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In RealTime posts, PIIE senior staff and colleagues discuss the fast-moving economic news, financial developments, and public policy choices confronting the United States and the world.
Safe assets—often called information insensitive assets—are those debt securities that do not suffer from financial frictions characteristic of other financial assets. They play a major role in the strategies of institutional investors. But as we have learned recently, they can quickly lose their safety status at times of financial crises. In the past few months, [...]
A recent report from the think tank Global Financial Integrity (GFI) identifies China as the largest source of illicit financial flows in the developing world. The report, Illicit Financial Flows from China and the Role of Trade Misinvoicing, identifies $3.75 trillion in illicit outflows during between 2000 and 2011. The possibility of trillions of dollars [...]
On March 2, 25 European Union members signed their long-discussed fiscal compact, the treaty committing them to balance their budgets in the future, paving the way for national ratification of the compact before January 2013. Most analysts expect the compact to be ratified in most countries. But a few signs of doubt have emerged over [...]