
5
0
0
2

3
Q
5
0
0
2

1
Q
6
0
0
2

3
Q
6
0
0
2

1
Q
7
0
0
2

3
Q
7
0
0
2

1
Q
8
0
0
2

3
Q
8
0
0
2

1
Q
9
0
0
2

3
Q
9
0
0
2

1
Q
0
1
0
2

3
Q
0
1
0
2

1
Q
1
1
0
2

3
Q
1
1
0
2

1
Q
2
1
0
2

3
Q
2
1
0
2

1
Q
3
1
0
2

 Direct investment

 Other investment

Portfolio equity

Portfolio debt

1
Q
4
1
0
2

3
Q
3
1
0
2

FA

Finland - Financial Account net componets (%GDP) 

1
Q
1
0
0
2

3
Q
1
0
0
2

1
Q
2
0
0
2

3
Q
2
0
0
2

1
Q
3
0
0
2

3
Q
3
0
0
2

1
Q
4
0
0
2

3
Q
4
0
0
2

1
Q
5
0
0
2

3
Q
5
0
0
2

1
Q
6
0
0
2

3
Q
6
0
0
2

1
Q
7
0
0
2

3
Q
7
0
0
2

1
Q
8
0
0
2

3
Q
8
0
0
2

1
Q
9
0
0
2

3
Q
9
0
0
2

1
Q
0
1
0
2

3
Q
0
1
0
2

1
Q
1
1
0
2

3
Q
1
1
0
2

1
Q
2
1
0
2

3
Q
2
1
0
2

1
Q
3
1
0
2

 Direct investment

 Other investment

Portfolio equity

Portfolio debt

1
Q
4
1
0
2

3
Q
3
1
0
2

FA

November 2014  211 

 
 
 
 
 
30

20

10

0

-10

-20

-30

40

30

20

10

0

-10

-20

-30

 Analysis of developments in EU capital flows in the global context 

France - Financial Account net componets (%GDP) 

1
Q
1
0
0
2

3
Q
1
0
0
2

1
Q
2
0
0
2

3
Q
2
0
0
2

1
Q
3
0
0
2

3
Q
3
0
0
2

1
Q
4
0
0
2

3
Q
4
0
0
2

1
Q
5
0
0
2

3
Q
5
0
0
2

1
Q
6
0
0
2

3
Q
6
0
0
2

1
Q
7
0
0
2

3
Q
7
0
0
2

1
Q
8
0
0
2

3
Q
8
0
0
2

1
Q
9
0
0
2

3
Q
9
0
0
2

1
Q
0
1
0
2

3
Q
0
1
0
2

1
Q
1
1
0
2

3
Q
1
1
0
2

1
Q
2
1
0
2

3
Q
2
1
0
2

1
Q
3
1
0
2

 Direct investment

 Other investment

Portfolio equity

Portfolio debt

1
Q
4
1
0
2

3
Q
3
1
0
2

FA

Croatia - Financial Account net componets (%GDP) 

1
Q
1
0
0
2

3
Q
1
0
0
2

1
Q
2
0
0
2

3
Q
2
0
0
2

1
Q
3
0
0
2

3
Q
3
0
0
2

1
Q
4
0
0
2

3
Q
4
0
0
2

1
Q
5
0
0
2

3
Q
5
0
0
2

1
Q
6
0
0
2

3
Q
6
0
0
2

1
Q
7
0
0
2

3
Q
7
0
0
2

1
Q
8
0
0
2

3
Q
8
0
0
2

1
Q
9
0
0
2

3
Q
9
0
0
2

1
Q
0
1
0
2

3
Q
0
1
0
2

1
Q
1
1
0
2

3
Q
1
1
0
2

1
Q
2
1
0
2

3
Q
2
1
0
2

1
Q
3
1
0
2

 Direct investment

 Other investment

Portfolio equity

Portfolio debt

1
Q
4
1
0
2

3
Q
3
1
0
2

FA

November 2014  212 

 
 
 
 
 
60

50

40

30

20

10

0

-10

-20

-30

25

20

15

10

5

0

-5

-10

-15

 Analysis of developments in EU capital flows in the global context 

Hungary - Financial Account net componets (%GDP) 

1
Q
1
0
0
2

3
Q
1
0
0
2

1
Q
2
0
0
2

3
Q
2
0
0
2

1
Q
3
0
0
2

3
Q
3
0
0
2

1
Q
4
0
0
2

3
Q
4
0
0
2

1
Q
5
0
0
2

3
Q
5
0
0
2

1
Q
6
0
0
2

3
Q
6
0
0
2

1
Q
7
0
0
2

3
Q
7
0
0
2

1
Q
8
0
0
2

3
Q
8
0
0
2

1
Q
9
0
0
2

3
Q
9
0
0
2

1
Q
0
1
0
2

3
Q
0
1
0
2

1
Q
1
1
0
2

3
Q
1
1
0
2

1
Q
2
1
0
2

3
Q
2
1
0
2

1
Q
3
1
0
2

 Direct investment

 Other investment

Portfolio equity

Portfolio debt

1
Q
4
1
0
2

3
Q
3
1
0
2

FA

Italy - Financial Account net componets (%GDP) 

1
Q
1
0
0
2

3
Q
1
0
0
2

1
Q
2
0
0
2

3
Q
2
0
0
2

1
Q
3
0
0
2

3
Q
3
0
0
2

1
Q
4
0
0
2

3
Q
4
0
0
2

1
Q
5
0
0
2

3
Q
5
0
0
2

1
Q
6
0
0
2

3
Q
6
0
0
2

1
Q
7
0
0
2

3
Q
7
0
0
2

1
Q
8
0
0
2

3
Q
8
0
0
2

1
Q
9
0
0
2

3
Q
9
0
0
2

1
Q
0
1
0
2

3
Q
0
1
0
2

1
Q
1
1
0
2

3
Q
1
1
0
2

1
Q
2
1
0
2

3
Q
2
1
0
2

1
Q
3
1
0
2

 Direct investment

 Other investment

Portfolio equity

Portfolio debt

1
Q
4
1
0
2

3
Q
3
1
0
2

FA

November 2014  213 

 
 
 
 
 
 Analysis of developments in EU capital flows in the global context 

Lithuania - Financial Account net componets (%GDP) 

40

30

20

10

0

-10

-20

-30

1
Q
1
0
0
2

3
Q
1
0
0
2

1
Q
2
0
0
2

3
Q
2
0
0
2

1
Q
3
0
0
2

3
Q
3
0
0
2

1
Q
4
0
0
2

3
Q
4
0
0
2

1
Q
5
0
0
2

3
Q
5
0
0
2

1
Q
6
0
0
2

3
Q
6
0
0
2

1
Q
7
0
0
2

3
Q
7
0
0
2

1
Q
8
0
0
2

3
Q
8
0
0
2

1
Q
9
0
0
2

3
Q
9
0
0
2

1
Q
0
1
0
2

3
Q
0
1
0
2

1
Q
1
1
0
2

3
Q
1
1
0
2

1
Q
2
1
0
2

3
Q
2
1
0
2

1
Q
3
1
0
2

 Direct investment

 Other investment

Portfolio equity

Portfolio debt

1
Q
4
1
0
2

3
Q
3
1
0
2

FA

Luxembourg - Financial Account net componets 
(%GDP) 

1500

1000

500

0

-500

-1000

-1500

1
Q
1
0
0
2

3
Q
1
0
0
2

1
Q
2
0
0
2

3
Q
2
0
0
2

1
Q
3
0
0
2

3
Q
3
0
0
2

1
Q
4
0
0
2

3
Q
4
0
0
2

1
Q
5
0
0
2

3
Q
5
0
0
2

1
Q
6
0
0
2

3
Q
6
0
0
2

1
Q
7
0
0
2

3
Q
7
0
0
2

1
Q
8
0
0
2

3
Q
8
0
0
2

1
Q
9
0
0
2

3
Q
9
0
0
2

1
Q
0
1
0
2

3
Q
0
1
0
2

1
Q
1
1
0
2

3
Q
1
1
0
2

1
Q
2
1
0
2

3
Q
2
1
0
2

1
Q
3
1
0
2

 Direct investment

 Other investment

Portfolio equity

Portfolio debt

1
Q
4
1
0
2

3
Q
3
1
0
2

FA

November 2014  214 

 
 
 
 
 
 Analysis of developments in EU capital flows in the global context 

Latvia - Financial Account net componets (%GDP) 

50

40

30

20

10

0

-10

-20

-30

-40

250

200

150

100

50

0

-50

-100

-150

-200

1
Q
1
0
0
2

3
Q
1
0
0
2

1
Q
2
0
0
2

3
Q
2
0
0
2

1
Q
3
0
0
2

3
Q
3
0
0
2

1
Q
4
0
0
2

3
Q
4
0
0
2

1
Q
5
0
0
2

3
Q
5
0
0
2

1
Q
6
0
0
2

3
Q
6
0
0
2

1
Q
7
0
0
2

3
Q
7
0
0
2

1
Q
8
0
0
2

3
Q
8
0
0
2

1
Q
9
0
0
2

3
Q
9
0
0
2

1
Q
0
1
0
2

3
Q
0
1
0
2

1
Q
1
1
0
2

3
Q
1
1
0
2

1
Q
2
1
0
2

3
Q
2
1
0
2

1
Q
3
1
0
2

 Direct investment

 Other investment

Portfolio equity

Portfolio debt

1
Q
4
1
0
2

3
Q
3
1
0
2

FA

Malta - Financial Account net componets (%GDP) 

1
Q
1
0
0
2

3
Q
1
0
0
2

1
Q
2
0
0
2

3
Q
2
0
0
2

1
Q
3
0
0
2

3
Q
3
0
0
2

1
Q
4
0
0
2

3
Q
4
0
0
2

1
Q
5
0
0
2

3
Q
5
0
0
2

1
Q
6
0
0
2

3
Q
6
0
0
2

1
Q
7
0
0
2

3
Q
7
0
0
2

1
Q
8
0
0
2

3
Q
8
0
0
2

1
Q
9
0
0
2

3
Q
9
0
0
2

1
Q
0
1
0
2

3
Q
0
1
0
2

1
Q
1
1
0
2

3
Q
1
1
0
2

1
Q
2
1
0
2

3
Q
2
1
0
2

1
Q
3
1
0
2

 Direct investment

 Other investment

Portfolio equity

Portfolio debt

1
Q
4
1
0
2

3
Q
3
1
0
2

FA

November 2014  215 

 
 
 
 
 
80

60

40

20

0

-20

-40

-60

-80

20

15

10

5

0

-5

-10

-15

 Analysis of developments in EU capital flows in the global context 

Netherlands - Financial Account net componets 
(%GDP) 

1
Q
1
0
0
2

3
Q
1
0
0
2

1
Q
2
0
0
2

3
Q
2
0
0
2

1
Q
3
0
0
2

3
Q
3
0
0
2

1
Q
4
0
0
2

3
Q
4
0
0
2

1
Q
5
0
0
2

3
Q
5
0
0
2

1
Q
6
0
0
2

3
Q
6
0
0
2

1
Q
7
0
0
2

3
Q
7
0
0
2

1
Q
8
0
0
2

3
Q
8
0
0
2

1
Q
9
0
0
2

3
Q
9
0
0
2

1
Q
0
1
0
2

3
Q
0
1
0
2

1
Q
1
1
0
2

3
Q
1
1
0
2

1
Q
2
1
0
2

3
Q
2
1
0
2

1
Q
3
1
0
2

 Direct investment

 Other investment

Portfolio equity

Portfolio debt

1
Q
4
1
0
2

3
Q
3
1
0
2

FA

Poland - Financial Account net componets (%GDP) 

1
Q
1
0
0
2

3
Q
1
0
0
2

1
Q
2
0
0
2

3
Q
2
0
0
2

1
Q
3
0
0
2

3
Q
3
0
0
2

1
Q
4
0
0
2

3
Q
4
0
0
2

1
Q
5
0
0
2

3
Q
5
0
0
2

1
Q
6
0
0
2

3
Q
6
0
0
2

1
Q
7
0
0
2

3
Q
7
0
0
2

1
Q
8
0
0
2

3
Q
8
0
0
2

1
Q
9
0
0
2

3
Q
9
0
0
2

1
Q
0
1
0
2

3
Q
0
1
0
2

1
Q
1
1
0
2

3
Q
1
1
0
2

1
Q
2
1
0
2

3
Q
2
1
0
2

1
Q
3
1
0
2

 Direct investment

 Other investment

Portfolio equity

Portfolio debt

1
Q
4
1
0
2

3
Q
3
1
0
2

FA

November 2014  216 

 
 
 
 
 
60

50

40

30

20

10

0

-10

-20

-30

-40

30

25

20

15

10

5

0

-5

-10

-15

 Analysis of developments in EU capital flows in the global context 

Portugal - Financial Account net componets (%GDP) 

1
Q
1
0
0
2

3
Q
1
0
0
2

1
Q
2
0
0
2

3
Q
2
0
0
2

1
Q
3
0
0
2

3
Q
3
0
0
2

1
Q
4
0
0
2

3
Q
4
0
0
2

1
Q
5
0
0
2

3
Q
5
0
0
2

1
Q
6
0
0
2

3
Q
6
0
0
2

1
Q
7
0
0
2

3
Q
7
0
0
2

1
Q
8
0
0
2

3
Q
8
0
0
2

1
Q
9
0
0
2

3
Q
9
0
0
2

1
Q
0
1
0
2

3
Q
0
1
0
2

1
Q
1
1
0
2

3
Q
1
1
0
2

1
Q
2
1
0
2

3
Q
2
1
0
2

1
Q
3
1
0
2

 Direct investment

 Other investment

Portfolio equity

Portfolio debt

1
Q
4
1
0
2

3
Q
3
1
0
2

FA

Romania - Financial Account net componets (%GDP) 

1
Q
1
0
0
2

3
Q
1
0
0
2

1
Q
2
0
0
2

3
Q
2
0
0
2

1
Q
3
0
0
2

3
Q
3
0
0
2

1
Q
4
0
0
2

3
Q
4
0
0
2

1
Q
5
0
0
2

3
Q
5
0
0
2

1
Q
6
0
0
2

3
Q
6
0
0
2

1
Q
7
0
0
2

3
Q
7
0
0
2

1
Q
8
0
0
2

3
Q
8
0
0
2

1
Q
9
0
0
2

3
Q
9
0
0
2

1
Q
0
1
0
2

3
Q
0
1
0
2

1
Q
1
1
0
2

3
Q
1
1
0
2

1
Q
2
1
0
2

3
Q
2
1
0
2

1
Q
3
1
0
2

 Direct investment

 Other investment

Portfolio equity

Portfolio debt

1
Q
4
1
0
2

3
Q
3
1
0
2

FA

November 2014  217 

 
 
 
 
 
40

30

20

10

0

-10

-20

-30

-40

-50

40

30

20

10

0

-10

-20

-30

-40

-50

 Analysis of developments in EU capital flows in the global context 

Sweden - Financial Account net componets (%GDP) 

1
Q
1
0
0
2

3
Q
1
0
0
2

1
Q
2
0
0
2

3
Q
2
0
0
2

1
Q
3
0
0
2

3
Q
3
0
0
2

1
Q
4
0
0
2

3
Q
4
0
0
2

1
Q
5
0
0
2

3
Q
5
0
0
2

1
Q
6
0
0
2

3
Q
6
0
0
2

1
Q
7
0
0
2

3
Q
7
0
0
2

1
Q
8
0
0
2

3
Q
8
0
0
2

1
Q
9
0
0
2

3
Q
9
0
0
2

1
Q
0
1
0
2

3
Q
0
1
0
2

1
Q
1
1
0
2

3
Q
1
1
0
2

1
Q
2
1
0
2

3
Q
2
1
0
2

1
Q
3
1
0
2

 Direct investment

 Other investment

Portfolio equity

Portfolio debt

1
Q
4
1
0
2

3
Q
3
1
0
2

FA

Slovenia - Financial Account net componets (%GDP) 

1
Q
1
0
0
2

3
Q
1
0
0
2

1
Q
2
0
0
2

3
Q
2
0
0
2

1
Q
3
0
0
2

3
Q
3
0
0
2

1
Q
4
0
0
2

3
Q
4
0
0
2

1
Q
5
0
0
2

3
Q
5
0
0
2

1
Q
6
0
0
2

3
Q
6
0
0
2

1
Q
7
0
0
2

3
Q
7
0
0
2

1
Q
8
0
0
2

3
Q
8
0
0
2

1
Q
9
0
0
2

3
Q
9
0
0
2

1
Q
0
1
0
2

3
Q
0
1
0
2

1
Q
1
1
0
2

3
Q
1
1
0
2

1
Q
2
1
0
2

3
Q
2
1
0
2

1
Q
3
1
0
2

 Direct investment

 Other investment

Portfolio equity

Portfolio debt

1
Q
4
1
0
2

3
Q
3
1
0
2

FA

November 2014  218 

 
 
 
 
 
70

60

50

40

30

20

10

0

-10

-20

-30

-40

50

40

30

20

10

0

-10

-20

-30

-40

-50

 Analysis of developments in EU capital flows in the global context 

Slovakia - Financial Account net componets (%GDP) 

1
Q
1
0
0
2

3
Q
1
0
0
2

1
Q
2
0
0
2

3
Q
2
0
0
2

1
Q
3
0
0
2

3
Q
3
0
0
2

1
Q
4
0
0
2

3
Q
4
0
0
2

1
Q
5
0
0
2

3
Q
5
0
0
2

1
Q
6
0
0
2

3
Q
6
0
0
2

1
Q
7
0
0
2

3
Q
7
0
0
2

1
Q
8
0
0
2

3
Q
8
0
0
2

1
Q
9
0
0
2

3
Q
9
0
0
2

1
Q
0
1
0
2

3
Q
0
1
0
2

1
Q
1
1
0
2

3
Q
1
1
0
2

1
Q
2
1
0
2

3
Q
2
1
0
2

1
Q
3
1
0
2

 Direct investment

 Other investment

Portfolio equity

Portfolio debt

1
Q
4
1
0
2

3
Q
3
1
0
2

FA

United Kingdom - Financial Account net componets 
(%GDP) 

1
Q
1
0
0
2

3
Q
1
0
0
2

1
Q
2
0
0
2

3
Q
2
0
0
2

1
Q
3
0
0
2

3
Q
3
0
0
2

1
Q
4
0
0
2

3
Q
4
0
0
2

1
Q
5
0
0
2

3
Q
5
0
0
2

1
Q
6
0
0
2

3
Q
6
0
0
2

1
Q
7
0
0
2

3
Q
7
0
0
2

1
Q
8
0
0
2

3
Q
8
0
0
2

1
Q
9
0
0
2

3
Q
9
0
0
2

1
Q
0
1
0
2

3
Q
0
1
0
2

1
Q
1
1
0
2

3
Q
1
1
0
2

1
Q
2
1
0
2

3
Q
2
1
0
2

1
Q
3
1
0
2

 Direct investment

 Other investment

Portfolio equity

Portfolio debt

1
Q
4
1
0
2

3
Q
3
1
0
2

FA

November 2014  219 

 
 
 
 
 
 
 
 
 
15

10

5

0

-5

-10

-15

15

10

5

0

-5

-10

-15

30

20

10

0

-10

-20

-30

-40

 Analysis of developments in EU capital flows in the global context 

7.2  Appendix  B  to  Section  4:  financial  accounts  by  sector  of  each 
EU country 
Austria (in % of GDP) 

Flows 

Stocks 

General Government 

General Government 

0

-10

-20

-30

-40

-50

-60

-70

1
Q
6
0
0
2

3
Q
6
0
0
2

1
Q
7
0
0
2

3
Q
7
0
0
2

1
Q
8
0
0
2

3
Q
8
0
0
2

1
Q
9
0
0
2

3
Q
9
0
0
2

1
Q
0
1
0
2

3
Q
0
1
0
2

1
Q
1
1
0
2

3
Q
1
1
0
2

1
Q
2
1
0
2

3
Q
2
1
0
2

1
Q
3
1
0
2

3
Q
3
1
0
2

1
Q
4
1
0
2

1
Q
6
0
0
2

3
Q
6
0
0
2

1
Q
7
0
0
2

3
Q
7
0
0
2

1
Q
8
0
0
2

3
Q
8
0
0
2

1
Q
9
0
0
2

3
Q
9
0
0
2

1
Q
0
1
0
2

3
Q
0
1
0
2

1
Q
1
1
0
2

3
Q
1
1
0
2

1
Q
2
1
0
2

3
Q
2
1
0
2

1
Q
3
1
0
2

3
Q
3
1
0
2

1
Q
4
1
0
2

Other Investments

Portfolio - equity

Portfolio Debt: GG

Other Investment: GG

Portfolio Equity: GG

Portfolio Debt: GG

Other Sectors 

1
Q
6
0
0
2

3
Q
6
0
0
2

1
Q
7
0
0
2

3
Q
7
0
0
2

1
Q
8
0
0
2

3
Q
8
0
0
2

1
Q
9
0
0
2

3
Q
9
0
0
2

1
Q
0
1
0
2

3
Q
0
1
0
2

1
Q
1
1
0
2

3
Q
1
1
0
2

1
Q
2
1
0
2

3
Q
2
1
0
2

1
Q
3
1
0
2

3
Q
3
1
0
2

1
Q
4
1
0
2

Direct Investment

Other Investments

Portfolio Equity: OS

Portfolio Debt: OS

Monetary Financial Institutions 

1
Q
6
0
0
2

3
Q
6
0
0
2

1
Q
7
0
0
2

3
Q
7
0
0
2

1
Q
8
0
0
2

3
Q
8
0
0
2

1
Q
9
0
0
2

3
Q
9
0
0
2

1
Q
0
1
0
2

3
Q
0
1
0
2

1
Q
1
1
0
2

3
Q
1
1
0
2

1
Q
2
1
0
2

3
Q
2
1
0
2

1
Q
3
1
0
2

3
Q
3
1
0
2

1
Q
4
1
0
2

Direct Investment

Other Investments

Portfolio Equity: MFI

Portfolio Debt: MFI

Monetary Authorities 

20

15

10

5

0

-5

-10

-15

-20

Other Sectors 

1
Q
6
0
0
2

3
Q
6
0
0
2

1
Q
7
0
0
2

3
Q
7
0
0
2

1
Q
8
0
0
2

3
Q
8
0
0
2

1
Q
9
0
0
2

3
Q
9
0
0
2

1
Q
0
1
0
2

3
Q
0
1
0
2

1
Q
1
1
0
2

3
Q
1
1
0
2

1
Q
2
1
0
2

3
Q
2
1
0
2

1
Q
3
1
0
2

3
Q
3
1
0
2

1
Q
4
1
0
2

Direct Investment: OS

Other Investment: OS

Portfolio Equity: OS

Portfolio Debt: OS

Monetary Financial Institutions 

1
Q
6
0
0
2

3
Q
6
0
0
2

1
Q
7
0
0
2

3
Q
7
0
0
2

1
Q
8
0
0
2

3
Q
8
0
0
2

1
Q
9
0
0
2

3
Q
9
0
0
2

1
Q
0
1
0
2

3
Q
0
1
0
2

1
Q
1
1
0
2

3
Q
1
1
0
2

1
Q
2
1
0
2

3
Q
2
1
0
2

1
Q
3
1
0
2

3
Q
3
1
0
2

1
Q
4
1
0
2

Direct Investment: MFI

Other Investment: MFI

Portfolio Equity: MFI

Portfolio Debt: MFI

Monetary Authorities 

40

35

30

25

20

15

10

5

0

-5

-10

-15

40

30

20

10

0

-10

-20

-30

15

10

5

0

-5

-10

-15

1
Q
6
0
0
2

3
Q
6
0
0
2

1
Q
7
0
0
2

3
Q
7
0
0
2

1
Q
8
0
0
2

3
Q
8
0
0
2

1
Q
9
0
0
2

3
Q
9
0
0
2

1
Q
0
1
0
2

3
Q
0
1
0
2

1
Q
1
1
0
2

3
Q
1
1
0
2

1
Q
2
1
0
2

3
Q
2
1
0
2

1
Q
3
1
0
2

3
Q
3
1
0
2

1
Q
4
1
0
2

1
Q
6
0
0
2

3
Q
6
0
0
2

1
Q
7
0
0
2

3
Q
7
0
0
2

1
Q
8
0
0
2

3
Q
8
0
0
2

1
Q
9
0
0
2

3
Q
9
0
0
2

1
Q
0
1
0
2

3
Q
0
1
0
2

1
Q
1
1
0
2

3
Q
1
1
0
2

1
Q
2
1
0
2

3
Q
2
1
0
2

1
Q
3
1
0
2

3
Q
3
1
0
2

1
Q
4
1
0
2

Other Investments: MA

Portfolio Equity: MA

Portfolio Debt: MA

Other Investment: MA

Portfolio Debt: MA

Portfolio, debt, equity: MA

November 2014  220 

 
 
