## _wp1038

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---

### I. Introduction
- Objective: document and assess the role of small international financial centers (SIFCs) in the global financial system using a newly-assembled dataset.
- Key illustrative statistics:
  - Banks resident in the Cayman Islands held over $1.7 trillion in assets at the end of 2008.
  - U.S. survey of portfolio liabilities for June 2008 finds that Caribbean financial centers were holding over $1 trillion in U.S. long-term securities.
- Measurement challenge and guiding principle:
  - Most SIFCs do not report international investment positions; estimates rely on indirect reporting (claims and liabilities vis-à-vis SIFCs reported by other countries).
  - Guiding data-construction principle: assume net external positions of these countries are negligible in absolute terms; use the maximum between estimated external assets and estimated external liabilities as the most reliable estimate of scale.
- Policy relevance:
  - Understanding SIFCs clarifies ultimate exposure of countries’ external claims and liabilities (examples cited: Italian portfolio assets reported on Ireland/Luxembourg; Cayman Islands holdings of U.S. private-label mortgage-backed securities).

### II. International financial activities of small financial centers
- Principal lines of financial production: international banking, insurance, collective investment schemes, asset management, trusts, structured finance (Table 1).
- Sources of comparative advantage: legal systems favoring incorporation, specialized skilled workers, accommodative regulatory environment, tax advantages.
- Activity highlights:
  - International banking: conduits and structured investment vehicles established in offshore centers during the 2003-2007 securitization boom; offshore instruments account for 32 percent of total sweep assets (Cantillon and Franske (2009)).
  - Insurance: Bermuda dominant for captive insurance; legal/regulatory/tax systems designed for captive insurance firms.
  - Collective investment schemes: Cayman Islands home to many feeder funds; feeder funds feed onshore master funds and may borrow from offshore and onshore banks.
  - Structured finance: SIFCs host special purpose vehicles and structured investment vehicles; examples include SIVs and aircraft-leasing activity in the Cayman Islands.
  - Headquarter services: 732 companies traded on U.S. exchanges reported to SEC they are incorporated in the Cayman Islands—potentially explaining US resident common stock holdings in the Cayman Islands ($158bn).
  - Foreign direct investment: SIFCs used in multinational firms’ financial management and treasury operations; some firms locate headquarters offshore.
- Implication: SIFCs are significant counterparts in international positions across portfolio equity, portfolio debt, other debt, and FDI; round-tripping and opaque ultimate destinations complicate risk assessment (examples: Hong Kong for China; Mauritius for India).

### III. Data construction
- SIFC sample:
  - SIFC group: thirty-two small international financial centers; excludes larger centers reported in Lane and Milesi-Ferretti (2007) such as Cyprus, Hong Kong S.A.R. of China, Ireland, Luxembourg, and Singapore.
- Main data sources:
  - BIS locational banking statistics
  - IMF Information Framework
  - IMF Coordinated Portfolio Investment Survey (CPIS)
  - IMF International Financial Statistics and Balance of Payments Statistics
  - UNCTAD FDI data
  - National data sources for advanced economies (geographical breakdowns)
- Methodological approaches by instrument:
  - Portfolio investment: rely primarily on CPIS and BIS securities issuance statistics; derive portfolio liabilities for non-participating SIFCs by summing claims reported by CPIS-participating countries.
  - Other investment: use BIS locational banking statistics and BIS immediate-borrower perspective to infer claims/liabilities vis-à-vis BIS-reporting banks.
  - FDI: use UNCTAD and geographical FDI breakdowns from some advanced economies (e.g., United States).
  - Reserve assets: IMF International Financial Statistics where available.
  - Financial derivatives: data very difficult to track and largely unavailable.

