BCE Bulletin mensuel Août 2010

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	Publié par : Economist

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M O N T H LY B U L L E T I N
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A U G U S T
BULLETIN 0312010
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0512010
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MONTHL
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EAN CENTRAL BANK
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EUR
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M O N T H LY B U L L E T I N
A U G U S T 2 010
In 2010 all ECB
publications
feature a motif
taken from the
€500 banknote.

© European Central Bank, 2010
Address
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Germany
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Germany
Telephone
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Website
http://www.ecb.europa.eu
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This Bulletin was produced under the
responsibility of the Executive Board of
the ECB. Translations are prepared and
published by the national central banks.
All rights reserved. Reproduction for
educational and non-commercial purposes
is permitted provided that the source is
acknowledged.
The cut-off date for the statistics included
in this issue was 4 August 2010.
ISSN 1561-0136 (print)
ISSN 1725-2822 (online)

CONTENTS
EDITORIAL 5
EURO AREA STATISTICS
S1
ECONOMIC AND MONETARY
ANNEXES
DEVELOPMENTS 9
Chronology of monetary policy
The external environment of the euro area
9
measures of the Eurosystem
I
Monetary and ﬁ nancial developments
1 4
Documents published by the European
Prices and costs
4 8
Central Bank since 2009
V
Output, demand and the labour market
6 1
Glossary
X I I I
Exchange rate and balance of payments
developments
6 7
Boxes:
1 The funding of euro area MFIs through
the issuance of debt securities
1 7
2 The results of the July 2010 bank
lending survey for the euro area
2 2
3 Covered bond market developments
and the covered bond purchase
programme
3 2
4 An assessment of the capital shortfall
revealed in the EU-wide stress-testing
exercise
4 0
5 Integrated euro area accounts
for the ﬁ rst quarter of 2010
4 2
6 Euro area house prices and the rent
component of the HICP
4 9
7 Results of the ECB Survey of Professional
Forecasters for the third quarter of 2010
5 6
8 The introduction of the euro in Estonia
on 1 January 2011
6 9
ARTICLES
Oil prices – their determinants
and impact on euro area inﬂ ation
and the macroeconomy
7 5
Recent developments in global
and euro area trade
9 3
Harmonised ECB statistics on euro area
investment funds and their analytical use
for monetary policy purposes
1 0 9
ECB
Monthly Bulletin
August 2010
3

ABBREVIATIONS
COUNTRIES
LU
Luxembourg
BE
Belgium
HU
Hungary
BG
Bulgaria
MT
Malta
CZ Czech
Republic
NL Netherlands
DK
Denmark
AT
Austria
DE
Germany
PL
Poland
EE Estonia
PT Portugal
IE
Ireland
RO
Romania
GR
Greece
SI
Slovenia
ES
Spain
SK
Slovakia
FR
France
FI
Finland
IT
Italy
SE
Sweden
CY
Cyprus
UK
United Kingdom
LV
Latvia
JP
Japan
LT
Lithuania
US
United States
OTHERS
BIS
Bank for International Settlements
b.o.p.
balance of payments
BPM5
IMF Balance of Payments Manual (5th edition)
CD
certiﬁ cate of deposit
c.i.f.
cost, insurance and freight at the importer’s border
CPI
Consumer Price Index
ECB
European Central Bank
EER
effective exchange rate
EMI
European Monetary Institute
EMU
Economic and Monetary Union
ESA 95
European System of Accounts 1995
ESCB
European System of Central Banks
EU
European Union
EUR
euro
f.o.b.
free on board at the exporter’s border
GDP
gross domestic product
HICP
Harmonised Index of Consumer Prices
HWWI
Hamburg Institute of International Economics
ILO
International Labour Organization
IMF
International Monetary Fund
MFI
monetary ﬁ nancial institution
NACE
statistical classiﬁ cation of economic activities in the European Union
NCB
national central bank
OECD
Organisation for Economic Co-operation and Development
PPI
Producer Price Index
SITC Rev. 4
Standard International Trade Classiﬁ cation (revision 4)
ULCM
unit labour costs in manufacturing
ULCT
unit labour costs in the total economy
In accordance with EU practice, the EU countries are listed in this Bulletin using the
alphabetical order of the country names in the national languages.
ECB
4
Monthly Bulletin
August 2010

EDITORIAL
Based on its regular economic and monetary appropriate. Accordingly, the Governing Council
analyses, the Governing Council at its meeting will continue to monitor all developments over
on 5 August 2010 viewed the current key the period ahead very closely.
ECB interest rates as appropriate and therefore
decided to leave them unchanged. Considering Turning to the economic analysis, after a period
all the new information which has become of sharp decline, euro area economic activity has
available since its meeting on 8 July 2010, been expanding since mid-2009. Euro area real
the Governing Council continues to expect GDP increased, on a quarterly basis, by 0.2% in
price developments to remain moderate over the ﬁ rst quarter of 2010. The available economic
the policy-relevant medium-term horizon, data and survey-based indicators suggest a
beneﬁ ting from low domestic price pressures. strengthening in economic activity in the second
The available economic data and survey-based quarter of 2010, and the available data for the
indicators suggest a strengthening in economic third quarter are better than expected. Looking
activity in the second quarter of 2010, and the further ahead, and taking into account temporary
available data for the third quarter are better than
effects, the Governing Council continues to
expected. Looking further ahead, and taking expect real GDP to grow at a moderate and still
into account a number of temporary factors, uneven pace over time and across economies
the Governing Council continues to expect and sectors of the euro area. Ongoing growth
the euro area economy to grow at a moderate at the global level and its impact on the
and still uneven pace, in an environment of demand for euro area exports, together with the
uncertainty. The monetary analysis conﬁ rms accommodative monetary policy stance and the
that inﬂ ationary pressures over the medium term
measures adopted to restore the functioning of
remain contained, as suggested by weak money the ﬁ nancial system, should continue to support
and credit growth. Overall, the Governing the euro area economy. However, the recovery
Council expects price stability to be maintained in activity is expected to be dampened by the
over the medium term, thereby supporting the process of balance sheet adjustment in various
purchasing power of euro area households. sectors and labour market prospects.
Inﬂ ation expectations remain ﬁ rmly anchored
in line with the aim of keeping inﬂ ation rates In the Governing Council’s assessment, the risks
below, but close to, 2% over the medium term. to the economic outlook are broadly balanced in
The ﬁ rm anchoring of inﬂ ation expectations an environment of uncertainty. On the upside,
remains of the essence.
the global economy and foreign trade may
recover more strongly than is now projected,
Monetary policy will do all that is needed to thereby further supporting euro area exports.
maintain price stability in the euro area over On the downside, concerns remain relating to
the medium term. This is the necessary and the emergence of renewed tensions in ﬁ nancial
central contribution that monetary policy makes markets, renewed increases in oil and other
to fostering sustainable economic growth, job commodity prices, and protectionist pressures, as
creation and ﬁ nancial stability. All the non-
well as the possibility of a disorderly correction
standard measures taken during the period of of global imbalances.
acute ﬁ nancial market tensions, referred to as
“enhanced credit support” and the Securities With regard to price developments, euro area
Markets Programme, are fully consistent annual HICP inﬂ ation increased to 1.7% in July,
with the Governing Council’s mandate and, according to Eurostat’s ﬂ ash estimate, from
by construction, temporary in nature. The 1.4% in June, most likely owing to upward
Governing Council remains ﬁ rmly committed base effects in the energy and food components.
to price stability over the medium to longer In the next few months, annual HICP inﬂ ation
term. The monetary policy stance and the rates are expected to display some further
overall provision of liquidity will be adjusted as volatility around the current level. Looking
ECB
Monthly Bulletin
August 2010
5

further ahead, in 2011 inﬂ ation rates should The still weak annual growth rate of bank
remain moderate overall, beneﬁ ting from low loans to the private sector continues to conceal
domestic price pressures. Inﬂ ation expectations countervailing developments, with increasingly
over the medium to longer term continue to positive growth in loans to households and
be ﬁ rmly anchored in line with the Governing stabilised negative annual growth in loans to
Council’s aim of keeping inﬂ ation rates below, non-ﬁ nancial corporations. A lagged response
but close to, 2% over the medium term.
of loans to non-ﬁ
nancial corporations to
developments in economic activity is a normal
Risks to the outlook for price developments are feature of the business cycle.
broadly balanced. Upside risks over the medium
term relate, in particular, to the evolution of The data up to June indicate that, after
commodity prices. Furthermore, increases in expanding for a few months earlier in the year,
indirect taxation and administered prices may the size of banks’ overall balance sheets has
be greater than currently expected, owing to not increased further. The challenge remains
the need for ﬁ scal consolidation in the coming for banks to expand the availability of credit
years. At the same time, risks to domestic price to the non-ﬁ nancial sector when demand picks
and cost developments are contained. Overall, up. Where necessary, to address this challenge,
the Governing Council will monitor closely the banks should retain earnings, turn to the market
future evolution of all available price indicators.
to strengthen further their capital bases or take
full advantage of government support measures
Turning to the monetary analysis, the annual for recapitalisation.
growth rate of M3 turned positive and was
0.2% in June 2010, after -0.1% in May. In this respect, the Governing Council welcomes
The annual growth rate of loans to the private the EU-wide stress-testing exercise, which
sector increased slightly further but, at 0.3%, was prepared and conducted by the Committee
remained weak. Together, these data continue to of European Banking Supervisors (CEBS)
support the assessment that the underlying pace and national supervisory authorities, in close
of monetary expansion is moderate and that cooperation with the ECB. This stress-testing
inﬂ ationary pressures over the medium term are exercise was comprehensive and rigorous, and the
contained. Shorter-term developments in M3 results conﬁ rm the resilience of EU and euro area
and some of its components and counterparts banking systems as a whole to severe economic
have remained volatile, and this volatility may and ﬁ nancial shocks. The stress test has also
well persist.
signiﬁ cantly enhanced transparency regarding the
current ﬁ nancial conditions and risk exposures of
The previously strong impact of the interest rate the 91 institutions that participated in the exercise.
constellation on monetary dynamics, while still Hence, the exercise represents an important step
affecting the pace of underlying money growth, forward in restoring market conﬁ dence.
appears to be gradually waning. This implies
a gradual reduction in the effect on actual M3 The Governing Council also welcomes the
growth arising from the downward impact of the
commitment made by national authorities with
steep yield curve and the associated allocation regard to the provision of support facilities for
of funds into longer-term deposits and securities banks where private sector means are insufﬁ cient.
outside M3. At the same time, the annual growth
Sound balance sheets, effective risk management
rate of M1 has continued to moderate, although and transparent, robust business models are key
it remained strong at 9.2% in June 2010. In part, to strengthening banks’ resilience to shocks and
this reﬂ ects somewhat higher opportunity costs to ensuring adequate access to ﬁ nance, thereby
of holding overnight deposits relative to other laying the foundations for sustainable growth,
short-term deposits.
job creation and ﬁ nancial stability.
ECB
6
Monthly Bulletin
August 2010

E D I T O R I A L
To sum up, the current key ECB interest rates credible ﬁ scal adjustment measures, focusing
remain appropriate. Considering all the new on the expenditure side, while being prepared to
information which has become available since implement additional measures, where needed,
its meeting on 8 July 2010, the Governing over the coming years.
Council continues to expect price developments
to remain moderate over the policy-relevant In order to support the process of ﬁ scal
medium-term horizon, beneﬁ
ting from low consolidation, to underpin the proper functioning
domestic price pressures. The available of the euro area and to strengthen the prospects
economic data and survey-based indicators for higher sustainable growth, the pursuit of
suggest a strengthening in economic activity in far-reaching structural reforms is essential.
the second quarter of 2010, and the available Major reforms are particularly needed in
data for the third quarter are better than those countries that have experienced losses
expected. Looking further ahead, and taking in competitiveness in the past or that are
into account a number of temporary factors, the suffering from high ﬁ scal and external deﬁ cits.
Governing Council continues to expect the euro Measures should ensure a wage bargaining
area economy to grow at a moderate and still process that allows wages to adjust ﬂ exibly
uneven pace, in an environment of uncertainty. to the unemployment situation and losses
A cross-check of the outcome of the economic in competitiveness. Reforms to strengthen
analysis with that of the monetary analysis productivity growth would further support the
conﬁ rms that inﬂ ationary pressures over the adjustment process of these economies.
medium term remain contained, as suggested
by weak money and credit growth. Overall, This issue of the Monthly Bulletin contains
the Governing Council expects price stability three articles. The ﬁ rst article reviews oil price
to be maintained over the medium term, thereby developments and their impact on euro area
supporting the purchasing power of euro area inﬂ ation and economic activity. The second
households. Inﬂ
ation expectations remain article discusses recent developments in global
ﬁ rmly anchored in line with the aim of keeping and euro area trade. The third article provides an
inﬂ ation rates below, but close to, 2% over the overview of the new harmonised ECB statistics
medium term. The ﬁ rm anchoring of inﬂ ation on euro area investment funds.
expectations remains of the essence.
Turning to ﬁ scal policies, it is essential that
budget plans for 2011 and beyond reﬂ ect a
strong commitment to returning to sound
public ﬁ nances. Given the exceptional ﬁ scal
deterioration over the past two years, there
is an urgent need to implement credible
medium-term consolidation strategies aimed
at restoring ﬁ scal sustainability and creating
room for budgetary manoeuvre. As a minimum,
countries’ budgetary targets must comply
with the ﬁ
scal consolidation requirements
foreseen under the respective excessive deﬁ cit
procedures. More ambitious targets, as already
adopted by a number of euro area countries,
may become necessary where current plans fall
short of meeting the main objective of halting
and reversing the increase in the government
debt ratio. Moreover, all countries must specify
ECB
Monthly Bulletin
August 2010
7

E C O N O M I C
A N D M O N E T A R Y
D E V E L O P M E N T S
E C O N O M I C A N D M O N E T A R Y
The external
D E V E L O P M E N T S
environment
of the euro area
1 THE EXTERNAL ENVIRONMENT
OF THE EURO AREA
The recovery in the global economy is continuing, albeit at an uneven pace. While several
economies have recorded robust growth in the ﬁ rst half of 2010, supported by policy stimuli and the
inventory cycle, there are some indications that the pace of expansion is moderating. Inﬂ ationary
pressures have remained subdued overall in advanced economies, while they have picked up in
dynamic emerging market regions. Risks to the global economic outlook are seen to be broadly
balanced.
1.1 DEVELOPMENTS IN THE WORLD ECONOMY
Chart 1 Global PMI output
The recovery in the global economy is
continuing, supported by policy stimuli and the
(diffusion index; seasonally adjusted; monthly data)
inventory cycle, but the pattern of the global
PMI output: overall
PMI output: manufacturing
expansion remains uneven. The major advanced
PMI output: services
economies are still recording high spare capacity
65
65
and only modest growth overall, while the upturn
60
60
in emerging markets has been very strong. There
are some indications, however, that the pace of
55
55
expansion in fast-growing emerging economies
50
50
is starting to moderate towards more sustainable
45
45
levels.
40
40
Survey-based indicators suggest that the pace
35
35
of the global economic expansion, while 30
30
remaining robust, has continued to moderate
25
25
somewhat. The overall global PMI output index
1999 2001 2003 2005 2007 2009
continued to decline slightly, falling to 54.6 in
Source: Markit.
July from 56.7 in the previous three-month
period (see Chart 1). However, this ﬁ gure is still
well above the expansion/contraction threshold
Chart 2 International price developments
of 50 and exceeds the index’s average level over
the past ten years. The slower inﬂ ow of new
(monthly data; annual percentage changes)
orders compared with the previous three months
OECD consumer prices (all items)
also suggests that growth in economic activity
OECD consumer prices (all items excluding food
and energy)
may have peaked in the second quarter of the
year. The slowdown in global growth is also
6
6
likely to have repercussions on the outlook for
5
5
global trade and thus euro area foreign demand
in the second half of the year.
4
4
3
3
Global price developments have tended to
mirror the uneven growth patterns, with
2
2
inﬂ
ationary pressures remaining subdued
overall in advanced economies, but picking up
1
1
in dynamic emerging market regions. In the
0
0
OECD area, headline consumer price inﬂ ation
fell to 1.5% in the year to June, compared
-1
-1
1999 2001 2003 2005 2007 2009
with 2.0% in May (see Chart 2), mainly owing
Source: OECD.
to energy-related base effects. Excluding
ECB
Monthly Bulletin
August 2010
9

food and energy, consumer prices rose by 1.3% in June, unchanged from the previous
month. The global PMI input price index is also signalling lower price pressures and
showed some further moderation in July, declining to 53.3 from the peak of 60.9 recorded in
April 2010. However, a reading above 50 is still consistent with increasing prices.
UNITED STATES
In the United States, real GDP growth lost some momentum in the second quarter of 2010.
According to the advance estimate by the Bureau of Economic Analysis, real GDP increased
by 2.4% in annualised terms in the second quarter of 2010, while growth in the ﬁ rst quarter was
revised upwards to 3.7% from 2.7%. While
growth in private consumer spending has slowed
Chart 3 Main developments in major
down since the ﬁ rst quarter, private business
industrialised economies
investment has accelerated rapidly. GDP growth
also partly reﬂ ected a positive contribution from
euro area
United States
inventories as well as government consumption
Japan
United Kingdom
and investment. On the other hand, growth was
dampened by a large negative contribution from
Output growth 1)
(quarter-on-quarter percentage changes; quarterly data)
net trade, owing to a marked rebound in imports
relative to exports.
3
3
2
2
As regards price developments, annual CPI
1
1
inﬂ ation declined from 2.0% in May to 1.1%
in June. A slowdown in annual energy price
0
0
inﬂ ation in June accounted for the fall in
-1
-1
headline CPI. Excluding food and energy, -2
-2
annual inﬂ ation remained at 0.9% in June, the
lowest rate since 1966, reﬂ ecting the substantial
-3
-3
slack in product and labour markets.
-4
-4
-5
-5
On 23 June 2010 the US Federal Open Market
1999 2001 2003 2005 2007 2009
Committee (FOMC) decided to maintain its
target range for the federal funds rate at 0% to
Inﬂ ation rates 2)
(consumer prices; annual percentage changes; monthly data)
0.25%. The FOMC continues to hold the view
that economic conditions, including low rates of
6
6
resource utilisation, subdued inﬂ ationary trends
5
5
and stable inﬂ ation expectations, are likely to
4
4
warrant exceptionally low levels of the federal
3
3
funds rate for an extended period.
2
2
1
1
JAPAN
Japan’s economy has shown further signs of a
0
0
recovery, mainly on the back of robust net exports
-1
-1
and, to a lesser extent, domestic demand. High
-2
-2
growth in Asia has continued to boost exports,
-3
-3
while ﬁ scal stimuli have supported domestic
1999 2001 2003 2005 2007 2009
demand. However, recent data releases point
Sources: National data, BIS, Eurostat and ECB calculations.
1) Eurostat data are used for the euro area and the United Kingdom;
to some moderation. In particular, real exports
national data are used for the United States and Japan. GDP ﬁ gures
have been seasonally adjusted.
increased year on year in June, but at a slower
2) HICP for the euro area and the United Kingdom; CPI for the
pace compared with May, partly as a result of
United States and Japan.
ECB
10 Monthly Bulletin
August 2010

E C O N O M I C
A N D M O N E T A R Y
D E V E L O P M E N T S
The external
environment
of the euro area
the appreciation of the yen. At the same time industrial production, while still showing a positive
quarterly growth rate in the second quarter of 2010, slowed down in month-on-month terms in June.
As regards price developments, consumer prices declined in June, but deﬂ ation is moderating.
CPI inﬂ ation stood at -0.7% year on year in June compared with -0.9% in May. Annual CPI inﬂ ation
excluding food and energy was -1.5% in June compared with -1.6% in May. At its meeting on
10 August 2010, the Bank of Japan decided to leave its target for the uncollateralised overnight call
rate unchanged at 0.1%.
UNITED KINGDOM
In the United Kingdom, recent indicators continue to suggest ongoing recovery. Real GDP
increased by 1.1% quarter on quarter in the second quarter of 2010, after expanding by 0.3% in the
ﬁ rst quarter (see Chart 3). The recovery in the second quarter was broadly based across the main
economic sectors. House prices continued their upward trend in June, with the Halifax index rising
by 6.3% in year-on-year terms, but in month-on-month terms, they have declined in recent months.
Looking ahead, the gradual recovery is expected to continue, supported by lagged effects of the
depreciation of the pound sterling, monetary stimuli and improvements in overall global economic
conditions. However, growth of domestic demand is expected to remain restrained by tight credit
conditions, household balance sheet adjustment and substantial ﬁ scal tightening.
Annual CPI inﬂ ation decreased to 3.2% in June from 3.4% in May. It is expected that the lagged
effects of the depreciation of the pound sterling and the impact of the VAT rate increase in
January 2011 will exert upward pressure on consumer prices. On 5 August the Bank of England’s
Monetary Policy Committee voted to maintain the ofﬁ cial Bank Rate paid on commercial bank
reserves at 0.5%. The Committee also voted to maintain the stock of asset purchases ﬁ nanced by
the issuance of central bank reserves at GBP 200 billion.
OTHER EUROPEAN COUNTRIES
In other non-euro area EU countries, economic activity also continued to improve in the ﬁ rst quarter
of 2010. At the same time, inﬂ ationary developments show a mixed picture.
In Sweden, real GDP increased by 1.5% quarter on quarter in the ﬁ rst quarter of 2010, after
growth of 0.5% in the fourth quarter of 2009. The labour market has recently shown some signs
of stabilisation, providing further support to the economic recovery. In Denmark, output increased
by 0.5% in the ﬁ rst quarter of 2010, up from 0.2% in the fourth quarter of 2009. The rebound in
economic activity is expected to continue, although only gradually, supported by the ﬁ scal stimulus
package, low inﬂ ation and improving external conditions. In June 2010 annual HICP inﬂ ation
moderated to 1.6% in Sweden and 1.7% in Denmark.
Among the largest central and eastern European EU countries, only Romania registered negative
real GDP growth in the ﬁ rst quarter of 2010, at -0.3% quarter on quarter. At the same time, growth
reached 0.9% in Hungary and 0.5% in the Czech Republic and Poland. Overall, with the exception
of Romania, recent conﬁ dence indicators as well as industrial production and trade ﬁ gures point to
an improvement in activity. However, a number of factors – including rising unemployment and
weak credit conditions (particularly in Hungary and Romania) – point to continued weakness in
domestic demand. In June 2010 annual HICP inﬂ ation stood at 1.0% in the Czech Republic and
2.3% in Poland. By contrast, in Hungary and Romania, annual HICP inﬂ ation remained at higher
levels, standing at 5.0% and 4.3% respectively.
ECB
Monthly Bulletin
August 2010
11

EMERGING ASIA
According to the latest available evidence, economic activity in emerging Asia remained buoyant
during the second quarter of 2010. Strong exports and domestic private demand were the main
drivers of growth, while government spending declined in some economies. At the same time,
there are signs that growth is slowing down slightly in a number of countries. After picking up
during the ﬁ rst quarter of 2010, inﬂ ation largely stabilised across the region in the second quarter.
In China, real GDP increased by 10.3% year on year in the second quarter compared with 11.9%
in the ﬁ rst quarter, thus signalling some cooling down of the economy coupled with a diminishing
risk of overheating. The gradual withdrawal, including through administrative measures, of the
ﬁ scal and monetary policy stimuli seems to have proven effective in curbing public expenditure
in ﬁ xed-asset investment and avoiding the possible further accumulation of a property market
bubble. External demand has recovered markedly, partly as a result of the gradual strengthening
of demand in advanced economies. At the same time, imports have slowed down somewhat in
a context of decelerating domestic investment, resulting in a widening trade surplus in June.
Inﬂ ationary pressures persist, but are expected to remain contained on account of the emergence
of some excess capacity in a cooling economy. CPI and PPI inﬂ ation declined to 2.9% and 6.4% in
June respectively, in the context of a slowdown in credit and money supply.
LATIN AMERICA
In Latin America, the pace of economic activity has remained solid overall, while developments
in inﬂ ation have been mixed. In Brazil, industrial production grew by 14.8% on an annual basis in
May. In June consumer price inﬂ ation stood at 4.8%. In response to the rapid recovery in economic
activity, the Banco Central do Brasil raised its key interest rate by 50 basis points to 10.75% on
21 July. In Argentina, an exceptional harvest coupled with the ﬁ scal stimulus and positive spillover
effects stemming from the rapid growth in Brazil have resulted in strong economic activity in
recent months. Industrial production expanded by 10.2% on an annual basis in May. However,
consumer price inﬂ ation has remained high, with an annual rate of 11.0% in June. Finally, industrial
production in Mexico grew by 8.6% in May,
while inﬂ ationary pressures receded somewhat,
Chart 4 Main developments in commodity
with headline inﬂ ation dropping below 4% in
prices
the same month.
Brent crude oil (USD/barrel; left-hand scale)
non-energy commodities (USD; index: 2000 = 100;
right-hand scale)
1.2 COMMODITY MARKETS
150
300
140
285
Oil prices increased during most of July, 130
270
recovering from the decline at the start of
120
255
the month. Brent crude oil prices stood at
110
240
USD 81.9 per barrel on 4 August, which is
100
225
4.6% higher than at the beginning of the year
90
210
(see Chart 4). Looking ahead, market participants
80
195
are expecting higher oil prices in the medium
70
180
term, with futures contracts for December 2012
60
165
trading at USD 89.1 per barrel.
50
150
40
135
Looking at fundamentals, oil demand remains
30
120
2008
2009
2010
high in non-OECD countries and is steadily
Sources: Bloomberg and HWWI.
recovering in OECD countries, in particular in
ECB
12 Monthly Bulletin
August 2010

E C O N O M I C
A N D M O N E T A R Y
D E V E L O P M E N T S
The external
environment
of the euro area
the United States. The International Energy Agency expects global oil demand to rise by 1.6%
in 2011, mainly driven by an increase in demand in non-OECD countries. On the supply side,
oil production capacity remains ample and inventory levels continue to be high, partially dampening
the demand-side pressures on oil prices.
The prices of non-energy commodities increased signiﬁ cantly in July. Food prices increased on the
back of considerably higher wheat prices, and metal prices also recovered from the lows reached in
early June owing, in particular, to higher prices for copper and lead. In aggregate terms, the price
index for non-energy commodities (denominated in US dollars) was 17.6% higher towards the end
of July than at the beginning of the year.
1.3 OUTLOOK FOR THE EXTERNAL ENVIRONMENT
Recent data releases continue to suggest that some moderation in the growth momentum might be
expected during the second half of the year as the support from the inventory cycle and the policy
stimuli fades. Leading indicators suggest that growth in global economic activity may have peaked
in the second quarter. The OECD composite
leading indicator for May 2010 points to
Chart 5 OECD composite leading indicators
continued but slower expansion in the OECD
area. In more detail, it suggests a slowdown
(monthly data; amplitude-adjusted)
in the expansion in the United States, Japan
and Russia and anticipates peaks in the United
OECD
emerging markets
Kingdom, Canada and some major emerging
106
106
economies. Conﬁ dence indicators for major
economies have also been cooling recently,
104
104
suggesting some headwinds for global economic
102
102
expansion in the near future.
100
100
In an environment of uncertainty, the risks to
98
98
global activity remain broadly balanced. On the
96
96
upside, trade may recover more strongly than is
94
94
now projected. On the downside, concerns remain
92
92
relating to the emergence of renewed tensions
in ﬁ nancial markets, renewed increases in oil
90
90
1999 2001 2003 2005 2007 2009
and other commodity prices, and protectionist
Source: OECD.
pressures, as well as the possibility of a disorderly
Note: The emerging market indicator is a weighted average of
correction of global imbalances.
the composite leading indicators for Brazil, Russia and China.
ECB
Monthly Bulletin
August 2010
13

2 MONETARY AND FINANCIAL DEVELOPMENTS
2.1 MONEY AND MFI CREDIT
The annual growth rates of M3 and MFI loans to the private sector increased marginally in June,
but remained weak. The dampening impact of the steep yield curve on M3 growth is gradually
diminishing. Against this background, the assessment of moderate underlying monetary expansion
and contained inﬂ ationary pressures over the medium term still prevails. The subdued annual
growth in MFI loans to the private sector continues to conceal moderately positive growth in loans
to households and negative growth in loans to non-ﬁ nancial corporations, albeit at a stable level.
Finally, the data up to June on MFIs’ main assets show that the overall size of banks’ balance
sheets has stabilised.
THE BROAD MONETARY AGGREGATE M3
In June 2010 the annual growth rate of M3 turned slightly positive after four months of negative
readings, standing at 0.2% (see Chart 6). June saw a strong month-on-month inﬂ ow, which was
reﬂ ected in another increase in the annualised six-month growth rate. However, the volatility that
has characterised shorter-term developments in M3 and some of its components and counterparts
over recent quarters still persists. The increase in the annual growth rate of M3 was predominantly
due to large positive ﬂ ows for repurchase agreements resulting from the settling of transactions
through central counterparties.
Overall, the developments in M3 continue to be explained, to some extent, by the impact of the
interest rate constellation. As a result of the still steep yield curve, which implies a relatively
high remuneration of non-monetary interest-bearing assets, there continued to be an incentive to
allocate new funds outside of M3, but this effect is gradually waning. Therefore, while headline M3
growth is continuing to understate the pace of
underlying monetary growth, it is doing so to a
diminishing extent.
Chart 6 M3 growth
On the components side, the overall growth in
(percentage changes; adjusted for seasonal and calendar effects)
M3 continued to conceal substantial differences
M3 (annual growth rate)
between strong, but declining, annual growth
M3 (three-month centred moving average of the annual
in M1 and negative, but improving, growth in
growth rate)
M3 (six-month annualised growth rate)
both other short-term deposits and marketable
14
14
instruments. On the counterparts side, the annual
growth of loans to the private sector remained
12
12
weak, continuing to conceal differences between
10
10
moderate positive growth in loans to households
8
8
and negative growth in loans to non-ﬁ nancial
corporations.
6
6
4
4
The data up to June on MFIs’ main assets show
that the size of banks’ overall balance sheets
2
2
has stabilised following the increases observed
0
0
since the turn of the year. This reﬂ ects a monthly
contraction in inter-MFI credit, which was offset
-2
-2
1999
2001
2003
2005
2007
2009
by increases in claims on the Eurosystem, and in
Source: ECB.
loans to the euro area private sector.
ECB
14 Monthly Bulletin
August 2010

E C O N O M I C
A N D M O N E T A R Y
D E V E L O P M E N T S
Monetary and
financial
developments
MAIN COMPONENTS OF M3
In June 2010 the weak annual growth rate of M3 continued to conceal differences in the levels
of growth of its various components. While these differences have tended to narrow over recent
months, they remain large. Indeed, the annual growth rate of M1 remained strong, although it has
gradually declined in recent quarters. At the same time, the annual growth rates of marketable
instruments and short-term deposits other than overnight deposits continued to be substantially
negative, although they have recovered somewhat recently.
The annual growth rate of M1 declined further to 9.2% in June, down from 10.3% in May.
This development reﬂ ected moderate monthly inﬂ ows for both overnight deposits and currency in
circulation. While monthly developments continued to be characterised by a high level of volatility,
the moderation in the annual growth rate of M1 may reﬂ ect the fact that the opportunity costs
of holding overnight deposits relative to other types of short-term deposit have been gradually
increasing over recent months, as interest rates paid on other short-term deposits have been rising.
The annual growth rate of short-term deposits other than overnight deposits increased to -7.2% in
June, up from -8.0% in May. This resulted from a subdued monthly outﬂ ow from deposits with an
agreed maturity of up to two years (short-term time deposits), which was fully offset by an inﬂ ow
of the same magnitude for deposits redeemable at notice of up to three months (short-term savings
deposits). Overall, the less negative annual growth rate of short-term deposits other than overnight
deposits suggests that the shifting of funds towards overnight deposits that has been occurring over
the last year and a half seems to have declined.
The annual growth rate of marketable instruments increased to -7.3% in June, up from -9.8%
in May. This less negative annual growth rate was the result of a strong monthly ﬂ ow for repurchase
agreements, while money market fund shares/units registered a further outﬂ ow. The monthly
increase in repurchase agreements continued to reﬂ ect the settling of transactions through central
counterparties.
The annual growth rate of M3 deposits – which comprise short-term deposits and repurchase
agreements and represent the broadest monetary aggregate for which a timely sectoral breakdown
is available – registered, at a sectoral level, an increase in the contribution from households for
the ﬁ rst time since November 2008. The contribution from non-monetary ﬁ nancial intermediaries
other than pension funds and insurance corporations (OFIs) remained stable, whereas that of
non-ﬁ nancial corporations marked a renewed decrease. As a result, the contributions from each
of these sectors to the annual growth rate of M3 deposits tended to converge in June, although the
increase in holdings of non-ﬁ nancial corporations still represents the largest contribution to the
annual growth of these instruments.
MAIN COUNTERPARTS OF M3
Regarding the counterparts of M3, the annual growth rate of total MFI credit to euro area residents
decreased to 1.5% in June, from 1.7% in May, on account of declines in the annual growth rates of
both credit to general government, which remained fairly strong, and credit to the private sector,
which fell to zero (see Table 1).
The annual growth rate of loans to the private sector (the largest component of credit to the private
sector) increased marginally, to stand at 0.3% in June, up from 0.2% in May, thus remaining weak.
As in the previous two months, in June the impact of securitisation was negligible.
ECB
Monthly Bulletin
August 2010
15

Table 1 Summary table of monetary variables
(quarterly ﬁ gures are averages; adjusted for seasonal and calendar effects)
Outstanding
Annual growth rates
amount as a
2009
2009
2010
2010
2010
2010
percentage of M3 1)
Q3
Q4
Q1
Q2
May
June
M1
49.5
12.2
12.3
11.3
10.3
10.3
9.2
Currency in circulation
8.3
12.8
7.5
6.2
6.4
6.8
6.9
Overnight deposits
41.1
12.1
13.3
12.4
11.1
11.0
9.7
M2 - M1 (= other short-term deposits)
38.5
-3.1
-7.7
-8.2
-8.1
-8.0
-7.2
Deposits with an agreed maturity
of up to two years
19.0
-13.2
-22.1
-22.8
-21.6
-21.2
-19.5
Deposits redeemable at notice
of up to three months
19.5
12.9
15.8
13.3
10.2
9.7
8.7
M2
88.0
4.5
2.2
1.7
1.4
1.5
1.4
M3 - M2 (= marketable instruments)
12.0
-7.7
-11.4
-11.6
-9.6
-9.8
-7.3
M3
100.0
2.7
0.3
-0.2
-0.1
-0.1
0.2
Credit to euro area residents
3.7
3.1
1.9
1.7
1.7
1.5
Credit to general government
12.0
14.2
9.9
9.0
9.4
8.1
Loans to general government
2.6
3.1
3.8
6.6
7.7
6.9
Credit to the private sector
2.1
0.9
0.3
0.2
0.1
0.0
Loans to the private sector
0.4
-0.6
-0.4
0.1
0.2
0.3
Loans to the private sector adjusted
for sales and securitisation
1.6
0.3
-0.2
0.1
0.2
0.2
Longer-term ﬁ nancial liabilities
(excluding capital and reserves)
4.8
6.7
5.5
4.4
4.0
2.8
Source: ECB.
1) As at the end of the last month available. Figures may not add up due to rounding.
The annual growth of loans to the private sector continues to reﬂ ect conﬂ icting developments across
the various sub-sectors. The annual growth rate of loans to non-ﬁ nancial corporations remained in
negative territory in June (at -1.9%), although slightly less negative than in May (see Table 2).
In June a monthly outﬂ ow was recorded, mostly driven by short-term loans (loans with maturities of
up to one year). The latter development may in part represent a correction after a signiﬁ cant inﬂ ow
Table 2 MFI loans to the private sector
(quarterly ﬁ gures are averages; adjusted for seasonal and calendar effects)
Outstanding amount
Annual growth rates
as a percentage
2009
2009
2010
2010
2010
2010
of the total 1)
Q3
Q4
Q1
Q2
May
June
Non-ﬁ nancial corporations
42.7
1.2
-1.4
-2.5
-2.2
-2.1
-1.9
Up to one year
24.3
-8.7
-11.9
-12.3
-10.8
-10.4
-10.1
Over one and up to ﬁ ve years
19.7
4.7
-0.2
-3.3
-4.6
-4.7
-4.6
Over ﬁ ve years
56.0
5.4
3.9
3.2
3.1
3.2
3.3
Households 2)
46.5
-0.1
0.3
1.7
2.5
2.6
2.8
Consumer credit 3)
12.5
-1.0
-1.0
-0.6
-0.7
-0.3
-1.6
Lending for house purchase 3)
71.5
-0.2
0.2
2.0
3.0
3.1
3.4
Other lending
16.0
1.3
1.9
2.4
3.0
2.9
3.4
Insurance corporations and pension funds
0.8
-6.1
-12.4
-9.3
-9.2
-7.8
-13.4
Other non-monetary ﬁ nancial intermediaries
10.0
0.0
0.2
0.2
0.8
0.5
-0.4
Source: ECB.
Notes: MFI sector including the Eurosystem; sectoral classiﬁ cation based on the ESA 95.
For further details, see the relevant technical notes.
1) As at the end of the last month available. Sector loans as a percentage of total MFI loans to the private sector; maturity breakdown
and breakdown by purpose as a percentage of MFI loans to the respective sector. Figures may not add up due to rounding.
2) As deﬁ ned in the ESA 95.
3) The deﬁ nitions of consumer credit and lending for house purchase are not fully consistent across the euro area.
ECB
16 Monthly Bulletin
August 2010

E C O N O M I C
A N D M O N E T A R Y
D E V E L O P M E N T S
Monetary and
financial
developments
recorded in May. Regarding loans to households, the annual growth rate continued to increase slightly
(to 2.8% in June). The growth of loans to households continues to mainly reﬂ ect developments in
lending for house purchase, while consumer credit growth contracted signiﬁ cantly.
Overall, developments in private sector loans still remain broadly consistent with business cycle
regularities. These regularities suggest that, in terms of annual growth rates, real loans to households
are broadly coincident with real GDP, while real loans to non-ﬁ nancial corporations tend to lag
economic activity by about one year. Although no clear evidence has yet emerged of a turning point
in real loans to non-ﬁ nancial corporations, deviations from historical averages are not unknown and
can be explained by special factors. In the current situation, for example, special factors which may
imply a somewhat delayed recovery in the annual growth rate of real loans to enterprises include the
uneven recovery across countries and economic sectors and the ability of ﬁ rms in some sectors to
make increasing recourse to internally generated funds or to market-based funding, which has been
strong over the last 12 months. For details of developments in euro area banks’ credit standards and
loan demand, see the box entitled “The results of the July 2010 bank lending survey for the euro area”
at the end of this section. For an analysis of savings, investment and ﬁ nancing by institutional sector,
see the box entitled “Integrated euro area accounts for the ﬁ rst quarter of 2010” in Section 2.6.
Among the other counterparts of M3, the annual growth rate of MFI longer-term ﬁ nancial liabilities
(excluding capital and reserves) moderated further in June, having followed a broadly declining
trend since October 2009. This decline reﬂ ected similar developments across sub-components.
More precisely, the decline in the annual growth rate of longer-term deposits reﬂ ected the fact
that the shifting of funds from M3 deposits to longer-term deposits – encouraged by the yield
conﬁ guration – has subsided over recent months. Moreover, the annual growth rate of long-term
MFI debt securities held by the money-holding sector declined further in June. This was the result
of another sizeable negative monthly ﬂ ow, the largest since October 2008, which may reﬂ ect the
reduced attractiveness of market issuance under prevailing market conditions (for more details
see the box entitled “The funding of euro area MFIs through the issuance of debt securities”).
The annual growth rate of capital and reserves declined to 6.3% in June, down from 8.0% in May.
Box 1
THE FUNDING OF EURO AREA MFIS THROUGH THE ISSUANCE OF DEBT SECURITIES
The recent tensions in the sovereign debt markets affected euro area MFIs’ ﬁ nancing conditions
and their access to wholesale funding in the second quarter of 2010. The impact was visible
on bank bond spreads and bank credit default swap premia, which increased sharply in May
and June 2010, but is also likely to have affected the debt issuance of euro area banks in recent
months. Indeed, the MFI balance sheet data showed a net decline of debt securities issued by MFIs
in both May and June 2010. This picture is conﬁ rmed by the latest results of the Eurosystem’s
bank lending survey (see Box 2), which point to a deterioration of wholesale funding access in
the second quarter. Against this background, this box describes the most recent developments in
euro area MFIs’ issuance of debt securities.
ECB
Monthly Bulletin
August 2010
17

Net debt security issuance
Tensions in markets for euro area sovereign debt implied direct spillover effects from higher
sovereign yields to bank bond yields. Banks’ exposures to sovereign debt, as well as the
uncertainties surrounding those exposures, also seemed to increase counterparty risk and to
affect banks’ probability of default more generally. This was reﬂ ected, for example, in spreads
on AA and A-rated bank bonds that rose by around 70-100 basis points between mid-April
and mid-June 2010 relative to a composite euro area government bond index (see Chart A).1
More recently, bank bond spreads have narrowed somewhat, reﬂ ecting, among other things, the
publication of the EU-wide bank stress tests on 23 July 2010, but remained at elevated levels in
comparison with the ﬁ rst quarter of 2010.
The sharp increase in MFIs’ costs of issuing debt in the ﬁ nancial market in May and June 2010
may have deterred many euro area banks from renewing maturing debt, as reﬂ ected in negative
net ﬂ ows of debt securities issued by MFIs in these two months.2 This development was also
conﬁ rmed by debt securities issues statistics (for which data are available up to May 2010), which
showed negative net issuance in the order of around €25 billion by euro area MFIs in May 2010
(see Chart B). This compares with a long-term average of around €22 billion in monthly net
issuance by euro area MFIs. One reason for the generally subdued net issuance of debt securities
by MFIs in recent months could be that the euro area banking sector is currently undergoing a
1 According to Iboxx; similarly, the Itraxx Senior Financials index of credit default swap spreads rose by around 100 basis points over
the same period.
2 According to MFI balance sheet items statistics.
Chart A Euro area corporate bond spreads
Chart B Net issuance of debt securities
for financial institutions
by euro area MFIs broken down by maturity
(basis points)
(monthly ﬂ ows in EUR billions; not adjusted for seasonal
and calendar effects)
AAA (left-hand scale)
long-term (above one year)
AA (left-hand scale)
short-term (below one year)
A (left-hand scale)
average monthly net issuance 1999-2009
BBB (right-hand scale)
1,000
3,600
120
120
900
3,240
100
100
800
2,880
80
80
700
2,520
600
2,160
60
60
500
1,800
40
40
400
1,440
20
20
300
1,080
0
0
200
720
-20
-20
100
360
0
0
-40
-40
-100
-360
-60
-60
Jan.
July
Jan.
July
Jan.
July
Jan.
July
2006
2007
2008
2009
2010
2007
2008
2009
2010
Source: Thompson Financial Datastream.
Source: ECB.
Note: The benchmark is the EMU AAA government bond index
Note: Last observation: May 2010.
calculated by Merrill Lynch.
ECB
18 Monthly Bulletin
August 2010

E C O N O M I C
A N D M O N E T A R Y
D E V E L O P M E N T S
Monetary and
financial
developments
process of balance sheet adjustment and is, at the same time, facing rather weak demand for
loans, which may have reduced the need for a ﬁ nancing of new activities. For some banks, the
subdued net issuance activity in May and June may simply reﬂ ect a postponement of new debt
issuance in the expectation of improved market conditions in the period ahead. At the same time,
other (allegedly weaker) banks might have found the costs of entering the debt securities market
prohibitively high throughout 2010.
Government guarantees in net debt security issuance
The existence of heterogeneity within the euro area banking sector as regards the capacity to
tap market-based funding throughout 2010 is supported by the developments in the issuance of
MFI debt securities backed by government guarantees. The use of government guarantees should
facilitate issuance in the markets. In late 2008 and in the ﬁ rst half of 2009, the introduction of
government support programmes, whereby banks issued debt securities covered by government
guarantees, allowed banks to maintain their issuance despite the adverse market conditions for
bank debt. In the ﬁ rst three months of 2010 the recourse of euro area banks to government support
was low, as at least some banks were increasingly able to access market-based funding without
government support (see Chart C). The deterioration in market conditions in April and May did
not result in a marked increase in recourse to such government support, despite the fact that, in the
ﬁ rst half of 2010, these programmes were still in place in most of the countries where they had been
introduced. This suggests that the majority of euro area banks did not face such a large increase
in funding pressure that they would be prepared to incur the cost entailed in issuing government-
guaranteed debt securities. At the same time,
issuance of such securities, while low, has
Chart C Net issuance of debt securities
not disappeared altogether in recent months.
by euro area MFIs covered by government
guarantee programmes
Recourse to this type of funding has been
(monthly ﬂ ows in EUR billions; not adjusted for seasonal
concentrated on MFIs resident in a few euro
and calendar effects)
area countries that have been at the epicentre
long-term covered by government guarantee
of the sovereign debt market tensions and on
long-term not covered by government guarantee
short-term covered by govermemt guarantee
a few other speciﬁ c issuers. This points to the
short-term not covered by governent guarantee
total net issuance of MFI debt securities
existence of a subset of euro area MFIs that are
being confronted with very tight borrowing
100
100
conditions when attempting to tap market-based
75
75
debt funding without government backing.
50
50
However, government guarantees also allow
25
25
MFIs to pledge the debt securities as collateral
0
0
in Eurosystem reﬁ
nancing operations and
-25
-25
thereby obtain funding.
-50
-50
Gross debt security issuance
-75
-75
-100
-100
Notwithstanding the subdued net
2007
2008
2009
2010
issuance of government-guaranteed and
Source: ECB, ECB estimates.
Note: Last observation: May 2010 for total net issuance and
non-government-guaranteed MFI debt
issuance not covered by guarantees; June 2010 for net issuance
covered by guarantees.
securities, on a gross basis, the euro
ECB
Monthly Bulletin
August 2010
19

Chart D Gross issuance of short-term debt
Chart E Gross issuance of long-term debt
securities by euro area MFIs
securities by euro area MFIs
(monthly ﬂ ows in EUR billions; not adjusted for seasonal
(monthly ﬂ ows in EUR billions; not adjusted for seasonal
and calendar effects)
and calendar effects)
short-term (up to one year)
long-term (over one year)
average monthly gross short-term issuance 1999-2009
average monthly gross long-term issuance 1999-2009
1,000
1,000
160
160
900
900
140
140
800
800
120
120
700
700
600
600
100
100
500
500
80
80
400
400
60
60
300
300
40
40
200
200
100
100
20
20
0
0
0
0
2007
2008
2009
2010
2007
2008
2009
2010
Source: ECB.
Source: ECB.
Note: Last observation: May 2010.
Note: Last observation: May 2010.
area banking sector as a whole remained capable of issuing substantial amounts of debt securities,
also in recent months. Notably, the level of gross issuance of short-term debt securities (i.e. securities
with an original maturity of up to one year) remained not only solid in May 2010, but also above the
historical monthly average ﬂ ow of gross issuance since 1999 (see Chart D). This suggests that, at
the aggregate level, euro area banks remained capable of covering their short-term funding needs
in the debt securities market, as is also reﬂ ected in the only modestly negative net issuance of short-
term paper (see Chart B). Hence, the ﬁ nancial market tensions in May 2010 seem mainly to have
dented banks’ previous reliance on funding through longer-term debt securities (which possibly
reﬂ ected the aim of taking advantage of low long-term interest rates). The gross issuance of
longer-term debt securities contracted from a monthly level of around €100-120 billion in the
two preceding months to about €60 billion in May (see Chart E).
Gross issuance and maturing issues of longer-term debt securities
Given the considerable volume of longer-term debt securities issued by euro area MFIs that
will be maturing in the next few years, banks may be expected to increase their issuance at
some time in the coming months in order to ensure their long-term ﬁ nancing. According to
estimates based on data from Dealogic, a private data provider, euro area banks may face
redemptions of outstanding longer-term debt issues in the order of approximately €1.3 trillion
in the next 14 quarters up to the fourth quarter of 2013 (see Chart F). This, however, is less
than the approximately €1.9 trillion which matured in the preceding 14 quarters (between
the ﬁ rst quarter of 2007 and the second quarter of 2010). Over that period, euro area banks
managed to issue around €1.7 trillion. Hence, while the amount of maturing debt that banks
need to reﬁ nance in the next 2½ years is substantial, it appears manageable on the basis of
experience in the recent past and subject to a normalisation of funding conditions in the debt
securities market.
ECB
20 Monthly Bulletin
August 2010

E C O N O M I C
A N D M O N E T A R Y
D E V E L O P M E N T S
Monetary and
financial
developments
Chart F Longer-term debt securities issued
The need for a renewal of maturing debt
by euro area MFIs – gross issuance and
securities issued could moreover be lower
maturing issues
than in the past, to the extent that euro area
(monthly ﬂ ows in EUR billions; not adjusted for seasonal and
calendar effects)
banks may amend their business models –
bonds
in the light of the ﬁ
nancial crisis –
medium-term notes
by reducing their reliance on market-
covered bonds
maturing bonds
based funding and increasingly taking
maturing medium-term notes
maturing covered bonds
recourse to deposit-based funding. Indeed,
150
150
a reassessment of funding strategies may be
particularly called for in the context of the
100
100
persistently subdued level of (non-retained)
50
50
securitisation activity, which (according to
0
0
Dealogic data) is still hovering at a low level
of less than one-third of the average monthly
-50
-50
issuance since 2000. Meanwhile, despite the
-100
-100
recent move towards consolidation of public
-150
-150
ﬁ nances in euro area countries, debt-issuing
2006 2007 2008 2009 2010 2011 2012 2013
banks are likely to face more intense
Sources: Dealogic and ECB calculations.
Notes: “Maturing issues” on inverted scale. Dealogic
competition for funds from both sovereign
debt securities data are less encompassing than the ECB’s
issuers and non-ﬁ nancial private issuers, as
securities issuance statistics on which Charts B to E are based.
The statistical methodology applied is also not directly
the latter may increasingly want to access
comparable between the two datasets. Based on issues in the
euro area by banks.
market funding in the wake of the crisis.
Finally, the annual inﬂ ow for MFIs’ net external
Chart 7 Counterparts of M3
asset position was €76 billion in June, down
from €105 billion in May (see Chart 7). As in
(annual ﬂ ows in EUR billions; adjusted for seasonal and
the previous month, the positive annual ﬂ ow
calendar effects)
for net external assets reﬂ ects negative annual
credit to the private sector (1)
credit to general government (2)
ﬂ ows both for external assets and for external
net external assets (3)
liabilities, with the reduction in liabilities
longer-term financial liabilities (excluding capital
and reserves) (4)
outweighing that in assets.
other counterparts (including capital and reserves) (5)
M3
To sum up, the annual growth rates of M3 and
1,600
1,600
1,400
1,400
of loans to the private sector both increased in
1,200
1,200
1,000
1,000
June, but remain weak. The yield curve remains
800
800
steep, but the dampening impact that this has on
600
600
400
400
M3 growth is receding, albeit slowly. Thus, the
200
200
assessment that the pace of underlying monetary
0
0
-200
-200
expansion is moderate and that inﬂ ationary
-400
-400
-600
-600
pressures over the medium term stemming
-800
-800
from monetary developments are contained still
2005
2006
2007
2008
2009
2010
prevails.
Source: ECB.
Notes: M3 is shown for reference only (M3 = 1+2+3-4+5).
Longer-term ﬁ nancial liabilities (excluding capital and reserves)
are shown with an inverted sign, since they are liabilities of the
MFI sector.
ECB
Monthly Bulletin
August 2010
21

