RS22331
Foreign Holdings of Federal Debt
November 23, 2005
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Summary
This report presents current data on estimated ownership of United States Treasury securities and major holders of federal debt by country. Federal debt represents the accumulated balance of borrowing by the federal government. To finance federal borrowing, United States Treasury securities are sold to investors. Treasury securities may be purchased directly from the Treasury on the secondary market in the United States or overseas by the individual private investors, financial institutions, and foreign, state, or local governments. Foreign investment in federal debt has grown in recent years, prompting questions on the location of the foreign holders and how much debt they hold. Federal debt represents, in large measure, the accumulated balance of federal borrowing of the United States government. The portion of gross federal debt held by the public consists primarily of investment in U.S. Treasury securities. Investors in the United States and abroad include official institutions such as the United States Federal Reserve, financial institutions such as private banks, and private individual investors. Table 1 below provides data available as of November 2005 on estimated ownership of U.S. Treasury securities by type of investment and the percentage of that investment attributable to foreign investors. As the table notes, during the past four years, foreign holdings of the public debt have increased more than the total privately held debt has increased. Foreign holdings of debt increased by $856.5 billion to nearly $1.9 trillion from December 2000 to December 2004. During the same period, total privately held debt increased by $786 billion to $3.7 billion.1