### IV. Country characteristics and external balance sheet of the SIFC group
- Aggregate characteristics (as of 2007):
  - Total population of the SIFC group: just over 12.7 million.
  - Average GDP per capita: around US$11,600.
  - Median population: 88,000; range: Montserrat 6,000 to Lebanon 4.1 million.
  - Median GDP per capita: around $18,000; range: Nauru $2,200 to Liechtenstein $118,000.
- Sovereignty and currency arrangements:
  - Majority independent but several high-asset SIFCs (Bermuda, British Virgin Islands, Cayman Islands, Channel Islands) are British territories or Crown dependencies.
  - Exchange-rate regimes are fixed or use a major currency (Table 4).
- Main estimated magnitudes (end-2007 focus):
  - Estimated gross international balance sheet (sum of external assets and liabilities) of SIFCs: over US$18 trillion.
  - SIFCs account for about 8 ½ percent of world cross-border holdings.
  - SIFC external assets and liabilities exceed those of France, Germany, or Japan and are a multiple of China (around $4 trillion).
- Country concentration:
  - A small group accounts for the vast bulk: Bahamas, Bermuda, Cayman Islands, U.K. Channel Islands (Guernsey, Jersey, Isle of Man), British Virgin Islands, Netherlands Antilles.
  - Cayman Islands accounts for approximately half the aggregate international balance sheet of the SIFC group; particularly important in portfolio liabilities and banking assets/liabilities.
- Data shortfalls and underestimation:
  - Hedge fund net asset value reported by Cayman Islands Monetary Authority: over US$2.2 trillion at end-2007 (survey includes feeder funds, funds of funds, master funds—some double-counting likely).
  - CPIS-participating countries reported portfolio equity claims on the Cayman Islands of $768bn—less than the $2.2 trillion NAV reported by the Cayman Islands Monetary Authority.
- Composition of international balance sheet:
  - Other investment (primarily bank assets and liabilities): more than half of total external claims and liabilities.
  - Portfolio (debt and equity): 36 percent share.
  - FDI: relatively small share overall, but highly important for some countries (example: Hong Kong’s FDI to/from British Virgin Islands comparable to Mainland China, end-2007).
- Time series patterns:
  - CPIS (2001–2007): portfolio equity share of global holdings invested in SIFCs rose from just under 6 percent to nearly 9 percent; portfolio debt share stable in the 5-6 percent range.
  - BIS-reporting banks’ claims and liabilities vis-à-vis SIFCs: claims share 13-14 percent, liabilities share 9-10 percent; these holdings tripled in dollar terms between end-2001 and end-2007. Claims on SIFCs comparable to claims on emerging markets as a whole.

### V. Bilateral patterns
- Coverage:
  - Bilateral data (Milesi-Ferretti, Strobbe, and Tamirisa (2010) and published sources) account for around 90 percent of total estimated external assets and liabilities of SIFCs.
- Major counterparties:
  - Dominant counterparties: United States, euro area, United Kingdom, Switzerland, Japan, and Hong Kong.
  - U.S. cross-border assets and liabilities vis-à-vis SIFCs at end-2007: over US$6 trillion, about 16 percent of total U.S. portfolio.
  - For the euro area and the United Kingdom, SIFCs account for just under 10 percent of cross-border holdings.
  - Hong Kong’s ratio vis-à-vis SIFCs is much higher.
- Instrument composition:
  - Bilateral SIFC cross-border holdings show large shares of both portfolio and other investment instruments (other investment mostly bank loans and deposits).
- Data anomalies and limits:
  - Estimated bilateral FDI assets and liabilities of SIFCs can exceed estimated totals—largely due to euro-area reporting of holdings vis-à-vis “offshore centers” without further geographical breakdown.

### VI. The effects of the financial crisis: A preliminary look
- Impact by end-2008:
  - Total external assets and liabilities declined by more in SIFCs than in the world economy as a whole; SIFCs’ world share fell below 8 percent.
- Drivers:
  - Absolute decline driven by end-2008 collapse in equity prices.
  - Relative decline driven by sharp retrenchment in cross-border banking positions during 2008, particularly in the 4th quarter; banking positions are especially large in financial centers.
- Portfolio liabilities:
  - SIFCs saw some decline in their share of outstanding portfolio liabilities as inferred from the IMF CPIS.
- Uncertainty:
  - Medium-term implications for financial intermediation in SIFCs remain uncertain given crisis and policy responses.

### VII. Concluding remarks and implications
- Empirical conclusions:
  - External assets and liabilities of SIFCs are substantial—especially in cross-border banking and portfolio investment—despite severe data limitations and likely underestimation.
  - SIFCs are quantitatively important intermediaries and have significant bilateral linkages with major advanced economies and larger financial centers.
  - Ultimate risk exposures generally lie elsewhere, but residence-based data obscures true ultimate exposures (consolidated/ultimate-risk banking data show smaller direct exposures to SIFCs).
- Policy and data implications:
  - Analysis of cross-border financial linkages would be significantly enhanced if aggregate and bilateral data on cross-border asset trade involving financial centers became more readily available.

