(2018), “The international dimension of the ECB’s asset purchase programme: an update”, speech at a conference on “Exiting Unconventional Monetary Policies”, organised by the Euro 50 Group, the CF40 forum and CIGI, Paris, 26 October 2018. [30] Standard finance theory would predict that investors choose an equity portfolio that is diversified across the world if capital is fully mobile across borders.
While the liberalisation of capital accounts, electronic trading and lower transactions have spurred cross-border asset trade (Lane and Milesi-Ferreti (2003), nonetheless home bias continues to be prevalent, see i.a. Poterba and French (1991) and Coeurdacier and Rey (2003).