‘Huge, Missing and Growing:’ $65 Trillion in Dollar Debt Sparks Concern
- BIS researchers highlight off-balance sheet dollar obligations
- Report calls FX swaps a ‘blind spot’ in global finance
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There’s a hidden risk to the global financial system embedded in the $65 trillion of dollar debt being held by non-US institutions via currency derivatives, according to the Bank for International Settlements.
In a paper with the title “huge, missing and growing,” the BIS said a lack of information is making it harder for policy makers to anticipate the next financial crisis. In particular, they raised concern with the fact that the debt is going unrecorded on balance sheets because of accounting conventions on how to track derivative positions.