Capital Account
A balance-of-payments term with two meanings. In the older textbook usage -- still common in commentary -- it names the component recording net foreign purchases of domestic assets minus domestic purchases of foreign assets, plus changes in central-bank reserves. Modern BoP accounting (IMF BPM6) calls that component the FINANCIAL account, and reserves "capital account" for a small category of capital transfers and non-produced assets. Either way the identity is the same: a country running a current account deficit must, by accounting, import capital of the same magnitude. That financing flow is where trade deficits actually live -- foreigners buying Treasuries, equities, real estate, or extending loans to domestic borrowers.
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Related terms
10Y Treasury · Altman Z-Score · Asset Sensitivity · Basel III · Bond ETF · Bretton Woods
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