Box 2
THE RESULTS OF THE JULY 2010 BANK LENDING SURVEY FOR THE EURO AREA
This box describes the main results of the July 2010 bank lending survey (BLS) for the euro
area, which was conducted by the Eurosystem between 14 June and 2 July 2010.1 The survey
results point to a discontinuation in the second quarter of 2010 of the downward trend in the
net tightening of credit standards on loans to enterprises observed in previous quarters. Also in
the second quarter of 2010, the net tightening of credit standards remained broadly unchanged
both for consumer credit and other lending to households and for loans to households for
house purchase.
Loans and credit lines to enterprises
Credit standards: In the second quarter of 2010, the net percentage 2 of banks reporting
a tightening of credit standards on loans and credit lines to enterprises increased to 11%
(see Chart A), thereby exceeding banks’ expectations in the previous survey round (when it stood
at 2%). The overall results for enterprises were consistent across ﬁ rm size. The net percentage
1 The cut-off date of the survey was 2 July 2010. A comprehensive assessment of the results of the July 2010 bank lending survey for the
euro area was published on 28 July 2010 on the ECB’s website.
2 The reported net percentage refers to the difference between the proportion of banks reporting that credit standards have been tightened and
the proportion of banks reporting that they have been eased. A positive net percentage indicates that banks have tended to tighten credit
standards (“net tightening”), whereas a negative net percentage indicates that banks have tended to ease credit standards (“net easing”).
Chart A Changes in credit standards applied to the approval of loans or credit lines to
enterprises
(net percentages)
realised
expected
Factors contributing to tightening credit standards
120
120
Costs related to
Bank’s ability to
Bank’s liquidity
Expectations
Industry or firm-
bank’s capital
access market
position
regarding general
specific outlook
100
financing
economic activity
100
80
80
60
60
40
40
20
20
0
0
-20
-20
(a)
(b)
(c)
(d)
(e)
(f)
-40
-40
Q2 Q4 Q2 Q4 Q2 Q2 Q4 Q2 Q4 Q2 Q3
Q2 Q4 Q2Q2 Q4 Q2 Q4 Q2Q2 Q4 Q2 Q4 Q2Q2 Q4 Q2 Q4 Q2
2008
2009
2010
2008
2009
2010 2008
2009
2010 2008
2009
2010 2008
2009
2010 2008
2009
2010
Notes: In panel (a), the net percentages refer to the difference between the sum of the percentages for “tightened considerably” and
“tightened somewhat” and the sum of the percentages for “eased somewhat” and “eased considerably”. The net percentages for the
questions related to the factors are the difference between the percentage of banks reporting that the given factor contributed to tightening
and the percentage reporting that it contributed to easing. “Realised” values refer to the period in which the survey was conducted.
“Expected” values refer to the expected changes over the next three months.
ECB
22 Monthly Bulletin
August 2010

E C O N O M I C
A N D M O N E T A R Y
D E V E L O P M E N T S
Monetary and
financial
developments
of credit standards increased to 14% for loans to small and medium-sized enterprises (SMEs)
(compared with 4% in the ﬁ rst quarter of 2010) and to 12% for loans to large ﬁ rms (compared
with 3% in the previous quarter).
Looking at the factors contributing to the net tightening of credit standards, in the second
quarter of 2010 banks reported stronger contributions from bank-speciﬁ c factors, possibly
indicating renewed ﬁ nancial market tensions. In particular, this was reﬂ ected in the fact that
banks’ liquidity position contributed to a tightening of credit standards (6%, against -6% in the
ﬁ rst quarter of 2010), after contributing to an easing in the preceding four quarters. A stronger
positive contribution pertaining to banks’ ability to access market ﬁ nancing was reported
(9%, compared with 2% in the ﬁ rst quarter of 2010). While still contributing to a net tightening
of credit standards, costs related to banks’ capital positions became somewhat less pronounced
than before (4%, against 6% in the ﬁ rst quarter of 2010). By contrast, competition (by banks,
non-banks and market ﬁ nancing) generally tended to ease credit standards on loans to enterprises
in the second quarter of 2010. At the same time, following the trend observed in previous
quarters, there was a further decline in the contributions from business cycle-related factors to the
net tightening of credit standards, such as the industry or ﬁ rm-speciﬁ c outlook (11%, compared
with 21% in the ﬁ rst quarter of 2010) and expectations regarding general economic activity
(6%, against 9% in the ﬁ rst quarter of 2010).
Developments were mixed with respect to price and non-price terms and conditions through
which the net tightening of credit standards on loans to enterprises was achieved in the
second quarter of 2010 (see Chart B). Thus, while margins, loan covenants and collateral
demanded eased somewhat, there was a slightly more restrictive attitude towards the size of
loans granted and the length of loan maturity. As in the previous quarter, margins on average
loans to large ﬁ rms eased slightly in the second quarter of 2010 (to -2%, from -1% in the
ﬁ rst quarter of 2010), whereas the net tightening of margins remained broadly unchanged
(at 8%) for loans to SMEs.
Chart B Changes in terms and conditions for approving loans or credit lines to enterprises
(net percentages of banks reporting tightening terms and conditions)
80
80
Margins on
Margins on
Size of loan
Collateral
Loan
Non-interest
Maturity
average loans
riskier loans
or credit line
requirements
covenants
rate charges
70
70
60
60
50
50
40
40
30
30
20
20
10
10
0
0
-10
-10
Q2 Q3 Q4 Q1 Q2 Q2 Q3 Q4 Q1 Q2 Q2 Q3 Q4 Q1 Q2 Q2 Q3 Q4 Q1 Q2 Q2 Q3 Q4 Q1 Q2 Q2 Q3 Q4 Q1 Q2 Q2 Q3 Q4 Q1 Q2
2009
2010
2009
2010
2009
2010
2009
2010
2009
2010
2009
2010
2009
2010
Note: The net percentages refer to the difference between the sum of the percentages for “tightened considerably” and “tightened somewhat”
and the sum of the percentages for “eased somewhat” and “eased considerably”.
ECB
Monthly Bulletin
August 2010
23

Looking ahead, banks expect a lower net tightening of credit standards in the third quarter of
2010 (at 5%; see Chart A).
Loan demand: Net demand for corporate loans 3, while remaining negative, increased to -2% in
the second quarter of 2010 from -13% in the ﬁ rst quarter of 2010 (see Chart C), thus continuing
the gradual recovery in net loan demand from enterprises that started in the ﬁ rst quarter of 2009.
The net demand for loans became less negative both for loans to SMEs (-3%, compared with
-9% in the ﬁ rst quarter of 2010) and for loans to large ﬁ rms (-10%, compared with -20% in
the previous quarter), but remained weaker overall in the case of the latter. Notably, while net
demand for short-term loans remained in negative territory (at -3%) in the second quarter of 2010,
net demand for long-term loans turned positive (at 3%) for the ﬁ rst time since the ﬁ rst quarter
of 2008. The most important reason for the improvement in net demand for loans by enterprises
was a less negative contribution from factors such as ﬁ xed investment (-23%, after -32% in
the ﬁ rst quarter of 2010) and mergers and acquisitions (at -7%, after -18% in the ﬁ rst quarter
of 2010). Moreover, the negative contribution from substitute sources of ﬁ nancing, debt securities
issuance in particular, became somewhat less pronounced in the second quarter. At the same time,
the positive contribution from debt restructuring (i.e. enterprises altering the terms and conditions
of their outstanding debt obligations) remained unchanged compared with the previous survey
round, and the contribution from inventories and working capital further increased somewhat
(to 7%, up from 3% in the previous quarter).
3 The net demand for loans is calculated as the percentage difference between those banks reporting that demand for loans has increased
and those reporting that demand for loans has decreased.
Chart C Changes in demand for loans or credit lines to enterprises
(net percentages)
realised
expected
Factors contributing to increasing demand
80
80
Fixed
Debt restructuring
Internal
Issuance of debt
70
70
investment
financing
securities
60
60
50
50
40
40
30
30
20
20
10
10
0
0
-10
-10
-20
-20
-30
-30
-40
-40
-50
-50
-60
-60
(a)
(b)
(c)
(d)
(e)
-70
-70
Q2
Q4
Q2
Q4
Q2
Q2
Q4
Q2
Q4
Q2Q2
Q4
Q2
Q4
Q2Q2
Q4
Q2
Q4
Q2Q2
Q4
Q2
Q4
Q2
2008
2009
2010
2008
2009
2010 2008
2009
2010 2008
2009
2010 2008
2009
2010
Notes: In panel (a), the net percentages refer to the difference between the sum of the percentages for “increased considerably” and
“increased somewhat” and the sum of the percentages for “decreased somewhat” and “decreased considerably”. The net percentages for
the questions related to the factors are the difference between the percentage of banks reporting that the given factor contributed to an
increase in demand and the percentage reporting that it contributed to a decline. “Realised” values refer to the period in which the survey
was conducted. “Expected” values refer to the expected changes over the next three months.
ECB
24 Monthly Bulletin
August 2010

E C O N O M I C
A N D M O N E T A R Y
D E V E L O P M E N T S
Monetary and
financial
developments
Looking ahead, banks expect increased demand for loans. On a net basis, 29% of the banks
surveyed (up from 21%) expect loan demand from enterprises to increase in the third quarter
of 2010, but to a larger extent from SMEs (33% of banks) than from large ﬁ rms (19%).
Furthermore, banks expect a rebound in net demand for short-term lending from -3% to 30%
in the third quarter of 2010.
Loans to households for house purchase
Credit standards: In the second quarter of 2010, the net percentage of banks reporting a
tightening of credit standards for loans to households for house purchase remained unchanged
compared with the previous quarter at 10% (see Chart D). For the second consecutive quarter,
banks’ expectations from previous survey rounds underestimated the net tightening of credit
standards. As in the case of loans to enterprises, factors related to cost of funds and balance
sheet constraints contributed more strongly to the net tightening of credit standards for loans
to households for house purchase (6% in the second quarter of 2010, compared with 1% in the
ﬁ rst quarter). Likewise, banks reported a somewhat less pronounced contribution from risk-based
factors, such as housing market prospects and the general economic outlook. Finally, as in
previous survey rounds, competition between banks contributed to an easing of credit standards
on housing loans.
Regarding terms and conditions for loans for house purchase, in the second quarter of 2010
margins on riskier loans (11%, compared with 16% in the ﬁ rst quarter of 2010), loan-to-value
ratios (7%, against 11% in the ﬁ rst quarter) and collateral requirements (3%, against 4% in the
ﬁ rst quarter) continued to be tightened by banks, although gradually less so compared with
previous quarters. By contrast, banks tightened somewhat conditions related to the maturity
of the loans (3%, against 1% in the ﬁ rst quarter) and also increased the margins on average loans
(3%, against -3% in the ﬁ rst quarter).
Chart D Changes in credit standards applied to the approval of loans to households for house
purchase
(net percentages)
realised
expected
Factors contributing to tightening credit standards
70
70
Housing market
Expectations
Cost of funds and
Competition from
60
prospects
regarding general
balance sheet
other banks
60
economic activity
constraints
50
50
40
40
30
30
20
20
10
10
0
0
-10
-10
(a)
(b)
(c)
(d)
(e)
-20
-20
Q2
Q4
Q2
Q4
Q2
Q2
Q4
Q2
Q4
Q2
Q3
Q1
Q3
Q1
Q2
Q4
Q2
Q4
Q2
Q3
Q1
Q3
Q1
2008
2009
2010
2008
2009
2010 2008
2009
2010 2008
2009
2010 2008
2009
2010
Note: See notes to Chart A.
ECB
Monthly Bulletin
August 2010
25

Chart E Changes in demand for loans to households for house purchase and consumer credit
(net percentages)
realised
expected
60
60
Loans for house purchase
Consumer credit
40
40
20
20
0
0
-20
-20
-40
-40
-60
-60
(a)
(b)
-80
-80
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
2008
2009
2010
2008
2009
2010
Notes: The net percentages refer to the difference between the sum of the percentages for “increased considerably” and “increased
somewhat” and the sum of the percentages for “decreased somewhat” and “decreased considerably”. “Realised” values refer to the period in
which the survey was conducted. “Expected” values refer to the expected changes over the next three months.
Looking ahead, banks expect a lower degree of net tightening of credit standards for loans
to households for house purchase in the third quarter of 2010 (3%).
Loan demand: Net demand for housing loans increased signiﬁ cantly in the second quarter
of 2010 (24%, against -2% in the ﬁ rst quarter of 2010), broadly in line with expectations in
the previous survey round (see Chart E). The increase in housing-related loan demand can
be explained in particular by a more positive contribution from housing market prospects
(9%, compared with 3% in the ﬁ rst quarter of 2010) and a less negative contribution from
consumer conﬁ dence (-6%, against -13% in the previous quarter).
Banks expect net demand for loans for house purchase to fall to 5% in the third quarter of 2010
from 24% in the second quarter.
Consumer credit and other lending to households
Credit standards: The net percentage of banks reporting a tightening of credit standards for
loans to households for consumer credit and other lending was positive in the second quarter
of 2010 (12%; see Chart F). This was similar to the level observed in the previous quarter,
but exceeded the expectations in the previous survey round. As with loans to households for
house purchase, funding costs and banks’ balance sheet positions contributed more strongly to
the net tightening observed in the second quarter of 2010 (4%, against 1% in the ﬁ rst quarter).
At the same time, a somewhat more benign outlook for credit risk was observed, notably through
a less tightening contribution from consumer creditworthiness (12%, compared with 19% in the
previous round).
Looking forward, banks still expect a net tightening, albeit somewhat less so, in the third quarter
of 2010 (to 6%).
ECB
26 Monthly Bulletin
August 2010

E C O N O M I C
A N D M O N E T A R Y
D E V E L O P M E N T S
Monetary and
financial
developments
Chart F Changes in credit standards applied to the approval of consumer credit and other
lending to households
(net percentages)
realised
expected
Factors contributing to tightening credit standards
60
60
Creditworthiness
Expectations
Risk on collateral
Competition from
of consumers
regarding general
demanded
other banks
50
50
economic activity
40
40
30
30
20
20
10
10
0
0
(a)
(b)
(c)
(d)
(e)
-10
-10
Q2
Q4
Q2
Q4
Q2
Q2
Q4
Q2
Q4
Q2Q2 Q4
Q2
Q4
Q2Q2 Q4
Q2 Q4
Q2Q2 Q4
Q2
Q4
Q2
2008
2009
2010
2008
2009
2010 2008
2009
2010
2008
2009
2010 2008
2009
2010
Note: See notes to Chart A.
Loan demand: Net demand for consumer loans increased in the second quarter of 2010 to
1%, from -13% in the ﬁ rst quarter of 2010 (see Chart E), broadly in line with expectations.
The main factors behind the increase in net demand related to spending on consumer durables
and consumer conﬁ dence.
Looking ahead, banks expect a slightly negative net demand for consumer credit and other
lending to households in the third quarter of 2010 (-6%).
Ad hoc questions on the impact of the ﬁ nancial turmoil
As in previous survey rounds, the July 2010 survey also contained a set of ad hoc questions aimed
at assessing the extent to which the ﬁ nancial market tensions affected banks’ credit standards for
loans and credit lines to enterprises and loans to households in the euro area in the second quarter
of 2010 and the extent to which they might still have an effect in the third quarter of 2010.
For the second quarter of 2010, possibly reﬂ ecting the renewed ﬁ nancial market tensions
following concerns about sovereign risk, banks generally reported a deterioration in their access
to wholesale funding across all segments, but more intensely as regards access to short-term
money markets and the markets for debt securities issuance (see Chart G). On balance, in the
second quarter of 2010 around 30-40% of the banks surveyed (excluding the banks that replied
“not applicable”) reported deteriorated access to money markets and around 40-50% of the banks
reported deteriorated access to debt securities markets. In addition, true-sale securitisation of
corporate loans and loans to households for house purchase also became somewhat more difﬁ cult
in the second quarter of 2010. Between 20% and 30% of the banks for which this business is
relevant (around 60% of the sample group) reported deteriorated access to securitisation of
corporate loans and mortgage loans. Moreover, according to 37% of the banks for which this
ECB
Monthly Bulletin
August 2010
27

Chart G Change in the access to wholesale funding over the past three months
(net percentages of banks reporting deteriorated market access)
Q4 2009
Q1 2010
Q2 2010
Q3 2010 expected
60
60
50
50
40
40
30
30
20
20
10
10
0
0
-10
-10
-20
-20
-30
-30
very short-term
short-term
short-term
medium to
securitisation
securitisation
ability to
money market
money market
debt securities
long-term
of corporate loans
of loans for
transfer credit risk
debt securities
house purchase off balance sheet
Note: The net percentages are deﬁ ned as the difference between the sum of the percentages for “deteriorated considerably” and “deteriorated
somewhat” and the sum of the percentages for “eased somewhat” and “eased considerably”.
business is relevant (which is the case for 40% of the sample group), synthetic securitisation,
i.e. the ability to transfer credit risk off balance sheet, deteriorated.
Over the next three months, on a net basis, around 10-20% of the banks surveyed continue to
expect a further deterioration across all wholesale funding markets. In particular, 20% of the
banks expect a further deterioration in their access to short-term money markets.
Regarding the impact of the ﬁ nancial turmoil on banks’ costs related to their capital positions
and on their lending policy, there was only a very slight change between the ﬁ rst and the second
quarters of 2010. In the second quarter of 2010, about 40% of the reporting banks indicated
“some impact” or “considerable impact” on both capital and lending, broadly in line with the
responses in the previous survey round. In addition, in the second quarter of 2010, 34% reported
that there was basically no impact on their capital stemming from the ﬁ nancial turmoil (against
38% in the ﬁ rst quarter of 2010).
2.2 SECURITIES ISSUANCE
The annual growth rate of debt securities issuance continued to moderate, declining to 4.3% in
May 2010. Data on sectoral issuance activity reveal that this moderation was broadly based across
sectors but driven mainly by MFIs. At the same time, the annual growth rate of quoted shares
issued continued to decline.
ECB
28 Monthly Bulletin
August 2010

E C O N O M I C
A N D M O N E T A R Y
D E V E L O P M E N T S
Monetary and
financial
developments
Table 3 Securities issued by euro area residents
Amount outstanding
Annual growth rates 1)
(EUR billions)
2010
2009
2009
2009
2010
2010
2010
Issuing sector
May
Q2
Q3
Q4
Q1
April
May
Debt
securities
15,766
11.8
11.3
10.0 6.6 5.3 4.3
MFIs
5,484 5.8
4.0 2.9 1.6 1.3 -0.2
Non-monetary ﬁ
nancial
corporations
3,246
30.4
26.1
20.1 8.3 4.1 2.9
Non-ﬁ
nancial
corporations
885 10.2 13.4 15.8 14.0 15.5 14.5
General
government
6,151 12.2 13.5 12.7 10.0 8.6 8.2
of which:
Central
government
5,748 12.4 13.8 12.9 9.9 8.5 8.0
Other
general
government
404 9.6 9.5 10.4 10.2 11.0 10.2
Quoted
shares
4,110 1.9 2.7 2.8 2.9 2.7 2.4
MFIs
450
8.7 9.3 8.8 8.2 7.0 6.3
Non-monetary ﬁ
nancial
corporations
321 3.1 3.9 2.7 5.4 5.3 5.3
Non-ﬁ
nancial
corporations
3,340 0.8 1.6 1.9 1.9 1.7 1.5
Source: ECB.
1) For details, see the technical notes for Sections 4.3 and 4.4 of the “Euro area statistics” section.
DEBT SECURITIES
The annual growth rate of debt securities issued by euro area residents continued to moderate, falling
to 4.3% in May 2010, from 5.3% in the previous month (see Table 3). Weaker developments in May
may partly be due to postponement of issuance in the context of difﬁ cult market conditions related to
the sovereign debt crisis. The decline reﬂ ected, to a large extent, a deceleration in the annual growth
rate of long-term debt securities issuance, which fell to 5.9%. Following the downward trend that
started about a year ago, the annual growth of short-term debt securities issuance continued to decline,
reaching -7.8% in May 2010. The annualised
and seasonally adjusted six-month growth
rate of debt securities issued, which captures
Chart 8 Sectoral breakdown of debt
short-term trends better, returned to a downward
securities issued by euro area residents
path in May, primarily on account of a slower
growth in issuance by MFIs (see Chart 8).
(six-month annualised growth rates; seasonally adjusted)
total
monetary financial institutions
Over recent months, reﬁ nancing activity,
non-monetary financial corporations
notably at ﬁ xed rates, has remained buoyant
non-financial corporations
general government
in the long-term segment, to the detriment of
70
70
short-term debt securities issuance. In the last
few months, the annual growth rate of ﬁ xed rate
60
60
long-term debt securities issuance has stabilised
50
50
below 11%. At the same time, the annual growth
rate of ﬂ oating rate long-term debt securities
40
40
issuance became negative.
30
30
20
20
From a sectoral perspective, the moderation in
the pace of debt securities issuance recorded
10
10
in recent months appears to have been broadly
0
0
based, with the exception of the corporate sector
where the growth of issuance has been hovering
-10
-10
1999 2001 2003 2005 2007 2009
around historically high levels. In May, however,
Source: ECB.
the annual growth rate of debt securities issued
ECB
Monthly Bulletin
August 2010
29

by non-ﬁ nancial corporations in the euro area declined by 1 percentage point, although remaining
robust at 14.5%. High volumes and the sustained pace of net issuance of ﬁ xed rate long-term
debt securities since the end of 2008 suggest that corporations, especially large ones, have drawn
resources from capital markets, taking advantage of still favourable market conditions and in view
of relatively tight terms and conditions on bank loans.
Despite some signs of moderation, the annual growth rate of debt securities issued by the general
government sector remained high in May, at 8.2%. This is in line with the persistently substantial
funding needs of the public sector in the euro area, although there has been a sharp reduction in
short-term government debt securities issuance in the last few months, where the annual growth has
turned negative since April.
As far as the ﬁ nancial sector is concerned, the annual growth rate of debt securities issued by MFIs
moved into negative territory in May, at -0.2%, after 1.3% in the previous month. The intensiﬁ cation
of tensions related to sovereign risk seemed to have had negative effects on access to funding by
euro area banks. The annual growth rate of long-term debt securities issued declined signiﬁ cantly,
while the annual contraction in the volume of debt securities issued with short-term maturities
became stronger. The annual growth rate of debt securities issued by non-monetary ﬁ nancial
corporations declined to 2.9% in May, from 4.1% in the previous month, owing to a deceleration in
long-term issuance growth.
QUOTED SHARES
The annual growth rate of quoted shares issued by euro area residents declined to 2.4% in May 2010
(see Chart 9). Moderating somewhat in comparison with the previous month, the annual growth
rate of equity issuance by MFIs remained high at 6.3% in May. This reﬂ ects the efforts by banks
to raise capital in order to strengthen their balance sheets. At the same time, the annual growth
rate of quoted shares issued by non-ﬁ nancial
corporations declined to 1.5%. The slowdown
Chart 9 Sectoral breakdown of quoted
in equity issuance reﬂ ected the considerable
shares issued by euro area residents
pick-up in the cost of equity ﬁ nancing.
(annual growth rates)
2.3 MONEY MARKET INTEREST RATES
total
monetary financial institutions
non-monetary financial corporations
non-financial corporations
Money market interest rates increased
further across all maturities in July and early
12.0
12.0
August 2010. The EONIA rate has become
10.0
10.0
more volatile since the maturing of the
8.0
8.0
one-year longer-term reﬁ nancing operation on
6.0
6.0
1 July 2010. In line with the gradual reduction
in excess liquidity in the euro area, the average
4.0
4.0
daily recourse to the deposit facility declined
2.0
2.0
signiﬁ cantly during the seventh maintenance
0.0
0.0
period of 2010, in comparison with the previous
-2.0
-2.0
one, which had ended on 13 July.
-4.0
-4.0
1999
2001
2003
2005
2007
2009
Source: ECB.
In July and early August 2010, unsecured
Note: Growth rates are calculated on the basis of ﬁ nancial
transactions.
money market rates increased further across
ECB
30 Monthly Bulletin
August 2010

E C O N O M I C
A N D M O N E T A R Y
D E V E L O P M E N T S
Monetary and
financial
developments
all maturities. On 4 August the one-month,
Chart 10 Money market interest rates
three-month, six-month and twelve-month
EURIBOR rates stood at 0.649%, 0.900%,
1.149% and 1.421% respectively – i.e. around
(percentages per annum; spread in percentage points; daily data)
13, 10, 8 and 9 basis points higher respectively
one-month EURIBOR (left-hand scale)
three-month EURIBOR (left-hand scale)
than the levels observed on 7 July. As a result,
twelve-month EURIBOR (left-hand scale)
the spread between the twelve-month and the
spread between twelve-month and
one-month EURIBOR (right-hand scale)
one-month EURIBOR – an indicator of the slope
2.0
3.0
of the money market yield curve – decreased by
4 basis points in that period, standing at around
1.5
2.5
77 basis points on 4 August (see Chart 10).
1.0
2.0
Between 7 July and 4 August the money market
rates derived from the three-month EONIA swap
0.5
1.5
index increased by less than the corresponding
unsecured rate. The three-month EONIA
swap rate stood at 0.57% on 4 August, around
0.0
1.0
2 basis points higher than on 7 July. As a result,
the spread between this money market rate and
-0.5
0.5
the corresponding unsecured EURIBOR rate
increased to 33 basis points on 4 August, 8 basis
-1.0
0.0
June
Aug.
Oct.
Dec.
Feb.
Apr.
June
Aug.
points higher than on 7 July, thus remaining
2009
2010
relatively wide in comparison with the levels
Sources: ECB and Reuters.
prevailing prior to the onset of the ﬁ nancial
market turmoil in August 2007.
The interest rates implied by the prices of
Chart 11 ECB interest rates and the
overnight interest rate
three-month EURIBOR futures maturing in
September and December 2010 and in March
(percentages per annum; daily data)
and June 2011 stood at 0.95%, 1.03%, 1.10% and
fixed rate in the main refinancing operations
1.18% respectively on 4 August, representing
interest rate on the deposit facility
overnight interest rate (EONIA)
decreases of around 3, 8, 7 and 6 basis points
interest rate on the marginal lending facility
respectively from the rates on 7 July.
2.5
2.5
The EONIA has become more volatile since the
maturing of the one-year longer-term reﬁ nancing
2.0
2.0
operation on 1 July 2010. The EONIA rate
increased during the ﬁ rst half of July and decreased
1.5
1.5
thereafter, ranging between 0.36% and 0.56%
(see Chart 11), with the exception of 13 July.
This was the last day of the sixth maintenance
1.0
1.0
period of 2010, when the EONIA rose to 0.75%
as a result of the Eurosystem conducting a
liquidity-absorbing ﬁ
ne-tuning operation by 0.5
0.5
means of a variable rate tender procedure.
The operation absorbed €200.9 billion, with
0.0
0.0
a maximum rate of 1.00%, a marginal rate of
June
Aug.
Oct.
Dec.
Feb.
Apr.
June
Aug.
2009
2010
0.80% and a weighted average rate of 0.76%.
Sources: ECB and Reuters.
On 4 August the EONIA stood at 0.365%.
ECB
Monthly Bulletin
August 2010
31

In the main reﬁ nancing operations of 13, 20 and 27 July and 3 August, the ECB allotted
€195.7 billion, €201.3 billion, €190.0 billion and €154.8 billion respectively. As regards its
longer-term operations, the ECB allotted two LTROs in July, both as a ﬁ xed rate tender with
full allotment: a one-month operation on 13 July (in which €49.4 billion was allotted) and a
three-month operation on 28 July (in which €23.2 billion was allotted). In addition, the ECB
conducted four one-week liquidity-absorbing operations as a variable rate tender with a maximum
bid rate of 1.00% on 13, 20 and 27 July and 3 August. In the last of these operations, the ECB
absorbed €60.5 billion, which corresponds to the size of purchases under the Securities Markets
Programme, taking into account transactions up until, and including, 30 July 2010 (see also Box 3).
In line with the gradual reduction of excess liquidity in the euro area, average daily recourse to
the deposit facility declined to €84.9 billion in the period from 14 July to 4 August. This was
signiﬁ cantly lower than the €230.4 billion observed in the previous maintenance period, which had
ended on 13 July.
Box 3
COVERED BOND MARKET DEVELOPMENTS AND THE COVERED BOND PURCHASE PROGRAMME1
On 7 May 2009 the Governing Council decided to initiate the covered bond purchase programme
(CBPP), under which the Eurosystem purchased eligible covered bonds. The operational
speciﬁ cations of the CBPP were announced on 4 June 2009. The purchases started on 6 July 2009
and ended on 30 June 2010.
The CBPP was aimed at improving the funding conditions for ﬁ nancial institutions that issue
covered bonds, as well as the secondary market liquidity of covered bonds, and at encouraging
an easing of credit conditions, given that the process of deleveraging in the banking sector
was predicted to continue for some time. These measures were also meant to improve the risk
proﬁ le of institutions holding covered bonds and, thereby, to spur credit growth.
The announcement of the CBPP was followed by a rather swift tightening of the spreads
between covered bond yields and swap rates, which accelerated with the start of the purchases
themselves in the case of some markets (Chart A a)). As from 7 May 2009 activity on the
secondary market shifted very quickly from the previously strongly one-sided selling interest to a
one-sided buying interest. The primary market, which had remained more or less closed since
mid-2008, also recovered quickly and saw strong issuance activity in the period between May and
October 2009, with the exception of August, when new issuance activity is traditionally low
because of the holidays.
In the fourth quarter of 2009 the earlier trend of rapidly tightening spreads came to an end.
This induced many investors to engage in proﬁ t-taking. Moreover, since the spreads between
the yields on many covered bonds and those on their respective sovereign benchmarks had also
become relatively narrow (Chart A b)), some investors started undertaking so-called switching
transactions, i.e. to move out of covered bonds into government bonds. As a result, the situation
1 Further information is available in the ECB’s press releases of 4 June 2009 and 30 June 2010, in the ECB’s Decision of 2 July 2009 on
the implementation of the covered bond purchase programme (ECB/2009/16) and in the monthly reports on the Eurosystem’s covered
bond purchase programme, published on the ECB’s website from July 2009 to June 2010. See also the special feature on European
covered bonds in the ECB’s Financial Integration Report of April 2010.
ECB
32 Monthly Bulletin
August 2010

E C O N O M I C
A N D M O N E T A R Y
D E V E L O P M E N T S
Monetary and
financial
developments
Chart A Developments in selected covered
with respect to buying and selling interests on
bond market segments
the secondary market became more balanced,
with more two-way ﬂ ows. After the very high
(basis points)
new issuance activity seen in September 2009,
Portugal
Spain
the primary market also calmed down
France
somewhat in the fourth quarter, and issuance
a) Spreads between covered bond yields and swap rates
volumes returned to more normal levels.
CBPP
CBPP
announcement
start
In the ﬁ rst few months of 2010, developments
400
400
in the covered bond market were dominated
350
350
by spillover effects induced by tensions in
300
300
euro area sovereign debt markets. Sharp
250
250
moves in government bond yields also led to
200
200
sharp changes in covered bond yields, which
150
150
did not, as a rule, fall below their respective
100
100
sovereign benchmarks. After a record high
in January, activity on the primary market
50
50
for covered bonds came to a standstill in
0
0
Jan.
May
Sep.
Jan.
May
Sep.
Jan.
May
several jurisdictions, except for a brief respite
2008
2009
2010
on account of sovereign risk concerns in
b) Spreads between covered bond and government
March 2010.
bond yields
CBPP
CBPP
After the start of the Securities Markets
announcement
start
Programme on 10 May 2010, the covered
150
150
bond market recovered somewhat. The spreads
between covered bond yields and swap rates
100
100
tightened in almost all jurisdictions, although
this move towards tightening was later reversed
in some cases. In several jurisdictions, primary
50
50
market activity resumed.
As the above retrospective overview of market
0
0
-20
-20
developments since the launch of the CBPP
Jan.
May
Sep.
Jan.
May
Sep.
Jan.
May
highlights, one of the important signs of the
2008
2009
2010
success of the CBPP is to be found in the
Source: ECB calculations based on iBoxx data.
noticeable re-activation of primary market
activity for covered bonds. In the period under
review, a signiﬁ cantly broader spectrum of euro area credit institutions turned to the use of
covered bonds as a funding instrument. This helped some jurisdictions to signiﬁ cantly increase
the number of issuers and outstanding amounts, and thereby to deepen and broaden their covered
bond markets. These developments contributed to improving the overall funding situation of
both euro area and non-euro area ﬁ nancial institutions, in the case of the latter via positive
spillover effects. Between the announcement of the CBPP on 7 May 2009 and its termination
on 30 June 2010, 175 CBPP-eligible new covered bonds and 55 taps of already existing
CBPP-eligible covered bonds were issued for an overall amount of around €184 billion. Over this
period a new covered bond jurisdiction saw its ﬁ rst publicly placed covered bond, and 25 banks
issued covered bonds for the ﬁ rst time.
ECB
Monthly Bulletin
August 2010
33

The Eurosystem supported new issuance of covered bonds in two ways, namely by, ﬁ rst, directly
participating in primary market transactions, albeit mainly for a small portion of the total amount
issued, and, second, by buying covered bonds held by other investors in the secondary market who
then had the opportunity to participate in primary market transactions. Both supporting mechanisms
helped to stabilise covered bond spreads. The amounts purchased by the Eurosystem in the primary
market generally corresponded to the primary market supply (Chart B). This response, however, was
not mechanistic. For example, in September 2009 there was a very favourable market environment
for primary market issuance of covered bonds, so Eurosystem support was not really needed.
In that month, purchases by the Eurosystem in the primary market were therefore more limited
than in other months that saw similar amounts issued. Overall, of the total nominal amount of
€60 billion purchased by the Eurosystem, 27% was purchased in the primary market.
In the secondary market, the Eurosystem allocated the CBPP purchases widely to the various
segments of the covered bond markets, taking into account the outstanding amounts of covered
bonds and the selling offers submitted by eligible counterparties to the Eurosystem’s CBPP
portfolio managers. The launch of the CBPP led to a narrowing of quoted bid-offer spreads in
the covered bond market. However, the market depth and liquidity only improved signiﬁ cantly
when, in late 2009, more balanced two-way ﬂ ows emerged. Some of this improvement was
reversed between February and May 2010, given spillover effects of tensions in euro area
sovereign debt markets. Overall, the depth and liquidity of the secondary market for covered
bonds have improved since May 2009. Of the total nominal amount of €60 billion, 73% was
accounted for by purchases in the secondary market.
The securities held by the Eurosystem in its CBPP portfolio have been made available for lending to
eligible counterparties against eligible collateral since March 2010. The amount of securities lent is
not large, but it is not negligible either. Thus, the availability of CBPP securities for lending meets
Chart B Jumbo covered bond issuance in the
Chart C Jumbo covered bond issuance in the
euro area and CBPP participation in primary
euro area, broken down by maturity
market transactions
(EUR billions; percentages)
(EUR billions)
covered bond issuance, EUR billions (left-hand scale)
7 May to 31 December 2009
percentage of CBPP purchases in the primary market
1 January to 30 June 2010
(right-hand scale)
25
45
45
45
40
40
40
20
35
35
35
30
30
30
15
25
25
25
20
20
20
10
15
15
15
5
10
10
10
5
5
5
0
0
0
0
Jan. Mar. May July Sep. Nov. Jan. Mar. May
2012
2014
2016
2018
2020
2022
2024
2009
2010

Source: ECB calculations based on Dealogic data.
Source: ECB calculations based on Bloomberg data.
Note: Issuance amounts refer to CBPP-eligible securities with
Note: CBPP-eligible securities with issue volumes of €500 million
issue volumes of €500 million or more.
or more.
ECB
34 Monthly Bulletin
August 2010

E C O N O M I C
A N D M O N E T A R Y
D E V E L O P M E N T S
Monetary and
financial
developments
some demand and contributes positively, albeit to a rather small extent, to a proper functioning of
the covered bond market. In particular, the awareness of market participants that CBPP securities
are available for lending against eligible collateral on demand probably contributes to expectations
that the market will continue to function properly at the aggregate level.
The CBPP portfolio contains covered bonds with maturities of mainly between three and seven
years. With regard to the maturity of the securities purchased, the Eurosystem likewise responded
to the supply in markets: most new issuance and secondary market offers were in this maturity
bucket (Chart C). As a result, the average modiﬁ ed duration of the portfolio was 4.12 as of
June 2010, meaning that the average remaining maturity of the portfolio is around four years.
Overall, it can be concluded that the functioning of the covered bond market has improved
signiﬁ cantly since the announcement of the CBPP in May 2009, although it suffered from the
effects of tensions in the sovereign debt markets in the ﬁ rst few months of 2010.
2.4 BOND MARKETS
Market sentiment continued to drive bond yields in global markets in the course of July.
By 4 August AAA-rated long-term euro area government bond yields were slightly below their level
in early June, but intra-euro area sovereign bond yield spreads, in particular for countries faced
with market concerns about their ﬁ scal soundness, narrowed signiﬁ cantly. In the United States,
long-term government bond yields remained broadly unchanged over the period under review.
Euro area long-term break-even inﬂ ation rates remained broadly unchanged in July.
Between end-June and 4 August 2010 the level
Chart 12 Long-term government bond yields
of yields on AAA-rated ten-year government
bonds in the euro area declined slightly to around
2.8%, while long-term government bond yields
(percentages per annum; daily data)
in the United States remained broadly unchanged
euro area (left-hand scale)
United States (left-hand scale)
at around 3.0% (see Chart 12). As a result,
Japan (right-hand scale)
the ten-year nominal interest rate differential
4.1
2.2
between US and euro area government bonds
widened somewhat. Despite some swings in
3.9
2.0
investors’ risk appetite over the period under
3.7
1.8
review, market participants’ uncertainty about
near-term developments in long-term bond 3.5
1.6
yields, as measured by implied bond market
volatility, has declined somewhat on both sides
3.3
1.4
of the Atlantic since early July.
3.1
1.2
Ten-year US government bond yields remained
2.9
1.0
broadly unchanged over the review period as
a whole, but in the course of July reached the
2.7
0.8
lowest levels recorded since the spring of 2009,
Aug. Oct. Dec. Feb. Apr. June Aug.
2009
2010
as concerns about the strength and sustainability
Sources: Bloomberg and Reuters.
of the global economic recovery weighed on
Note: Long-term government bond yields refer to ten-year bonds
or to the closest available bond maturity.
market sentiment. In particular, uncertainty about
ECB
Monthly Bulletin
August 2010
35

the magnitude of the expected slowdown in the US economy in the second half of the year affected
market sentiment negatively. Against this background, releases during the period under review of
mixed macroeconomic data for both the United States and some other economies throughout the
world, followed by the conﬁ rmation of a growth slowdown in the second quarter of 2010, contributed
to keeping long-term US bond yields below 3% for most of the review period, although investors’
concerns about the sovereign risk of some euro area countries appeared to recede in the course of
July, and the publication of the stress tests results for euro area banks improved global risk appetite.
Sentiment in the euro area sovereign bond markets, in particular, improved over the review period.
In addition to the publication of details on euro area banks’ exposures to various sovereign debt
risks as part of the stress tests, successful debt auctions by some countries facing market concerns
about their ﬁ scal soundness had a positive effect on ten-year euro area sovereign bond yield spreads
(vis-à-vis Germany). Moreover, in the course of July some AAA-rated long-term bond yields also
rose in comparison with their levels in early June, which suggests some unwinding of the strong
ﬂ ight-to-safety ﬂ ows into high-rated euro area sovereign bonds seen in May.
Yields on inﬂ ation-linked euro area government bonds with a ﬁ ve-year maturity remained broadly
unchanged at around 0.5% in the course of July, while those with a ten-year maturity declined
by around 10 basis points to stand at around 1.1% on 4 August (see Chart 13). Consequently,
long-term implied forward real interest rates declined somewhat. At the same time, ﬁ nancial
indicators of medium to long-term inﬂ ation expectations remained broadly unchanged in July
(see Chart 14), and long-term implied forward break-even inﬂ ation rates (ﬁ ve years forward
ﬁ ve years ahead) in the euro area ﬂ uctuated around 2.4%. Five and ten-year spot break-even
Chart 13 Euro area zero coupon
Chart 14 Euro area zero coupon break-even
inflation-linked bond yields
inflation rates
(percentages per annum; ﬁ ve-day moving averages of daily data;
(percentages per annum; ﬁ ve-day moving averages of daily data;
seasonally adjusted)
seasonally adjusted)
five-year forward inflation-linked bond yield
five-year forward break-even inflation rate
five years ahead
five years ahead
five-year spot inflation-linked bond yield
five-year spot break-even inflation rate
ten-year spot inflation-linked bond yield
ten-year spot break-even inflation rate
3.0
3.0
3.0
3.0
2.5
2.5
2.6
2.6
2.0
2.0
2.2
2.2
1.5
1.5
1.8
1.8
1.0
1.0
1.4
1.4
0.5
0.5
0.0
0.0
1.0
1.0
Aug. Oct. Dec. Feb. Apr. June Aug.
Aug. Oct. Dec. Feb. Apr. June Aug.
2009
2010
2009
2010
Sources: Reuters and ECB calculations.
Sources: Reuters and ECB calculations.
ECB
36 Monthly Bulletin
August 2010

E C O N O M I C
A N D M O N E T A R Y
D E V E L O P M E N T S
Monetary and
financial
developments
inﬂ ation rates were fairly stable over the review
Chart 15 Implied forward euro area
period and stood at 1.4% and 1.9% respectively
overnight interest rates
on 4 August. Long-term forward inﬂ ation swap
rates also remained broadly unchanged at around
(percentages per annum; daily data)
2.2%, which again suggests that euro area
4 August 2010
30 June 2010
inﬂ ation expectations remain ﬁ rmly anchored.
5.0
5.0
4.5
4.5
Investors’ expectations regarding the future
4.0
4.0
path of short-term interest rates in the euro area
3.5
3.5
appeared to remain broadly unchanged between
3.0
3.0
the end of June and 4 August, as suggested by the
2.5
2.5
minor change in the implied forward overnight
2.0
2.0
interest rate curve for euro area government
1.5
1.5
bonds (see Chart 15).
1.0
1.0
0.5
0.5
0.0
0.0
2010
2012
2014
2016
2018
2020
2.5 INTEREST RATES ON LOANS AND DEPOSITS
Sources: ECB, EuroMTS (underlying data) and Fitch Ratings
(ratings).
Notes: The implied forward yield curve, which is derived from
Most MFI lending rates declined in June 2010,
the term structure of interest rates observed in the market, reﬂ ects
market expectations of future levels for short-term interest rates.
reaching levels marking new, or standing close
The method used to calculate these implied forward yield curves
is outlined in the “Euro area yield curve” section of the ECB’s
to, historical lows for both households and
website. The data used in the estimate are euro area AAA-rated
non-ﬁ nancial corporations, and across most
government bond yields.
maturities. The pass-through of past reductions
in key ECB interest rates to bank customers is
Chart 16 Short-term MFI interest rates
coming to an end.
and a short-term market rate
(percentages per annum; rates on new business)
In June 2010 the vast majority of short-term
deposits from households redeemable at notice
MFI interest rates on deposits increased for
of up to three months
both households and non-ﬁ nancial corporations.
deposits from households with an agreed maturity
of up to one year
Most short-term rates on loans to households
overnight deposits from non-financial corporations
declined, whereas those on loans to non-
loans to households for consumption with a floating
rate and an initial rate fixation of up to one year
ﬁ nancial corporations developed along mixed
loans to households for house purchase with a floating
rate and an initial rate fixation of up to one year
lines (see Chart 16). More precisely, average
loans to non-financial corporations of over €1 million
rates on overdrafts extended to households
with a floating rate and an initial rate fixation
of up to one year
rose to 9.0%, while short-term rates on loans
three-month money market rate
to households for house purchase declined
10
10
marginally (by 3 basis points to 2.5%), thus
9
9
reaching a new historical low. The more volatile
8
8
7
7
short-term rates on consumer credit declined
6
6
sharply, to 5.2% (inﬂ uenced by country-speciﬁ c
5
5
developments). In the case of non-ﬁ nancial
4
4
3
3
corporations, banks’ rates on overdrafts declined
2
2
to 3.7%, while short-term rates on small loans
1
1
0
0
(i.e. loans of less than €1 million) remained
2003
2004
2005
2006
2007
2008
2009
2010
unchanged. Short-term lending rates on large
Source: ECB.
loans (i.e. loans of more than €1 million)
Note: Data as of June 2010 may not be fully comparable with
those prior to that date owing to methodological changes arising
picked up to 2.2%. Since the EURIBOR
from the implementation of Regulations ECB/2008/32 and
ECB/2009/7 (amending Regulation ECB/2001/18).
increased by 4 basis points in June 2010, the
ECB
Monthly Bulletin
August 2010
37

spreads between short-term MFI lending rates to households and the three-month money market
rate narrowed, while the spread vis-à-vis interest rates on large loans to non-ﬁ nancial corporations
widened (see Chart 17).
Taking a longer-term perspective, between September 2008 (i.e. immediately prior to the beginning
of the cycle of monetary policy easing) and June 2010 short-term rates on both loans to households
for house purchase and loans to non-ﬁ nancial corporations decreased by 325 basis points and
336 basis points respectively. This compares with a decline of 429 basis points in the three-month
EURIBOR and indicates a considerable pass-through of market rate changes to bank lending rates.
As regards longer maturities, MFI interest rates on long-term deposits rose in June 2010, while most
interest rates on longer-term loans to households and non-ﬁ nancial corporations fell (see Chart 18).
More precisely, interest rates on loans to households for house purchase with an initial rate ﬁ xation
of over ﬁ ve years and up to ten years declined by 6 basis points to 4.1%, while those on loans to
households for house purchase with an initial rate ﬁ xation of over ten years decreased by 11 basis
points to 3.9%. Average rates on small loans to non-ﬁ nancial corporations with an initial rate
ﬁ xation period of over one year and up to ﬁ ve years, and those with an initial period of rate ﬁ xation
of over ﬁ ve years declined slightly to stand at 4.1% and 3.8% respectively. The average rates on
large loans increased by 8 basis points to 2.9% in the case of loans with an initial rate ﬁ xation
period of over one year and up to ﬁ ve years, but declined by 8 basis points, to 3.3%, for loans with
an initial period of rate ﬁ xation of over ﬁ ve years.
Chart 17 Spreads of short-term MFI interest
Chart 18 Long-term MFI interest rates
rates vis-à-vis the three-month money
and a long-term market rate
market rate
(percentage points; rates on new business)
(percentages per annum; rates on new business)
loans to non-financial corporations of over €1 million
deposits from non-financial corporations with an
with a floating rate and an initial rate fixation of up
agreed maturity of over two years
to one year
deposits from households with an agreed maturity
loans to households for house purchase with a floating
of over two years
rate and an initial rate fixation of up to one year
loans to non-financial corporations of over €1 million
deposits from households with an agreed maturity
with an initial rate fixation of over five years
of up to one year
loans to households for house purchase with an initial
rate fixation of over five and up to ten years
seven-year government bond yield
2.5
2.5
6.0
6.0
2.0
2.0
5.5
5.5
1.5
1.5
5.0
5.0
1.0
1.0
4.5
4.5
0.5
0.5
4.0
4.0
0.0
0.0
3.5
3.5
-0.5
-0.5
-1.0
-1.0
3.0
3.0
-1.5
-1.5
2.5
2.5
-2.0
-2.0
2.0
2.0
2003
2004
2005
2006
2007
2008
2009
2003
2004
2005
2006
2007
2008
2009
Source: ECB.
Source: ECB.
Notes: For the loans, the spreads are calculated as the lending rate
Note: Data as of June 2010 may not be fully comparable with
minus the three-month money market rate. For the deposits, the
those prior to that date owing to methodological changes arising
spread is calculated as the three-month money market rate minus
from the implementation of Regulations ECB/2008/32 and
the deposit rate. Data as of June 2010 may not be fully comparable
ECB/2009/7 (amending Regulation ECB/2001/18).
with those prior to that date owing to methodological changes
arising from the implementation of Regulations ECB/2008/32
and ECB/2009/7 (amending Regulation ECB/2001/18).
ECB
38 Monthly Bulletin
August 2010

