Report
Patrick Artus

Is the United States still the "world’s banker"?

The United States still has a shortfall in savings, and therefore an external deficit. But it has developed a financial intermediation activity: It receives capital from the rest of the world, which is invested in risk-free assets (in US Treasuries in particular); It uses this capital to finance investments in risky assets (corporate investment, in equities) in the rest of the world. The United States has therefore become the "world’s banker", transforming risk-free savings into risky investments, as banks use deposits to finance loans. The United States’ capacity to buy risky assets in the rest of the world is therefore linked to its capacity to collect risk-free savings, and to attract them to the Treasury market. Does this capacity still exist nowadays? Is not the confidence in the United States’ solidity starting to erode? We are seeing a decline in this capacity, given the decline in bond purchases by non-residents in the United States.
Provider
Natixis
Natixis

Based across the world’s leading financial centers, Natixis CIB Research offers an integrated view of the markets. The team provides support to inform Natixis clients’ investment and hedging decisions across all asset classes.

 

Analysts
Patrick Artus

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