### Appendix highlights
- Appendix 1 — Countries and territories listed (SIFC group of thirty-two): Andorra; Anguilla; Antigua and Barbuda; Aruba; Bahamas; Bahrain; Barbados; Belize; Bermuda; Cayman Islands; Gibraltar; Grenada; Guernsey; Isle of Man; Jersey; Lebanon; Liechtenstein; Macao SAR of China; Mauritius; Monaco; Montserrat; Nauru; Netherlands Antilles; Palau; Panama; Samoa; St. Kitts and Nevis; St. Lucia; St. Vincent and the Grenadines; Turks and Caicos Islands; Vanuatu; British Virgin Islands.
- Appendix II — Data sources and methodological notes:
  - Emphasizes piecing together estimates from alternative sources (BIS, CPIS, IFS, UNCTAD, national liability surveys).
  - Recommends using the maximum between estimated external assets and estimated external liabilities as an approximate measure of total intermediated funds where full IIP is not available.

### Key tabulated numerical findings (selected, end-2007 unless noted)
- Table 2 (selected):
  - Median GDP (millions USD): 1,967
  - Median Population: 87,955
  - Median GDP per capita (USD): 18,042
  - Total GDP (millions USD): 147,869
  - Total population: 12,695,561
  - Total GDP per capita aggregate: 11,647
- Table 5 (SIFC size of external balance sheet, billions of US$, end-2007; selected entries):
  - Cayman Islands: Estimated assets 3,132.9; Estimated liabilities 4,200.3; Size of balance sheet 8,400.6
  - Bermuda: Estimated assets 735.2; Estimated liabilities 788.2; Size of balance sheet 1,576.4
  - Virgin Islands (British): Estimated assets 822.9; Estimated liabilities 793.7; Size of balance sheet 1,645.8
  - Jersey: Estimated assets 1,012.1; Estimated liabilities 852.2; Size of balance sheet 2,024.3
  - Total (sum reported): Estimated assets 8,013; Estimated liabilities 8,432; Size of balance sheet 18,454
  - Note on estimation: size of balance sheet is estimated assuming net external position equals zero; total reported corresponds to 2 times the maximum between estimated external assets and estimated external liabilities.
- Table 6 (Relative importance of cross-border holdings with SIFCs, 2007; percent, selected):
  - United States: Liabilities vis-à-vis SIFCs 16.9%; Assets vis-à-vis SIFCs 15.4%
  - Euro Area: Liabilities vis-à-vis SIFCs 7.9%; Assets vis-à-vis SIFCs 9.8%
  - United Kingdom: Liabilities vis-à-vis SIFCs 9.0%; Assets vis-à-vis SIFCs 7.2%
  - Japan: Liabilities vis-à-vis SIFCs 3.9%; Assets vis-à-vis SIFCs 9.3%
  - Switzerland: Liabilities vis-à-vis SIFCs 16.3%; Assets vis-à-vis SIFCs 15.1%
  - Hong Kong: Liabilities vis-à-vis SIFCs 23.3%; Assets vis-à-vis SIFCs 28.0%
- Table 7 (Sum of external assets and liabilities of financial centers, 2007-2008, billions of US$):
  - Small international financial centers: 2007 = 18,454; 2008 = 15,934
  - Other financial centers 1/: 2007 = 70,213; 2008 = 59,856
  - World: 2007 = 214,458; 2008 = 202,103
  - Share SIFC: 2007 = 8.6%; 2008 = 7.9%
  - Share other financial centers: 2007 = 32.7%; 2008 = 29.6%
  - 1/ Include Belgium, Cyprus, Hong Kong S.A.R., Iceland, Ireland, Liberia, Malta, Netherlands, Singapore, Switzerland, United Kingdom.

