Financial accounts are the records of financial transactions across countries between residents and non-residents. The financial transactions result in a change of ownership of financial assets or liabilities. When the country has claims on its non-residents, it is considered an asset, but, when claims are made on a resident, they are known as liabilities. The financial account experience a deficiency when a country’s nationals purchase more foreign assets than foreign buyers purchase domestic assets. This will result in a negative financial account. The financial accounts consist of three main components: long-term direct investments, long-term portfolio investments, and short-term ‘hot-money’ capital flows.