 
 
 
 
 
 
 
 
 
 
25

20

15

10

5

0

-5

-10

-15

-20

50

40

30

20

10

0

-10

-20

-30

-40

80

60

40

20

0

-20

-40

-60

-80

-100

 Analysis of developments in EU capital flows in the global context 

Belgium (in % of GDP) 

Flows 

Stocks 

General Government 

General Government 

10

0

-10

-20

-30

-40

-50

-60

-70

1
Q
6
0
0
2

3
Q
6
0
0
2

1
Q
7
0
0
2

3
Q
7
0
0
2

1
Q
8
0
0
2

3
Q
8
0
0
2

1
Q
9
0
0
2

3
Q
9
0
0
2

1
Q
0
1
0
2

3
Q
0
1
0
2

1
Q
1
1
0
2

3
Q
1
1
0
2

1
Q
2
1
0
2

3
Q
2
1
0
2

1
Q
3
1
0
2

3
Q
3
1
0
2

1
Q
4
1
0
2

1
Q
6
0
0
2

3
Q
6
0
0
2

1
Q
7
0
0
2

3
Q
7
0
0
2

1
Q
8
0
0
2

3
Q
8
0
0
2

1
Q
9
0
0
2

3
Q
9
0
0
2

1
Q
0
1
0
2

3
Q
0
1
0
2

1
Q
1
1
0
2

3
Q
1
1
0
2

1
Q
2
1
0
2

3
Q
2
1
0
2

1
Q
3
1
0
2

3
Q
3
1
0
2

1
Q
4
1
0
2

Other Investments

Portfolio - equity

Portfolio Debt: GG

Other Investment: GG

Portfolio Equity: GG

Portfolio Debt: GG

Other Sectors 

Other Sectors 

200

180

160

140

120

100

80

60

40

20

0

80

60

40

20

0

-20

-40

10

5

0

-5

-10

-15

-20

-25

-30

-35

-40

-45

1
Q
6
0
0
2

3
Q
6
0
0
2

1
Q
7
0
0
2

3
Q
7
0
0
2

1
Q
8
0
0
2

3
Q
8
0
0
2

1
Q
9
0
0
2

3
Q
9
0
0
2

1
Q
0
1
0
2

3
Q
0
1
0
2

1
Q
1
1
0
2

3
Q
1
1
0
2

1
Q
2
1
0
2

3
Q
2
1
0
2

1
Q
3
1
0
2

3
Q
3
1
0
2

1
Q
4
1
0
2

Direct Investment: OS

Other Investment: OS

Portfolio Equity: OS

Portfolio Debt: OS

Monetary Financial Institutions 

1
Q
6
0
0
2

3
Q
6
0
0
2

1
Q
7
0
0
2

3
Q
7
0
0
2

1
Q
8
0
0
2

3
Q
8
0
0
2

1
Q
9
0
0
2

3
Q
9
0
0
2

1
Q
0
1
0
2

3
Q
0
1
0
2

1
Q
1
1
0
2

3
Q
1
1
0
2

1
Q
2
1
0
2

3
Q
2
1
0
2

1
Q
3
1
0
2

3
Q
3
1
0
2

1
Q
4
1
0
2

Direct Investment: MFI

Other Investment: MFI

Portfolio Equity: MFI

Portfolio Debt: MFI

Monetary Authorities 

1
Q
6
0
0
2

3
Q
6
0
0
2

1
Q
7
0
0
2

3
Q
7
0
0
2

1
Q
8
0
0
2

3
Q
8
0
0
2

1
Q
9
0
0
2

3
Q
9
0
0
2

1
Q
0
1
0
2

3
Q
0
1
0
2

1
Q
1
1
0
2

3
Q
1
1
0
2

1
Q
2
1
0
2

3
Q
2
1
0
2

1
Q
3
1
0
2

3
Q
3
1
0
2

1
Q
4
1
0
2

Direct Investment

Other Investments

Portfolio Equity: OS

Portfolio Debt: OS

Monetary Financial Institutions 

1
Q
6
0
0
2

3
Q
6
0
0
2

1
Q
7
0
0
2

3
Q
7
0
0
2

1
Q
8
0
0
2

3
Q
8
0
0
2

1
Q
9
0
0
2

3
Q
9
0
0
2

1
Q
0
1
0
2

3
Q
0
1
0
2

1
Q
1
1
0
2

3
Q
1
1
0
2

1
Q
2
1
0
2

3
Q
2
1
0
2

1
Q
3
1
0
2

3
Q
3
1
0
2

1
Q
4
1
0
2

Direct Investment

Other Investments

Portfolio Equity: MFI

Portfolio Debt: MFI

Monetary Authorities 

100

80

60

40

20

0

-20

-40

-60

1
Q
6
0
0
2

3
Q
6
0
0
2

1
Q
7
0
0
2

3
Q
7
0
0
2

1
Q
8
0
0
2

3
Q
8
0
0
2

1
Q
9
0
0
2

3
Q
9
0
0
2

1
Q
0
1
0
2

3
Q
0
1
0
2

1
Q
1
1
0
2

3
Q
1
1
0
2

1
Q
2
1
0
2

3
Q
2
1
0
2

1
Q
3
1
0
2

3
Q
3
1
0
2

1
Q
4
1
0
2

1
Q
6
0
0
2

3
Q
6
0
0
2

1
Q
7
0
0
2

3
Q
7
0
0
2

1
Q
8
0
0
2

3
Q
8
0
0
2

1
Q
9
0
0
2

3
Q
9
0
0
2

1
Q
0
1
0
2

3
Q
0
1
0
2

1
Q
1
1
0
2

3
Q
1
1
0
2

1
Q
2
1
0
2

3
Q
2
1
0
2

1
Q
3
1
0
2

3
Q
3
1
0
2

1
Q
4
1
0
2

Other Investments: MA

Portfolio Equity: MA

Portfolio Debt: MA

Other Investment: MA

Portfolio Debt: MA

Portfolio, debt, equity: MA

Bulgaria (in % of GDP) 

November 2014  221 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
15

10

5

0

-5

-10

45

40

35

30

25

20

15

10

5

0

-5

-10

25

20

15

10

5

0

-5

-10

-15

 Analysis of developments in EU capital flows in the global context 

Flows 

Stocks 

General Government 

General Government 

1

0

-1

-2

-3

-4

-5

-6

-7

-8

-9

1
Q
6
0
0
2

3
Q
6
0
0
2

1
Q
7
0
0
2

3
Q
7
0
0
2

1
Q
8
0
0
2

3
Q
8
0
0
2

1
Q
9
0
0
2

3
Q
9
0
0
2

1
Q
0
1
0
2

3
Q
0
1
0
2

1
Q
1
1
0
2

3
Q
1
1
0
2

1
Q
2
1
0
2

3
Q
2
1
0
2

1
Q
3
1
0
2

3
Q
3
1
0
2

1
Q
4
1
0
2

1
Q
6
0
0
2

3
Q
6
0
0
2

1
Q
7
0
0
2

3
Q
7
0
0
2

1
Q
8
0
0
2

3
Q
8
0
0
2

1
Q
9
0
0
2

3
Q
9
0
0
2

1
Q
0
1
0
2

3
Q
0
1
0
2

1
Q
1
1
0
2

3
Q
1
1
0
2

1
Q
2
1
0
2

3
Q
2
1
0
2

1
Q
3
1
0
2

3
Q
3
1
0
2

1
Q
4
1
0
2

Other Investments

Portfolio - equity

Portfolio Debt: GG

Other Investment: GG

Portfolio Equity: GG

Portfolio Debt: GG

Other Sectors 

Other Sectors 

10

0

-10

-20

-30

-40

-50

-60

-70

-80

10

5

0

-5

-10

-15

-20

-25

-30

0

-0,2

-0,4

-0,6

-0,8

-1

-1,2

-1,4

-1,6

1
Q
6
0
0
2

3
Q
6
0
0
2

1
Q
7
0
0
2

3
Q
7
0
0
2

1
Q
8
0
0
2

3
Q
8
0
0
2

1
Q
9
0
0
2

3
Q
9
0
0
2

1
Q
0
1
0
2

3
Q
0
1
0
2

1
Q
1
1
0
2

3
Q
1
1
0
2

1
Q
2
1
0
2

3
Q
2
1
0
2

1
Q
3
1
0
2

3
Q
3
1
0
2

1
Q
4
1
0
2

Direct Investment: OS

Other Investment: OS

Portfolio Equity: OS

Portfolio Debt: OS

Monetary Financial Institutions 

1
Q
6
0
0
2

3
Q
6
0
0
2

1
Q
7
0
0
2

3
Q
7
0
0
2

1
Q
8
0
0
2

3
Q
8
0
0
2

1
Q
9
0
0
2

3
Q
9
0
0
2

1
Q
0
1
0
2

3
Q
0
1
0
2

1
Q
1
1
0
2

3
Q
1
1
0
2

1
Q
2
1
0
2

3
Q
2
1
0
2

1
Q
3
1
0
2

3
Q
3
1
0
2

1
Q
4
1
0
2

Direct Investment: MFI

Other Investment: MFI

Portfolio Equity: MFI

Portfolio Debt: MFI

Monetary Authorities 

1
Q
6
0
0
2

3
Q
6
0
0
2

1
Q
7
0
0
2

3
Q
7
0
0
2

1
Q
8
0
0
2

3
Q
8
0
0
2

1
Q
9
0
0
2

3
Q
9
0
0
2

1
Q
0
1
0
2

3
Q
0
1
0
2

1
Q
1
1
0
2

3
Q
1
1
0
2

1
Q
2
1
0
2

3
Q
2
1
0
2

1
Q
3
1
0
2

3
Q
3
1
0
2

1
Q
4
1
0
2

Direct Investment

Other Investments

Portfolio Equity: OS

Portfolio Debt: OS

Monetary Financial Institutions 

1
Q
6
0
0
2

3
Q
6
0
0
2

1
Q
7
0
0
2

3
Q
7
0
0
2

1
Q
8
0
0
2

3
Q
8
0
0
2

1
Q
9
0
0
2

3
Q
9
0
0
2

1
Q
0
1
0
2

3
Q
0
1
0
2

1
Q
1
1
0
2

3
Q
1
1
0
2

1
Q
2
1
0
2

3
Q
2
1
0
2

1
Q
3
1
0
2

3
Q
3
1
0
2

1
Q
4
1
0
2

Direct Investment

Other Investments

Portfolio Equity: MFI

Portfolio Debt: MFI

Monetary Authorities 

0

-0,5

-1

-1,5

-2

-2,5

-3

-3,5

1
Q
6
0
0
2

3
Q
6
0
0
2

1
Q
7
0
0
2

3
Q
7
0
0
2

1
Q
8
0
0
2

3
Q
8
0
0
2

1
Q
9
0
0
2

3
Q
9
0
0
2

1
Q
0
1
0
2

3
Q
0
1
0
2

1
Q
1
1
0
2

3
Q
1
1
0
2

1
Q
2
1
0
2

3
Q
2
1
0
2

1
Q
3
1
0
2

3
Q
3
1
0
2

1
Q
4
1
0
2

1
Q
6
0
0
2

3
Q
6
0
0
2

1
Q
7
0
0
2

3
Q
7
0
0
2

1
Q
8
0
0
2

3
Q
8
0
0
2

1
Q
9
0
0
2

3
Q
9
0
0
2

1
Q
0
1
0
2

3
Q
0
1
0
2

1
Q
1
1
0
2

3
Q
1
1
0
2

1
Q
2
1
0
2

3
Q
2
1
0
2

1
Q
3
1
0
2

3
Q
3
1
0
2

1
Q
4
1
0
2

Other Investments: MA

Portfolio Equity: MA

Portfolio Debt: MA

Other Investment: MA

Portfolio Debt: MA

Portfolio, debt, equity: MA

November 2014  222 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
80

60

40

20

0

-20

-40

-60

80

60

40

20

0

-20

-40

-60

-80

-100

-120

300

200

100

0

-100

-200

-300

 Analysis of developments in EU capital flows in the global context 

Cyprus (in % of GDP) 

Flows 

Stocks 

General Government 

General Government 

0

-10

-20

-30

-40

-50

-60

-70

1
Q
6
0
0
2

3
Q
6
0
0
2

1
Q
7
0
0
2

3
Q
7
0
0
2

1
Q
8
0
0
2

3
Q
8
0
0
2

1
Q
9
0
0
2

3
Q
9
0
0
2

1
Q
0
1
0
2

3
Q
0
1
0
2

1
Q
1
1
0
2

3
Q
1
1
0
2

1
Q
2
1
0
2

3
Q
2
1
0
2

1
Q
3
1
0
2

3
Q
3
1
0
2

1
Q
4
1
0
2

1
Q
6
0
0
2

3
Q
6
0
0
2

1
Q
7
0
0
2

3
Q
7
0
0
2

1
Q
8
0
0
2

3
Q
8
0
0
2

1
Q
9
0
0
2

3
Q
9
0
0
2

1
Q
0
1
0
2

3
Q
0
1
0
2

1
Q
1
1
0
2

3
Q
1
1
0
2

1
Q
2
1
0
2

3
Q
2
1
0
2

1
Q
3
1
0
2

3
Q
3
1
0
2

1
Q
4
1
0
2

Other Investments

Portfolio - equity

Portfolio Debt: GG

Other Investment: GG

Portfolio Equity: GG

Portfolio Debt: GG

Other Sectors 

Other Sectors 

70

60

50

40

30

20

10

0

-10

-20

-30

300

200

100

0

-100

-200

-300

30

20

10

0

-10

-20

-30

-40

-50

-60

-70

1
Q
6
0
0
2

3
Q
6
0
0
2

1
Q
7
0
0
2

3
Q
7
0
0
2

1
Q
8
0
0
2

3
Q
8
0
0
2

1
Q
9
0
0
2

3
Q
9
0
0
2

1
Q
0
1
0
2

3
Q
0
1
0
2

1
Q
1
1
0
2

3
Q
1
1
0
2

1
Q
2
1
0
2

3
Q
2
1
0
2

1
Q
3
1
0
2

3
Q
3
1
0
2

1
Q
4
1
0
2

Direct Investment: OS

Other Investment: OS

Portfolio Equity: OS

Portfolio Debt: OS

Monetary Financial Institutions 

1
Q
6
0
0
2

3
Q
6
0
0
2

1
Q
7
0
0
2

3
Q
7
0
0
2

1
Q
8
0
0
2

3
Q
8
0
0
2

1
Q
9
0
0
2

3
Q
9
0
0
2

1
Q
0
1
0
2

3
Q
0
1
0
2

1
Q
1
1
0
2

3
Q
1
1
0
2

1
Q
2
1
0
2

3
Q
2
1
0
2

1
Q
3
1
0
2

3
Q
3
1
0
2

1
Q
4
1
0
2

Direct Investment: MFI

Other Investment: MFI

Portfolio Equity: MFI

Portfolio Debt: MFI

Monetary Authorities 

1
Q
6
0
0
2

3
Q
6
0
0
2

1
Q
7
0
0
2

3
Q
7
0
0
2

1
Q
8
0
0
2

3
Q
8
0
0
2

1
Q
9
0
0
2

3
Q
9
0
0
2

1
Q
0
1
0
2

3
Q
0
1
0
2

1
Q
1
1
0
2

3
Q
1
1
0
2

1
Q
2
1
0
2

3
Q
2
1
0
2

1
Q
3
1
0
2

3
Q
3
1
0
2

1
Q
4
1
0
2

Direct Investment

Other Investments

Portfolio Equity: OS

Portfolio Debt: OS

Monetary Financial Institutions 

1
Q
6
0
0
2

3
Q
6
0
0
2

1
Q
7
0
0
2

3
Q
7
0
0
2

1
Q
8
0
0
2

3
Q
8
0
0
2

1
Q
9
0
0
2

3
Q
9
0
0
2

1
Q
0
1
0
2

3
Q
0
1
0
2

1
Q
1
1
0
2

3
Q
1
1
0
2

1
Q
2
1
0
2

3
Q
2
1
0
2

1
Q
3
1
0
2

3
Q
3
1
0
2

1
Q
4
1
0
2

Direct Investment

Other Investments

Portfolio Equity: MFI

Portfolio Debt: MFI

Monetary Authorities 

100

80

60

40

20

0

-20

-40

-60

-80

-100

1
Q
6
0
0
2

3
Q
6
0
0
2

1
Q
7
0
0
2

3
Q
7
0
0
2

1
Q
8
0
0
2

3
Q
8
0
0
2

1
Q
9
0
0
2

3
Q
9
0
0
2

1
Q
0
1
0
2

3
Q
0
1
0
2

1
Q
1
1
0
2

3
Q
1
1
0
2

1
Q
2
1
0
2

3
Q
2
1
0
2

1
Q
3
1
0
2

3
Q
3
1
0
2

1
Q
4
1
0
2

1
Q
6
0
0
2

3
Q
6
0
0
2

1
Q
7
0
0
2

3
Q
7
0
0
2

1
Q
8
0
0
2

3
Q
8
0
0
2

1
Q
9
0
0
2

3
Q
9
0
0
2

1
Q
0
1
0
2

3
Q
0
1
0
2

1
Q
1
1
0
2

3
Q
1
1
0
2

1
Q
2
1
0
2

3
Q
2
1
0
2

1
Q
3
1
0
2

3
Q
3
1
0
2

1
Q
4
1
0
2

Other Investments: MA

Portfolio Equity: MA

Portfolio Debt: MA

Other Investment: MA

Portfolio Debt: MA

Portfolio, debt, equity: MA

November 2014  223 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
10

8

6

4

2

0

-2

-4

-6

12

10

8

6

4

2

0

-2

-4

-6

-8

-10

20

15

10

5

0

-5

-10

 Analysis of developments in EU capital flows in the global context 

Czech Republic (in % of GDP) 

Flows 

Stocks 

General Government 

General Government 

0

-2

-4

-6

-8

-10

-12

-14

-16

1
Q
6
0
0
2

3
Q
6
0
0
2

1
Q
7
0
0
2

3
Q
7
0
0
2

1
Q
8
0
0
2

3
Q
8
0
0
2

1
Q
9
0
0
2

3
Q
9
0
0
2

1
Q
0
1
0
2

3
Q
0
1
0
2

1
Q
1
1
0
2

3
Q
1
1
0
2

1
Q
2
1
0
2

3
Q
2
1
0
2

1
Q
3
1
0
2

3
Q
3
1
0
2

1
Q
4
1
0
2

1
Q
6
0
0
2

3
Q
6
0
0
2

1
Q
7
0
0
2

3
Q
7
0
0
2

1
Q
8
0
0
2

3
Q
8
0
0
2

1
Q
9
0
0
2

3
Q
9
0
0
2

1
Q
0
1
0
2

3
Q
0
1
0
2

1
Q
1
1
0
2

3
Q
1
1
0
2

1
Q
2
1
0
2

3
Q
2
1
0
2

1
Q
3
1
0
2

3
Q
3
1
0
2

1
Q
4
1
0
2

Other Investments

Portfolio - equity

Portfolio Debt: GG

Other Investment: GG

Portfolio Equity: GG

Portfolio Debt: GG

Other Sectors 

Other Sectors 

1
Q
6
0
0
2

3
Q
6
0
0
2

1
Q
7
0
0
2

3
Q
7
0
0
2

1
Q
8
0
0
2

3
Q
8
0
0
2

1
Q
9
0
0
2

3
Q
9
0
0
2

1
Q
0
1
0
2

3
Q
0
1
0
2

1
Q
1
1
0
2

3
Q
1
1
0
2

1
Q
2
1
0
2

3
Q
2
1
0
2

1
Q
3
1
0
2

3
Q
3
1
0
2

1
Q
4
1
0
2

Direct Investment

Other Investments

Portfolio Equity: OS

Portfolio Debt: OS

Monetary Financial Institutions 

5

0

-5

-10

-15

-20

15

10

5

0

-5

-10

-15

1
Q
6
0
0
2

3
Q
6
0
0
2

1
Q
7
0
0
2

3
Q
7
0
0
2

1
Q
8
0
0
2

3
Q
8
0
0
2

1
Q
9
0
0
2

3
Q
9
0
0
2

1
Q
0
1
0
2

3
Q
0
1
0
2

1
Q
1
1
0
2

3
Q
1
1
0
2

1
Q
2
1
0
2

3
Q
2
1
0
2

1
Q
3
1
0
2

3
Q
3
1
0
2

1
Q
4
1
0
2

Direct Investment: OS

Other Investment: OS

Portfolio Equity: OS

Portfolio Debt: OS

Monetary Financial Institutions 

1
Q
6
0
0
2

3
Q
6
0
0
2

1
Q
7
0
0
2

3
Q
7
0
0
2

1
Q
8
0
0
2

3
Q
8
0
0
2

1
Q
9
0
0
2

3
Q
9
0
0
2

1
Q
0
1
0
2

3
Q
0
1
0
2

1
Q
1
1
0
2

3
Q
1
1
0
2

1
Q
2
1
0
2

3
Q
2
1
0
2

1
Q
3
1
0
2

3
Q
3
1
0
2

1
Q
4
1
0
2

Direct Investment: MFI

Other Investment: MFI

Portfolio Equity: MFI

Portfolio Debt: MFI

1
Q
6
0
0
2

3
Q
6
0
0
2

1
Q
7
0
0
2

3
Q
7
0
0
2

1
Q
8
0
0
2

3
Q
8
0
0
2

1
Q
9
0
0
2

3
Q
9
0
0
2

1
Q
0
1
0
2

3
Q
0
1
0
2

1
Q
1
1
0
2

3
Q
1
1
0
2

1
Q
2
1
0
2

3
Q
2
1
0
2

1
Q
3
1
0
2

3
Q
3
1
0
2

1
Q
4
1
0
2

Direct Investment

Other Investments

Portfolio Equity: MFI

Portfolio Debt: MFI

Monetary Authorities 

Monetary Authorities 

0,6

0,4

0,2

0

-0,2

-0,4

-0,6

-0,8

0,35

0,3

0,25

0,2

0,15

0,1

0,05

0

-0,05

1
Q
6
0
0
2

3
Q
6
0
0
2

1
Q
7
0
0
2

3
Q
7
0
0
2

1
Q
8
0
0
2

3
Q
8
0
0
2

1
Q
9
0
0
2

3
Q
9
0
0
2

1
Q
0
1
0
2

3
Q
0
1
0
2

1
Q
1
1
0
2

3
Q
1
1
0
2

1
Q
2
1
0
2

3
Q
2
1
0
2

1
Q
3
1
0
2

3
Q
3
1
0
2

1
Q
4
1
0
2

1
Q
6
0
0
2

3
Q
6
0
0
2

1
Q
7
0
0
2

3
Q
7
0
0
2

1
Q
8
0
0
2

3
Q
8
0
0
2

1
Q
9
0
0
2

3
Q
9
0
0
2

1
Q
0
1
0
2

3
Q
0
1
0
2

1
Q
1
1
0
2

3
Q
1
1
0
2

1
Q
2
1
0
2

3
Q
2
1
0
2

1
Q
3
1
0
2

3
Q
3
1
0
2

1
Q
4
1
0
2

Other Investments: MA

Portfolio Equity: MA

Portfolio Debt: MA

Other Investment: MA

Portfolio Debt: MA

Portfolio, debt, equity: MA

November 2014  224 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
10

5

0

-5

-10

-15

-20

10

5

0

-5

-10

-15

40

30

20

10

0

-10

-20

 Analysis of developments in EU capital flows in the global context 

Germany (in % of GDP) 

