Article

• The Financial Crisis and U.S. Cross-Border Financial Flows
  Carol C. Bertaut and Laurie Pounder
  November 18, 2009
  The financial crisis that began in the summer of 2007 caused notable changes in the composition of U.S. cross-border financial flows, especially in the fall of 2008, when the crisis intensified. This article documents three major channels through which financial flows and associated portfolio positions were affected: (1) “flight to safety” shifts away from riskier securities and toward investments in safe and liquid markets, particularly U.S. Treasury securities; (2) unusual flows through the banking system resulting from a shortage of dollar liquidity abroad and a breakdown in interbank markets; and (3) a pullback from cross-border positions during the crisis. PDF (294 KB)
• all 2009 articles...