Treasury International Capital System

Views of TIC Users
(October 2000 to July 2001)

Summary of Special Survey conducted from October 2000 to July 2001.

Overall, the users expressed satisfaction with the quality of the data, stressing their importance in analyzing trends in international capital markets, particularly the volume of flows to and from the U.S., its influence on the dollar, and the sustainability of the U.S. external position. Some of the issues raised by users are under consideration, in particular, the need for more accurate data on U.S. holdings of foreign securities and the inaccuracies in current estimates between benchmark survey years because TIC S reports allocate purchases by location of the transactor and not the issuer of the security. Other concerns of data users cannot be met, either because of confidentiality agreements with foreign central banks and governments that hold U.S. assets, or because obtaining much more detailed information would involve excessive additional burden on reporters. Suggested modifications of the presentation of the data on the web site are being considered. End Summary.

As part of the strategic review of the Treasury International Capital/Benchmark reporting system, a survey was sent to known users of the system and also posted on the TIC web site. The following summarizes the responses to the specific questions and the general comments received.

Data Quality
Overall, the users expressed satisfaction with the quality of the data, stressing their importance in analyzing trends in international capital markets, particularly the volume of flows to and from the U.S., its influence on the dollar, and the sustainability of the U.S. external position. Some users would like the data to be provided in a more timely fashion.

Data Limitations
The primary limitations cited concerned the inadequacy of the geographic breakdown of the securities transactions data because the data track only the residence of the transactor, not the country of the issuer or ultimate holder. One user noted that due to the transactor-based system, holdings estimates for the UK are huge and for some other countries are negative, severely limiting the usefulness of the data. Another user noted the constraints the unreliability of the geographic data places on understanding the sources of U.S. external financing.

The respondents also provided a collective wish list for (i) the currency composition of U.S. corporate and agency bond issuance; (ii) a breakdown of agency data into MBS and GSE debt; (iii) inclusion of Treasury Bills on the same basis as Treasury coupons; (iv) data on central bank activity by country; (v) more details on securities transactions with all oil exporting countries; (vi) weekly or daily data; (vii) more timely data; (viii) more information on the volume of transactions in derivative securities, repurchase agreements, and securities lending with nonresidents; and (ix) introduce additional currency detail on the cross-border positions of banks in the United States in the TIC locational banking statistics.

Benchmark Survey Alternatives
When asked about alternative ways of providing more frequent and accurate data -- more frequent benchmark surveys or changing the basis of the monthly reports -- many respondents did not express an opinion either way, possibly because of confusion over what changing the basis entailed. Several suggested more frequent (annual) benchmark surveys. Some, however, thought that the timeliness of the data was the key, so that improving the quality of the monthly data by changing the basis of the monthly reports was desirable. (Note: Annual benchmark surveys are expected to begin in 2002 and 2003.)

One user made several detailed suggestions, including creating two sets of codes for Caribbean banking centers (U.S.-controlled and non-U.S.-controlled) and doing surveys of interest and dividend payments abroad made by custodial banks to provide an independent measure of the notional value of debt instruments owned by accounts in different regions abroad.

BEA Adjustments
The users were then asked about the effects on their research and analysis of BEA's adjustments for estimated commissions and for estimated stock swaps associated with publicized mergers. Most respondents were aware of these adjustments. One responded that reconciliation tables between the TIC and BEA data would be helpful. Others prefer the raw data, as they make the adjustments using cross border M&A data that they collect. Another respondent does not pay much attention to the adjustments because he does not think they alter the overall trends in the data. However, this respondent did appreciate the discussion of the stock swap data in the website's Quaterly Analysis & Charts, as it provided a clear understanding of what the data do and do not show. One user underscored the fact that the stock swaps data come from a non-governmental source and are of doubtful reliability and limited coverage.

Data Accessibility
Nearly all of the users expressed their satisfaction with the online version of the data, with a few suggestions. Several users mentioned the fact that the text format on the web site is not easy to download, and Excel files would be more convenient for this. Additionally, several would like the data in chronological order, rather than reverse chronological order. (Note: Since October 2001 the website presents data in chronological order.)

Clarity of Capital Flow Tables
When asked to comment on changes that might improve the clarity of the international capital flow tables, one user suggested discussing the difference between the TIC data and the flow of funds data. Another suggestion was to break out holdings of agency bills/discount notes in the Treasury Bulletin's aggregated CM tables. Some users suggested producing a net figure for each category, and one for the euro-area. The other respondents were very comfortable with the present format or had no suggestions for improvement.

TIC Web Site
When asked to comment on the TIC web site, the users echoed the comments about the ease of downloading data, suggesting the use of Excel or comma separated files, rather than text. Several would like to see euro-area composite flows. One user would like to see data on the number of survey respondents and the number or average size of transactions. Another user suggested linking an article by Dorothy Sobel of the FRBNY to the web site, as its discussion of the TIC data might be helpful to other users. (Note: In November 2001 a link was added to a more recent, comprehensive article by the Board of Governors, "The U.S. System for Measuring Cross-Border Investment in Securities: A Primer with a Discussion of Recent Developments", Federal Reserve Bulletin, October 2001.)

Last Updated: July 25, 2007