Higher prices of high-risk financial assets boosted households’ financial assets in the third quarter of 2009

Househods’ financial assets¹ increased in July-September 2009 by EUR 5.8 billion. The growth was almost entirely attributable to higher prices of high-risk financial assets: in net terms, households only invested EUR 0.1 billion in financial assets, whereas the rise in prices increased financial assets by EUR 5.7 billion. Households’ financial assets were EUR 152.2 billion at the end of September 2009, ie EUR 4.7 billion (3.2%) higher than in the corresponding period a year earlier.

Over the course of the financial market crisis, households have transferred a substantial amount of money from high-risk financial assets to deposits. However, this trend was reversed already at end-2008, and in 2009 the stock of household deposits remained virtually unchanged. At end-September 2009, the stock of household deposits totalled EUR 69.7 billion. At the same time, fund subscriptions have increased. In July-September 2009, households’ net subscriptions of fund shares amounted to EUR 0.3 billion. Owing to higher prices, the stock of households’ investments in funds increased by 1.2 billion in the third quarter of 2009.

The stock of household loans increased by EUR 1.3 billion in the third quarter of 2009. At EUR 97.0 million at end-September, the stock was 4.6% higher than a year earlier. However, financial assets increased slightly more than loan-based liabilities, signifying a continuation of the growth in households’ net financial assets, which had started in the second half of 2009. At EUR 55.2 billion at end-September, net financial assets were EUR 0.4 billion or 0.8% higher than a year earlier.

The stock of corporate loans decreased by EUR 4.2 billion in the third quarter of 2009. At end-September, corporate loan stock (excl. loans between Finnish non-financial corporations) totalled EUR 95.0 billion, up by 5.8% on the third quarter of 2008. Total debt financing by non-financial corporations (loans + debt securities) increased by 7.1% year-on-year.

Due to the rise in prices, non-financial corporations’ listed share-based liabilities rose sharply in the third quarter of 2009: the stock of shares issued by domestic corporations grew by EUR 11.1 billion, of which net emissions accounted for EUR 0.2 billion. At end-September, the stock amounted to EUR 116.7 billion, which was still 8.4% less than a year earlier.

The above information has been excerpted from the quarterly financial accounts statistics compiled by the Bank of Finland. These provide an overview of the stocks of financial assets and liabilities of the different sectors of the national economy and of the related transaction flows.

¹⁾ Data excludes unquoted shares and other equity, and other accounts receivable. Shares in housing corporations are also excluded from financial assets.

More information:
Hanna Häkkinen, tel. +358 10 831 2552, email: firstname.surname@bof.fi