*Source: IMF working paper _wp1038 - 8. Claims and Liabilities of SIFC vis-à-vis Individual Partner Countries (PDF)._*

### references and to Kalin Tintchev for his help with the Information Framework database.

### _wp1038 - references and to Kalin Tintchev for his help with the Information Framework database.

### Major sections (from Contents)
- I. Introduction (page 3)
- II. International financial activities of Small Financial Centers (page 4)
- III. Data Construction (page 6)
- IV. Country Characteristics and External Balance Sheet of the sifc group (page 8)
- V. Bilateral patterns (page 10)
- VI. The Effects of the Financial Crisis: A Preliminary Look (page 11)
- VII. Concluding Remarks (page 11)

### Appendices and References
- Appendix 1 (page 13)
- Appendix 2 (page 13)
- References (page 18)

### Tables (titles and page numbers)
- Table 1. Small Financial Centers: Main International Financial Activity (page 19)
- Table 2. Basic Country Characteristics (page 20)
- Table 3. Political Status of Small International Financial Centers (page 21)
- Table 4. Exchange Rate Regime (page 22)
- Table 5. SOFC: Size of the External Balance Sheet (page 23)
- Table 6. Relative Importance of Asset Trade with SIFCs (page 24)
- Table 7. Sum of External Assets and Liabilities of Financial Centers (page 24)

### Figures (titles and page numbers)
- Figure 1. Share of SIFC Group in Global Aggregates (page 25)
- Figure 2. External Balance Sheets: A Global Comparison (page 26)
- Figure 3. Country Shares in SIFC Balance Sheet (page 27)
- Figure 4. SIFC Share of External Assets and Liabilities in Broad Group of Financial Centers (page 28)
- Figure 5. Composition of International Balance Sheet for SIFC Group (page 29)
- Figure 6. Hong Kong S.A.R. of China: FDI Assets and Liabilities (page 30)
- Figure 7A. Share of SIFC Group in Global Cross-Border Portfolio Holdings (page 31)
- Figure 7B. SIFC Claims on and Liabilities vis-à-vis BIS Reporting Banks (page 31)

*Source: _wp1038 - references and to Kalin Tintchev for his help with the Information Framework database. (PDF chapter/section).*

### 8. Claims and Liabilities of SIFC vis-à-vis Individual Partner Countries .............................32

### _wp1038 - 8. Claims and Liabilities of SIFC vis-à-vis Individual Partner Countries .............................32

### I. Introduction
- Objective: document and assess the role of small international financial centers (SIFCs) in the global financial system using a newly-assembled dataset.
- Key illustrative statistics:
  - Banks resident in the Cayman Islands held over $1.7 trillion in assets at the end of 2008.
  - U.S. survey of portfolio liabilities for June 2008 finds that Caribbean financial centers were holding over $1 trillion in U.S. long-term securities.
- Measurement challenge: most SIFCs do not report international investment positions; estimates rely on indirect reporting (claims and liabilities vis-à-vis SIFCs reported by other countries).
- Guiding data-construction principle: assume net external positions of these countries are negligible in absolute terms; use the maximum between estimated external assets and estimated external liabilities as the most reliable estimate of scale.
- Policy relevance: understanding SIFCs clarifies ultimate exposure of countries’ external claims and liabilities (examples cited: Italian portfolio assets reported on Ireland/Luxembourg; Cayman Islands holdings of U.S. private-label mortgage-backed securities).

### II. International financial activities of small financial centers
- Principal lines of financial production: international banking, insurance, collective investment schemes, asset management, trusts, structured finance (Table 1).
- Sources of comparative advantage: legal systems favoring incorporation, specialized skilled workers, accommodative regulatory environment, tax advantages.
- Activity highlights:
  - International banking: conduits and structured investment vehicles established in offshore centers during the 2003-2007 securitization boom; offshore instruments account for 32 percent of total sweep assets (Cantillon and Franske (2009)).
  - Insurance: Bermuda dominant for captive insurance; designed legal/regulatory/tax systems for captive insurance firms.
  - Collective investment schemes: Cayman Islands home to many feeder funds; feeder funds feed onshore master funds and may borrow from offshore and onshore banks.
  - Structured finance: SIFCs host special purpose vehicles and structured investment vehicles; examples include SIVs and aircraft-leasing activity in the Cayman Islands.
  - Headquarter services: incorporation in offshore centers for legal/tax advantages; 732 companies traded on U.S. exchanges reported to SEC they are incorporated in the Cayman Islands—potentially explaining US resident common stock holdings in the Cayman Islands ($158bn).
  - Foreign direct investment: SIFCs used in multinational firms’ financial management and treasury operations; some firms locate headquarters offshore.
- Implication: SIFCs are significant counterparts in international positions across portfolio equity, portfolio debt, other debt, and FDI; round-tripping and opaque ultimate destinations complicate risk assessment (examples: Hong Kong for China; Mauritius for India).

