Have Foreign Investors Been Losing Confidence In Spain For Years Already?

Morgan Stanley’s Daniele Antonucci is out with a very interesting research report regarding EMU contagion risks and cross-country exposure.

There’s a lot to pluck out of it, but one particular chart showing which European sovereign had the highest percentage of their debt owned by foreigners jumped out.

chart

Photo: Morgan Stanley

A few points stand out:

  • UK has more of its debt held domestically than anyone else, which is probably a good thing.
  • Finland is almost all foreign.
  • And while for the most part, government have steadily been relying on foreigners for more and more borrowing, Spain’s trend reversed starting in 2005, perhaps signalling an early loss of appetite for its debt going back for some time.

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