Acquisition of financial assets and financing by sector in the third quarter of 2011
Results of the financial accounts
Households’ acquisition of financial assets fell by €63 billion in the third quarter of 2011. This decline was due solely to the price losses on the capital markets: adjusted for this effect, acquisition of financial assets rose by around €31 billion. Households’ debt increased, once again, by just under €7 billion. In a favourable setting for profitability and financing, non-financial corporations, too, showed a rise of roughly €87 billion in their acquisition of financial assets at the same time as a sharp €85 billion increase in their external financing.
Households: slight increase in financial assets, rising debt
Households’ acquisition of financial assets, at just over €31 billion in the third quarter of 2011, was significantly lower than in the two preceding quarters. Bank deposits, shares and claims on insurance corporations were the main areas of growth. In particular, bank deposits (including cash holdings) showed a perceptible increase. They rose by around €18 billion net in the reporting period and thus played a key part in the acquisition of financial assets. However, households accepted negative real interest rates, preferring short-term deposits. Mainly sight deposits (including currency), with a net inflow of just over €11 billion – as in the preceding quarter – were seen as relatively attractive. Time deposits rose by just under €7 billion on balance. In this case, too, it was chiefly short-term investments (with a maturity of up to two years) that benefited. By contrast, households showed restraint in savings deposits (including savings certificates), the latter posting a net inflow of just under €0.1 billion.
Bonds (including money market paper) showed a net outflow of around €4 billion in the reporting quarter. One factor behind this development was the continuing uncertainty on the bond markets. At more than €3 billion, the decline was most marked in the case of long-term paper. There were also heavy outflows out of mutual fund shares, which declined by just under €7 billion on balance. The falling share prices in the third quarter of 2011 were the key reason for this: this led to heavy selling, especially of mutual fund shares open to the general public. Directly acquired shares, on the other hand, were bought in the value of around €5.5 billion net. Finally, claims on insurance corporations, which have been rising steadily over the past few years, increased again by just under €12.5 billion.
This transaction-related increase in financial assets was masked by falls in the prices of securities already held amounting to more than €90 billion. On balance, this led to households holding financial assets amounting to €4,663 billion at the end of the third quarter of 2011.
Household debt rose again in the third quarter of 2011; on balance, just under €7 billion worth of loans (including other liabilities) were taken up. Total liabilities thus amounted to roughly €1,552 billion at the end of the quarter and net financial assets fell to €3,111 billion.
Non-financial corporations: financial assets and external financing clearly on the rise
Given a robust situation for profitability and earnings and more or less unchanging gross investment, the acquisition of financial assets by non-financial corporations totalled over €87 billion in the reporting period. This was considerably higher than in the previous quarter (€62 billion). Non-financial corporations’ deposits (including currency) rose by €3 billion, having been reduced by almost €15 billion in the preceding quarter. This increase is due to growth in sight deposits (including currency) of just under €21 billion, compared with an outflow of funds in sight deposits amounting to €18 billion. One likely reason for this shift was the precautionary motive, ie being able to counter any unexpected financial developments in the wake of the persistent European sovereign debt crisis with readily available liquid funds. At the same time, there was an expansion of the capital-market-based acquisition of financial assets during the period under review. Non-financial corporations acquired bonds in the amount of just under €9 billion and increased their share exposures (including mutual fund shares) by €31 billion net. Lending – above all, in the form of intragroup loans – amounted to roughly €38 billion and, as in the preceding quarters, made a key contribution to the acquisition of financial assets.
The increase in external financing in a favourable environment for financing, at just under €85 billion, was significantly higher than in the previous quarter (€34 billion). Loans by domestic banks rose by more than €3 billion in net terms, however, having been repaid by almost €8 billion in the preceding quarter. Borrowing from domestic non-banks and from abroad, at €53 billion, continued to increase and was most conspicuous in the short maturities. As in the preceding quarters, however, market-based financing played no more than a secondary role. Bonds – mainly money market paper – were issued in the amount of just over €4 billion, while these had been redeemed for not quite €0.3 billion net in the preceding quarter. In the case of issues of shares, there was even a decline of more than €0.3 billion in the period under review.
Owing to data revisions, the results published in this press release are not directly comparable with data in earlier press releases.