tic

In addition, the Fed team concluded that TIC data is not capturing just how much Cayman-domiciled hedge funds are dominating positions in the so-called basis trade.

TIC data is the main source of U.S. data on cross-border securities and banking.

Meanwhile, the gap between what’s being reported in the Treasury Department’s TIC data versus what’s reported to the Securities and Exchange Commission has widened to almost $1.4 trillion as of the end of last year.

“TIC data on Cayman Islands holdings of Treasuries do not appear to be picking up the Treasury transactions associated with the basis trade activity” that can be seen on the hedge funds’ filings to the SEC, according to the Fed note.

The TIC model often comes in the form of developers replacing single-family homes with townhouses, splitting one house into two.