Acquisition of financial assets and financing by sector in the second quarter of 2011
(Results of the financial accounts)
In an environment of low interest rates and relatively high uncertainty, financial investment and borrowing of households and non-financial corporations basically followed the path of previous quarters. Households’ financial assets rose to €4,757 billion in the second quarter of 2011. Their acquisition of financial assets amounted to just under €35 billion and was thus down on the quarter. At the same time, their debt again slightly increased by just under €5 billion. Non-financial corporations also reported an acquisition of financial assets by around €42 billion, whilst their external financing went up by only €24 billion.
Households: increase in both financial assets and debt
Households’ acquisition of financial assets amounted to just under €35 billion in the second quarter of 2011, which is – as in the years before – less than in the previous quarter (€48 billion). Bank deposits, securities and claims on insurance corporations were the main areas of growth. In particular bank deposits (including cash holdings) increased noticeably in the reporting period by just under €20 billion net. This growth is due to a quarter-on-quarter strong inflow of €14.7 billion in overnight sight deposits (including currency) which carry relatively low opportunity costs in a continuing low-interest rate environment. Time deposits rose by €5.7 billion on balance. This inflow benefited mainly short-term time deposits (with a maturity of up to two years); long-term time deposits recorded only a small increase due to heightened uncertainty. By contrast, households showed restraint in savings deposits (including savings certificates) posting a net outflow of just under €0.5 billion.
The net inflows of funds into households’ securities remained constant in total relative to the previous quarter. Specifically, inflows of funds into bonds (including money market paper) added up to a net total of just over €1.8 billion in the reporting quarter. Long-term securities were purchased in particular, including Bunds which continued to profit from the increased uncertainty about the creditworthiness of some euro-area countries. A clearly cautious development could be ascertained for shares, with purchases of only €0.5 billion net (2011 Q1 €3.25 billion). Muted economic expectations were a particular cause, making investment in equities more unattractive for households. Mutual fund shares showed an even more restrained development, with no new inflows of funds on balance. Whilst real estate funds retained some popularity, bond-based funds recorded a significant outflow. This is also likely to be caused, inter alia, by increased uncertainty on the bond markets. Finally, claims on insurance corporations increased again by just under €13.5 billion.
In addition to the transaction-related rise, the stock of financial assets also increased by just under €3.5 billion as a result of capital gains on securities already held, in particular bunds. Overall, this resulted in total holdings of financial assets of €4,757 billion at the end of the second quarter of 2011.
Household debt rose again in the second quarter of 2011; on balance, €5 billion worth of loans (including other liabilities) were taken up. Total liabilities to banks and insurance corporations amounted to just over €1,540 billion at the end of the quarter and net financial assets rose to €3,217 billion.
Non-financial corporations: acquisition of financial assets on the rise again in the face of weaker external financing
Taking into account intrasectoral flows, the acquisition of financial assets by non-financial corporations amounted to just under €42 billion in the reporting period. This was considerably less than in the previous quarter (€68 billion). Subdued profitability (primarily due to one-off effects in employee compensation) in association with roughly constant gross capital formation is likely to have contributed to this slowdown. Outflows of just under €16 billion from deposits are behind the weakened acquisition of financial assets. This contrasts with the inflows into mutual investment funds (just over €22 billion) and loans of more than €25 billion in total, mainly granted to domestic enterprises. There was also strong growth again in trade credit (€8.5 billion).
The almost €24 billion increase in external financing was significantly weaker than in the previous quarter. Loans from financial institutions fell by €5.5 billion in net terms, whilst borrowing from non-banks increased further by €32 billion. The latter has gained considerably in importance since the end of 2008 in the aftermath of the financial crisis. By contrast, as already seen in recent quarters, market-based financing played only a minor role in corporate funding. There were even outflows of €0.3 billion net in fixed-income securities. €5.5 billion net worth of shares were issued, increasing slightly on the quarter.
Owing to data revisions, the results published in this press release are not directly comparable with data in earlier press releases.
The complete data on the financial accounts are available online at http://www.bundesbank.de/statistik/statistik_zeitreihen.en.php?func=&open=wirtschaftsdaten