DP8567 The Financial Crisis and the Geography of Wealth Transfers

Author(s): Pierre-Olivier Gourinchas, Hélène Rey, Kai Alexander Truempler
Publication Date: September 2011
Keyword(s): global financial crisis, international monetary system, reserve currency, valuation effects
JEL(s): F32, F33
Programme Areas: International Macroeconomics
Link to this Page: cepr.org/active/publications/discussion_papers/dp.php?dpno=8567

This paper studies the geography of wealth transfers during the 2008 global financial crisis. We construct valuation changes on bilateral external positions in equity, direct investment and portfolio debt at the height of the crisis to map who benefited and who lost on their external exposure. We find a very diverse set of fortunes governed by the structure of countries' external portfolios. In particular, we are able to relate the gains and losses on debt portfolios to the country's exposure to ABCP conduits and the extent of dollar shortage.