In the fourth quarter of 2013, the financial assets of households rose by around €79 billion or 1.6% on the quarter to €5,152 billion by the year-end.The largest part of this increase, at around €47 billion, was the result of valuation gains; the transaction-related acquisition of financial assets amounted to around €32 billion. There was a continuation of the trend towards liquid assets in an ongoing low-interest-rate environment, a trend which has been observed for some time now. With household debt practically unchanged on the quarter as a result of a very low level of external financing, their net financial assets expanded by around €79 billion or 2.3% to €3,574 billion at the end of 2013. In the period under review, the financial assets of non-financial corporations rose by approximately €85 billion or 2.5% to €3,529 billion at the year-end. At the same time, the significant increase in liabilities, by around €171 billion or 3.4% to €5,141 billion, caused net financial assets in this sector to shrink. However, as with households, valuation effects played a central part in this.

Households: appreciable increase in financial assets with debt practically unchanged

In the fourth quarter of 2013, the acquisition of financial assets by households totalled around €32 billion, and was thus less pronounced than in the same quarter the previous year. Additions were made in particular to bank deposits (including currency holdings), which recorded net inflows of just under €32 billion. This is the largest addition to this asset class since the fourth quarter of 2010. The inflows were almost exclusively into sight deposits (including currency holdings). By contrast, fixed-term and savings deposits (including savings certificates) remained almost unchanged on a net basis, following significant withdrawals in previous quarters. Households’ preference for liquid bank deposits, a preference observable over the whole year, thus remained clearly discernible in the fourth quarter. Appreciable additions were also recorded in claims on insurance corporations; at around €16 billion, these additions were approximately on a level with the same quarter the previous year. 

By contrast, the acquisition of financial assets in the capital markets was once again weak. Overall, net outflows of around €4 billion were recorded. Shares and bonds (including money market paper) were a particular focus of divestment, with net sales in each case of around €4 billion. Although mutual fund shares, including those of mixed funds, registered inflows, the total, at around €3 billion, was down on the level recorded in the same quarter of the previous year. These trends, which were observed in a similar form throughout the year, indicate that households’ acquisition of financial assets continues to be characterised by a certain degree of risk aversion despite positive capital market performance in the period under review.

As well as the transaction-related €32 billion increase in financial assets in the fourth quarter of 2013, there were valuation gains of around €47 billion. Shares and mutual fund shares in particular recorded price gains. Thus, taken together, in the fourth quarter of 2013 the financial assets of households rose by around €79 billion or 1.6% on the quarter to €5,152 billion at the year-end. This means that over the course of 2013 their financial assets grew by a total of around €200 billion.

Households’ external financing was very low in the fourth quarter of 2013, at just under €1 billion. They borrowed only through bank loans; liabilities towards other lenders (including insurance corporations) were reduced in net terms. Thus, total outstanding loans (including other liabilities) were little changed overall. As a result, households’ net financial assets expanded by around €79 billion or 2.3% to €3,574 billion at the end of 2013. This means that over the course of 2013 their net financial assets grew by a total of around €189 billion. The debt ratio – defined as total liabilities as a percentage of annualised gross domestic product – shrank once again, falling 0.5 percentage point to 57.7% at the end of 2013.

Non-financial corporations: growth in financial assets unable to keep up with the expansion in liabilities

In the fourth quarter of 2013, the acquisition of financial assets by non-financial corporations was unusually low at around €1 billion net, falling well short of its long-term average. Whilst sight deposits (including currency holdings) recorded appreciable inflows of around €14 billion, there was a particular drop in receivables in the form of loans (including intragroup loans, down €19 billion), trade credit (- €10 billion) and shares (- €5 billion). Fixed-term and savings deposits (including savings certificates) neither increased nor decreased on balance. 

External financing at non-financial corporations was also unusually low in the quarter under review. Outstanding amounts of around €12 billion were paid down in net terms. A comparable reduction in outstanding liabilities has not been recorded since 2009, when growth in the economy as a whole cooled significantly as a result of the financial and economic crisis. Net repayments were made principally onloans, in an amount of around €10 billion; these were mainly loans from domestic banks and affiliated enterprises. In contrast, bonds (including money market paper) added around €1 billion to the external financing total. Equity financing, too, recorded significant additions of around €7 billion. A similar pattern was observed over the whole of 2013. Overall, however, external financing in 2013 was unusually modest, totalling approximately €25 billion. Against the continued backdrop of subdued investment activity, this indicates that enterprises have been using their stable earnings position to pay down outstanding liabilities to an increased extent. 

Whilst transaction-related changes, both in the acquisition of financial assets and in external financing, were limited, significant valuation effects were recorded in the fourth quarter of 2013. These were particularly marked in the case of shares, on the assets side but also and more especially on the liabilities side. As a result, in the fourth quarter of 2013 the net financial assets of non-financial corporations shrank by around €86 billion or 5.7% to -€1,613 billion at the end of 2013. The debt ratio – defined as the sum of issued bonds, loans and company pension commitments over annualised gross domestic product – fell slightly, by 0.3 percentage point to 66.2%, continuing the downward trend of the previous quarter.