### III. Data construction
- SIFC sample: group of thirty-two small international financial centers (SIFC group); excludes larger centers reported in Lane and Milesi-Ferretti (2007) such as Cyprus, Hong Kong S.A.R. of China, Ireland, Luxembourg, and Singapore.
- Main data sources:
  - BIS locational banking statistics
  - IMF Information Framework (data initiative for offshore centers)
  - IMF Coordinated Portfolio Investment Survey (CPIS)
  - IMF International Financial Statistics and Balance of Payments Statistics
  - UNCTAD FDI data
  - National data sources for advanced economies (geographical breakdowns)
- Methodological notes:
  - Portfolio investment: rely primarily on CPIS and BIS securities issuance statistics; CPIS coverage (around 70 participating economies) is used to infer portfolio liabilities for non-participating SIFCs by summing claims reported by CPIS-participating countries.
  - Other investment: use BIS locational banking statistics and BIS immediate-borrower perspective to infer claims/liabilities vis-à-vis BIS-reporting banks.
  - FDI: use UNCTAD and geographical FDI breakdowns from some advanced economies (e.g., United States).
  - Reserve assets: IMF International Financial Statistics where available.
  - Financial derivatives: data very difficult to track and largely unavailable.

### IV. Country characteristics and external balance sheet of the SIFC group
- Aggregate characteristics (as of 2007):
  - Total population of the SIFC group: just over 12.7 million.
  - Average GDP per capita: around US$11,600 (Table 2).
  - Median population: 88,000; range: Montserrat 6,000 to Lebanon 4.1 million.
  - Median GDP per capita: around $18,000; range: Nauru $2,200 to Liechtenstein $118,000.
- Sovereignty and currency arrangements: majority independent but several high-asset SIFCs (Bermuda, British Virgin Islands, Cayman Islands, Channel Islands) are British territories or Crown dependencies; exchange-rate regimes are fixed or use a major currency (Table 4).
- Main estimated magnitudes (end-2007 focus):
  - Estimated gross international balance sheet (sum of external assets and liabilities) of SIFCs: over US$18 trillion.
  - SIFCs account for about 8 ½ percent of world cross-border holdings (Figure 1).
  - SIFC external assets and liabilities exceed those of France, Germany, or Japan and are a multiple of China (around $4 trillion) (Figure 2).
- Country concentration:
  - A small group of SIFCs account for the vast bulk of holdings: Bahamas, Bermuda, Cayman Islands, U.K. Channel Islands (Guernsey, Jersey, Isle of Man), British Virgin Islands, Netherlands Antilles.
  - Cayman Islands accounts for approximately half the aggregate international balance sheet of the SIFC group; particularly important in portfolio liabilities and banking assets/liabilities.
- Data shortfalls and underestimation:
  - Hedge fund net asset value reported by Cayman Islands Monetary Authority: over US$2.2 trillion at end-2007 (survey includes feeder funds, funds of funds, master funds—some double-counting likely).
  - This $2.2 trillion is almost 3 times the portfolio assets reported to be held in the Cayman Islands by CPIS-participating countries ($768bn reported portfolio equity claims on the Cayman Islands by main investor countries).
- Composition of SIFC international balance sheet (Figure 4):
  - Other investment (primarily bank assets and liabilities): more than half of total external claims and liabilities.
  - Portfolio (debt and equity): 36 percent share.
  - FDI: relatively small share overall, but highly important for some countries (example: Hong Kong’s FDI to/from British Virgin Islands comparable to Mainland China, end-2007).
- Time series patterns:
  - Based on CPIS (2001–2007): portfolio equity share of global holdings invested in SIFCs rose from just under 6 percent to nearly 9 percent; portfolio debt share stable in the 5-6 percent range (Figure 6A).
  - BIS-reporting banks’ claims and liabilities vis-à-vis SIFCs (claims share 13-14 percent, liabilities share 9-10 percent) have remained broadly stable since end-2001; in dollar terms, these holdings tripled between end-2001 and end-2007. Claims on SIFCs comparable to claims on emerging markets as a whole (Figure 6B).

