Many Creditors, One Large Debtor: Understanding the Buildup of Global Stock Imbalances after the Global Financial Crisis

The past decade has seen a remarkable widening of global creditor and debtor positions in relation to world GDP, with the lion’s share of net external liabilities accounted for by the United States, and a surge in net global claims particularly in advanced Europe and smaller economies of advanced Asia. This has occurred despite a compression in global current account imbalances. This paper explores the factors underpinning these developments, highlighting the role of the US asset price boom and dollar appreciation in widening the net US debtor position, and examines how, where, and to what extent those valuation gains are reflected in other countries’ external accounts. It also looks at the economic and structural factors explaining the emergence of new large international creditors, highlighting common features but also important country-specific factors.