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Balance of Payments: Financial Account and Capital Account definitions

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  • Balance of Payments
    A record of all economic transactions between residents of a country and the rest of the world, always summing to zero.
  • Financial Account
    Section tracking long-term investments like stocks, bonds, real estate, and business infrastructure across borders.
  • Capital Account
    Component covering minor items such as migrant transfers and intangible assets, typically negligible in size.
  • Foreign Assets
    Resources or investments located abroad and owned by domestic residents, including property, stocks, and bonds.
  • US Assets
    Resources or investments located in the United States and owned by foreign entities, such as land or corporate shares.
  • Stocks
    Equity instruments representing ownership in a corporation, often bought or sold internationally as investments.
  • Bonds
    Debt securities issued by entities to raise funds, frequently traded across borders as part of investment flows.
  • Current Account
    Section recording short-term transactions like exports and imports, balanced by the financial account in the overall record.
  • Migrant Transfers
    Movements of assets or funds when individuals relocate to another country, a minor part of the capital account.
  • Debt Forgiveness
    Cancellation of financial obligations owed by one country to another, included in the capital account.
  • Long-term Investments
    Commitments of funds to assets such as factories, real estate, or infrastructure, intended to generate returns over time.
  • Foreign Holdings
    Ownership of domestic assets by non-residents, such as foreign companies building factories or buying shares.
  • US Holdings
    Ownership of foreign assets by US residents, including overseas property, factories, or financial instruments.
  • Intangible Assets
    Non-physical resources like patents or copyrights, occasionally transferred internationally and recorded in the capital account.
  • Net Exports
    Difference between a country's exports and imports, a key part of the current account affecting the overall balance.