### V. Bilateral patterns
- Coverage: bilateral data (from Milesi-Ferretti, Strobbe, and Tamirisa (2010) and published sources) account for around 90 percent of total estimated external assets and liabilities of SIFCs.
- Major counterparties (Figure 8a): United States, euro area, United Kingdom, Switzerland, Japan, and Hong Kong dominate bilateral claims and liabilities vis-à-vis SIFCs.
  - U.S. cross-border assets and liabilities vis-à-vis SIFCs at end-2007: over US$6 trillion, about 16 percent of total U.S. portfolio (Table 6).
  - For the euro area and the United Kingdom, SIFCs account for just under 10 percent of cross-border holdings.
  - Hong Kong’s ratio vis-à-vis SIFCs is much higher (note: bilateral bank holdings vis-à-vis SIFCs generally excluded for some reporters due to lack of data).
- Instrument composition (Figure 8b): bilateral SIFC cross-border holdings show large shares of both portfolio and other investment instruments (other investment mostly bank loans and deposits).
- Data anomalies and limits:
  - Estimated bilateral FDI assets and liabilities of SIFCs can exceed estimated totals—largely due to euro-area reporting of holdings vis-à-vis “offshore centers” without further geographical breakdown (definition of “offshore centers” in euro-area statistics is close to SIFC but includes Hong Kong and Singapore).

### VI. The effects of the financial crisis: a preliminary look
- Impact by end-2008 (Table 8):
  - Total external assets and liabilities declined by more in SIFCs than in the world economy as a whole; SIFCs’ world share fell below 8 percent.
- Drivers:
  - Absolute decline driven by end-2008 collapse in equity prices.
  - Relative decline in financial centers’ size linked to sharp retrenchment in cross-border banking positions during 2008, particularly in the 4th quarter; banking positions are especially large in financial centers.
- Portfolio liabilities: SIFCs saw some decline in their share of outstanding portfolio liabilities as inferred from the IMF CPIS (Figure 7a).
- Uncertainty remains about medium-term implications for financial intermediation in SIFCs given crisis and policy responses.

### VII. Concluding remarks and implications
- Empirical conclusions:
  - External assets and liabilities of SIFCs are substantial—especially in cross-border banking and portfolio investment—despite severe data limitations and likely underestimation.
  - SIFCs are quantitatively important intermediaries and have significant bilateral linkages with major advanced economies and larger financial centers.
  - Ultimate risk exposures generally lie elsewhere, but residence-based data obscures true ultimate exposures (consolidated/ultimate-risk banking data show smaller direct exposures to SIFCs).
- Policy/data implication:
  - Analysis of cross-border financial linkages would be significantly enhanced if aggregate and bilateral data on cross-border asset trade involving financial centers became more readily available.

*Source: IMF working paper _wp1038 - 8. Claims and Liabilities of SIFC vis-à-vis Individual Partner Countries (PDF)._*

### Appendix 1. List of countries and territories

### Appendix 1. List of countries and territories

### Appendix 1 — Countries and territories listed
- Andorra, Anguilla, Antigua and Barbuda, Aruba, Bahamas, Bahrain, Barbados, Belize, Bermuda, Cayman Islands, Gibraltar, Grenada, Guernsey, Isle of Man, Jersey, Lebanon, Liechtenstein, Macao SAR of China, Mauritius, Monaco, Montserrat, Nauru, Netherlands Antilles, Palau, Panama, Samoa, St. Kitts and Nevis, St. Lucia, St. Vincent and the Grenadines, Turks and Caicos Islands, Vanuatu, British Virgin Islands.

### Appendix II — Data Sources for IIP estimates: overview
- Purpose: describe how to assemble estimates for external asset and liability categories for small international financial centers (SIFCs) where a full-fledged IIP is typically not available.
- Key methodological notes:
  - Estimates must be pieced together from alternative sources.
  - SIFCs can intermediate very significant absolute funds while having extremely small net external positions.
  - Imprecision in external assets and liabilities can imply implausibly large net creditor/debtor positions.
  - The estimates are intended to provide a broad order of magnitude for intermediated funds.
  - Given incomplete coverage, the maximum between estimated external assets and estimated external liabilities is likely a more accurate (albeit imperfect) measure of total intermediated funds.

