What are the problems of geographic attribution for securities holdings and transactions in the TIC system?

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What are the problems of geographic attribution for securities holdings and transactions in the TIC system?

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The country attribution of foreign holdings of U.S. securities as reported in the position surveys is imperfect because some foreign owners entrust the safekeeping of their securities to institutions that are neither in the United States nor in the owner’s country of residence. For example, a German investor may buy a U.S. security and place it in the custody of a Swiss bank. In the surveys of foreign holdings of U.S. securities, such a holding typically is recorded vis-à-vis Switzerland rather than Germany. This “custodial bias” contributes to the large recorded foreign holdings of U.S. securities in major financial centers, such as Belgium, the Caribbean banking centers, Luxembourg, Switzerland, and the United Kingdom.

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