E C O N O M I C
A N D M O N E T A R Y
D E V E L O P M E N T S
Monetary and
financial
developments
Viewed from a longer-term perspective, since September 2008 euro area banks have adjusted
their rates on long-term loans to non-ﬁ nancial corporations more or less in line with the decline in
long-term government bond yields. By contrast, long-term rates on loans to households have not
fallen by as much over the same period, reﬂ ecting a more incomplete and sluggish pass-through
for households, but also increased credit risk concerns in some parts of the euro area. In the second
quarter of 2010 longer-term interest rates continued to decline for both households and non-ﬁ nancial
corporations, albeit to a much lesser extent than AAA-rated long-term government bond yields that
fell considerably owing to ﬂ ight-to-safety behaviour by investors.
Recent developments in loan-deposit margins on outstanding amounts signal improvements in the
proﬁ tability of euro area banks. These margins have recovered in comparison with those recorded
in the early part of 2009, thus contributing to the pick-up in euro area banks’ proﬁ tability since the
second half of 2009.
2.6 EQUITY MARKETS
Risk appetite in the global stock markets appeared to recover in the course of July. The publication
of the results of the EU-wide stress tests for banks and related information on banks’ sovereign debt
exposures, revised proposals for ﬁ nancial regulation and the easing of market concerns about the
sovereign debt situation in the euro area, as well as some positive corporate results for the second
quarter of 2010, boosted gains in stock prices on both sides of the Atlantic. Investors’ uncertainty
about stock market developments, as measured by implied volatility, also declined over the period
under review.
In the course of July major stock price indices
Chart 19 Stock price indices
in the euro area and the United States recovered
some of the losses experienced since early
May. By 4 August the Dow Jones EURO
(index: 1 August 2009 = 100; daily data)
STOXX index had gained about 9% on its
euro area
United States
level at the end of June, with ﬁ nancials and,
Japan
in particular, bank stocks leading the upward
125
125
movement. Over the same period the Standard
120
120
& Poor’s 500 index was also around 9% higher
(see Chart 19). Japanese stock prices, as 115
115
measured by the Nikkei 225 index, rose by only
110
110
1%, as they were negatively affected by some
disappointing economic data in July.
105
105
100
100
The publication of the results of the stress tests for
euro area banks, the easing of market concerns
95
95
about the sovereign debt situation in the euro
90
90
area, and some positive macroeconomic data
85
85
releases for the euro area economy and corporate
Aug.
Oct.
Dec.
Feb.
Apr.
June
Aug.
results for the second quarter of 2010 appeared
2009
2010
to have improved the market’s risk appetite in
Sources: Reuters and Thomson Financial Datastream.
Note: The indices used are the Dow Jones EURO STOXX broad
July. For example, investors’ uncertainty about
index for the euro area, the Standard & Poor’s 500 index for the
United States and the Nikkei 225 index for Japan.
near-term stock price movements, as measured
ECB
Monthly Bulletin
August 2010
39

by implied volatility extracted from options on
Chart 20 Implied stock market volatility
stock price indices, declined and, although still
relatively high, remained well below the peaks
reached during the market turbulence in May.
(percentages per annum; ﬁ ve-day moving average of daily data)
euro area
United States
In July the increases in US stock prices were
Japan
supported by the improvement in risk appetite
40
40
in the global markets and by the publication of
some positive corporate earnings ﬁ gures in the
35
35
course of the July reporting season. However,
concerns about the sustainability of the global
30
30
economic recovery and about the outlook for
corporate earnings in the second half of the year
25
25
after the conﬁ rmation of the slowdown in US
growth in the second quarter of 2010 contributed
20
20
to keeping the gains limited. Increases in stock
15
15
prices were spread broadly across sectors, with
ﬁ nancial and non-ﬁ nancial stock prices showing
10
10
a similar performance.
Aug.
Oct.
Dec.
Feb.
Apr.
June
Aug.
2009
2010
Major euro area stock price indices also Source: Bloomberg.
Notes: The implied volatility series reﬂ ects the expected standard
recovered signiﬁ
cantly in July. Euro area deviation of percentage changes in stock prices over a period of
up to three months, as implied in the prices of options on stock
ﬁ
nancials, in particular bank stock prices,
price indices. The equity indices to which the implied volatilities
beneﬁ ted strongly from the publication of the
refer are the Dow Jones EURO STOXX 50 for the euro area, the
Standard & Poor’s 500 for the United States and the Nikkei 225
results of the EU-wide stress tests and the details
for Japan.
about the banks’ exposures to sovereign debt in
several countries (see Box 4 below for details on the bank stress tests, in particular the reported
capital shortfall), as well as from the modiﬁ cations of the regulatory proposals put forward by the
Basel Committee on Banking Supervision. Consequently, the performance of ﬁ nancial stocks,
which showed double-digit advances in most countries, was better than that of the overall index in
July, and was the main driver of the signiﬁ cant increase in the overall indices.
Box 4
AN ASSESSMENT OF THE CAPITAL SHORTFALL REVEALED IN THE EU-WIDE STRESS-TESTING EXERCISE
The European Union has recently completed an EU-wide macro stress test, in which 91 banks
participated. The results were published by the Committee of European Banking Supervisors
(CEBS) on 23 July, together with a press release issued jointly with the ECB and the European
Commission.1 In the exercise, a 6% Tier 1 capital ratio was set as the threshold for assessing
the magnitude of capital shortfalls of the participating banks. It is important to note that this
6% ratio is not a regulatory minimum capital requirement. Under the adverse macroeconomic
scenario applied in the test, seven banks published Tier 1 capital ratios below the 6% threshold,
20 banks had Tier 1 ratios of between 6% and 7%, and 13 banks had Tier 1 ratios of between 7%
and 8%. The other 51 banks had higher capital ratios, demonstrating the overall resilience of the
1 The press release is available at http://www.ecb.int/press/pr/date/2010/html/pr100723_1.en.html.
ECB
40 Monthly Bulletin
August 2010

E C O N O M I C
A N D M O N E T A R Y
D E V E L O P M E N T S
Monetary and
financial
developments
EU banking system to a relatively severe adverse scenario. The aggregate capital shortfall of the
banks that participated in the exercise was €3.5 billion, a ﬁ gure which was somewhat lower than
market participants had expected. This box sets this estimated capital shortfall in the context of
the measures to bolster capital that had already been implemented prior to the stress test.
In assessing the size of the capital shortfall revealed by the EU-wide stress test, it must be borne in
mind that this exercise was carried out at a rather late stage in the ﬁ nancial crisis, after a considerable
amount of capital support had already been provided by EU governments to their banking systems.
For instance, by end-2009, the starting point for the exercise, the EU banking sector had beneﬁ ted
from public capital support amounting to €222 billion (see the table). In addition, although the
stress test took as a starting point the capital levels that prevailed at end-2009, in the estimation of
the ﬁ nal capital shortfall ﬁ gures the banks that participated in the exercise were allowed to count
capital injections and increases that took place between end-2009 and 1 July 2010 as part of their
Tier 1 capital. For the EU as a whole, such capital adjustments amounted to €14.8 billion. Of
this total, €11.3 billion prevented banks from falling below the 6% Tier 1 capital ratio threshold
(i.e. the amount of capital injected exceeded the amount needed to maintain the 6% Tier 1 capital
ratio threshold by €3.5 billion). These capital adjustments included (i) capital injections by the
Spanish Fund for Orderly Bank Restructuring (Fondo de Reestructuración Ordenada Bancaria –
FROB) into several savings banks; (ii) the capital relief provided by the Spanish deposit guarantee
fund for Caja Castilla-La Mancha; and (iii) the capital increase by Bank of Ireland.2
The capital injected into some euro area banking systems between end-2009 and 1 July 2010 had
the effect of lowering the aggregate capital shortfall revealed by the EU-wide stress test under the
adverse scenario. Taking full account of the measures to bolster capital that were implemented
during this period, it is possible to compute a “gross capital shortfall”, i.e. the shortfall that
would have prevailed had the banks that participated in the exercise not been allowed to include
these additional measures in their calculations. In total, this gross capital shortfall would have
amounted to €14.9 billion (which is the sum of €11.3 billion of additional capital measures that
counted against a shortfall and the €3.5 billion “net capital shortfall” revealed by the stress test).3
2 The Bank of Ireland raised €1.7 billion from private investors. It also converted €1.7 billion of the government’s €3.5 billion
preference shares into ordinary equity. This conversion is, however, neutral for the capital shortfall computation and is therefore not
included here.
3 The
ﬁ gures used in this calculation do not add up owing to rounding.
Capital measures and shortfalls in the EU stress test
(EUR billions)
EU
Euro
area
DE
ES
GR
A) Public capital injected before end-2009
222
146
54
12
3
B) Capital measures taken between end-2009 and 1 July 2010
14.8
14.8 1)
0.0
13.1 2)
0.0
C) Of which offset against the estimated capital shortfall 3)
11.3
11.3
0.0
10.6
0.0
D) Net capital shortfall identiﬁ ed in the stress test
3.5
3.5
1.2
2.0
0.2
E) Gross capital shortfall (C+D)
14.9
14.9
1.2
12.6
0.2
F) Remaining public commitment
189
147
11
88
12 4)
Sources: CEBS, FROB and ECB calculations.
1) The amount reported includes the sum of capital measures taken in Spain and the €1.7 billion of capital that Bank of Ireland raised from
private sources.
2) The amount reported includes (i) the €10.58 billion of capital injected into Spanish banks by the FROB and (ii) the €2.48 billion
of capital relief provided by the Spanish deposit guarantee fund to Caja Castilla-La Mancha.
3) The amount includes the share of the capital measures that prevented a capital shortfall in the stress test, i.e. the share that brings the
Tier 1 capital ratio to 6%.
Individual items may not add up to the total owing to rounding.
4) The amount reported includes (i) the remainder of the old recapitalisation scheme (€1.8 billion); and (ii) the new Financial Stability
Fund (€10.0 billion), which is currently being implemented.
ECB
Monthly Bulletin
August 2010
41

Any capital shortfall should be judged against the ﬁ nancial resources available. In this respect,
it is important to bear in mind that the commitments made by EU governments to support their
banking sectors provide ample funds to address even sizeable capital shortfalls. In particular, EU
governments have pledged a further €189 billion (€147 billion of which has been pledged by euro
area governments) that could be injected into banks if needed. Moreover, in all three countries
where some banks “failed” the stress test, the remaining amounts pledged are sufﬁ cient to cover
the capital shortfalls revealed by the exercise. For instance, in Germany, Spain and Greece, the
pledged capital that remains after subtracting the sum already injected amounts to €11 billion,
€88 billion and €12 billion respectively. Furthermore, the banks perceived to have failed the
stress test and the respective national authorities have swiftly communicated their intentions to
implement further recapitalisation measures.
Overall, the corporate results for the second quarter of 2010 that were published in the period
under review also contributed to the increases in stock prices. For companies listed in the
Dow Jones EURO STOXX index, the year-on-year rate of growth in actual earnings improved
further in July, with actual earnings per share rising by 2%, the ﬁ rst positive reading over the last
24 months, compared with a growth of -3% in June. Moreover, the earnings outlook remained sound:
analysts’ expectations with respect to the growth of earnings per share over the next 12 months
remained at the robust level of 23% in July, whereas longer-term earnings growth was expected to
be around 12%.
Box 5
INTEGRATED EURO AREA ACCOUNTS FOR THE FIRST QUARTER OF 2010 1
The integrated euro area accounts offer comprehensive and consistent information on the
income, spending, ﬁ nancing and portfolio decisions of the institutional sectors of the euro
area. The accounts up to the ﬁ rst quarter of 2010, released on 29 July 2010, show further signs
of normalisation, with the household saving rate declining, risk appetite recovering and net
worth rising. At the same time, the non-ﬁ nancial corporate sector showed a ﬁ nancial surplus,
with the need for external ﬁ nancing limited by increased availability of internal funds. Patterns
of disintermediation in favour of market instruments continued across sectors.
Euro area income and net lending/net borrowing
The pick-up in the growth rate of euro area nominal disposable income that started in the second
quarter of 2009 continued in the ﬁ rst quarter of 2010 with a return to a positive yearly growth
of 1% (see Chart A), beneﬁ ting non-ﬁ nancial corporations (NFCs) on the back of increasing
operating surpluses. Moreover, the yearly decline in government disposable income moderated
as the economy recovered slightly and ﬁ scal consolidation packages unfolded, in particular
through tax increases. By contrast, and in part reﬂ ecting the improvement in government income,
household nominal income growth slowed.
1 Detailed data can be found on the ECB’s website at http://sdw.ecb.europa.eu/browse.do?node=2019181.
ECB
42 Monthly Bulletin
August 2010

E C O N O M I C
A N D M O N E T A R Y
D E V E L O P M E N T S
Monetary and
financial
developments
Chart A Euro area gross disposable income
Chart B Euro area net lending/net
and sectoral contributions
borrowing
(annual percentage changes; percentage point contributions)
(percentages of GDP; four-quarter moving sum)
households
households
non-financial corporations
non-financial corporations
financial corporations
financial corporations
government
government
euro area economy
euro area economy
7
7
8
8
6
6
5
5
4
4
3
3
2
2
1
1
0
0
-2
-2
-1
-1
-4
-4
-3
-3
-6
-6
-5
-5
-8
-8
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Sources: Eurostat and ECB.
Sources: Eurostat and ECB.
Against that background, euro area gross saving continued to decline as observed since the end
of 2007. However, the pace of the yearly contraction in saving moderated signiﬁ cantly (to an
annual rate of change of -1.7%), reﬂ ecting the increase in NFCs’ operating surpluses and less
rapid contractions in government saving. At the same time, the household saving rate fell for the
third consecutive quarter to 14.6% (seasonally adjusted).
The annual growth rate of gross ﬁ xed capital formation continued to recover, albeit less rapidly
than that of savings. These developments contributed to a further improvement in euro area net
lending/net borrowing (to a deﬁ cit of 0.6% of GDP, on a four-quarter moving sum basis). From
a sectoral point of view, this mainly reﬂ ects the NFC ﬁ nancial balance, which turned into a
surplus, absorbing a slight decline in the household surplus and a further deterioration in the
government deﬁ cit (see Chart B).
The mirror image of these developments can be seen in the external accounts, showing an
improvement in the current account balance and a decrease in external net borrowing (mainly
resulting in decreasing net inﬂ ows in debt securities). At the same time, the dampening of
“gross” cross-border transactions that had characterised external developments since the end of
2008 started to recede, while a shift towards more risky equity instruments can be observed.
Behaviour of institutional sectors
The year-on-year growth of nominal gross disposable income of households dropped to 0.6%
(from 0.8% in the last quarter of 2009) on the back of a lower positive contribution from net social
beneﬁ ts and contributions from the government, together with increased taxation following the
introduction of the ﬁ rst ﬁ scal consolidation measures, while all other sources of income exhibited
subdued growth similar to that seen in the previous quarter (see Chart C). The drop was more acute
ECB
Monthly Bulletin
August 2010
43

Chart C Households’ nominal gross
Chart D Households’ financial investment
disposable income
(annual percentage changes; percentage point contributions)
(four-quarter moving sums; percentages of gross disposable
income)
net social benefits and contributions
total assets
direct taxes
deposits not included in M3
net property income
equity
gross operating surplus and mixed income
debt securities not included in M3
compensation of employees
mutual fund shares (other than money market fund shares)
gross disposable income
insurance technical reserves
M3
other
8
8
16
16
14
14
6
6
12
12
10
10
4
4
8
8
2
2
6
6
4
4
0
0
2
2
0
0
-2
-2
-2
-2
-4
-4
-4
-4
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Sources: Eurostat and ECB.
Sources: Eurostat and ECB.
in real terms as a result of the rebound in consumer prices which led the year-on-year growth rate
of real gross disposable income to enter negative territory. Household consumption increased
robustly to reach year-on-year growth of 1.6% (against -0.1% in the previous quarter), in spite
of the lower income growth, indicating some renewed conﬁ dence in the context of slightly better
labour prospects and an increase in ﬁ nancial wealth driven by equity market developments. This
resulted in a further drop in the saving ratio. Household gross capital formation still decreased
substantially, albeit somewhat more moderately than in the previous quarter (-7.4% year-on-year,
compared with -11.9% previously), reﬂ ecting still weak housing markets and deleveraging
pressures. This was also reﬂ ected in a still subdued uptake of loans (2.1% annual growth rate),
although increasing compared with the previous quarter. As ﬁ nancial investment stabilised at an
annual growth rate of 3.3%, net lending dropped slightly. At the same time, patterns of portfolio
allocation continued to point to liquidity preference receding further, to a renewed search for
yield, and to a return of risk appetite. In particular, purchases of equity, non-money market mutual
funds and insurance liabilities expanded to the detriment of low-yielding deposits (see Chart D).
The gross operating surplus of non-ﬁ nancial corporations rebounded strongly in the ﬁ rst quarter
owing to vigorous exports of goods and continued cost savings, exhibiting a record annual growth
of 4.1% (from -3.5% in the previous quarter) which led to a sharp increase in savings as distributed
dividends remained subdued (see Chart E). At the same time, the annual contraction in NFC ﬁ xed
capital formation moderated further, and, as the pace of inventory reductions decreased abruptly,
the yearly decline in capital formation slowed markedly, from -21% in the last quarter of 2009 to
-2.6% in the ﬁ rst quarter of 2010. However, with saving higher than capital investment, the usual
net borrowing position of NFCs turned into net lending on a four-quarter moving sum basis
ECB
44 Monthly Bulletin
August 2010

E C O N O M I C
A N D M O N E T A R Y
D E V E L O P M E N T S
Monetary and
financial
developments
Chart E NFCs’ external financing by source
Chart F NFCs’ saving, capital investment
of funds
and net borrowing
(four-quarter moving sums; EUR billions)
(four-quarter moving sums; EUR billions)
unquoted equity issued minus purchased
non-financial investment
other liabilities minus other assets
of which, fixed capital formation
quoted equities issued
retained earnings and net capital transfers
debt securities issued
net borrowing (+)/net lending (-)
loans incurred net of loans granted
external financing
800
800
1,200
1,200
1,100
700
700
1,100
1,000
1,000
600
600
900
900
500
500
800
800
400
400
700
700
600
600
300
300
500
500
200
200
400
400
100
100
300
300
200
200
0
0
100
100
-100
-100
0
0
-200
-200
-100
-100
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
2000200120022003200420052006200720082009
Sources: Eurostat and ECB.
Sources: Eurostat and ECB.
Note: For presentational purposes, some transactions in assets are
netted here from ﬁ nancing, as they are predominantly internal to
the sector (loans granted by NFCs, unquoted shares and other
accounts receivable/payable).
(see Chart F). The resulting build-up of ample liquidity buffers could signal precautionary
behaviour, in view of a still uncertain outlook for activity and bank ﬁ nancing, and of ongoing
reductions of balance-sheet vulnerabilities. Corporate leverage ratios still remained at historically
high levels – the debt-to-gross value added stabilised at 165% while the debt-to-equity (notional
stock) ratio stabilised at 70%. In this context, the annual growth rate of ﬁ nancing by NFCs
rebounded slightly to 1.1%, from 0.8% in the previous quarter, as the need for external ﬁ nancing
was limited by the subdued real investment activities and the ongoing rise in available internal
funds which typically precedes any recourse to external funds (the “pecking order” of corporate
ﬁ nance). Pronounced substitution effects are still observed, as market ﬁ nancing (debt securities
and quoted shares) more than offset net redemptions of MFI loans.
In the ﬁ rst quarter of 2010 the euro area general government budget balance (net borrowing)
deteriorated further to 6.6% of GDP (four-quarter moving sum), compared with 6.2% in the
last quarter of 2009. This deterioration, for the ninth consecutive quarter since the end of 2007,
mainly reﬂ ected broadly stable gross government investment (at 2.7% of GDP) and a further
contraction in gross savings (net of capital transfers), which stood at -3.9% of GDP, down from
-3.4% recorded in the previous quarter. Gross savings nevertheless showed a diminishing rate of
decline – which points to a potential trough in the next quarter – on the back of the operation of
automatic stabilisers in a moderately recovering economy, while the impact of most ﬁ scal stimulus
measures taken by euro area governments also declined. At the same time, this development was
underpinned by tax increases in the context of the introduction of ﬁ scal consolidation measures.
The annual growth rate of government ﬁ nancial investment contracted rapidly to -0.7%, by far the
lowest value since the beginning of the crisis (a peak of 15.8% was recorded in the second quarter
ECB
Monthly Bulletin
August 2010
45

of 2009), as governments scaled down their
Chart G Holding gains and losses on financial
corporations’ assets
interventions aimed at stabilising the ﬁ nancial
sector. In addition, the cash build-up recorded
(quarterly ﬂ ows; EUR billions)
in previous quarters started to be reduced.
total
As a consequence, ﬁ nancing by issuance of
loans
loans and debt securities also slowed to 7.8%,
mutual funds shares
debt securities
down from 9.5% in the last quarter of 2009.
unquoted shares
The still high government debt securities
quoted shares
other
issuance continued to be absorbed by MFIs
800
800
and non-residents, as well as, increasingly,
600
600
by resident institutional investors.
400
400
200
200
Gross entrepreneurial income of ﬁ nancial
0
0
corporations returned to modest positive
-200
-200
growth owing to an improvement in net
-400
-400
-600
-600
interest received (partly related to carry-
-800
-800
trade on government bonds and the steep
-1,000
-1,000
yield curve). The contribution from the net
-1,200
-1,200
operating surplus to income growth diminished
2000200120022003200420052006200720082009
(to 2.8% from 7.3% in the last quarter of 2009)
Sources: Eurostat and ECB.
Note: This chart provides other economic ﬂ ows, which mainly
owing to a moderation in bank spreads and
refer to holding gains and losses (realised or unrealised) on
weakness in traditional lending business. assets that are valued at market value in the integrated euro area
accounts (quoted, unquoted and mutual fund shares and debt
In addition, ﬁ
nancial corporations have securities). For the rest of the asset classes (notably loans), which
are valued at nominal value, it shows the changes in balance
beneﬁ ted from substantial holding gains in
sheets owing to exchange rate variations and the writing-off of
bad assets from the balance sheet of the creditor and the debtor
recent quarters (see Chart G) which reached
upon recognition by the former that the cash ﬂ ows associated
with the asset can no longer be collected.
an all-time high in terms of accumulated
four-quarter ﬂ ows of around €1,900 billion in a
context of diminishing long-term interest rates and the stock market recovery from the trough
recorded in the ﬁ rst quarter of 2009. The annual growth rate of ﬁ nancial investment (netting out
interbank deposits) increased to 2.7% from 2.2% in the last quarter of 2009. MFI deposits with
non-residents were the main contributors to that development (although still showing a negative
four-quarter moving sum), while the growth rate of acquisitions of debt securities by MFIs
continued to decline. At the same time, holdings of debt securities by institutional investors (mostly
of public debt) continued to rise, in particular holdings by insurance corporations and pension funds
(ICPFs), whose acquisitions over the quarter reached a record volume of €77 billion (compared
with acquisitions by MFIs of €75 billion). The ratio of equity to ﬁ nancial assets stabilised at 8.8%
as the expansion in the balance sheet of the sector was compensated by increases in its equity value.
Financial markets
The considerable expansion of net transactions in debt securities that characterised
developments one year ago further moderated, although strong NFC issuance continued to
substitute for bank loans as has been the case since the end of 2008. The net buyer position
of other ﬁ nancial intermediaries (OFIs) reﬂ ects large purchases by investment funds, while
issuance by special-purpose vehicles (notably in the context of retained securitisations)
slowed. In the same vein, ICPFs stepped up purchases, while households were large sellers.
Issuance by MFIs continued to be limited and MFIs added moderately to their holdings of
debt securities. The rest of the world remained a substantial net buyer, although on a smaller
ECB
46 Monthly Bulletin
August 2010

E C O N O M I C
A N D M O N E T A R Y
D E V E L O P M E N T S
Monetary and
financial
developments
scale than in the previous quarter, reﬂ ecting
Chart H Change in net worth of households
the improvement in euro area net lending.
At the same time, issues of quoted shares by
(four-quarter moving sums; percentages of gross disposable income)
NFCs remained robust in the context of an
other flows in non-financial assets 1)
overall disintermediation trend away from
other flows in financial assets and liabilities 2)
bank ﬁ
nancing. NFCs were net sellers
change in net worth owing to net saving 3)
change in net worth
of equity, and investment funds were
70
70
prominent buyers. On the mutual funds
60
60
market, issuance of non-money market
mutual fund shares continued the strong
50
50
acceleration shown in previous quarters on
40
40
the back of household appetite for riskier and
30
30
longer-term assets in place of monetary assets.
20
20
On the loan market, the ongoing reduction in
MFI loans to NFCs was accompanied by a
10
10
moderate increase in loans to households.
0
0
-10
-10
Balance sheet dynamics
-20
-20
In the ﬁ rst quarter of 2010 the annual change in
-30
-30
households’ net worth continued to be positive
-40
-40
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
(after two years of decline), on the back of a
stock market rally (see Chart H). The increase
Sources: Eurostat and ECB.
Note: The data on non-ﬁ nancial assets are ECB estimates.
in market prices also boosted the balance
1) Mainly holding gains and losses on real estate and land.
2) Mainly holding gains and losses on shares and other equity.
sheets of banks, which have sizeable positions
3) This item comprises net saving, net capital transfers received,
and the discrepancy between the non-ﬁ nancial and the ﬁ nancial
in equity and debt securities (see Chart G).
accounts.
ECB
Monthly Bulletin
August 2010
47

3 PRICES AND COSTS
According to Eurostat’s ﬂ ash estimate, euro area annual HICP inﬂ ation increased to 1.7% in July,
from 1.4% in June, most likely owing to upward base effects in the energy and food components.
In the next few months annual HICP inﬂ ation rates are expected to display some further volatility
around the current level. Looking further ahead, inﬂ ation rates should, overall, remain moderate
in 2011, beneﬁ ting from low domestic price pressures. Risks to the outlook for price developments
are broadly balanced.
3.1 CONSUMER PRICES
According to Eurostat’s ﬂ ash estimate, the euro area annual HICP inﬂ ation rate stood at 1.7% in
July 2010, up from 1.4% in June (see Table 4). Ofﬁ cial estimates of the breakdown of HICP inﬂ ation
in July are not yet available, but it would appear that the increase was related mostly to upward base
effects in the energy and food components.
In June, the last month for which an ofﬁ cial breakdown is available, the annual growth rate of
overall HICP inﬂ ation fell somewhat, by 0.2 percentage point compared with May. This drop was
attributable mainly to the strong fall in the annual rate of change in the energy component, which
stood at 6.2% in June, down from 9.2% in the previous month, owing to a negative base effect and
partly to negative month-on-month changes in the prices of oil-related items.1
The annual growth rate of total food prices (including alcohol and tobacco) continued to trend
upwards, standing at 0.9% in June, which is 0.2 percentage point higher than in May. As for the
sub-components, unprocessed food prices accelerated in June, mainly on account of fruit and
vegetable prices. The year-on-year change in the prices of unprocessed food stood at 0.9% in June,
up from 0.4% in the previous month, while that in processed food prices remained unchanged at
0.9%. Within processed food prices, the sub-components with the highest weight (bread and cereals;
milk, cheese and eggs; sugar products; mineral water and fruit juices) still recorded negative annual
growth rates in June. By contrast, tobacco prices continued to rise strongly in annual terms in the
same month, by 5.4%, driven mainly by increases in excise duties and other indirect taxes.
1 For more details on the links between oil prices and inﬂ ation, see the article entitled “Oil prices: their determinants and impact on euro
area inﬂ ation and the macroeconomy” in this issue of the Monthly Bulletin.
Table 4 Price developments
(annual percentage changes, unless otherwise indicated)
2008
2009
2010
2010
2010
2010
2010
2010
Feb.
Mar.
Apr.
May
June
July
HICP and its components
Overall index 1)
3.3
0.3
0.9
1.4
1.5
1.6
1.4
1.7
Energy
10.3
-8.1
3.3
7.2
9.1
9.2
6.2
.
Unprocessed food
3.5
0.2
-1.2
-0.1
0.7
0.4
0.9
.
Processed food
6.1
1.1
0.6
0.5
0.6
0.9
0.9
.
Non-energy industrial goods
0.8
0.6
0.1
0.1
0.2
0.3
0.4
.
Services
2.6
2.0
1.3
1.6
1.2
1.3
1.3
.
Other price indicators
Industrial producer prices
6.1
-5.1
-0.4
0.9
2.8
3.1
3.0
.
Oil prices (EUR per barrel)
65.9
44.6
54.5
59.1
64.0
61.6
62.2
58.9
Non-energy commodity prices
2.0
-18.5
25.4
34.5
51.9
52.1
50.5
56.0
Sources: Eurostat, ECB and ECB calculations based on Thomson Financial Datastream data.
Note: The non-energy commodity price index is weighted according to the structure of euro area imports in the period 2004-06.
1) HICP inﬂ ation in July 2010 refers to Eurostat’s ﬂ ash estimate.
ECB
48 Monthly Bulletin
August 2010

E C O N O M I C
A N D M O N E T A R Y
D E V E L O P M E N T S
Prices
and costs
Chart 21 Breakdown of HICP inflation: main components
(annual percentage changes; monthly data)
total HICP (left-hand scale)
total HICP excluding energy and unprocessed food
unprocessed food (left-hand scale)
(left-hand scale)
energy (right-hand scale)
processed food (right-hand scale)
non-energy industrial goods (left-hand scale)
services (left-hand scale)
5
25
4
8
4
20
3
6
3
15
2
10
2
4
1
5
0
0
1
2
-1
-5
0
0
-2
-10
-3
-15
-1
-2
2004 2005 2006 2007 2008 2009
2010
2004 2005 2006 2007 2008 2009
2010
Source: Eurostat.
Excluding all food and energy items, which represent around 30% of the HICP basket, annual
HICP inﬂ ation stood at 0.9% in June, up 0.1 percentage point from May. This pick-up was related
mainly to a slight increase in non-energy industrial goods prices, while services prices remained
stable. The year-on-year rate of change in non-energy industrial goods prices increased in June to
0.4%, from 0.3% in May. Among the items contributing most to this rise were garments, footwear
and jewellery, the latter owing to a rally in the price of gold and other precious metals. This recent
increase notwithstanding, about one-quarter of non-energy industrial good items still recorded
negative year-on-year rates in June, which is a higher proportion than the average observed since
1999. The annual rate of inﬂ ation in services prices remained unchanged in June, standing at 1.3%,
with no substantial changes in the dynamics of its major sub-components. Box 6 describes the
extent to which the HICP rent component of services prices has been inﬂ uenced by developments
in euro area house prices.
Box 6
EURO AREA HOUSE PRICES AND THE RENT COMPONENT OF THE HICP
In the euro area, as in many other economies, expenditures on buying a house or ﬂ at are not
incorporated directly into consumer price indices, but expenditures on rent generally are.
Given the theoretical long-run relationship between developments in house prices and rents,
changes in the prices of residential dwellings could have an indirect impact on consumer price
inﬂ ation via changes in rents. In this context, it is possible that the recent sharp decline in house
prices in some euro area countries may have exerted some downward pressure on rents which,
in turn, may have had an impact on the euro area headline HICP through its rent component.
The purpose of this box is to assess the scope of such an impact for the euro area. First, it
ECB
Monthly Bulletin
August 2010
49

describes the relationship between developments in house prices and rents from a theoretical
perspective. Second, it presents an empirical analysis of the co-movement of euro area house
prices and the rent component of the HICP, highlighting, in particular, some of the limitations to
the theoretical implications. Finally, the impact on the euro area headline HICP is evaluated and
compared with the results for the US consumer price index (CPI).
The co-movement of house prices and rents from a theoretical perspective
Housing can be considered from an investment perspective, i.e. as a non-ﬁ nancial asset,
or from a consumption perspective, i.e. as shelter consumed by an owner-occupier or a tenant.
Both perspectives imply that there is a long-run relationship between house prices and rents,
although with potentially different adjustment mechanisms in the short run. When considering
residential property as an asset, rents can be viewed as a proxy for the corresponding dividend.
This would imply, for example, that a higher present discounted value of future dividends,
all else being equal, would translate into a higher price for the underlying asset. However, when
considering housing as a service that is consumed by the owner-occupiers or tenants – under the
assumption that owning and renting a property can be substituted for one another – the existence
of temporary price misalignments, such as the overvaluation of purchase prices of residential
dwellings, would imply a trade-off of buying for renting. This would have opposite effects on
changes in house prices and changes in rents, resulting – under perfect market conditions –
in a long-run equilibrium in the housing market. In practice, the forces driving house prices and
rents, as well as their co-movement, are nevertheless subject to several limitations, which are
discussed below in relation to the empirical evidence for the euro area.
Empirical evidence for the euro area
The empirical analysis of the co-movement of house prices and rents in the euro area is based
on the ECB’s euro area residential property price indicator 1 and the rent component of the euro
area HICP. Annual rates of change in these series are presented in Chart A.2 Having followed an
upward trend for a protracted period of time, the annual rate of change in euro area residential
property prices started to decelerate around 2005 and ﬁ nally went into negative territory in 2009.3
By contrast, rent growth in the euro area was much less volatile over the same period. Overall,
the movements in euro area property prices have been more pronounced than those seen in the
rent component of the HICP. From 1997 to 1999, the growth rates of the two series moved in
opposite directions. Starting in 2000 changes in the growth of the rent component of the HICP
appeared to have mirrored changes in the growth of residential property prices, albeit with a
substantial lag and much smaller amplitude.
There are several factors that might explain the above-mentioned differences between developments
in residential property prices and developments in rents, including rent regulation, ﬁ scal policy
measures related to housing, structural economic changes, ﬁ nancing conditions and statistical issues.
In the euro area, there are various forms of rent regulation, such as rent indexation (to various price
indices), caps on rent increases, long rental agreements with various clauses on adjusting rents and
rent protection. The rent component of the HICP also includes social housing rents, which constitute
1 The ECB’s euro area residential property price indicator is a semi-annual weighted average of country indicators. The series starts in
1996 and the latest available observation refers to the second half of 2009.
2 The semi-annual data of the rent component of the euro area HICP represent an average of the monthly observations.
3 For more details, see the box entitled “Recent housing market developments in the euro area”, Monthly Bulletin, ECB, May 2010.
ECB
50 Monthly Bulletin
August 2010

E C O N O M I C
A N D M O N E T A R Y
D E V E L O P M E N T S
Prices
and costs
a signiﬁ cant share of the rental market in some
Chart A Euro area residential property
prices and the rent component of the HICP
euro area countries. As a result, only a fraction
of the rental payments covered by the HICP –
(annual percentage changes)
typically those referring to new rental agreements
residential property prices
for non-social housing – might be expected to
rent component of the HICP
directly adapt to market forces in general and to
8
8
changes in house prices in particular.4 This is a
key reason for the muted and delayed response
6
6
from the overall rent index.
4
4
The relationship between house prices and rents
2
2
may also be weakened by supply constraints as
0
0
well as by the limited scope for substituting
buying and renting for one another, owing, for
-2
-2
example to borrowing constraints, the size of the
rental market, differences in the characteristics
-4
-4
1997
1999
2001
2003
2005
2007
2009
of rented and owner-occupied property and high
Sources: Eurostat and ECB.
transaction costs. When considering housing as
an asset, other factors affecting the user cost of
housing could drive a wedge between rents and residential property prices. Such factors include
mortgage interest rates, various forms of property taxes and subsidies, as well as expectations
for future house price developments.5 In view of the most recent boom and bust in the housing
markets in the United States and some euro area countries, the latter factor could have played an
important role in the decoupling of house prices and rents in the ﬁ rst part of the last decade.
Some of the above-mentioned factors may also explain the divergence between the annual rates
of change in rents and house prices that was observed in several euro area countries during the
late 1990s. As shown in the left-hand panel of Chart B, many euro area countries saw a decline
in rent inﬂ ation between 1997 and 1999, while house prices were accelerating. The start of
EMU during this period brought about important structural changes. First, in many countries,
consumer price inﬂ ation fell, which could have had a downward impact on rent inﬂ ation through
the indexation mechanism. As shown in the right-hand panel of Chart B, in many countries,
the deceleration in inﬂ ation of the rent component of the HICP mirrored the deceleration in the
headline HICP, even though it was stronger.6 Second, falling nominal and real interest rates
made it more economical for households to buy rather than to rent a property, possibly triggering
a substitution effect that supported house prices and drove down growth in rents.7
In addition, it is important to realise that the limited co-movement observed between euro area
house prices and the rent component of the HICP might also reﬂ ect some statistical issues.
With regard to house prices, the data used in this box have been collected by euro area NCBs 8
4 See also the Structural Issues Report entitled “Structural factors in the EU housing markets”, ECB, 2003.
5 For more information, see the article entitled “Assessing house price developments in the euro area”, Monthly Bulletin, ECB,
February 2006 and “Housing ﬁ nance in the euro area”, Occasional Paper Series, No 101, ECB, March 2009. See also Hiebert, P. and
Sydow, M., “What drives returns to euro area housing? Evidence from a dynamic dividend-discount model”, Working Paper Series,
No 1019, ECB, 2009.
6 Chart B should be interpreted with some caution as it depicts contemporaneous changes in one series against another, while changes in
rents might be expected to react to changes in the headline HICP and house prices with a lag.
7 See the above-mentioned Structural Issues Report for more details.
8 EU statistical ofﬁ ces are currently working on a harmonised statistical approach for compiling residential property price indices.
However, so far only a few countries have published results for this project.
ECB
Monthly Bulletin
August 2010
51

Chart B Changes in euro area residential property prices, rents and headline HICP between
1997 and 1999
(percentage points)
x-axis: residential property prices
x-axis: headline HICP
y-axis: rent component of the HICP
y-axis: rent component of the HICP
4
4
4
4
IE
IE
3
3
3
3
2
2
2
2
1
1
FR
1
1
BE
FR
BE
FI
0
0
0
0
LU
LU
NL
-1
-1
-1
-1
GR
DE
AT
NL
euro area
GR
euro area
-2
PT
-2
DE
-2
PT
-2
AT
-3
-3
-3
-3
IT
ES
IT
ES
-4
-4
-4
-4
-7 -6 -5 -4 -3 -2 -1
0
1
2
3
4
5
6
7
8
-4
-3
-2
-1
0
1
2
Sources: Eurostat and ECB.
Note: The changes refer to the annual rate of growth in 1999 minus the annual rate of growth in 1997 (or 1998 when earlier data are not
available).
and are not harmonised in terms of statistical properties. An analysis of the pass-through of
changes in house prices to changes in residential rents could be affected, in particular, by
differences in the coverage of dwelling types across indices. Moreover, such an analysis may
also be affected by the way in which individual price changes are combined to form an aggregate
index and adjustments are made for compositional changes in the characteristics of dwellings
whose prices are observed over time. For example, house price indices reﬂ ecting the prices of
existing dwellings measure a different phenomenon than indices that cover the prices of new
dwellings. The transmission of price changes in existing and new dwellings to the rent component
of the HICP may have very different dynamics in terms of the size, channel and timing of the
pass-through. Notably, in the euro area, whereas the indicators for many countries cover both new
and existing dwellings, around one-third of the coverage of the euro area residential property price
indicator refers to country indicators that only reﬂ ect changes in the prices of existing dwellings.
As for the rent component of the HICP, although it is more suitable for cross-country comparisons,
statistical issues may still hamper the analysis of the pass-through. In particular, it is important
that rent indices accurately reﬂ ect the balance between rental agreements for newly developed
and existing properties and that they cover open market and social rents. As noted above,
the prices of existing agreements may tend to be stickier than prices for new agreements and
more often subject to price regulation. In some euro area countries, coverage of new rental
agreements, in particular those for newly built units, is limited.
Another issue relates to the relative contribution of country developments to the euro area
residential property price indicator on the one hand, and to the rent component of the euro area
HICP on the other hand. The euro area residential property price indicator aggregates changes
in national house prices by using GDP shares, while the estimates for the rent component of the
euro area HICP reﬂ ect the relative size of the rental markets in each country.
Impact on the overall consumer price indices in the euro area and the United States
To assess the impact of rent inﬂ ation on the overall HICP, the left-hand panel of Chart C compares
the euro area annual HICP inﬂ ation rate of the all-items index with the index including all items
ECB
52 Monthly Bulletin
August 2010

E C O N O M I C
A N D M O N E T A R Y
D E V E L O P M E N T S
Prices
and costs
Chart C Euro area HICP and US CPI, all items and all items excluding rents
(annual percentage changes)
euro area HICP, all items
US CPI, all items
euro area HICP, all items excluding rents
US CPI, all items less shelter
5
5
8
8
4
4
6
6
3
3
4
4
2
2
2
2
1
1
0
0
0
0
-2
-2
-1
-1
-4
-4
1997
1999
2001
2003
2005
2007
2009
1997
1999
2001
2003
2005
2007
2009
Sources: Eurostat, ECB and Thomson Financial Datastream.
apart from rents. The right-hand panel shows annual percentage changes in the US CPI all-items
and all-items-less-shelter indices. While the differences between both series are negligible in the
euro area, they are more signiﬁ cant in the United States. In particular, most recently, the US CPI
all-items-less-shelter index has recorded higher growth rates than the CPI including all items.
One important point to be stressed in this context is that the US CPI and the euro area HICP
differ in terms of their coverage of housing costs. The former includes owner-occupiers’ costs
for shelter in the form of imputed rental payments, while the latter does not cover the shelter
costs of owner-occupied housing.9 Owners’ equivalent rents constitute around 24% of the cost of
living covered by the US CPI. By contrast, actual rents account for around 6% of the basket of
both the US CPI and the euro area HICP.
In conclusion, while, in theory, house prices and rents may be expected to co-move in the long run,
various institutional and economic factors are likely to affect the dynamics of this relationship.
In the euro area, the response of the rent component of the HICP to developments in residential
property prices is only muted. Consequently, the recent sharp movements in house prices have
had an overall negligible impact on the euro area HICP when considered through the “rent”
channel. By contrast, in the United States, the falls in the growth rates of rents have contributed
signiﬁ cantly to lowering inﬂ ation in recent months.
9 With regard to the treatment of owner-occupied housing in the HICP, see also Box 2 in the article entitled “The Harmonised Index of
Consumer Prices: concept, properties and experience to date”, Monthly Bulletin, ECB, July 2005. The shelter index of the US CPI also
includes lodging away from home and tenants’ and household insurance, but the weight of these items is relatively low.
3.2 INDUSTRIAL PRODUCER PRICES
In June the annual rate of change in industrial producer prices (excluding construction) remained
broadly unchanged at 3.0%, after 3.1% in May (see Chart 22). The marginal decline was due to a lower
annual rate of change in energy prices driven by a base effect, while industrial producer prices excluding
energy and construction rose on account of the intermediate and consumer goods component.
Survey indicators in July also signalled the persistence of some upward price pressures, albeit to
a lesser extent than in June. With regard to the Purchasing Managers’ Index, the input price index
ECB
Monthly Bulletin
August 2010
53

Chart 22 Breakdown of industrial producer
Chart 23 Producer input and output
prices
price surveys
(annual percentage changes; monthly data)
(diffusion indices; monthly data)
total industry excluding construction (left-hand scale)
manufacturing; input prices
intermediate goods (left-hand scale)
manufacturing; prices charged
capital goods (left-hand scale)
services; input prices
consumer goods (left-hand scale)
services; prices charged
energy (right-hand scale)
10
25
80
80
8
20
70
70
6
15
4
10
60
60
2
5
0
0
50
50
-2
-5
40
40
-4
-10
-6
-15
30
30
-8
-20
-10
-25
20
20
2004 2005 2006 2007 2008 2009
2010
2004 2005 2006 2007 2008 2009
2010
Sources: Eurostat and ECB calculations.
Source: Markit.
Note: An index value above 50 indicates an increase in prices,
whereas a value below 50 indicates a decrease.
for the manufacturing sector weakened for the second consecutive month in July, partly on account of
recent commodity price developments (see Chart 23). Nevertheless, its level is still much above the
threshold level of 50, indicating rising input prices. The index for prices charged in the manufacturing
sector declined only marginally in July. In the services sector, both the input and selling price indices
remained broadly unchanged in the same month. The level of the selling price index is still below the
50 mark, indicating falling prices in that sector. Overall, the survey indicators still suggest that euro
area ﬁ rms are having difﬁ culty passing on the higher input prices to consumers.
3.3 LABOUR COST INDICATORS
There are few new data on labour cost indicators since the previous issue of the Monthly Bulletin.
In the ﬁ rst quarter of 2010 the gap between various labour cost indicators, in terms of the annual
growth rate, continued to narrow (see Chart 24 and Table 5). The overall picture conﬁ rms subdued
labour costs in early 2010.
Table 5 Labour cost indicators
(annual percentage changes, unless otherwise indicated)
2008
2009
2009
2009
2009
2009
2010
Q1
Q2
Q3
Q4
Q1
Negotiated wages
3.3
2.7
3.2
2.8
2.4
2.2
1.8
Total hourly labour costs
3.5
2.7
3.1
3.3
2.6
1.7
2.1
Compensation per employee
3.1
1.5
1.8
1.4
1.5
1.3
1.5
Memo items:
Labour productivity
-0.2
-2.3
-3.9
-3.1
-1.9
0.0
1.9
Unit labour costs
3.3
3.8
5.9
4.7
3.5
1.3
-0.5
Sources: Eurostat, national data and ECB calculations.
ECB
54 Monthly Bulletin
August 2010

E C O N O M I C
A N D M O N E T A R Y
D E V E L O P M E N T S
Prices
and costs
The annual rate of growth in euro area
Chart 24 Selected labour cost indicators
negotiated wages declined to 1.8% in the ﬁ rst
quarter of 2010, from 2.2% in the last quarter
(annual percentage changes; quarterly data)
of 2009. This reduction was broadly based
compensation per employee
across countries and conﬁ rmed that growth
negotiated wages
hourly labour costs
in euro area negotiated wages remains on the
4.5
4.5
downward path that it took at the beginning
of 2009. Available information suggests that
4.0
4.0
the relatively subdued negotiated wage growth
observed in the ﬁ rst quarter of 2010 continued
3.5
3.5
into the second quarter, in line with weak labour
market conditions.
3.0
3.0
In the ﬁ rst quarter of 2010 annual hourly labour
2.5
2.5
cost growth in the euro area increased slightly to
2.0
2.0
2.1%, from 1.7% in the fourth quarter of 2009.
This rise can be viewed as a normalisation of
1.5
1.5
the sharp decline recorded in the fourth quarter
of 2009, when annual hourly labour cost growth
1.0
1.0
fell by 0.9 percentage point. Even after the
2004 2005 2006 2007 2008 2009
small acceleration recorded in the ﬁ rst quarter,
Sources: Eurostat, national data and ECB calculations.
the annual growth rate of hourly labour costs
still remains at a level close to the lows observed
in 2005. The increase in annual hourly labour cost growth in the ﬁ rst quarter reﬂ ects primarily
developments in the industrial sector, where the annual growth rate increased to 1.8%, which was
1.2 percentage points higher than in the previous quarter (see Chart 25).
The annual growth rate in compensation per employee rose slightly to 1.5% in the ﬁ rst quarter of
2010, from 1.3% in the last quarter of 2009. The sectoral breakdown showed a marked increase in
the industrial sector, but a sharp decline in the construction sector. The fact that the annual growth
Chart 25 Sectoral labour cost developments
(annual percentage changes; quarterly data)
industry excluding construction, CPE
industry excluding construction, hourly LCI
construction, CPE
construction, hourly LCI
market services, CPE
market services, hourly LCI
services, CPE
6
6
6
6
5
5
5
5
4
4
4
4
3
3
3
3
2
2
2
2
1
1
1
1
0
0
0
0
2004
2005
2006
2007
2008
2009
2010
2004
2005
2006
2007
2008
2009
2010
Sources: Eurostat and ECB calculations.
Notes: CPE stands for “compensation per employee” and LCI stands for “labour cost index”.
ECB
Monthly Bulletin
August 2010
55

rate in negotiated wages in the ﬁ rst quarter was higher than that in compensation per employee
indicates that the wage drift in the euro area is still negative.
The broadly stable growth of compensation per employee, combined with a further substantial gain
in productivity, both measured on a per head basis, led to a further substantial slowdown in unit
labour cost growth. In the ﬁ rst quarter of 2010 the annual growth rate of unit labour costs was
negative (-0.5%), compared with the 1.3% increase recorded in the previous quarter, marking a
signiﬁ cant decline from the peak of nearly 6% reached in the ﬁ rst quarter of 2009.
3.4 THE OUTLOOK FOR INFLATION
In the next few months the annual HICP inﬂ ation rate is expected to display some further volatility
around the current level. Looking further ahead, inﬂ ation rates should, overall, remain moderate
in 2011, beneﬁ ting from low domestic price pressures.
The latest ECB Survey of Professional Forecasters (SPF; see Box 7) shows that forecasters have
not changed their outlook for inﬂ ation in 2010, 2011 and 2012, compared with the previous round.
Risks to the outlook for price developments are broadly balanced. Upside risks over the medium
term relate, in particular, to the evolution of commodity prices. Furthermore, increases in indirect
taxation and administered prices may be greater than currently expected, owing to the need for ﬁ scal
consolidation in the coming years. At the same time, risks to domestic price and cost developments
are contained.
Box 7
RESULTS OF THE ECB SURVEY OF PROFESSIONAL FORECASTERS FOR THE THIRD QUARTER OF 2010
This box reports the results of the ECB Survey of Professional Forecasters (SPF) for the
third quarter of 2010. The survey was conducted between 14 and 19 July 2010. There were
55 responses from forecasters. The SPF collects information on expectations for euro area
inﬂ ation, real GDP growth and unemployment from experts afﬁ liated with ﬁ nancial or
non-ﬁ nancial institutions that are based in the EU.1
Inﬂ ation expectations for 2010, 2011 and 2012
Compared with the previous SPF round, forecasters have not changed their outlook for
inﬂ ation: expectations remained unchanged at 1.4% for 2010, 1.5% for 2011 and 1.7% for 2012
(see the table).2
The SPF inﬂ ation expectations for 2010 and 2011 are within the ranges reported in the June 2010
Eurosystem staff macroeconomic projections. Compared with the forecasts of the July 2010
1 Given the diversity of the panel of participants, aggregate SPF results can reﬂ ect a relatively heterogeneous set of subjective views and
assumptions.
2 Additional data are available on the ECB’s website at www.ecb.europa.eu/stats/prices/indic/forecast/html/index.en.html
ECB
56 Monthly Bulletin
August 2010

