Tue. Jan 31st, 2023

28 October 2022

  • As of October 2022, quarterly financial accounts published by European Central Bank provide more detailed breakdown of other financial institutions (OFIs)
  • Euro area net saving decreased to €733 billion in four quarters up to second quarter of 2022, compared with €790 billionone quarter earlier
  • Household debt-to-income ratio declined to 95.3% in second quarter of 2022 from 95.9% one year earlier
  • Non-financial corporations’ debt-to-GDP ratio (consolidated measure) decreased to 77.3% in second quarter of 2022 from 79.8% one year earlier
Financial Accounts for other financial institutions by subsector

As of October 2022, the quarterly financial accounts published by the European Central Bank provide a more detailed breakdown of other financial institutions (OFIs),which, after monetary financial institutions (MFIs – i.e. banks and money market funds), constitutes the second largest financial sector in the euro area. The new breakdown distinguishes other financial intermediaries, financial auxiliaries, and captive financial institutions and money lenders. For more details see: Other financial institutions explained.

Chart 1. Financial subsectors in the euro area: Liabilities, outstanding amount end-second quarter 2022, as percentage of financial sector liabilities

Source: ECB: Data for liabilities by financial subsector

Total euro area economy

Euro areanet savingdecreased to €733 billion (7.2% of euro area net disposable income) in the four quarters to the second quarter of 2022, as compared with €790 billion one quarter earlier. Euro areanet non-financial investmentdecreased to €556 billion (5.4% of net disposable income), due to decreased investment by non-financial corporations which was only partially offset by higher investment by households, while net investment by financial corporations and general government were broadly unchanged (see Chart 2).

Euro areanet lendingto the rest of the world decreased to €207 billion (from €250 billion in the previous quarter), as net saving decreased more than non-financial investment. Net lending by households declined to €370 billion (3.6% of net disposable income, after 4.8%). Net lending of non-financial corporations decreased to €120 billion (1.2% of net disposable income, after 1.8%) while that of financial corporations was broadly unchanged at €91 billion (0.9% of net disposable income). The decrease in net lending by the total private sector was partially offset by a decline in net borrowing by the general government sector (-3.6% of net disposable income, after -5.0%).

Chart 2. Euro area saving, investment and net lending to the rest of the world – (EUR billions, four-quarter sums)

Sources: ECB and Eurostat.

* Net saving minus net capital transfers to the rest of the world (equals change in net worth due to transactions).

Households

Household financial investment increased at an annual growth rate of 2.7% in the second quarter of 2022, down from 3.0% in the previous quarter. This deceleration was mainly due to lower growth rates of investment in currency and deposits (3.8%, after 4.2%), and in shares and other equity (2.3%, after 2.8%), while life insurance and pension schemes grew at a broadly unchanged rate (1.8%) (see Table 1 below).

Households were overall net buyers of listed shares. By issuing sector, they were net buyers of listed shares issued by resident sectors and the rest of the world (i.e. shares issued by non-residents of the euro area). In net terms, households continued to sell debt securities issued by MFIs, other financial institutions, and the rest of the world, while buying debt securities issued by general government, insurance corporations and non-financial corporations (see Table 2.2. in the Annex).

The household debt-to-income ratio[1] decreased to 95.3% in the second quarter of 2022 from 95.9% in the second quarter of 2021. The household debt-to-GDP ratio decreased to 58.7% in the second quarter of 2022 from 60.9% in the second quarter of 2021 (see Chart 3).

Table 1. Financial investment and financing of households, main items (annual growth rates)

Financial transactions
2021 Q2 2021 Q3 2021 Q4 2022 Q1 2022 Q2
Financial investment* 4.2 3.9 3.4 3.0 2.7
Currency and deposits 6.7 6.2 5.0 4.2 3.8
Debt securities -9.2 -10.0 -8.4 -6.8 -0.5
Shares and other equity 3.3 3.5 3.8 2.8 2.3
Life insurance and pension schemes 2.2 2.2 2.1 1.9 1.8
Financing** 3.5 3.7 4.0 4.6 5.4
Loans 4.0 4.0 4.1 4.2 4.4

Source: ECB.