Flows 

Stocks 

General Government 

General Government 

5

0

-5

-10

-15

-20

-25

-30

-35

-40

-45

1
Q
6
0
0
2

3
Q
6
0
0
2

1
Q
7
0
0
2

3
Q
7
0
0
2

1
Q
8
0
0
2

3
Q
8
0
0
2

1
Q
9
0
0
2

3
Q
9
0
0
2

1
Q
0
1
0
2

3
Q
0
1
0
2

1
Q
1
1
0
2

3
Q
1
1
0
2

1
Q
2
1
0
2

3
Q
2
1
0
2

1
Q
3
1
0
2

3
Q
3
1
0
2

1
Q
4
1
0
2

1
Q
6
0
0
2

3
Q
6
0
0
2

1
Q
7
0
0
2

3
Q
7
0
0
2

1
Q
8
0
0
2

3
Q
8
0
0
2

1
Q
9
0
0
2

3
Q
9
0
0
2

1
Q
0
1
0
2

3
Q
0
1
0
2

1
Q
1
1
0
2

3
Q
1
1
0
2

1
Q
2
1
0
2

3
Q
2
1
0
2

1
Q
3
1
0
2

3
Q
3
1
0
2

1
Q
4
1
0
2

Other Investments

Portfolio - equity

Portfolio Debt: GG

Other Investment: GG

Portfolio Equity: GG

Portfolio Debt: GG

Other Sectors 

Other Sectors 

50

40

30

20

10

0

-10

-20

35

30

25

20

15

10

5

0

-5

-10

-15

30

25

20

15

10

5

0

-5

1
Q
6
0
0
2

3
Q
6
0
0
2

1
Q
7
0
0
2

3
Q
7
0
0
2

1
Q
8
0
0
2

3
Q
8
0
0
2

1
Q
9
0
0
2

3
Q
9
0
0
2

1
Q
0
1
0
2

3
Q
0
1
0
2

1
Q
1
1
0
2

3
Q
1
1
0
2

1
Q
2
1
0
2

3
Q
2
1
0
2

1
Q
3
1
0
2

3
Q
3
1
0
2

1
Q
4
1
0
2

Direct Investment: OS

Other Investment: OS

Portfolio Equity: OS

Portfolio Debt: OS

Monetary Financial Institutions 

1
Q
6
0
0
2

3
Q
6
0
0
2

1
Q
7
0
0
2

3
Q
7
0
0
2

1
Q
8
0
0
2

3
Q
8
0
0
2

1
Q
9
0
0
2

3
Q
9
0
0
2

1
Q
0
1
0
2

3
Q
0
1
0
2

1
Q
1
1
0
2

3
Q
1
1
0
2

1
Q
2
1
0
2

3
Q
2
1
0
2

1
Q
3
1
0
2

3
Q
3
1
0
2

1
Q
4
1
0
2

Direct Investment: MFI

Other Investment: MFI

Portfolio Equity: MFI

Portfolio Debt: MFI

Monetary Authorities 

1
Q
6
0
0
2

3
Q
6
0
0
2

1
Q
7
0
0
2

3
Q
7
0
0
2

1
Q
8
0
0
2

3
Q
8
0
0
2

1
Q
9
0
0
2

3
Q
9
0
0
2

1
Q
0
1
0
2

3
Q
0
1
0
2

1
Q
1
1
0
2

3
Q
1
1
0
2

1
Q
2
1
0
2

3
Q
2
1
0
2

1
Q
3
1
0
2

3
Q
3
1
0
2

1
Q
4
1
0
2

Direct Investment

Other Investments

Portfolio Equity: OS

Portfolio Debt: OS

Monetary Financial Institutions 

1
Q
6
0
0
2

3
Q
6
0
0
2

1
Q
7
0
0
2

3
Q
7
0
0
2

1
Q
8
0
0
2

3
Q
8
0
0
2

1
Q
9
0
0
2

3
Q
9
0
0
2

1
Q
0
1
0
2

3
Q
0
1
0
2

1
Q
1
1
0
2

3
Q
1
1
0
2

1
Q
2
1
0
2

3
Q
2
1
0
2

1
Q
3
1
0
2

3
Q
3
1
0
2

1
Q
4
1
0
2

Direct Investment

Other Investments

Portfolio Equity: MFI

Portfolio Debt: MFI

Monetary Authorities 

10

5

0

-5

-10

-15

-20

-25

-30

1
Q
6
0
0
2

3
Q
6
0
0
2

1
Q
7
0
0
2

3
Q
7
0
0
2

1
Q
8
0
0
2

3
Q
8
0
0
2

1
Q
9
0
0
2

3
Q
9
0
0
2

1
Q
0
1
0
2

3
Q
0
1
0
2

1
Q
1
1
0
2

3
Q
1
1
0
2

1
Q
2
1
0
2

3
Q
2
1
0
2

1
Q
3
1
0
2

3
Q
3
1
0
2

1
Q
4
1
0
2

1
Q
6
0
0
2

3
Q
6
0
0
2

1
Q
7
0
0
2

3
Q
7
0
0
2

1
Q
8
0
0
2

3
Q
8
0
0
2

1
Q
9
0
0
2

3
Q
9
0
0
2

1
Q
0
1
0
2

3
Q
0
1
0
2

1
Q
1
1
0
2

3
Q
1
1
0
2

1
Q
2
1
0
2

3
Q
2
1
0
2

1
Q
3
1
0
2

3
Q
3
1
0
2

1
Q
4
1
0
2

Other Investments: MA

Portfolio Equity: MA

Portfolio Debt: MA

Other Investment: MA

Portfolio Debt: MA

Portfolio, debt, equity: MA

November 2014  225 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
15

10

5

0

-5

-10

30

20

10

0

-10

-20

-30

50

40

30

20

10

0

-10

-20

-30

-40

-50

-60

 Analysis of developments in EU capital flows in the global context 

Denmark (in % of GDP) 

Flows 

Stocks 

General Government 

General Government 

5

0

-5

-10

-15

-20

-25

1
Q
6
0
0
2

3
Q
6
0
0
2

1
Q
7
0
0
2

3
Q
7
0
0
2

1
Q
8
0
0
2

3
Q
8
0
0
2

1
Q
9
0
0
2

3
Q
9
0
0
2

1
Q
0
1
0
2

3
Q
0
1
0
2

1
Q
1
1
0
2

3
Q
1
1
0
2

1
Q
2
1
0
2

3
Q
2
1
0
2

1
Q
3
1
0
2

3
Q
3
1
0
2

1
Q
4
1
0
2

1
Q
6
0
0
2

3
Q
6
0
0
2

1
Q
7
0
0
2

3
Q
7
0
0
2

1
Q
8
0
0
2

3
Q
8
0
0
2

1
Q
9
0
0
2

3
Q
9
0
0
2

1
Q
0
1
0
2

3
Q
0
1
0
2

1
Q
1
1
0
2

3
Q
1
1
0
2

1
Q
2
1
0
2

3
Q
2
1
0
2

1
Q
3
1
0
2

3
Q
3
1
0
2

1
Q
4
1
0
2

Other Investments

Portfolio - equity

Portfolio Debt: GG

Other Investment: GG

Portfolio Equity: GG

Portfolio Debt: GG

Other Sectors 

Other Sectors 

80

60

40

20

0

-20

-40

10

0

-10

-20

-30

-40

-50

-60

-70

0

-1

-2

-3

-4

-5

-6

-7

-8

1
Q
6
0
0
2

3
Q
6
0
0
2

1
Q
7
0
0
2

3
Q
7
0
0
2

1
Q
8
0
0
2

3
Q
8
0
0
2

1
Q
9
0
0
2

3
Q
9
0
0
2

1
Q
0
1
0
2

3
Q
0
1
0
2

1
Q
1
1
0
2

3
Q
1
1
0
2

1
Q
2
1
0
2

3
Q
2
1
0
2

1
Q
3
1
0
2

3
Q
3
1
0
2

1
Q
4
1
0
2

Direct Investment: OS

Other Investment: OS

Portfolio Equity: OS

Portfolio Debt: OS

Monetary Financial Institutions 

1
Q
6
0
0
2

3
Q
6
0
0
2

1
Q
7
0
0
2

3
Q
7
0
0
2

1
Q
8
0
0
2

3
Q
8
0
0
2

1
Q
9
0
0
2

3
Q
9
0
0
2

1
Q
0
1
0
2

3
Q
0
1
0
2

1
Q
1
1
0
2

3
Q
1
1
0
2

1
Q
2
1
0
2

3
Q
2
1
0
2

1
Q
3
1
0
2

3
Q
3
1
0
2

1
Q
4
1
0
2

Direct Investment: MFI

Other Investment: MFI

Portfolio Equity: MFI

Portfolio Debt: MFI

Monetary Authorities 

1
Q
6
0
0
2

3
Q
6
0
0
2

1
Q
7
0
0
2

3
Q
7
0
0
2

1
Q
8
0
0
2

3
Q
8
0
0
2

1
Q
9
0
0
2

3
Q
9
0
0
2

1
Q
0
1
0
2

3
Q
0
1
0
2

1
Q
1
1
0
2

3
Q
1
1
0
2

1
Q
2
1
0
2

3
Q
2
1
0
2

1
Q
3
1
0
2

3
Q
3
1
0
2

1
Q
4
1
0
2

Direct Investment

Other Investments

Portfolio Equity: OS

Portfolio Debt: OS

Monetary Financial Institutions 

1
Q
6
0
0
2

3
Q
6
0
0
2

1
Q
7
0
0
2

3
Q
7
0
0
2

1
Q
8
0
0
2

3
Q
8
0
0
2

1
Q
9
0
0
2

3
Q
9
0
0
2

1
Q
0
1
0
2

3
Q
0
1
0
2

1
Q
1
1
0
2

3
Q
1
1
0
2

1
Q
2
1
0
2

3
Q
2
1
0
2

1
Q
3
1
0
2

3
Q
3
1
0
2

1
Q
4
1
0
2

Direct Investment

Other Investments

Portfolio Equity: MFI

Portfolio Debt: MFI

Monetary Authorities 

25

20

15

10

5

0

-5

-10

-15

-20

1
Q
6
0
0
2

3
Q
6
0
0
2

1
Q
7
0
0
2

3
Q
7
0
0
2

1
Q
8
0
0
2

3
Q
8
0
0
2

1
Q
9
0
0
2

3
Q
9
0
0
2

1
Q
0
1
0
2

3
Q
0
1
0
2

1
Q
1
1
0
2

3
Q
1
1
0
2

1
Q
2
1
0
2

3
Q
2
1
0
2

1
Q
3
1
0
2

3
Q
3
1
0
2

1
Q
4
1
0
2

1
Q
6
0
0
2

3
Q
6
0
0
2

1
Q
7
0
0
2

3
Q
7
0
0
2

1
Q
8
0
0
2

3
Q
8
0
0
2

1
Q
9
0
0
2

3
Q
9
0
0
2

1
Q
0
1
0
2

3
Q
0
1
0
2

1
Q
1
1
0
2

3
Q
1
1
0
2

1
Q
2
1
0
2

3
Q
2
1
0
2

1
Q
3
1
0
2

3
Q
3
1
0
2

1
Q
4
1
0
2

Other Investments: MA

Portfolio Equity: MA

Portfolio Debt: MA

Other Investment: MA

Portfolio Debt: MA

Portfolio, debt, equity: MA

November 2014  226 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
10

8

6

4

2

0

-2

-4

-6

-8

-10

-12

30

25

20

15

10

5

0

-5

-10

-15

-20

40

30

20

10

0

-10

-20

-30

-40

 Analysis of developments in EU capital flows in the global context 

Estonia (in % of GDP) 

Flows 

Stocks 

General Government 

General Government 

10

8

6

4

2

0

-2

-4

-6

1
Q
6
0
0
2

3
Q
6
0
0
2

1
Q
7
0
0
2

3
Q
7
0
0
2

1
Q
8
0
0
2

3
Q
8
0
0
2

1
Q
9
0
0
2

3
Q
9
0
0
2

1
Q
0
1
0
2

3
Q
0
1
0
2

1
Q
1
1
0
2

3
Q
1
1
0
2

1
Q
2
1
0
2

3
Q
2
1
0
2

1
Q
3
1
0
2

3
Q
3
1
0
2

1
Q
4
1
0
2

1
Q
6
0
0
2

3
Q
6
0
0
2

1
Q
7
0
0
2

3
Q
7
0
0
2

1
Q
8
0
0
2

3
Q
8
0
0
2

1
Q
9
0
0
2

3
Q
9
0
0
2

1
Q
0
1
0
2

3
Q
0
1
0
2

1
Q
1
1
0
2

3
Q
1
1
0
2

1
Q
2
1
0
2

3
Q
2
1
0
2

1
Q
3
1
0
2

3
Q
3
1
0
2

1
Q
4
1
0
2

Other Investments

Portfolio - equity

Portfolio Debt: GG

Other Investment: GG

Portfolio Equity: GG

Portfolio Debt: GG

Other Sectors 

Other Sectors 

15

10

5

0

-5

-10

-15

-20

-25

10

0

-10

-20

-30

-40

-50

-60

-70

25

20

15

10

5

0

-5

1
Q
6
0
0
2

3
Q
6
0
0
2

1
Q
7
0
0
2

3
Q
7
0
0
2

1
Q
8
0
0
2

3
Q
8
0
0
2

1
Q
9
0
0
2

3
Q
9
0
0
2

1
Q
0
1
0
2

3
Q
0
1
0
2

1
Q
1
1
0
2

3
Q
1
1
0
2

1
Q
2
1
0
2

3
Q
2
1
0
2

1
Q
3
1
0
2

3
Q
3
1
0
2

1
Q
4
1
0
2

Direct Investment: OS

Other Investment: OS

Portfolio Equity: OS

Portfolio Debt: OS

Monetary Financial Institutions 

1
Q
6
0
0
2

3
Q
6
0
0
2

1
Q
7
0
0
2

3
Q
7
0
0
2

1
Q
8
0
0
2

3
Q
8
0
0
2

1
Q
9
0
0
2

3
Q
9
0
0
2

1
Q
0
1
0
2

3
Q
0
1
0
2

1
Q
1
1
0
2

3
Q
1
1
0
2

1
Q
2
1
0
2

3
Q
2
1
0
2

1
Q
3
1
0
2

3
Q
3
1
0
2

1
Q
4
1
0
2

Direct Investment: MFI

Other Investment: MFI

Portfolio Equity: MFI

Portfolio Debt: MFI

Monetary Authorities 

1
Q
6
0
0
2

3
Q
6
0
0
2

1
Q
7
0
0
2

3
Q
7
0
0
2

1
Q
8
0
0
2

3
Q
8
0
0
2

1
Q
9
0
0
2

3
Q
9
0
0
2

1
Q
0
1
0
2

3
Q
0
1
0
2

1
Q
1
1
0
2

3
Q
1
1
0
2

1
Q
2
1
0
2

3
Q
2
1
0
2

1
Q
3
1
0
2

3
Q
3
1
0
2

1
Q
4
1
0
2

Direct Investment

Other Investments

Portfolio Equity: OS

Portfolio Debt: OS

Monetary Financial Institutions 

1
Q
6
0
0
2

3
Q
6
0
0
2

1
Q
7
0
0
2

3
Q
7
0
0
2

1
Q
8
0
0
2

3
Q
8
0
0
2

1
Q
9
0
0
2

3
Q
9
0
0
2

1
Q
0
1
0
2

3
Q
0
1
0
2

1
Q
1
1
0
2

3
Q
1
1
0
2

1
Q
2
1
0
2

3
Q
2
1
0
2

1
Q
3
1
0
2

3
Q
3
1
0
2

1
Q
4
1
0
2

Direct Investment

Other Investments

Portfolio Equity: MFI

Portfolio Debt: MFI

Monetary Authorities 

30

20

10

0

-10

-20

-30

1
Q
6
0
0
2

3
Q
6
0
0
2

1
Q
7
0
0
2

3
Q
7
0
0
2

1
Q
8
0
0
2

3
Q
8
0
0
2

1
Q
9
0
0
2

3
Q
9
0
0
2

1
Q
0
1
0
2

3
Q
0
1
0
2

1
Q
1
1
0
2

3
Q
1
1
0
2

1
Q
2
1
0
2

3
Q
2
1
0
2

1
Q
3
1
0
2

3
Q
3
1
0
2

1
Q
4
1
0
2

1
Q
6
0
0
2

3
Q
6
0
0
2

1
Q
7
0
0
2

3
Q
7
0
0
2

1
Q
8
0
0
2

3
Q
8
0
0
2

1
Q
9
0
0
2

3
Q
9
0
0
2

1
Q
0
1
0
2

3
Q
0
1
0
2

1
Q
1
1
0
2

3
Q
1
1
0
2

1
Q
2
1
0
2

3
Q
2
1
0
2

1
Q
3
1
0
2

3
Q
3
1
0
2

1
Q
4
1
0
2

Other Investments: MA

Portfolio Equity: MA

Portfolio Debt: MA

Other Investment: MA

Portfolio Debt: MA

Portfolio, debt, equity: MA

November 2014  227 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
100

80

60

40

20

0

-20

-40

-60

-80

15

10

5

0

-5

-10

-15

50

40

30

20

10

0

-10

-20

-30

-40

-50

 Analysis of developments in EU capital flows in the global context 

Greece (in % of GDP) 

Flows 

Stocks 

General Government 

General Government 

0

-20

-40

-60

-80

-100

-120

-140

-160

1
Q
6
0
0
2

3
Q
6
0
0
2

1
Q
7
0
0
2

3
Q
7
0
0
2

1
Q
8
0
0
2

3
Q
8
0
0
2

1
Q
9
0
0
2

3
Q
9
0
0
2

1
Q
0
1
0
2

3
Q
0
1
0
2

1
Q
1
1
0
2

3
Q
1
1
0
2

1
Q
2
1
0
2

3
Q
2
1
0
2

1
Q
3
1
0
2

3
Q
3
1
0
2

1
Q
4
1
0
2

1
Q
6
0
0
2

3
Q
6
0
0
2

1
Q
7
0
0
2

3
Q
7
0
0
2

1
Q
8
0
0
2

3
Q
8
0
0
2

1
Q
9
0
0
2

3
Q
9
0
0
2

1
Q
0
1
0
2

3
Q
0
1
0
2

1
Q
1
1
0
2

3
Q
1
1
0
2

1
Q
2
1
0
2

3
Q
2
1
0
2

1
Q
3
1
0
2

3
Q
3
1
0
2

1
Q
4
1
0
2

Other Investments

Portfolio - equity

Portfolio Debt: GG

Other Investment: GG

Portfolio Equity: GG

Portfolio Debt: GG

Other Sectors 

Other Sectors 

25

20

15

10

5

0

-5

-10

-15

-20

40

30

20

10

0

-10

-20

-30

20

10

0

-10

-20

-30

-40

-50

-60

1
Q
6
0
0
2

3
Q
6
0
0
2

1
Q
7
0
0
2

3
Q
7
0
0
2

1
Q
8
0
0
2

3
Q
8
0
0
2

1
Q
9
0
0
2

3
Q
9
0
0
2

1
Q
0
1
0
2

3
Q
0
1
0
2

1
Q
1
1
0
2

3
Q
1
1
0
2

1
Q
2
1
0
2

3
Q
2
1
0
2

1
Q
3
1
0
2

3
Q
3
1
0
2

1
Q
4
1
0
2

Direct Investment: OS

Other Investment: OS

Portfolio Equity: OS

Portfolio Debt: OS

Monetary Financial Institutions 

1
Q
6
0
0
2

3
Q
6
0
0
2

1
Q
7
0
0
2

3
Q
7
0
0
2

1
Q
8
0
0
2

3
Q
8
0
0
2

1
Q
9
0
0
2

3
Q
9
0
0
2

1
Q
0
1
0
2

3
Q
0
1
0
2

1
Q
1
1
0
2

3
Q
1
1
0
2

1
Q
2
1
0
2

3
Q
2
1
0
2

1
Q
3
1
0
2

3
Q
3
1
0
2

1
Q
4
1
0
2

Direct Investment: MFI

Other Investment: MFI

Portfolio Equity: MFI

Portfolio Debt: MFI

Monetary Authorities 

1
Q
6
0
0
2

3
Q
6
0
0
2

1
Q
7
0
0
2

3
Q
7
0
0
2

1
Q
8
0
0
2

3
Q
8
0
0
2

1
Q
9
0
0
2

3
Q
9
0
0
2

1
Q
0
1
0
2

3
Q
0
1
0
2

1
Q
1
1
0
2

3
Q
1
1
0
2

1
Q
2
1
0
2

3
Q
2
1
0
2

1
Q
3
1
0
2

3
Q
3
1
0
2

1
Q
4
1
0
2

Direct Investment

Other Investments

Portfolio Equity: OS

Portfolio Debt: OS

Monetary Financial Institutions 

1
Q
6
0
0
2

3
Q
6
0
0
2

1
Q
7
0
0
2

3
Q
7
0
0
2

1
Q
8
0
0
2

3
Q
8
0
0
2

1
Q
9
0
0
2

3
Q
9
0
0
2

1
Q
0
1
0
2

3
Q
0
1
0
2

1
Q
1
1
0
2

3
Q
1
1
0
2

1
Q
2
1
0
2

3
Q
2
1
0
2

1
Q
3
1
0
2

3
Q
3
1
0
2

1
Q
4
1
0
2

Direct Investment

Other Investments

Portfolio Equity: MFI

Portfolio Debt: MFI

Monetary Authorities 

60

40

20

0

-20

-40

-60

-80

1
Q
6
0
0
2

3
Q
6
0
0
2

1
Q
7
0
0
2

3
Q
7
0
0
2

1
Q
8
0
0
2

3
Q
8
0
0
2

1
Q
9
0
0
2

3
Q
9
0
0
2

1
Q
0
1
0
2

3
Q
0
1
0
2

1
Q
1
1
0
2

3
Q
1
1
0
2

1
Q
2
1
0
2

3
Q
2
1
0
2

1
Q
3
1
0
2

3
Q
3
1
0
2

1
Q
4
1
0
2

1
Q
6
0
0
2

3
Q
6
0
0
2

1
Q
7
0
0
2

3
Q
7
0
0
2

1
Q
8
0
0
2

3
Q
8
0
0
2

1
Q
9
0
0
2

3
Q
9
0
0
2

1
Q
0
1
0
2

3
Q
0
1
0
2

1
Q
1
1
0
2

3
Q
1
1
0
2

1
Q
2
1
0
2

3
Q
2
1
0
2

1
Q
3
1
0
2

3
Q
3
1
0
2

1
Q
4
1
0
2

Other Investments: MA

Portfolio Equity: MA

Portfolio Debt: MA

Other Investment: MA

Portfolio Debt: MA

Portfolio, debt, equity: MA

November 2014  228 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
25

20

15

10

5

0

-5

-10

-15

25

20

15

10

5

0

-5

-10

-15

30

20

10

0

-10

-20

-30

-40

 Analysis of developments in EU capital flows in the global context 

Spain (in % of GDP) 

