As at the end of 2016 Q1, households' financial assets amounted to €5,339 billion; this figure was €17 billion (or 0.3 %) higher than at the end of 2015. This comparatively small increase was due chiefly to marked valuation losses of some €42 billion on financial assets, with equities and investment fund shares being worst affected. The transaction-related acquisition of financial assets, amounting to just under €59 billion, was comparatively strong, however. There was a continuation of the preference for liquid and low-risk assets, which has prevailed for some time now, but it was accompanied - as in the two preceding quarters - by significant investment in shares and other equity, which points to a growing yield awareness. At the same time, households' liabilities went up by approximately €7 billion, which meant that their net financial assets rose to €3,710 billion in the quarter under review. At just over €10 billion (or 0.3 %), this was, however, a subdued increase following the sharp rise in the previous quarter. Net financial assets of non-financial corporations remained virtually unchanged. At the end of 2016 Q1, they amounted to minus €1,506 billion, thus falling slightly by €1 billion (or 0.1 %).

Households: Lower net inflows into bank deposits, with, once again, high capital market exposure

In 2016 Q1, the transaction-related acquisition of financial assets by households amounted to roughly €59 billion on balance and was thus well above the long-term average. Of these funds, around €8 billion was invested in bank deposits (including currency). The accumulation of deposits in the quarter under review was therefore down on the very high figures recorded last year. The particularly liquid category of transferable deposits (including currency) accounted for virtually all inflows, while fixed-term deposits remained broadly unchanged and savings deposits (including savings certificates) once again saw net outflows. Households' preference for highly liquid deposits - which has been apparent for some time now given the low-interest-rate environment - was thus still in evidence, although it has been showing a declining trend since mid-2015. Claims on insurance corporations and pension funds were built up strongly in the reporting quarter at just under €29 billion. As such claims and, above all, bank deposits are deemed to be relatively low-risk, this development - along with a continuing preference for liquidity - also points to a certain risk aversion overall on the part of households with regard to the acquisition of financial assets, although the risk aversion in particular does seem to have been less pronounced than hitherto.

This is also evident from households' comparatively high exposure on the capital markets. For example, households again purchased notable volumes of shares and other equity amounting to more than €10 billion on balance. The inflows were thus not only above the long-term average, they were also higher than the current level of inflows into bank deposits. Once again, listed shares of domestic corporations were the chief beneficiaries of this; a preference of this kind for domestic assets (home bias) can often be seen in international comparisons and generally indicates a certain amount of risk aversion. Since households are typically better informed when investing domestically, local investments are felt to be safer. Thus, only a small part of these funds flowed into foreign corporations. At just over €5 billion net, investment fund shares likewise saw significant inflows, with investment principally in bond and real estate funds. Given the continuing fall in yields during the reporting period, debt securities were again being sold in net terms, as has now been the case for more than four consecutive years, with foreign securities being most affected. At just under €2 billion, the outflows were clearly down on the figure in the previous quarter, however. Overall, this means that, as in the preceding quarters, securities continued to be of growing importance in households' acquisition of financial assets. Their increased capital market exposure points to households' heightened yield awareness.

Along with the strong transaction-related increase in financial assets during the period under review, there were significant valuation losses on financial assets, attaining a volume of around €42 billion. In what was, on the whole, a negative stock market environment, equities and investment fund shares were most affected. Taken together, these two factors led to a slight rise in households' financial assets in Q1 by just over €17 billion (or 0.3 %) on balance. At the end of the quarter under review, the financial assets of this sector thus totalled €5,339 billion (or 175 % of the annualised gross domestic product).

At €6.4 billion, households' external financing in the reporting quarter was indeed somewhat lower than in the previous quarter, but was still comparatively high for the first quarter of the year. Loans taken out mainly took the form of loans for house purchase. Sole lenders were domestic corporations, mainly banks. Households' total liabilities consequently went up by 0.5 % to €1,629 billion. In conjunction with the moderate rise in financial assets, this caused an increase in net financial assets of just over €10 billion (or 0.3 %) in the period under review, bringing them to €3,710 billion. The debt ratio - defined as total liabilities as a percentage of annualised nominal gross domestic product - remained virtually unchanged at 53.4 % at the end of 2016 Q1.

Non-financial corporations: Weak acquisition of financial assets and strong external financing

At €28 billion, the transaction-related acquisition of financial assets by non-financial corporations in 2016 Q1 was down on the strong showing of the preceding quarters. Investment was chiefly in shares and other equity and loans, which saw net increases of around €9 billion and €7 billion respectively. In both cases, funds flowed primarily into foreign non-financial corporations. Likewise, just over €2 billion was invested in claims on insurance corporations and pension funds. Debt securities and investment fund shares saw only a marginal increase in net terms of just under €1 billion and €0.5 billion respectively. In the case of debt securities, investment was primarily in paper issued by other domestic corporations.

Amounting to just under €47 billion, external financing was higher in the quarter under review than in the previous quarter and was, on the whole, comparatively strong. Positive contributions came from funds raised through loans, with funds being tapped, in particular, from domestic lenders. Financing via market-based instruments was also expanded. This included more than €3 billion worth of shares and other equity being issued on balance, with households and non-residents providing much of the funding. Financing through debt securities also made a sizeable contribution at €10 billion net, with predominantly other domestic corporations and non-residents featuring as investors.

The transaction-related increase in both financial assets and liabilities was offset by valuation changes, which left a mark on financial assets (minus €102 billion) but affected liabilities (minus €120 billion) in particular. Taking these strong valuation changes into account, net financial assets remained virtually unchanged overall, which meant that a figure of minus €1,506 billion was reached at the end of the first quarter. The debt ratio - defined as the sum of issued debt securities, loans and pension provisions as a percentage of annualised nominal gross domestic product - therefore stood at 61.7 % at the end of 2016 Q1. As annualised GDP growth was more subdued than the increase in debt, the debt ratio was 0.5 percentage point higher than in the previous quarter.

Owing to interim data revisions of the financial accounts and national accounts, the figures stated in this press release are not directly comparable with those shown in earlier press releases.