Financial markets
Financial markets can be divided into: money,debt, and equity markets.
Money market
The money market consists of the unsecured and secured ‘cash’ segments and derivatives segments. The money market in a broader sense also includes the market for short-term debt securities.
- Studies on the money markets
- ECB Monthly Bulletin article “The analysis of the euro money market from a monetary policy perspective”, February 2008
Debt market
The amount outstanding of euro-denominated short-term debt securities issued by euro area residents totalled around 13% of GDP at the end of 2012, showing a decline compared with the end of 2011. While the outstanding amount of short-term debt securities issued by non-financial corporations in 2012 remained broadly stable, it declined for MFIs. The outstanding amount of short-term debt issued by the public sector decreased slightly in 2012 compared to the previous year.
| (end of year; EUR billions; (% of GDP)) | 1990 | 1995 | 2000 | 2002 | 2007 | 2008 | 2009 | 2010 | 2011 | 2012 |
|---|---|---|---|---|---|---|---|---|---|---|
| Source: ECB. | ||||||||||
| Total | 475 (11.6) | 605 (10.8) | 582 (8.6) | 700 (9.5) | 1120 (12.4) | 1454 (15.7) | 1429 (16.0) | 1344 (14.7) | 1376 (14.6) | 1260 (13.3) |
| MFIs | 104 (2.6) | 165.9 (3.0) | 244 (3.6) | 281 (3.8) | 610 (6.7) | 686 (7.4) | 573 (6.4) | 422 (4.6) | 562 (6.0) | 454 (4.8) |
| Non-monetary financial corporations | 4 (0.1) | 9.6 (0.2) | 6 (0.1) | 19 (0.3) | 52 (0.6) | 90 (1.0) | 71 (0.8) | 106 (1.2) | 91 (1.0) | 124 (1.3) |
| Non-financial corporations | 44 (1.1) | 33.7 (0.6) | 87 (1.3) | 75 (1.0) | 98 (1.1) | 119 (1.3) | 72 (0.8) | 64 (0.7) | 77 (0.8) | 79 (0.8) |
| Public sector | 322 (7.9) | 395.9 (7.1) | 246 (3.6) | 325 (4.4) | 361 (4.0) | 559 (6.1) | 713 (8.0) | 752 (8.2) | 645 (6.9) | 603 (6.4) |
Long-term debt securities accounted for around 142% of GDP at the end of 2012. In this market, the public sector is the most important issuer, followed by the MFI sector and the other issuers of the private sector.
| (end of year; EUR billions; (% of GDP)) | 1990 | 1995 | 2000 | 2002 | 2007 | 2008 | 2009 | 2010 | 2011 | 2012 |
|---|---|---|---|---|---|---|---|---|---|---|
| Source: ECB. | ||||||||||
| Total | 2,307 (56.5) | 4,133 (74.1) | 5,914 (87.1) | 6,755 (92.1) | 9,650 (106.8) | 10,617 (114.9) | 12,155 (136.3) | 12,688 (138.5) | 13,227 (140.4) | 13,447 (141.8) |
| MFIs | 961 (23.5) | 1,463 (26.2) | 2,179 (32.1) | 2,401 (32.7) | 3,485 (38.6) | 3,696 (40.0) | 3,915 (43.9) | 3,874 (42.3) | 4,012 (42.6) | 4,032 (42.5) |
| Non-monetary financial corporations | 54 (1.3) | 86 (1.5) | 262 (3.9) | 474 (6.5) | 1314 (14.5) | 1858 (20.1) | 2596 (29.1) | 2587 (28.2) | 2568 (27.3) | 2529 (26.7) |
| Non-financial corporations | 152 (3.7) | 221 (4.0) | 280 (4.1) | 363 (5.0) | 465 (5.1) | 487 (5.3) | 610 (6.8) | 641 (7.0) | 641 (6.8) | 738 (7.8) |
| Public sector | 1,140 (27.9) | 2,362 (42.3) | 3,191 (47.0) | 3,516 (47.9) | 4,386 (48.6) | 4,577 (49.6) | 5,033 (56.4) | 5,585 (61.0) | 6,006 (63.8) | 6149 (64.8) |
Equity market
Turning to the equity market, a commonly used indicator of its importance is the market capitalisation of stocks traded in terms of GDP. This indicator, albeit affected by movements in stock prices, shows that the equity market is less important than the debt securities market in the euro area.
| (end of year, as a percentage of GDP) | 1990 | 1995 | 1998 | 2000 | 2002 | 2007 | 2008 | 2011 | 2012 | |
|---|---|---|---|---|---|---|---|---|---|---|
| Source: World Federation of Exchanges and ECB calculations. | ||||||||||
| Euro area | 20 | 27 | 63 | 86 | 50 | 84 | 38 | 42 | 52 | |
| United States | 54 | 93 | 144 | 153 | 104 | 142 | 82 | 104 | 119 | |
| Japan | 96 | 67 | 63 | 68 | 53 | 99 | 64 | 57 | 58 | |