Shares flow more freely

THE growth of an “equity culture” in a number of countries is a well-known phenomenon. But how is it affecting the composition of international capital flows? State Street, an American bank that specialises in providing custody services, has tried to answer that question by using data from the portfolios in its care. These are worth more than $6 trillion, covering about 12% of tradable securities world-wide, and provide a good proxy for measuring the total market. State Street's findings show that, though bonds still account for most financial-market capital flows, equities are catching up (see chart).