E C O N O M I C
A N D M O N E T A R Y
D E V E L O P M E N T S
Prices
and costs
Results of the SPF, Eurosystem staff macroeconomic projections, Consensus Economics
and Euro Zone Barometer
(annual percentage changes, unless otherwise indicated)
Survey horizon
HICP inﬂ
ation
2010 June
2011 2011 June
2012 2012 Longer-term
2)
SPF
Q3
2010
1.4 1.4 1.5 1.7 1.7
2.0
Previous SPF (Q2 2010)
1.4
-
1.5
-
1.7
1.9
Eurosystem staff macroeconomic projections
1.4-1.6
-
1.0-2.2
-
-
-
Consensus Economics (July 2010)
1.5
-
1.5
-
1.5
2.0
Euro Zone Barometer (July 2010)
1.4
-
1.5
-
1.6
1.9
Real GDP growth
2010
Q1 2011
2011
Q1 2012
2012
Longer-term 2)
SPF
Q3
2010
1.1 1.4 1.4 1.4 1.6
1.8
Previous SPF (Q2 2010)
1.1
-
1.5
-
-
1.8
Eurosystem staff macroeconomic projections
0.7-1.3
-
0.2-2.2
-
-
-
Consensus Economics (July 2010)
1.1
-
1.4
-
1.6
1.8
Euro Zone Barometer (July 2010)
1.1
-
1.3
-
1.6
2.0
Unemployment rate 1)
2010 May
2011 2011 May
2012 2012 Longer-term
2)
SPF Q3 2010
10.1
10.2
10.2
9.9
9.8
8.4
Previous SPF (Q3 2010)
10.3
-
10.3
-
-
8.5
Consensus Economics (July 2010)
10.1
-
10.2
-
-
-
Euro Zone Barometer (July 2010)
10.2
-
10.2
-
10.0
8.8
1) As a percentage of the labour force.
2) Longer-term inﬂ ation expectations refer to 2014 in the Euro Zone Barometer and to 2015 in the SPF for the third quarter of 2010 and
Consensus Economics. Expectations for 2012 and the longer-term expectations for Consensus Economics are from the April 2010 release.
issues of Consensus Economics and the Euro Zone Barometer, the SPF inﬂ ation expectations are
broadly similar for 2010 and 2011, and slightly higher for 2012.3
The SPF participants were also asked to assess the probability of inﬂ ation falling within speciﬁ c
intervals. Compared with the previous SPF round, the aggregate probability distribution for
2010 is now more concentrated in the range between 1.0% and 1.9%, as respondents now assign
3 Consensus Economics forecasts for 2012 were published in the April 2010 release.
Chart A Probability distribution for average annual inflation in 2010 and 2011 in the latest
SPF rounds1)
(probability in percentages)
a) 2010
b) 2011
Q3 2010 SPF
Q3 2010 SPF
Q2 2010 SPF
Q2 2010 SPF
Q1 2010 SPF
Q1 2010 SPF
45
45
45
45
40
40
40
40
35
35
35
35
30
30
30
30
25
25
25
25
20
20
20
20
15
15
15
15
10
10
10
10
5
5
5
5
0
0
0
0
<0.0
0.0-
0.5-
1.0-
1.5-
2.0-
2.5-
≥3.0
<0.0
0.0-
0.5-
1.0-
1.5-
2.0-
2.5-
≥3.0
0.4
0.9
1.4
1.9
2.4
2.9
0.4
0.9
1.4
1.9
2.4
2.9
Source: ECB.
1) Corresponds to the average of individual probability distributions provided by SPF forecasters.
ECB
Monthly Bulletin
August 2010
57

an 81% probability to this interval. Within this range, the two intervals from 1.0% to 1.4% and
from 1.5% to 1.9% have been assigned around the same probability. Respondents have assigned
a probability of 11% to a lower inﬂ ation outcome (below 1.0%) and a probability of 8% to a
higher inﬂ ation outcome (above 1.9%). The probability distribution for 2011 has remained
broadly stable compared with the previous SPF round, with a slight increase in the probability of
inﬂ ation outcomes being in the range from 1.0% to 1.9% (see Chart A). Based on the individual
probability distributions, the balance of risks to these forecasts is assessed by respondents as
being on the downside across all forecast horizons, and in particular for 2012. This is reﬂ ected
in the fact that the majority of respondents provided a point forecast that is above the mean
forecast from their probability distribution, implying that they assign a higher probability to
outcomes below this point forecast than to those above it. Most respondents mention low wage
growth owing to the high unemployment rate as the main downside risk to the inﬂ ation outlook.
Many respondents commented that the main upside risks to the baseline scenario are: i) higher
import prices owing to the depreciation of the euro; ii) rising raw materials and oil prices;
and iii) increases in indirect taxes and administered prices as a result of ﬁ scal consolidation plans.
Indicators of longer-term inﬂ ation expectations
Longer-term inﬂ ation expectations (for 2015) have been slightly revised upwards, on average,
to 2.0% from 1.9% (for 2014) in the previous SPF round. The median of the point estimates,
which is less affected by extreme values than the average point estimate, remained at 1.9%.
The average point forecast is in line with the long-term inﬂ ation projections provided by
Consensus Economics in April (at 2.0%) for 2015 and above those of the Euro Zone Barometer
(at 1.9%) for 2014, which were published in July 2010.
The slight upward movement in longer-term inﬂ ation expectations is combined with a greater
disagreement among forecasters in their longer-term inﬂ ation expectations, as measured by the
standard deviation of their point forecasts. Nevertheless, the majority of respondents provided a
point forecast for longer-term inﬂ ation expectations in the range from 1.8% to 2.0% (see Chart B).
At the same time, aggregate uncertainty surrounding these inﬂ ation expectations, as measured
by the standard deviation of the aggregate probability distribution, remained at a level similar to
that in the previous SPF round.4 Finally, the probability of longer-term inﬂ ation standing at 2%
or above remained broadly stable at 44%, after 43% in the previous SPF round.
Measures of inﬂ ation expectations derived from ﬁ nancial markets have remained broadly
unchanged. However, they have generally been higher than SPF forecasts because they incorporate
not only the level of expected inﬂ ation, but also an additional premium, to compensate bond
investors for inﬂ ation risks. They have also been more volatile than survey-based measures, not
only owing to the volatility of said inﬂ ation risk premium, but also to the ﬂ uctuation in bond
market liquidity conditions since the middle of 2008 (see Chart C).5 The volatility observed
in these measures should thus be treated with some caution and should not be mechanically
interpreted as reﬂ ecting revisions in market participants’ long-term inﬂ ation expectations.6
4 For a discussion regarding uncertainty measures, see the box entitled “Measuring perceptions of macroeconomic uncertainty”,
Monthly Bulletin, ECB, January 2010.
5 See also the article entitled “Measures of inﬂ ation expectations in the euro area”, Monthly Bulletin, ECB, July 2006.
6 For further discussion on the impact of the ﬁ nancial market crisis on market-based measures of inﬂ ation expectations, see the box
entitled “Recent increases in real yields and their implications for the analysis of inﬂ ation expectations”, Monthly Bulletin, ECB,
November 2008. Recent developments in ﬁ nancial market indicators of inﬂ ation expectations are discussed in Section 2.4 of the
Monthly Bulletin.
ECB
58 Monthly Bulletin
August 2010

E C O N O M I C
A N D M O N E T A R Y
D E V E L O P M E N T S
Prices
and costs
Chart B Cross-sectional distribution
Chart C Longer-term inflation expectations
of longer-term (2015) inflation expectations
from surveys and break-even inflation rates
among SPF respondents
(percentage of respondents)
(average annual percentage changes; ﬁ ve-day moving averages
of daily data)
Q3 2010 SPF
SPF (for 2015)
Q2 2010 SPF
Consensus Economics (for 2015)
Q1 2010 SPF
Euro Zone Barometer (for 2014)
implied five-year forward break-even inflation rate
five years ahead, seasonally adjusted
30
30
2.9
2.9
2.8
2.8
2.7
2.7
2.6
2.6
2.5
2.5
20
20
2.4
2.4
2.3
2.3
2.2
2.2
2.1
2.1
10
10
2.0
2.0
1.9
1.9
1.8
1.8
1.7
1.7
0
0
1.6
1.6
≤1.5 1.6 1.7 1.8 1.9 2.0
2.1
2.2 2.3 2.4 ≥2.5
2004
2005
2006
2007
2008
2009
2010
Source: ECB.
Sources: Consensus Economics, Euro Zone Barometer, Reuters
and ECB calculations.
Real GDP growth expectations
On average, the SPF respondents’ expectations for real GDP growth are unchanged at 1.1% for 2010,
but have been revised slightly downwards to 1.4% for 2011, from 1.5% in the previous round.
In 2012 respondents expect euro area real GDP to grow by 1.6%.
The SPF growth expectations for 2010 and 2011 are within the ranges reported in the June 2010
Eurosystem staff macroeconomic projections for the euro area and broadly in line with the latest
Consensus Economics and Euro Zone Barometer forecasts for 2010 and 2011.
The aggregate probability distribution for 2010 is now more concentrated in the range between
1.0% and 1.4% than in the previous SPF round, as respondents now assign a 46% probability to
this interval. With regard to 2011, forecasters now assign the highest probability (33%) to the
interval between 1.0% and 1.4% (see Chart D).
The level of uncertainty surrounding one-year-ahead and two-year-ahead real GDP forecasts has
not changed from the previous SPF round. The balance of risks to the average point forecast of
real GDP growth is assessed to be on downside across all forecast horizons, and in particular for
2012. Several respondents commented that the adoption of ﬁ scal consolidation plans, weaker
private consumption and public investment, and heightened ﬁ nancial tensions, in particular tight
credit standards, are expected to be downside risks to growth. They also perceived the positive
effects of the depreciation of the euro to be the main upside risk to the growth scenario.
ECB
Monthly Bulletin
August 2010
59

Chart D Probability distribution for average annual real GDP growth in 2010 and 2011
in the latest SPF rounds1)
(probability in percentages)
Q3 2010 SPF
Q2 2010 SPF
Q1 2010 SPF
a) 2010
b) 2011
50
50
50
50
40
40
40
40
30
30
30
30
20
20
20
20
10
10
10
10
0
0
0
0
<0.0
0.0-
0.5-
1.0-
1.5-
2.0-
2.5-
≥3.0
<0.0
0.0-
0.5-
1.0-
1.5-
2.0-
2.5-
≥3.0
0.4
0.9
1.4
1.9
2.4
2.9
0.4
0.9
1.4
1.9
2.4
2.9
Source: ECB.
1) Corresponds to the average of individual probability distributions provided by SPF forecasters.
Longer-term growth expectations (for 2015) stand at 1.8%, unchanged from the previous SPF
round. The SPF assessment is in line with that of the April issue of Consensus Economics
(1.8% for 2015) and below that of the July issue of the Euro Zone Barometer (2.0% for 2014).
Looking at the individual probability distributions, respondents assess the balance of risks to
longer-term growth to be clearly on the downside.
Expectations for the euro area unemployment rate
Unemployment rate expectations have been revised downwards by 0.2 percentage point for 2010
and by 0.1 percentage point for 2011, to 10.1% and 10.2% respectively. For 2012, they now
stand at 9.8%. The balance of risks to short and medium-term expectations is assessed to be
on the upside. Longer-term unemployment rate expectations (for 2015) have been revised slightly
downwards, by 0.1 percentage point, to 8.4%, and the balance of risks to the longer-term outlook
is again assessed to be on the upside.
Other variables and conditioning assumptions
According to other information provided by the respondents, they generally expect: i) oil prices
to increase from USD 77 in the third quarter of 2010 to around USD 87 in 2012; ii) wage growth
to be at 1.4% in 2010, rising to 1.5% in 2011, 1.9% in 2012 and 2.4% by 2014; iii) the euro to
weaken against the US dollar, to stand on average at USD 1.23 in 2011 and USD 1.26 in 2012;
iv) the ECB policy rate to remain stable at around 1.0% until the ﬁ rst quarter of 2011 and then
increase to around 2.1%, on average, during 2012.
ECB
60 Monthly Bulletin
August 2010

E C O N O M I C
A N D M O N E T A R Y
D E V E L O P M E N T S
Output,
demand and the
labour market
4 OUTPUT, DEMAND AND THE LABOUR MARKET
Economic activity in the euro area has been expanding since the middle of 2009. Recent economic
data and information from business surveys point to a strengthening in activity in the second
quarter of 2010, and the available data for the third quarter are better than expected. Looking
further ahead, euro area real GDP is expected to grow at a moderate and still uneven pace over
time and across economies and sectors of the euro area. Ongoing growth at the global level,
and its impact on the demand for euro area exports, together with the accommodative monetary
policy stance and the measures adopted to restore the functioning of the ﬁ nancial system, should
continue to support the euro area economy. At the same time, the process of balance sheet
adjustment and labour market prospects are expected to dampen the pace of the recovery. The
risks to the economic outlook remain broadly balanced, in an environment of uncertainty.
4.1 REAL GDP AND DEMAND COMPONENTS
Chart 26 Real GDP growth and contributions
Euro area real GDP rose by 0.2% in the ﬁ rst
quarter of 2010, according to Eurostat’s second
(quarter-on-quarter growth rate and quarterly percentage point
contributions; seasonally adjusted)
estimate, compared with an increase of 0.1% in
domestic demand (excluding inventories)
the previous quarter (see Chart 26). Available
changes in inventories
indicators point to a strengthening of the
net exports
total GDP growth
recovery in the second quarter.
1.5
1.5
1.0
1.0
In the ﬁ
rst quarter of 2010 the positive
0.5
0.5
contribution to real GDP growth from 0.0
0.0
inventories, of 1.0 percentage point, more -0.5
-0.5
than offset negative contributions from other
-1.0
-1.0
components of domestic demand and net trade.
-1.5
-1.5
-2.0
-2.0
Regarding the components of domestic demand,
-2.5
-2.5
private consumption declined slightly in the ﬁ rst
-3.0
-3.0
quarter of 2010, after increasing moderately in
Q1
Q2
Q3
Q4
Q1
2009
2010
the fourth quarter of 2009. Available indicators
suggest that consumer spending remained Sources: Eurostat and ECB calculations.
subdued in the second quarter of 2010. The
quarterly growth rate of retail sales declined by 0.2% in the same quarter (see Chart 27). If new
passenger car registrations are included, the decline is even sharper, at -0.9%, owing to a drop in
car registrations as the impact of car scrappage schemes faded. All in all, the latest consumption
indicators point towards subdued private consumption in the second quarter. As regards the
third quarter of the year, only very limited information is available. Surveys with a bearing on
consumption provide mixed signals. The European Commission’s indicator of consumer conﬁ dence
increased in July, reaching a level not seen since May 2008. Survey indicators for retail sales also
increased in July. Meanwhile, the indicator for major purchases from the same survey, which has a
stronger correlation with consumption growth than overall consumer conﬁ dence, decreased in
the same month.
Gross ﬁ xed capital formation fell by 1.2%, quarter on quarter, in the ﬁ rst quarter of 2010, after a
similar decline in the previous quarter. This decline was largely determined by the construction
component, which fell more sharply than in the previous quarter, partly owing to the effects of
adverse weather conditions. Non-construction investment also declined, but at a much slower rate.
ECB
Monthly Bulletin
August 2010
61

Available indicators suggest that investment in
Chart 27 Retail sales and confidence
the euro area is likely to have increased beyond
in the retail trade and household sectors
the ﬁ rst quarter. Construction production fell in
May. Nevertheless, in April and May, it stood on
(monthly data)
average 1.1% above its level in the ﬁ rst quarter
total retail sales ¹) (left-hand scale)
of 2010 when it declined by 4.1%. The effects
consumer confidence ²) (right-hand scale)
retail confidence ²) (right-hand scale)
of the unusually severe weather conditions in
4
40
the ﬁ rst quarter seem to have been reversed
in the second quarter. Industrial production
3
30
of capital goods, an indicator of future non-
construction investment, rose further in April
2
20
and May. Manufacturing conﬁ dence continued
1
10
to provide positive signals in July. In addition,
according to the European Commission’s
0
0
surveys, capacity utilisation increased in July
compared with April. Limits on production
-1
-10
owing to insufﬁ cient demand continued to
decline notably over that period, while supply-
-2
-20
side limits stemming from a lack of equipment
-3
-30
or space and the shortage of labour have risen
2004
2005
2006
2007
2008
2009
2010
somewhat. Overall, investment is likely to be
Sources: European Commission Business and Consumer Surveys
relatively strong in the second quarter as a result
and Eurostat.
Notes: From May 2010 onwards, Commission business survey
of the reversal of the effects of adverse weather
data refer to the NACE Rev. 2 Classiﬁ cation.
1) Annual percentage changes; three-month moving averages;
conditions in the ﬁ rst quarter. Beyond that, it is
working day-adjusted. Excludes fuel.
expected to remain rather subdued overall.
2) Percentage balances; seasonally and mean-adjusted.
As regards trade developments, both imports and exports increased sharply in the ﬁ rst quarter
of 2010, with a somewhat stronger increase in imports leading to a negative net trade contribution
to GDP growth. The high rates of growth in trade can be seen as a correction of the severe
contraction in 2008 and the ﬁ rst half of 2009.1 Recent data and surveys indicate that euro area trade
has continued to grow strongly beyond the ﬁ rst quarter of 2010, albeit at a somewhat slower rate.
Inventories made a sizeable positive contribution to GDP growth in the ﬁ rst quarter of 2010.
Looking ahead, surveys and anecdotal evidence suggest that restocking should slow. The
contribution to GDP growth in the second quarter, however, remains highly uncertain, as it depends
on how quickly demand has picked up and the extent to which ﬁ rms have revised their expectations
regarding economic activity. In addition, there is some statistical uncertainty linked to the way
inventories are estimated.
4.2 OUTPUT, SUPPLY AND LABOUR MARKET DEVELOPMENTS
Real value added increased by 0.5%, quarter on quarter, in the ﬁ rst quarter of 2010, following
an increase of 0.1% in the fourth quarter of 2009. This rise reﬂ ects stronger growth in industry
(excluding construction) and, to a lesser extent, in services. Meanwhile, the downturn in construction
production continued in the ﬁ rst quarter of 2010.
1 See also the article entitled “Recent developments in global and euro area trade” in this issue of the Monthly Bulletin.
ECB
62 Monthly Bulletin
August 2010

E C O N O M I C
A N D M O N E T A R Y
D E V E L O P M E N T S
Output,
demand and the
labour market
Chart 28 Industrial production growth
Chart 29 Industrial production, industrial
and contributions
confidence and the PMI
(growth rate and percentage point contributions; monthly data;
(monthly data; seasonally adjusted)
seasonally adjusted)
capital goods
industrial production ¹) (left-hand scale)
consumer goods
industrial confidence ²) (right-hand scale)
intermediate goods
PMI ³) (right-hand scale)
energy
total excluding construction
4
4
4
8
3
3
2
4
2
2
0
0
1
1
0
0
-2
-4
-1
-1
-4
-8
-2
-2
-6
-12
-3
-3
-8
-16
-4
-4
-5
-5
-10
-20
-6
-6
-12
-24
-7
-7
-14
-28
-8
-8
-16
-32
-9
-9
-10
-10
-18
-36
-11
-11
-20
-40
2004
2005
2006
2007
2008
2009
2004
2005
2006
2007
2008
2009
2010
Sources: Eurostat and ECB calculations.
Sources: Eurostat, European Commission Business and
Notes: Data shown are calculated as three-month moving
Consumer Surveys, Markit and ECB calculations.
averages against the corresponding average three months earlier.
Notes: Survey data refer to manufacturing. From May 2010
onwards, Commission business survey data refer to the NACE
Rev. 2 Classiﬁ cation.
1) Three-month-on-three-month percentage changes.
2) Percentage balances.
3) Purchasing Managers’ Index; deviations from an index value
of 50.
As regards developments in the second quarter of 2010, industrial production (excluding
construction) increased in April and May (see Chart 28), with the result that, in these two months,
it was on average 2.5% above its level in the ﬁ rst quarter of 2010, after a quarter-on-quarter
increase of the same amount in the ﬁ rst quarter. Industrial new orders (excluding heavy transport
equipment) also rose in April and May, bringing the average level of the two months to well above
the level observed in the ﬁ rst quarter of the year and also pointing to stronger growth in the second
quarter than in the ﬁ rst.
Information from surveys points towards expanding economic activity in the second quarter
of 2010 and in July. The Purchasing Managers’ Index (PMI) for the manufacturing sector increased
further, to above 56, in July, pointing to accelerating activity in the sector (see Chart 29). As regards
the services sector, the PMI index for business activity also rose strongly in July, conﬁ rming that
activity has continued to expand in that sector, too, although at a more moderate pace than in the
manufacturing sector. Other business surveys, such as the European Commission’s business
surveys, are in line with the PMI, suggesting that sentiment regarding the economy has improved.
Conﬁ dence rose in all sectors in July.
LABOUR MARKET
Conditions in the euro area labour markets have stabilised over recent months. In the ﬁ rst quarter
of 2010 euro area employment remained unchanged, on a quarterly basis, a noticeable improvement
on the sharp declines observed previously.
ECB
Monthly Bulletin
August 2010
63

Table 6 Employment growth
(percentage changes compared with the previous period; seasonally adjusted)
Annual rates
Quarterly rates
2008
2009
2009
2009
2009
2009
2010
Q1
Q2
Q3
Q4
Q1
Whole economy
0.7
-1.9
-0.8
-0.5
-0.5
-0.2
0.0
of which:
Agriculture and ﬁ shing
-1.8
-2.2
-0.6
-0.7
-1.2
0.3
0.1
Industry
-0.7
-5.6
-1.8
-1.6
-1.7
-0.9
-1.1
Excluding construction
0.0
-5.1
-1.7
-1.7
-1.7
-1.1
-0.9
Construction
-2.3
-6.7
-2.2
-1.3
-1.7
-0.4
-1.5
Services
1.4
-0.6
-0.5
-0.1
-0.1
0.0
0.4
Trade and transport
1.2
-1.8
-0.8
-0.5
-0.3
-0.6
0.0
Finance and business
2.3
-2.2
-1.2
-0.7
-0.5
0.2
0.5
Public administration 1)
1.1
1.3
0.1
0.4
0.3
0.2
0.5
Sources: Eurostat and ECB calculations.
1) Also includes education, health and other services.
At the sectoral level, employment in industrial production (excluding construction) fell, albeit at
a slower pace than in the fourth quarter of 2009 (see Table 6 and Chart 30). The unusually severe
weather conditions in the ﬁ rst quarter of 2010 led to a decline in employment in the construction
sector which is expected to be reversed in the second quarter. Employment in the services sector
increased in the ﬁ rst quarter of 2010 for the ﬁ rst time since the second quarter of 2008, with increases
in the ﬁ nance and business, and public administration sub-sectors, but zero growth in the trade and
transport sub-sector. Eurostat data on quarterly hours worked in the euro area show only a minor
reduction in the ﬁ rst quarter of 2010, compared with stronger reductions in previous quarters.
Chart 30 Employment growth and employment expectations
(annual percentage changes; percentage balances; seasonally adjusted)
employment growth in industry excluding construction
employment expectations in construction
(left-hand scale)
employment expectations in the retail trade
employment expectations in manufacturing
employment expectations in the services sector
(right-hand scale)
2
20
20
20
1
10
15
15
0
0
10
10
-1
-10
5
5
-2
-20
0
0
-3
-30
-5
-5
-4
-40
-10
-10
-5
-50
-15
-15
-6
-60
-20
-20
-7
-70
-25
-25
2004
2005
2006
2007
2008
2009 2010
2004
2005
2006
2007
2008
2009 2010
Sources: Eurostat and European Commission Business and Consumer Surveys.
Notes: Percentage balances are mean-adjusted. From May 2010 onwards, Commission business survey data refer to the NACE Rev. 2
Classiﬁ cation.
ECB
64 Monthly Bulletin
August 2010

E C O N O M I C
A N D M O N E T A R Y
D E V E L O P M E N T S
Output,
demand and the
labour market
Chart 31 Labour productivity
Chart 32 Unemployment
(annual percentage changes)
(monthly data; seasonally adjusted)
whole economy
monthly change in thousands (left-hand scale)
industry excluding construction
percentage of the labour force (right-hand scale)
services
10
10
600
11
8
8
500
6
6
4
4
400
10
2
2
300
0
0
-2
-2
200
9
-4
-4
100
-6
-6
-8
-8
0
8
-10
-10
-100
-12
-12
-14
-14
-200
7
2004 2005 2006 2007 2008 2009
2004 2005 2006 2007 2008 2009
2010
Sources: Eurostat and ECB calculations.
Source: Eurostat.
Together with the recovery in euro area output growth, the job losses seen in recent quarters have
contributed to an inﬂ ection in the decline in productivity. In year-on-year terms, aggregate euro
area productivity (measured as output per employee) increased further in the ﬁ rst quarter of 2010,
to 1.9%, year on year, after ﬂ at growth in the fourth quarter of 2009 (see Chart 31). To a large
extent, this increase stems from industry (excluding construction). Productivity rose more gradually
in the services sector.
The euro area unemployment rate remained unchanged at 10.0% for the ﬁ fth consecutive
month in June, meaning that the quarterly rate for the second quarter of 2010 was also 10.0%,
marginally up from 9.9% in the ﬁ rst quarter (see Chart 32). Survey indicators improved in the
second quarter of 2010, with a further rise in July compared with June, suggesting a stabilisation
in euro area unemployment in the months ahead. This is also in line with a downward revision of
the unemployment ﬁ gures expected for 2010 according to the Survey of Professional Forecasters
(see Box 7 in Section 3).
4.3 THE OUTLOOK FOR ECONOMIC ACTIVITY
In the second quarter of 2010 euro area real GDP growth is expected to have strengthened, largely on
account of temporary effects. Available data for the third quarter are better than expected. Looking
ahead, GDP is expected to grow at a moderate and still uneven pace over time and across economies
and sectors of the euro area. Ongoing growth at the global level, and its impact on the demand for euro
area exports, together with the accommodative monetary policy stance and the measures adopted to
restore the functioning of the ﬁ nancial system, should continue to support the euro area economy.
At the same time, the process of balance sheet adjustment and labour market prospects are expected
to have a dampening effect on economic growth.
ECB
Monthly Bulletin
August 2010
65

The risks to the economic outlook continue to be viewed as broadly balanced, in an environment of
uncertainty. On the upside, both the global economy and foreign trade may recover more strongly
than is now projected, thereby supporting euro area exports. On the downside, concerns remain
with respect to renewed tensions in ﬁ nancial markets. In addition, renewed increases in oil and
other commodity prices, and the intensiﬁ cation of protectionist pressures, as well as the possibility
of a disorderly correction of global imbalances, may weigh on the downside.
ECB
66 Monthly Bulletin
August 2010

E C O N O M I C
A N D M O N E T A R Y
D E V E L O P M E N T S
Exchange rate
and balance
of payments
developments
5 EXCHANGE RATE AND BALANCE OF PAYMENTS
DEVELOPMENTS
5.1 EXCHANGE RATES
Over the three months to 4 August 2010 the euro depreciated in nominal effective terms by 2.2%,
moving well below its average level in 2009. The weakening of the euro was broad based.
EFFECTIVE EXCHANGE RATE OF THE EURO
On 4 August 2010 the nominal effective exchange rate of the euro – as measured against the
currencies of 21 of the euro area’s most important trading partners – was 2.2% lower than at the end
of April and 7.4% below its average level in 2009 (see Chart 33). The depreciation of the euro was
broad based and accompanied by an increase in the implied volatility of the bilateral exchange rates
of the euro vis-à-vis other major currencies.
US DOLLAR/EURO
In the three-month period to 4 August 2010 the euro weakened against the US dollar, standing
below the average for 2009 (see Chart 34). On 4 August the euro traded at USD 1.32, 0.8% lower
than at the end of April and around 5% below its 2009 average. This rather moderate depreciation
was the result of a sharp depreciation in May, which was largely offset by a strong appreciation
notably in July. The renewed tensions in the ﬁ nancial markets in early May, which accounted
for the downward pressures on the euro in May, were followed by more positive than expected
macroeconomic news for the euro area, reversing the trend of the bilateral exchange rate of the euro
against the US dollar.
Chart 33 Euro effective exchange rate (EER-21) and its decomposition 1)
(daily data)
Index: Q1 1999 = 100
Contributions to EER-21 changes 2)
From 30 April 2010 to 4 August 2010 (percentage points)
108
108
1.0
1.0
0.5
0.5
106
106
0.0
0.0
104
104
-0.5
-0.5
-1.0
-1.0
102
102
-1.5
-1.5
100
100
-2.0
-2.0
98
98
-2.5
-2.5
May
June
July
USD JPY CHF OMS
EER-21
2010
GBP CNY SEK other
Source: ECB.
1) An upward movement of the index represents an appreciation of the euro against the currencies of 21 of the most important trading
partners of the euro area (including all non-euro area EU Member States).
2) Contributions to EER-21 changes are displayed individually for the currencies of the six main trading partners of the euro area.
The category “Other Member States” (OMS) refers to the aggregate contribution of the currencies of the non-euro area Member States
(except the pound sterling and the Swedish krona). The category “other” refers to the aggregate contribution of the remaining six trading
partners of the euro area in the EER-21 index. Changes are calculated using the corresponding overall trade weights in the EER-21 index.
ECB
Monthly Bulletin
August 2010
67

Chart 34 Patterns in exchange rates and
Chart 35 Patterns in exchange rates in ERM II
implied volatilities
(daily data)
(daily data; deviation from the central parity in percentage points)
EEK/EUR
Exchange rates
DKK/EUR
LTL/EUR
USD/EUR (left-hand scale)
LVL/EUR
JPY/EUR (right-hand scale)
15
15
1.40
135
12
12
9
9
1.30
125
6
6
3
3
1.20
115
0
0
-3
-3
1.10
105
-6
-6
May
June
July
2010
-9
-9
-12
-12
GBP/EUR (left-hand scale)
CHF/EUR (right-hand scale)
-15
-15
May
June
July
1.00
1.60
2010
1.55
Source: ECB.
0.90
Notes: A positive (negative) deviation from the central rate
1.50
against the euro implies that the currency is on the weak (strong)
side of the band. In the case of the Danish krone, the ﬂ uctuation
0.80
1.45
band is ±2.25%; for all other currencies, the standard ﬂ uctuation
band of ±15% applies.
1.40
0.70
1.35
YEN/EURO
0.60
1.30
Over the three months to 4 August 2010 the
May
June
July
2010
euro depreciated vis-à-vis the Japanese yen.
On 4 August it stood at JPY 112.9, 10.3%
Implied exchange rate volatilities (three-month)
weaker than at the end of April and 13.4%
USD/EUR
below its 2009 average. Over the same
GBP/EUR
JPY/EUR
three-month period the implied volatility
of the JPY/EUR exchange rate increased at
24
24
22
22
both the short-term and long-term horizons
20
20
(see Chart 34).
18
18
16
16
EU MEMBER STATES’ CURRENCIES
14
14
Over the three-month period to 4 August
12
12
2010 the currencies participating in ERM
10
10
8
8
II remained broadly stable against the euro,
May
June
July
trading at, or close to, their respective central
2010
rates (see Chart 35). At the same time, the
Sources: Bloomberg and ECB.
Latvian lats remained on the weak side of
the unilaterally set ﬂ uctuation band of ±1%.
On 13 July 2010 the EU Council adopted a decision allowing Estonia to adopt the euro as its
currency from 1 January 2011. The ﬁ xed conversion rate was set at 15.6466 kroons to one euro
(see Box 8).
With regard to the currencies of the EU Member States not participating in ERM II, the euro
depreciated by 4.8% vis-à-vis the pound sterling in the three months to 4 August, trading on
ECB
68 Monthly Bulletin
August 2010

E C O N O M I C
A N D M O N E T A R Y
D E V E L O P M E N T S
Exchange rate
and balance
of payments
developments
4 August at GBP 0.83. Over the same period the euro strengthened against the Hungarian forint
(by 5.7%) and the Polish zloty (by 2.2%), and weakened against the Czech koruna (by 3.1%).
OTHER CURRENCIES
The euro weakened vis-à-vis the Swiss franc over the three months to the beginning of August,
as the Swiss currency beneﬁ ted from ﬂ ight-to-safety behaviour on the part of international investors.
In late June interventions by the Swiss National Bank to limit the appreciation of the Swiss franc
were suspended. On 4 August 2010 the euro stood at CHF 1.37, 4.3% lower than at the end of April.
Over the same period the bilateral euro exchange rates vis-à-vis the Chinese renminbi and the
Hong Kong dollar continued to move in line with the USD/EUR exchange rate.
Box 8
THE INTRODUCTION OF THE EURO IN ESTONIA ON 1 JANUARY 2011
The European Central Bank (ECB) and the European Commission prepared their respective
Convergence Reports in 2010, pursuant to the requirement set out in Article 140 of the Treaty
on the Functioning of the European Union to report to the Council of the European Union
(EU Council) at least once every two years – or at the request of a Member State with a derogation – on
the progress made by the Member States with a derogation in fulﬁ lling their obligations
regarding the achievement of Economic and Monetary Union. These reports were published
on 12 May 2010. On the basis of the results of the underlying examination, the European
Commission concluded that Estonia had fulﬁ lled the necessary conditions for the adoption of the
single currency. On 13 July 2010 the EU Council adopted a decision allowing Estonia to adopt
the euro as its currency from 1 January 2011.
On 13 July 2010 the EU Council also adopted a regulation ﬁ xing the irrevocable conversion
rate between the Estonian kroon and the euro. This conversion rate is set at 15.6466 kroons
to one euro, which corresponds to the central rate agreed on 28 June 2004, when the Estonian
currency entered the Exchange Rate Mechanism II (ERM II). Since entry in ERM II, the
Estonian currency’s central rate against the euro has not been devalued, and the exchange rate
for the kroon has been maintained at its central rate as a unilateral commitment, thus placing no
additional obligations on the ECB. The ECB supported the choice of the current central rate as
the conversion rate upon adoption of the euro. Following the ﬁ xing of the conversion rate of the
Estonian kroon, the ECB and Eesti Pank will monitor developments in the market exchange rate of
the Estonian kroon against the euro in the context of the ERM II agreement until the end of 2010.
With the introduction of the euro by Estonia on 1 January 2011, the euro area will comprise
17 EU Member States. Estonia will be able to share the beneﬁ ts of the single currency, which
eliminates exchange rate uncertainty within Economic and Monetary Union and offers a credible
monetary policy framework for maintaining price stability in an environment of low long-term
interest rates, full price and cost transparency, reduced transaction and information costs, and a
greater resilience to economic and ﬁ nancial shocks. At the same time, in order to fully reap the
advantages of the euro and to allow adjustment mechanisms to operate efﬁ ciently within the
enlarged currency area, it is important for Estonia to conduct policies that are fully geared towards
meeting the challenge of ensuring the sustainability of the convergence process. Importantly,
ECB
Monthly Bulletin
August 2010
69

the Estonian authorities have publicly underlined their commitment to ensuring an economic
environment that is conducive to sustainable output and employment growth, with balanced
macroeconomic conditions, including price stability. Speciﬁ cally, this implies: (i) maintaining
prudent ﬁ scal policies; (ii) continuing structural reforms to enhance cost competitiveness and
productivity; and (iii) implementing appropriate ﬁ nancial sector policies to ensure ﬁ nancial
stability and avoid the build-up of imbalances.
5.2 BALANCE OF PAYMENTS
Extra-euro area trade further expanded in recent months, although there are some signs of
stabilisation in its rate of growth. In May the 12-month cumulated current account deﬁ cit of the
euro area narrowed markedly compared with a year earlier to €43.9 billion (around 0.5% of euro
area GDP). In the ﬁ nancial account, net inﬂ ows in combined direct and portfolio investment fell to
a cumulative €189.8 billion in the year to May.
TRADE AND THE CURRENT ACCOUNT
Extra-euro area trade in goods further expanded in recent months, with imports growing at a
higher pace than exports. According to balance of payments data, extra-euro area export values of
goods advanced by 9.4%, while extra-euro area import values of goods increased by 11.0% in the
three-month period to May (see Chart 36 and Table 7). However, some signs of stabilisation in the
growth of extra-euro area trade in goods have emerged.
The strong growth in foreign demand, partly supported by ﬁ scal stimuli and the inventory cycle,
remains an important determinant of a continued expansion of exports of goods. Moreover,
Chart 36 Extra-euro area trade in goods
Chart 37 Main items of the current account
(three-month on three-month percentage changes; for goods
(EUR billions; 12-month cumulated ﬂ ows; monthly data;
balance, EUR billions and three-month moving averages;
working day and seasonally adjusted)
monthly data; working day and seasonally adjusted)
goods balance
current transfers balance
goods exports
income balance
goods imports
services balance
goods balance
current account balance
15
15
150
150
100
100
10
10
50
50
5
5
0
0
0
0
-50
-50
-100
-100
-5
-5
-150
-150
-10
-10
-200
-200
-15
-15
-250
-250
2007
2008
2009
2010
2007
2008
2009
2010
Source: ECB.
Source: ECB.
ECB
70 Monthly Bulletin
August 2010

E C O N O M I C
A N D M O N E T A R Y
D E V E L O P M E N T S
Exchange rate
and balance
of payments
developments
the improved price competitiveness as a result of the depreciation of the euro may also have had a
positive impact on recent developments in extra-euro area exports.
At the same time, extra-euro area imports of goods are increasingly supported by strengthening
domestic demand, as well as continued export-induced demand for imported inputs. The rise in the
import values of goods reﬂ ects to some extent a surge in import prices, which is partly attributed to
the depreciation of the euro and higher commodity prices.
The growth in extra-euro area trade in services also strengthened somewhat in May, but remained
rather subdued compared with that of goods. Following weaker developments in the previous
months, values of both exports and imports of services registered a pick-up in growth in May,
increasing by 1.9% and 2.5% respectively on a three-month on three-month basis.
From a longer-term perspective the 12-month cumulated current account deﬁ cit has been showing
signs of stabilisation in recent months, although it declined signiﬁ cantly compared with the deﬁ cit
recorded a year earlier (see Chart 37 and Table 7). In the year to May the cumulated current account
Table 7 Main items of the euro area balance of payments
(seasonally adjusted data; unless otherwise indicated)
Three-month moving
12-month cumulated
average ﬁ gures ending
ﬁ gures ending
2010
2010
2009
2009
2010
2010
2009
2010
Apr.
May
Aug.
Nov.
Feb.
May
May
May
EUR billions
Current account
-5.6
-5.8
-2.8
-5.2
-2.2
-4.4
-156.3
-43.9
Goods balance
0.6
3.1
5.6
3.7
4.0
2.5
-17.6
47.6
Exports 124.4
131.6
106.5
107.6
116.8
127.7
1,429.1
1,375.8
Imports 123.8
128.5
100.8
103.9
112.8
125.2
1,446.7
1,328.2
Services balance
4.0
3.1
2.0
2.1
3.6
3.4
33.6
33.5
Exports 40.3
41.4
38.1
38.5
40.1
40.8
500.4
472.4
Imports 36.3
38.4
36.1
36.3
36.5
37.4
466.9
439.0
Income balance
-3.0
-4.4
-4.1
-3.8
-1.2
-3.0
-70.4
-36.4
Current transfers balance
-7.2
-7.6
-6.4
-7.1
-8.6
-7.4
-101.9
-88.6
Financial account 1)
8.6
17.8
-15.6
7.3
4.3
9.1
177.6
15.4
Combined net direct and portfolio
investment 20.9
46.7
8.6
15.1
26.4
13.2
292.0
189.8
Net direct investment
-11.4
-17.2
-5.3
-10.8
0.1
-18.4
-145.1
-103.1
Net portfolio investment
32.3
63.9
13.8
25.9
26.3
31.6
437.2
292.8
Equities -10.3
21.7
33.7
-21.5
11.1
-2.4
-81.5
62.8
Debt instruments
42.6
42.1
-19.8
47.4
15.1
33.9
518.7
230.0
Bonds and notes
35.4
39.3
-33.9
23.0
8.0
24.1
217.2
63.8
Money market instruments
7.2
2.8
14.1
24.4
7.1
9.8
301.5
166.2
Net other investment
-12.5
-26.6
-22.1
-9.2
-24.1
-22.1
-141.3
-173.3
Percentage changes from previous period
Goods and services
Exports -1.9
5.0
-0.3
1.0
7.4
7.5
-7.4
-4.2
Imports -0.4
4.2
-2.1
2.4
6.4
8.9
-4.6
-7.6
Goods
Exports -2.2
5.7
1.0
1.0
8.5
9.4
-9.1
-3.7
Imports 0.4
3.7
-2.0
3.1
8.5
11.0
-6.2
-8.2
Services
Exports -1.1
2.9
-3.6
0.9
4.1
1.9
-2.2
-5.6
Imports -3.1
5.6
-2.5
0.6
0.4
2.5
0.8
-6.0
Source: ECB.
Note: Figures may not add up due to rounding.
1) Figures refer to balances (net ﬂ ows). A positive (negative) sign indicates a net inﬂ ow (outﬂ ow). Not seasonally adjusted.
ECB
Monthly Bulletin
August 2010
71

deﬁ cit stood at €43.9 billion (around 0.5% of GDP), while it amounted to €156.3 billion a year
earlier. This decline in the deﬁ cit reﬂ ected a shift from a deﬁ cit to a surplus in the trade balance and
a decrease in the deﬁ cits in the income and current transfers balances. A more detailed analysis of
trade developments is presented in this month’s article entitled “Recent developments in global and
euro area trade”.
Looking ahead available indicators suggest that extra-euro area exports of goods will continue to
grow in the near term on the back of still robust foreign demand. However, there may be some
loss of momentum against the backdrop of a slowdown in global economic growth. Indeed, the
Purchasing Managers’ Index of new export orders in the euro area manufacturing sector remains
well above the expansion/contraction threshold of 50, but has declined somewhat in recent months.
FINANCIAL ACCOUNT
In the three-month period to May 2010 combined direct and portfolio investment recorded average
monthly net inﬂ ows of €13.2 billion, about half of the net inﬂ ows over the previous three-month
period (see Chart 38 and Table 7). This moderation was almost entirely the result of higher net
outﬂ ows in direct investment, partly owing to euro area companies increasing their outstanding
loans to foreign afﬁ liates.
Meanwhile, net inﬂ ows in portfolio investment only slightly increased in the three-month period
to May on the back of counteracting developments in the equities and debt markets. On the one
hand, investors’ interest in equities declined further, notably from euro area non-residents, resulting
in a shift from net inﬂ ows to net outﬂ ows in equities. The reduced appetite for risk on the part of
investors was the result of a sudden re-intensiﬁ cation of tensions in the ﬁ nancial markets in early
May, triggered in part by mounting concerns about the ﬁ scal situation of some euro area countries,
but also by economic developments outside of the euro area. On the other hand, investment in debt
Chart 38 Main items of the financial account
(EUR billions; net ﬂ ows; three-month moving averages; monthly data)
(EUR billions; 12-month cumulated net ﬂ ows; monthly data)
equities
equities
money market instruments
money market instruments
bonds and notes
bonds and notes
direct investment
direct investment
combined direct and portfolio investment
combined direct and portfolio investment
120
120
600
600
100
100
400
400
80
80
60
60
200
200
40
40
20
20
0
0
0
0
-20
-20
-200
-200
-40
-40
-60
-60
-400
-400
2007
2008
2009
2010
2007
2008
2009
2010
Source: ECB.
ECB
72 Monthly Bulletin
August 2010

E C O N O M I C
A N D M O N E T A R Y
D E V E L O P M E N T S
Exchange rate
and balance
of payments
developments
instruments recorded substantially increased net inﬂ ows in the three-month period to May compared
with the previous three-month period. This was in line with renewed risk aversion by investors in
an environment of high stock market volatility, as well as ﬂ ight-to-quality behaviour.
Turning to longer-term developments, net inﬂ ows in combined direct and portfolio investment
decreased to €189.8 billion in the 12-month period to May 2010, compared with €292 billion in the
same period a year earlier. That was mainly driven by reduced net inﬂ ows in portfolio investment
(see Table 7). The breakdown of portfolio investment by instrument indicates that this reduction
was primarily the result of a large decrease in the net inﬂ ows in debt instruments, which more than
offset the shift from net outﬂ ows to net inﬂ ows in equities (see Chart 38). Overall, the trend in
portfolio re-balancing by global investors away from debt instruments, where investment has been
exceptionally high during the ﬁ nancial crisis, towards equities remained strong.
ECB
Monthly Bulletin
August 2010
73

A R T I C L E S
OIL PRICES – THEIR DETERMINANTS AND IMPACT
ON EURO AREA INFLATION AND THE MACROECONOMY
In view of the high and volatile oil prices experienced over the past decade, this article reviews oil
price developments and their impact on the euro area macroeconomy. Understanding the factors
underlying oil price movements and their likely future developments is important, given the impact
of oil price movements on euro area inﬂ ation and the macroeconomy. Since the ﬁ rst oil shock in the
early 1970s, the evolution of oil prices has been determined mainly by the interplay of supply and
demand developments. Whereas abrupt disruptions in the supply of oil by OPEC were instrumental
in explaining sharp oil price movements in the 1970s, strongly rising oil demand, particularly from
non-OECD countries, together with the supply policies of some producers, appears to have been the
main driver of oil prices over the past decade. Financial factors may also have played a role, especially
in the surge and subsequent decline in oil prices in 2008. Looking forward, the oil supply/demand
balance is likely to be tight; oil supply may well be constrained by physical factors as well as by reduced
investment, while demand, particularly from emerging economies, is likely to continue to grow.
Oil price shocks have an impact on economic activity mainly via the terms of trade and demand
and supply channels, although conﬁ dence and uncertainty effects may also occur. The empirical
evidence suggests that an increase in oil prices dampens activity gradually over the course of three
years. However, it should be noted that the effect may vary across countries, depending not only
on their oil dependency and oil intensity but more importantly on the ﬂ exibility of their economies.
The source of the underlying oil price shock also plays a crucial role. An increase in oil prices
stemming from a supply contraction is likely to have a more negative impact on activity than a
similarly sized increase stemming from high oil demand.
The impact of oil price movements on inﬂ ation is considered using a stylised framework which breaks
down the impact into direct and indirect ﬁ rst and second-round effects. The largest and most immediate
impact comes from the direct ﬁ rst-round effects (i.e. on consumer energy prices). Given the importance
of excise taxes and the fact that distribution and retailing costs and margins have been broadly constant,
the elasticity of consumer energy prices with respect to oil prices increases as the oil price level rises.
At the same time, there is some evidence that the indirect ﬁ rst and second-round effects may have
declined, owing to a combination of structural changes in the economy as well as a change in wage
and price-setting behaviour. As the euro area is heavily dependent on imported oil, ﬁ rst-round effects
are largely unavoidable and essentially represent a transfer of income to oil exporting countries.
However, appropriate wage and price-setting behaviour and well-anchored inﬂ ation expectations,
along with a credible monetary policy, are necessary to avoid the materialisation of second-round
effects and a sustained impact on inﬂ ation over a medium-term horizon.
1 INTRODUCTION
ﬂ exibility. An understanding of these factors is
essential to be able to assess the impact of oil
Oil prices have been high and volatile over the price movements on the economy, whether it
past decade. To understand how movements has changed over time and what it may be in the
in oil prices propagate through the economy, future. Moreover, these factors, combined with
monetary policy-makers need to consider the policy response of central banks, ultimately
not only the nature of these shocks, but explain the transmission of oil price shocks
also the structure of the energy sector, how to inﬂ ation and to the macroeconomy more
oil is used in the economy more generally generally. The purpose of this article is therefore
(i.e. in terms of its energy mix, dependency to understand better the main factors behind the
and intensity) and the degree of economic evolution of global oil prices and how these,
ECB
Monthly Bulletin
August 2010
75

combined with the structural features of the euro
Chart 1 Nominal and real oil prices
area economy, affect euro area inﬂ ation and the
macroeconomy.
(USD per barrel)
This article is structured as follows. Section 2
nominal price
real price
reviews the determinants of global oil price
140
140
developments both over the longer term and
the recent past. In particular, the relative
120
120
contributions from demand, supply and other
factors (including ﬁ nancial ones) are assessed,
100
100
as the source of ﬂ uctuations in oil prices
80
80
has strong implications for the resulting
macroeconomic impact. Section 3, in the
60
60
context of the high and volatile oil prices
40
40
observed over the past ten years, analyses the
impact of oil price movements on the euro
20
20
area macroeconomy (i.e. output and prices).
The possibility that this impact may change
0
0
1970 1975 1980 1985 1990 1995 2000 2005 2010
over time or may have been partially offset
Sources: Global Financial Data, BLS.
by other factors (such as, for example, oil bill
Notes: Real prices are expressed in 1982-84 USD terms.
recycling, through which increased exports
Last observation for real prices refers to May 2010 and for
nominal prices to June 2010.
to oil-producing countries partially offset the
negative impact of higher oil prices) is also
considered. Section 4 concludes.
developments over recent years, and assess their
medium and long-term prospects.
2
THE DETERMINANTS OF OIL PRICES
SUPPLY AND DEMAND DEVELOPMENTS
IN THE OIL MARKET
The price of oil has risen sharply over the past
decade, with new all-time highs recorded – To understand the determinants and prospects
in both nominal and real terms – in July 2008 for oil prices, it is useful to consider oil price
(see Chart 1). This rise has no precedent shocks over the past 50 years. In the 1960s, the
during the previous 40 years, either in terms spare capacity in the United States, which had
of magnitude or speed. The oil price surge until then been the marginal supplier of oil,1
came to an end in the second half of 2008, and began to erode. In parallel, OPEC started to test
the subsequent price fall was exacerbated by its newly acquired market power: the oil price
the intensiﬁ cation of the ﬁ nancial crisis and shocks of 1973 and 1979 were associated with
the steep decline in global economic activity. signiﬁ cant reductions in OPEC’s supply and
The fall in prices was sharp and fast, to a trough operable capacity. Higher prices led to a marked
of USD 38 per barrel at the end of 2008. Oil decline in global oil demand, especially in
prices, however, started rebounding in the second
OECD countries, and generated incentives to
quarter of 2009 and experienced a strong upturn, increase oil supply in several non-OPEC
almost doubling to reach around USD 75 per countries. This weakened OPEC’s control over
barrel in June 2010. Real oil prices (i.e. deﬂ ated the marginal supply of oil and created increasing
by the US CPI) continue to be high by historical
standards, although they are slightly below the
previous peak levels temporarily recorded at 1 A marginal supplier is a producer which is able to inﬂ uence
prices and balance the market by changing the amount it supplies.
the beginning of the 1980s. This section will
Such producers generally have ample spare capacity and can
analyse the main drivers of international oil price
change their production levels at relatively low additional cost.
ECB
76 Monthly Bulletin
August 2010