* Items not shown include: loans granted, prepayments of insurance premiums and reserves for outstanding claims and other accounts receivable.

** Items not shown include: financial derivatives’ net liabilities, pension schemes and other accounts payable.

Chart 3. Debt ratios of households and non-financial corporations

Source: ECB and Eurostat.

* Outstanding amount of loans, debt securities, trade credits and pension scheme liabilities.
** Outstanding amount of loans and debt securities, excluding debt positions between non-financial corporations.
*** Outstanding amount of loan liabilities.

Non-financial corporations

In the second quarter of 2022, the annual growth of  financing of non-financial corporations increased to 3.2%, after 3.0% in the previous quarter, reflecting an acceleration in financing by loans and trade credits, while the issuance of debt securities decelerated (see Table 2 below).

The acceleration of loan financing was due to higher growth rates in loans from MFIs and from the rest of the world, which more than offset a deceleration of loans from other financial institutions, insurance corporations and pension funds, general government and via intercompany loans (see Table 3.2 in the Annex).

Non-financial corporations’ debt-to-GDP ratio  (consolidated measure) decreased to 77.3% in the second quarter of 2022, from 79.8% in the second quarter of 2021; the non-consolidated, wider debt measure, decreased to 139.9%, from 142.5% (see Chart 3).

Table 2. Financing and financial investment of non-financial corporations, main items(annual growth rates)

Financial transactions
2021 Q2 2021 Q3 2021 Q4 2022 Q1 2022 Q2
Financing* 2.3 2.3 3.0 3.0 3.2
Debt securities 2.3 2.0 5.6 5.8 4.9
Loans 2.8 3.6 4.4 4.6 5.3
Shares and other equity 1.6 1.1 1.1 1.1 1.1
Trade credits and advances 4.7 6.7 10.9 11.0 11.7
Financial investment** 4.2 4.2 4.9 4.8 4.7
Currency and deposits 8.1 7.0 9.6 8.8 8.2
Debt securities 2.6 -0.2 -5.2 -1.4 4.2
Loans 5.8 6.9 7.2 7.3 6.6
Shares and other equity 1.9 1.3 1.7 2.0 2.3

Source: ECB.

* Items not shown include: pension schemes, other accounts payable, financial derivative’s net liabilities and deposits.

** Items not shown include: other accounts receivable and prepayments of insurance premiums and reserves for outstanding claims.

For queries, please use the Statistical information request form.

Notes

  • These data come from a second release of quarterly euro area sector accounts from the European Central Bank (ECB) and Eurostat, the statistical office of the European Union. This release incorporates revisions and completed data for all sectors compared with the first quarterly release on “Euro area households and non-financial corporations” of 5 October 2022.
  • The debt-to-GDP (or debt-to-income) ratios are calculated as the outstanding amount of debt in the reference quarter divided by the sum of GDP (or income) in the four quarters to the reference quarter. The ratio of non-financial transactions (e.g. savings) as a percentage of income or GDP is calculated as sum of the four quarters to the reference quarter for both numerator and denominator.
  • The annual growth rate of non-financial transactions and of outstanding assets and liabilities (stocks) is calculated as the percentage change between the value for a given quarter and that value recorded four quarters earlier. The annual growth rates used for financial transactions refer to the total value of transactions during the year in relation to the outstanding stock a year before.
  • Hyperlinks in the main body of the statistical release lead to data that may change with subsequent releases as a result of revisions. Figures shown in annex tables are a snapshot of the data as at the time of the current release.
  1. Calculated as loans divided by gross disposable income adjusted for the change in pension entitlements.
Annexes
28 October 2022
28 October 2022
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