Flows 

Stocks 

General Government 

General Government 

0

-5

-10

-15

-20

-25

-30

-35

-40

1
Q
6
0
0
2

3
Q
6
0
0
2

1
Q
7
0
0
2

3
Q
7
0
0
2

1
Q
8
0
0
2

3
Q
8
0
0
2

1
Q
9
0
0
2

3
Q
9
0
0
2

1
Q
0
1
0
2

3
Q
0
1
0
2

1
Q
1
1
0
2

3
Q
1
1
0
2

1
Q
2
1
0
2

3
Q
2
1
0
2

1
Q
3
1
0
2

3
Q
3
1
0
2

1
Q
4
1
0
2

1
Q
6
0
0
2

3
Q
6
0
0
2

1
Q
7
0
0
2

3
Q
7
0
0
2

1
Q
8
0
0
2

3
Q
8
0
0
2

1
Q
9
0
0
2

3
Q
9
0
0
2

1
Q
0
1
0
2

3
Q
0
1
0
2

1
Q
1
1
0
2

3
Q
1
1
0
2

1
Q
2
1
0
2

3
Q
2
1
0
2

1
Q
3
1
0
2

3
Q
3
1
0
2

1
Q
4
1
0
2

Other Investments

Portfolio - equity

Portfolio Debt: GG

Other Investment: GG

Portfolio Equity: GG

Portfolio Debt: GG

Other Sectors 

Other Sectors 

5

0

-5

-10

-15

-20

-25

-30

-35

20

10

0

-10

-20

-30

-40

-50

-60

20

10

0

-10

-20

-30

-40

-50

1
Q
6
0
0
2

3
Q
6
0
0
2

1
Q
7
0
0
2

3
Q
7
0
0
2

1
Q
8
0
0
2

3
Q
8
0
0
2

1
Q
9
0
0
2

3
Q
9
0
0
2

1
Q
0
1
0
2

3
Q
0
1
0
2

1
Q
1
1
0
2

3
Q
1
1
0
2

1
Q
2
1
0
2

3
Q
2
1
0
2

1
Q
3
1
0
2

3
Q
3
1
0
2

1
Q
4
1
0
2

Direct Investment: OS

Other Investment: OS

Portfolio Equity: OS

Portfolio Debt: OS

Monetary Financial Institutions 

1
Q
6
0
0
2

3
Q
6
0
0
2

1
Q
7
0
0
2

3
Q
7
0
0
2

1
Q
8
0
0
2

3
Q
8
0
0
2

1
Q
9
0
0
2

3
Q
9
0
0
2

1
Q
0
1
0
2

3
Q
0
1
0
2

1
Q
1
1
0
2

3
Q
1
1
0
2

1
Q
2
1
0
2

3
Q
2
1
0
2

1
Q
3
1
0
2

3
Q
3
1
0
2

1
Q
4
1
0
2

Direct Investment: MFI

Other Investment: MFI

Portfolio Equity: MFI

Portfolio Debt: MFI

Monetary Authorities 

1
Q
6
0
0
2

3
Q
6
0
0
2

1
Q
7
0
0
2

3
Q
7
0
0
2

1
Q
8
0
0
2

3
Q
8
0
0
2

1
Q
9
0
0
2

3
Q
9
0
0
2

1
Q
0
1
0
2

3
Q
0
1
0
2

1
Q
1
1
0
2

3
Q
1
1
0
2

1
Q
2
1
0
2

3
Q
2
1
0
2

1
Q
3
1
0
2

3
Q
3
1
0
2

1
Q
4
1
0
2

Direct Investment

Other Investments

Portfolio Equity: OS

Portfolio Debt: OS

Monetary Financial Institutions 

1
Q
6
0
0
2

3
Q
6
0
0
2

1
Q
7
0
0
2

3
Q
7
0
0
2

1
Q
8
0
0
2

3
Q
8
0
0
2

1
Q
9
0
0
2

3
Q
9
0
0
2

1
Q
0
1
0
2

3
Q
0
1
0
2

1
Q
1
1
0
2

3
Q
1
1
0
2

1
Q
2
1
0
2

3
Q
2
1
0
2

1
Q
3
1
0
2

3
Q
3
1
0
2

1
Q
4
1
0
2

Direct Investment

Other Investments

Portfolio Equity: MFI

Portfolio Debt: MFI

Monetary Authorities 

60

50

40

30

20

10

0

-10

-20

-30

1
Q
6
0
0
2

3
Q
6
0
0
2

1
Q
7
0
0
2

3
Q
7
0
0
2

1
Q
8
0
0
2

3
Q
8
0
0
2

1
Q
9
0
0
2

3
Q
9
0
0
2

1
Q
0
1
0
2

3
Q
0
1
0
2

1
Q
1
1
0
2

3
Q
1
1
0
2

1
Q
2
1
0
2

3
Q
2
1
0
2

1
Q
3
1
0
2

3
Q
3
1
0
2

1
Q
4
1
0
2

1
Q
6
0
0
2

3
Q
6
0
0
2

1
Q
7
0
0
2

3
Q
7
0
0
2

1
Q
8
0
0
2

3
Q
8
0
0
2

1
Q
9
0
0
2

3
Q
9
0
0
2

1
Q
0
1
0
2

3
Q
0
1
0
2

1
Q
1
1
0
2

3
Q
1
1
0
2

1
Q
2
1
0
2

3
Q
2
1
0
2

1
Q
3
1
0
2

3
Q
3
1
0
2

1
Q
4
1
0
2

Other Investments: MA

Portfolio Equity: MA

Portfolio Debt: MA

Other Investment: MA

Portfolio Debt: MA

Portfolio, debt, equity: MA

November 2014  229 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
1,2

1

0,8

0,6

0,4

0,2

0

1,2

1

0,8

0,6

0,4

0,2

0

1,2

1

0,8

0,6

0,4

0,2

0

 Analysis of developments in EU capital flows in the global context 

Ireland (in % of GDP) 

Flows 

Stocks 

General Government 

General Government 

1

0,9

0,8

0,7

0,6

0,5

0,4

0,3

0,2

0,1

0

1
Q
6
0
0
2

3
Q
6
0
0
2

1
Q
7
0
0
2

3
Q
7
0
0
2

1
Q
8
0
0
2

3
Q
8
0
0
2

1
Q
9
0
0
2

3
Q
9
0
0
2

1
Q
0
1
0
2

3
Q
0
1
0
2

1
Q
1
1
0
2

3
Q
1
1
0
2

1
Q
2
1
0
2

3
Q
2
1
0
2

1
Q
3
1
0
2

3
Q
3
1
0
2

1
Q
4
1
0
2

1
Q
6
0
0
2

3
Q
6
0
0
2

1
Q
7
0
0
2

3
Q
7
0
0
2

1
Q
8
0
0
2

3
Q
8
0
0
2

1
Q
9
0
0
2

3
Q
9
0
0
2

1
Q
0
1
0
2

3
Q
0
1
0
2

1
Q
1
1
0
2

3
Q
1
1
0
2

1
Q
2
1
0
2

3
Q
2
1
0
2

1
Q
3
1
0
2

3
Q
3
1
0
2

1
Q
4
1
0
2

Other Investments

Portfolio - equity

Portfolio Debt: GG

Other Investment: GG

Portfolio Equity: GG

Portfolio Debt: GG

Other Sectors 

Other Sectors 

1

0,9

0,8

0,7

0,6

0,5

0,4

0,3

0,2

0,1

0

1

0,9

0,8

0,7

0,6

0,5

0,4

0,3

0,2

0,1

0

1

0,9

0,8

0,7

0,6

0,5

0,4

0,3

0,2

0,1

0

1
Q
6
0
0
2

3
Q
6
0
0
2

1
Q
7
0
0
2

3
Q
7
0
0
2

1
Q
8
0
0
2

3
Q
8
0
0
2

1
Q
9
0
0
2

3
Q
9
0
0
2

1
Q
0
1
0
2

3
Q
0
1
0
2

1
Q
1
1
0
2

3
Q
1
1
0
2

1
Q
2
1
0
2

3
Q
2
1
0
2

1
Q
3
1
0
2

3
Q
3
1
0
2

1
Q
4
1
0
2

Direct Investment: OS

Other Investment: OS

Portfolio Equity: OS

Portfolio Debt: OS

Monetary Financial Institutions 

1
Q
6
0
0
2

3
Q
6
0
0
2

1
Q
7
0
0
2

3
Q
7
0
0
2

1
Q
8
0
0
2

3
Q
8
0
0
2

1
Q
9
0
0
2

3
Q
9
0
0
2

1
Q
0
1
0
2

3
Q
0
1
0
2

1
Q
1
1
0
2

3
Q
1
1
0
2

1
Q
2
1
0
2

3
Q
2
1
0
2

1
Q
3
1
0
2

3
Q
3
1
0
2

1
Q
4
1
0
2

Direct Investment: MFI

Other Investment: MFI

Portfolio Equity: MFI

Portfolio Debt: MFI

Monetary Authorities 

1
Q
6
0
0
2

3
Q
6
0
0
2

1
Q
7
0
0
2

3
Q
7
0
0
2

1
Q
8
0
0
2

3
Q
8
0
0
2

1
Q
9
0
0
2

3
Q
9
0
0
2

1
Q
0
1
0
2

3
Q
0
1
0
2

1
Q
1
1
0
2

3
Q
1
1
0
2

1
Q
2
1
0
2

3
Q
2
1
0
2

1
Q
3
1
0
2

3
Q
3
1
0
2

1
Q
4
1
0
2

Direct Investment

Other Investments

Portfolio Equity: OS

Portfolio Debt: OS

Monetary Financial Institutions 

1
Q
6
0
0
2

3
Q
6
0
0
2

1
Q
7
0
0
2

3
Q
7
0
0
2

1
Q
8
0
0
2

3
Q
8
0
0
2

1
Q
9
0
0
2

3
Q
9
0
0
2

1
Q
0
1
0
2

3
Q
0
1
0
2

1
Q
1
1
0
2

3
Q
1
1
0
2

1
Q
2
1
0
2

3
Q
2
1
0
2

1
Q
3
1
0
2

3
Q
3
1
0
2

1
Q
4
1
0
2

Direct Investment

Other Investments

Portfolio Equity: MFI

Portfolio Debt: MFI

Monetary Authorities 

1,2

1

0,8

0,6

0,4

0,2

0

1
Q
6
0
0
2

3
Q
6
0
0
2

1
Q
7
0
0
2

3
Q
7
0
0
2

1
Q
8
0
0
2

3
Q
8
0
0
2

1
Q
9
0
0
2

3
Q
9
0
0
2

1
Q
0
1
0
2

3
Q
0
1
0
2

1
Q
1
1
0
2

3
Q
1
1
0
2

1
Q
2
1
0
2

3
Q
2
1
0
2

1
Q
3
1
0
2

3
Q
3
1
0
2

1
Q
4
1
0
2

1
Q
6
0
0
2

3
Q
6
0
0
2

1
Q
7
0
0
2

3
Q
7
0
0
2

1
Q
8
0
0
2

3
Q
8
0
0
2

1
Q
9
0
0
2

3
Q
9
0
0
2

1
Q
0
1
0
2

3
Q
0
1
0
2

1
Q
1
1
0
2

3
Q
1
1
0
2

1
Q
2
1
0
2

3
Q
2
1
0
2

1
Q
3
1
0
2

3
Q
3
1
0
2

1
Q
4
1
0
2

Other Investments: MA

Portfolio Equity: MA

Portfolio Debt: MA

Other Investment: MA

Portfolio Debt: MA

Portfolio, debt, equity: MA

November 2014  230 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
25

20

15

10

5

0

-5

-10

-15

-20

-25

20

15

10

5

0

-5

-10

-15

80

60

40

20

0

-20

-40

-60

-80

-100

 Analysis of developments in EU capital flows in the global context 

Finland (in % of GDP) 

Flows 

Stocks 

General Government 

General Government 

10

5

0

-5

-10

-15

-20

-25

-30

1
Q
6
0
0
2

3
Q
6
0
0
2

1
Q
7
0
0
2

3
Q
7
0
0
2

1
Q
8
0
0
2

3
Q
8
0
0
2

1
Q
9
0
0
2

3
Q
9
0
0
2

1
Q
0
1
0
2

3
Q
0
1
0
2

1
Q
1
1
0
2

3
Q
1
1
0
2

1
Q
2
1
0
2

3
Q
2
1
0
2

1
Q
3
1
0
2

3
Q
3
1
0
2

1
Q
4
1
0
2

1
Q
6
0
0
2

3
Q
6
0
0
2

1
Q
7
0
0
2

3
Q
7
0
0
2

1
Q
8
0
0
2

3
Q
8
0
0
2

1
Q
9
0
0
2

3
Q
9
0
0
2

1
Q
0
1
0
2

3
Q
0
1
0
2

1
Q
1
1
0
2

3
Q
1
1
0
2

1
Q
2
1
0
2

3
Q
2
1
0
2

1
Q
3
1
0
2

3
Q
3
1
0
2

1
Q
4
1
0
2

Other Investments

Portfolio - equity

Portfolio Debt: GG

Other Investment: GG

Portfolio Equity: GG

Portfolio Debt: GG

Other Sectors 

Other Sectors 

20

10

0

-10

-20

-30

-40

-50

-60

-70

-80

-90

20

10

0

-10

-20

-30

-40

-50

-60

-70

50

40

30

20

10

0

-10

1
Q
6
0
0
2

3
Q
6
0
0
2

1
Q
7
0
0
2

3
Q
7
0
0
2

1
Q
8
0
0
2

3
Q
8
0
0
2

1
Q
9
0
0
2

3
Q
9
0
0
2

1
Q
0
1
0
2

3
Q
0
1
0
2

1
Q
1
1
0
2

3
Q
1
1
0
2

1
Q
2
1
0
2

3
Q
2
1
0
2

1
Q
3
1
0
2

3
Q
3
1
0
2

1
Q
4
1
0
2

Direct Investment: OS

Other Investment: OS

Portfolio Equity: OS

Portfolio Debt: OS

Monetary Financial Institutions 

1
Q
6
0
0
2

3
Q
6
0
0
2

1
Q
7
0
0
2

3
Q
7
0
0
2

1
Q
8
0
0
2

3
Q
8
0
0
2

1
Q
9
0
0
2

3
Q
9
0
0
2

1
Q
0
1
0
2

3
Q
0
1
0
2

1
Q
1
1
0
2

3
Q
1
1
0
2

1
Q
2
1
0
2

3
Q
2
1
0
2

1
Q
3
1
0
2

3
Q
3
1
0
2

1
Q
4
1
0
2

Direct Investment: MFI

Other Investment: MFI

Portfolio Equity: MFI

Portfolio Debt: MFI

Monetary Authorities 

1
Q
6
0
0
2

3
Q
6
0
0
2

1
Q
7
0
0
2

3
Q
7
0
0
2

1
Q
8
0
0
2

3
Q
8
0
0
2

1
Q
9
0
0
2

3
Q
9
0
0
2

1
Q
0
1
0
2

3
Q
0
1
0
2

1
Q
1
1
0
2

3
Q
1
1
0
2

1
Q
2
1
0
2

3
Q
2
1
0
2

1
Q
3
1
0
2

3
Q
3
1
0
2

1
Q
4
1
0
2

Direct Investment

Other Investments

Portfolio Equity: OS

Portfolio Debt: OS

Monetary Financial Institutions 

1
Q
6
0
0
2

3
Q
6
0
0
2

1
Q
7
0
0
2

3
Q
7
0
0
2

1
Q
8
0
0
2

3
Q
8
0
0
2

1
Q
9
0
0
2

3
Q
9
0
0
2

1
Q
0
1
0
2

3
Q
0
1
0
2

1
Q
1
1
0
2

3
Q
1
1
0
2

1
Q
2
1
0
2

3
Q
2
1
0
2

1
Q
3
1
0
2

3
Q
3
1
0
2

1
Q
4
1
0
2

Direct Investment

Other Investments

Portfolio Equity: MFI

Portfolio Debt: MFI

Monetary Authorities 

100

80

60

40

20

0

-20

-40

-60

-80

1
Q
6
0
0
2

3
Q
6
0
0
2

1
Q
7
0
0
2

3
Q
7
0
0
2

1
Q
8
0
0
2

3
Q
8
0
0
2

1
Q
9
0
0
2

3
Q
9
0
0
2

1
Q
0
1
0
2

3
Q
0
1
0
2

1
Q
1
1
0
2

3
Q
1
1
0
2

1
Q
2
1
0
2

3
Q
2
1
0
2

1
Q
3
1
0
2

3
Q
3
1
0
2

1
Q
4
1
0
2

1
Q
6
0
0
2

3
Q
6
0
0
2

1
Q
7
0
0
2

3
Q
7
0
0
2

1
Q
8
0
0
2

3
Q
8
0
0
2

1
Q
9
0
0
2

3
Q
9
0
0
2

1
Q
0
1
0
2

3
Q
0
1
0
2

1
Q
1
1
0
2

3
Q
1
1
0
2

1
Q
2
1
0
2

3
Q
2
1
0
2

1
Q
3
1
0
2

3
Q
3
1
0
2

1
Q
4
1
0
2

Other Investments: MA

Portfolio Equity: MA

Portfolio Debt: MA

Other Investment: MA

Portfolio Debt: MA

Portfolio, debt, equity: MA

November 2014  231 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
15

10

5

0

-5

-10

15

10

5

0

-5

-10

-15

20

10

0

-10

-20

-30

-40

 Analysis of developments in EU capital flows in the global context 

France (in % of GDP) 

Flows 

Stocks 

General Government 

General Government 

10

0

-10

-20

-30

-40

-50

-60

-70

1
Q
6
0
0
2

3
Q
6
0
0
2

1
Q
7
0
0
2

3
Q
7
0
0
2

1
Q
8
0
0
2

3
Q
8
0
0
2

1
Q
9
0
0
2

3
Q
9
0
0
2

1
Q
0
1
0
2

3
Q
0
1
0
2

1
Q
1
1
0
2

3
Q
1
1
0
2

1
Q
2
1
0
2

3
Q
2
1
0
2

1
Q
3
1
0
2

3
Q
3
1
0
2

1
Q
4
1
0
2

1
Q
6
0
0
2

3
Q
6
0
0
2

1
Q
7
0
0
2

3
Q
7
0
0
2

1
Q
8
0
0
2

3
Q
8
0
0
2

1
Q
9
0
0
2

3
Q
9
0
0
2

1
Q
0
1
0
2

3
Q
0
1
0
2

1
Q
1
1
0
2

3
Q
1
1
0
2

1
Q
2
1
0
2

3
Q
2
1
0
2

1
Q
3
1
0
2

3
Q
3
1
0
2

1
Q
4
1
0
2

Other Investments

Portfolio - equity

Portfolio Debt: GG

Other Investment: GG

Portfolio Equity: GG

Portfolio Debt: GG

Other Sectors 

Other Sectors 

35

30

25

20

15

10

5

0

-5

-10

-15

-20

20

15

10

5

0

-5

-10

-15

-20

-25

10

8

6

4

2

0

-2

-4

-6

-8

-10

-12

1
Q
6
0
0
2

3
Q
6
0
0
2

1
Q
7
0
0
2

3
Q
7
0
0
2

1
Q
8
0
0
2

3
Q
8
0
0
2

1
Q
9
0
0
2

3
Q
9
0
0
2

1
Q
0
1
0
2

3
Q
0
1
0
2

1
Q
1
1
0
2

3
Q
1
1
0
2

1
Q
2
1
0
2

3
Q
2
1
0
2

1
Q
3
1
0
2

3
Q
3
1
0
2

1
Q
4
1
0
2

Direct Investment: OS

Other Investment: OS

Portfolio Equity: OS

Portfolio Debt: OS

Monetary Financial Institutions 

1
Q
6
0
0
2

3
Q
6
0
0
2

1
Q
7
0
0
2

3
Q
7
0
0
2

1
Q
8
0
0
2

3
Q
8
0
0
2

1
Q
9
0
0
2

3
Q
9
0
0
2

1
Q
0
1
0
2

3
Q
0
1
0
2

1
Q
1
1
0
2

3
Q
1
1
0
2

1
Q
2
1
0
2

3
Q
2
1
0
2

1
Q
3
1
0
2

3
Q
3
1
0
2

1
Q
4
1
0
2

Direct Investment: MFI

Other Investment: MFI

Portfolio Equity: MFI

Portfolio Debt: MFI

Monetary Authorities 

1
Q
6
0
0
2

3
Q
6
0
0
2

1
Q
7
0
0
2

3
Q
7
0
0
2

1
Q
8
0
0
2

3
Q
8
0
0
2

1
Q
9
0
0
2

3
Q
9
0
0
2

1
Q
0
1
0
2

3
Q
0
1
0
2

1
Q
1
1
0
2

3
Q
1
1
0
2

1
Q
2
1
0
2

3
Q
2
1
0
2

1
Q
3
1
0
2

3
Q
3
1
0
2

1
Q
4
1
0
2

Direct Investment

Other Investments

Portfolio Equity: OS

Portfolio Debt: OS

Monetary Financial Institutions 

1
Q
6
0
0
2

3
Q
6
0
0
2

1
Q
7
0
0
2

3
Q
7
0
0
2

1
Q
8
0
0
2

3
Q
8
0
0
2

1
Q
9
0
0
2

3
Q
9
0
0
2

1
Q
0
1
0
2

3
Q
0
1
0
2

1
Q
1
1
0
2

3
Q
1
1
0
2

1
Q
2
1
0
2

3
Q
2
1
0
2

1
Q
3
1
0
2

3
Q
3
1
0
2

1
Q
4
1
0
2

Direct Investment

Other Investments

Portfolio Equity: MFI

Portfolio Debt: MFI

Monetary Authorities 

25

20

15

10

5

0

-5

-10

-15

-20

1
Q
6
0
0
2

3
Q
6
0
0
2

1
Q
7
0
0
2

3
Q
7
0
0
2

1
Q
8
0
0
2

3
Q
8
0
0
2

1
Q
9
0
0
2

3
Q
9
0
0
2

1
Q
0
1
0
2

3
Q
0
1
0
2

1
Q
1
1
0
2

3
Q
1
1
0
2

1
Q
2
1
0
2

3
Q
2
1
0
2

1
Q
3
1
0
2

3
Q
3
1
0
2

1
Q
4
1
0
2

1
Q
6
0
0
2

3
Q
6
0
0
2

1
Q
7
0
0
2

3
Q
7
0
0
2

1
Q
8
0
0
2

3
Q
8
0
0
2

1
Q
9
0
0
2

3
Q
9
0
0
2

1
Q
0
1
0
2

3
Q
0
1
0
2

1
Q
1
1
0
2

3
Q
1
1
0
2

1
Q
2
1
0
2

3
Q
2
1
0
2

1
Q
3
1
0
2

3
Q
3
1
0
2

1
Q
4
1
0
2

Other Investments: MA

Portfolio Equity: MA

Portfolio Debt: MA

Other Investment: MA

Portfolio Debt: MA

Portfolio, debt, equity: MA

November 2014  232 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
12

10

8

6

4

2

0

-2

-4

-6

-8

20

15

10

5

0

-5

-10

4

3

2

1

0

-1

-2

-3

-4

-5

-6

-7

 Analysis of developments in EU capital flows in the global context 

Croatia (in % of GDP) 

