What information is available about foreign holdings of U.S. Treasury and other securities?

The Treasury International Capital (TIC) reporting system collects data for the United States on cross-border portfolio investment flows, including an annual survey of foreign portfolio holdings of U.S. securities. Data indicate that as of June 30, 2012, foreign holdings of U.S. securities—both public and private—were approximately $13.3 trillion. Holdings of Treasury securities and U.S. agency debt account for a little less than half of foreign holdings of U.S. securities (in the TIC data U.S. agency debt includes debt issued by government-sponsored enterprises (GSEs) The Federal Government chartered these to provide financial intermediation for specified public purposes, such as mortgages. Examples include the Federal National Mortgage Association (Fannie Mae), the Federal Home Loan Mortgage Corporation (Freddie Mac), the Federal Home Loan Banks, the Farm Credit System, and the Federal Agricultural Mortgage Corporation. Although federally chartered to serve public-policy purposes, the GSEs are classified as non-budgetary and excluded from the Budget. This is because they were intended to be privately owned and controlled, with any public benefits resulting from the GSEs' business transactions accruing indirectly. such as Fannie Mae and Freddie Mac). The other half of foreign holdings is split between equities (i.e., stock and shares in investment companies such as mutual funds) and corporate debt.

Source: GAO analysis of data from the Department of the Treasury, Federal Reserve Bank of New York and the Board of Governors of the Federal Reserve System.

Notes: Data from Report on Foreign Portfolio Holdings of U.S. Securities as of June 30, 2012.  The corporate debt category includes small foreign holdings of municipal debt, nonprofit organizations' debt, and certificates of deposit with a maturity of over one year. Treasury consolidates these foreign holdings into corporate debt. The U.S. agency debt category includes securities issued by both federal agencies (such as the Tennessee Valley Authority) and government-sponsored enterprises (such as Fannie Mae, Freddie Mac, and the Federal Home Loan Banks).

Total Foreign Holdings of U.S. Securities data: txt pdf

There are some limitations to these foreign ownership data. Specifically, because of the widespread use of financial intermediaries,Firms that borrow from consumer/savers and lend to companies and households that need resources for investment and consumption. the data identifies where the securities are held or the country through which the transaction was made, which may not be the owner's resident country. For example, a resident of Germany may buy a U.S. security and place it in the custody of a Swiss bank, which will often hold the security at a U.S. resident bank. For the survey, the U.S. bank will report that it is holding the security on behalf of a Swiss bank, not knowing that the owner of the security is German. Consequently, the survey reports large holdings of U.S. securities in major financial centers, such as the Cayman Islands, Switzerland, the United Kingdom, and Hong Kong.

Another limitation is that the survey does not provide insight into how a particular country's holdings are divided between private investors and official institutions, which have different reasons for investing. Foreign official institutions include central banks and national government-owned investment funds. Central banks hold foreign currency reserves to maintain exchange rates or to facilitate the country's trade. While the survey reported that foreign official institutions held 73 percent of foreign holdings of Treasury securities as of June 30, 2012, it does not identify foreign official holdings by country.

With these limitations in mind, the 2012 survey reports that almost 75 percent of foreign holdings of Treasury securities can be attributed to eleven countries and a group of Middle Eastern oil exporting countries. China (excluding Hong Kong and Macau) and Japan have the largest holdings. However, this does not mean that residents of these countries are the ultimate owners.

Source: GAO analysis of data from the Department of the Treasury, Federal Reserve Bank of New York, and the Board of Governors of the Federal Reserve System.

Notes: Data from Report on Foreign Portfolio Holdings of U.S. Securities as of June 30, 2012.  The corporate debt category includes small foreign holdings of municipal debt, nonprofit organizations' debt, and certificates of deposit with a maturity of over one year. Treasury consolidates these foreign holdings into corporate debt. The U.S. agency debt category includes securities issued by both federal agencies (such as the Tennessee Valley Authority) and government-sponsored enterprises (such as Fannie Mae, Freddie Mac, and the Federal Home Loan Banks).

Total Foreign Holdings of U.S. Securities data: txt pdf

Countries with Largest Holdings of Treasury Securities (As of June 2012)

map displaying Countries with Largest Holdings of Treasury Securities (June 2012)

Sources: GAO analysis of data from the Department of the Treasury, the Federal Reserve Bank of New York, and the Board of Governors of the Federal Reserve System (data); Map Resources (map).

Notes: Countries on the map represent those with at least $100 billion of foreign-held Treasury securities, which represents almost 75 percent of foreign holdings. Data from Foreign Portfolio Holdings of U.S. Securities, as of June 30, 2012. China refers to mainland China and not Hong Kong or Macau. Middle East oil exporters are Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, and the United Arab Emirates; the holdings for individual oil exporting countries are not available.

Countries with Largest Holdings of Treasury Securities data: txt pdf