Foreign central banks' US debt holdings rise - Fed

NEW YORK Thu Jan 17, 2013 4:29pm EST

NEW YORK Jan 17 (Reuters) - Foreign central banks' overall holdings of U.S. marketable securities at the Federal Reserve rose in the latest week, data from the U.S. central bank showed on Thursday.

The Fed said its holdings of U.S. securities kept for overseas central banks rose $8.9 billion in the week ended Jan 16, to stand at $3.3 trillion.

The breakdown of custody holdings showed overseas central banks' holdings of Treasury debt rose by $12.12 billion to stand at $2.92 trillion.

Foreign institutions' holdings of securities issued or guaranteed by the biggest U.S. mortgage financing agencies, including Fannie Mae and Freddie Mac, fell by $3.21 billion to stand at $307 billion.

The Fed said its holdings of so-called "other" securities held in custody and reported at face value fell by $30 million to stand at $35.8 billion. These securities include non-marketable U.S. Treasury securities, supranationals, corporate bonds, asset-backed securities and commercial paper.

Overseas central banks, particularly those in Asia, have been huge buyers of U.S. debt in recent years and own more than a quarter of marketable Treasuries. China and Japan are the biggest foreign holders of Treasuries.

The full Fed report can be found on:

**Please note that in the week ended Nov. 15, 2012 the Fed changed how it calculates the data covering securities held in custody for foreign official and international accounts.

Custody holdings of U.S. Treasuries held by the central bank does not include those securities pledged by the Fed as "collateral in reverse repurchase agreements conducted with foreign official and international accounts," the Fed advised.

It added that the data now incorporates "inflation compensation on Treasury Inflation-Protected Securities (TIPS), which captures the inflation adjustment to original face value of TIPS over time."

The calculation for agency debt holdings was revised to reflect current face value rather than original face value as previously reported, the Fed said.

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Comments (2)
kafantaris wrote:
Ben Bernanke dropped the ball alright, but so did many of us. Something from nothing is what our economy was based on, which was fine so long as we made money.
Investment trickery, even on a pervasive scale, only lasts so long. Not only did we play the game too long, but we also fooled ourselves into a belief that we were immune to foreseeable market forces, such as the precipitous rise in oil prices.
And we have yet to address a root cause of our 2008 meltdown. Investment banks continue to generate money out of thin air, and investment banks continue to be indifferent to the rest of us the world over that in the end would have to pay for it.
Yes we were quick to sure up big banks — to save our own hide — but it is now time to chop them down to size.
Any bank that would not flinch after a $6 billion hit is way too big to have around.

Jan 19, 2013 11:07am EST  --  Report as abuse
kafantaris wrote:
Ben Bernanke dropped the ball alright, but so did many of us. Something from nothing is what our economy was based on, which was fine so long as we made money.
Investment trickery, even on a pervasive scale, only lasts so long. Not only did we play the game too long, but we also fooled ourselves into a belief that we were immune to foreseeable market forces, such as the precipitous rise in oil prices.
And we have yet to address a root cause of our 2008 meltdown. Investment banks continue to generate money out of thin air, and investment banks continue to be indifferent to the rest of us the world over that in the end would have to pay for it.
Yes we were quick to sure up big banks — to save our own hide — but it is now time to chop them down to size.
Any bank that would not flinch after a $6 billion hit is way too big to have around.

Jan 19, 2013 11:07am EST  --  Report as abuse
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