Flows 

Stocks 

General Government 

General Government 

0

-5

-10

-15

-20

-25

-30

1
Q
6
0
0
2

3
Q
6
0
0
2

1
Q
7
0
0
2

3
Q
7
0
0
2

1
Q
8
0
0
2

3
Q
8
0
0
2

1
Q
9
0
0
2

3
Q
9
0
0
2

1
Q
0
1
0
2

3
Q
0
1
0
2

1
Q
1
1
0
2

3
Q
1
1
0
2

1
Q
2
1
0
2

3
Q
2
1
0
2

1
Q
3
1
0
2

3
Q
3
1
0
2

1
Q
4
1
0
2

1
Q
6
0
0
2

3
Q
6
0
0
2

1
Q
7
0
0
2

3
Q
7
0
0
2

1
Q
8
0
0
2

3
Q
8
0
0
2

1
Q
9
0
0
2

3
Q
9
0
0
2

1
Q
0
1
0
2

3
Q
0
1
0
2

1
Q
1
1
0
2

3
Q
1
1
0
2

1
Q
2
1
0
2

3
Q
2
1
0
2

1
Q
3
1
0
2

3
Q
3
1
0
2

1
Q
4
1
0
2

Other Investments

Portfolio - equity

Portfolio Debt: GG

Other Investment: GG

Portfolio Equity: GG

Portfolio Debt: GG

Other Sectors 

Other Sectors 

1
Q
6
0
0
2

3
Q
6
0
0
2

1
Q
7
0
0
2

3
Q
7
0
0
2

1
Q
8
0
0
2

3
Q
8
0
0
2

1
Q
9
0
0
2

3
Q
9
0
0
2

1
Q
0
1
0
2

3
Q
0
1
0
2

1
Q
1
1
0
2

3
Q
1
1
0
2

1
Q
2
1
0
2

3
Q
2
1
0
2

1
Q
3
1
0
2

3
Q
3
1
0
2

1
Q
4
1
0
2

Direct Investment

Other Investments

Portfolio Equity: OS

Portfolio Debt: OS

Monetary Financial Institutions 

10

0

-10

-20

-30

-40

-50

-60

-70

5

0

-5

-10

-15

-20

-25

1
Q
6
0
0
2

3
Q
6
0
0
2

1
Q
7
0
0
2

3
Q
7
0
0
2

1
Q
8
0
0
2

3
Q
8
0
0
2

1
Q
9
0
0
2

3
Q
9
0
0
2

1
Q
0
1
0
2

3
Q
0
1
0
2

1
Q
1
1
0
2

3
Q
1
1
0
2

1
Q
2
1
0
2

3
Q
2
1
0
2

1
Q
3
1
0
2

3
Q
3
1
0
2

1
Q
4
1
0
2

Direct Investment: OS

Other Investment: OS

Portfolio Equity: OS

Portfolio Debt: OS

Monetary Financial Institutions 

1
Q
6
0
0
2

3
Q
6
0
0
2

1
Q
7
0
0
2

3
Q
7
0
0
2

1
Q
8
0
0
2

3
Q
8
0
0
2

1
Q
9
0
0
2

3
Q
9
0
0
2

1
Q
0
1
0
2

3
Q
0
1
0
2

1
Q
1
1
0
2

3
Q
1
1
0
2

1
Q
2
1
0
2

3
Q
2
1
0
2

1
Q
3
1
0
2

3
Q
3
1
0
2

1
Q
4
1
0
2

Direct Investment: MFI

Other Investment: MFI

Portfolio Equity: MFI

Portfolio Debt: MFI

1
Q
6
0
0
2

3
Q
6
0
0
2

1
Q
7
0
0
2

3
Q
7
0
0
2

1
Q
8
0
0
2

3
Q
8
0
0
2

1
Q
9
0
0
2

3
Q
9
0
0
2

1
Q
0
1
0
2

3
Q
0
1
0
2

1
Q
1
1
0
2

3
Q
1
1
0
2

1
Q
2
1
0
2

3
Q
2
1
0
2

1
Q
3
1
0
2

3
Q
3
1
0
2

1
Q
4
1
0
2

Direct Investment

Other Investments

Portfolio Equity: MFI

Portfolio Debt: MFI

Monetary Authorities 

Monetary Authorities 

1

0,9

0,8

0,7

0,6

0,5

0,4

0,3

0,2

0,1

0

0

-0,05

-0,1

-0,15

-0,2

-0,25

1
Q
6
0
0
2

3
Q
6
0
0
2

1
Q
7
0
0
2

3
Q
7
0
0
2

1
Q
8
0
0
2

3
Q
8
0
0
2

1
Q
9
0
0
2

3
Q
9
0
0
2

1
Q
0
1
0
2

3
Q
0
1
0
2

1
Q
1
1
0
2

3
Q
1
1
0
2

1
Q
2
1
0
2

3
Q
2
1
0
2

1
Q
3
1
0
2

3
Q
3
1
0
2

1
Q
4
1
0
2

1
Q
6
0
0
2

3
Q
6
0
0
2

1
Q
7
0
0
2

3
Q
7
0
0
2

1
Q
8
0
0
2

3
Q
8
0
0
2

1
Q
9
0
0
2

3
Q
9
0
0
2

1
Q
0
1
0
2

3
Q
0
1
0
2

1
Q
1
1
0
2

3
Q
1
1
0
2

1
Q
2
1
0
2

3
Q
2
1
0
2

1
Q
3
1
0
2

3
Q
3
1
0
2

1
Q
4
1
0
2

Other Investments: MA

Portfolio Equity: MA

Portfolio Debt: MA

Other Investment: MA

Portfolio Debt: MA

Portfolio, debt, equity: MA

November 2014  233 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
30

25

20

15

10

5

0

-5

-10

-15

-20

10

5

0

-5

-10

-15

25

20

15

10

5

0

-5

-10

-15

-20

 Analysis of developments in EU capital flows in the global context 

Hungary (in % of GDP) 

Flows 

Stocks 

General Government 

General Government 

0

-10

-20

-30

-40

-50

-60

1
Q
6
0
0
2

3
Q
6
0
0
2

1
Q
7
0
0
2

3
Q
7
0
0
2

1
Q
8
0
0
2

3
Q
8
0
0
2

1
Q
9
0
0
2

3
Q
9
0
0
2

1
Q
0
1
0
2

3
Q
0
1
0
2

1
Q
1
1
0
2

3
Q
1
1
0
2

1
Q
2
1
0
2

3
Q
2
1
0
2

1
Q
3
1
0
2

3
Q
3
1
0
2

1
Q
4
1
0
2

1
Q
6
0
0
2

3
Q
6
0
0
2

1
Q
7
0
0
2

3
Q
7
0
0
2

1
Q
8
0
0
2

3
Q
8
0
0
2

1
Q
9
0
0
2

3
Q
9
0
0
2

1
Q
0
1
0
2

3
Q
0
1
0
2

1
Q
1
1
0
2

3
Q
1
1
0
2

1
Q
2
1
0
2

3
Q
2
1
0
2

1
Q
3
1
0
2

3
Q
3
1
0
2

1
Q
4
1
0
2

Other Investments

Portfolio - equity

Portfolio Debt: GG

Other Investment: GG

Portfolio Equity: GG

Portfolio Debt: GG

Other Sectors 

Other Sectors 

5

0

-5

-10

-15

-20

-25

-30

0

-5

-10

-15

-20

-25

-30

-35

-40

0

-1

-2

-3

-4

-5

-6

-7

-8

1
Q
6
0
0
2

3
Q
6
0
0
2

1
Q
7
0
0
2

3
Q
7
0
0
2

1
Q
8
0
0
2

3
Q
8
0
0
2

1
Q
9
0
0
2

3
Q
9
0
0
2

1
Q
0
1
0
2

3
Q
0
1
0
2

1
Q
1
1
0
2

3
Q
1
1
0
2

1
Q
2
1
0
2

3
Q
2
1
0
2

1
Q
3
1
0
2

3
Q
3
1
0
2

1
Q
4
1
0
2

Direct Investment: OS

Other Investment: OS

Portfolio Equity: OS

Portfolio Debt: OS

Monetary Financial Institutions 

1
Q
6
0
0
2

3
Q
6
0
0
2

1
Q
7
0
0
2

3
Q
7
0
0
2

1
Q
8
0
0
2

3
Q
8
0
0
2

1
Q
9
0
0
2

3
Q
9
0
0
2

1
Q
0
1
0
2

3
Q
0
1
0
2

1
Q
1
1
0
2

3
Q
1
1
0
2

1
Q
2
1
0
2

3
Q
2
1
0
2

1
Q
3
1
0
2

3
Q
3
1
0
2

1
Q
4
1
0
2

Direct Investment: MFI

Other Investment: MFI

Portfolio Equity: MFI

Portfolio Debt: MFI

Monetary Authorities 

1
Q
6
0
0
2

3
Q
6
0
0
2

1
Q
7
0
0
2

3
Q
7
0
0
2

1
Q
8
0
0
2

3
Q
8
0
0
2

1
Q
9
0
0
2

3
Q
9
0
0
2

1
Q
0
1
0
2

3
Q
0
1
0
2

1
Q
1
1
0
2

3
Q
1
1
0
2

1
Q
2
1
0
2

3
Q
2
1
0
2

1
Q
3
1
0
2

3
Q
3
1
0
2

1
Q
4
1
0
2

Direct Investment

Other Investments

Portfolio Equity: OS

Portfolio Debt: OS

Monetary Financial Institutions 

1
Q
6
0
0
2

3
Q
6
0
0
2

1
Q
7
0
0
2

3
Q
7
0
0
2

1
Q
8
0
0
2

3
Q
8
0
0
2

1
Q
9
0
0
2

3
Q
9
0
0
2

1
Q
0
1
0
2

3
Q
0
1
0
2

1
Q
1
1
0
2

3
Q
1
1
0
2

1
Q
2
1
0
2

3
Q
2
1
0
2

1
Q
3
1
0
2

3
Q
3
1
0
2

1
Q
4
1
0
2

Direct Investment

Other Investments

Portfolio Equity: MFI

Portfolio Debt: MFI

Monetary Authorities 

15

10

5

0

-5

-10

-15

-20

1
Q
6
0
0
2

3
Q
6
0
0
2

1
Q
7
0
0
2

3
Q
7
0
0
2

1
Q
8
0
0
2

3
Q
8
0
0
2

1
Q
9
0
0
2

3
Q
9
0
0
2

1
Q
0
1
0
2

3
Q
0
1
0
2

1
Q
1
1
0
2

3
Q
1
1
0
2

1
Q
2
1
0
2

3
Q
2
1
0
2

1
Q
3
1
0
2

3
Q
3
1
0
2

1
Q
4
1
0
2

1
Q
6
0
0
2

3
Q
6
0
0
2

1
Q
7
0
0
2

3
Q
7
0
0
2

1
Q
8
0
0
2

3
Q
8
0
0
2

1
Q
9
0
0
2

3
Q
9
0
0
2

1
Q
0
1
0
2

3
Q
0
1
0
2

1
Q
1
1
0
2

3
Q
1
1
0
2

1
Q
2
1
0
2

3
Q
2
1
0
2

1
Q
3
1
0
2

3
Q
3
1
0
2

1
Q
4
1
0
2

Other Investments: MA

Portfolio Equity: MA

Portfolio Debt: MA

Other Investment: MA

Portfolio Debt: MA

Portfolio, debt, equity: MA

November 2014  234 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
15

10

5

0

-5

-10

-15

15

10

5

0

-5

-10

-15

-20

15

10

5

0

-5

-10

-15

 Analysis of developments in EU capital flows in the global context 

Italy (in % of GDP) 

Flows 

Stocks 

General Government 

General Government 

4

3,5

3

2,5

2

1,5

1

0,5

0

1
Q
6
0
0
2

3
Q
6
0
0
2

1
Q
7
0
0
2

3
Q
7
0
0
2

1
Q
8
0
0
2

3
Q
8
0
0
2

1
Q
9
0
0
2

3
Q
9
0
0
2

1
Q
0
1
0
2

3
Q
0
1
0
2

1
Q
1
1
0
2

3
Q
1
1
0
2

1
Q
2
1
0
2

3
Q
2
1
0
2

1
Q
3
1
0
2

3
Q
3
1
0
2

1
Q
4
1
0
2

1
Q
6
0
0
2

3
Q
6
0
0
2

1
Q
7
0
0
2

3
Q
7
0
0
2

1
Q
8
0
0
2

3
Q
8
0
0
2

1
Q
9
0
0
2

3
Q
9
0
0
2

1
Q
0
1
0
2

3
Q
0
1
0
2

1
Q
1
1
0
2

3
Q
1
1
0
2

1
Q
2
1
0
2

3
Q
2
1
0
2

1
Q
3
1
0
2

3
Q
3
1
0
2

1
Q
4
1
0
2

Other Investments

Portfolio - equity

Portfolio Debt: GG

Other Investment: GG

Portfolio Equity: GG

Portfolio Debt: GG

Other Sectors 

Other Sectors 

25

20

15

10

5

0

-5

-10

0

-5

-10

-15

-20

-25

10

5

0

-5

-10

-15

-20

1
Q
6
0
0
2

3
Q
6
0
0
2

1
Q
7
0
0
2

3
Q
7
0
0
2

1
Q
8
0
0
2

3
Q
8
0
0
2

1
Q
9
0
0
2

3
Q
9
0
0
2

1
Q
0
1
0
2

3
Q
0
1
0
2

1
Q
1
1
0
2

3
Q
1
1
0
2

1
Q
2
1
0
2

3
Q
2
1
0
2

1
Q
3
1
0
2

3
Q
3
1
0
2

1
Q
4
1
0
2

Direct Investment: OS

Other Investment: OS

Portfolio Equity: OS

Portfolio Debt: OS

Monetary Financial Institutions 

1
Q
6
0
0
2

3
Q
6
0
0
2

1
Q
7
0
0
2

3
Q
7
0
0
2

1
Q
8
0
0
2

3
Q
8
0
0
2

1
Q
9
0
0
2

3
Q
9
0
0
2

1
Q
0
1
0
2

3
Q
0
1
0
2

1
Q
1
1
0
2

3
Q
1
1
0
2

1
Q
2
1
0
2

3
Q
2
1
0
2

1
Q
3
1
0
2

3
Q
3
1
0
2

1
Q
4
1
0
2

Direct Investment: MFI

Other Investment: MFI

Portfolio Equity: MFI

Portfolio Debt: MFI

Monetary Authorities 

1
Q
6
0
0
2

3
Q
6
0
0
2

1
Q
7
0
0
2

3
Q
7
0
0
2

1
Q
8
0
0
2

3
Q
8
0
0
2

1
Q
9
0
0
2

3
Q
9
0
0
2

1
Q
0
1
0
2

3
Q
0
1
0
2

1
Q
1
1
0
2

3
Q
1
1
0
2

1
Q
2
1
0
2

3
Q
2
1
0
2

1
Q
3
1
0
2

3
Q
3
1
0
2

1
Q
4
1
0
2

Direct Investment

Other Investments

Portfolio Equity: OS

Portfolio Debt: OS

Monetary Financial Institutions 

1
Q
6
0
0
2

3
Q
6
0
0
2

1
Q
7
0
0
2

3
Q
7
0
0
2

1
Q
8
0
0
2

3
Q
8
0
0
2

1
Q
9
0
0
2

3
Q
9
0
0
2

1
Q
0
1
0
2

3
Q
0
1
0
2

1
Q
1
1
0
2

3
Q
1
1
0
2

1
Q
2
1
0
2

3
Q
2
1
0
2

1
Q
3
1
0
2

3
Q
3
1
0
2

1
Q
4
1
0
2

Direct Investment

Other Investments

Portfolio Equity: MFI

Portfolio Debt: MFI

Monetary Authorities 

30

25

20

15

10

5

0

-5

-10

-15

1
Q
6
0
0
2

3
Q
6
0
0
2

1
Q
7
0
0
2

3
Q
7
0
0
2

1
Q
8
0
0
2

3
Q
8
0
0
2

1
Q
9
0
0
2

3
Q
9
0
0
2

1
Q
0
1
0
2

3
Q
0
1
0
2

1
Q
1
1
0
2

3
Q
1
1
0
2

1
Q
2
1
0
2

3
Q
2
1
0
2

1
Q
3
1
0
2

3
Q
3
1
0
2

1
Q
4
1
0
2

1
Q
6
0
0
2

3
Q
6
0
0
2

1
Q
7
0
0
2

3
Q
7
0
0
2

1
Q
8
0
0
2

3
Q
8
0
0
2

1
Q
9
0
0
2

3
Q
9
0
0
2

1
Q
0
1
0
2

3
Q
0
1
0
2

1
Q
1
1
0
2

3
Q
1
1
0
2

1
Q
2
1
0
2

3
Q
2
1
0
2

1
Q
3
1
0
2

3
Q
3
1
0
2

1
Q
4
1
0
2

Other Investments: MA

Portfolio Equity: MA

Portfolio Debt: MA

Other Investment: MA

Portfolio Debt: MA

Portfolio, debt, equity: MA

November 2014  235 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
25

20

15

10

5

0

-5

-10

20

15

10

5

0

-5

-10

-15

20

15

10

5

0

-5

-10

-15

-20

-25

-30

 Analysis of developments in EU capital flows in the global context 

Lithuania (in % of GDP) 

Flows 

Stocks 

General Government 

General Government 

0

-5

-10

-15

-20

-25

-30

-35

-40

1
Q
6
0
0
2

3
Q
6
0
0
2

1
Q
7
0
0
2

3
Q
7
0
0
2

1
Q
8
0
0
2

3
Q
8
0
0
2

1
Q
9
0
0
2

3
Q
9
0
0
2

1
Q
0
1
0
2

3
Q
0
1
0
2

1
Q
1
1
0
2

3
Q
1
1
0
2

1
Q
2
1
0
2

3
Q
2
1
0
2

1
Q
3
1
0
2

3
Q
3
1
0
2

1
Q
4
1
0
2

1
Q
6
0
0
2

3
Q
6
0
0
2

1
Q
7
0
0
2

3
Q
7
0
0
2

1
Q
8
0
0
2

3
Q
8
0
0
2

1
Q
9
0
0
2

3
Q
9
0
0
2

1
Q
0
1
0
2

3
Q
0
1
0
2

1
Q
1
1
0
2

3
Q
1
1
0
2

1
Q
2
1
0
2

3
Q
2
1
0
2

1
Q
3
1
0
2

3
Q
3
1
0
2

1
Q
4
1
0
2

Other Investments

Portfolio - equity

Portfolio Debt: GG

Other Investment: GG

Portfolio Equity: GG

Portfolio Debt: GG

Other Sectors 

Other Sectors 

10

5

0

-5

-10

-15

-20

10

5

0

-5

-10

-15

-20

-25

-30

-35

0,6

0,4

0,2

0

-0,2

-0,4

-0,6

-0,8

-1

-1,2

-1,4

-1,6

1
Q
6
0
0
2

3
Q
6
0
0
2

1
Q
7
0
0
2

3
Q
7
0
0
2

1
Q
8
0
0
2

3
Q
8
0
0
2

1
Q
9
0
0
2

3
Q
9
0
0
2

1
Q
0
1
0
2

3
Q
0
1
0
2

1
Q
1
1
0
2

3
Q
1
1
0
2

1
Q
2
1
0
2

3
Q
2
1
0
2

1
Q
3
1
0
2

3
Q
3
1
0
2

1
Q
4
1
0
2

Direct Investment: OS

Other Investment: OS

Portfolio Equity: OS

Portfolio Debt: OS

Monetary Financial Institutions 

1
Q
6
0
0
2

3
Q
6
0
0
2

1
Q
7
0
0
2

3
Q
7
0
0
2

1
Q
8
0
0
2

3
Q
8
0
0
2

1
Q
9
0
0
2

3
Q
9
0
0
2

1
Q
0
1
0
2

3
Q
0
1
0
2

1
Q
1
1
0
2

3
Q
1
1
0
2

1
Q
2
1
0
2

3
Q
2
1
0
2

1
Q
3
1
0
2

3
Q
3
1
0
2

1
Q
4
1
0
2

Direct Investment: MFI

Other Investment: MFI

Portfolio Equity: MFI

Portfolio Debt: MFI

Monetary Authorities 

1
Q
6
0
0
2

3
Q
6
0
0
2

1
Q
7
0
0
2

3
Q
7
0
0
2

1
Q
8
0
0
2

3
Q
8
0
0
2

1
Q
9
0
0
2

3
Q
9
0
0
2

1
Q
0
1
0
2

3
Q
0
1
0
2

1
Q
1
1
0
2

3
Q
1
1
0
2

1
Q
2
1
0
2

3
Q
2
1
0
2

1
Q
3
1
0
2

3
Q
3
1
0
2

1
Q
4
1
0
2

Direct Investment

Other Investments

Portfolio Equity: OS

Portfolio Debt: OS

Monetary Financial Institutions 

1
Q
6
0
0
2

3
Q
6
0
0
2

1
Q
7
0
0
2

3
Q
7
0
0
2

1
Q
8
0
0
2

3
Q
8
0
0
2

1
Q
9
0
0
2

3
Q
9
0
0
2

1
Q
0
1
0
2

3
Q
0
1
0
2

1
Q
1
1
0
2

3
Q
1
1
0
2

1
Q
2
1
0
2

3
Q
2
1
0
2

1
Q
3
1
0
2

3
Q
3
1
0
2

1
Q
4
1
0
2

Direct Investment

Other Investments

Portfolio Equity: MFI

Portfolio Debt: MFI

Monetary Authorities 

6

5

4

3

2

1

0

-1

-2

-3

-4

-5

1
Q
6
0
0
2

3
Q
6
0
0
2

1
Q
7
0
0
2

3
Q
7
0
0
2

1
Q
8
0
0
2

3
Q
8
0
0
2

1
Q
9
0
0
2

3
Q
9
0
0
2

1
Q
0
1
0
2

3
Q
0
1
0
2

1
Q
1
1
0
2

3
Q
1
1
0
2

1
Q
2
1
0
2

3
Q
2
1
0
2

1
Q
3
1
0
2

3
Q
3
1
0
2

1
Q
4
1
0
2

1
Q
6
0
0
2

3
Q
6
0
0
2

1
Q
7
0
0
2

3
Q
7
0
0
2

1
Q
8
0
0
2

3
Q
8
0
0
2

1
Q
9
0
0
2

3
Q
9
0
0
2

1
Q
0
1
0
2

3
Q
0
1
0
2

1
Q
1
1
0
2

3
Q
1
1
0
2

1
Q
2
1
0
2

3
Q
2
1
0
2

1
Q
3
1
0
2

3
Q
3
1
0
2

1
Q
4
1
0
2

Other Investments: MA

Portfolio Equity: MA

Portfolio Debt: MA

Other Investment: MA

Portfolio Debt: MA

Portfolio, debt, equity: MA

November 2014  236 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
20

15

10

5

0

-5

-10

1500

1000

500

0

-500

-1000

-1500

 Analysis of developments in EU capital flows in the global context 

Luxembourg (in % of GDP) 

