Our study documents the central role of the foreign sector in the market for safety and explores its macroeconomic implications. Using new data for advanced economies since 1980, we show that foreign demand for safe assets has steadily increased, and that is has been mainly met by safe asset issuances of the domestic financial sector. Such issuances, however, are typically backed by risky loans, and thus the increases in foreign demand for safety may result in domestic credit booms that contribute to macroeconomic instability. The results highlight the importance of carefully managing the creation of safe assets within the global financial system. […]