### I. EXTERNAL ASSETS — data sources by category
A. Portfolio investment assets (equity and debt)
- CPIS asset survey (when available). Note: coverage may be limited to certain sectors (example: banking—but not mutual or hedge funds—for the Cayman Islands).
- Surveys of portfolio liabilities by country of holder (available for the United States as of June 30, and from some CPIS-participating countries such as Japan).
- BIS — bank assets other than loans reported to the BIS (for SIFCs whose banks report their assets to BIS). Non-loan assets comprise mainly portfolio holdings but could also include direct investment holdings or derivatives.
- BIS — for SIFCs whose banks do not report assets to the BIS, an alternative source are BIS-reporting banks‘ non-deposit liabilities towards individual SIFCs.
- National data on total asset value of collective investment schemes (a possibly significant fraction of the TAV of collective investment schemes is likely held in portfolio instruments).

B. Direct investment abroad
- UNCTAD database (reports total foreign direct investment stocks and flows for several SIFCs).
- Alternatively, estimate FDI abroad from other countries‘ FDI liability surveys (bilateral positions) reported by Eurostat, the OECD, UNCTAD, and individual countries such as the United States.

C. Other investment assets
- BIS — loans reported by SIFC banks (for BIS reporters).
- BIS — liabilities of BIS-reporting banks vis-à-vis individual SIFCs (data on BIS-reporting banks‘ liabilities to nonbank entities in SIFCs can complement SIFC-reported bank loans).
- IFS — foreign assets held by banks and nonbank financial institutions (including monetary authorities non-reserve assets).

D. Financial derivatives
- Theoretical estimation from reported bilateral derivatives positions of other countries (such as the United States), but in practice very few countries report counterparty breakdowns detailed enough to identify SIFC counterparties.

E. Reserve assets
- When relevant, sources: IFS (when available) and WEO.

### II. EXTERNAL LIABILITIES — data sources by category
A. Portfolio investment liabilities
- Equity:
  - CPIS — derived liabilities (from bilateral asset positions reported by participating countries). Equity will include shares of mutual fund and hedge fund investments and, on occasion, shares of US companies headquartered in the center.
  - National data on Net Asset Value (NAV) of collective investment vehicles (CIV). To the extent CIV shares are held by nonresidents, NAV of CIVs would be portfolio liabilities of the reporting economy (some double-counting possible for feeder funds or funds of funds).
- Debt:
  - BIS — international debt securities outstanding by residence of issuer (proxy for external debt liabilities).
  - CPIS — derived liabilities (from bilateral asset positions reported by participating countries).

B. Direct investment liabilities
- UNCTAD database (FDI stocks and flows for several SIFCs).
- Alternatively, estimate FDI in the SIFC from other countries‘ surveys of FDI abroad (bilateral positions) reported by Eurostat, the OECD, UNCTAD, and individual countries such as the United States.
- Derived liabilities from bilateral asset surveys of individual countries (UNCTAD, OECD, Eurostat).

C. Other investment liabilities
- BIS — deposits reported by offshore country banks (for BIS reporters).
- BIS — assets of BIS-reporting banks vis-à-vis offshore country entities (claims on nonbank offshore country entities can complement SIFC-reported bank deposit liabilities).
- IFS — foreign liabilities held by banks and nonbank financial institutions (including monetary authorities non-reserve liabilities).

D. Financial derivatives
- Can be estimated from reported bilateral derivatives positions of other countries (such as the United States). In practice, counterparty breakdowns are rarely detailed enough. One exception: the Cayman Islands are reported separately in U.S. bilateral data on derivatives.

### III. REFERENCE DATA — listed sources and specific tables
A. BIS
- Tables 2 and 3 locational bank statistics (reported assets and liabilities—for reporting SIFCs)
- Tables 6 and 7 locational bank statistics (derived data from BIS-reporting banks—for all countries)
- Table 11 international debt securities (all countries)

B. CPIS
- Tables 8, 8.1, 8.2 (global tables, portfolio assets equity and debt, derived portfolio liabilities equity and debt)
- Reported liability surveys, Table 4 (to calculate sum of reported liabilities by these countries to individual SIFCs)

C. IFS
- Banks and other financial institutions‘ foreign assets and liabilities (lines 7a etc).

D. Other sources
- UNCTAD: FDI stocks and flows.
- US survey of portfolio liabilities, June 2008 (U.S. Treasury International Capital System website).
- Bilateral FDI holdings: country-specific series noted (United States, Eurostat, Japan, United Kingdom, Hong Kong S.A.R. of China) as sources for bilateral positions.