Flows 

Stocks 

General Government 

General Government 

4

2

0

-2

-4

-6

-8

-10

-12

-14

1
Q
6
0
0
2

3
Q
6
0
0
2

1
Q
7
0
0
2

3
Q
7
0
0
2

1
Q
8
0
0
2

3
Q
8
0
0
2

1
Q
9
0
0
2

3
Q
9
0
0
2

1
Q
0
1
0
2

3
Q
0
1
0
2

1
Q
1
1
0
2

3
Q
1
1
0
2

1
Q
2
1
0
2

3
Q
2
1
0
2

1
Q
3
1
0
2

3
Q
3
1
0
2

1
Q
4
1
0
2

1
Q
6
0
0
2

3
Q
6
0
0
2

1
Q
7
0
0
2

3
Q
7
0
0
2

1
Q
8
0
0
2

3
Q
8
0
0
2

1
Q
9
0
0
2

3
Q
9
0
0
2

1
Q
0
1
0
2

3
Q
0
1
0
2

1
Q
1
1
0
2

3
Q
1
1
0
2

1
Q
2
1
0
2

3
Q
2
1
0
2

1
Q
3
1
0
2

3
Q
3
1
0
2

1
Q
4
1
0
2

Other Investments

Portfolio - equity

Portfolio Debt: GG

Other Investment: GG

Portfolio Equity: GG

Portfolio Debt: GG

Other Sectors 

Other Sectors 

3000

2000

1000

0

-1000

-2000

-3000

1500

1000

500

0

-500

-1000

-1500

1
Q
6
0
0
2

3
Q
6
0
0
2

1
Q
7
0
0
2

3
Q
7
0
0
2

1
Q
8
0
0
2

3
Q
8
0
0
2

1
Q
9
0
0
2

3
Q
9
0
0
2

1
Q
0
1
0
2

3
Q
0
1
0
2

1
Q
1
1
0
2

3
Q
1
1
0
2

1
Q
2
1
0
2

3
Q
2
1
0
2

1
Q
3
1
0
2

3
Q
3
1
0
2

1
Q
4
1
0
2

Direct Investment: OS

Other Investment: OS

Portfolio Equity: OS

Portfolio Debt: OS

Monetary Financial Institutions 

1
Q
6
0
0
2

3
Q
6
0
0
2

1
Q
7
0
0
2

3
Q
7
0
0
2

1
Q
8
0
0
2

3
Q
8
0
0
2

1
Q
9
0
0
2

3
Q
9
0
0
2

1
Q
0
1
0
2

3
Q
0
1
0
2

1
Q
1
1
0
2

3
Q
1
1
0
2

1
Q
2
1
0
2

3
Q
2
1
0
2

1
Q
3
1
0
2

3
Q
3
1
0
2

1
Q
4
1
0
2

Direct Investment: MFI

Other Investment: MFI

Portfolio Equity: MFI

Portfolio Debt: MFI

1
Q
6
0
0
2

3
Q
6
0
0
2

1
Q
7
0
0
2

3
Q
7
0
0
2

1
Q
8
0
0
2

3
Q
8
0
0
2

1
Q
9
0
0
2

3
Q
9
0
0
2

1
Q
0
1
0
2

3
Q
0
1
0
2

1
Q
1
1
0
2

3
Q
1
1
0
2

1
Q
2
1
0
2

3
Q
2
1
0
2

1
Q
3
1
0
2

3
Q
3
1
0
2

1
Q
4
1
0
2

Direct Investment

Other Investments

Portfolio Equity: OS

Portfolio Debt: OS

Monetary Financial Institutions 

600

400

200

0

-200

-400

-600

1
Q
6
0
0
2

3
Q
6
0
0
2

1
Q
7
0
0
2

3
Q
7
0
0
2

1
Q
8
0
0
2

3
Q
8
0
0
2

1
Q
9
0
0
2

3
Q
9
0
0
2

1
Q
0
1
0
2

3
Q
0
1
0
2

1
Q
1
1
0
2

3
Q
1
1
0
2

1
Q
2
1
0
2

3
Q
2
1
0
2

1
Q
3
1
0
2

3
Q
3
1
0
2

1
Q
4
1
0
2

Direct Investment

Other Investments

Portfolio Equity: MFI

Portfolio Debt: MFI

Monetary Authorities 

Monetary Authorities 

200

100

0

-100

-200

-300

-400

350

300

250

200

150

100

50

0

1
Q
6
0
0
2

3
Q
6
0
0
2

1
Q
7
0
0
2

3
Q
7
0
0
2

1
Q
8
0
0
2

3
Q
8
0
0
2

1
Q
9
0
0
2

3
Q
9
0
0
2

1
Q
0
1
0
2

3
Q
0
1
0
2

1
Q
1
1
0
2

3
Q
1
1
0
2

1
Q
2
1
0
2

3
Q
2
1
0
2

1
Q
3
1
0
2

3
Q
3
1
0
2

1
Q
4
1
0
2

1
Q
6
0
0
2

3
Q
6
0
0
2

1
Q
7
0
0
2

3
Q
7
0
0
2

1
Q
8
0
0
2

3
Q
8
0
0
2

1
Q
9
0
0
2

3
Q
9
0
0
2

1
Q
0
1
0
2

3
Q
0
1
0
2

1
Q
1
1
0
2

3
Q
1
1
0
2

1
Q
2
1
0
2

3
Q
2
1
0
2

1
Q
3
1
0
2

3
Q
3
1
0
2

1
Q
4
1
0
2

Other Investments: MA

Portfolio Equity: MA

Portfolio Debt: MA

Other Investment: MA

Portfolio Debt: MA

Portfolio, debt, equity: MA

November 2014  237 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
35

30

25

20

15

10

5

0

-5

-10

-15

-20

15

10

5

0

-5

-10

-15

40

30

20

10

0

-10

-20

-30

 Analysis of developments in EU capital flows in the global context 

Latvia (in % of GDP) 

Flows 

Stocks 

General Government 

General Government 

0

-5

-10

-15

-20

-25

-30

-35

1
Q
6
0
0
2

3
Q
6
0
0
2

1
Q
7
0
0
2

3
Q
7
0
0
2

1
Q
8
0
0
2

3
Q
8
0
0
2

1
Q
9
0
0
2

3
Q
9
0
0
2

1
Q
0
1
0
2

3
Q
0
1
0
2

1
Q
1
1
0
2

3
Q
1
1
0
2

1
Q
2
1
0
2

3
Q
2
1
0
2

1
Q
3
1
0
2

3
Q
3
1
0
2

1
Q
4
1
0
2

1
Q
6
0
0
2

3
Q
6
0
0
2

1
Q
7
0
0
2

3
Q
7
0
0
2

1
Q
8
0
0
2

3
Q
8
0
0
2

1
Q
9
0
0
2

3
Q
9
0
0
2

1
Q
0
1
0
2

3
Q
0
1
0
2

1
Q
1
1
0
2

3
Q
1
1
0
2

1
Q
2
1
0
2

3
Q
2
1
0
2

1
Q
3
1
0
2

3
Q
3
1
0
2

1
Q
4
1
0
2

Other Investments

Portfolio - equity

Portfolio Debt: GG

Other Investment: GG

Portfolio Equity: GG

Portfolio Debt: GG

Other Sectors 

Other Sectors 

10

5

0

-5

-10

-15

-20

-25

-30

20

10

0

-10

-20

-30

-40

-50

-60

-70

-80

10

8

6

4

2

0

-2

-4

1
Q
6
0
0
2

3
Q
6
0
0
2

1
Q
7
0
0
2

3
Q
7
0
0
2

1
Q
8
0
0
2

3
Q
8
0
0
2

1
Q
9
0
0
2

3
Q
9
0
0
2

1
Q
0
1
0
2

3
Q
0
1
0
2

1
Q
1
1
0
2

3
Q
1
1
0
2

1
Q
2
1
0
2

3
Q
2
1
0
2

1
Q
3
1
0
2

3
Q
3
1
0
2

1
Q
4
1
0
2

Direct Investment: OS

Other Investment: OS

Portfolio Equity: OS

Portfolio Debt: OS

Monetary Financial Institutions 

1
Q
6
0
0
2

3
Q
6
0
0
2

1
Q
7
0
0
2

3
Q
7
0
0
2

1
Q
8
0
0
2

3
Q
8
0
0
2

1
Q
9
0
0
2

3
Q
9
0
0
2

1
Q
0
1
0
2

3
Q
0
1
0
2

1
Q
1
1
0
2

3
Q
1
1
0
2

1
Q
2
1
0
2

3
Q
2
1
0
2

1
Q
3
1
0
2

3
Q
3
1
0
2

1
Q
4
1
0
2

Direct Investment: MFI

Other Investment: MFI

Portfolio Equity: MFI

Portfolio Debt: MFI

Monetary Authorities 

1
Q
6
0
0
2

3
Q
6
0
0
2

1
Q
7
0
0
2

3
Q
7
0
0
2

1
Q
8
0
0
2

3
Q
8
0
0
2

1
Q
9
0
0
2

3
Q
9
0
0
2

1
Q
0
1
0
2

3
Q
0
1
0
2

1
Q
1
1
0
2

3
Q
1
1
0
2

1
Q
2
1
0
2

3
Q
2
1
0
2

1
Q
3
1
0
2

3
Q
3
1
0
2

1
Q
4
1
0
2

Direct Investment

Other Investments

Portfolio Equity: OS

Portfolio Debt: OS

Monetary Financial Institutions 

1
Q
6
0
0
2

3
Q
6
0
0
2

1
Q
7
0
0
2

3
Q
7
0
0
2

1
Q
8
0
0
2

3
Q
8
0
0
2

1
Q
9
0
0
2

3
Q
9
0
0
2

1
Q
0
1
0
2

3
Q
0
1
0
2

1
Q
1
1
0
2

3
Q
1
1
0
2

1
Q
2
1
0
2

3
Q
2
1
0
2

1
Q
3
1
0
2

3
Q
3
1
0
2

1
Q
4
1
0
2

Direct Investment

Other Investments

Portfolio Equity: MFI

Portfolio Debt: MFI

Monetary Authorities 

30

25

20

15

10

5

0

-5

-10

-15

1
Q
6
0
0
2

3
Q
6
0
0
2

1
Q
7
0
0
2

3
Q
7
0
0
2

1
Q
8
0
0
2

3
Q
8
0
0
2

1
Q
9
0
0
2

3
Q
9
0
0
2

1
Q
0
1
0
2

3
Q
0
1
0
2

1
Q
1
1
0
2

3
Q
1
1
0
2

1
Q
2
1
0
2

3
Q
2
1
0
2

1
Q
3
1
0
2

3
Q
3
1
0
2

1
Q
4
1
0
2

1
Q
6
0
0
2

3
Q
6
0
0
2

1
Q
7
0
0
2

3
Q
7
0
0
2

1
Q
8
0
0
2

3
Q
8
0
0
2

1
Q
9
0
0
2

3
Q
9
0
0
2

1
Q
0
1
0
2

3
Q
0
1
0
2

1
Q
1
1
0
2

3
Q
1
1
0
2

1
Q
2
1
0
2

3
Q
2
1
0
2

1
Q
3
1
0
2

3
Q
3
1
0
2

1
Q
4
1
0
2

Other Investments: MA

Portfolio Equity: MA

Portfolio Debt: MA

Other Investment: MA

Portfolio Debt: MA

Portfolio, debt, equity: MA

November 2014  238 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
8

6

4

2

0

-2

-4

-6

-8

20

15

10

5

0

-5

-10

250

200

150

100

50

0

-50

-100

-150

-200

 Analysis of developments in EU capital flows in the global context 

Malta (in % of GDP) 

Flows 

Stocks 

General Government 

General Government 

0

-1

-2

-3

-4

-5

-6

-7

-8

-9

1
Q
6
0
0
2

3
Q
6
0
0
2

1
Q
7
0
0
2

3
Q
7
0
0
2

1
Q
8
0
0
2

3
Q
8
0
0
2

1
Q
9
0
0
2

3
Q
9
0
0
2

1
Q
0
1
0
2

3
Q
0
1
0
2

1
Q
1
1
0
2

3
Q
1
1
0
2

1
Q
2
1
0
2

3
Q
2
1
0
2

1
Q
3
1
0
2

3
Q
3
1
0
2

1
Q
4
1
0
2

1
Q
6
0
0
2

3
Q
6
0
0
2

1
Q
7
0
0
2

3
Q
7
0
0
2

1
Q
8
0
0
2

3
Q
8
0
0
2

1
Q
9
0
0
2

3
Q
9
0
0
2

1
Q
0
1
0
2

3
Q
0
1
0
2

1
Q
1
1
0
2

3
Q
1
1
0
2

1
Q
2
1
0
2

3
Q
2
1
0
2

1
Q
3
1
0
2

3
Q
3
1
0
2

1
Q
4
1
0
2

Other Investments

Portfolio - equity

Portfolio Debt: GG

Other Investment: GG

Portfolio Equity: GG

Portfolio Debt: GG

Other Sectors 

Other Sectors 

35

30

25

20

15

10

5

0

-5

-10

-15

300

250

200

150

100

50

0

-50

-100

-150

-200

40

30

20

10

0

-10

-20

1
Q
6
0
0
2

3
Q
6
0
0
2

1
Q
7
0
0
2

3
Q
7
0
0
2

1
Q
8
0
0
2

3
Q
8
0
0
2

1
Q
9
0
0
2

3
Q
9
0
0
2

1
Q
0
1
0
2

3
Q
0
1
0
2

1
Q
1
1
0
2

3
Q
1
1
0
2

1
Q
2
1
0
2

3
Q
2
1
0
2

1
Q
3
1
0
2

3
Q
3
1
0
2

1
Q
4
1
0
2

Direct Investment: OS

Other Investment: OS

Portfolio Equity: OS

Portfolio Debt: OS

Monetary Financial Institutions 

1
Q
6
0
0
2

3
Q
6
0
0
2

1
Q
7
0
0
2

3
Q
7
0
0
2

1
Q
8
0
0
2

3
Q
8
0
0
2

1
Q
9
0
0
2

3
Q
9
0
0
2

1
Q
0
1
0
2

3
Q
0
1
0
2

1
Q
1
1
0
2

3
Q
1
1
0
2

1
Q
2
1
0
2

3
Q
2
1
0
2

1
Q
3
1
0
2

3
Q
3
1
0
2

1
Q
4
1
0
2

Direct Investment: MFI

Other Investment: MFI

Portfolio Equity: MFI

Portfolio Debt: MFI

Monetary Authorities 

1
Q
6
0
0
2

3
Q
6
0
0
2

1
Q
7
0
0
2

3
Q
7
0
0
2

1
Q
8
0
0
2

3
Q
8
0
0
2

1
Q
9
0
0
2

3
Q
9
0
0
2

1
Q
0
1
0
2

3
Q
0
1
0
2

1
Q
1
1
0
2

3
Q
1
1
0
2

1
Q
2
1
0
2

3
Q
2
1
0
2

1
Q
3
1
0
2

3
Q
3
1
0
2

1
Q
4
1
0
2

Direct Investment

Other Investments

Portfolio Equity: OS

Portfolio Debt: OS

Monetary Financial Institutions 

1
Q
6
0
0
2

3
Q
6
0
0
2

1
Q
7
0
0
2

3
Q
7
0
0
2

1
Q
8
0
0
2

3
Q
8
0
0
2

1
Q
9
0
0
2

3
Q
9
0
0
2

1
Q
0
1
0
2

3
Q
0
1
0
2

1
Q
1
1
0
2

3
Q
1
1
0
2

1
Q
2
1
0
2

3
Q
2
1
0
2

1
Q
3
1
0
2

3
Q
3
1
0
2

1
Q
4
1
0
2

Direct Investment

Other Investments

Portfolio Equity: MFI

Portfolio Debt: MFI

Monetary Authorities 

100

80

60

40

20

0

-20

-40

-60

-80

1
Q
6
0
0
2

3
Q
6
0
0
2

1
Q
7
0
0
2

3
Q
7
0
0
2

1
Q
8
0
0
2

3
Q
8
0
0
2

1
Q
9
0
0
2

3
Q
9
0
0
2

1
Q
0
1
0
2

3
Q
0
1
0
2

1
Q
1
1
0
2

3
Q
1
1
0
2

1
Q
2
1
0
2

3
Q
2
1
0
2

1
Q
3
1
0
2

3
Q
3
1
0
2

1
Q
4
1
0
2

1
Q
6
0
0
2

3
Q
6
0
0
2

1
Q
7
0
0
2

3
Q
7
0
0
2

1
Q
8
0
0
2

3
Q
8
0
0
2

1
Q
9
0
0
2

3
Q
9
0
0
2

1
Q
0
1
0
2

3
Q
0
1
0
2

1
Q
1
1
0
2

3
Q
1
1
0
2

1
Q
2
1
0
2

3
Q
2
1
0
2

1
Q
3
1
0
2

3
Q
3
1
0
2

1
Q
4
1
0
2

Other Investments: MA

Portfolio Equity: MA

Portfolio Debt: MA

Other Investment: MA

Portfolio Debt: MA

Portfolio, debt, equity: MA

November 2014  239 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
1,2

1

0,8

0,6

0,4

0,2

0

1,2

1

0,8

0,6

0,4

0,2

0

1,2

1

0,8

0,6

0,4

0,2

0

 Analysis of developments in EU capital flows in the global context 

The Netherlands (in % of GDP) 

Flows 

Stocks 

General Government 

General Government 

5

0

-5

-10

-15

-20

-25

-30

-35

-40

-45

1
Q
6
0
0
2

3
Q
6
0
0
2

1
Q
7
0
0
2

3
Q
7
0
0
2

1
Q
8
0
0
2

3
Q
8
0
0
2

1
Q
9
0
0
2

3
Q
9
0
0
2

1
Q
0
1
0
2

3
Q
0
1
0
2

1
Q
1
1
0
2

3
Q
1
1
0
2

1
Q
2
1
0
2

3
Q
2
1
0
2

1
Q
3
1
0
2

3
Q
3
1
0
2

1
Q
4
1
0
2

1
Q
6
0
0
2

3
Q
6
0
0
2

1
Q
7
0
0
2

3
Q
7
0
0
2

1
Q
8
0
0
2

3
Q
8
0
0
2

1
Q
9
0
0
2

3
Q
9
0
0
2

1
Q
0
1
0
2

3
Q
0
1
0
2

1
Q
1
1
0
2

3
Q
1
1
0
2

1
Q
2
1
0
2

3
Q
2
1
0
2

1
Q
3
1
0
2

3
Q
3
1
0
2

1
Q
4
1
0
2

Other Investments

Portfolio - equity

Portfolio Debt: GG

Other Investment: GG

Portfolio Equity: GG

Portfolio Debt: GG

Other Sectors 

Other Sectors 

120

100

80

60

40

20

0

-20

-40

20

0

-20

-40

-60

-80

-100

35

30

25

20

15

10

5

0

-5

-10

1
Q
6
0
0
2

3
Q
6
0
0
2

1
Q
7
0
0
2

3
Q
7
0
0
2

1
Q
8
0
0
2

3
Q
8
0
0
2

1
Q
9
0
0
2

3
Q
9
0
0
2

1
Q
0
1
0
2

3
Q
0
1
0
2

1
Q
1
1
0
2

3
Q
1
1
0
2

1
Q
2
1
0
2

3
Q
2
1
0
2

1
Q
3
1
0
2

3
Q
3
1
0
2

1
Q
4
1
0
2

Direct Investment: OS

Other Investment: OS

Portfolio Equity: OS

Portfolio Debt: OS

Monetary Financial Institutions 

1
Q
6
0
0
2

3
Q
6
0
0
2

1
Q
7
0
0
2

3
Q
7
0
0
2

1
Q
8
0
0
2

3
Q
8
0
0
2

1
Q
9
0
0
2

3
Q
9
0
0
2

1
Q
0
1
0
2

3
Q
0
1
0
2

1
Q
1
1
0
2

3
Q
1
1
0
2

1
Q
2
1
0
2

3
Q
2
1
0
2

1
Q
3
1
0
2

3
Q
3
1
0
2

1
Q
4
1
0
2

Direct Investment: MFI

Other Investment: MFI

Portfolio Equity: MFI

Portfolio Debt: MFI

Monetary Authorities 

1
Q
6
0
0
2

3
Q
6
0
0
2

1
Q
7
0
0
2

3
Q
7
0
0
2

1
Q
8
0
0
2

3
Q
8
0
0
2

1
Q
9
0
0
2

3
Q
9
0
0
2

1
Q
0
1
0
2

3
Q
0
1
0
2

1
Q
1
1
0
2

3
Q
1
1
0
2

1
Q
2
1
0
2

3
Q
2
1
0
2

1
Q
3
1
0
2

3
Q
3
1
0
2

1
Q
4
1
0
2

Direct Investment

Other Investments

Portfolio Equity: OS

Portfolio Debt: OS

Monetary Financial Institutions 

1
Q
6
0
0
2

3
Q
6
0
0
2

1
Q
7
0
0
2

3
Q
7
0
0
2

1
Q
8
0
0
2

3
Q
8
0
0
2

1
Q
9
0
0
2

3
Q
9
0
0
2

1
Q
0
1
0
2

3
Q
0
1
0
2

1
Q
1
1
0
2

3
Q
1
1
0
2

1
Q
2
1
0
2

3
Q
2
1
0
2

1
Q
3
1
0
2

3
Q
3
1
0
2

1
Q
4
1
0
2

Direct Investment

Other Investments

Portfolio Equity: MFI

Portfolio Debt: MFI

Monetary Authorities 

1,2

1

0,8

0,6

0,4

0,2

0

1
Q
6
0
0
2

3
Q
6
0
0
2

1
Q
7
0
0
2

3
Q
7
0
0
2

1
Q
8
0
0
2

3
Q
8
0
0
2

1
Q
9
0
0
2

3
Q
9
0
0
2

1
Q
0
1
0
2

3
Q
0
1
0
2

1
Q
1
1
0
2

3
Q
1
1
0
2

1
Q
2
1
0
2

3
Q
2
1
0
2

1
Q
3
1
0
2

3
Q
3
1
0
2

1
Q
4
1
0
2

1
Q
6
0
0
2

3
Q
6
0
0
2

1
Q
7
0
0
2

3
Q
7
0
0
2

1
Q
8
0
0
2

3
Q
8
0
0
2

1
Q
9
0
0
2

3
Q
9
0
0
2

1
Q
0
1
0
2

3
Q
0
1
0
2

1
Q
1
1
0
2

3
Q
1
1
0
2

1
Q
2
1
0
2

3
Q
2
1
0
2

1
Q
3
1
0
2

3
Q
3
1
0
2

1
Q
4
1
0
2

Other Investments: MA

Portfolio Equity: MA

Portfolio Debt: MA

Other Investment: MA

Portfolio Debt: MA

Portfolio, debt, equity: MA

November 2014  240 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
10

8

6

4

2

0

-2

-4

10

8

6

4

2

0

-2

-4

-6

12

10

8

6

4

2

0

-2

-4

-6

-8

 Analysis of developments in EU capital flows in the global context 

Poland (in % of GDP) 

