Selected results of the financial accounts by sector

The financial assets of households rose to €4,811 billion by the end of second quarter of 2012.At €9 billion and 0,2%, respectively, the quarter-on-quarter increase was only very small. This was due mainly to considerable price losses  in the capital markets of around €30 billion. Overall, the trend to invest in liquid assets continued. Debt likewise showed no more than a moderate increase. Non-financial corporations’ acquisition of financial assets amounted to roughly €14 billion, while their external financing rose by just over €27 billion. 

Households: strong acquisition of assets largely by price losses, slight rise in debt
Households’ acquisition of financial assets amounted to roughly €39 billion in the second quarter of 2012. Thus, as in earlier years, the figure was down on the first quarter (€50 billion), but well above the long-term average for the second quarter. Bank deposits and claims on insurers were the main areas of growth. In particular, bank deposits (including cash holdings) showed a perceptible increase again. Their growth was comparatively strong in the reporting period at around €22 billion (net). The related inflows of funds were concentrated solely on sight deposits (including currency), however, which increased by just over €25.5 billion net. By contrast, all other deposits were reduced; outflows of funds from fixed-term and savings deposits (including savings certificates) totalled roughly €3.5 billion. Such mixed developments in deposits are unusual. Since the end of the New Economy boom, in which households reduced their fixed-term and savings deposits in favour of large-scale activity in the capital market, such a situation had been observed only in a single quarter. One of the reasons for this heightened preference for liquidity was, as in previous quarters, the historically low interest rate setting. Furthermore, it is likely to be connected with the uncertainty concerning the sovereign debt crisis in Europe. 

This might also be reflected in the weak activity in the capital markets. For the fourth quarter in succession, there were net sales of bonds (including money market paper), amounting to €2.5 billion net. This was due, among other things, to the continuing low and, in some cases, even negative nominal yield on domestic government bonds. There were also net sales of investment fund shares (€2.5 billion). Only shares (including other equities) were sold on a small scale for almost €1.5 billion net. Claims on insurance corporations – which have risen steadily over the past few years – increased sharply by just under €12.5 billion, however. 

This transaction-related increase in financial assets contrasted with considerable valuation losses of around €30 billion, mainly of shares. On balance, this led to households holding financial assets amounting to €4,811 billion (184% of annualised GDP) at the end of the second quarter of 2012, which was scarcely higher than at the end of the first quarter (€4,802 billion). 

Household debt increased only slightly in the second quarter. On balance, loans (including other liabilities) in the amount of just under €7 billion were taken up, chiefly for house purchase. Total liabilities therefore amounted to €1,555 billion at the end of the quarter. The debt ratio – defined as total liabilities as a percentage of annualised GDP – showed hardly any change and amounted to 59.3% at the end of the observation period.

Non-financial corporations: acquisition of financial assets weak, external financing up slightly
In the period under review, acquisition of assets by non-financial corporations amounted to roughly €14 billion in total. As in earlier years, the figure was distinctly less than in the previous quarter (€37 billion). There were inflows of funds mostly in lending (€8 billion), including to affiliated enterprises, as well in trade credits and advances (€16 billion). Capital-market-based acquisition of assets was negative, however; sales of securities totalled €6 billion net. 

During the reporting period, non-financial corporations’ external financing amounted to around €27.5 billion, and was thus somewhat stronger than in the preceding quarter (€25.5billion). Borrowing was effected primarily through loans (€10 billion) as well as by means of trade credits and payments on account (€13.5 billion) Capital-market-based financing was, if anything, of secondary importance in comparison, as was the case in the preceding quarters. Bonds (including money market paper) were issued for just under €4 billion net. The fact that the financing conditions for enterprises remained favourable in a low interest rate environment probably played a part in this. By contrast, equity financing, at €2 billion, was even lower than in the already weak preceding quarter. Among other things, this is likely to have been due to the volatile setting in the capital markets during the reporting period. The debt ratio of non-financial corporations – defined as the sum of issued bonds, loans and company pension commitments over annualised GDP – was virtually unchanged from the previous quarter, at 70.5%. 

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 under internal link.