FROM THE OFFICE OF PUBLIC AFFAIRS

The Treasury Department and Federal Reserve Board, Monday, released a report on the benchmark survey on U.S. holdings of foreign long-term securities.

The findings have reduced the estimates of the deficits in the U.S. international investment position and the U.S. international transactions accounts. The report also estimates that total U.S. holdings of foreign long-term securities increased 40 percent since year-end 1997, to an estimated $2.5 trillion as of year-end 1999.

Based on preliminary results of the benchmark year-end 1997 survey, the deficit in the U.S. net international investment position in 1997 was reduced last July to $968 billion, from the earlier estimate of $1,224 billion. Another $16 billion will be added to the U.S. asset figures in June 2000, when the Commerce Department's Bureau of Economic Analysis incorporates the final benchmark survey data into the accounts. In addition, the U.S. current account deficit in 1997 was reduced by more than $10 billion because of resulting increased estimates of interest and dividends received from foreign securities held by U.S. residents.

The 1997 survey was part of an international effort coordinated by the International Monetary Fund (IMF). The effort was made primarily because of the large discrepancy between worldwide measured portfolio assets and worldwide measured portfolio liabilities, with reported liabilities greatly exceeding reported assets.

The top ten countries for U.S. investors at year-end 1999 were: The United Kingdom (U.S. investors held an estimated $394 billion of U.K. securities), Japan ($295 billion), Canada ($194 billion), France ($178 billion), Germany ($167 billion), Netherlands ($140 billion), Sweden ($90 billion), Mexico ($72 billion), Italy ($66 billion), and Switzerland ($65 billion).

Over 75 percent of total U.S. holdings of foreign long-term securities at year-end 1999, or about $1.9 trillion, represent equity securities, and the remainder long-term debt securities. Long-term debt securities have an original term-to-maturity of more than one year.

The report is available on the Internet at www.treas.gov/fpis.