### Key tabulated and numerical findings (selected)
- Table 2. Basic Country Characteristics (2007): selected entries
  - Median GDP (millions USD): 1,967
  - Median Population: 87,955
  - Median GDP per capita (USD): 18,042
  - Total GDP (millions USD): 147,869
  - Total population: 12,695,561
  - Total GDP per capita aggregate: 11,647
- Table 5. SIFC: Size of the External Balance Sheet (billions of US$, end-2007): selected entries
  - Cayman Islands: Estimated assets 3,132.9; Estimated liabilities 4,200.3; Size of balance sheet 8,400.6
  - Bermuda: Estimated assets 735.2; Estimated liabilities 788.2; Size of balance sheet 1,576.4
  - Virgin Islands (British): Estimated assets 822.9; Estimated liabilities 793.7; Size of balance sheet 1,645.8
  - Jersey: Estimated assets 1,012.1; Estimated liabilities 852.2; Size of balance sheet 2,024.3
  - Total (sum reported): Estimated assets 8,013; Estimated liabilities 8,432; Size of balance sheet 18,454
  - Note on estimation: size of balance sheet is estimated assuming net external position equals zero; total reported corresponds to 2 times the maximum between estimated external assets and estimated external liabilities.
- Table 6. Relative importance of cross-border holdings with SIFCs (2007): selected ratios (in percent)
  - United States: Liabilities vis-à-vis SIFCs 16.9%; Assets vis-à-vis SIFCs 15.4%
  - Euro Area: Liabilities vis-à-vis SIFCs 7.9%; Assets vis-à-vis SIFCs 9.8%
  - United Kingdom: Liabilities vis-à-vis SIFCs 9.0%; Assets vis-à-vis SIFCs 7.2%
  - Japan: Liabilities vis-à-vis SIFCs 3.9%; Assets vis-à-vis SIFCs 9.3%
  - Switzerland: Liabilities vis-à-vis SIFCs 16.3%; Assets vis-à-vis SIFCs 15.1%
  - Hong Kong: Liabilities vis-à-vis SIFCs 23.3%; Assets vis-à-vis SIFCs 28.0%
- Table 7. Sum of external assets and liabilities of financial centers, 2007-2008 (billions of US$)
  - Small international financial centers: 2007 = 18,454; 2008 = 15,934
  - Other financial centers 1/: 2007 = 70,213; 2008 = 59,856
  - World: 2007 = 214,458; 2008 = 202,103
  - Share SIFC: 2007 = 8.6%; 2008 = 7.9%
  - Share other financial centers: 2007 = 32.7%; 2008 = 29.6%
  - 1/ Include Belgium, Cyprus, Hong Kong S.A.R., Iceland, Ireland, Liberia, Malta, Netherlands, Singapore, Switzerland, United Kingdom. Source: Lane and Milesi-Ferretti, External Wealth of Nations database.

### Figures and composition notes (selected qualitative summaries)
- Figure 1: Share of SIFC group in global cross-border investment positions, global GDP, and global population (graphical shares for Total Assets and Liabilities, GDP, Population).
- Figure 2: External balance sheets compared globally (columns depict sum of external assets and liabilities, in billions of US dollars).
- Figure 3: Country shares in SIFC balance sheet (2007) — major contributors listed: Cayman Islands, Jersey, Bermuda, Virgin Islands (British), Guernsey, Bahamas; "Other" category enumerated in source.
- Figure 5: Composition of international balance sheet for SIFC group (2007) — components shown: Portfolio, FDI, Other investment (primarily bank assets and liabilities), Reserves, Derivatives.
- Figure 7A/B: Share of SIFC group in global cross-border portfolio holdings (CPIS-based) and SIFC claims on and liabilities vis-à-vis BIS-reporting banks (locational banking statistics, Table 6); noted break in series in December 2001 when U.K. Channel Islands data start being reported separately.
- Figure 8: Claims and liabilities of SIFC vis-à-vis individual partner countries (2007) — aggregate and composition by instrument (FDI, portfolio, other, derivatives) across partner countries: United States, Euro Area, United Kingdom, Japan, Switzerland, Hong Kong, others.

*Source: _wp1038 - Appendix 1. List of countries and territories (IMF PDF content provided).*

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_Source: https://www.imf.org/-/media/websites/imf/imported-full-text-pdf/external/pubs/ft/wp/2010/_wp1038.pdf_