A R T I C L E S
incentives for the cartel members to exceed the decline in global economic activity, which also
Oil prices – their determinants
agreed quotas, which caused prices to led oil demand growth to decline in emerging
and impact on euro
area inflation and the
progressively decline.
economies. Looking at the supply side, OPEC
macroeconomy
accompanied the slowdown in global oil
Oil prices, however, became substantially more demand by announcing a total reduction in
volatile again from the second half of the 1990s, production quotas of almost 5 million barrels
and surged with increasing momentum between per day. This served to limit the decline
2004 and mid-2008. This hike in crude oil prices
in oil prices. From spring 2009 oil prices
was mainly triggered by increasing demand from
started to recover and ﬂ uctuated around USD
non-OECD emerging economies, particularly 75 per barrel in June, i.e. the level reached at
China, India and the Middle East (see Chart 2 the beginning of September 2007. On the
and Box 1). In turn, future oil supply prospects demand side, amid a gradually stabilising
increasingly became a matter of concern, as global economy, market expectations of future
the growth in non-OPEC crude oil production oil demand have been an important factor
broadly stagnated from the end of 2004 behind the rebound in oil prices. In particular,
onwards (see Chart 3). The scope for increased higher than expected non-OECD oil demand –
non-OPEC production was constrained owing most notably stemming from higher demand
to geological restrictions, and the low level of in large emerging market economies such as
spare capacity in most OPEC countries added to China and India – put upward pressures on oil
market tightness.
prices. Amid rising oil demand in early 2010,
OPEC’s (estimated) production moved higher
The oil price boom was disrupted by a above its target level and non-OPEC supply
combination of the slowing of economic growth also increased, mainly because of higher output
in major advanced economies, the onset of the in Canada and Russia. Therefore, although oil
ﬁ nancial crisis and the subsequent very sharp demand seems to be recovering quickly, by
Chart 2 Changes in global oil demand
Chart 3 Global oil supply by producer
by region
(annual percentage change)
(millions of barrels per day)
total
non-OPEC
OECD
OPEC
non-OECD
8
8
60
60
6
6
50
50
4
4
40
40
2
2
30
30
0
0
20
20
-2
-2
10
10
-4
-4
-6
-6
0
0
1987
1991
1995
1999
2003
2007
1986
1990
1994
1998
2002
2006
2010
Source: International Energy Agency.
Source: International Energy Agency.
Note: Last observation refers to 2010.
Note: Last observation refers to 2010 Q1.
ECB
Monthly Bulletin
August 2010
77

1.7 million barrels per day year on year in the mixed results as regards possible systematic
ﬁ rst quarter of 2010, global supply has also causality between investment positions held by
increased, by almost 2.0 million barrels per day. non-commercial agents in oil futures markets
and spot prices and the volatility of such prices.
The speed and size of the recent movements in However, some research clearly suggests
oil prices have led many to argue that there has that a degree of overshooting of oil prices
been a decoupling of market prices from those above their equilibrium level as determined
warranted by fundamentals, and to discuss the by fundamentals took place in 2008, due in
potential role of speculative trading in driving particular to a spike in ﬁ nancial investment.
oil price movements. The ﬁ nancialisation of In any case, it is important to note that the price
commodity markets, particularly those for elasticity of demand and supply is rather low
oil, has sharply increased in recent years: in oil markets, which means that relatively
the volume of crude oil derivatives traded on small changes in fundamentals can have a
NYMEX quintupled between 2000 and 2008. large impact on prices. Overall, the debate
It is difﬁ cult to measure directly the extent to on speculation in commodity markets is still
which movements in oil prices are related to ongoing, as data limitations hamper more
speculative activity. Empirical studies report in-depth analyses.
Box 1
EMERGING MARKET ECONOMIES AND OIL DEMAND
Owing in part to buoyant global economic
Chart A Contribution of selected regions to
growth, global oil consumption increased
the annual average consumption increase
more rapidly in the period 2001-2007 than
in the previous two decades (see Chart A).
(annual data; millions of tonnes; period averages)
Most of this increase was driven by demand
emerging economies excluding China
OECD
from several major emerging economies
China
(notably China, India and the Middle East
net balance
countries), resulting from a combination of
44
44
industrialisation and a higher commodity
34
34
intensity of growth, increases in per capita
24
24
income, and rapid population growth. In
some instances, the high demand also reﬂ ects
14
14
the fact that domestic end-user prices are
4
4
heavily subsidised and thus delinked from
-6
-6
world market prices. This is especially the
-16
-16
case in the oil-exporting economies but also
in some of the emerging economies.1 Since
-26
-26
1980-1990
1991-2000
2001-2007
2008-2009
2007, oil demand in emerging and developing
Sources: International Energy Agency, British Petroleum and
economies has continued to increase - despite
ECB staff calculations.
1 See Helbling, T., V. Mercer-Blackman and K. Cheng (2008), “Riding a wave” in IMF Finance and Development, March 2008,
Volume 45, Number 1.
ECB
78 Monthly Bulletin
August 2010

A R T I C L E S
Chart B Crude oil consumption per capita
Oil prices – their determinants
the global downturn in economic activity –
in selected countries in 2008
and impact on euro
albeit less strongly than in the ﬁ rst half of the
area inflation and the
decade.
(barrels per year)
macroeconomy
40
40
Looking forward, as oil consumption
per capita remains signiﬁ
cantly lower in 30
30
emerging and developing countries than
in advanced economies, demand in these
countries has strong growth potential, even
20
20
though higher energy efﬁ ciency may partially
counteract this. For example, in 2008 in
10
10
the euro area, around 12 barrels of crude
oil were consumed per person, compared
0
0
with little more than two barrels in China
1
2
3
4
5
6
7
8
9
10 11 12 13
and less than one barrel per person in India.
1 Saudi Arabia
6 Mexico
11 China
2 United States
7 Argentina
12 Indonesia
The difference compared with the United
3 South Korea
8 Brazil
13 India
States, where each person in 2008 consumed
4 euro area
9 South Africa
5 Russia
10 Turkey
on average almost 23 barrels a year, is even
Sources: International Energy Agency, British Petroleum and
greater (see Chart B).
ECB staff calculations.
MEDIUM AND LONG-TERM PROSPECTS
recover more strongly than expected, and
FOR THE OIL MARKET
investment is not able to respond quickly,
OPEC’s spare capacity will decline again from
Looking ahead, the International Energy Agency next year on. In addition, the global production
(IEA) projects oil supply to be ample in the capacity base loses around 3.1 million barrels per
medium term, although the risk of a tighter oil day to mature ﬁ eld decline each year, which
supply/demand balance remains signiﬁ cant. could tighten the outlook for the oil supply and
Following the substantial decline in oil demand, demand balance in the medium term.
which has mainly been driven by the substantial
decline in demand in OECD countries (see In the longer term, the physical ability to expand
Chart 2) due to the ﬁ nancial crisis and subsequent oil production capacity will depend on the global
recession, oil demand is expected to increase resource base, which will be an important
strongly as the world economy recovers. The IEA
determinant of future global oil supply and
estimates that oil demand will increase by prices. There is considerable uncertainty
1.2 million barrels per day per year on average surrounding the volume of oil reserves. The IEA
between 2009 and 2015, particularly in emerging does not envisage a peak in conventional oil
economies. Although supply prospects have also production until 2030. Nevertheless, additional
been negatively affected by the economic unconventional sources will be needed to match
downturn, with investment in upstream capacity growing demand: the IEA forecasts that global
and maintenance declining substantially in 2009
supply from unconventional oil sources will
2, the IEA projects global supply capacity to be increase four-fold by 2030, to 7.4 million barrels
ample in the medium term. The increase in global per day. Among the unconventional oil sources,
supply capacity stems mainly from increased net the geological resource base for heavy oil such
production capacity in OPEC countries, of which
an important share is projected to be supplied by
Saudi Arabia (see Box 2). However, signiﬁ cant 2 Whilst nominal investment declined by 20%, the decline in
investment in real terms – which is more difﬁ cult to quantify
uncertainties surround both the oil demand and
precisely – was smaller owing to falling development
supply outlook. If global oil demand should
(in particular wage and drilling) costs.
ECB
Monthly Bulletin
August 2010
79

as tar sands and oil shale is considerable.3 from the high volatility observed in oil prices in
However, the estimated costs of producing these recent years and the increased risk aversion in
alternative fuels are subject to wide uncertainty ﬁ nancial markets may have discouraged or
and the energy return is signiﬁ cantly less than postponed investment in this sector, even though
for oil, as considerable amounts of energy are higher prices should in theory stimulate
required to recover them. Apart from the investment in supply.
environmental considerations, these new
extraction technologies are also highly capital 3 Tar sands represent a form of heavy oil which is present in
Canada and Venezuela. Similarly, oil shale is a type of rock
intensive, with long lead times of up to ﬁ fteen
containing oil, of which a large resource base is available in the
years. In addition, the uncertainty stemming
United States.
Box 2
SAUDI ARABIA’S OIL PRODUCTION CAPACITY – RECENT DEVELOPMENTS AND PROSPECTS
Spare capacity in oil production 1 – alongside
Chart A Developments in OPEC’s spare crude
spare capacity in reﬁ ning and inventories –
oil production capacity
provides a cushion to absorb sudden upward
(millions of barrels per day; USD per barrel)
shocks to oil demand and downward shocks
to oil supply, such as geopolitical events
spare capacity of Saudi Arabia (left-hand scale)
spare capacity of OPEC excluding Saudi Arabia
or natural disasters. Low spare capacity
Brent oil prices (right-hand scale)
tends to amplify price reactions to actual
8
160
(or anticipated) supply or demand shocks and
7
140
contributes to volatility in the oil market.
6
120
5
100
At 6.1 million barrels per day, estimated spare
4
80
capacity stood in May 2010 above its levels in
the period leading up to mid-2008, when it was
3
60
relatively low and oil prices were rising steadily
2
40
(see Chart A). This is mainly the result of cuts in
1
20
OPEC’s oil production, in view of the fall in oil
0
0
prices in the second half of 2008 and weakening
2003
2004
2005
2006
2007
2008
2009
global demand, but also capacity expansion,
Sources: International Energy Agency and ECB staff
calculations.
which mainly took place in Saudi Arabia, the
world’s largest oil exporter. In May 2010, Saudi
Arabia accounted for almost 62% of OPEC’s total spare capacity. At current levels of production
(8.25 million barrels per day), Saudi Arabia’s spare capacity of 3.75 million barrels per day could
offset a shortfall in oil supply from other large oil exporters, within a short period of time.
Saudi Arabia is likely to remain a key provider of spare capacity in the future, as the country
plans signiﬁ cant investments to further increase its oil (and gas) production capacity.
The IEA estimates that Saudi Arabia will increase its sustainable net oil production capacity in the
period 2009-15 by 0.43 million barrels per day (see Chart B). This is the largest estimated capacity
increase among OPEC members – with the exception of Iraq, where uncertainties surrounding
1 Spare capacity is deﬁ ned by the IEA as the difference between current oil production and capacity levels that can be achieved within
30 days and sustained for 90 days.
ECB
80 Monthly Bulletin
August 2010

A R T I C L E S
Chart B Projected increase in OPEC’s crude
Oil prices – their determinants
capacity expansion are signiﬁ cant
–,
oil production capacity from 2009 to 2015
and impact on euro
slightly ahead of Angola and the United Arab
area inflation and the
Emirates (UAE). Non-OPEC crude supply
(millions of barrels per day)
macroeconomy
capacity is projected to decline by 1.0 million
1.0
1.0
barrels per day over the same period.
0.5
0.5
In the short run, the recent increase in
spare capacity in oil production should be a
0.0
0.0
stabilising factor for oil markets, when demand
recovers in the wake of a global economic
-0.5
-0.5
recovery. Over the medium term, commitment
by oil producers to expand production capacity
-1.0
-1.0
Iraq
Saudi Angola UAE
Iran Rest of Non-
is important to match a potentially stronger
Arabia
OPEC OPEC
than currently expected rebound in global
Sources: International Energy Agency and ECB staff calculations.
oil demand, in particular in emerging market
economies. This is especially relevant for Saudi Arabia, given that the outlook for investment
in production capacity in general has become more uncertain after the fall in oil prices in
mid-2008 and in view of tighter ﬁ nancing conditions and the country’s large oil reserves –
estimated at 20% of global reserves – that can be lifted at relatively low costs.
At the same time, investment in capacity in other countries and regions remains key, inter alia,
to mitigate further regional concentration of prospective oil production and spare capacity.
3
THE IMPACT OF OIL PRICES ON THE EURO
electricity generation, oil, natural gas and coal
AREA MACROECONOMY 4
are substitutes for one another. Nonetheless,
despite its primary role, both the share of oil in
Oil has remained the principal source of energy overall energy consumption and the oil intensity
in the euro area countries – whether measured of economic activity have declined since the
as a percentage of total gross (46%) or ﬁ nal early 1970s – sharply during the late-1970s
(37%) inland consumption of energy – ever following the oil crises and more gradually, and
since it “overtook” coal and other solid fuels continuously, since the 1980s. This decline, which
in the mid-1960s. This is notwithstanding has implications for the economic impact of oil
the increased use of natural gas, nuclear and price ﬂ uctuations, is attributable to a combination
renewable energies (see Chart 4). Oil derives its of factors, including the substitution of other
importance both from its direct role in private energy sources for oil (e.g. the use of natural
consumption (for transport and heating fuel) and gas and nuclear power in electricity generation),
from its indirect role as a factor of production increased efﬁ ciency (more fuel efﬁ cient cars),
(e.g. via logistics and distribution, as well as its and the changing structure of the economy.
use in the production of chemicals). However,
owing to a lack of natural endowments, very 4 This section draws extensively from the ECB Structural Issues
little oil is produced in the euro area and
Report 2010 on energy markets and the euro area macroeconomy,
consequently the dependency ratio (i.e. net
available on the ECB’s website at www.ecb.europa.eu.
5 However, this overall ﬁ gure masks an important distinction
imports to total supply) is high (at close to
between household transport (in particular passenger cars)
100%). Oil is a particularly crucial source of fuel
and commercial transport (freight). Approximately two-thirds
for transport, accounting for over 95% of energy
of private passenger cars in the euro area are petrol powered,
although around half of new passenger car registrations are for
consumption in that sector.5 Oil prices also have
diesel powered vehicles (according to the European Automobile
an additional impact via their inﬂ uence on other
Manufacturers’ Association). The commercial freight sector
however is almost completely diesel powered. This distinction
energy prices, in particular those of natural gas
is relevant when one considers the impact on prices of reﬁ ning
and coal, since for certain purposes, especially
margins for petrol/gasoline and diesel/gas oil.
ECB
Monthly Bulletin
August 2010
81

Chart 4 Decomposition of euro area energy consumption
(thousands of tonnes of oil equivalent; percentages)
Gross consumption
Final consumption
renewables and waste
renewables and waste
nuclear energy
heat
natural gas
electricity
liquid fuels
natural gas
solid fuels
liquid fuels
total (left-hand scale)
solid fuels
total (left-hand scale)
1,300
100
900
100
1,200
90
850
90
800
1,100
80
750
80
1,000
70
700
70
650
900
60
60
600
800
50
550
50
500
700
40
40
450
600
30
400
30
500
20
350
20
300
400
10
10
250
300
0
200
0
1960 1965 1970 1975 1980 1985 1990 1995 2000 2005
1960 1965 1970 1975 1980 1985 1990 1995 2000 2005
Sources: Eurostat, International Energy Agency and Eurosystem staff calculations.
Notes: Energy consumption may be viewed either in “gross” terms (i.e. the combination of domestic primary production and net imports)
or in “ﬁ nal” terms (i.e. after the transformation of primary energy sources into usable forms of energy). A key difference arises from the
transformation of primary energy sources (nuclear, gas, solid fuels and oil) into electricity.
THE IMPACT ON ECONOMIC ACTIVITY
prices, which lower real disposable income and,
therefore, consumption. Supply effects reﬂ ect the
Oil price shocks have an impact on economic importance of oil as an input in the production
activity in the euro area mainly via the terms process. In the short term, the ability of ﬁ rms
of trade and demand and supply channels, to react to oil price increases by substituting
although conﬁ
dence and uncertainty effects another source of energy for oil is limited, so a
may also occur. The impact of oil price shocks rise in the price of oil inevitably leads to higher
may also vary depending on the state of the production costs. Firms may respond to this
business cycle and the underlying nature of the by changing either their pricing or production
oil price shock – whether it is driven by demand, behaviour, which can have adverse implications
supply or other factors.
for proﬁ ts, investment, employment and wages.
In the long run, increases in the relative price
Terms-of-trade effects arise from the increases in
of energy may lead to substitution effects and
oil import prices, which lead to a rise in average to a reduction in the overall energy intensity of
import prices relative to average export prices. production and consumption.
The deterioration in the terms of trade may
trigger adverse real income and wealth effects The empirical evidence from a set of
in net oil-importing economies like the euro macroeconometric models available at the
area. Unless savings are reduced or borrowing ESCB suggests that a 10% increase in oil
increases, this translates into lower domestic prices gradually dampens euro area activity,
consumption. Demand effects arise from the reducing real GDP by 0.24% after three years
inﬂ ationary effects of oil prices on consumer (see Table 1), assuming no monetary or ﬁ scal
ECB
82 Monthly Bulletin
August 2010

A R T I C L E S
Table 1 Effect of a 10% oil price increase
Chart 5 Effect of a 10% oil price increase
Oil prices – their determinants
on euro area activity
on real GDP in the euro area countries
and impact on euro
area inflation and the
(cumulative percentage deviations, annual averages)
(cumulative percentage deviation in year 3 from baseline
macroeconomy
scenario)
Year 1
Year 2
Year 3
0.0
0.0
Real GDP
-0.08
-0.19
-0.24
Private consumption
-0.14
-0.27
-0.33
Investment
-0.09
-0.24
-0.35
-0.1
-0.1
Exports (goods and services)
-0.03
-0.09
-0.12
Imports (goods and services)
-0.10
-0.15
-0.19
Net trade contribution
0.03
0.02
0.02
-0.2
-0.2
Employment
0.01
-0.04
-0.11
Source: Eurosystem staff calculations.
Note: net trade contribution is in percentage points.
-0.3
-0.3
policy reaction.6 Most of the effect stems from
-0.4
-0.4
the negative impact of an oil price increase on
real private consumption, which is caused by
a fall in real disposable income, related to the
-0.5
-0.5
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16
impact on inﬂ ation, and, from the second year
1 BE
5 ES
9 LU
13 PT
onwards, by lower employment. Notwithstanding
2 DE
6 FR
10 MT
14 SI
lower real interest rates,7 real investment is
3 IE
7 IT
11 NL
15 SK
dampened, reﬂ ecting lower demand. While both
4 GR
8 CY
12 AT
16 euro area
imports and exports are also dampened by the
Source: Eurosystem staff calculations.
oil price shock, the contribution of net exports
to GDP is estimated to be slightly positive, as
the dampening impact on imports is slightly There is some evidence that the impact of oil
larger. It should be noted that oil bill recycling prices on activity may have become more muted
(see Box 3), which is not explicitly included in since the 1990s relative to that observed in the
the simulation results but may be substantial, 1970s and early 1980s.9 This attenuation may be
reinforces the positive impact on net trade.
attributable to the complex interaction of a
number of factors, including the lower energy
The simulation results using the macroeconometric intensity of developed economies, changes in
models suggest considerable variation across wage-setting behaviour and the role of monetary
euro area countries in the impact of a 10% policy in stabilising inﬂ ation expectations.
increase in oil prices, ranging from close As mentioned above, the nature of the underlying
to zero to -0.4% of real GDP (see Chart 5). oil shocks is an important factor shaping their
These differing effects are partly due to impact on real GDP. In general, shocks to the
structural differences across the countries, such oil supply have a larger negative impact on
as the degree of dependence on oil imports,
the energy intensity of production and 6 The results stem from a largely harmonised simulation exercise
using macroeconometric models available at the ESCB.
consumption, and trade patterns. In addition,
Results for Finland are not available. For further details on the
the degree of nominal rigidity in the economy,
technical description of the exercise and the results, see the
Structural Issues Report on “Energy markets and the euro area
its sector structure and openness can also be
macroeconomy”, ECB, June 2010.
drivers of cross-country variation.8 It should be 7 As mentioned above, nominal interest rates were kept constant
noted that most of these models do not incorporate
in the simulations.
8 Peersman and Van Robays, using a different modelling approach,
inﬂ ation expectations. Incorporating expectations
also ﬁ nd evidence of substantial cross-country heterogeneity.
might result in a somewhat smaller dampening
See “Oil and the euro area economy”, in Economic Policy, Vol.
24, Issue 60, October 2009, pp. 603-651.
effect on economic activity as agents react to 9 See the Structural Issues Report (Annex 2.2), ECB, June 2010
expected future policy actions.
for a more detailed discussion.
ECB
Monthly Bulletin
August 2010
83

activity than oil price increases generated by long run. These long-term losses are higher when
rising oil demand, which are usually considering the long-term levels of consumption
accompanied by stronger global activity. In the and investment. Key factors affecting the
macroeconometric model simulations the nature long-run vulnerability of the economy to oil
of the oil price shock is generally not explicitly prices are the intensity and, in particular,
speciﬁ ed, but given that the underlying models substitutability of oil. The more ﬂ exible the
are based on historical data going back to the economy in substituting relatively expensive
1980s for most countries, the oil price shock can energy sources, the less vulnerable it is to
be viewed as a global shock resulting from both energy price ﬂ uctuations. Moreover, wage and
oil supply and demand disturbances and price rigidities exacerbate the adjustment costs
reﬂ
ecting also external adjustments.
following an energy price shock. In particular
The differing nature of underlying oil price the losses of output and labour input into the
shocks may explain why there is some production process would be less pronounced if
disagreement in the economic literature prices and wages adjusted more rapidly.
regarding the possible asymmetric effects of oil
price increases and decreases on economic When considering model-based estimates of the
activity, as the relative importance of the supply impact of energy prices on economic activity, it is
and demand factors behind the oil price important to bear in mind that macroeconometric
movements may have varied over time.
models are, by necessity, simpliﬁ cations of the
underlying economic structure. Even if model
In addition to the short and medium-term effects,
builders incorporate expectations formation and
energy price developments may also have an (monetary and ﬁ scal) policy responses into their
impact on the long-run potential output of the toolkit, these are impossible to capture in their
economy. Model estimates suggest that a 10% entirety and may change over time. Thus the
increase in oil prices has a negative impact of estimates reported here should be considered as
approximately 0.1% on the level of output in the merely indicative.
Box 3
OIL BILL RECYCLING
Energy products represent an important share of international trade and large movements
in oil prices can have a signiﬁ cant impact on external balances. In 2008, for example, the net
external energy deﬁ cit of the euro area reached 2.1% of GDP after oil prices climbed to almost
USD 100 per barrel on average. This box focuses on the international trade effects through
which oil price changes have an impact on the external accounts of oil-importing economies,
such as the euro area, in the short run. A rise in oil prices directly increases the cost of imported
oil, which decreases the current account balance (the direct trade effect). However, higher oil
prices increase oil revenues and the demand for goods and services by oil exporters, leading in
principle to higher foreign demand and counteracting increases in the current account balances
of oil-importing countries (the indirect trade or “oil bill recycling” effect).
Empirical evidence from past episodes of oil price increases suggests that roughly half of the
overall “petrodollar” windfall gain for oil-producing countries was spent on foreign goods,
while the remainder was invested in foreign assets. However, there are signiﬁ cant differences
across countries in the extent to which may beneﬁ t from this spending. In the period between
ECB
84 Monthly Bulletin
August 2010

A R T I C L E S
Combined direct and indirect trade effect of an oil price increase on the current account
Oil prices – their determinants
and impact on euro
area inflation and the
(change in oil-exporters’ import demand as a share of the increase in their oil export revenues (scenarios 1-4); as a percentage of GDP)
macroeconomy
Scenario 1
Scenario 2
Scenario 3
Scenario 4
0%
20%
60%
100%
Oil price increases to:
USD 70
USD 100
USD 70
USD 100
USD 70
USD 100
USD 70
USD 100
per barrel
per barrel
per barrel
per barrel
per barrel
per barrel
per barrel
per barrel
Euro area
-0.7
-1.8
-0.6
-1.5
-0.3
-0.9
-0.1
-0.4
“max-min”
-0.1 to -1.9
-0.2 to -5.2
0.1 to -1.8
0.3 to -4.7
0.4 to -1.4
1.1 to -3.8
0.8 to -1.1
2.0 to -3.0
United
States
-0.7 -1.8 -0.6 -1.7 -0.6 -1.6 -0.5 -1.4
China
-0.4 -1.1 -0.3 -0.8 -0.1 -0.3 0.1 0.3
Sources: Eurosystem staff estimates based on the IMF World Economic Outlook and IMF Direction of Trade Statistics.
Note: “max-min” denotes the range of maximum to minimum impacts of an oil price increase on the current account across euro area
countries.
2002 and 2006, estimates suggest that 41% of the increase in the euro area’s oil deﬁ cit, and 60%
of the increase in China’s oil bill, were compensated for by higher purchases of domestically-
produced goods in the oil-exporting countries, as against only 20% for the United States and 18%
for Japan.1 Geographic proximity, historical ties and the sectoral specialisation of exports are likely
to account for the higher initial sales base of euro area goods to oil exporters, compared with that
of the United States. In China, the high amount of exports to the oil-producing countries seems to
be in line with the signiﬁ cant gains in China’s export market shares worldwide. At the same time,
OPEC countries have signiﬁ cantly increased their net holdings of foreign assets as a percentage of
GDP in recent years. Evidence suggests that the bulk was invested in the United States.
The table above shows the results of a simple benchmark calculation of the combined direct
and indirect trade channels for two variants of an oil price increase: an increase of roughly 40%
(from USD 52 per barrel – the average price level that prevailed in the second half of 2009 – to
USD 70 per barrel) and a stronger increase of 100% (to USD 100 per barrel) in 2009. Results
are shown for four alternative scenarios regarding the extent to which petrodollars are recycled:
0%, 20%, 60% and 100%. The results of the simulations broadly conﬁ rm the ﬁ ndings of previous
empirical research.
First, as would be expected, the largest net oil importers, i.e. the euro area and the United States,
experience the most pronounced deterioration in their oil balances in the short term (as illustrated
by the ﬁ rst scenario in the table, which assumes no “oil bill recycling”, and thus captures only the
“direct” effect of higher oil prices on oil balances). The deterioration ranges from 0.7% to 1.8%
of GDP, depending on the size of the change in oil prices. The overall euro area impact conceals
considerable variation across countries, which is primarily a result of differences in their trade
patterns (i.e. both their energy import dependence and export specialisation).
Second, the economies with the largest export activity towards the oil-exporting countries,
i.e. the euro area and China, signiﬁ cantly beneﬁ t from the “indirect” effect of increased import
demand by the oil exporters, although in most cases it only partly offsets the negative direct
effect. As long as the propensity of oil exporters to import does not decline in favour of more
saving, euro area countries should beneﬁ t from higher exports to oil-exporting economies.
As mentioned above, geographical proximity to most major oil exporters and historical ties seem
to partly explain the closer trade links between euro area countries and oil exporters and the
1 See Higgins, M., T. Klitgaard and R. Lerman (2006), “Recycling Petrodollars”, Current Issues in Economics and Finance, Federal
Reserve Bank of New York, Vol. 12, No 9, December 2006.
ECB
Monthly Bulletin
August 2010
85

relatively weaker export ties of the United States. Furthermore, the structure of import demand
from oil-exporting countries, largely determined by an infrastructure and construction-led pattern
of growth, seems to create a comparative advantage for those euro area countries that specialise
in the production of capital goods, like Germany with its specialisation in transport equipment
and machinery. The euro area as a whole has been gaining import market shares in a number of
oil-exporting countries over the last decade, notably in Algeria, Saudi Arabia, the United Arab
Emirates and Russia.
THE IMPACT ON INFLATION
indirect, only generate a rise in the price level but
no lasting inﬂ ationary effects. Second-round
A stylised overview of the main transmission effects capture the reaction of wage and price-
mechanisms through which oil prices affect setters to the ﬁ rst-round effects of a price shock.
consumer price developments is presented in Attempts by economic agents to compensate for
Chart 6. In terms of price effects, the impact of the loss of real income caused by past inﬂ ation
energy price changes is often broken down into shocks may affect inﬂ ation expectations and
direct and indirect ﬁ
rst and second-round further inﬂ
uence price and wage-setting
effects.10 The direct ﬁ rst-round effects refer to the behaviour. A transitory shock may thereby
impact of changes in oil prices on consumer become entrenched and more costly to eradicate.
energy prices. The indirect ﬁ rst-round effects The likelihood of a commodity price shock
refer to changes in consumer prices that occur as leading to second-round effects depends on
a result of the impact of oil prices on production several factors, including the cyclical position of
costs (e.g. an oil price increase that affects the economy, the ﬂ exibility of goods and labour
through higher input costs the prices of goods markets (particularly the presence of indexation
which have a signiﬁ cant oil input, such as some
chemical goods, or the prices of transport 10 This taxonomy of the breakdown of oil price pass-through into
different effects is drawn from the article entitled “Oil prices
services). In principle, ﬁ rst-round effects of a
and the euro area economy”, in the November 2004 issue of the
one-off change in the oil price, whether direct or
Monthly Bulletin.
Chart 6 Stylised overview of oil price pass-through channels
Additional
Oil price (in EUR)
channels
Trade
Direct
First-round
effects
effects
Producer prices
Financial markets
Indirect
effects
Confidence
Consumer prices
Second-round
Economic activity
effects
Inflation
expectations
Wages/profits
Source: ECB.
ECB
86 Monthly Bulletin
August 2010

A R T I C L E S
mechanisms affecting wage bargaining and price by oil price movements. Understanding Oil prices – their determinants
setting), the formation of inﬂ ation expectations this pass-through can be facilitated by
and impact on euro
area inflation and the
and, crucially, the credibility of the central bank.
considering a simpliﬁ
ed representation of
macroeconomy
the pricing chain for liquid fuel products.
DIRECT FIRST-ROUND EFFECTS
In particular, the key steps between the
Oil price ﬂ uctuations have a direct impact on extraction of crude oil and the purchase of liquid
HICP inﬂ ation via the HICP energy component. fuels by consumers are: reﬁ ning, distribution
Energy products account for approximately 10%
and taxation.12
of the overall euro area HICP, of which around
half is liquid fuels, i.e. transport (4%) and home Chart 7 illustrates the evolution of euro
heating fuel (0.7%). The remainder relates to area consumer liquid fuel prices since 1994.
electricity (2.3%), natural gas (1.8%), heat There are a number of noteworthy features.
energy (0.6%) and solid fuels (0.1%).11 Owing First, taxes (excise taxes and VAT combined)
to the volatility of oil prices, energy is also by account for more than half of the ﬁ nal selling
far the most volatile of the main HICP prices of petrol and diesel (on average 60% and
sub-components, with a standard deviation of 52% respectively in the ﬁ rst half of 2010), but
month-on-month changes of 1.5% – compared for a much smaller portion of heating fuel prices
with 0.2% for the seasonally adjusted HICP, and
0.1% for the seasonally adjusted HICP excluding
energy. Given this high volatility it is particularly
11 The share and composition of energy products in the HICP varies
substantially across euro area countries; the share ranges from
useful to understand the response of consumer
15.7% in Slovakia to 6.3% in Malta, whilst natural gas, solid
energy prices to movements in oil prices.
fuels and heat energy have little or no weight in consumption in
a number of countries.
12 Excise taxes are levied as a ﬁ xed amount per unit volume
In the ﬁ rst instance, the pass-through into
(e.g. the average level of excise tax on petrol in the euro area
consumer liquid fuel prices (i.e. transport – petrol
is around 59 euro cent per litre compared with around 8 euro
cent per litre for home heating fuel), whereas VAT is levied as a
and diesel – and heating fuel) is considered,
percentage of the pre-tax price plus excise taxes (e.g. the average
as these are generally the most rapidly affected
VAT rate on petrol in the euro area is around 19%).
Chart 7 Decomposition of euro area consumer liquid fuel prices
(as a percentage of total ﬁ nal selling price; euro cent per litre)
crude oil
cost of crude oil
refining cost/margin
cost of refined oil
taxes
cost of goods sold (refined oil + taxes)
distribution cost/margin
final selling price inc. taxes
100
150
80
120
60
90
40
60
20
30
0
0
1994
1997 2000 2003 2006 2009 1994
1997 2000 2003 2006 2009 1994 1997
2000 2003 2006 2009
Petrol
Diesel
Heating oil
Sources: European Commission (Eurostat), Bloomberg, Reuters and Eurosystem calculations.
Notes: Line series (in euro cent per litre) are shown on the right-hand scale, whereas column series (percentage of ﬁ nal selling price
including taxes) are shown on the left-hand scale. 2010 refers to the ﬁ rst six months of the year.
ECB
Monthly Bulletin
August 2010
87

(28%). Second, reﬂ ecting the strong increase €60 per barrel than at €20 per barrel. For petrol
in crude oil prices, the portion accounted for the elasticity increases from 15% to 35%, for
by the crude oil cost has increased greatly diesel from 19% to 41%, and for heating fuel from
since the late 1990s. Third, although reﬁ ning 39% to 66%.
margins are relatively small in relation to the
crude oil price, they can ﬂ uctuate substantially. In view of the high and volatile oil prices
For example, reﬁ ning margins for diesel and observed in recent years, numerous studies have
heating fuel reached a level of USD 40 per examined the speed of pass-through to liquid
barrel in mid-2008, compared with historical fuel prices in Europe. Generally these studies
averages (since 1986) of around USD 5 per show that the direct pass-through of oil price
barrel. Thus, ﬂ uctuations in reﬁ ning margins can
shocks into pre-tax consumer energy prices is
result, at least in the short term, in movements complete (i.e. an increase in crude oil prices
in consumer prices that do not reﬂ ect those in equivalent to 10 euro cent per litre results in an
crude oil prices. Lastly, the contribution from increase in pre-tax consumer prices of 10 euro
distribution costs and margins to ﬁ nal selling cent per litre) and quick (with most of the
prices has been relatively constant over time, increase being passed through within three to
implying that mark-ups in this sector are not ﬁ ve weeks). Moreover, there is little signiﬁ cant
set as a percentage of input costs.
evidence of substantial asymmetry between the
pass-through of oil price increases and oil price
The combination of relatively constant decreases.13
distribution costs and margins, the important
role of excise taxes and the strong increase Turning to natural gas prices, one of their key
observed in crude oil prices has signiﬁ cant and well-known features is their strong
implications for the elasticity of consumer co-movement with crude oil prices, albeit with
liquid fuel prices with respect to oil prices. some lag (see Chart 8). This mainly reﬂ ects the
Table 2 illustrates the role of indirect taxes substitutability of, and competition between, gas
in determining the elasticity of consumer oil and oil for certain purposes (such as electricity
prices with respect to crude oil prices: the generation), as well as institutional arrangements,
elasticity of heating fuel prices is much higher
than that of petrol and diesel prices, owing to
the relatively low level of excise taxes. The
table also shows that the elasticity of consumer 13 See, for example, Meyler A., “The pass through of oil prices into
energy prices is a function of the level of crude
euro area consumer liquid fuel prices in an environment of high
and volatile oil prices” in Energy Economics, Issue 6, Energy
oil prices: the elasticity of consumer prices
Sector Pricing and Macroeconomic Dynamics, November 1990,
is substantially higher when crude oil is at
pp. 867-881.
Table 2 Elasticity of HICP energy with respect to crude oil prices
(percentages)
Crude oil
Weighted average
Petrol
Diesel
Heating fuel
Natural gas
(€ per barrel)
pass-through
(2.6%) 2)
(1.4%) 2)
(0.7%) 2)
(1.8%) 2)
to HICP energy 1)
20
16
15
19
39
24
40
26
26
32
56
39
60
33
35
41
66
49
80
38
41
48
72
56
100
42
47
54
76
61
Source: Eurosystem staff calculations.
Notes: Based on taxes (VAT, excise and other) as at end-2009 and median reﬁ ning and distribution costs and margins since 1999.
1) Estimated assuming HICP heat energy (0.6% weight) co-moves with natural gas. Weighted average slightly underestimates extent of
pass-through as it assumes zero pass-through for electricity and solid fuels.
2) Denotes weight in overall HICP.
ECB
88 Monthly Bulletin
August 2010

A R T I C L E S
Chart 8 Oil and gas prices (contracted
Chart 9 Consumer gas prices
Oil prices – their determinants
border 1) and spot market 2))
and impact on euro
area inflation and the
(USD/MMBtu 3))
(euro per gigajoule)
macroeconomy
Brent crude oil
consumer post-tax price
euro area gas – border price
consumer pre-tax price
euro area gas – spot market
border gas
mark-up
25
25
20
20
18
18
20
20
16
16
14
14
15
15
12
12
10
10
10
10
8
8
6
6
5
5
4
4
2
2
0
0
0
0
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
1995
1997
1999
2001
2003
2005
2007
2009
Sources: Eurostat, Haver Analytics, Reuters, Bloomberg and
Sources: Eurostat, Haver Analytics, Reuters, Bloomberg and
Eurosystem staff calculations.
Eurosystem staff calculations.
1) Unweighted average of border gas prices for Belgium,
Germany, Spain, France, Italy and the Netherlands.
2) Unweighted average of the Belgian Zeebrugge and Dutch
Title Transfer Facility hub prices.
3) MMBtu denotes one million British thermal units.
particularly in Europe, whereby many long-term a crude oil price level of €20 per barrel would
gas supply contracts are explicitly linked to result in an elasticity of consumer gas prices
oil prices.14
with respect to oil prices of around 25%,
but this elasticity would be twice as high at
Oil prices impact relatively quickly on gas €60 per barrel.
border (i.e. import) prices, whilst the gap
between the border and the pre-tax consumer Turning to electricity prices, the reaction of
price (here referred to as the “mark-up”) consumer prices to oil price changes is much less
reﬂ ects the costs of processing, transmitting, clear. However, there are notable differences
storing and distributing gas to consumers as between wholesale and consumer electricity
well as the margins of the various operators price developments. Chart 10 shows that there
along the gas chain. Notwithstanding the is a considerable degree of co-movement
large increase in gas border prices since between crude oil and exchange-based (spot and
the late 1990s, the mark-up has remained one-year-ahead futures) wholesale electricity
relatively stable, at around €5/gigajoule prices. This co-movement stems from the
(see Chart 9). This suggests that movements co-movement of gas and oil prices and the
in gas border prices are passed through fully key role of gas power plants as the “swing” or
into consumer prices, albeit with some lag, and marginal generator. Notwithstanding the link
that as international gas prices have increased, between crude oil and exchange-based wholesale
the share of consumer prices accounted for electricity prices, the link between electricity
by raw inputs has increased. One implication
of this is that as the price level increases, the
elasticity (i.e. percentage response) of consumer
14 Such institutional arrangements are a crucial determinant of
these co-movements since gas, being less storable and shippable
gas prices with respect to oil prices increases,
than oil, is still primarily transmitted by pipeline. In the absence
although the absolute pass-through remains
of explicit indexing to oil prices, regional supply and demand
developments would have more impact on gas price movements.
the same (i.e. complete). Given the historical
The growing importance of spot markets and liqueﬁ ed natural
relationship between oil and border gas prices,
gas has put some pressure on these indexing arrangements.
ECB
Monthly Bulletin
August 2010
89

which prevailed in the ﬁ rst half of 2010). If oil
Chart 10 Consumer electricity prices
prices were to increase to €100 per barrel, the
elasticity (assuming broadly constant reﬁ ning
(euro per barrel/MWh; euro cent per kWh)
and distribution margins and excise taxes)
crude oil (left-hand scale)
would rise to above 40%.
wholesale electricity – spot (left-hand scale)
wholesale electricity – futures (left-hand scale)
consumer electricity price (right-hand scale)
INDIRECT FIRST AND SECOND-ROUND EFFECTS
100
0.15
Estimating the indirect ﬁ rst and second-round
effects of energy prices is more challenging,
80
0.14
and surrounded by more uncertainty, than is
60
0.13
the case for direct effects. Moreover, indirect
effects may differ at various stages of the
40
0.12
production chain and across different sectors of
20
0.11
the economy.16 Therefore, evidence should be
drawn from a range of analyses. Table 3 reports
0
0.10
2001 2002 2003 2004 2005 2006 2007 2008 2009
the estimated impact of oil prices on inﬂ ation
Sources: EEX, Eurostat, Haver Analytics, Reuters, Bloomberg
using a range of different approaches, including
and Eurosystem staff calculations.
Note: MWh denotes megawatt hour and kWh denotes kilowatt
input-output tables and dynamic simulations
hour.
of various model speciﬁ
cations (such as
structural vector autoregression (VAR) models
and oil prices at the consumer level is very weak and macroeconometric models). Despite some
(see Chart 10). This is due to a variety of factors differences across approaches, they generally
including taxes, the possibility of using different provide a consistent picture. The cumulative
sources of power for electricity generation indirect ﬁ rst and second-round effects on the
and network costs, but may also in part reﬂ ect price level of a 10% oil price increase after
price regulation.
three years is estimated to range from 0.20%
to 0.29%, about half of which represents a
Although European gas and electricity markets second-round effect from the endogenous
have undergone a sustained process of reaction of wages. There is also some evidence
deregulation and liberalisation dating back to (e.g. from the structural VAR analysis) that
the mid-1990s, the process is not complete 15 and
indirect ﬁ rst and second-round effects have
there is a substantial wedge between the degree declined since the mid-1980s owing to changes
of de jure and de facto competition. For example,
in the structural features of economic activity
although all gas and electricity markets are now and changes in wage and price-setting behaviour.
open to competition, more than half of the In this regard, models where expectations play
Member States have regulated end-user prices an important role point to a somewhat milder
and the large majority of consumers in those reaction of core inﬂ ation to commodity prices, as
markets are being supplied at regulated prices.
agents react to expected future policy actions.
Owing to the full pass-through into pre-tax 15 In June 2009 the European Commission initiated infringement
prices, and the broad constancy of margins and
procedures against Member States for not complying with the
indirect taxes, the elasticity of consumer energy
EU legislation on the internal market for electricity (25 Member
States) and gas (21 Member States). The key grounds for complaint
prices (i.e. the percentage response to a given
were lack of transparency, insufﬁ cient coordination efforts by
percentage change in oil prices) is a function
transmission system operators to make maximum interconnection
of the crude oil price level (see Table 2).
capacity available, absence of regional cooperation, lack of
enforcement action by the national competent authorities and lack
The elasticity of consumer energy prices doubles
of adequate dispute settlement procedures.
from around 16% when crude oil prices are 16 See, for example, Landau, B. and F. Skudelny “Pass-through
€20 per barrel, to around 33% when prices rise
of external shocks along the pricing chain: A panel estimation
approach for the euro area”, ECB Working Paper Series
to €60 per barrel (i.e. around the average level
No 1104, November 2009.
ECB
90 Monthly Bulletin
August 2010

A R T I C L E S
Table 3 Decomposition of the impact of a 10% increase in crude oil prices
Oil prices – their determinants
on the HICP level using different approaches
and impact on euro
area inflation and the
(percentages)
macroeconomy
Approach
Speciﬁ cation
Direct
Indirect
Second round
Total
Disaggregated energy components 1)
€20
0.15
N/A
N/A
N/A
€50
0.29
N/A
N/A
N/A
Input-output tables 2)
0.22
0.14
N/A
N/A
Structural VARs (SVARs) 3)
1971-2009
0.20
0.25
0.45
1971-2000
0.39
0.29
0.68
1980-2009
0.16
0.20
0.36
Large-scale macroeconometric
wage reaction on
0.25
0.20
0.45
models 4)
wage reaction off
0.26
0.10
0.36
Source: Eurosystem staff calculations.
Notes: See the ECB’s 2010 Structural Issues Report for more details.
1) Pass-through is a function of the oil price level – estimates calculated on the basis of constant reﬁ ning and distribution costs
and margins and of indirect taxes at end-2009.
2) Based on 2005 input-output tables. Input-output methodology implicitly assumes constant margins and no second-round effects.
3) Results reported for SVARs estimated over three different sample periods (1971-2009, 1971-2000 and 1980-2009).
4) Results reported for two variants: one allows wages to react to the oil price increase, the other blocks this reaction.
Overall, the pass-through of oil prices into the ﬁ nancial crisis and subsequent recession.
consumer prices is complex, typically a function Furthermore, there is considerable uncertainty
of many factors, and may vary over time. Key about the overall available energy resource
factors comprise the price level of oil, the base. However, technological advances and the
amount of indirect taxation (excise taxes), discovery of alternative sources of energy (such
and other structural aspects of the economy, as shale gas) could imply that the overall supply
including the sector specialisation of activity and
of energy is greater than currently estimated.
wage and price-setting institutions. Wage and On the demand side, although affected by the
price-setting behaviour and monetary policy recession, demand is likely to increase again
have a key role to play in determining whether as the global economy picks up and energy
the direct and indirect effects arising from oil consumption in emerging economies converges
price changes translate into inﬂ ation over a with that of developed economies. Climate
medium-term horizon. In particular, whilst change polices, such as carbon pricing and
there is little monetary policy can do about the the encouragement of alternative renewable
ﬁ rst-round effects of oil price shocks, it can energy sources, and increased energy efﬁ ciency
largely avoid second-round effects. If oil price may attenuate demand. Nonetheless, on
ﬂ uctuations strongly affect wage and price balance, the most likely scenario is that the oil
expectations, more vigorous monetary policy supply/demand balance will tighten over time,
action is required to restore price stability. Thus, putting further upward pressure on oil prices in
monetary policy best counteracts the price and the medium term.
output volatility induced by oil price ﬂ uctuations
by implementing a credible medium-term-
The impact of future oil price movements on
oriented monetary policy strategy that stabilises the euro area macroeconomy depends on a
inﬂ ation expectations.
number of factors including the nature of such
movements, the level of oil prices and associated
excise taxes, structural features of energy use
4 CONCLUSION
and energy markets, the degree of economic
ﬂ exibility and wage and price-setting behaviour.
The outlook for oil prices is surrounded by This article has analysed the impact of oil price
a high degree of uncertainty linked to both movements on euro area inﬂ ation using a stylised
demand and supply-side factors. On the supply framework which breaks down the impact into
side, investment in oil production and processing
direct and indirect ﬁ rst and second-round effects.
capacity may have been adversely impacted by The largest and most immediate impact comes
ECB
Monthly Bulletin
August 2010
91

from direct ﬁ rst-round effects (i.e. on consumer
energy prices). Owing to the important role of
excise taxes and broadly constant distribution
and retailing costs and margins, the elasticity
of consumer energy prices with respect to oil
prices increases as the oil price level rises.
At the same time, there is some evidence that
the indirect ﬁ
rst and second-round effects
may have declined, owing to a combination of
structural changes in the economy and a change
in wage and price-setting behaviour. As the
euro area is heavily dependent on imported
oil, ultimately there is little that can be done to
avoid the ﬁ rst-round effects. However, wage and
price-setting behaviour, and well-anchored
inﬂ
ation expectations with a credible
monetary policy are key determinants of
whether inﬂ ationary pressures stemming from
energy prices translate into inﬂ ation over a
medium-term horizon.
ECB
92 Monthly Bulletin
August 2010

RECENT DEVELOPMENTS IN GLOBAL
AND EURO AREA TRADE
A R T I C L E S
In the wake of the global economic downturn of 2008-09, there was an unprecedented contraction
Recent developments in
in global trade. This was due to a number of demand and supply-side factors that had exacerbated
global and euro area
trade
the impacts of the downturn on international trade. First, the decline in global GDP stemmed mainly
from developments in its trade-intensive components (such as investment), with a particularly large
drop in demand for durable goods. Second, the expansion of international production networks
over the past two decades appears to have increased the responsiveness of trade to ﬂ uctuations in
demand. Third, trade was hampered by tight trade ﬁ nance conditions worldwide. The second half
of 2009 saw global trade start to recover, partly owing to a correction of the preceding collapse,
but also to temporary factors, such as ﬁ scal stimuli and a turn in the inventory cycle.
1 INTRODUCTION
Understanding these developments is important
for several reasons. First, shedding some light
Following the intensiﬁ
cation of the global on the roles played by one-off factors and
ﬁ nancial turmoil in autumn 2008, the prolonged structural changes in explaining the collapse in
period of rapid growth in global trade gave way trade provides useful input for trade forecasts.
to its most severe downturn in post-war history, Second, from an accounting perspective, these
with extra-euro area trade developing virtually in trade developments had a signiﬁ cant and
lockstep (see Chart 1). Moreover, the contraction pro-cyclical effect on euro area GDP growth
in global trade was considerably greater than the (see Chart 2).1 On the one hand, net trade
decrease in global GDP. The standard aggregate accounted for about two-ﬁ fths of the cumulated
models used to forecast international trade failed contraction in euro area GDP between the third
to fully explain the decline in trade, highlighting quarter of 2008 and the ﬁ rst quarter of 2009.
a potential “trade puzzle”. Against this backdrop, On the other hand, around one-half of total GDP
this article reviews the main reasons for the growth between the second quarter of 2009 and
contraction in global and euro area trade during 1 See also the article entitled “The latest euro area recession
the period 2008-09 and assesses the key
in a historical context” in the November 2009 issue of the
determinants of the subsequent recovery.
Monthly Bulletin.
Chart 1 Extra-euro area exports of goods
Chart 2 Contributions to quarterly euro
and world merchandise trade
area real GDP growth
(volume indices; September 2008 = 100; three-month moving
(percentage changes; percentage points)
averages)
extra-euro area exports
GDP growth
world merchandise trade
net trade
domestic demand
inventories
105
105
2
2
100
100
1
1
95
95
0
0
90
90
-1
-1
85
85
-2
-2
80
80
75
75
-3
-3
2005
2006
2007
2008
2009
2007
2008
2009
Sources: Eurostat (external trade statistics) and CPB Netherlands
Source: Eurostat (national accounts).
Bureau for Economic Policy Analysis.
Note: Net trade refers to goods and services.
ECB
Monthly Bulletin
August 2010
93

the ﬁ
rst quarter of 2010 was attributable quarter of 2009 before the recovery eventually
to net trade.2
took hold in the second half of the year. A very
similar picture emerges for global trade.
The remainder of this article is structured as
follows. Section 2 provides a set of stylised facts A “TRADE PUZZLE”?
about global and euro area trade during the recent
ﬁ nancial crisis. Section 3 reviews the main reasons
The severity of the contractions in global and
for the contraction in global and euro area trade euro area trade during the period 2008-09 was
during the period 2008-09 and Section 4 looks at unprecedented in post-war history. From peak
the key determinants of the subsequent recovery.3 to trough, world merchandise trade volumes
Section 5 puts developments in euro area trade contracted by 19%, while the volume of
into perspective by comparing them with those of extra-euro area exports and imports of goods
other major economies.
declined by 22% and 20% respectively. At their
nadir, extra-euro area trade ﬂ ows had returned
to 2005 levels, with the downturn lasting about
2 STYLISED
FACTS
16 months in the euro area and 11 months at the
global level.
During the initial phase of the ﬁ nancial crisis,
extra-euro area trade was fairly resilient, but it The collapse in global trade signiﬁ cantly
began to show signs of weakness in the second exceeded the contraction in global GDP, which
quarter of 2008 when the euro area recession resulted in a decrease in the trade-to-GDP ratio
started. It then proceeded to decline signiﬁ cantly
following the intensiﬁ
cation of the global 2 This article covers data up to the ﬁ rst quarter of 2010.
3 See also the boxes entitled “The downturn in euro area trade”
ﬁ nancial crisis in autumn 2008 (see Chart 3).
and “Recent developments in euro area trade” in the June 2009
The pace of the decline eased in the second
and February 2010 issues of the Monthly Bulletin.
Chart 3 Extra-euro area volumes of trade
Chart 4 Growth in world trade and GDP
in goods and world merchandise trade
(three-month-on-three-month percentage change)
(quarter-on-quarter percentage change)
x-axis: GDP
y-axis: Trade
imports
exports
1985-2007
world merchandise trade
2008-2009
10
10
6
6
4
4
5
5
2
2
0
0
0
0
-2
-2
-5
-5
-4
-4
-6
Q4 2008
-6
-10
-10
-8
-8
Q1 2009
-15
-15
-10
-10
2007
2008
2009
-2
-1
0
1
2
Sources: CPB Netherlands Bureau for Economic Policy Analysis
Source: ECB staff calculations.
and Eurostat (external trade statistics).
Note: The regression line is based on the sub-sample from the
ﬁ rst quarter of 1985 to the fourth quarter of 2007.
ECB
94 Monthly Bulletin
August 2010

