Little Belgium is in the news right now, and not entirely for the best of reasons.* But judging from the US TIC data, Belgium doesn't have much to worry about *Belgian politics seem to have been captured by a custodian, which is a bit strange -- 1/
For what it is worth, nothing much showed up in the OCtober TIC data, foreign private and foreign official holdings were more or less flat 2/
I am sympathetic to the Belgian argument that Euroclear is part of Europe's financial infrastructure, and that Euroclear specific risks should not be born by Belgium alone (even tho the Euroclear tax windfall was initially enjoyed by Belgium alone) 3/
At the same time, Euroclear shouldn't overstate its argument. The initial freeze of Russia's reserves in early 2022 was WAY more consequential than the current debate over the use of the frozen assets (it was just done quickly, so there was less debate) 4/
And there is no evidence that the freezing of Russian assets adversely impacted Euroclear's role -- notably as a custodian for US Treasuries. Euroclear holdings have more or less doubled since early 2022 ... 5/
Now China did shift out of US custodians (and more recently into shorter duration debt) back in 2022 ... but that was a boon to Euroclear and the broader European custodial ecosystem 6/
Bottom line -- not that many people understand the mechanics of the reparations loan (it works within the context of a freeze, it isn't an asset seizure, all the rhetoric aside), and Euroclear's concerns are wildly overstated. It has done just fine after 2022 7/7
