As is customary each July, the estimates of the U.S. international
investment position incorporate new source data and methodological improvements
that relate to the changes incorporated in the annual revision of the U.S.
international transactions accounts. This year, the following changes are
The estimates of U.S. holdings of foreign bonds and stocks are revised to
incorporate the results of the U.S. Treasury Department's new benchmark survey
of U.S. portfolio investment abroad as of March 1994. This survey is the first
such survey in more than 50 years, and its completion represents a major
milestone in the multiyear program for statistical improvement developed jointly
by BEA, the Treasury Department, and the Federal Reserve Board.
Based on the survey results, BEA's previous estimates of holdings of
foreign securities at yearend 1993 are raised by $302.9 billion, to $853.6
billion. Holdings of foreign stocks are raised by $241.1 billion, to $543.9
billion: The understatement was widespread and was especially large for British
stocks; the only overstatement was in Asian stocks other than Japanese stocks.
Holdings of foreign bonds increased $62.0 billion, to $309.7 billion: The
understatement was widespread; the only overstatement was in Canadian bonds.
Estimates of foreign holdings of U.S. currency appear for the first time in
the international position accounts of the United States. With this addition,
BEA closes what had grown into a sizable gap in coverage in the international
investment position and international transactions accounts. Currency flows do
not appear in the international accounts of most countries because of the
difficulties of accurate measurement. The estimates were developed by the
Federal Reserve Board.
The new estimates added $209.6 billion to foreign assets in the United
States. These holdings of U.S. currency are classified as unallocated in the
area breakdown in table 2, in as much as no country detail is available.
Estimates of the foreign direct investment position in the United States
for 1992 (on both the current-cost and market-value bases) have been revised to
incorporate data collected in BEA's 1992 benchmark survey of foreign direct
investment in the United States. For years after 1992, the estimates have been
revised by extrapolating the 1992 universe data on the basis of data collected
in BEA's quarterly sample surveys for 199396 and by incorporating new or
adjusted data from those surveys.
For yearend 1992, the incorporation of the data from the benchmark survey
increased the position $1.1 billion on the current-cost basis and $2.0 billion
on the market-value basis. No area breakdown for either basis is available;
however, for the position at historical cost, small upward revisions were made
to investments by Latin America and the Middle East, and small downward
revisions were made to investments by the United Kingdom and Japan.
Currency translation gains and losses have been removed from certain
banking transactions in the international transactions accounts to provide a
more accurate measure of U.S. banks' international activity; they are now
classified more appropriately as valuation adjustments in the investment
For a further explanation of these changes, see
"U.S. International Transactions, Revised
Estimates for 197496" in this issue.