The nature and extent of these financial linkages are reflected in a range of characteristics, which include not only the net international investment positions but also the sizes of gross cross-border claims and liabilities positions, the composition of these positions by asset type, and the returns on the underlying assets.
As demands for investable funds far outstrip their supply, the task of the financial sector is to ensure that these scarce resources are allocated only to those firms and households which are best able to use them productively and, in doing so, to generate income for the savers who have provided the funds; for example in the form of interest or dividends.