A R T I C L E S
of about 15 percentage points. While it is well Another important characteristic of the
Recent developments in
known that trade ﬂ ows are generally more downturn in trade in 2008-09 was its
global and euro area
trade
volatile than overall economic activity (and truly global scope and high cross-country
positively correlated with it), the decline in global
synchronisation. Having expanded in the
trade over the fourth quarter of 2008 and the ﬁ rst overwhelming majority of countries up to
quarter of 2009 was markedly greater than might September 2008, exports declined precipitously
have been expected on the basis of historical worldwide as the turmoil on the global ﬁ nancial
regularities and the actual decline in GDP markets intensiﬁ ed. By January 2009 73% of
(see Chart 4). Therefore, it is not surprising that countries had witnessed a severe contraction
standard aggregate quantitative trade models in exports (i.e. three-month-on-three-month
considerably underestimated the downturn in growth rates below -10%) and a further 16% had
global and euro area trade in 2008-09, highlighting
seen their exports fall, but at a more moderate
a potential “trade puzzle”.4 Interestingly, the pace (see Chart 5). These developments indicate
observations from the second quarter of 2009 that most economies were hit by a common
onwards were again roughly in line with historical
shock or that cross-country transmission was
model relationships. Furthermore, previous exceptionally swift.
recessions did not give rise to a “trade puzzle” of
a comparable magnitude. Thus, it appears that
this puzzle may be related to the structural
changes in the global economy over the past few 4 See, for instance, C. Cheung and S. Guichard, “Understanding
years and the unprecedented nature of the recent
the world trade collapse”, Economics Department Working
Papers, No 729, OECD, 2009; and M. Bussière, A. Chudik and
ﬁ nancial crisis. Both factors will be discussed in
G. Sestieri, “Modelling global trade ﬂ ows: results from a GVAR
Section 3.
model”, Working Paper Series, No 1087, ECB, 2009.
Chart 5 Cross-country dispersion of export
Chart 6 Extra-euro area trade in goods
growth
and services
(percentages; share of countries)
(value indices, September 2008 = 100; three-month moving
average)
sharp contraction
goods exports
moderate contraction
goods imports
moderate expansion
services exports
sharp expansion
services imports
100
100
105
105
100
100
80
80
95
95
60
60
90
90
85
85
40
40
80
80
20
20
75
75
0
0
70
70
2007
2008
2009
2007
2008
2009
Sources: CPB Netherlands Bureau for Economic Policy Analysis
Source: ECB (balance of payments statistics).
and ECB staff calculations.
Note: Based on the three-month-on-three-month export growth
rate, each country is assigned to one of the above-mentioned
groups. The groups’ cut-off values are export growth rates
of -10%, 0% and 10%. The sample covers around 97% of
global merchandise trade.
ECB
Monthly Bulletin
August 2010
95

Chart 7 Extra-euro area export volumes
Chart 8 Growth in extra-euro area export
of goods by Broad Economic Categories
values of consumption goods
and contributions
(three-month-on-three-month percentage change)
(annual percentage change; percentage points; non-seasonally
adjusted)
total
total
capital goods
durable and semi-durable goods
intermediate goods
non-durable goods
consumer goods
15
15
15
15
10
10
10
10
5
5
0
0
5
5
-5
-5
0
0
-10
-10
-15
-15
-5
-5
-20
-20
-25
-25
-10
-10
2007 2008 2009
2007 2008 2009
Source: Eurostat (external trade statistics).
Source: Eurostat (Comext).
Note: The chart refers to the category “consumer goods not
elsewhere speciﬁ ed”, which excludes, for instance, cars as well
as food and beverages, and accounts for about 15% of total
extra-euro area exports of goods.
COMPOSITION OF EURO AREA TRADE
a relatively shallow downturn and mild recovery.
By contrast, extra-euro area exports of durable
During the ﬁ
nancial crisis the euro area consumer goods (as well as semi-durable
witnessed notable changes in the composition of consumer goods, such as apparel) contracted
its trade ﬂ ows, which may provide valuable sharply (see Chart 8).5 Durable goods, i.e. capital
insights into the determinants of the collapse in goods and (semi-) durable consumer goods, tend
trade. First, the decline in extra-euro area trade to respond quite strongly to changes in overall
in goods was signiﬁ cantly greater than that in economic activity, credit conditions and
services (see Chart 6). This reﬂ ected the fact uncertainty.6 In the light of the exceptional level
that global activity contracted more in the of uncertainty about the global economic
manufacturing sector than in the services sector. outlook during the ﬁ
nancial crisis, many
Second, the share of services in euro area value consumers and ﬁ rms worldwide took a “wait-
added is much larger (around 70%) than that in and-see” approach and postponed parts of their
euro area trade (around 25%), resulting in a planned expenditure, particularly on durable
larger decline in trade than in value added. goods. At the same time, they may also have
Third, extra-euro area exports contracted across found it more difﬁ cult
to
ﬁ nance
all main goods categories, but the decline was “big-ticket items”.
not uniform. Looking at the breakdown of
goods exports by Broad Economic Categories,
intermediate and capital goods recorded a 5 A similar development was observed in the United States.
See J. Wang, “Durable goods and the collapse of global
more severe downturn than consumer goods
trade”, Economic Letter, Vol. 5, No 2, Federal Reserve Bank
(see Chart 7). A more detailed breakdown
of Dallas, 2010.
6 See the box entitled “Household consumption of durable
reveals that exports of non-durable consumer
goods during the latest recession” in the July 2010 issue of the
goods – in particular food and beverages – saw
Monthly Bulletin.
ECB
96 Monthly Bulletin
August 2010

A R T I C L E S
Chart 9 Extra-euro area export volumes
Chart 10 Extra-euro area export volumes
Recent developments in
of goods to selected destinations
of intermediate goods and PMI global stocks
global and euro area
of purchases
trade
(three-month-on-three-month percentage change)
(index; September 2008 = 100; mean-adjusted diffusion index)
total
exports of intermediate goods
United States
PMI global stocks of purchases (right-hand scale)
United kingdom
China
other non-euro area EU Member States
20
20
110
6
15
15
105
4
10
10
2
100
5
5
0
95
0
0
-2
90
-5
-5
-4
85
-10
-10
-6
-15
-15
80
-8
-20
-20
75
-10
2007
2008
2009
2007
2008
2009
Source: Eurostat (external trade statistics).
Sources: Eurostat (external trade statistics) and Markit.
Note: “Other non-euro area EU Member States” includes all
non-euro area EU countries except Denmark, Sweden and the
United Kingdom.
Finally, the contraction in extra-euro area demand was also one of the main drivers behind
exports of goods was broad based across the collapse in euro area trade during 2008-09
destinations, but the recovery was more uneven and subsequently its recovery.8 As the ﬁ nancial
(see Chart 9). Exports to Asia – in particular crisis intensiﬁ ed in late 2008, consumers cut
China – rebounded quickly on the back of
spending and businesses scaled down production
substantial ﬁ scal stimuli in that region, while and investment at the global level. As a result,
those to other major destinations recovered only global activity and hence demand for euro area
with a considerable delay.
exports plummeted. The fact that the global
contraction in private demand was skewed
towards durable goods (see Section 2) partly
3
EXPLANATIONS FOR THE COLLAPSE
explains why trade contracted more signiﬁ cantly
IN TRADE DURING 2008-09
than GDP, in that the share of durable goods in
international trade is much higher than their
A SEVERE DROP IN DEMAND SKEWED TOWARDS
share in domestic value added.9
TRADABLE GOODS
7 See R. Anderton and F. di Mauro, “The external dimension of
According to standard trade forecast models,
the euro area: Stylised facts and initial ﬁ ndings”, in F. di Mauro
and R. Anderton (eds.), The external dimension of the euro area:
ﬂ uctuations in foreign demand – captured by the
Assessing the linkages, Cambridge University Press, 2007.
trade-weighted real imports of the euro area’s 8 According to some estimates, 70% of the collapse in global trade
trading partners – account for around 70% to
in 2008-09 can be explained by changes in ﬁ nal demand alone.
See R. Bems, R. C. Johnson and K.-M. Yi, “Demand spillovers
80% of the changes in extra-euro area export
and the collapse of trade in the global recession”, Working Paper
volumes, with the remainder being largely
No 10/142, IMF, June 2010.
9 See C. Engel and J. Wang, “International trade in durable goods:
attributable to movements in the exchange rate
Understanding volatility, cyclicality, and elasticities”, Working
and relative export prices.7 Clearly, foreign
Paper No 13814, NBER, 2008.
ECB
Monthly Bulletin
August 2010
97

The shock to ﬁ nal demand was also exacerbated STRUCTURAL CHANGES RELATED
by an inventory effect.10 In the ﬁ nal quarter of 2008
TO INTERNATIONAL SUPPLY CHAINS
and in early 2009, the global Purchasing Managers’
Index of stocks of purchases – a measure of pre-
Recent empirical evidence suggests that trade
production inventory levels – fell steeply. At the has become more responsive to business
same time, there was a sharp contraction in euro cycle ﬂ uctuations over the past few decades,
area exports of intermediate goods (see Chart 10). owing to structural changes in the world
Therefore, global production appears to have drawn
economy. According to some estimates, the
largely on existing stocks of intermediate goods elasticity of world trade to world income has
for some time and thus have curbed trade in these risen from 2.8 in the 1980s to 3.7 in the 2000s
goods. As ﬁ rms also ran down post-production (see Chart 11).12 Furthermore, it appears to
inventories in order to restore inventory-to-sales have been particularly high, at 4.7, during
ratios to their optimal level, a similar effect appears
previous downturns (as compared with tranquil
to have affected trade in ﬁ nal goods.
times), indicating that trade adjustments may
sometimes be characterised by non-linearities
More generally, in the euro area and other and asymmetries. Consequently, the contraction
major economies, the contraction in the trade-
in world trade, relative to the fall in GDP, was
intensive GDP components, such as investment,
more pronounced during the period 2008-09
was larger than that in the other components, than during past recessions.
such as government consumption. These
different movements in the components of To some extent, the gradual increase in the
GDP account for a signiﬁ cant part of the elasticity of trade has been driven by the
contraction in global trade.11
international fragmentation of production over
the past two decades. Propelled by trade
In summary, the sharp contraction in demand liberalisation and technological advances,
following the intensiﬁ
cation of the global international production networks have gained
ﬁ nancial crisis was the main driver behind the drastically in importance (see Chart 12). They
collapse in global and euro area trade. The nature have stimulated trade in intermediate goods and
of this demand shock also helps to clarify some of thereby boosted the import content of GDP
the stylised facts identiﬁ ed in Section 2. First, the components in many economies, including the
underlying conﬁ dence and liquidity shock appears
euro area (see Box 1).13 In such an environment,
to have hit all major economies at the same time, any decrease in global GDP (measured in terms
partly accounting for the high cross-country of value added) may trigger a signiﬁ cantly larger
synchronisation of the collapse in trade. Second, decline in trade (measured in gross terms),
the impact on the intensively traded goods and provided that marginal trade disproportionately
import-intensive components of demand was involves vertically fragmented industries. With
particularly strong, resulting in a larger decline regard to the recent ﬁ nancial crisis, there is
in trade than in GDP. Third, the fact that services
cannot be stored partly accounts for the relatively 10 See G. Alessandria, J. P. Kaboski and V. Midrigan, “The Great
small decline in trade in services, as it was less
Trade Collapse of 2008-09: An inventory adjustment?”, Working
Paper No 16059, NBER, 2010.
affected by the severe inventory adjustment. 11 See R. Anderton and T. Tewolde, “Turmoil, global trade and
Overall, however, the explanatory power of
the internationalisation of production”, paper presented at
the conference “The global ﬁ nancial crisis”, University of
ﬂ uctuations in aggregate demand for both global
Nottingham, 10-11 November 2009, available at http://www.
and euro area export growth was lower than usual
nottingham.ac.uk/gep/documents/china/conferences/2009/bob-
in late 2008 and early 2009. While this may be due
anderton.pdf
12 See C. Freund, “The trade response to global downturns:
partly to different movements in the components
historical evidence”, Policy Research Working Paper No 5015,
of demand and their differential import intensities,
The World Bank, 2009.
13 See, for instance, D. Hummels, J. Ishii and K.-M. Yi, “The nature
as well as to possible non-linearities, some supply-
and growth of vertical specialization in world trade”, Journal of
side factors also appear to be at play.
International Economics, Vol. 54, Issue 1, 2001.
ECB
98 Monthly Bulletin
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A R T I C L E S
Chart 11 Elasticity of world trade to world
Chart 12 Index of vertical specialisation in
Recent developments in
income
the global economy
global and euro area
trade
(index; 1975 = 1)
4.0
4.0
35
35
3.7
3.5
3.4
3.5
30
30
3.0
3.0
2.8
25
25
2.5
2.5
2.1
20
20
1.9
2.0
2.0
15
15
1.5
1.5
10
10
1.0
1.0
0.5
0.5
5
5
0.0
0.0
0
0
1960s
1970s
1980s
1990s
2000s
1975
1980
1985
1990
1995
2000
2005
Source: C. Freund, “The trade response to global downturns:
Sources: J. Amador and S. Cabral, “Vertical specialization
historical evidence”, Policy Research Working Paper No 5015,
across the world: A relative measure”, North American Journal
The World Bank, 2009.
of Economics and Finance, 2009.
Note: This index is a measure of the global volume of imports
used in the production of exports.
indeed some evidence that trade contracted complements the idea that the majority of
systematically more in industries that are closely
countries were hit by a common shock and is
involved in vertical production networks, consistent with recent evidence showing that
controlling for various industry characteristics.14 vertical linkages contribute signiﬁ cantly to
Of course, this ﬁ nding has to be viewed against aggregate output co-movement across countries.15
the backdrop of the considerable long-term
beneﬁ ts of international specialisation and trade.
The fact that international production networks 14 See A. Levchenko, L. Lewis and L. Tesar, “The collapse of
allow for the instantaneous transmission
international trade during the 2008-2009 crisis: In search of the
of demand shocks to all countries involved
smoking gun”, Working Paper No 16006, NBER, 2010.
15 J. di Giovanni and A. Levchenko, “Putting the parts together:
partly explains why the downturn was highly
Trade, vertical linkages, and business cycle comovement”,
synchronised across countries. This hypothesis
American Economic Journal, Vol.2, Issue 2, 2010.
Box 1
THE IMPORT CONTENT OF EURO AREA GDP COMPONENTS
The vertical fragmentation of production across borders has been accompanied by a surge in
international trade in intermediate goods and services. Partly as a result of this development, the
share of both exports and imports in euro area GDP has increased signiﬁ cantly, rising from around
30% in 1996 to around 40% of GDP in 2007, according to the national accounts statistics (which
include both intra and extra-euro area trade). The international integration of production has also
contributed to the high co-movement of exports and imports. According to Eurostat’s external
trade statistics, the contemporaneous correlation coefﬁ cient for quarter-on-quarter growth rates
ECB
Monthly Bulletin
August 2010
99

of extra-euro area imports and exports of
Import intensity of euro area GDP
components
goods was around 0.6 for the period 2000-07
(the most recent years are excluded owing to
(percentages)
their exceptionality), up from around 0.2 for
imports embodied in euro area domestic production
the period 1992-99. Furthermore, the import
direct imports for final use
content of euro area exports has increased
25
25
over time, i.e. euro area exports increasingly
20
20
embody foreign value added. This box sheds
some light on the importance of imports for
15
15
the euro area economy. First, it compares the
relative import intensities of euro area GDP
10
10
components, and second, it compares the use
5
5
of imported versus domestic inputs in euro
area production.
0
0
exports gross
capital
private
government
formation
consumption consumption
The measure of the import intensity of GDP
Sources: ECB and R. van der Helm and R. Hoekstra “Attributing
expenditure components used in this box takes
Quarterly GDP Growth Rates of the Euro Area to Final Demand
Components”, Statistics Netherlands, 2009.
into account two effects: ﬁ rst, the amount of
Note: Exports and imports refer to extra-euro area trade.
At the time of compilation, data limitations prevented separate
goods and services imported directly, and
compilation of changes in inventories data.
second, foreign value added embodied in
domestically produced goods and services for consumption, investment or export purposes.
Foreign value added is embodied in domestic production either directly, in the form of imported
inputs, or indirectly, via domestic inputs which, in turn, have been produced with the help of
foreign inputs.
These two effects can be estimated for the various euro area GDP components using the euro
area input-output table for 2005.1 Among the GDP components, extra-euro area exports have the
highest total import intensity – around 23% of total exports to the rest of the world (see Chart).2
This share is the sum of the direct imports (around 6%) – which are then re-exported – and the
import content embodied in domestically produced exports (around 17%). These estimates do
not include intra-euro area trade.
The import content of euro area investment and private consumption is lower, but still sizeable.
Estimates indicate that around 18% and 15% respectively of total investment and private
consumption are import-related, with directly imported goods accounting for about one-third of
the total import content for both of these expenditure components. Government consumption has
the smallest import intensity, amounting to around 6% in total, most of which reﬂ ects imports
embodied in the intermediate inputs supplied by domestic producers.
1 The input-output table for the euro area as an aggregate was commissioned by the ECB and compiled by Statistics Netherlands using
individual country input-output tables published by national statistical institutes. For more information, see R. van der Helm and
R. Hoekstra, “Attributing quarterly GDP growth rates of the euro area to ﬁ nal demand components”, Statistics Netherlands, 2009.
The estimates for the import content of consumption, gross capital formation and exports are based on nominal values available in the
input-output table with a breakdown for 30 sectors. Imports and exports refer to euro area trade with the rest of the world. At the time
the input-output table was constructed, data limitations meant that it was decided not to compile changes in inventory data separately.
2 See also the box entitled “The import content of exports and the internationalisation of production”, in “Competitiveness and the export
performance of the euro area” by a task force of the Monetary Policy Committee of the ESCB, Occasional Paper Series, No 30, ECB,
2005. According to this paper, the euro area import content of exports to countries outside the EU was around 20% in 2000. The paper
uses a weighted aggregation of input-output tables for selected euro area countries, covering around 55% of the euro area. By contrast,
this box uses an estimated input-output table for the euro area aggregate and refers to euro area trade vis-à-vis the rest of the world.
Notably, the import content varies signiﬁ cantly across euro area countries.
ECB
100 Monthly Bulletin
August 2010

A R T I C L E S
Recent developments in
The aggregate ﬁ gures for the import content of euro area production conceal a considerable
global and euro area
amount of variation across sectors, with the industrial sector having the largest share (around
trade
20%) of inputs directly imported from outside the euro area. Standing at around 10%, the share
of imported inputs is smaller for the services sector.
Overall, the euro area economy depends quite strongly on imports from other countries, particularly
for exports and, to a lesser extent, investment and private consumption. The recent downturn
in the euro area was characterised by severe declines in both investment – which accounted for
more than half of the contraction in euro area real GDP – and gross exports. It also was more
pronounced in the industrial sector than in the services sector.3 These developments triggered a
sharp decline in imports, limiting the negative contribution of net trade to euro area GDP.
3 For a discussion of investment, trade and sectoral developments during the downturn, see the box entitled “Euro area investment in
the current downturn” in the July 2009 issue of the Monthly Bulletin, the box entitled “Recent developments in euro area trade” in
the February 2010 issue of the Monthly Bulletin and the box entitled “The current euro area recovery across economic sectors from a
historical perspective” in the April 2010 issue of the Monthly Bulletin.
TIGHTENING FINANCIAL CONDITIONS
result of the tightening ﬁ nancial conditions for
exporters and importers. Box 2 provides an
The contraction in trade during the period overview of the ﬁ nancial instruments geared
2008-09 may have differed from past at facilitating international trade, commonly
contractions, not only because of signiﬁ cant known as “trade ﬁ nance”. Of course, ﬁ rms
changes in the global economy itself, but also engaged in international trade will also be
because of the speciﬁ c nature of the shock. In affected by ﬁ nancial conditions outside trade
particular, the turmoil on the global ﬁ nancial ﬁ nance, e.g. when foreign customers ﬁ nd it
markets during 2008-09 may have had a direct more difﬁ cult to ﬁ nance “big-ticket items”, such
impact on global and euro area trade as a as capital or durable consumer goods.
Box 2
AN INTRODUCTION TO TRADE FINANCE
Broadly deﬁ ned, trade ﬁ nance includes all types of loans, insurance policies or guarantees that
are directly linked to cross-border sales of goods and services.1 The common feature of all these
instruments is that they aim to facilitate international trade, either in the form of ﬁ nancing or risk
management.
Since shipping goods from the factory to customers overseas takes time, many exporters face
a lag between production and payment by the importer.2 Therefore, they may have to extend
trade credit to their customers – a form of trade ﬁ nance known as an “open account transaction”.
1 This deﬁ nition of trade ﬁ nance is widely used in the literature, although some authors prefer a narrower deﬁ nition that excludes, for
instance, working capital ﬁ nancing. For background information, see M. Auboin, “Boosting the availability of trade ﬁ nance in the
current crisis: Background analysis for a substantial G20 package”, CEPR Policy Insight No 35, 2009; and T. Dorsey, “Trade ﬁ nance
stumbles”, Finance and Development, Vol. 46, No 1, March 2009.
2 For more details on the time lags involved in international trade, see S. Djankov, C. Freund and C. S. Pham, “Trading on time”, Policy
Research Working Paper No 3909, The World Bank, 2006; and D. Hummels, “Time as a trade barrier”, GTAP Working Paper Series,
No 18, 2001.
ECB
Monthly Bulletin
August 2010 101

Alternatively, exporters may insist on “cash in advance”, which also eliminates the risk of
non-payment. While both forms of ﬁ nancial relationship do not require the assistance of banks
or other institutions, they are commonly seen as being part of trade ﬁ nance.
However, ﬁ rms may ﬁ nd it useful to have recourse to specialised intermediaries, such as
commercial banks, private insurers, national export credit agencies and multilateral development
banks. For instance, a bank can provide a letter of credit, which constitutes a commitment by the
bank on behalf of the importer that payment will be made as soon as the terms and conditions
stated in the letter are met. While this service is relatively costly, it reduces the risk of non-
payment, as long as the bank itself is ﬁ nancially robust and healthy. Alternatively, an intermediary
(the exporter’s bank) can be brought in to collect payment from the importer – through the
importer’s bank – as soon as the exporter presents the shipping documents, usually without a
veriﬁ cation process or recourse in the event of non-payment (“documentary collections”).
Furthermore, export credit insurance and related instruments (e.g. export factoring or forfeiting)
allow exporters to mitigate or transfer the risk of non-payment in the case of open account
transactions. Commercial banks also provide export working capital ﬁ nancing for the entire
cash cycle, either in the form of short-term loans or a revolving line of credit. Finally, in many
countries, exporters are given support by national agencies, e.g. in the form of government-
backed guarantees.
All these trade ﬁ nance instruments are vulnerable to a deterioration in liquidity conditions
and the evaporation of trust. In times of ﬁ nancial turmoil, commercial banks and insurers are
likely to introduce more stringent lending conditions and increase the spreads on trade ﬁ nance
instruments. At the same time, exporters may attempt to switch from open account transactions to
cash-in-advance transactions, which may be difﬁ cult if the importers are short of liquidity
themselves. In brief, one would expect ﬁ nancial market turmoil to be accompanied by a
deterioration in trade ﬁ nance conditions. As a result of such supply-side disruptions, some
international transactions, which would be warranted by ﬁ nal demand, may not take place.
In the wake of the ﬁ nancial crisis, the aggregate the signiﬁ cant decline in other instruments, such
values of bank-intermediated trade ﬁ nance as letters of credit.
contracted worldwide. Survey-based evidence
clearly indicates that this decline was mainly the Surveys also show that importers and exporters
result of lower trade ﬂ ows (i.e. demand for trade were faced with more stringent lending standards
ﬁ nance fell as trade itself declined).16 The decline
(e.g. in the form of higher collateral requirements
in the bank-intermediated trade ﬁ nance business or shorter tenors) and higher trade ﬁ nance
appears to have been lower than that in trade costs during the global ﬁ nancial crisis. Spreads
values.17 This ﬁ nding should be interpreted with increased across the board as many ﬁ nancial
caution, however, as the aggregate ﬁ gures mask institutions faced higher funding costs or capital
shifts in the composition of overall trade requirements and reassessed counterparty risk
ﬁ nance. First of all, there has been a shift away
from open account transactions towards 16 See the two reports by the IMF and the Banker’s Association for
more secure cash-in-advance transactions and
Finance and Trade entitled “IMF-BAFT Trade Finance Survey:
bank-intermediated trade ﬁ nance (see Chart 13),
A survey among banks assessing the current trade ﬁ nance
environment”, March 2009 and “Global Finance Markets:
possibly signalling exporters’ reassessment of
The Road to Recovery”, September 2009.
counterparty risk. Moreover, some ﬁ rms’ higher 17 For a comparison of the changes in trade ﬁ nance values and
trade values, see J.-P. Chauffour and T. Farole, “Trade ﬁ nance
demand for export credit insurance and similar
in crisis: market adjustment or market failure?”, Policy Research
instruments may have partly counterbalanced
Working Paper No 5003, The World Bank, 2009.
ECB
102 Monthly Bulletin
August 2010

A R T I C L E S
in an environment of exceptional uncertainty
Chart 13 Breakdown of global trade finance
Recent developments in
and sharp exchange rate movements.
according to transaction type
global and euro area
trade
Increases in trade costs may have severe (percentages)
ramiﬁ
cations for international trade. First,
open account transactions
bank-intermediated transactions
exporters may ﬁ nd it difﬁ cult to raise the working
cash-in-advance transactions
capital needed to ﬁ nance their international
100
100
activities, while importers may not be able to
pay for their purchases in advance. Second, tight
80
80
ﬁ nancial conditions appear to hamper international
60
60
transactions more than domestic transactions. When
the health of an exporter’s main reference bank
40
40
deteriorates, it is likely to have a greater negative
20
20
impact on foreign sales than on domestic sales.18
This may be explained by the fact that international
0
0
2007
2008
2009
transactions tend to be associated with a greater
Source: World Economic Outlook, IMF, October 2009.
need for working capital ﬁ nancing (given the
time lags involved) and are often perceived by
banks as being more risky than similar domestic Some may argue, however, that the impact of
transactions (e.g. owing to differences in legal tightening conditions in bank-intermediated
systems across countries). In addition, trade trade ﬁ nance may have been mitigated by the
ﬁ nance is provided largely at short maturities and growing recourse to liquidity provided along
therefore needs to be constantly renewed. Third, international supply chains.22 Large, liquid
the complex nature of international production companies (“deep pockets”) with access to
networks implies that conﬁ dence and liquidity global ﬁ nancial markets – and often at the centre
shocks – even when conﬁ ned to a small number of these production networks – have an incentive
of ﬁ rms – can be quickly transmitted across to alleviate the liquidity constraints of afﬁ liates,
countries. This can lead to supply bottlenecks suppliers and customers to sustain production.23
that disrupt the entire network and magnify the
contraction in trade.19 For instance, ﬁ nal goods 18 See M. Amiti and D. E. Weinstein, “Exports and ﬁ nancial shocks”,
producers may have to temporarily scale down
Working Paper No 15556, NBER, 2009. The authors also ﬁ nd that
their exports because ﬁ nancially distressed
the deterioration in trade ﬁ nance conditions accounted for about
one-third of the decline in Japanese exports during the Japanese
suppliers are no longer in a position to provide
ﬁ nancial crises of the 1990s.
essential intermediate goods on time. Concerns 19 For a closely related theoretical model, see N. Kiyotaki and J. Moore,
about the liquidity position of ﬁ nal goods
“Credit chains”, mimeo, London School of Economics, 1998.
20 See J.-C. Bricongne, L. Fontagné, G. Gaulier, D. Taglioni and
producers or retailers, in turn, may discourage
V. Vicard, “Exports and sectoral ﬁ nancial dependence: evidence
foreign suppliers from timely delivery.
on French ﬁ rms during the great global crisis”, Working Paper
Series, ECB, forthcoming; and M. Wynne, “The ﬁ nancial crisis,
trade ﬁ nance and the collapse of world trade”, in Globalization
Empirical evidence on the recent ﬁ nancial crisis
and Monetary Policy Institute 2009 Annual Report, Federal
further underpins the idea that international trade
Reserve Bank of Dallas, 2009.
21 The OECD estimates that trade ﬁ nance accounted for about
and ﬁ nancial conditions are closely intertwined.
one-third of the decline in global trade in the winter of 2008-09.
In fact, exports of ﬁ rms reliant on external ﬁ nance
See Economic Outlook, OECD, June 2009.
22 See M. Kolasa, M. Rubaszek and D. Taglioni, “Firms in the Great
were particularly affected by the crisis.20 Thus,
Global Recession: The role of foreign ownership and intra-group
the difﬁ culties faced by ﬁ nancial institutions
ﬁ nance”, Working Paper, Narodowy Bank Polski, forthcoming;
worldwide during the crisis appear to have
and C. Altomonte and G. Ottaviano, “Resilient to the crisis?
Global supply chains and trade ﬂ ows”, in R. Baldwin (ed.),
resulted in supply-side disruptions to international
The Great Trade Collapse: Causes, Consequences and
trade. Crucially, this effect compounds the effects
Prospects, CEPR, 2009.
23 See, for instance, F. Boissay and R. Gropp, “Trade credit defaults
operating through the demand side, partly
and liquidity provision by ﬁ rms”, Working Paper Series, No 753,
accounting for the “trade puzzle”.21
ECB, 2007.
ECB
Monthly Bulletin
August 2010 103

In this respect, international production networks
Chart 14 Import and export volumes of
may have been a source of resilience during
goods by country groups
the recent ﬁ nancial crisis, preventing an even
sharper downturn in global and euro area trade.
(three-month-on-three-month percentage change)
However, it appears that this partial substitution
exports of advanced economies
imports of advanced economies
of bank-intermediated trade ﬁ nance was not
exports of emerging economies
sufﬁ cient to shield international trade from the
imports of emerging economies
direct impact of the ﬁ nancial crisis.
15
15
PROTECTIONISM
10
10
5
5
During the Great Depression of the 1930s,
many governments succumbed to protectionist
0
0
pressures, thereby exacerbating the global
downturn. The recent ﬁ nancial crisis has also
-5
-5
seen greater recourse to restrictive trade policy
measures. So far, the scope of these measures
-10
-10
has been fairly narrow. The import-restricting
measures introduced between October 2008
-15
-15
2007
2008
2009
and mid-February 2010 by G20 members cover
around 2.0% of G20 imports, which is equivalent
Source: CPB Netherlands Bureau for Economic Policy Analysis.
Note: The series include intra-regional trade.
to around 1.2% of total world imports. The
induced reduction in trade volumes is likely
to be signiﬁ cantly lower than these ﬁ gures. of 2009 and continued into the ﬁ rst half of 2010.
The timing of these measures suggests that the In the advanced economies, both imports and
increase in protectionism was indeed mostly a exports expanded in late 2009 at a pace well
result of the collapse in trade.24
above the average for the past two decades.
In the emerging economies, however, the
It is difﬁ cult to capture more covert forms of rebound in trade was even more pronounced, on
protectionism, particularly those related to the both the import and export side (see Chart 14).
ﬁ scal stimulus packages implemented worldwide,
This was due not only to resilient GDP growth
such as “buy-local clauses”.25 Furthermore, weak in many emerging economies and the increased
labour markets, an uneven recovery and the lack importance of trade between them, but also
of room for ﬁ scal manoeuvre in many countries to demand impulses from some advanced
could increasingly tempt governments to resort to economies – partly transmitted through
protectionism.26 Looking back at the 1970s, international supply chains.
it can be particularly difﬁ
cult to remove
non-tariff protectionist measures. Therefore, an
intensiﬁ cation of protectionism across the world 24 See H. K. Kee, C. Neagu and A. Nicita, “Is protectionism on the
remains a downward risk to the global economic
rise? Assessing national trade policies during the crisis of 2008”,
Policy Research Working Paper No 5274, The World Bank, 2010.
outlook and should be strongly resisted.
The authors estimate that the increase in protectionism accounted
for less than 2% of the collapse in world trade in 2009.
25 See the box entitled “The risks of protectionism” in the
September 2009 issue of the Monthly Bulletin and the article
4
THE RECENT RECOVERY IN GLOBAL
entitled “Assessing global trends in protectionism” in the February
AND EURO AREA TRADE
2009 issue of the Monthly Bulletin. See also S. Evenett (ed.),
“Unequal compliance: The 6th GTA Report”, CEPR, 2010.
26 During the Great Depression, trade policy was particularly
Following the severe contraction in late 2008
restrictive in countries that could not resort to alternative
expansionary policies. See B. Eichengreen and D. A. Irwin,
and early 2009, a recovery in global and euro
“The slide to protectionism in the Great Depression: Who
area trade started to take hold in the second half
succumbed and why?”, Working Paper No 15142, NBER, 2009.
ECB
104 Monthly Bulletin
August 2010

A R T I C L E S
Notably, the upswing in global trade was the ﬁ nancial system and of the decision by the
Recent developments in
supported by some of the factors that had G20, in April 2009, to ensure the availability of
global and euro area
trade
actually curbed trade growth during the USD 250 billion for trade ﬁ nance over the period
downturn. First, although the trade-intensive 2009-11. However, lending standards and trade
global manufacturing sector had contracted ﬁ nance costs have generally remained above
more than the services sector, it rebounded pre-downturn levels, which may have prevented
vigorously, thereby supporting international a stronger recovery in trade.29 Following past
trade. Indeed, this can be seen as a correction of global downturns, industries reliant on external
the severe contraction following the global ﬁ nance experienced a more sluggish recovery
conﬁ dence and liquidity shock in late 2008. in exports than other industries, controlling
Second, the car-scrapping schemes and related for demand effects. This suggests that supply-
measures implemented in many economies side ﬁ nancial frictions also affect the recovery
helped to revive, at least temporarily, the of trade. Therefore, a sustainable recovery in
automobile industry, whose output is traded global and euro area trade not only requires
intensively.27 This contributed to a sharp improvements in global demand conditions, but
increase in extra-euro area exports of cars, as also a robust and healthy ﬁ nancial system.
well as related parts and components, which had
witnessed a particularly severe downturn
(see Chart 15).28 Third, the inventory effect 5
RELATIVE EXPORT PERFORMANCE
started to reverse globally towards the end of
2009, which further supported trade.
While the contraction in euro area exports in
2008-09 was severe by historical standards,
In parallel, global supply chains appear to all other major economies experienced equally
have been gradually reactivated, as signalled severe downturns in trade. The subsequent
by the rebound in intermediate goods trade. recovery, however, was weaker in the euro
Moreover, trade ﬁ
nance conditions eased area than in most other major economies
globally on account of the various policy (see Chart 16). Overall, the euro area appears
measures implemented worldwide to stabilise to have lost export market share between the
ﬁ rst quarter of 2008 and the ﬁ nal quarter of
Chart 15 Extra-euro area export values
2009, as indicated by a negative “export growth
of goods
gap” (i.e. the growth differential between euro
area exports and total foreign import demand).
(year-on-year percentage change; non-seasonally adjusted)
The most recent data for 2010 suggest some
passenger motor cars
correction in this regard, owing in particular,
total
but not exclusively, to the growing demand for
40
40
capital goods.
30
30
20
20
During the downturn, import demand
contracted across the globe, dominating other
10
10
determinants of export growth. Thereafter,
0
0
country-speciﬁ c factors – such as the product
-10
-10
-20
-20
27 OECD data show that in Germany, for instance, the automobile
industry accounts for about 21% and 13% of total manufacturing
-30
-30
exports and imports respectively.
-40
-40
28 For an overview of the recent measures to support the car
industry, see D. Haugh, A. Mourougane and O. Chatal,
-50
-50
“The automobile industry in and beyond the crisis”, Economics
1999
2001
2003
2005
2007
2009
Department Working Papers, No 745, OECD, 2010.
29 See, for instance, the report entitled “Rethinking trade ﬁ nance
Source: Eurostat (Comext).
2010”, International Chamber of Commerce, 2010.
ECB
Monthly Bulletin
August 2010 105

Chart 16 Merchandise export volume growth
Chart 17 Composition of world imports and
in selected economies
euro area foreign demand
(percentage changes; percentage points)
(percentages; average for 2000-08)
peak to trough
United States
trough to end-2009
United Kingdom
export growth gap (right-hand scale)
other EU Member States
other advanced economies
emerging Asia
other emerging economies
50
25
100
100
40
20
90
90
30
15
80
80
20
10
70
70
10
5
60
60
0
0
50
50
-10
-5
40
40
-20
-10
30
30
-30
-15
20
20
-40
-20
10
10
-50
-25
0
0
Japan
United
euro
United
world
world imports
euro area foreign demand
States
area
Kingdom excluding
euro area
Sources: CPB Netherlands Bureau for Economic Policy Analysis,
Sources: IMF and ECB staff calculations.
Eurostat and ECB staff calculations.
Notes: Euro area foreign demand is a trade-weighted measure
Note: “Euro area” excludes intra-euro area trade. The “export
of the total import volumes of the euro area’s trading partners.
growth gap” is computed as the percentage point difference
“World imports” excludes the euro area.
between export growth and growth in country-speciﬁ c foreign
demand between the ﬁ rst quarter of 2008 and the ﬁ nal quarter
of 2009. Foreign demand is proxied by the trade-weighted real
imports of the euro area’s trading partners.
and country composition of exports, as well the impact of these developments in price
as price competitiveness – made more of competitiveness was arguably mostly felt
an impact amid an uneven recovery of the during the trade recovery and thus contributed
global economy. Above all, euro area exports to its uneven shape.
were constrained during the recovery by
relatively weaker import demand in some
of its major export markets, particularly the 6 CONCLUSIONS
non-euro area EU Member States. At the
same time, the increase in export growth The unprecedented contraction in global
stemming from buoyant imports in emerging and euro area trade in the wake of the global
Asia was smaller for the euro area than for economic downturn of 2008-09 gave rise to
other major economies, particularly compared a “trade puzzle”. The contraction in trade
with Japan, owing to the relatively lower was signiﬁ cantly larger than might have been
weight of emerging Asia in euro area exports expected on the basis of historical regularities,
(see Chart 17). The signiﬁ cant movements leading to the failure of aggregate quantitative
in effective exchange rates, particularly in trade models to predict the severity of this
the ﬁ nal quarter of 2008, are also likely to downturn. Recent empirical evidence suggests
have affected the export performance of all that the puzzle was due partly to various factors
major economies. However, in the light of that exacerbated the impacts of the global
the time lags in exchange rate pass-through, economic downturn on international trade.
ECB
106 Monthly Bulletin
August 2010

A R T I C L E S
First, the decline in global and euro area GDP
Recent developments in
was focused mainly in the trade-intensive
global and euro area
trade
components (such as investment), with a
particularly large drop in demand for durable
goods. Second, the expansion of international
production networks over the past two decades
appears to have increased the responsiveness
of trade to ﬂ uctuations in demand and may
have acted as an additional ampliﬁ cation
mechanism. Third, trade was hampered by
ﬁ nancial constraints worldwide. In brief, the
unusual responsiveness of global and euro area
trade during the recent ﬁ nancial crisis appears to
be related to both the structural changes in the
global economy and the exceptional nature of
the crisis itself.
In the second half of 2009 global trade and –
with some lag – euro area trade started to
recover from its worst downturn in post-war
history. The rebound can be seen as a correction
of the severe contraction following the
intensiﬁ cation of the ﬁ nancial crisis in late 2008.
However, it was also supported by temporary
effects, such as the turn in the inventory cycle
and government car-scrapping schemes. The
sustainability of the recovery in global and euro
area trade will depend critically not only on a
further strengthening of private demand, but
also on the robustness and health of the global
ﬁ
nancial system. Finally, an intensiﬁ cation
of protectionism across the world remains a
downward risk to the global economic outlook
and should be strongly resisted.
ECB
Monthly Bulletin
August 2010 107

HARMONISED ECB STATISTICS ON EURO AREA
INVESTMENT FUNDS AND THEIR ANALYTICAL
USE FOR MONETARY POLICY PURPOSES
A R T I C L E S
The ECB published harmonised statistics on the assets and liabilities of investment funds resident
Harmonised ECB statistics
in the euro area for the ﬁ rst time in December 2009.1 High-quality statistics on the activities of euro
on euro area investment
funds and their analytical
area investment funds are important to enhance monetary, ﬁ nancial and economic analyses.
use for monetary policy
This article sets out the main features and concepts of the new statistics and provides an overview
purposes
of the euro area investment fund industry. In this context, it also presents supplementary statistics
on euro area money market funds. It further shows how the new statistics can be used by the ECB
to analyse portfolio shifts, sectoral contributions to M3 developments, funding of the economy and
the impact of changes in net wealth on saving and consumption, also in combination with other
euro area statistics.
1 INTRODUCTION
This article presents the new data and explains
how they are used to enhance monetary, ﬁ nancial
The availability of reliable and timely and economic analyses. Section 2 deﬁ nes
information on the balance sheets of investment investment funds and their role in ﬁ nancial
funds is important for the ECB’s monetary, intermediation. It also provides a general
ﬁ nancial and economic analyses. Together with overview of the IF industry in the euro area
other monetary and ﬁ nancial statistics for the and an insight into the speciﬁ c national features
euro area,2 the new investment fund (IF) of the countries with the largest IF sectors.
statistics can give indications regarding changes Section 3 provides a description of the IF
in investors’ conﬁ dence and risk appetite and statistics published by the ECB and also includes
help in detecting and quantifying portfolio information on quarterly data published on euro
reallocations between monetary assets and area money market funds (MMFs; see box).
longer-term asset classes in a timely manner. Section 4 shows how the statistics are used for
The new IF statistics will also be used to support
regular analyses.
the ﬁ nancial stability analysis carried out by the
ECB. Investment fund activity is central to
ﬁ nancial stability surveillance for identifying 2
THE INVESTMENT FUND INDUSTRY
investment behaviour and its implications
IN THE EURO AREA
for ﬁ nancial sector developments. This article,
however, focuses on the analytical use of these ACTIVITIES OF INVESTMENT FUNDS
data for monetary policy purposes only.
Investment funds are ﬁ nancial investment
vehicles which raise capital from private and
The ECB has been publishing quarterly euro area
institutional investors by issuing shares and/or
IF balance sheet statistics since 2003. Until 2009
units and which invest the proceeds in
these statistics were neither fully harmonised nor
ﬁ nancial and non-ﬁ nancial assets. As ﬁ nancial
complete. At the end of 2009 new harmonised intermediaries, investment funds perform two
ECB statistics on euro area investment funds main functions. Firstly, they offer investors
were released. These provide a comparable
and complete picture of the IF industry within 1 These new statistics do not include the assets and liabilities of
money market funds, which are included instead in the statistics
the euro area, as well as detailed information
on the MFI sector.
on the assets held and liabilities incurred by 2 In particular, the MFI balance sheet and euro area accounts
the investment funds.3 The statistical reporting
statistics in parts 2 and 3 of the “Euro area statistics” section of
the Monthly Bulletin.
requirements are contained in Regulation 3 The main improvements of the new statistics were presented
ECB/2007/8 (hereafter the “Regulation”),4 which
in Box 2 of the January 2010 issue of the Monthly Bulletin.
4 Regulation (EC) No 958/2007 of the European Central Bank
is addressed to investment funds resident in the
of 27 July 2007 concerning statistics on the assets and liabilities
euro area.
of investment funds (ECB/2007/8).
ECB
Monthly Bulletin
August 2010 109

Chart 1 Role of investment funds in financial intermediation
ISSUERS AND OTHER COUNTERPARTS
INVESTMENT FUNDS
INVESTORS
- Financial
Assets
Liabilities
- Financial
institutions (e.g.
institutions
MFIs, insurance
(e.g. MFIs, insurance
- deposits
- IF shares/units
corporations,
corporations,
- bonds
- loans
pension funds,
pension funds,
- equity
- financial derivatives
investment funds)
investment funds)
- non-financial assets
- other liabilities
- Non-financial
- Households
- financial derivatives
corporations
- Non-financial
- other assets
- Government
corporations
agencies
- Government
agencies
Source: ECB.
opportunities to invest in a diversiﬁ ed pool of of credit institutions and also includes MMFs.
assets with a single purchase of shares/units
The OFI sector accounts for about one-fourth of
issued by an investment fund. Secondly, total assets and includes, alongside investment
investment funds provide a source of funding funds, institutions such as securitisation vehicles
to other sectors, such as monetary ﬁ nancial and security and derivative dealers. Insurance
institutions (MFIs), non-ﬁ nancial corporations corporations and pension funds (ICPFs) account
or government agencies. This is primarily carried for 12% of the ﬁ nancial sector’s total assets.
out through purchases of debt or equity securities
issued by these sectors. Investment funds may The euro area IF sector has grown signiﬁ cantly
also invest in assets other than securities, such as over the last decade. As shown in Chart 2,
bank deposits, real estate, commodities or the outstanding amount of IF shares/units
ﬁ nancial derivatives. Chart 1 illustrates the role issued stood at the end of 1998 at slightly over
of investment funds in ﬁ nancial intermediation.
€2 trillion. It reached almost €6 trillion at its
peak in 2007 before the ﬁ nancial crisis started
INVESTMENT FUNDS IN THE EURO AREA
to unfold. The value of IF shares/units then
FINANCIAL SECTOR
tumbled to around €4 trillion in early 2009,
In the euro area, investment funds represent before recovering to the current level above
around 10% of the ﬁ nancial sector in terms €5 trillion. This evolution reﬂ ects both the net
of total assets and are, together with further sales of shares/units by investment funds to their
intermediaries, included in a sub-sector investors and valuation effects, since in particular
entitled “other ﬁ nancial intermediaries” (OFIs) changes in stock market valuations have a
(see Table 1). The largest ﬁ nancial sub-sector strong inﬂ uence on the value of IF shares/units.
is the MFI sector, which accounts for about Chart 2 also shows how the outstanding amount
two-thirds. This sub-sector mainly consists of IF shares/units issued would have evolved
Table 1 Comparison of euro area financial intermediaries
(data as at Q4 2009)
Total
MFIs
ICPFs 1)
OFIs
Total
Of which MMFs
Total 1)
Of which IFs
Total assets (EUR billions)
52,784
33,535
1,233
6,421
12,828
5,371
As a percentage of total
100
64
2
12
24
10
Source: ECB.
1) Total ﬁ nancial assets.
ECB
110 Monthly Bulletin
August 2010

A R T I C L E S
Chart 2 Shares/units issued by euro area
Chart 3 Total assets of euro area
Harmonised ECB statistics
investment funds
investment funds, broken down by country
on euro area investment
funds and their analytical
(EUR billions)
(percentages; as at Q1 2010)
use for monetary policy
purposes
outstanding amounts
other
notional outstanding amounts
Spain
6
Italy
3
6,000
6,000
4
5,500
5,500
Luxembourg
The Netherlands
32
8
5,000
5,000
4,500
4,500
Ireland
4,000
4,000
9
3,500
3,500
3,000
3,000
2,500
2,500
France
Germany
19
19
2,000
2,000
1999
2001
2003
2005
2007
2009
Source: ECB.
Source: ECB.
Notes: Notional outstanding amounts are derived using the
outstanding amount as at the fourth quarter of 2000 and adding
the subsequent cumulative quarterly transactions (available since
the ﬁ rst quarter of 2001).
since the ﬁ rst quarter of 2001 if the effect of THE INVESTMENT FUND INDUSTRY IN SELECTED
price revaluations on the outstanding amount EURO AREA COUNTRIES
were not taken into account. As an example, The countries with the largest IF sectors
the net sales were positive between the ﬁ rst in the euro area,6 in terms of total assets,
quarter of 2001 and the ﬁ rst quarter of 2003, are Luxembourg, Germany and France, which
while the outstanding amount of IF shares/units together accounted for 70% of the euro area
actually declined due to falling asset prices total at the end of the ﬁ rst quarter of 2010
during that period.
(see Chart 3). They are followed by Ireland
and the Netherlands, which bring the largest
The cornerstone of the EU regulatory framework ﬁ ve countries to 87% of the euro area total.
for investment funds is the Directive on The speciﬁ c features of the IF sectors in these
Undertakings for Collective Investment in countries are highlighted in the following
Transferable Securities (UCITS Directive).5 paragraphs.
The UCITS Directive, originally adopted in
1985 and subsequently amended, triggered
strong growth in the European IF industry.
Investment funds conforming to the UCITS
Directive can be marketed in all EU Member
States based on an authorisation by a single 5 Directive 2009/65/EC of the European Parliament and of the
Council of 13 July 2009 on the coordination of laws, regulations
Member State. This has allowed companies to
and administrative provisions relating to undertakings for
establish investment funds in the jurisdiction
collective investment in transferable securities (UCITS) (recast).
6 The IF sector covers the investment funds resident in a certain
they consider the most suitable, regardless of
country. The managers of these funds may or may not be resident
the residency of the targeted investor base.
in this country.
ECB
Monthly Bulletin
August 2010 111

