Earlier, the Treasury International Capital website released its periodic update/refinement of Treasury holdings. Not surprisingly, the most impacted holders were China and the "UK" which as we had previously speculated was nothing but a custodian front for Chinese institutional accumulation. China, which according to the most recent TIC data, owned $891.6 billion in Treasurys as of December 31, is now said to hold $1,160 billion, an adjustment of $268 billion. This upward revision came almost exclusively at the expense of the UK, which saw its holdings decline by $269 billion, in other words a nearly dollar for dollar shift between the UK and China. Japan, the third largest holder, was virtually unchanged at $882.3 billion compared to $883.6 billion pre revision. Oil exporters also saw a modest drop to $212 billion from $218 billion previously (all numbers as of December 31). Still, even with this adjustment, the Fed continues to be, and likely will never be surpassed, at the top position in terms of Treasury Holdings.
Preliminary data from the latest annual survey of foreign portfolio holdings of U.S. securities are now available. The survey measured foreign holdings of U.S. securities as of June 30, 2010, to be $10,701 billion, with $2,813 billion held in U.S. equities, $6,930 billion in U.S. long-term debt securities (of which $1,167 billion are holdings of asset-backed securities (ABS) and $5,763 billion are holdings of non-ABS securities), and $959 billion held in U.S. short-term debt securities. The previous survey, conducted as of June 30, 2009, measured total foreign holdings of U.S. securities at $9,641 billion, with holdings of $2,252 billion in U.S. equities, $6,240 billion in U.S. long-term debt securities, and $1,149 billion in U.S. short-term debt securities. Long-term debt securities have an original term-to-maturity of over one year. Asset-backed securities are backed by pools of assets, such as pools of residential home mortgages or credit card receivables, which give the security owners claims against the cash flows generated by the underlying assets. Unlike most other debt securities, these securities generally repay both principal and interest on a regular basis, reducing the principal outstanding with each payment cycle. A detailed survey report, which will include final data as well as additional data detail, is expected to be available at end-April 2011. The survey was a joint effort of the Department of the Treasury, the Federal Reserve Bank of New York, and the Board of Governors of the Federal Reserve System.
Three data tables are presented below. Each table presents holdings by country of foreign holder. The first table shows foreign holdings of U.S. securities split into holdings of equities, long-term debt, and short-term debt. The second table divides holdings of long-term debt securities by type of issuer as follows: U.S. Treasury, U.S. government agency asset-backed, U.S. government agency non-asset-backed, U.S. corporate and other asset-backed, and U.S. corporate and other non-asset-backed. The third table shows separately foreign holdings of short-term U.S. Treasury, U.S. government agencies, and corporate (and other) debt securities.
It should be noted that in many cases it is not possible to accurately determine the country of residence of the beneficial owner of U.S. securities. Securities are often held in custody in countries other than the beneficial owner's country of residence. Respondents on this survey, in turn, may only know where the securities are held in custody. Thus, excessive foreign holdings may be attributed to countries that are major custodial centers, such as the United Kingdom, Switzerland, Belgium, and Luxembourg. Additional information on survey methodology and accuracy can be found in the article, Understanding U.S. Cross-Border Securities Data (PDF), from the Federal Reserve Bulletin, 2006.
Surveys of foreign portfolio holdings of U.S. securities are conducted annually and measure foreign holdings as of end-June each year. Complementary surveys of U.S. holdings of foreign securities are conducted annually as of end-December. Questions about the survey can be directed to Contact TIC (this link is found also at the upper right-side of any TIC webpage). Questions from the news media should be directed to the Office of Public Affairs at the Department of the Treasury at (202) 622-2960.
The Department of the Treasury, the Federal Reserve Bank of New York, and the Board of Governors of the Federal Reserve System wish to thank all of the institutions who participated in the survey, without whose efforts the survey would not have been possible.