Flows 

Stocks 

General Government 

General Government 

0

-5

-10

-15

-20

-25

-30

-35

1
Q
6
0
0
2

3
Q
6
0
0
2

1
Q
7
0
0
2

3
Q
7
0
0
2

1
Q
8
0
0
2

3
Q
8
0
0
2

1
Q
9
0
0
2

3
Q
9
0
0
2

1
Q
0
1
0
2

3
Q
0
1
0
2

1
Q
1
1
0
2

3
Q
1
1
0
2

1
Q
2
1
0
2

3
Q
2
1
0
2

1
Q
3
1
0
2

3
Q
3
1
0
2

1
Q
4
1
0
2

1
Q
6
0
0
2

3
Q
6
0
0
2

1
Q
7
0
0
2

3
Q
7
0
0
2

1
Q
8
0
0
2

3
Q
8
0
0
2

1
Q
9
0
0
2

3
Q
9
0
0
2

1
Q
0
1
0
2

3
Q
0
1
0
2

1
Q
1
1
0
2

3
Q
1
1
0
2

1
Q
2
1
0
2

3
Q
2
1
0
2

1
Q
3
1
0
2

3
Q
3
1
0
2

1
Q
4
1
0
2

Other Investments

Portfolio - equity

Portfolio Debt: GG

Other Investment: GG

Portfolio Equity: GG

Portfolio Debt: GG

Other Sectors 

Other Sectors 

5

0

-5

-10

-15

-20

-25

10

5

0

-5

-10

-15

-20

-25

0

-0,5

-1

-1,5

-2

-2,5

-3

-3,5

-4

1
Q
6
0
0
2

3
Q
6
0
0
2

1
Q
7
0
0
2

3
Q
7
0
0
2

1
Q
8
0
0
2

3
Q
8
0
0
2

1
Q
9
0
0
2

3
Q
9
0
0
2

1
Q
0
1
0
2

3
Q
0
1
0
2

1
Q
1
1
0
2

3
Q
1
1
0
2

1
Q
2
1
0
2

3
Q
2
1
0
2

1
Q
3
1
0
2

3
Q
3
1
0
2

1
Q
4
1
0
2

Direct Investment: OS

Other Investment: OS

Portfolio Equity: OS

Portfolio Debt: OS

Monetary Financial Institutions 

1
Q
6
0
0
2

3
Q
6
0
0
2

1
Q
7
0
0
2

3
Q
7
0
0
2

1
Q
8
0
0
2

3
Q
8
0
0
2

1
Q
9
0
0
2

3
Q
9
0
0
2

1
Q
0
1
0
2

3
Q
0
1
0
2

1
Q
1
1
0
2

3
Q
1
1
0
2

1
Q
2
1
0
2

3
Q
2
1
0
2

1
Q
3
1
0
2

3
Q
3
1
0
2

1
Q
4
1
0
2

Direct Investment: MFI

Other Investment: MFI

Portfolio Equity: MFI

Portfolio Debt: MFI

Monetary Authorities 

1
Q
6
0
0
2

3
Q
6
0
0
2

1
Q
7
0
0
2

3
Q
7
0
0
2

1
Q
8
0
0
2

3
Q
8
0
0
2

1
Q
9
0
0
2

3
Q
9
0
0
2

1
Q
0
1
0
2

3
Q
0
1
0
2

1
Q
1
1
0
2

3
Q
1
1
0
2

1
Q
2
1
0
2

3
Q
2
1
0
2

1
Q
3
1
0
2

3
Q
3
1
0
2

1
Q
4
1
0
2

Direct Investment

Other Investments

Portfolio Equity: OS

Portfolio Debt: OS

Monetary Financial Institutions 

1
Q
6
0
0
2

3
Q
6
0
0
2

1
Q
7
0
0
2

3
Q
7
0
0
2

1
Q
8
0
0
2

3
Q
8
0
0
2

1
Q
9
0
0
2

3
Q
9
0
0
2

1
Q
0
1
0
2

3
Q
0
1
0
2

1
Q
1
1
0
2

3
Q
1
1
0
2

1
Q
2
1
0
2

3
Q
2
1
0
2

1
Q
3
1
0
2

3
Q
3
1
0
2

1
Q
4
1
0
2

Direct Investment

Other Investments

Portfolio Equity: MFI

Portfolio Debt: MFI

Monetary Authorities 

10

8

6

4

2

0

-2

-4

-6

-8

-10

1
Q
6
0
0
2

3
Q
6
0
0
2

1
Q
7
0
0
2

3
Q
7
0
0
2

1
Q
8
0
0
2

3
Q
8
0
0
2

1
Q
9
0
0
2

3
Q
9
0
0
2

1
Q
0
1
0
2

3
Q
0
1
0
2

1
Q
1
1
0
2

3
Q
1
1
0
2

1
Q
2
1
0
2

3
Q
2
1
0
2

1
Q
3
1
0
2

3
Q
3
1
0
2

1
Q
4
1
0
2

1
Q
6
0
0
2

3
Q
6
0
0
2

1
Q
7
0
0
2

3
Q
7
0
0
2

1
Q
8
0
0
2

3
Q
8
0
0
2

1
Q
9
0
0
2

3
Q
9
0
0
2

1
Q
0
1
0
2

3
Q
0
1
0
2

1
Q
1
1
0
2

3
Q
1
1
0
2

1
Q
2
1
0
2

3
Q
2
1
0
2

1
Q
3
1
0
2

3
Q
3
1
0
2

1
Q
4
1
0
2

Other Investments: MA

Portfolio Equity: MA

Portfolio Debt: MA

Other Investment: MA

Portfolio Debt: MA

Portfolio, debt, equity: MA

November 2014  241 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
50

40

30

20

10

0

-10

-20

-30

25

20

15

10

5

0

-5

-10

-15

-20

30

20

10

0

-10

-20

-30

-40

-50

 Analysis of developments in EU capital flows in the global context 

Portugal (in % of GDP) 

Flows 

Stocks 

General Government 

General Government 

0

-10

-20

-30

-40

-50

-60

-70

-80

-90

-100

1
Q
6
0
0
2

3
Q
6
0
0
2

1
Q
7
0
0
2

3
Q
7
0
0
2

1
Q
8
0
0
2

3
Q
8
0
0
2

1
Q
9
0
0
2

3
Q
9
0
0
2

1
Q
0
1
0
2

3
Q
0
1
0
2

1
Q
1
1
0
2

3
Q
1
1
0
2

1
Q
2
1
0
2

3
Q
2
1
0
2

1
Q
3
1
0
2

3
Q
3
1
0
2

1
Q
4
1
0
2

1
Q
6
0
0
2

3
Q
6
0
0
2

1
Q
7
0
0
2

3
Q
7
0
0
2

1
Q
8
0
0
2

3
Q
8
0
0
2

1
Q
9
0
0
2

3
Q
9
0
0
2

1
Q
0
1
0
2

3
Q
0
1
0
2

1
Q
1
1
0
2

3
Q
1
1
0
2

1
Q
2
1
0
2

3
Q
2
1
0
2

1
Q
3
1
0
2

3
Q
3
1
0
2

1
Q
4
1
0
2

Other Investments

Portfolio - equity

Portfolio Debt: GG

Other Investment: GG

Portfolio Equity: GG

Portfolio Debt: GG

Other Sectors 

Other Sectors 

50

40

30

20

10

0

-10

-20

-30

20

10

0

-10

-20

-30

-40

-50

-60

-70

20

10

0

-10

-20

-30

-40

-50

1
Q
6
0
0
2

3
Q
6
0
0
2

1
Q
7
0
0
2

3
Q
7
0
0
2

1
Q
8
0
0
2

3
Q
8
0
0
2

1
Q
9
0
0
2

3
Q
9
0
0
2

1
Q
0
1
0
2

3
Q
0
1
0
2

1
Q
1
1
0
2

3
Q
1
1
0
2

1
Q
2
1
0
2

3
Q
2
1
0
2

1
Q
3
1
0
2

3
Q
3
1
0
2

1
Q
4
1
0
2

Direct Investment: OS

Other Investment: OS

Portfolio Equity: OS

Portfolio Debt: OS

Monetary Financial Institutions 

1
Q
6
0
0
2

3
Q
6
0
0
2

1
Q
7
0
0
2

3
Q
7
0
0
2

1
Q
8
0
0
2

3
Q
8
0
0
2

1
Q
9
0
0
2

3
Q
9
0
0
2

1
Q
0
1
0
2

3
Q
0
1
0
2

1
Q
1
1
0
2

3
Q
1
1
0
2

1
Q
2
1
0
2

3
Q
2
1
0
2

1
Q
3
1
0
2

3
Q
3
1
0
2

1
Q
4
1
0
2

Direct Investment: MFI

Other Investment: MFI

Portfolio Equity: MFI

Portfolio Debt: MFI

Monetary Authorities 

1
Q
6
0
0
2

3
Q
6
0
0
2

1
Q
7
0
0
2

3
Q
7
0
0
2

1
Q
8
0
0
2

3
Q
8
0
0
2

1
Q
9
0
0
2

3
Q
9
0
0
2

1
Q
0
1
0
2

3
Q
0
1
0
2

1
Q
1
1
0
2

3
Q
1
1
0
2

1
Q
2
1
0
2

3
Q
2
1
0
2

1
Q
3
1
0
2

3
Q
3
1
0
2

1
Q
4
1
0
2

Direct Investment

Other Investments

Portfolio Equity: OS

Portfolio Debt: OS

Monetary Financial Institutions 

1
Q
6
0
0
2

3
Q
6
0
0
2

1
Q
7
0
0
2

3
Q
7
0
0
2

1
Q
8
0
0
2

3
Q
8
0
0
2

1
Q
9
0
0
2

3
Q
9
0
0
2

1
Q
0
1
0
2

3
Q
0
1
0
2

1
Q
1
1
0
2

3
Q
1
1
0
2

1
Q
2
1
0
2

3
Q
2
1
0
2

1
Q
3
1
0
2

3
Q
3
1
0
2

1
Q
4
1
0
2

Direct Investment

Other Investments

Portfolio Equity: MFI

Portfolio Debt: MFI

Monetary Authorities 

80

60

40

20

0

-20

-40

1
Q
6
0
0
2

3
Q
6
0
0
2

1
Q
7
0
0
2

3
Q
7
0
0
2

1
Q
8
0
0
2

3
Q
8
0
0
2

1
Q
9
0
0
2

3
Q
9
0
0
2

1
Q
0
1
0
2

3
Q
0
1
0
2

1
Q
1
1
0
2

3
Q
1
1
0
2

1
Q
2
1
0
2

3
Q
2
1
0
2

1
Q
3
1
0
2

3
Q
3
1
0
2

1
Q
4
1
0
2

1
Q
6
0
0
2

3
Q
6
0
0
2

1
Q
7
0
0
2

3
Q
7
0
0
2

1
Q
8
0
0
2

3
Q
8
0
0
2

1
Q
9
0
0
2

3
Q
9
0
0
2

1
Q
0
1
0
2

3
Q
0
1
0
2

1
Q
1
1
0
2

3
Q
1
1
0
2

1
Q
2
1
0
2

3
Q
2
1
0
2

1
Q
3
1
0
2

3
Q
3
1
0
2

1
Q
4
1
0
2

Other Investments: MA

Portfolio Equity: MA

Portfolio Debt: MA

Other Investment: MA

Portfolio Debt: MA

Portfolio, debt, equity: MA

November 2014  242 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
14

12

10

8

6

4

2

0

-2

-4

-6

14

12

10

8

6

4

2

0

-2

-4

-6

20

15

10

5

0

-5

-10

 Analysis of developments in EU capital flows in the global context 

Romania (in % of GDP) 

Flows 

Stocks 

General Government 

General Government 

0

-5

-10

-15

-20

-25

1
Q
6
0
0
2

3
Q
6
0
0
2

1
Q
7
0
0
2

3
Q
7
0
0
2

1
Q
8
0
0
2

3
Q
8
0
0
2

1
Q
9
0
0
2

3
Q
9
0
0
2

1
Q
0
1
0
2

3
Q
0
1
0
2

1
Q
1
1
0
2

3
Q
1
1
0
2

1
Q
2
1
0
2

3
Q
2
1
0
2

1
Q
3
1
0
2

3
Q
3
1
0
2

1
Q
4
1
0
2

1
Q
6
0
0
2

3
Q
6
0
0
2

1
Q
7
0
0
2

3
Q
7
0
0
2

1
Q
8
0
0
2

3
Q
8
0
0
2

1
Q
9
0
0
2

3
Q
9
0
0
2

1
Q
0
1
0
2

3
Q
0
1
0
2

1
Q
1
1
0
2

3
Q
1
1
0
2

1
Q
2
1
0
2

3
Q
2
1
0
2

1
Q
3
1
0
2

3
Q
3
1
0
2

1
Q
4
1
0
2

Other Investments

Portfolio - equity

Portfolio Debt: GG

Other Investment: GG

Portfolio Equity: GG

Portfolio Debt: GG

Other Sectors 

Other Sectors 

5

0

-5

-10

-15

-20

-25

-30

-35

5

0

-5

-10

-15

-20

-25

0

-1

-2

-3

-4

-5

-6

-7

-8

-9

1
Q
6
0
0
2

3
Q
6
0
0
2

1
Q
7
0
0
2

3
Q
7
0
0
2

1
Q
8
0
0
2

3
Q
8
0
0
2

1
Q
9
0
0
2

3
Q
9
0
0
2

1
Q
0
1
0
2

3
Q
0
1
0
2

1
Q
1
1
0
2

3
Q
1
1
0
2

1
Q
2
1
0
2

3
Q
2
1
0
2

1
Q
3
1
0
2

3
Q
3
1
0
2

1
Q
4
1
0
2

Direct Investment: OS

Other Investment: OS

Portfolio Equity: OS

Portfolio Debt: OS

Monetary Financial Institutions 

1
Q
6
0
0
2

3
Q
6
0
0
2

1
Q
7
0
0
2

3
Q
7
0
0
2

1
Q
8
0
0
2

3
Q
8
0
0
2

1
Q
9
0
0
2

3
Q
9
0
0
2

1
Q
0
1
0
2

3
Q
0
1
0
2

1
Q
1
1
0
2

3
Q
1
1
0
2

1
Q
2
1
0
2

3
Q
2
1
0
2

1
Q
3
1
0
2

3
Q
3
1
0
2

1
Q
4
1
0
2

Direct Investment: MFI

Other Investment: MFI

Portfolio Equity: MFI

Portfolio Debt: MFI

Monetary Authorities 

1
Q
6
0
0
2

3
Q
6
0
0
2

1
Q
7
0
0
2

3
Q
7
0
0
2

1
Q
8
0
0
2

3
Q
8
0
0
2

1
Q
9
0
0
2

3
Q
9
0
0
2

1
Q
0
1
0
2

3
Q
0
1
0
2

1
Q
1
1
0
2

3
Q
1
1
0
2

1
Q
2
1
0
2

3
Q
2
1
0
2

1
Q
3
1
0
2

3
Q
3
1
0
2

1
Q
4
1
0
2

Direct Investment

Other Investments

Portfolio Equity: OS

Portfolio Debt: OS

Monetary Financial Institutions 

1
Q
6
0
0
2

3
Q
6
0
0
2

1
Q
7
0
0
2

3
Q
7
0
0
2

1
Q
8
0
0
2

3
Q
8
0
0
2

1
Q
9
0
0
2

3
Q
9
0
0
2

1
Q
0
1
0
2

3
Q
0
1
0
2

1
Q
1
1
0
2

3
Q
1
1
0
2

1
Q
2
1
0
2

3
Q
2
1
0
2

1
Q
3
1
0
2

3
Q
3
1
0
2

1
Q
4
1
0
2

Direct Investment

Other Investments

Portfolio Equity: MFI

Portfolio Debt: MFI

Monetary Authorities 

14

12

10

8

6

4

2

0

-2

-4

1
Q
6
0
0
2

3
Q
6
0
0
2

1
Q
7
0
0
2

3
Q
7
0
0
2

1
Q
8
0
0
2

3
Q
8
0
0
2

1
Q
9
0
0
2

3
Q
9
0
0
2

1
Q
0
1
0
2

3
Q
0
1
0
2

1
Q
1
1
0
2

3
Q
1
1
0
2

1
Q
2
1
0
2

3
Q
2
1
0
2

1
Q
3
1
0
2

3
Q
3
1
0
2

1
Q
4
1
0
2

1
Q
6
0
0
2

3
Q
6
0
0
2

1
Q
7
0
0
2

3
Q
7
0
0
2

1
Q
8
0
0
2

3
Q
8
0
0
2

1
Q
9
0
0
2

3
Q
9
0
0
2

1
Q
0
1
0
2

3
Q
0
1
0
2

1
Q
1
1
0
2

3
Q
1
1
0
2

1
Q
2
1
0
2

3
Q
2
1
0
2

1
Q
3
1
0
2

3
Q
3
1
0
2

1
Q
4
1
0
2

Other Investments: MA

Portfolio Equity: MA

Portfolio Debt: MA

Other Investment: MA

Portfolio Debt: MA

Portfolio, debt, equity: MA

November 2014  243 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
20

15

10

5

0

-5

-10

-15

15

10

5

0

-5

-10

-15

-20

30

20

10

0

-10

-20

-30

-40

-50

 Analysis of developments in EU capital flows in the global context 

Sweden (in % of GDP) 

Flows 

Stocks 

General Government 

General Government 

5

0

-5

-10

-15

-20

1
Q
6
0
0
2

3
Q
6
0
0
2

1
Q
7
0
0
2

3
Q
7
0
0
2

1
Q
8
0
0
2

3
Q
8
0
0
2

1
Q
9
0
0
2

3
Q
9
0
0
2

1
Q
0
1
0
2

3
Q
0
1
0
2

1
Q
1
1
0
2

3
Q
1
1
0
2

1
Q
2
1
0
2

3
Q
2
1
0
2

1
Q
3
1
0
2

3
Q
3
1
0
2

1
Q
4
1
0
2

1
Q
6
0
0
2

3
Q
6
0
0
2

1
Q
7
0
0
2

3
Q
7
0
0
2

1
Q
8
0
0
2

3
Q
8
0
0
2

1
Q
9
0
0
2

3
Q
9
0
0
2

1
Q
0
1
0
2

3
Q
0
1
0
2

1
Q
1
1
0
2

3
Q
1
1
0
2

1
Q
2
1
0
2

3
Q
2
1
0
2

1
Q
3
1
0
2

3
Q
3
1
0
2

1
Q
4
1
0
2

Other Investments

Portfolio - equity

Portfolio Debt: GG

Other Investment: GG

Portfolio Equity: GG

Portfolio Debt: GG

Other Sectors 

Other Sectors 

30

20

10

0

-10

-20

-30

-40

40

20

0

-20

-40

-60

-80

1

0

-1

-2

-3

-4

-5

-6

-7

-8

1
Q
6
0
0
2

3
Q
6
0
0
2

1
Q
7
0
0
2

3
Q
7
0
0
2

1
Q
8
0
0
2

3
Q
8
0
0
2

1
Q
9
0
0
2

3
Q
9
0
0
2

1
Q
0
1
0
2

3
Q
0
1
0
2

1
Q
1
1
0
2

3
Q
1
1
0
2

1
Q
2
1
0
2

3
Q
2
1
0
2

1
Q
3
1
0
2

3
Q
3
1
0
2

1
Q
4
1
0
2

Direct Investment: OS

Other Investment: OS

Portfolio Equity: OS

Portfolio Debt: OS

Monetary Financial Institutions 

1
Q
6
0
0
2

3
Q
6
0
0
2

1
Q
7
0
0
2

3
Q
7
0
0
2

1
Q
8
0
0
2

3
Q
8
0
0
2

1
Q
9
0
0
2

3
Q
9
0
0
2

1
Q
0
1
0
2

3
Q
0
1
0
2

1
Q
1
1
0
2

3
Q
1
1
0
2

1
Q
2
1
0
2

3
Q
2
1
0
2

1
Q
3
1
0
2

3
Q
3
1
0
2

1
Q
4
1
0
2

Direct Investment: MFI

Other Investment: MFI

Portfolio Equity: MFI

Portfolio Debt: MFI

Monetary Authorities 

1
Q
6
0
0
2

3
Q
6
0
0
2

1
Q
7
0
0
2

3
Q
7
0
0
2

1
Q
8
0
0
2

3
Q
8
0
0
2

1
Q
9
0
0
2

3
Q
9
0
0
2

1
Q
0
1
0
2

3
Q
0
1
0
2

1
Q
1
1
0
2

3
Q
1
1
0
2

1
Q
2
1
0
2

3
Q
2
1
0
2

1
Q
3
1
0
2

3
Q
3
1
0
2

1
Q
4
1
0
2

Direct Investment

Other Investments

Portfolio Equity: OS

Portfolio Debt: OS

Monetary Financial Institutions 

1
Q
6
0
0
2

3
Q
6
0
0
2

1
Q
7
0
0
2

3
Q
7
0
0
2

1
Q
8
0
0
2

3
Q
8
0
0
2

1
Q
9
0
0
2

3
Q
9
0
0
2

1
Q
0
1
0
2

3
Q
0
1
0
2

1
Q
1
1
0
2

3
Q
1
1
0
2

1
Q
2
1
0
2

3
Q
2
1
0
2

1
Q
3
1
0
2

3
Q
3
1
0
2

1
Q
4
1
0
2

Direct Investment

Other Investments

Portfolio Equity: MFI

Portfolio Debt: MFI

Monetary Authorities 

20

15

10

5

0

-5

-10

-15

-20

1
Q
6
0
0
2

3
Q
6
0
0
2

1
Q
7
0
0
2

3
Q
7
0
0
2

1
Q
8
0
0
2

3
Q
8
0
0
2

1
Q
9
0
0
2

3
Q
9
0
0
2

1
Q
0
1
0
2

3
Q
0
1
0
2

1
Q
1
1
0
2

3
Q
1
1
0
2

1
Q
2
1
0
2

3
Q
2
1
0
2

1
Q
3
1
0
2

3
Q
3
1
0
2

1
Q
4
1
0
2

1
Q
6
0
0
2

3
Q
6
0
0
2

1
Q
7
0
0
2

3
Q
7
0
0
2

1
Q
8
0
0
2

3
Q
8
0
0
2

1
Q
9
0
0
2

3
Q
9
0
0
2

1
Q
0
1
0
2

3
Q
0
1
0
2

1
Q
1
1
0
2

3
Q
1
1
0
2

1
Q
2
1
0
2

3
Q
2
1
0
2

1
Q
3
1
0
2

3
Q
3
1
0
2

1
Q
4
1
0
2

Other Investments: MA

Portfolio Equity: MA

Portfolio Debt: MA

Other Investment: MA

Portfolio Debt: MA

Portfolio, debt, equity: MA

November 2014  244 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
40

35

30

25

20

15

10

5

0

-5

-10

6

4

2

0

-2

-4

-6

-8

-10

-12

20

10

0

-10

-20

-30

-40

 Analysis of developments in EU capital flows in the global context 

Slovenia (in % of GDP) 

