ABS inflows to the United States and the global financial crisis

► Global saving glut is incomplete characterization of role of capital flows to crisis. ► GSG countries purchased Treasuries and Agency debt pushing down yields on safe assets. ► More complete picture looks at sizable inflows from Europe into US ABS. ► European purchases of ABS contributed to decline in spreads over Treasury yields. ► Both GSG and European inflows pre-crisis had significant impact on US interest rates.