An important reason for the size of the IF sector the local economy by increasing activity in
in Luxembourg has been the early incorporation the ﬁ nancial sector. Furthermore, the UCITS
of the UCITS Directive in national legislation. Directive was incorporated in the national
Luxembourg was the ﬁ rst EU Member State to legislation in 1989, which also facilitated the
implement the ﬁ rst UCITS Directive in 1988. establishment of the round-trip funds and other
Due to its infrastructure for establishing and cross-border funds.12
administering funds, as well as favourable ﬁ scal
and regulatory conditions, many companies The size of the IF sector in the Netherlands
have found in Luxembourg a suitable jurisdiction
increased sharply in 2009 as large pension funds
to establish investment funds. Consequently, sold equity and debt securities holdings and
the country’s IF sector has grown to be the purchased IF shares/units instead. These asset
largest in the euro area, and globally second transfers roughly doubled the size of the IF
after the United States.7
sector in the Netherlands.13
The German IF sector is dominated by
funds targeted at institutional investors 3
FEATURES OF THE NEW EURO AREA
(“Spezialfonds”), which represented roughly
INVESTMENT FUND STATISTICS
70% of the investment funds resident in
Germany at the end of the ﬁ rst quarter of 2010 This section presents the harmonised statistics
in terms of total assets.8 At the same time, on euro area investment funds which the ECB
the relatively small number of German resident released for the ﬁ rst time in December 2009.
investment funds targeting the general public These statistics replace the non-harmonised euro
also mirrors the success of the retail fund area IF statistics that were previously published
industry in Luxembourg. As at end-2008 the by the ECB on a quarterly basis.
amount outstanding of IF shares/units issued
abroad but sold in Germany was higher than REPORTING INVESTMENT FUNDS
the outstanding amount of IF shares/units The new IF statistics cover all investment funds
issued by UCITS funds resident in Germany.9 resident in the euro area that comply with the
Indeed, some of the largest German IF providers statistical deﬁ nition provided by the Regulation.
predominantly operate by using so-called All these funds are registered by the ECB in a
“round-trip funds” established in Luxembourg.10 list, which is also published.14 At the end of
Round-trip funds are investment funds which the ﬁ rst quarter of 2010, over 47 thousand
are established abroad, but sold to domestic investment funds were resident in the euro
investors.
area. In accordance with European statistical
The IF sector in France is comparable in 7 See “EFAMA Fact Book – Trends in the European investment
size to that of Germany. The large majority
funds”, 7th edition.
of investment funds are primarily targeted 8 See “Kapitalmarktstatistik”, Deutsche Bundesbank, May 2010.
9 See footnote 7.
at domestic investors, while the use of 10 See “BVI-Investmentstatistik”, Bundesverband Investment und
round-trip funds by French IF providers is
Asset Management e.V., 28 February 2010.
11 See footnote 7.
relatively small.11
12 “The investment fund industry in Ireland – A statistical
overview”, Central Bank and Financial Services Authority of
Like Luxembourg, Ireland has also emerged
Ireland, January 2010.
13 See statistical news release by De Nederlandsche Bank,
as an international IF centre. One aspect that
“Continued rise of Dutch investment fund assets” (http://www.
contributed to this position is the foundation
dnb.nl/en/news-and-publications/news-and-archive/statistische-
nieuwsberichten/dnb224751.jsp), dated 17 November 2009.
of the International Financial Services Centre 14 http://www.ecb.europa.eu/stats/money/mfi/funds/html/index.
(IFSC) in 1987 with the objective to support
en.html
ECB
112 Monthly Bulletin
August 2010

A R T I C L E S
standards,15 the statistics do not cover MMFs, purposes was developed. In line with this
Harmonised ECB statistics
which form part of the MFI sector (see box), deﬁ
nition, hedge funds cover in particular
on euro area investment
funds and their analytical
nor pension funds, which form part of the ICPF funds with relatively unconstrained investment
use for monetary policy
sector.16 Investment funds conforming to the strategies, including the use of leverage and
purposes
UCITS Directive, as well as non-UCITS funds the taking of short positions, as well as few
(i.e. all non-harmonised funds whether subject restrictions on the types of ﬁ nancial asset in
to national regulation or not), are covered. which they may invest.
The criterion for inclusion in the statistics refers
to the residency of the fund itself and not that of ASSET AND LIABILITY CATEGORIES
its manager. It follows that while the statistics OF INVESTMENT FUNDS
cover investment funds resident in the euro area The statistics contain various categories of
which are managed from outside the euro area, assets held and liabilities incurred by investment
they do not cover investment funds established funds. The liabilities of investment funds
outside the euro area, even if they are operated mainly consist of the shares or units they issue
by management companies located in the (see Chart 4). These indicate the net assets of
euro area.
the investment funds and represent the value
of the investors’ holdings (also referred to
SUB-CATEGORIES OF INVESTMENT FUNDS
as the net asset value). Information on the
Euro area aggregates are available for total residency of the investors in investment funds
investment funds and for six sub-categories (euro area/non-euro area) is also available.
according to investment policy: equity funds,
bond funds, mixed funds, real estate funds,
hedge funds and other funds. Each sub-category 15 The European Statistical Standards are set out in the “European
system of national and regional accounts in the Community”
is further broken down into open-end and
(the ESA 95).
closed-end funds. Broadly speaking, the 16 New statistics on the assets and liabilities of euro area insurance
corporations and pension funds are being developed and are
shares/units of open-end funds can be redeemed
scheduled to be published in 2011 (see Box 15 in the ECB
out of the fund’s assets. Closed-end funds are
Financial Stability Review, June 2010).
funds with a ﬁ xed number of issued shares/units.
In the euro area, the latter category mainly
consists of real estate funds.
Chart 4 Liabilities of euro area investment
funds
The classiﬁ
cation by investment policy is,
(percentages; Q1 2010)
in principle, done on the basis of the type of
remaining
asset in which the investment fund primarily
liabilities
invests, where “primarily” should be understood
6
loans and deposits
as “more than 50%”. For example, if an
received
2
investment fund primarily invests in shares and
other equity, then it should be classiﬁ ed in
the equity funds category. Funds of funds,
i.e. investment funds investing in shares/units
issued by other investment funds, are classiﬁ ed
in the category of funds in which they
primarily invest. The classiﬁ cation is based on
national regulatory provisions, if they exist,
or alternatively on what has been declared in the
investment funds’ prospectuses.
IF shares/units issued
92
In the absence of a generally accepted deﬁ nition
Source: ECB.
of hedge funds, a deﬁ nition for statistical
ECB
Monthly Bulletin
August 2010 113

The investment portfolio of investment funds is investment funds report a list of individual
broken down into six categories (see Chart 5), securities held, together with their publicly
where the share in total assets of each category available identiﬁ cation codes (e.g. ISIN codes)
may vary considerably depending on market and the corresponding amounts. This is in
conditions. The assets of investment funds also contrast to the more traditional “aggregated
include shares/units issued by other investment reporting” of data, which would require the
funds. This is the primary asset class of the reporter to aggregate its holdings by type of
funds of funds.
instrument (e.g. bond, share), maturity, currency,
geographical location and sector of the issuer.
For a number of asset categories, the statistics In the case of s-b-s reporting, the national central
show the geographical location and the economic
banks, as opposed to the reporters, compile the
sector of the issuer of the assets. This makes it required statistical aggregates by mapping the
possible, for example, to identify to what extent individual securities to the information available
euro area investment funds are investing in debt in a common securities reference database.
issued by euro area governments, non-ﬁ nancial The s-b-s reporting approach is cost-effective
corporations and ﬁ nancial institutions or the for the investment funds since information on
rest of the world (see Section 4). In the case individual securities is in general readily
of bonds held by investment funds, a further available to them. Furthermore, the s-b-s
breakdown by original maturity is also available,
reporting provides more ﬂ
exibility to the
as well as an indication of the currency in which statistical compilers who may produce new
the bonds issued by MFIs are denominated.
aggregates when additional requirements for
analytical purposes emerge, without the need
An important feature of the new statistics is the to issue new reporting requirements to the
reporting by investment funds on a security-by-
investment funds.17
security (s-b-s) basis. This means that the
OUTSTANDING AMOUNTS AND TRANSACTIONS
The data cover key variables at a monthly
Chart 5 Assets of euro area investment funds
frequency, while more detailed data are
quarterly. The quarterly data contain, in addition
(percentages)
to outstanding amounts (i.e. the value at the
end of the period), ﬁ nancial transactions for
shares and other equity
securities other than shares
each item. Financial transactions refer to the
IF shares
net acquisition of a given type of asset during
deposits
non-financial assets
the period, or the net incurrence of a liability.
remaining assets
The monthly dataset mainly consists of
100
100
outstanding amounts; monthly transactions are
currently available only for the shares/units
80
80
issued by investment funds. The latter provide
an approximation of the investment funds’
60
60
net sales of shares to investors during a given
reference period.
40
40
Table 2 summarises the euro area aggregates
that are published.
20
20
17 Details concerning the securities reference database and
0
0
security-by-security reporting are available in the ECB booklet
1999
2001
2003
2005
2007
2009
entitled “The ‘Centralised Securities Database’ in brief”,
available online at http://www.ecb.europa.eu/pub/pdf/other/
Source: ECB.
centralisedsecuritiesdatabase201002en.pdf.
ECB
114 Monthly Bulletin
August 2010

A R T I C L E S
Table 2 Summary of published euro area aggregates for IF statistics
Harmonised ECB statistics
on euro area investment
funds and their analytical
Further breakdowns
use for monetary policy
purposes
Geographical location
Sector of the
Total
of the counterpart l)
counterpart 2)
Maturity 3)
Currency 4)
ASSETS
Deposit and loan claims
Q and M
Q
Q
Securities other than shares
Q and M
Q and M
Q and M
Q and M
Q and M
Shares and other equity
Q and M
Q
Q
o/w quoted shares
Q
Q
Q
o/w IF and MMF shares/units
Q and M
Q and M
Q and M
Non-ﬁ nancial assets
Q and M
Q
Remaining assets
Q and M
LIABILITIES
IF shares/units
M*
Q and M
Loans and deposits received
Q and M
Remaining liabilities
Q and M
Source: ECB.
Notes: Q: quarterly outstanding amounts and transactions; M: monthly outstanding amounts; * including transactions.
1) Euro area; rest of the world (in the case of securities, further broken down into issuers resident in non-euro area EU Member States,
the United States and Japan).
2) For euro area counterparts: MFIs, general government, other ﬁ nancial intermediaries, insurance corporations and pension funds,
non-ﬁ nancial corporations, and households.
3) Up to one year, one to two years, over two years.
4) Euro; total foreign currencies.
TIMELINESS AND BACKDATA
not fully comparable with data starting from
The statistics are published around one and December 2008.
a half months after the end of the reference
period. The new harmonised time series date SUPPLEMENTARY STATISTICS ON MONEY MARKET
back to the reference period December 2008. FUNDS
The ECB has estimated longer historical time In order to provide a comprehensive picture of the
series derived mainly from the previously euro area fund industry, the ECB also publishes
published non-harmonised data. These statistics on the MMF sector. The background to
estimates are also used in this article and are that is explained in the box below.
Box
HARMONISED ECB STATISTICS ON MONEY MARKET FUNDS
Money market funds (MMFs) are collective investment undertakings which primarily invest
in short-term transferable debt instruments and/or in bank deposits. MMFs incur liabilities by
issuing shares or units. For investors, MMF shares/units are close substitutes for bank deposits
in terms of their liquidity. Therefore, for monetary analysis purposes, MMFs are included in
the money-issuing sector and classiﬁ ed in the ECB’s statistics together with credit institutions
in the MFI sector. Consequently, monthly statistical data on shares/units issued by MMFs have
always been published by the ECB as a contribution to the consolidated balance sheet of the
MFI sector. As a complement to this, since December 2009, new quarterly statistics on the assets
and liabilities of euro area MMFs are separately published starting with the reference quarter
Q1 2006. The reporting obligations for MMFs, however, remained unchanged.
ECB
Monthly Bulletin
August 2010 115

Main features of the euro area money market fund statistics
The MMF statistics provide: (i) full coverage across the euro area; (ii) breakdowns of assets and
liabilities consistent with the MFI and IF statistics; and (iii) key information on a monthly basis
and more detailed information on a quarterly basis. MMF statistics are published in the monthly
ECB press release on investment fund statistics, providing a comprehensive picture of the euro
area fund industry.
MMF statistics are available as outstanding amounts and transactions. The statistics on MMF
assets include breakdowns by euro area/non-euro area and sector of the counterparts, by original
maturity and by currency of denomination. For holders of MMF shares/units, a distinction
between euro area and non-euro area residents is made.
Some characteristics of the euro area money market fund industry
At the end of the ﬁ rst quarter of 2010 the approximately 1,500 MMFs resident in the euro area
held assets of around €1.2 trillion, compared with €5.8 trillion for other euro area investment
funds. The countries with the largest MMF sectors in the euro area, in terms of total assets,
are France, Luxembourg and Ireland, which together accounted for 92% of the euro area total.
As shown in Chart A, more than three-quarters of MMFs’ portfolio consists of debt securities.
MMFs are also buying shares/units from other MMFs in the euro area, as well as placing deposits
in banks. The euro area MFI sector is the main counterpart of MMFs, with 47% of total assets
(see Chart B); at the same time, MMFs hold a substantial portfolio of external assets, amounting
to 35% of total assets, which are mainly debt securities denominated in US dollars and pounds
Chart A MMF assets by instrument
Chart B MMF assets by counterpart
(percentages; Q1 2010)
(percentages; Q1 2010)
money market fund
non-financial other financial
shares/units
corporations
institutions
loans and deposits
5
4
3
14 (o/w 4 to
general
non-euro area
government
residents)
11
monetary
financial
institutions
47
non-euro area
counterparts
35
debt securities
81 (o/w 32
issued by non-euro
area residents)
Source: ECB.
Source: ECB.
ECB
116 Monthly Bulletin
August 2010

A R T I C L E S
Harmonised ECB statistics
sterling issued by non-euro area banks. The high share of external assets matches similar levels
on euro area investment
of external liabilities, mostly shares/units sold to non-euro area investors; this is more evident
funds and their analytical
for MMFs based in Ireland and Luxembourg, which are mostly serving non-euro area residents.
use for monetary policy
Finally, exposure to other euro area sectors is more limited and accounts in total for around 18%
purposes
of all MMF assets.
4
THE USE OF EURO AREA INVESTMENT
sheet data are published after 19 working days
FUND STATISTICS FOR MONETARY POLICY
following the reference month, while the BOP
PURPOSES
data are published after around 35 working days.
By contrast, the more detailed annual ﬁ nancial
The greater comprehensiveness and timeliness accounts data and more recently the quarterly
considerably increases the scope to apply euro area sectoral accounts data only become
the harmonised euro area IF statistics in the available with a longer time-lag and are thus
monetary, ﬁ
nancial and economic analyses mainly used for retrospective checking of the
that are regularly conducted as part of the real-time estimates.19 The fact that the new IF
monetary policy decision-making process at statistics become available very shortly after the
the ECB. In this respect, it is important to note MFI statistics will signiﬁ cantly improve the
that this increased scope not only refers to the real-time analysis of portfolio shifts.
IF statistics themselves, but also to the mutually
enhancing way in which these statistics can be The general framework of the enhanced analysis
linked with other statistics regularly used in the is shown in Charts 6 and 7. In general, portfolio
analyses. This section provides some examples shifts between monetary assets and other asset
of the type of issues and questions that can be classes are explained by differences in the
addressed with the new statistics in the different rates of return offered by various asset types
types of analyses.
and changes in the risk appetite of investors.
The yield curve and economic conﬁ dence are
MONETARY ANALYSIS: CHANGES IN THE
convenient but inevitably not fully encompassing
PORTFOLIO INVESTMENT BEHAVIOUR
indicators for such effects.
OF MONEY-HOLDING SECTORS
A key challenge in the ECB’s monetary analysis Inﬂ ows to M3 were strong in the euro area
is to analyse in real time the underlying pace of during the period from early 2001 until
monetary expansion that provides the relevant mid-2003 (see Chart 6). These inﬂ ows
signal for risks to price stability in the medium occurred in an environment in which consumer
term. In this context, the identiﬁ cation of a conﬁ
dence deteriorated markedly following
stronger liquidity preference in the demand the emergence of substantial economic and
for money and the possible exclusion of such ﬁ nancial uncertainty. The strong impact of this
inﬂ uences from headline M3 growth is a major deterioration on portfolio shifts into M3 assets
issue. The identiﬁ cation and quantiﬁ cation of is visible inter alia in the fact that these shifts
portfolio shifts from non-monetary assets – occurred when the yield curve was steepening,
including those held in investment funds – into which should in principle have increased the
M3, and the construction of a measure of M3 relative attractiveness of longer-term assets
corrected for portfolio shifts, is a good example
of this.
18 See the box entitled “Estimating the size of portfolio shifts from
equity to money” in the May 2003 issue of the Monthly Bulletin
Previously, the analysis and quantiﬁ cation of
and the article entitled “Monetary analysis in real time” in the
these shifts in real time had to rely solely on the
October 2004 issue of the Monthly Bulletin.
19 See the article entitled “The introduction of quarterly sectoral
MFI balance sheet and balance of payments
accounts statistics for the euro area” in the November 2007 issue
(BOP) statistics.18 The monthly MFI balance
of the Monthly Bulletin.
ECB
Monthly Bulletin
August 2010 117

parked the proceeds from selling IF shares/units
Chart 6 M3, other MFI instruments and IF shares/
units issued by euro area investment funds
in monetary assets and government bonds in this
period. Monetary assets beneﬁ ted particularly
(quarterly transactions in EUR billions, seasonally adjusted;
from the inverted shape of the yield curve,
percentages per annum; percentage balances)
and from the government measures taken to
IF shares/units issued
(left-hand scale; inverted)
restore conﬁ dence in credit institutions (e.g. the
other MFI instruments (left-hand scale)
extension of deposit guarantee schemes).
M3 (left-hand scale)
consumer confidence
(right-hand scale; normalised)
However, developments since the second
yield curve (right-hand scale)
quarter of 2009 suggest a strong recovery in
400
4
the net issuance of IF shares/units and a gradual
300
3
rebalancing of ﬁ nancial investment portfolios by
investors. This was consistent with the improved
200
2
ﬁ nancial market sentiment until early 2010
100
1
and the marked steepening of the yield curve
observed in 2009. Both factors fostered shifts
0
0
back into riskier and longer-term assets from
monetary assets.
-100
-1
-200
-2
Valuable information for analysing changes in
the portfolio investment behaviour of money-
-300
-3
holding sectors is also contained in the data
2001 2002 2003 2004 2005 2006 2007 2008 2009
for issuance of IF shares/units broken down by
Source: ECB.
Notes: The yield curve is calculated as the difference between
investment policy. Indeed, the individual fund
nominal long-term bond yields and short-term market interest
types have different risk proﬁ les and they offer
rates. IF shares/units are displayed against an inverted scale in
order to allow a better visualisation of shifts in the allocation
varying returns on investment. It is therefore
between the selected ﬁ nancial instrument classes.
interesting to look at whether portfolio shifts
take place, for instance, more from equity than
outside M3. Transactions in IF shares/units bond funds to other types of assets or whether
issued by euro area investment funds decreased all types of investment fund are similarly
noticeably in this period, although they still affected. Moreover, portfolio shifts do not
remained positive.
necessarily have to be limited to the reallocation
of assets between investment funds and other
Sizeable portfolio reallocations also took asset classes, but may also take place between
place between the second quarter of 2007 and different types of investment fund as the relative
the second quarter of 2009. In this period, returns change.
the transactions in IF shares/units issued not only
declined, but actually became negative, implying
Chart 7 shows that net withdrawals took place
net withdrawals by investors. The outﬂ ows from all types of investment fund in the period
reﬂ ected the combination of a ﬂ at yield curve between the second quarter of 2007 and the
and a sharp deterioration in the world growth second quarter of 2009. Nevertheless, both
outlook, downward revisions of corporate in absolute and relative terms, the outﬂ ows
proﬁ tability expectations and increased concerns
were the most pronounced from bond funds,
regarding the sustainability of the global ﬁ nancial amounting to €281 billion in this period, or 15%
system. All these factors dented substantially of their outstanding amount in the second quarter
the conﬁ dence and the risk appetite of investors of 2007. The net withdrawals were much smaller
and inﬂ uenced also the relative asset returns. from equity funds, summing up to €176 billion
Euro area investors appear to have mostly
or 10% of their outstanding amount.
ECB
118 Monthly Bulletin
August 2010

A R T I C L E S
This implies that money holdings of investment
Chart 7 IF shares/units issued by euro area
Harmonised ECB statistics
investment funds
funds inﬂ uence M3 growth, especially if there
on euro area investment
funds and their analytical
is more volatility in the deposit holdings of
(quarterly transactions in EUR billions; not adjusted for seasonal
use for monetary policy
investment funds than in other parts of the
effects)
purposes
OFI sector and the money-holding sector more
equity funds
bond funds
generally. Such volatility may for instance
mixed funds
stem from investment funds’ use of monetary
other funds
assets as a way of parking funds or building up
250
250
liquidity buffers.
200
200
150
150
FINANCIAL ANALYSIS: CAPITAL MARKET FUNDING
100
100
OF THE ECONOMY
50
50
A key issue in the regular ﬁ nancial analysis is
0
0
to assess the funding situation that different
-50
-50
sectors face in the ﬁ nancial market. Investment
funds are large institutional investors and, in this
-100
-100
capacity, purchase shares and debt securities
-150
-150
issued by non-ﬁ nancial corporations, ﬁ nancial
-200
-200
corporations or government. This provides
-250
-250
direct market-based funding to the sectors
2001 2002 2003 2004 2005 2006 2007 2008 2009
concerned and also indirectly inﬂ uences the
Source: ECB.
Note: “Other funds” includes all funds other than equity, bond
quantity of bank-based ﬁ nancing. Through their
and mixed funds.
net purchases of securities, investment funds
also inﬂ uence the levels of stock prices and
The particularly strong outﬂ ows from bond bond yields (directly), as well as bank lending
funds could reﬂ ect two factors. First, bond funds
rates (indirectly). Together with the MFI
and monetary assets are both interest-bearing balance sheet and securities issuance statistics
ﬁ nancial instruments and, in normal times, close and market prices, the new IF statistics provide
substitutes due to their “safety”. Given that the timely information on changes in the overall
slope of the yield curve was very ﬂ at during the ﬁ nancing conditions of individual institutional
period, investors may have preferred to switch sectors in the euro area.
from longer to shorter maturities and, thus,
have shifted their investments from bond funds The data on the assets side show that euro
to monetary assets. Second, investors might area investment funds mainly invested in debt
also have wanted to reduce the weight of bond securities and in shares and other equity in 2009
funds in their investment portfolios, due to the and the ﬁ rst quarter of 2010 (see Chart 8).
strains in the asset-backed securities markets They also modestly purchased other assets,
and the high uncertainty about the extent to while at the same time reducing their liquidity
which various bond funds were holding such (mostly deposit) holdings. These developments
instruments.
mirror closely the issuance and purchases of IF
shares/units by policy type on the liabilities
The new IF statistics can also enhance the side of investment funds’ balance sheet, since
regular monetary analysis through additional different investment funds are obliged mostly to
information on sectoral contributions to M3. invest in their respective asset classes.
Information on the asset side of the IF statistics
and the liability side of MFI statistics shows that The new statistics include also fairly detailed
investment funds accounted for about 30% of geographical and sectoral breakdowns of
total OFI M3 deposit holdings and some 5% of investment funds’ net purchases of securities
total M3 holdings in the ﬁ rst quarter of 2010. other than shares and of shares and other
ECB
Monthly Bulletin
August 2010 119

Chart 8 Net purchases of assets by euro
Chart 9 Net purchases of securities other
area investment funds
than shares by euro area investment funds
broken down by issuing sector
(quarterly ﬂ ows; EUR billions, not adjusted for seasonal effects)
(quarterly ﬂ ows; EUR billions, not adjusted for seasonal effects)
deposit and loan claims
MFIs
debt securities
OFIs
shares (excluding IF and MMF shares/units)
ICPFs
IF and MMF shares/units
NFCs
non-financial assets
general government
other assets (including financial derivatives)
RoW
250
250
200
200
200
200
150
150
150
150
100
100
100
100
50
50
50
50
0
0
0
0
-50
-50
-100
-100
-50
-50
2009
2010
2009
2010
Source: ECB.
Source: ECB.
equity.20 Such information can be particularly Based on the total outstanding amount of debt
helpful during economic or ﬁ nancial crises. securities in the euro area accounts, the new
For instance, the purchases and shedding by IF statistics imply that investment funds were
investment funds of asset-backed securities holding in the fourth quarter of 2009 about 10%
would be visible as changes in the net purchases and 15% of the bonds issued by euro area MFIs
of securities other than shares. In this respect, and non-ﬁ
nancial corporations, respectively,
the data suggest that in 2009 and the ﬁ rst quarter and around 15% of the total amount of quoted
of 2010 euro area investment funds were mainly shares issued by these sectors (based on the
acquiring debt securities issued by euro area data from the euro area accounts and the new
governments and by the rest of the world IF statistics). Similarly, they were holding
(see Chart 9).21 By contrast, their purchases of some 10% of the total outstanding amount of
bonds issued by MFIs and non-ﬁ nancial bonds issued by governments in the euro area.
corporations resident in the euro area were fairly This shows that investment funds have a
muted over this period.
20 Previously, this more detailed information was only partially
Euro area investment funds seem to have
available from the MFI balance sheet and balance of payments
increased their foreign equity holdings
statistics. The former contains a disaggregation of MFI holdings
and net purchases of shares and debt securities issued originally
signiﬁ cantly more than their domestic ones in the
by MFIs, general government and euro area private sectors,
past quarters (see Chart 10). This might reﬂ ect
while the latter include a split of holdings and net purchases of
differences in expected asset returns between
different ﬁ nancing instruments by MFIs, non-MFI private sectors
and general government vis-à-vis the rest of the world.
the rest of the world and the euro area, but in the 21 The apparent selling of direct bond and equity holdings and
context of the ﬁ nancial turmoil it may also reﬂ ect
purchasing of IF shares/units instead by the Dutch pension
funds also explain a signiﬁ cant part of the rise in the foreign
some reversal of a home bias that might have
securities holdings of investment funds in the second and third
been operating in the early phases of the crisis.
quarters of 2009.
ECB
120 Monthly Bulletin
August 2010

A R T I C L E S
Chart 10 Net purchases of shares and other
Chart 11 Changes in outstanding shares/units
Harmonised ECB statistics
equity by euro area investment funds
issued by euro area investment funds
on euro area investment
broken down by issuing sector
funds and their analytical
(quarterly ﬂ ows; EUR billions, not adjusted for seasonal effects)
(annual rates of growth; percentage point contributions)
use for monetary policy
purposes
MFIs
transaction change
OFIs (excluding IFs)
implicit valuation effect
ICPFs
change in IF shares/units issued
NFCs
RoW
200
200
40
40
30
30
150
150
20
20
100
100
10
10
0
0
50
50
-10
-10
0
0
-20
-20
-50
-50
-30
-30
2009
2010
2001 2002 2003 2004 2005 2006 2007 2008 2009
Source: ECB.
Source: ECB.
relatively important, albeit not a dominant role of different institutional sectors. In this respect,
in intermediating ﬁ nancing to banks, ﬁ rms and changes in the value of the assets held by
governments.
investment funds are transmitted through the
valuation of their shares/units issued to the net
ECONOMIC ANALYSIS: THE IMPACT
worth of households, non-ﬁ nancial corporations,
OF FINANCIAL WEALTH ON SPENDING
insurance corporations and pension funds and
The new IF statistics can also be used to support ultimately to spending and saving decisions.
economic analysis, for instance to assess the
impact of changes in net worth on saving and Sustained valuation effects may make the
consumption. First, the total outstanding amounts
holders of IF shares/units – in particular
of IF shares/units issued (on the liabilities side households – feel richer and could prompt them
of the IF balance sheet) provide information to reduce saving and increase spending.22
on the level of wealth that euro area residents Chart 11 shows that in the case of euro area
and non-residents hold in euro area investment investment funds, changes in outstanding
funds. Second, the data on IF shares issued by shares/units issued have on balance been driven
policy type and on asset holdings of investment more by changes in prices than by transactions.
funds by asset type offer information on the This impact was particularly strong in the period
type of asset price changes to which investors between the second quarter of 2003 and the ﬁ rst
may be exposed through their investment in quarter of 2008 due to favourable stock price
investment funds.
developments after the earlier decline in asset
This kind of information is particularly helpful 22 Based on the data in the euro area accounts and the new IF
to assess the effects that the size and structure of
statistics, households’ direct mutual fund share holdings
accounted for around 40% of total mutual fund shares held by
wealth holdings could have on the propensity to
euro area residents in the fourth quarter of 2009 (net of those
consume and invest, and on the saving behaviour
held by investment funds).
ECB
Monthly Bulletin
August 2010 121

prices following the bursting of the dotcom
bubble. In this period, the rate of return on IF
share holdings exceeded by a sizeable margin
the returns offered by alternative ﬁ nancial
instruments such as monetary assets.
At the moment, the IF statistics only provide
counterpart information on the liabilities side
of the IF balance sheet in terms of a breakdown
into euro area residents and non-residents.
The envisaged further breakdown in terms of
resident sectors will help to understand how
shocks to asset prices change the value of IF
asset holdings and IF shares/units issued and
thus the wealth of the various domestic sectors.
5 CONCLUSION
Harmonised statistics on the assets and
liabilities of investment funds resident in the
euro area have been published by the ECB
since December 2009. These data signiﬁ cantly
improve the euro area’s statistical framework
with regard to ﬁ nancial intermediaries other than
MFIs and act as an important complement to MFI
statistics. They facilitate more detailed analysis
of the changes in the investment behaviour of
the money-holding sector, the funding situation
in the economy, and the potential impact on
consumption through changes in the ﬁ nancial
wealth of economic agents.
ECB
122 Monthly Bulletin
August 2010

EURO AREA STATISTICS
ECB
Monthly Bulletin
August 2010 S 1

CONTENTS 1

EURO AREA OVERVIEW
Summary of economic indicators for the euro area
S 5
1
MONETARY POLICY STATISTICS
1.1 Consolidated ﬁ nancial statement of the Eurosystem
S 6
1.2 Key ECB interest rates
S 7
1.3 Eurosystem monetary policy operations allotted through tender procedures
S 8
1.4 Minimum reserve and liquidity statistics
S 9
2
MONEY, BANKING AND INVESTMENT FUNDS
2.1 Aggregated balance sheet of euro area MFIs
S 1 0
2.2 Consolidated balance sheet of euro area MFIs
S 1 1
2.3 Monetary statistics

S 1 2
2.4 MFI loans: breakdown

S 1 4
2.5 Deposits held with MFIs: breakdown
S 1 7
2.6 MFI holdings of securities: breakdown
S 2 0
2.7 Revaluation of selected MFI balance sheet items
S 2 1
2.8 Currency breakdown of selected MFI balance sheet items
S 2 2
2.9 Aggregated balance sheet of euro area investment funds
S 2 4
2.10 Securities held by investment funds broken down by issuer of securities
S 2 5
3
EURO AREA ACCOUNTS
3.1 Integrated economic and ﬁ nancial accounts by institutional sector
S 2 6
3.2 Euro area non-ﬁ nancial accounts
S 3 0
3.3 Households

S 3 2
3.4 Non-ﬁ nancial corporations

S 3 3
3.5 Insurance corporations and pension funds
S 3 4
4 FINANCIAL
MARKETS
4.1 Securities other than shares by original maturity, residency of the issuer and currency
S 3 5
4.2 Securities other than shares issued by euro area residents, by sector of the issuer and instrument type
S 3 6
4.3 Growth rates of securities other than shares issued by euro area residents
S 3 8
4.4 Quoted shares issued by euro area residents
S 4 0
4.5 MFI interest rates on euro-denominated deposits from and loans to euro area residents
S 4 2
4.6 Money market interest rates

S 4 4
4.7 Euro area yield curves

S 4 5
4.8 Stock market indices

S 4 6
5
PRICES, OUTPUT, DEMAND AND LABOUR MARKETS
5.1 HICP, other prices and costs

S 4 7
5.2 Output and demand

S 5 0
5.3 Labour markets

S 5 4
6 GOVERNMENT
FINANCE
6.1 Revenue, expenditure and deﬁ cit/surplus
S 5 6
6.2 Debt

S 5 7
1 For further information, please contact us at: statistics@ecb.europa.eu. See the ECB’s Statistical Data Warehouse in the “Statistics” section of the ECB’s website
(http://sdw.ecb.europa.eu) for longer runs and more detailed data.
ECB
Monthly Bulletin
August 2010 S 3

6.3 Change in debt

S 5 8
6.4 Quarterly revenue, expenditure and deﬁ cit/surplus
S 5 9
6.5 Quarterly debt and change in debt
S 6 0
7
EXTERNAL TRANSACTIONS AND POSITIONS
7.1 Summary balance of payments

S 6 1
7.2 Current and capital accounts
S 6 2
7.3 Financial account
S 6 4
7.4 Monetary presentation of the balance of payments
S 7 0
7.5 Trade in goods

S 7 1
8 EXCHANGE
RATES
8.1 Effective exchange rates

S 7 3
8.2 Bilateral exchange rates

S 7 4
9
DEVELOPMENTS OUTSIDE THE EURO AREA
9.1 In other EU Member States

S 7 5
9.2 In the United States and Japan

S 7 6

LIST OF CHARTS

S 7 7
TECHNICAL
NOTES

S 7 9
GENERAL
NOTES

S 8 5
Conventions used in the tables
“-”
data do not exist/data are not applicable
“.”
data are not yet available
“…”
nil or negligible
“billion” 109
(p) provisional
s.a. seasonally
adjusted
n.s.a. non-seasonally
adjusted
ECB
S 4 Monthly Bulletin
August 2010

EURO AREA OVERVIEW
Summary of economic indicators for the euro area
(annual percentage changes, unless otherwise indicated)
1. Monetary developments and interest rates 1)
M1 2)
M2 2)
M3 2), 3)
M3 2), 3)
MFI loans to
Securities other
3-month
10-year
3-month
euro area
than shares issued
interest rate
spot rate
moving average
residents
in euro by non-MFI
(EURIBOR;
(% per annum;
(centred)
excluding MFIs
corporations 2)
% per annum;
end of
and general
period
period) 4)
government 2)
averages)
1
2
3
4
5
6
7
8
2008
2.4
9.6
9.7
- 9.5
19.2
4.64
3.69

2009
9.5
4.8
3.3
- 1.6
23.6
1.22
3.76
2009 Q3
12.2
4.5
2.7
- 0.4
23.6
0.87
3.64
Q4
12.3
2.2
0.3
- -0.6
18.8
0.72
3.76
2010 Q1
11.3
1.7
-0.2
- -0.4
8.9
0.66
3.46

Q2
10.3
1.4
-0.1
- 0.1
. 0.69
3.03
2010 Feb.
11.0
1.6
-0.4
-0.2
-0.4
7.7
0.66
3.49
Mar.
10.8
1.6
-0.1
-0.2
-0.2
6.8
0.64
3.46
Apr.
10.7
1.3
-0.2
-0.1
0.2
5.6
0.64
3.40
May
10.3
1.5
-0.1
0.0
0.2
4.1
0.69
3.00
June
9.2
1.4
0.2
. 0.3
. 0.73
3.03

July
. . . . .
. 0.85
3.01
2. Prices, output, demand and labour markets
HICP 1)
Industrial
Hourly
Real GDP
Industrial
Capacity
Employment
Unemployment
producer
labour
production
utilisation in
(% of labour
prices
costs
excluding
manufacturing
force)
construction
(%)
1
2
3
4
5
6
7
8
2008
3.3
6.1
3.5
0.6
-1.7
81.8
0.7
7.5

2009
0.3
-5.1
2.7
-4.1
-14.9
71.1
-1.9
9.4
2009 Q4
0.4
-4.6
1.7
-2.1
-7.4
71.7
-2.0
9.8
2010 Q1
1.1
-0.1
2.1
0.6
4.8
73.9
-1.2
9.9

Q2
1.5
3.0
. . .
76.5
.
10.0
2010 Feb.
0.9
-0.4
- -
4.4
- -
9.9
Mar.
1.4
0.9
- -
7.8
- -
10.0
Apr.
1.5
2.8
- -
9.5
75.5
-
10.0
May
1.6
3.1
- -
9.6
- -
10.0

June
1.4
3.0
- - . - -
10.0
July
1.7
. - - .
77.4
-
.
3. External statistics
(EUR billions, unless otherwise indicated)

Balance of payments (net transactions)
Reserve assets
Net
Gross Effective exchange rate of
USD/EUR

(end-of-period
international
external debt
the euro: EER-21 5) exchange
rate
Current and
Combined
positions)
investment (as a % of GDP)
(index: 1999 Q1 = 100)
capital
Goods
direct and
position
accounts
portfolio
(as a % of GDP)
Nominal
Real (CPI)
investment
1
2
3
4
5
6
7
8
9
2008
-144.0
-19.1
145.4
374.2
-17.6
118.2
110.5
110.1
1.4708

2009
-49.7
40.7
229.8
462.4
-15.5
115.8
111.7
110.6
1.3948
2009 Q3
-2.2
13.8
54.4
430.9
-17.7
116.1
112.1
110.9
1.4303
Q4
8.0
20.5
62.9
462.4
-15.5
115.8
113.8
112.2
1.4779
2010 Q1
-22.9
2.8
-12.6
498.7
-14.8
119.9
108.7
106.9
1.3829

Q2
. .
.
583.3
.
.
103.1
101.8
1.2708
2010 Feb.
-7.9
4.2
-15.3
492.6
. .
108.0
106.1
1.3686
Mar.
-2.1
6.2
-27.8
498.7
. .
107.4
105.7
1.3569
Apr.
-7.7
2.9
20.9
521.6
. .
106.1
104.5
1.3406
May
-14.7
0.6
46.7
569.7
. .
102.8
101.4
1.2565

June
. .
.
583.3
.
.
100.7
99.4
1.2209
July
. .
.
.
.
.
102.5
101.2
1.2770
Sources: ECB, European Commission (Eurostat and Economic and Financial Affairs DG) and Reuters.
Note: For more information on the data, see the relevant tables later in this section.
1)
Data refer to the changing composition of the euro area. For further information, see the General Notes.
2)
Annual percentage changes for monthly data refer to the end of the month, whereas those for quarterly and yearly data refer to the annual change in the period average.
See the Technical Notes for details.
3)
M3 and its components exclude holdings by non-euro area residents of money market fund shares/units and debt securities with a maturity of up to two years.
4)
Based on AAA-rated euro area central government bond yield curves. For further information, see Section 4.7.
5)
For a definition of the trading partner groups and other information, please refer to the General Notes.
ECB
Monthly Bulletin
August 2010 S 5

1 MONETARY POLICY STATISTICS
1.1 Consolidated financial statement of the Eurosystem
(EUR millions)
1. Assets
9 July 2010
16 July 2010
23 July 2010
30 July 2010
Gold and gold receivables
352,092
352,093
351,970
351,969
Claims on non-euro area residents in foreign currency
234,242
234,071
235,568
236,347
Claims on euro area residents in foreign currency
30,780
30,479
29,840
29,473
Claims on non-euro area residents in euro
17,545
19,690
18,066
17,945
Lending to euro area credit institutions in euro
635,009
619,406
625,198
632,499
Main refinancing operations
229,070
195,661
201,286
189,986
Longer-term refinancing operations
405,927
423,722
423,722
442,042
Fine-tuning reverse operations
0
0
0
0
Structural reverse operations
0
0
0
0
Marginal lending facility
1
1
3
366
Credits related to margin calls
10
22
187
104
Other claims on euro area credit institutions in euro
43,009
42,630
44,382
42,934
Securities of euro area residents in euro
418,037
417,074
418,516
417,768
Securities held for monetary policy purposes
120,894
121,196
121,372
121,454
Other
securities
297,143
295,878
297,143
296,315
General government debt in euro
35,037
35,041
35,041
35,041
Other assets
238,995
236,504
235,031
237,684
Total assets
2,004,747
1,986,989
1,993,612
2,001,660
2. Liabilities
9 July 2010
16 July 2010
23 July 2010
30 July 2010
Banknotes in circulation
818,831
818,993
817,525
820,583
Liabilities to euro area credit institutions in euro
391,437
384,440
366,596
377,258
Current accounts (covering the minimum reserve system)
126,783
265,865
245,255
195,798
Deposit
facility
205,544
58,550
61,325
120,894
Fixed-term
deposits
59,000
60,000
60,000
60,500
Fine-tuning reverse operations
0
0
0
0
Deposits related to margin calls
109
25
17
66
Other liabilities to euro area credit institutions in euro
645
626
1,392
1,784
Debt certificates issued
0
0
0
0
Liabilities to other euro area residents in euro
108,907
100,028
124,824
118,125
Liabilities to non-euro area residents in euro
42,190
42,785
42,181
42,232
Liabilities to euro area residents in foreign currency
915
909
906
1,342
Liabilities to non-euro area residents in foreign currency
16,281
15,676
16,633
16,096
Counterpart of special drawing rights allocated by the IMF
56,711
56,711
56,711
56,711
Other liabilities
161,822
159,811
159,835
160,520
Revaluation accounts
328,818
328,818
328,818
328,818
Capital and reserves
78,191
78,191
78,190
78,190
Total liabilities
2,004,747
1,986,989
1,993,612
2,001,660
Source: ECB.
ECB
S Monthly Bulletin
6 August 2010

EURO AREA
STATISTICS
Monetary
policy
statistics
1.2 Key ECB interest rates
(levels in percentages per annum; changes in percentage points)

With effect from: 1)
Deposit facility
Main refinancing operations
Marginal lending facility

Fixed rate tenders
Variable rate tenders

Fixed rate
Minimum bid rate

Level
Change
Level
Level
Change
Level
Change
1
2
3
4
5
6
7
1999 1 Jan.
2.00
- 3.00
-
- 4.50
-
4 2)
2.75
0.75
3.00
- ...
3.25
-1.25
22
2.00
-0.75
3.00
- ...
4.50
1.25
9 Apr.
1.50
-0.50
2.50
- -0.50
3.50
-1.00
5 Nov.
2.00
0.50
3.00
- 0.50
4.00
0.50
2000 4 Feb.
2.25
0.25
3.25
- 0.25
4.25
0.25
17 Mar.
2.50
0.25
3.50
- 0.25
4.50
0.25
28 Apr.
2.75
0.25
3.75
- 0.25
4.75
0.25
9 June
3.25
0.50
4.25
- 0.50
5.25
0.50
28 3)
3.25
... - 4.25
...
5.25
...
1 Sep.
3.50
0.25
- 4.50
0.25
5.50
0.25
6 Oct.
3.75
0.25
- 4.75
0.25
5.75
0.25
2001 11 May
3.50
-0.25
- 4.50
-0.25
5.50
-0.25
31 Aug.
3.25
-0.25
- 4.25
-0.25
5.25
-0.25
18 Sep.
2.75
-0.50
- 3.75
-0.50
4.75
-0.50
9 Nov.
2.25
-0.50
- 3.25
-0.50
4.25
-0.50
2002 6 Dec.
1.75
-0.50
- 2.75
-0.50
3.75
-0.50
2003 7 Mar.
1.50
-0.25
- 2.50
-0.25
3.50
-0.25
6 June
1.00
-0.50
- 2.00
-0.50
3.00
-0.50
2005 6 Dec.
1.25
0.25
- 2.25
0.25
3.25
0.25
2006 8 Mar.
1.50
0.25
- 2.50
0.25
3.50
0.25
15 June
1.75
0.25
- 2.75
0.25
3.75
0.25
9 Aug.
2.00
0.25
- 3.00
0.25
4.00
0.25
11 Oct.
2.25
0.25
- 3.25
0.25
4.25
0.25
13 Dec.
2.50
0.25
- 3.50
0.25
4.50
0.25
2007 14 Mar.
2.75
0.25
- 3.75
0.25
4.75
0.25
13 June
3.00
0.25
- 4.00
0.25
5.00
0.25
2008 9 July
3.25
0.25
- 4.25
0.25
5.25
0.25
8 Oct.
2.75
-0.50
- -
-
4.75
-0.50
9 4)
3.25
0.50
- -
-
4.25
-0.50
15 5)
3.25
... 3.75
- -0.50
4.25
...
12 Nov.
2.75
-0.50
3.25
- -0.50
3.75
-0.50
10 Dec.
2.00
-0.75
2.50
- -0.75
3.00
-0.75
2009 21 Jan.
1.00
-1.00
2.00
- -0.50
3.00
...
11 Mar.
0.50
-0.50
1.50
- -0.50
2.50
-0.50
8 Apr.
0.25
-0.25
1.25
- -0.25
2.25
-0.25
13 May
0.25
... 1.00
- -0.25
1.75
-0.50

Source: ECB.
1)
From 1 January 1999 to 9 March 2004, the date refers to the deposit and marginal lending facilities. For main refinancing operations, changes in the rate are effective from the
first operation following the date indicated. The change on 18 September 2001 was effective on that same day. From 10 March 2004 onwards, the date refers both to the deposit
and marginal lending facilities and to the main refinancing operations (with changes effective from the first main refinancing operation following the Governing Council
decision), unless otherwise indicated.
2)
On 22 December 1998 the ECB announced that, as an exceptional measure between 4 and 21 January 1999, a narrow corridor of 50 basis points would be applied between the
interest rates for the marginal lending facility and the deposit facility, aimed at facilitating the transition to the new monetary regime by market participants.
3)
On 8 June 2000 the ECB announced that, starting from the operation to be settled on 28 June 2000, the main refinancing operations of the Eurosystem would be conducted as
variable rate tenders. The minimum bid rate refers to the minimum interest rate at which counterparties may place their bids.
4)
As of 9 October 2008 the ECB reduced the standing facilities corridor from 200 basis points to 100 basis points around the interest rate on the main refinancing operations.
The standing facilities corridor was restored to 200 basis points as of 21 January 2009.
5)
On 8 October 2008 the ECB announced that, starting from the operation to be settled on 15 October, the weekly main refinancing operations would be carried out through a
fixed rate tender procedure with full allotment at the interest rate on the main refinancing operations. This change overrode the previous decision (made on the same day)
to cut by 50 basis points the minimum bid rate on the main refinancing operations conducted as variable rate tenders.
ECB
Monthly Bulletin
August 2010 S 7

1.3 Eurosystem monetary policy operations allotted through tender procedures 1), 2)
(EUR millions; interest rates in percentages per annum)
1. Main and longer-term refinancing operations 3)

Date of
Bids
Number of
Allotment
Fixed rate tender
Variable rate tender
Running for
settlement
(amount)
participants
(amount)
procedures
procedures
(...) days
Fixed rate
Minimum
Marginal
Weighted
bid rate
rate 4)
average rate
1
2
3
4
5
6
7
8
Main refinancing operations
2010 7 Apr.
71,535
67
71,535
1.00
- - - 7
14
70,577
68
70,577
1.00
- - - 7
21
70,228
67
70,228
1.00
- - - 7
28
75,624
66
75,624
1.00
- - - 7
5 May
90,317
76
90,317
1.00
- - - 7
12
99,570
81
99,570
1.00
- - - 7
19
104,752
81
104,752
1.00
- - - 7
26
106,014
83
106,014
1.00
- - - 7
2 June
117,727
86
117,727
1.00
- - - 7
9
122,039
96
122,039
1.00
- - - 7
16
126,672
101
126,672
1.00
- - - 7
23
151,511
114
151,511
1.00
- - - 7
30
162,912
157
162,912
1.00
- - - 7
7 July
229,070
151
229,070
1.00
- - - 7
14
195,661
147
195,661
1.00
- - - 7
21
201,286
163
201,286
1.00
- - - 7
28
189,986
151
189,986
1.00
- - - 7
4 Aug.
154,844
125
154,844
1.00
- - - 7
Longer-term refinancing operations
2010 10 Mar.
9,315
11
9,315
1.00
- - -
35
1 Apr.
2,015
11
2,015
1.00
- - -
91
1 5)
17,876
62
17,876
.
- - -
182
14
15,730
12
15,730
1.00
- - -
28
29 3)
4,846
24
4,846
- 1.00
1.00
1.15
91
12 May
20,480
18
20,480
1.00
- - -
35
13 5)
35,668
56
35,668
.
- - -
182
27
12,163
35
12,163
1.00
- - -
91
16 June
31,603
23
31,603
1.00
- - -
28
1 July
131,933
171
131,933
1.00
- - -
91
14
49,399
34
49,399
1.00
- - -
28
29
23,166
70
23,166
1.00
- - -
91
2. Other tender operations

Date of settlement
Type of
Bids
Number of
Allotment Fixed rate tender
Variable rate tender
Running
operation
(amount) participants
(amount)
procedures
procedures
for
(...) days
Fixed rate
Minimum
Maximum
Marginal
Weighted
bid rate
bid rate
rate 4) average rate
1
2
3
4
5
6
7
8
9
10
2010 19 May
Collection of fixed-term deposits
162,744
223
16,500
-
-
1.00
0.29
0.28
7
26
Collection of fixed-term deposits
86,003
93
26,500
-
-
1.00
0.28
0.27
7
2 June
Collection of fixed-term deposits
73,576
68
35,000
-
-
1.00
0.28
0.28
7
9
Collection of fixed-term deposits
75,627
64
40,500
-
-
1.00
0.35
0.31
7
15
Collection of fixed-term deposits
363,775
174
363,475
-
-
1.00
0.80
0.77
1
16
Collection of fixed-term deposits
71,078
66
47,000
-
-
1.00
0.30
0.28
7
23
Collection of fixed-term deposits
71,560
67
51,000
-
-
1.00
0.40
0.31
7
30
Collection of fixed-term deposits
31,866
45
31,866
-
-
1.00
1.00
0.54
7
1 July
Reverse transaction
111,237
78
111,237
1.00
-
-
-
-
6
7
Collection of fixed-term deposits
87,431
88
59,000
-
-
1.00
0.75
0.56
7
13
Collection of fixed-term deposits
201,673
158
200,908
-
-
1.00
0.80
0.76
1
14
Collection of fixed-term deposits
98,288
85
60,000
-
-
1.00
0.65
0.56
7
21
Collection of fixed-term deposits
97,169
88
60,000
-
-
1.00
0.64
0.56
7
28
Collection of fixed-term deposits
88,550
86
60,500
-
-
1.00
0.60
0.55
7
4 Aug.
Collection of fixed-term deposits
115,689
93
60,500
-
-
1.00
0.50
0.45
7