Flows 

Stocks 

General Government 

General Government 

10

0

-10

-20

-30

-40

-50

-60

1
Q
6
0
0
2

3
Q
6
0
0
2

1
Q
7
0
0
2

3
Q
7
0
0
2

1
Q
8
0
0
2

3
Q
8
0
0
2

1
Q
9
0
0
2

3
Q
9
0
0
2

1
Q
0
1
0
2

3
Q
0
1
0
2

1
Q
1
1
0
2

3
Q
1
1
0
2

1
Q
2
1
0
2

3
Q
2
1
0
2

1
Q
3
1
0
2

3
Q
3
1
0
2

1
Q
4
1
0
2

1
Q
6
0
0
2

3
Q
6
0
0
2

1
Q
7
0
0
2

3
Q
7
0
0
2

1
Q
8
0
0
2

3
Q
8
0
0
2

1
Q
9
0
0
2

3
Q
9
0
0
2

1
Q
0
1
0
2

3
Q
0
1
0
2

1
Q
1
1
0
2

3
Q
1
1
0
2

1
Q
2
1
0
2

3
Q
2
1
0
2

1
Q
3
1
0
2

3
Q
3
1
0
2

1
Q
4
1
0
2

Other Investments

Portfolio - equity

Portfolio Debt: GG

Other Investment: GG

Portfolio Equity: GG

Portfolio Debt: GG

Other Sectors 

Other Sectors 

15

10

5

0

-5

-10

-15

20

10

0

-10

-20

-30

-40

15

10

5

0

-5

-10

-15

-20

1
Q
6
0
0
2

3
Q
6
0
0
2

1
Q
7
0
0
2

3
Q
7
0
0
2

1
Q
8
0
0
2

3
Q
8
0
0
2

1
Q
9
0
0
2

3
Q
9
0
0
2

1
Q
0
1
0
2

3
Q
0
1
0
2

1
Q
1
1
0
2

3
Q
1
1
0
2

1
Q
2
1
0
2

3
Q
2
1
0
2

1
Q
3
1
0
2

3
Q
3
1
0
2

1
Q
4
1
0
2

Direct Investment: OS

Other Investment: OS

Portfolio Equity: OS

Portfolio Debt: OS

Monetary Financial Institutions 

1
Q
6
0
0
2

3
Q
6
0
0
2

1
Q
7
0
0
2

3
Q
7
0
0
2

1
Q
8
0
0
2

3
Q
8
0
0
2

1
Q
9
0
0
2

3
Q
9
0
0
2

1
Q
0
1
0
2

3
Q
0
1
0
2

1
Q
1
1
0
2

3
Q
1
1
0
2

1
Q
2
1
0
2

3
Q
2
1
0
2

1
Q
3
1
0
2

3
Q
3
1
0
2

1
Q
4
1
0
2

Direct Investment: MFI

Other Investment: MFI

Portfolio Equity: MFI

Portfolio Debt: MFI

Monetary Authorities 

1
Q
6
0
0
2

3
Q
6
0
0
2

1
Q
7
0
0
2

3
Q
7
0
0
2

1
Q
8
0
0
2

3
Q
8
0
0
2

1
Q
9
0
0
2

3
Q
9
0
0
2

1
Q
0
1
0
2

3
Q
0
1
0
2

1
Q
1
1
0
2

3
Q
1
1
0
2

1
Q
2
1
0
2

3
Q
2
1
0
2

1
Q
3
1
0
2

3
Q
3
1
0
2

1
Q
4
1
0
2

Direct Investment

Other Investments

Portfolio Equity: OS

Portfolio Debt: OS

Monetary Financial Institutions 

1
Q
6
0
0
2

3
Q
6
0
0
2

1
Q
7
0
0
2

3
Q
7
0
0
2

1
Q
8
0
0
2

3
Q
8
0
0
2

1
Q
9
0
0
2

3
Q
9
0
0
2

1
Q
0
1
0
2

3
Q
0
1
0
2

1
Q
1
1
0
2

3
Q
1
1
0
2

1
Q
2
1
0
2

3
Q
2
1
0
2

1
Q
3
1
0
2

3
Q
3
1
0
2

1
Q
4
1
0
2

Direct Investment

Other Investments

Portfolio Equity: MFI

Portfolio Debt: MFI

Monetary Authorities 

40

30

20

10

0

-10

-20

-30

1
Q
6
0
0
2

3
Q
6
0
0
2

1
Q
7
0
0
2

3
Q
7
0
0
2

1
Q
8
0
0
2

3
Q
8
0
0
2

1
Q
9
0
0
2

3
Q
9
0
0
2

1
Q
0
1
0
2

3
Q
0
1
0
2

1
Q
1
1
0
2

3
Q
1
1
0
2

1
Q
2
1
0
2

3
Q
2
1
0
2

1
Q
3
1
0
2

3
Q
3
1
0
2

1
Q
4
1
0
2

1
Q
6
0
0
2

3
Q
6
0
0
2

1
Q
7
0
0
2

3
Q
7
0
0
2

1
Q
8
0
0
2

3
Q
8
0
0
2

1
Q
9
0
0
2

3
Q
9
0
0
2

1
Q
0
1
0
2

3
Q
0
1
0
2

1
Q
1
1
0
2

3
Q
1
1
0
2

1
Q
2
1
0
2

3
Q
2
1
0
2

1
Q
3
1
0
2

3
Q
3
1
0
2

1
Q
4
1
0
2

Other Investments: MA

Portfolio Equity: MA

Portfolio Debt: MA

Other Investment: MA

Portfolio Debt: MA

Portfolio, debt, equity: MA

November 2014  245 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
20

15

10

5

0

-5

-10

-15

14

12

10

8

6

4

2

0

-2

-4

-6

-8

40

20

0

-20

-40

-60

-80

 Analysis of developments in EU capital flows in the global context 

Slovakia (in % of GDP) 

Flows 

Stocks 

General Government 

General Government 

5

0

-5

-10

-15

-20

-25

-30

-35

-40

1
Q
6
0
0
2

3
Q
6
0
0
2

1
Q
7
0
0
2

3
Q
7
0
0
2

1
Q
8
0
0
2

3
Q
8
0
0
2

1
Q
9
0
0
2

3
Q
9
0
0
2

1
Q
0
1
0
2

3
Q
0
1
0
2

1
Q
1
1
0
2

3
Q
1
1
0
2

1
Q
2
1
0
2

3
Q
2
1
0
2

1
Q
3
1
0
2

3
Q
3
1
0
2

1
Q
4
1
0
2

1
Q
6
0
0
2

3
Q
6
0
0
2

1
Q
7
0
0
2

3
Q
7
0
0
2

1
Q
8
0
0
2

3
Q
8
0
0
2

1
Q
9
0
0
2

3
Q
9
0
0
2

1
Q
0
1
0
2

3
Q
0
1
0
2

1
Q
1
1
0
2

3
Q
1
1
0
2

1
Q
2
1
0
2

3
Q
2
1
0
2

1
Q
3
1
0
2

3
Q
3
1
0
2

1
Q
4
1
0
2

Other Investments

Portfolio - equity

Portfolio Debt: GG

Other Investment: GG

Portfolio Equity: GG

Portfolio Debt: GG

Other Sectors 

Other Sectors 

15

10

5

0

-5

-10

-15

-20

10

5

0

-5

-10

-15

-20

-25

30

20

10

0

-10

-20

-30

1
Q
6
0
0
2

3
Q
6
0
0
2

1
Q
7
0
0
2

3
Q
7
0
0
2

1
Q
8
0
0
2

3
Q
8
0
0
2

1
Q
9
0
0
2

3
Q
9
0
0
2

1
Q
0
1
0
2

3
Q
0
1
0
2

1
Q
1
1
0
2

3
Q
1
1
0
2

1
Q
2
1
0
2

3
Q
2
1
0
2

1
Q
3
1
0
2

3
Q
3
1
0
2

1
Q
4
1
0
2

Direct Investment: OS

Other Investment: OS

Portfolio Equity: OS

Portfolio Debt: OS

Monetary Financial Institutions 

1
Q
6
0
0
2

3
Q
6
0
0
2

1
Q
7
0
0
2

3
Q
7
0
0
2

1
Q
8
0
0
2

3
Q
8
0
0
2

1
Q
9
0
0
2

3
Q
9
0
0
2

1
Q
0
1
0
2

3
Q
0
1
0
2

1
Q
1
1
0
2

3
Q
1
1
0
2

1
Q
2
1
0
2

3
Q
2
1
0
2

1
Q
3
1
0
2

3
Q
3
1
0
2

1
Q
4
1
0
2

Direct Investment: MFI

Other Investment: MFI

Portfolio Equity: MFI

Portfolio Debt: MFI

Monetary Authorities 

1
Q
6
0
0
2

3
Q
6
0
0
2

1
Q
7
0
0
2

3
Q
7
0
0
2

1
Q
8
0
0
2

3
Q
8
0
0
2

1
Q
9
0
0
2

3
Q
9
0
0
2

1
Q
0
1
0
2

3
Q
0
1
0
2

1
Q
1
1
0
2

3
Q
1
1
0
2

1
Q
2
1
0
2

3
Q
2
1
0
2

1
Q
3
1
0
2

3
Q
3
1
0
2

1
Q
4
1
0
2

Direct Investment

Other Investments

Portfolio Equity: OS

Portfolio Debt: OS

Monetary Financial Institutions 

1
Q
6
0
0
2

3
Q
6
0
0
2

1
Q
7
0
0
2

3
Q
7
0
0
2

1
Q
8
0
0
2

3
Q
8
0
0
2

1
Q
9
0
0
2

3
Q
9
0
0
2

1
Q
0
1
0
2

3
Q
0
1
0
2

1
Q
1
1
0
2

3
Q
1
1
0
2

1
Q
2
1
0
2

3
Q
2
1
0
2

1
Q
3
1
0
2

3
Q
3
1
0
2

1
Q
4
1
0
2

Direct Investment

Other Investments

Portfolio Equity: MFI

Portfolio Debt: MFI

Monetary Authorities 

100

80

60

40

20

0

-20

-40

1
Q
6
0
0
2

3
Q
6
0
0
2

1
Q
7
0
0
2

3
Q
7
0
0
2

1
Q
8
0
0
2

3
Q
8
0
0
2

1
Q
9
0
0
2

3
Q
9
0
0
2

1
Q
0
1
0
2

3
Q
0
1
0
2

1
Q
1
1
0
2

3
Q
1
1
0
2

1
Q
2
1
0
2

3
Q
2
1
0
2

1
Q
3
1
0
2

3
Q
3
1
0
2

1
Q
4
1
0
2

1
Q
6
0
0
2

3
Q
6
0
0
2

1
Q
7
0
0
2

3
Q
7
0
0
2

1
Q
8
0
0
2

3
Q
8
0
0
2

1
Q
9
0
0
2

3
Q
9
0
0
2

1
Q
0
1
0
2

3
Q
0
1
0
2

1
Q
1
1
0
2

3
Q
1
1
0
2

1
Q
2
1
0
2

3
Q
2
1
0
2

1
Q
3
1
0
2

3
Q
3
1
0
2

1
Q
4
1
0
2

Other Investments: MA

Portfolio Equity: MA

Portfolio Debt: MA

Other Investment: MA

Portfolio Debt: MA

Portfolio, debt, equity: MA

November 2014  246 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
10

8

6

4

2

0

-2

30

20

10

0

-10

-20

-30

-40

30

20

10

0

-10

-20

-30

 Analysis of developments in EU capital flows in the global context 

United Kingdom (in % of GDP) 

Flows 

Stocks 

General Government 

General Government 

5

0

-5

-10

-15

-20

-25

-30

1
Q
6
0
0
2

3
Q
6
0
0
2

1
Q
7
0
0
2

3
Q
7
0
0
2

1
Q
8
0
0
2

3
Q
8
0
0
2

1
Q
9
0
0
2

3
Q
9
0
0
2

1
Q
0
1
0
2

3
Q
0
1
0
2

1
Q
1
1
0
2

3
Q
1
1
0
2

1
Q
2
1
0
2

3
Q
2
1
0
2

1
Q
3
1
0
2

3
Q
3
1
0
2

1
Q
4
1
0
2

1
Q
6
0
0
2

3
Q
6
0
0
2

1
Q
7
0
0
2

3
Q
7
0
0
2

1
Q
8
0
0
2

3
Q
8
0
0
2

1
Q
9
0
0
2

3
Q
9
0
0
2

1
Q
0
1
0
2

3
Q
0
1
0
2

1
Q
1
1
0
2

3
Q
1
1
0
2

1
Q
2
1
0
2

3
Q
2
1
0
2

1
Q
3
1
0
2

3
Q
3
1
0
2

1
Q
4
1
0
2

Other Investments

Portfolio - equity

Portfolio Debt: GG

Other Investment: GG

Portfolio Equity: GG

Portfolio Debt: GG

Other Sectors 

Other Sectors 

40

30

20

10

0

-10

-20

-30

-40

-50

30

20

10

0

-10

-20

-30

-40

1

0,9

0,8

0,7

0,6

0,5

0,4

0,3

0,2

0,1

0

1
Q
6
0
0
2

3
Q
6
0
0
2

1
Q
7
0
0
2

3
Q
7
0
0
2

1
Q
8
0
0
2

3
Q
8
0
0
2

1
Q
9
0
0
2

3
Q
9
0
0
2

1
Q
0
1
0
2

3
Q
0
1
0
2

1
Q
1
1
0
2

3
Q
1
1
0
2

1
Q
2
1
0
2

3
Q
2
1
0
2

1
Q
3
1
0
2

3
Q
3
1
0
2

1
Q
4
1
0
2

Direct Investment: OS

Other Investment: OS

Portfolio Equity: OS

Portfolio Debt: OS

Monetary Financial Institutions 

1
Q
6
0
0
2

3
Q
6
0
0
2

1
Q
7
0
0
2

3
Q
7
0
0
2

1
Q
8
0
0
2

3
Q
8
0
0
2

1
Q
9
0
0
2

3
Q
9
0
0
2

1
Q
0
1
0
2

3
Q
0
1
0
2

1
Q
1
1
0
2

3
Q
1
1
0
2

1
Q
2
1
0
2

3
Q
2
1
0
2

1
Q
3
1
0
2

3
Q
3
1
0
2

1
Q
4
1
0
2

Direct Investment: MFI

Other Investment: MFI

Portfolio Equity: MFI

Portfolio Debt: MFI

Monetary Authorities 

1
Q
6
0
0
2

3
Q
6
0
0
2

1
Q
7
0
0
2

3
Q
7
0
0
2

1
Q
8
0
0
2

3
Q
8
0
0
2

1
Q
9
0
0
2

3
Q
9
0
0
2

1
Q
0
1
0
2

3
Q
0
1
0
2

1
Q
1
1
0
2

3
Q
1
1
0
2

1
Q
2
1
0
2

3
Q
2
1
0
2

1
Q
3
1
0
2

3
Q
3
1
0
2

1
Q
4
1
0
2

Direct Investment

Other Investments

Portfolio Equity: OS

Portfolio Debt: OS

Monetary Financial Institutions 

1
Q
6
0
0
2

3
Q
6
0
0
2

1
Q
7
0
0
2

3
Q
7
0
0
2

1
Q
8
0
0
2

3
Q
8
0
0
2

1
Q
9
0
0
2

3
Q
9
0
0
2

1
Q
0
1
0
2

3
Q
0
1
0
2

1
Q
1
1
0
2

3
Q
1
1
0
2

1
Q
2
1
0
2

3
Q
2
1
0
2

1
Q
3
1
0
2

3
Q
3
1
0
2

1
Q
4
1
0
2

Direct Investment

Other Investments

Portfolio Equity: MFI

Portfolio Debt: MFI

Monetary Authorities 

1

0,9

0,8

0,7

0,6

0,5

0,4

0,3

0,2

0,1

0

1
Q
6
0
0
2

3
Q
6
0
0
2

1
Q
7
0
0
2

3
Q
7
0
0
2

1
Q
8
0
0
2

3
Q
8
0
0
2

1
Q
9
0
0
2

3
Q
9
0
0
2

1
Q
0
1
0
2

3
Q
0
1
0
2

1
Q
1
1
0
2

3
Q
1
1
0
2

1
Q
2
1
0
2

3
Q
2
1
0
2

1
Q
3
1
0
2

3
Q
3
1
0
2

1
Q
4
1
0
2

1
Q
6
0
0
2

3
Q
6
0
0
2

1
Q
7
0
0
2

3
Q
7
0
0
2

1
Q
8
0
0
2

3
Q
8
0
0
2

1
Q
9
0
0
2

3
Q
9
0
0
2

1
Q
0
1
0
2

3
Q
0
1
0
2

1
Q
1
1
0
2

3
Q
1
1
0
2

1
Q
2
1
0
2

3
Q
2
1
0
2

1
Q
3
1
0
2

3
Q
3
1
0
2

1
Q
4
1
0
2

Other Investments: MA

Portfolio Equity: MA

Portfolio Debt: MA

Other Investment: MA

Portfolio Debt: MA

Portfolio, debt, equity: MA

November 2014  247 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 Analysis of developments in EU capital flows in the global context 

7.3 Appendix to Revaluation Effects 

November 2014  248 

-20-15-10-50510RevaluationEffect (%)AustriaAssets - EquityAssets - DebtLiabilities - EquityLiabilities - Debt-20-15-10-50510RevaluationEffect (%)BelgiumAssets - EquityAssets - DebtLiabilities - EquityLiabilities - Debt-30-25-20-15-10-50510RevaluationEffect (%)BulgariaAssets - EquityAssets - DebtLiabilities - EquityLiabilities - Debt00.10.20.30.40.50.60.70.80.91RevaluationEffect (%)CyprusAssets - EquityAssets - DebtLiabilities - EquityLiabilities - Debt-20-10010203040RevaluationEffect (%)Czech RepublicAssets - EquityAssets - DebtLiabilities - EquityLiabilities - Debt-25-20-15-10-5051015RevaluationEffect (%)GermanyAssets - EquityAssets - DebtLiabilities - EquityLiabilities - Debt-25-20-15-10-5051015RevaluationEffect (%)DenmarkAssets - EquityAssets - DebtLiabilities - EquityLiabilities - Debt-30-25-20-15-10-505101520RevaluationEffect (%)EstoniaAssets - EquityAssets - DebtLiabilities - EquityLiabilities - Debt 
 
 
 Analysis of developments in EU capital flows in the global context 

November 2014  249 

00.10.20.30.40.50.60.70.80.91RevaluationEffect (%)GreeceAssets - EquityAssets - DebtLiabilities - EquityLiabilities - Debt-25-20-15-10-505RevaluationEffect (%)SpainAssets - EquityAssets - DebtLiabilities - EquityLiabilities - Debt-50-40-30-20-100102030RevaluationEffect (%)FinlandAssets - EquityAssets - DebtLiabilities - EquityLiabilities - Debt-6-4-202468101214RevaluationEffect (%)FranceAssets - EquityAssets - DebtLiabilities - EquityLiabilities - Debt-50-40-30-20-100102030RevaluationEffect (%)CroatiaAssets - EquityAssets - DebtLiabilities - EquityLiabilities - Debt-40-30-20-100102030RevaluationEffect (%)HungaryAssets - EquityAssets - DebtLiabilities - EquityLiabilities - Debt-30-20-10010203040RevaluationEffect (%)IrelandAssets - EquityAssets - DebtLiabilities - EquityLiabilities - Debt-45-40-35-30-25-20-15-10-505RevaluationEffect (%)ItalyAssets - EquityAssets - DebtLiabilities - EquityLiabilities - Debt 
 
 
 Analysis of developments in EU capital flows in the global context 

November 2014  250 

-30-25-20-15-10-5051015RevaluationEffect (%)LithuaniaAssets - EquityAssets - DebtLiabilities - EquityLiabilities - Debt-25-20-15-10-50510152025RevaluationEffect (%)LuxembourgAssets - EquityAssets - DebtLiabilities - EquityLiabilities - Debt-10-50510152025303540RevaluationEffect (%)LatviaAssets - EquityAssets - DebtLiabilities - EquityLiabilities - Debt-40-20020406080RevaluationEffect (%)MaltaAssets - EquityAssets - DebtLiabilities - EquityLiabilities - Debt-40-30-20-100102030RevaluationEffect (%)NetherlandsAssets - EquityAssets - DebtLiabilities - EquityLiabilities - Debt-30-20-10010203040RevaluationEffect (%)PolandAssets - EquityAssets - DebtLiabilities - EquityLiabilities - Debt-20-15-10-5051015RevaluationEffect (%)PortugalAssets - EquityAssets - DebtLiabilities - EquityLiabilities - Debt-20-10010203040506070RevaluationEffect (%)RomaniaAssets - EquityAssets - DebtLiabilities - EquityLiabilities - Debt 
 
 
 Analysis of developments in EU capital flows in the global context 

November 2014  251 

-25-20-15-10-5051015RevaluationEffect (%)SwedenAssets - EquityAssets - DebtLiabilities - EquityLiabilities - Debt-25-20-15-10-50510RevaluationEffect (%)SloveniaAssets - EquityAssets - DebtLiabilities - EquityLiabilities - Debt00.10.20.30.40.50.60.70.80.91RevaluationEffect (%)SlovakiaAssets - EquityAssets - DebtLiabilities - EquityLiabilities - Debt-30-20-10010203040RevaluationEffect (%)United KingdomAssets - EquityAssets - DebtLiabilities - EquityLiabilities - Debt 
 
 
 
 
 
 Analysis of developments in EU capital flows in the global context 

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DOI : 10.2780/2225 
ISBN : 978-92-79-34834-1 

November 2014  256