Reserves, Sovereign Wealth Funds and the Resilience of Global Imbalances

29 Pages Posted: 17 Jan 2009

See all articles by Enrique Alberola

Enrique Alberola

Bank for International Settlements (BIS)

José María Serena

Bank for International Settlements (BIS)

Abstract

Reserves and sovereign wealth funds (SWFs) assets should be jointly considered for the assessment of global imbalances, hence their denomination as sovereign external assets (SEAs): both are public capital outflows from developing to developed countries, both hinder adjustment in current account surplus and deficit countries and, therefore, both contribute to sustain global imbalances. They represented 135 per cent and 50 per cent of net and gross US financing needs, respectively, in 2007. Reserves contribute 80 per cent and SWFs 20 per cent. They will go on providing resilience to the global imbalances, and the relative importance of SWFs is set to increase if commodity prices stay high.

Suggested Citation

Alberola, Enrique and Serena, Jose Maria, Reserves, Sovereign Wealth Funds and the Resilience of Global Imbalances. Economic Notes, Vol. 37, Issue 3, pp. 315-343, November 2008. Available at SSRN: https://ssrn.com/abstract=1327367 or http://dx.doi.org/10.1111/j.1468-0300.2008.00203.x

Enrique Alberola (Contact Author)

Bank for International Settlements (BIS) ( email )

Ruben Dario 281
Polanco, Miguel Hidalgo
Mexico City, 11580
Mexico

HOME PAGE: http://www.bis.org/author/enrique_alberola-ila.htm

Jose Maria Serena

Bank for International Settlements (BIS) ( email )

Centralbahnplatz 2
Basel, Basel-Stadt 4002
Switzerland

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