Moreover, as the stock of bonds rises, our reinvestment needs rise in tandem and we have to increase our gross purchases – that is, our net purchases plus our reinvestments; and do that in an environment of lower new borrowing in most euro area countries.
Because the difference between a nation's domestic saving and domestic investment is the near-algebraic equivalent of that nation's current account balance, imbalances were small.2 However, starting in the 1990s home bias began to decline discernibly.