Bridgewater Sees Stability In Cross-Border Asset Flows

Cross-border asset flows have stabilized in a positive way, as an environment consistent with sustainable economic activity has emerged. This is a marked change from global cross-border lending leading up to 2008, which, according to a June 11 Bridgewater Associates report, provided “big support to credit creation in the run-up to the financial crisis.”

Debt and leverage associated with cross-border asset flows has given way to foreign investment, Bridgewater notes

In fact, it was cross-border lending that financed nearly half of leveraging prior to the 2008 financial crisis. Separately, a study by the Institute of International Finance found that in 2014 foreign capital flowing into mature economies was at its most expansive point since 2011, but...