Source: ECB.
1)
The amounts shown may differ slightly from those in Section 1.1 owing to operations that have been allotted but not settled.
2)
With effect from April 2002, split tender operations (i.e. operations with a one-week maturity conducted as standard tender procedures in parallel with a main refinancing
operation) are classified as main refinancing operations. For split tender operations conducted before this month, see Table 2 in Section 1.3.
3)
On 8 June 2000 the ECB announced that, starting from the operation to be settled on 28 June 2000, the main refinancing operations of the Eurosystem would be conducted as
variable rate tender procedures. The minimum bid rate refers to the minimum interest rate at which counterparties may place their bids. On 8 October 2008 the ECB announced
that, starting from the operation to be settled on 15 October 2008, the weekly main refinancing operations would be carried out through a fixed rate tender procedure with full
allotment at the interest rate on the main refinancing operations. On 4 March 2010 the ECB decided to return to variable rate tender procedures in the regular three-month
longer-term refinancing operations, starting with the operation to be allotted on 28 April 2010 and settled on 29 April 2010.
4)
In liquidity-providing (absorbing) operations, the marginal rate refers to the lowest (highest) rate at which bids were accepted.
5)
In the final one-year longer-term refinancing operation, which was settled on 17 December 2009, as well as in the six-month longer-term refinancing operations settled on
1 April and 13 May 2010, the rate at which all bids were satisfied was indexed to the average minimum bid rate in the main refinancing operations over the life of the operation.
ECB
S Monthly Bulletin
8 August 2010

EURO AREA
STATISTICS
Monetary
policy
statistics
1.4 Minimum reserve and liquidity statistics
(EUR billions; period averages of daily positions, unless otherwise indicated; interest rates as percentages per annum)
1. Reserve base of credit institutions subject to reserve requirements

Reserve
Total Liabilities to which a 2% reserve coefficient is applied
Liabilities to which a 0% reserve coefficient is applied
base
as at: 1)
Overnight deposits and
Debt securities
Deposits with an agreed
Repos
Debt securities
deposits with an agreed maturity
issued with a maturity
maturity or notice period
issued with a maturity
or notice period of up to 2 years
of up to 2 years
of over 2 years
of over 2 years
1
2
3
4
5
6
2008
18,169.6
10,056.8
848.7
2,376.9
1,243.5
3,643.7
2009
18,318.2
9,808.5
760.4
2,475.7
1,170.1
4,103.5
2010 Jan.
18,454.5
9,829.1
766.1
2,465.6
1,225.0
4,168.7
Feb.
18,516.2
9,828.1
759.3
2,479.5
1,282.5
4,166.8
Mar.
18,587.9
9,807.3
782.8
2,506.7
1,283.5
4,207.6
Apr.
18,861.5
9,912.0
764.4
2,584.6
1,345.7
4,254.8

May
19,042.0
9,993.3
746.6
2,600.6
1,411.4
4,290.0
2. Reserve maintenance
Maintenance
Required
Credit institutions’
Excess
Deficiencies
Interest rate on
period
reserves
current accounts
reserves
minimum reserves
ending on:
1
2
3
4
5
2008
217.2
218.7
1.5
0.0
3.25

2009
210.2
211.4
1.2
0.0
1.00
2010 9 Mar.
210.9
211.8
1.0
0.0
1.00
13 Apr.
211.4
212.5
1.2
0.0
1.00
11 May
211.2
212.4
1.2
0.0
1.00
15 June
211.3
212.5
1.3
0.0
1.00
13 July
213.0
214.4
1.4
0.0
1.00
10 Aug.
214.3
.
.
.
.
3. Liquidity

Maintenance
Liquidity-providing factors
Liquidity-absorbing factors
Credit
Base
period

institutions’
money
ending on:
Monetary policy operations of the Eurosystem

current
accounts
Eurosystem’s
Main
Longer-term
Marginal
Other
Deposit
Other
Banknotes
Central
Other
net assets
refinancing
refinancing
lending
liquidity-
facility
liquidity-
in
government
factors
in gold
operations
operations
facility
providing
absorbing circulation
deposits
(net)
and foreign
operations 2)
operations 3)
with the
currency
Eurosystem
1
2
3
4
5
6
7
8
9
10
11
12
2008
580.5
337.3
457.2
2.7
0.0
200.9
4.9
731.1
107.8
114.3
218.7
1,150.7

2009
407.6
55.8
593.4
0.7
24.6
65.7
9.9
775.2
150.1
-130.2
211.4
1,052.3
2010 9 Feb.
425.6
59.7
662.2
0.2
33.5
168.3
13.3
783.6
122.6
-117.5
210.9
1,162.8
9 Mar.
426.9
80.5
641.1
0.9
38.0
186.4
10.5
784.6
113.2
-119.3
211.8
1,182.9
13 Apr.
439.8
77.7
650.5
0.4
43.6
200.7
8.4
792.9
113.6
-116.1
212.5
1,206.1
11 May
457.0
76.7
666.4
0.9
49.4
218.2
11.4
796.6
112.1
-100.3
212.4
1,227.2
15 June
462.4
110.0
706.7
0.3
86.9
288.8
34.1
806.2
123.1
-98.4
212.5
1,307.5
13 July
500.9
167.5
573.2
0.3
140.2
230.4
54.4
813.0
126.5
-56.5
214.4
1,257.8
Source: ECB.
1) End of period.
2) Includes liquidity provided under the Eurosystem’s covered bond purchase programme and the Eurosystem’s securities markets programme.
3) Includes liquidity absorbed as a result of the Eurosystem’s foreign exchange swap operations.
For more information, please see: http://www.ecb.europa.eu/mopo/liq/html/index.en.html
ECB
Monthly Bulletin
August 2010 S 9

2 MONEY, BANKING AND INVESTMENT FUNDS
2.1 Aggregated balance sheet of euro area MFIs 1)
(EUR billions; outstanding amounts at end of period)
1. Assets

Total
Loans to euro area residents
Holdings of securities other than
Money
Holdings
External
Fixed Remaining

shares issued by euro area residents
market
of shares/
assets
assets
assets
fund other equity
Total
General
Other
MFIs
Total
General
Other
MFIs
shares/
issued by
government
euro area
government euro area
units 2)
euro area
residents
residents
residents
1
2
3
4
5
6
7
8
9
10
11
12
13
14
Eurosystem
2008
2,982.9
1,803.0
20.6
0.6
1,781.8
362.3
319.6
3.3
39.4
- 14.4
484.7
8.6
309.9
2009
2,829.9
1,475.6
19.5
0.7
1,455.4
451.7
368.3
7.5
75.9
- 16.5
557.7
8.5
320.0
2010 Q1
2,880.9
1,476.1
19.6
0.7
1,455.9
472.4
376.1
8.4
87.9
- 16.6
583.0
8.4
324.4
Q2 (p)
3,390.3
1,822.1
18.8
0.9
1,802.4
526.7
416.5
9.7
100.5
- 15.8
670.4
8.6
346.7
2010 Jan.
2,823.5
1,464.9
19.5
0.7
1,444.8
451.7
364.3
7.9
79.5
- 16.2
563.2
8.4
319.1
Feb.
2,867.1
1,479.4
19.5
0.7
1,459.3
465.4
373.7
8.0
83.7
- 16.1
585.8
8.4
312.0
Mar.
2,880.9
1,476.1
19.6
0.7
1,455.9
472.4
376.1
8.4
87.9
- 16.6
583.0
8.4
324.4
Apr.
2,946.5
1,511.9
19.0
0.7
1,492.3
478.9
377.6
8.7
92.6
- 16.4
609.9
8.4
321.0
May
3,259.3
1,732.5
19.0
0.7
1,712.9
516.5
408.6
9.2
98.7
- 15.9
665.6
8.5
320.3

June (p)
3,390.3
1,822.1
18.8
0.9
1,802.4
526.7
416.5
9.7
100.5
- 15.8
670.4
8.6
346.7
MFIs excluding the Eurosystem
2008
31,842.1
18,052.6
968.4
10,772.1
6,312.0
4,630.0
1,245.9
1,406.8
1,977.4
98.7
1,196.1
4,754.3
211.4
2,898.9
2009
31,153.8
17,703.7
1,002.3
10,780.3
5,921.1
5,061.5
1,483.9
1,496.8
2,080.8
85.1
1,234.9
4,258.1
220.4
2,590.2
2010 Q1
31,570.0
17,749.5
1,032.8
10,797.4
5,919.3
5,127.5
1,551.5
1,482.7
2,093.2
77.7
1,228.3
4,420.6
217.9
2,748.5
Q2 (p)
32,593.4
18,236.5
1,067.0
10,957.7
6,211.8
5,122.6
1,569.8
1,522.4
2,030.3
67.3
1,231.3
4,599.5
221.0
3,115.3
2010 Jan.
31,408.1
17,723.1
1,013.9
10,770.2
5,939.0
5,077.0
1,496.5
1,493.2
2,087.4
86.9
1,250.2
4,383.5
219.7
2,667.6
Feb.
31,525.0
17,712.6
1,009.1
10,773.5
5,930.0
5,094.9
1,523.7
1,497.4
2,073.7
85.6
1,232.7
4,432.0
218.2
2,749.0
Mar.
31,570.0
17,749.5
1,032.8
10,797.4
5,919.3
5,127.5
1,551.5
1,482.7
2,093.2
77.7
1,228.3
4,420.6
217.9
2,748.5
Apr.
31,990.9
17,905.5
1,037.2
10,818.9
6,049.4
5,130.9
1,561.6
1,490.1
2,079.2
76.6
1,271.2
4,517.5
217.9
2,871.3
May
32,714.6
18,182.1
1,051.4
10,861.0
6,269.6
5,080.2
1,553.0
1,469.0
2,058.2
74.6
1,255.3
4,688.2
218.5
3,215.7

June (p) 32,593.4
18,236.5
1,067.0
10,957.7
6,211.8
5,122.6
1,569.8
1,522.4
2,030.3
67.3
1,231.3
4,599.5
221.0
3,115.3
2. Liabilities

Total
Currency
Deposits of euro area residents
Money
Debt
Capital
External Remaining
in
market
securities
and
liabilities
liabilities
circulation
Total
Central
Other general
MFIs
fund
issued 4)
reserves
government
government/
shares/
other euro
units 3)
area residents
1
2
3
4
5
6
7
8
9
10
11
Eurosystem
2008
2,982.9
784.7
1,240.7
68.8
16.6
1,155.2
- 0.1
273.8
377.8
305.9
2009
2,829.9
829.3
1,185.7
102.6
22.6
1,060.5
- 0.1
320.9
140.2
353.7
2010 Q1
2,880.9
819.9
1,222.8
101.2
22.0
1,099.6
- 0.1
353.0
135.4
349.6
Q2 (p)
3,390.3
835.4
1,623.2
137.2
21.4
1,464.6
- 0.1
413.5
142.5
375.6
2010 Jan.
2,823.5
806.2
1,204.1
116.3
23.5
1,064.2
- 0.1
328.4
133.5
351.3
Feb.
2,867.1
807.0
1,225.9
107.0
23.6
1,095.2
- 0.1
344.7
138.1
351.4
Mar.
2,880.9
819.9
1,222.8
101.2
22.0
1,099.6
- 0.1
353.0
135.4
349.6
Apr.
2,946.5
821.1
1,264.2
87.8
22.0
1,154.4
- 0.1
369.2
140.1
351.8
May
3,259.3
828.4
1,510.9
128.8
22.7
1,359.5
- 0.1
407.0
155.3
357.6

June (p)
3,390.3
835.4
1,623.2
137.2
21.4
1,464.6
- 0.1
413.5
142.5
375.6
MFIs excluding the Eurosystem
2008
31,842.1
- 16,740.2
191.0
9,690.4
6,858.8
824.8
4,848.4
1,767.6
4,404.3
3,256.9
2009
31,153.8
- 16,465.8
144.2
10,034.6
6,287.1
732.3
4,919.1
1,921.0
4,099.8
3,015.8
2010 Q1
31,570.0
- 16,419.1
166.3
10,026.2
6,226.5
705.8
5,019.0
1,930.1
4,289.1
3,207.0
Q2 (p)
32,593.4
- 16,988.6
168.1
10,291.2
6,529.3
672.4
4,988.2
1,994.8
4,477.0
3,472.4
2010 Jan.
31,408.1
- 16,461.2
161.1
10,009.6
6,290.5
738.8
4,975.7
1,920.4
4,227.0
3,084.9
Feb.
31,525.0
- 16,460.3
166.5
10,012.0
6,281.8
729.4
4,961.0
1,916.9
4,285.4
3,172.0
Mar.
31,570.0
- 16,419.1
166.3
10,026.2
6,226.5
705.8
5,019.0
1,930.1
4,289.1
3,207.0
Apr.
31,990.9
- 16,593.5
159.7
10,113.7
6,320.1
710.6
5,025.0
1,933.8
4,410.1
3,317.9
May
32,714.6
- 16,867.7
155.6
10,138.1
6,574.0
704.6
5,034.7
1,941.0
4,550.4
3,616.2

June (p)
32,593.4
- 16,988.6
168.1
10,291.2
6,529.3
672.4
4,988.2
1,994.8
4,477.0
3,472.4
Source: ECB.
1)
Data refer to the changing composition of the euro area. For further information, see the General Notes.
2)
Amounts issued by euro area residents. Amounts issued by non-euro area residents are included in external assets.
3)
Amounts held by euro area residents.
4)
Amounts issued with a maturity of up to two years and held by non-euro area residents are included in external liabilities.
ECB
S Monthly Bulletin
10 August 2010

EURO AREA
STATISTICS
Money,
banking
and
investment
funds
2.2 Consolidated balance sheet of euro area MFIs 1)
(EUR billions; outstanding amounts at end of period; transactions during period)
1. Assets

Total
Loans to euro area residents
Holdings of securities other than shares
Holdings
External
Fixed
Remaining

issued by euro area residents
of shares/
assets
assets
assets
other equity
Total
General
Other
Total
General
Other
issued by
government
euro area
government
euro area other euro area
residents
residents
residents
1
2
3
4
5
6
7
8
9
10
11
Outstanding amounts
2008
24,127.6
11,761.8
989.0
10,772.8
2,975.6
1,565.5
1,410.1
784.2
5,239.0
220.0
3,147.1
2009
23,866.5
11,802.7
1,021.7
10,781.0
3,356.4
1,852.2
1,504.2
811.8
4,815.8
228.9
2,851.0
2010 Q1
24,314.2
11,850.4
1,052.3
10,798.1
3,418.7
1,927.6
1,491.1
793.5
5,003.7
226.3
3,021.6
Q2 (p)
25,260.5
12,044.3
1,085.7
10,958.6
3,518.5
1,986.4
1,532.2
785.9
5,269.9
229.5
3,412.2
2010 Jan.
24,094.3
11,804.2
1,033.3
10,770.9
3,361.8
1,860.7
1,501.1
815.6
4,946.7
228.1
2,937.7
Feb.
24,264.8
11,802.7
1,028.5
10,774.2
3,402.8
1,897.4
1,505.4
801.4
5,017.8
226.6
3,013.6
Mar.
24,314.2
11,850.4
1,052.3
10,798.1
3,418.7
1,927.6
1,491.1
793.5
5,003.7
226.3
3,021.6
Apr.
24,636.5
11,875.7
1,056.2
10,819.5
3,438.0
1,939.2
1,498.8
825.2
5,127.4
226.3
3,143.9
May
25,240.0
11,932.1
1,070.4
10,861.7
3,439.8
1,961.6
1,478.2
800.6
5,353.8
227.0
3,486.7

June (p)
25,260.5
12,044.3
1,085.7
10,958.6
3,518.5
1,986.4
1,532.2
785.9
5,269.9
229.5
3,412.2
Transactions
2008
1,711.2
599.0
12.8
586.2
499.6
90.1
409.4
-56.0
-56.3
-3.0
728.9
2009
-649.7
20.5
34.9
-14.4
364.5
269.8
94.7
12.8
-467.7
7.8
-588.1
2010 Q1
271.0
31.0
30.1
0.9
53.0
71.6
-18.5
-13.1
52.7
-2.7
150.0
Q2 (p)
531.0
124.6
34.8
89.8
52.4
59.6
-7.2
1.0
-36.6
2.7
385.3
2010 Jan.
126.6
-18.1
11.3
-29.5
2.2
8.6
-6.4
4.9
62.5
-0.7
75.8
Feb.
118.6
-1.7
-4.9
3.3
34.4
31.9
2.5
-12.1
16.7
-1.8
83.0
Mar.
25.8
50.8
23.7
27.1
16.4
31.1
-14.7
-6.0
-26.5
-0.1
-8.8
Apr.
282.1
33.7
3.6
30.1
20.4
13.3
7.1
34.9
71.5
0.1
121.6
May
399.1
36.9
13.8
23.1
-0.5
20.9
-21.3
-20.6
37.5
0.7
345.0

June (p)
-150.2
54.0
17.4
36.6
32.5
25.5
7.1
-13.4
-145.6
2.0
-81.2
2. Liabilities
Total Currency in
Deposits of
Deposits of Money market
Debt
Capital
External
Remaining
Excess of
circulation
central
other general
fund shares/
securities
and
liabilities
liabilities
inter-MFI
government
government/
units 2)
issued 3)
reserves
liabilities
other euro area
over inter-MFI
residents
assets
1
2
3
4
5
6
7
8
9
10
Outstanding amounts
2008
24,127.6
722.9
259.8
9,707.1
725.7
2,831.6
1,615.2
4,782.1
3,562.7
-79.9
2009
23,866.5
770.1
246.8
10,057.2
646.9
2,762.4
1,802.3
4,240.0
3,369.6
-29.0
2010 Q1
24,314.2
768.7
267.5
10,048.2
628.1
2,837.9
1,831.7
4,424.5
3,556.6
-49.0
Q2 (p)
25,260.5
785.6
305.3
10,312.6
604.8
2,857.5
1,947.1
4,619.5
3,848.1
-20.3
2010 Jan.
24,094.3
757.2
277.4
10,033.2
651.9
2,808.9
1,798.1
4,360.4
3,436.2
-29.1
Feb.
24,264.8
759.7
273.5
10,035.6
643.7
2,803.6
1,814.1
4,423.5
3,523.4
-12.2
Mar.
24,314.2
768.7
267.5
10,048.2
628.1
2,837.9
1,831.7
4,424.5
3,556.6
-49.0
Apr.
24,636.5
772.7
247.6
10,135.7
633.7
2,853.2
1,840.5
4,550.2
3,669.7
-67.2
May
25,240.0
779.1
284.3
10,160.8
629.8
2,877.9
1,877.4
4,705.7
3,973.7
-49.0

June (p)
25,260.5
785.6
305.3
10,312.6
604.8
2,857.5
1,947.1
4,619.5
3,848.1
-20.3
Transactions
2008
1,711.2
83.3
106.1
700.3
29.4
-31.8
139.0
93.1
616.2
-24.6
2009
-649.7
45.8
-4.5
288.8
-12.3
-54.8
142.7
-591.0
-506.9
42.5
2010 Q1
271.0
-1.3
20.7
-31.1
-20.1
49.8
0.5
75.4
190.7
-13.7
Q2 (p)
531.0
16.9
37.7
138.5
-27.3
-33.1
29.5
-58.1
400.9
25.5
2010 Jan.
126.6
-12.8
30.7
-32.3
4.7
30.5
-8.8
56.3
72.6
-14.2
Feb.
118.6
2.4
-3.9
-10.6
-8.2
-13.3
-1.0
28.9
101.7
22.5
Mar.
25.8
9.1
-6.0
11.8
-16.6
32.6
10.4
-9.7
16.4
-22.0
Apr.
282.1
4.0
-20.0
83.5
1.6
8.3
-1.0
96.5
121.2
-12.3
May
399.1
6.4
36.8
5.2
-4.0
-14.8
14.0
4.0
329.2
22.3

June (p)
-150.2
6.5
20.9
49.8
-24.9
-26.6
16.5
-158.6
-49.4
15.5
Source: ECB.
1)
Data refer to the changing composition of the euro area. For further information, see the General Notes.
2)
Amounts held by euro area residents.
3)
Amounts issued with a maturity of up to two years and held by non-euro area residents are included in external liabilities.
ECB
Monthly Bulletin
August 2010 S 11

2.3 Monetary statistics 1)
(EUR billions and annual growth rates; seasonally adjusted; outstanding amounts and growth rates at end of period; transactions during period)
1. Monetary aggregates 2) and counterparts

M3
M3 Longer-term
Credit to
Credit to other euro area residents
Net

3-month
financial
general
external
M2
M3-M2
moving
liabilities government
Loans
Memo item: Loans
assets 3)
average
adjusted
M1
M2-M1
(centred)
for sales and
securitisation 4)
1
2
3
4
5
6
7
8
9
10
11
12
Outstanding amounts
2008
3,980.2
4,033.1
8,013.3
1,372.0
9,385.4
- 6,286.8
2,576.2
12,966.7
10,777.2
- 437.2
2009
4,492.2
3,688.4
8,180.6
1,146.3
9,327.0
- 6,761.6
2,899.9
13,087.2
10,779.2
- 555.7
2010 Q1
4,567.8
3,653.8
8,221.5
1,103.0
9,324.5
- 6,908.9
2,979.0
13,097.2
10,803.2
- 590.8
Q2 (p)
4,662.6
3,630.9
8,293.5
1,129.7
9,423.2
- 7,134.2
3,048.5
13,238.4
10,931.3
- 656.3
2010 Feb.
4,561.1
3,659.6
8,220.7
1,091.1
9,311.8
- 6,876.7
2,929.6
13,122.5
10,795.6
- 572.7
Mar.
4,567.8
3,653.8
8,221.5
1,103.0
9,324.5
- 6,908.9
2,979.0
13,097.2
10,803.2
- 590.8
Apr.
4,648.6
3,616.5
8,265.1
1,120.0
9,385.0
- 6,962.3
2,983.5
13,102.8
10,821.4
- 604.4
May
4,645.6
3,630.0
8,275.6
1,103.4
9,379.0
- 7,021.6
3,025.0
13,102.0
10,859.0
- 689.9

June (p)
4,662.6
3,630.9
8,293.5
1,129.7
9,423.2
- 7,134.2
3,048.5
13,238.4
10,931.3
- 656.3
Transactions
2008
130.2
484.0
614.1
47.8
661.9
- 253.3
103.1
928.1
581.9
737.8
-150.3
2009
496.0
-368.3
127.7
-157.7
-30.0
- 420.7
308.8
83.7
-20.7
19.6
122.9
2010 Q1
71.6
-45.1
26.5
-43.7
-17.2
- 83.9
74.8
-6.4
7.8
-1.9
9.0
Q2 (p)
77.0
-32.6
44.5
23.9
68.4
- -12.3
71.6
31.0
57.5
65.0
15.7
2010 Feb.
21.2
-11.7
9.5
-8.6
0.9
- 3.4
27.3
19.6
21.6
18.7
-17.6
Mar.
6.6
-6.2
0.4
11.1
11.5
- 22.7
50.2
-20.5
10.8
8.9
16.4
Apr.
79.8
-39.4
40.4
13.1
53.4
- 35.6
5.9
16.7
26.9
28.3
-9.4
May
-10.1
6.7
-3.3
-16.7
-20.1
- -9.0
39.5
-16.7
18.5
19.2
48.1

June (p)
7.3
0.1
7.4
27.6
35.0
- -39.0
26.2
31.0
12.1
17.5
-23.0
Growth rates
2008
3.4
13.7
8.3
3.6
7.6
7.1
4.2
4.2
7.7
5.7
7.1
-150.3

2009
12.4
-9.1
1.6
-11.6
-0.3
-0.2
6.7
11.9
0.6
-0.2
0.2
122.9

2010 Q1
10.8
-8.0
1.6
-10.9
-0.1
-0.2
5.9
9.7
0.2
-0.2
-0.1
155.5
Q2 (p)
9.2
-7.2
1.4
-7.3
0.2
0.0
3.7
8.1
0.0
0.3
0.2
76.3
2010 Feb.
11.0
-8.1
1.6
-12.6
-0.4
-0.2
5.7
9.2
0.3
-0.4
-0.2
139.2
Mar.
10.8
-8.0
1.6
-10.9
-0.1
-0.2
5.9
9.7
0.2
-0.2
-0.1
155.5
Apr.
10.7
-8.6
1.3
-10.0
-0.2
-0.1
6.0
8.7
0.4
0.2
0.2
87.9
May
10.3
-8.0
1.5
-9.8
-0.1
0.0
5.1
9.4
0.1
0.2
0.2
105.0

June (p)
9.2
-7.2
1.4
-7.3
0.2
.
3.7
8.1
0.0
0.3
0.2
76.3
C1 Monetary aggregates 1)
C2 Counterparts 1)
(annual growth rates; seasonally adjusted)
(annual growth rates; seasonally adjusted)
longer-term financial liabilities
M1
credit to general government
M3
loans to other euro area residents
20
20
20
20
15
15
15
15
10
10
10
10
5
5
5
5
0
0
0
0
-5
-5
-5
-5
-10
-10
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Source: ECB.
1)
Data refer to the changing composition of the euro area. For further information, see the General Notes.
Monthly and other shorter-term growth rates for selected items are available at: http://www.ecb.europa.eu/stats/money/aggregates/aggr/html/index.en.html
2)
Monetary liabilities of MFIs and central government (post office, treasury, etc.) vis-à-vis non-MFI euro area residents excluding central government.
For definitions of M1, M2 and M3, see glossary.
3)
Values in the section ‘‘growth rates’’ are sums of the transactions during the 12 months ending in the period indicated.
4)
Adjustment for the derecognition of loans on the MFI balance sheet on account of their sale or securitisation.
ECB
S Monthly Bulletin
12 August 2010

EURO AREA
STATISTICS
Money,
banking
and
investment
funds
2.3 Monetary statistics 1)
(EUR billions and annual growth rates; seasonally adjusted; outstanding amounts and growth rates at end of period; transactions during period)
2. Components of monetary aggregates and longer-term financial liabilities
Currency
Overnight
Deposits
Deposits Repos
Money
Debt
Debt
Deposits
Deposits
Capital
in
deposits with an agreed
redeemable
market
securities with securities with
redeemable with an agreed
and
circulation
maturity of up
at notice of
fund
a maturity of a maturity of
at notice of
maturity of
reserves
to 2 years up to 3 months
shares/units
up to 2 years
over 2 years over 3 months
over 2 years
1
2
3
4
5
6
7
8
9
10
11
Outstanding amounts
2008
710.6
3,269.7
2,464.5
1,568.6 350.3
754.9
266.9
2,576.9
121.6
1,984.4
1,603.9
2009
755.3
3,736.9
1,883.0
1,805.4 340.3
673.5
132.6
2,642.3
131.9
2,198.3
1,789.1
2010 Q1
775.5
3,792.3
1,817.2
1,836.6 342.9
625.2
134.9
2,704.8
132.2
2,242.0
1,829.9
Q2 (p)
785.1
3,877.5
1,791.0
1,840.0 399.3
605.5
124.8
2,718.3
127.7
2,340.3
1,947.9
2010 Feb.
764.8
3,796.3
1,830.1
1,829.5 323.6
641.7
125.8
2,685.2
131.2
2,245.2
1,815.1
Mar.
775.5
3,792.3
1,817.2
1,836.6 342.9
625.2
134.9
2,704.8
132.2
2,242.0
1,829.9
Apr.
769.2
3,879.3
1,773.6
1,843.0 359.2
624.2
136.6
2,721.1
131.2
2,261.2
1,848.7
May
780.4
3,865.2
1,784.2
1,845.8 358.2
615.9
129.3
2,743.0
129.0
2,254.3
1,895.3

June (p)
785.1
3,877.5
1,791.0
1,840.0 399.3
605.5
124.8
2,718.3
127.7
2,340.3
1,947.9
Transactions
2008
83.6
46.5
463.4
20.5
47.0
32.6
-31.9
1.4
0.7
114.6
136.7
2009
43.4
452.6
-605.7
237.4
-10.1
-13.2
-134.4
79.6
8.9
191.4
140.8
2010 Q1
20.2
51.4
-75.3
30.2
2.4
-49.5
3.3
35.4
0.3
36.3
11.9
Q2 (p)
9.7
67.4
-43.4
10.8
56.2
-23.7
-8.5
-40.5
-3.6
0.0
31.8
2010 Feb.
4.0
17.3
-20.6
8.9
14.9
-16.8
-6.7
-15.7
-0.5
14.4
5.2
Mar.
10.7
-4.1
-13.4
7.1
19.2
-17.4
9.3
17.7
1.0
-3.5
7.6
Apr.
-6.2
86.0
-45.6
6.2
16.3
-5.1
1.9
9.2
0.2
17.2
9.0
May
11.1
-21.2
4.4
2.4
-1.2
-8.3
-7.3
-17.6
-1.1
-13.9
23.5

June (p)
4.8
2.5
-2.2
2.3
41.1
-10.4
-3.1
-32.2
-2.7
-3.4
-0.7
Growth rates
2008
13.3
1.4
23.3
1.3
15.3
4.7
-10.6
0.1
0.5
6.1
9.3

2009
6.1
13.8
-24.4
15.1
-2.8
-1.8
-50.1
3.1
7.2
9.6
8.6

2010 Q1
6.8
11.7
-22.0
11.8
1.3
-11.8
-29.4
3.6
5.5
7.0
8.3
Q2 (p)
6.9
9.7
-19.5
8.7
15.9
-13.3
-29.1
1.4
-0.8
4.6
6.3
2010 Feb.
6.0
12.0
-22.5
12.7
-1.2
-9.4
-41.0
2.8
5.9
8.1
7.2
Mar.
6.8
11.7
-22.0
11.8
1.3
-11.8
-29.4
3.6
5.5
7.0
8.3
Apr.
5.5
11.8
-22.6
10.6
7.2
-11.8
-32.3
4.1
4.7
7.0
7.8
May
6.8
11.0
-21.2
9.7
9.8
-12.4
-33.0
2.8
2.3
5.6
8.0

June (p)
6.9
9.7
-19.5
8.7
15.9
-13.3
-29.1
1.4
-0.8
4.6
6.3
C3 Components of monetary aggregates 1)
C4 Components of longer-term financial liabilities 1)
(annual growth rates; seasonally adjusted)
(annual growth rates; seasonally adjusted)
currency in circulation
debt securities with a maturity of over 2 years
overnight deposits
deposits with an agreed maturity of over 2 years
deposits redeemable at notice of up to 3 months
capital and reserves
60
60
20
20
40
40
15
15
20
20
10
10
0
0
5
5
-20
-20
0
0
-40
-40
-5
-5
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Source: ECB.
1)
Data refer to the changing composition of the euro area. For further information, see the General Notes.
ECB
Monthly Bulletin
August 2010 S 13

2.4 MFI loans: breakdown 1), 2)
(EUR billions and annual growth rates; seasonally adjusted; outstanding amounts and growth rates at end of period; transactions during period)
1. Loans to financial intermediaries, non-financial corporations and households

Insurance
Other

corporations
financial
Non-financial corporations
Households 4)
and pension funds
intermediaries 3)

Total
Total
Total
Up to
Over 1
Over
Total
Consumer
Loans
Other
1 year
and up to
5 years
credit
for house
loans
5 years
purchase
1
2
3
4
5
6
7
8
9
10
Outstanding amounts
2008
104.9
973.0
4,822.5
1,381.6
961.1
2,479.8
4,876.8
631.0
3,482.3
763.5
2009
90.0
1,059.9
4,685.9
1,185.8
936.9
2,563.2
4,943.4
630.3
3,542.4
770.7
2010 Q1
87.4
1,048.7
4,684.9
1,169.7
926.4
2,588.7
4,982.3
622.4
3,581.0
778.8
Q2 (p)
86.9
1,092.1
4,668.8
1,133.8
918.4
2,616.6
5,083.5
636.4
3,634.9
812.2
2010 Feb.
91.3
1,042.4
4,694.7
1,183.9
931.2
2,579.7
4,967.2
624.8
3,565.5
776.9
Mar.
87.4
1,048.7
4,684.9
1,169.7
926.4
2,588.7
4,982.3
622.4
3,581.0
778.8
Apr.
90.5
1,069.7
4,664.1
1,152.8
921.5
2,589.9
4,997.1
623.8
3,593.5
779.9
May
90.2
1,070.9
4,689.2
1,164.1
920.9
2,604.1
5,008.7
623.1
3,604.7
781.0

June (p)
86.9
1,092.1
4,668.8
1,133.8
918.4
2,616.6
5,083.5
636.4
3,634.9
812.2
Transactions
2008
-3.7
87.2
418.7
86.8
119.8
212.0
79.8
10.4
52.3
17.1
2009
-13.6
35.9
-105.7
-181.0
-18.2
93.5
62.6
-0.9
51.2
12.3
2010 Q1
-2.8
-32.3
2.7
-10.5
-8.1
21.3
40.2
-4.1
36.4
7.9
Q2 (p)
-1.1
34.5
-14.2
-31.7
-4.5
22.0
38.3
-7.9
35.8
10.4
2010 Feb.
3.7
-6.6
12.8
-2.2
1.9
13.0
11.7
-1.7
10.4
3.0
Mar.
-4.0
3.7
-4.9
-7.6
-3.6
6.2
16.0
-0.5
14.5
2.0
Apr.
3.1
19.5
-11.8
-16.5
-1.3
6.0
16.1
0.1
12.5
3.6
May
-0.5
-8.3
18.1
9.9
-1.7
9.9
9.3
-1.2
9.1
1.4

June (p)
-3.7
23.4
-20.5
-25.1
-1.5
6.1
12.9
-6.7
14.2
5.4
Growth rates
2008
-3.5
10.0
9.5
6.7
13.9
9.4
1.7
1.7
1.5
2.3
2009
-13.0
3.6
-2.2
-13.1
-1.9
3.8
1.3
-0.1
1.5
1.6
2010 Q1
-11.4
0.1
-2.3
-11.2
-4.1
3.0
2.2
-1.0
2.6
2.8
Q2 (p)
-13.4
-0.4
-1.9
-10.1
-4.6
3.3
2.8
-1.6
3.4
3.4
2010 Feb.
-5.4
-0.6
-2.4
-12.0
-3.5
3.1
1.8
-0.8
2.1
2.7
Mar.
-11.4
0.1
-2.3
-11.2
-4.1
3.0
2.2
-1.0
2.6
2.8
Apr.
-7.4
2.3
-2.5
-11.4
-4.7
3.0
2.5
-0.3
2.9
3.1
May
-7.8
0.5
-2.1
-10.4
-4.7
3.2
2.6
-0.3
3.1
2.9

June (p)
-13.4
-0.4
-1.9
-10.1
-4.6
3.3
2.8
-1.6
3.4
3.4
C5 Loans to other financial intermediaries and non-financial
C6 Loans to households 2)
corporations 2) (annual growth rates; not seasonally adjusted)
(annual growth rates; not seasonally adjusted)
consumer credit
other financial intermediaries
loans for house purchase
non-financial corporations
other loans
35
35
14
14
30
30
12
12
25
25
10
10
20
20
8
8
15
15
6
6
10
10
4
4
5
5
2
2
0
0
0
0
-5
-5
-2
-2
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Source: ECB.
1)
MFI sector excluding the Eurosystem; sectoral classification is based on the ESA 95.
2)
Data refer to the changing composition of the euro area. For further information, see the General Notes.
3)
Including investment funds.
4)
Including non-profit institutions serving households.
ECB
S Monthly Bulletin
14 August 2010

EURO AREA
STATISTICS
Money,
banking
and
investment
funds
2.4 MFI loans: breakdown 1), 2)
(EUR billions and annual growth rates; not seasonally adjusted; outstanding amounts and growth rates at end of period; transactions during period)
2. Loans to financial intermediaries and non-financial corporations

Insurance corporations and pension funds
Other financial intermediaries 3)
Non-financial corporations
Total
Up to
Over 1
Over
Total
Up to
Over 1
Over
Total
Up to
Over 1
Over
1 year
and up to
5 years
1 year
and up to
5 years
1 year
and up to
5 years
5 years
5 years
5 years
1
2
3
4
5
6
7
8
9
10
11
12
Outstanding amounts
2009
80.3
57.4
7.0
15.9
1,052.9
593.4
186.2
273.3
4,692.3
1,181.7
937.3
2,573.2
2010 Q1
87.0
65.2
5.9
15.9
1,056.3
594.4
184.9
277.0
4,681.4
1,166.5
927.6
2,587.3

Q2 (p)
91.1
69.7
5.6
15.8
1,102.6
590.5
214.2
297.9
4,677.1
1,145.9
918.3
2,612.9
2010 Apr.
92.1
70.2
6.1
15.9
1,077.5
613.5
186.1
277.9
4,668.2
1,156.5
923.0
2,588.7
May
93.8
71.7
5.8
16.3
1,083.5
617.0
186.0
280.5
4,688.0
1,160.9
922.9
2,604.3

June (p)
91.1
69.7
5.6
15.8
1,102.6
590.5
214.2
297.9
4,677.1
1,145.9
918.3
2,612.9
Transactions
2009
-11.9
-11.8
0.9
-0.9
39.4
24.4
7.6
7.4
-105.0
-180.8
-18.0
93.8
2010 Q1
6.5
7.7
-1.2
0.0
-17.7
-15.1
-5.8
3.1
-7.1
-9.7
-7.4
9.9

Q2 (p)
3.5
4.0
-0.3
-0.2
36.5
28.1
5.2
3.2
-2.5
-16.3
-5.8
19.6
2010 Apr.
5.1
4.9
0.2
0.0
19.6
18.3
0.7
0.6
-4.3
-9.6
-1.0
6.3

May
1.5
1.5
-0.4
0.4
-3.5
-2.9
-1.4
0.8
12.9
3.0
-1.3
11.1
June (p)
-3.1
-2.5
-0.1
-0.5
20.5
12.7
6.0
1.8
-11.0
-9.7
-3.5
2.3

Growth rates
2009
-13.1
-17.1
14.2
-4.8
4.1
4.3
4.4
3.1
-2.2
-13.1
-1.9
3.8
2010 Q1
-11.3
-12.7
-12.0
-3.2
-0.1
-0.7
-5.6
5.4
-2.3
-11.2
-4.1
3.0
Q2 (p)
-13.1
-14.7
-29.1
3.6
-0.2
-1.2
-3.9
5.1
-1.9
-10.1
-4.5
3.3
2010 Apr.
-7.5
-8.2
-2.4
-5.3
2.2
3.6
-5.3
4.2
-2.5
-11.4
-4.7
3.0
May
-7.8
-8.5
-7.9
-3.9
0.4
0.4
-5.9
5.0
-2.1
-10.3
-4.8
3.2

June (p)
-13.1
-14.7
-29.1
3.6
-0.2
-1.2
-3.9
5.1
-1.9
-10.1
-4.5
3.3
3. Loans to households 4)

Total
Consumer credit
Loans for house purchase
Other loans
Total
Up to
Over 1
Over
Total
Up to
Over 1
Over
Total
Up to
Over 1
Over
1 year
and up to
5 years
1 year
and up to
5 years
1 year
and up to
5 years
5 years
5 years
5 years
1
2
3
4
5
6
7
8
9
10
11
12
13
Outstanding amounts
2009
4,954.8
632.3
135.5
195.0
301.8
3,550.9
14.8
60.9
3,475.1
771.6
146.2
87.3
538.1
2010 Q1
4,972.7
620.2
129.3
191.5
299.4
3,575.3
14.5
59.0
3,501.8
777.2
146.8
85.7
544.6

Q2 (p)
5,086.9
639.7
140.8
192.7
306.2
3,629.9
13.9
56.5
3,559.4
817.3
152.5
86.1
578.7
2010 Apr.
4,981.1
621.4
128.9
191.9
300.7
3,582.7
14.6
58.9
3,509.2
777.0
145.5
84.1
547.4

May
4,995.7
621.0
130.0
190.1
300.9
3,595.9
14.7
58.7
3,522.5
778.8
144.6
84.2
550.0
June (p)
5,086.9
639.7
140.8
192.7
306.2
3,629.9
13.9
56.5
3,559.4
817.3
152.5
86.1
578.7
Transactions
2009
63.1
-0.8
-1.3
-4.3
4.8
51.5
-2.6
-8.2
62.4
12.3
-7.8
-1.7
21.9
2010 Q1
19.2
-8.4
-5.2
-2.3
-0.8
22.3
-0.2
-1.6
24.1
5.3
0.1
-0.8
6.1

Q2 (p)
51.0
-2.4
1.7
-6.5
2.3
36.4
-0.7
-2.2
39.4
17.0
-0.6
-3.5
21.1
2010 Apr.
9.7
0.0
-0.4
-0.5
0.9
7.4
0.0
-0.1
7.5
2.3
-1.2
-0.4
3.9
May
12.3
-1.0
0.3
-1.5
0.1
11.2
0.2
-0.3
11.3
2.1
-0.3
0.0
2.4

June (p)
29.0
-1.4
1.8
-4.5
1.3
17.9
-0.9
-1.8
20.6
12.6
0.8
-3.1
14.8

Growth rates
2009
1.3
-0.1
-0.9
-2.1
1.6
1.5
-15.2
-12.0
1.8
1.6
-5.1
-1.9
4.2
2010 Q1
2.2
-1.0
-2.9
-2.3
0.7
2.6
-11.7
-9.9
2.9
2.8
-2.4
-1.2
5.0
Q2 (p)
2.8
-1.6
-2.1
-5.1
0.9
3.4
-11.5
-11.2
3.8
3.4
-5.3
-5.3
7.4
2010 Apr.
2.5
-0.3
-2.0
-1.7
1.4
2.9
-9.1
-10.0
3.2
3.1
-1.5
-2.1
5.2
May
2.6
-0.4
-0.9
-2.3
1.1
3.1
-8.1
-10.2
3.4
2.9
-1.2
-2.1
4.9

June (p)
2.8
-1.6
-2.1
-5.1
0.9
3.4
-11.5
-11.2
3.8
3.4
-5.3
-5.3
7.4
Source: ECB.
1)
MFI sector excluding the Eurosystem; sectoral classification is based on the ESA 95.
2)
Data refer to the changing composition of the euro area. For further information, see the General Notes.
3)
Including investment funds.
4)
Including non-profit institutions serving households.
ECB
Monthly Bulletin
August 2010 S 15

2.4 MFI loans: breakdown 1), 2)
(EUR billions and annual growth rates; not seasonally adjusted; outstanding amounts and growth rates at end of period; transactions during period)
4. Loans to government and non-euro area residents

General government
Non-euro area residents

Total
Central
Other general government
Total
Banks 3)
Non-banks
government
State
Local
Social
Total
General
Other
government
government
security
government
funds
1
2
3
4
5
6
7
8
9
10
Outstanding amounts
2008
968.4
227.1
210.1
509.0
22.2
3,247.8
2,282.0
965.8
57.8
908.1
2009
1,002.3
229.9
211.0
527.7
33.8
2,826.3
1,917.4
908.9
46.3
862.6
2009 Q2
999.0
249.4
206.5
514.5
28.6
2,949.2
1,999.9
949.3
57.1
892.2
Q3
994.7
235.9
209.7
518.3
30.7
2,808.1
1,894.1
914.0
47.7
866.2
Q4
1,002.3
229.9
211.0
527.7
33.8
2,826.3
1,917.4
908.9
46.3
862.6

2010 Q1 (p)
1,032.8
242.9
210.5
537.0
42.2
2,954.7
1,987.8
966.9
47.0
920.0
Transactions
2008
13.7
12.4
-8.1
16.5
-7.2
-59.3
-85.8
26.4
0.3
26.1
2009
36.0
2.8
0.9
20.8
11.5
-385.5
-346.8
-39.3
-1.5
-37.8
2009 Q2
28.0
16.9
0.9
2.6
7.6
-72.3
-78.9
6.9
-1.1
8.1
Q3
-4.2
-13.4
3.2
3.9
2.1
-75.1
-70.0
-5.1
0.8
-5.9
Q4
10.2
-6.2
1.3
12.0
3.1
-4.0
10.6
-15.4
-1.4
-14.0

2010 Q1 (p)
30.0
12.6
-0.4
9.4
8.5
54.0
24.1
29.6
-0.6
30.2
Growth rates
2008
1.4
5.8
-3.7
3.3
-24.5
-1.8
-3.6
2.8
0.5
3.0

2009
3.7
1.2
0.5
4.1
52.0
-11.8
-15.1
-4.1
-3.1
-4.2
2009 Q2
2.6
12.8
-4.1
3.9
-31.9
-13.8
-16.5
-7.5
-7.8
-7.5
Q3
1.7
4.5
-0.2
4.4
-32.3
-18.2
-21.9
-9.4
-1.3
-9.9

Q4
3.7
1.2
0.5
4.1
52.0
-11.8
-15.1
-4.1
-3.1
-4.2
2010 Q1 (p)
6.6
4.2
2.4
5.5
101.0
-3.2
-5.4
1.7
-4.7
2.1
C7 Loans to government 2)
C8 Loans to non-euro area residents 2)
(annual growth rates; not seasonally adjusted)
(annual growth rates; not seasonally adjusted)
central government
non-resident banks
other general government
non-resident non-banks
15
15
40
40
10
10
30
30
5
5
20
20
0
0
10
10
-5
-5
0
0
-10
-10
-10
-10
-15
-15
-20
-20
-20
-20
-30
-30
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Source: ECB.
1)
MFI sector excluding the Eurosystem; sectoral classification is based on the ESA 95.
2)
Data refer to the changing composition of the euro area. For further information, see the General Notes.
3)
The term ‘‘banks’’ is used in this table to indicate institutions similar to MFIs which are resident outside the euro area.
ECB
S Monthly Bulletin
16 August 2010

EURO AREA
STATISTICS
Money,
banking
and
investment
funds
2.5 Deposits held with MFIs: breakdown 1), 2)
(EUR billions and annual growth rates; outstanding amounts and growth rates at end of period; transactions during period)
1. Deposits by financial intermediaries

Insurance corporations and pension funds
Other financial intermediaries 3)

Total Overnight With an agreed maturity of: Redeemable at notice of:
Repos
Total Overnight With an agreed maturity of: Redeemable at notice of:
Repos
Up to
Over 2
Up to
Over
Up to
Over
Up to
Over
2 years
years
3 months
3 months
2 years
2 years
3 months
3 months
1
2
3
4
5
6
7
8
9
10
11
12
13
14
Outstanding amounts
2008
761.9
84.4
114.3
537.5
1.1
1.5
23.1 1,803.1
320.3
420.6
852.9
12.3
0.1
197.0

2009
738.3
84.2
87.0
543.3
2.2
1.4
20.2 1,873.1
313.4
335.3
957.6
15.9
0.0
250.9

2010 Q1
735.7
87.0
84.8
539.7
2.5
1.4
20.2 1,888.4
329.3
312.0
957.9
17.1
0.1
271.9
Q2 (p)
739.7
94.7
84.9
535.8
2.3
0.3
21.8 2,070.7
368.0
299.1
1,059.5
9.0
0.2
334.9
2010 Feb.
736.4
90.3
85.6
539.5
2.3
1.4
17.3 1,897.4
334.4
327.4
962.9
17.0
0.2
255.5
Mar.
735.7
87.0
84.8
539.7
2.5
1.4
20.2 1,888.4
329.3
312.0
957.9
17.1
0.1
271.9
Apr.
735.9
88.4
84.7
540.6
2.5
1.4
18.3 1,950.5
367.5
301.9
967.2
18.3
0.2
295.4
May
732.7
91.3
87.3
536.4
2.4
0.3
15.0 1,954.0
369.4
299.8
967.4
12.4
0.2
304.8

June (p)
739.7
94.7
84.9
535.8
2.3
0.3
21.8 2,070.7
368.0
299.1
1,059.5
9.0
0.2
334.9
Transactions
2008
69.4
12.4
42.8
12.3
-0.3
0.1
2.2
268.9
4.5
71.8
142.3
-0.3
-0.3
51.0

2009
-27.7
-1.0
-30.5
5.6
1.1
-0.1
-2.8
56.6
6.8
-93.7
85.8
3.7
0.0
54.1
2010 Q1
-3.9
2.7
-3.2
-3.7
0.3
0.0
0.0
-1.5
13.7
-30.1
-7.1
1.0
0.1
20.9

Q2 (p)
0.5
3.5
0.7
-6.1
-0.2
1.1
1.5
72.3
33.6
-19.8
3.8
-8.2
0.1
62.7
2010 Feb.
-7.2
-3.8
2.4
-0.7
0.0
0.0
-5.0
9.2
-8.8
-0.9
-2.9
-0.1
0.1
21.8
Mar.
-1.5
-3.3
-1.6
0.2
0.2
0.0
3.0
-10.5
-5.4
-16.1
-5.4
0.0
0.0
16.4
Apr.
0.1
1.3
-0.2
-0.2
0.0
1.1
-1.9
58.8
37.3
-11.6
8.4
1.2
0.0
23.4

May
-5.2
2.6
2.3
-6.6
-0.1
0.0
-3.3
-4.9
-0.6
-3.8
-3.9
-6.0
0.1
9.2
June (p)
5.6
-0.4
-1.3
0.7
-0.1
0.0
6.8
18.4
-3.2
-4.4
-0.8
-3.4
0.0
30.1

Growth rates
2008
10.0
17.3
60.0
2.3
-23.4
- 10.5
17.6
1.4
20.9
20.0
-2.5
- 34.6
2009
-3.6
-1.1
-26.5
1.0
96.8
- -12.3
3.1
2.0
-22.0
10.0
30.0
- 27.4
2010 Q1
-3.6
-4.7
-16.5
-1.1
53.8
- -5.6
1.2
2.7
-15.2
3.1
18.1
- 15.9
Q2 (p)
-1.9
5.6
-6.9
-3.1
32.3
- 14.4
1.6
6.7
-16.1
-1.0
-37.2
- 31.2
2010 Feb.
-3.2
-3.1
-14.6
-0.8
64.7
- -18.9
3.1
2.1
-13.0
5.7
21.7
- 20.6
Mar.
-3.6
-4.7
-16.5
-1.1
53.8
- -5.6
1.2
2.7
-15.2
3.1
18.1
- 15.9
Apr.
-3.6
-2.1
-15.6
-1.8
42.2
- -12.1
2.8
11.4
-20.0
3.3
21.6
- 24.1
May
-3.4
8.4
-12.6
-3.2
28.7
- -23.8
2.6
16.7
-20.0
0.9
-17.1
- 27.3

June (p)
-1.9
5.6
-6.9
-3.1
32.3
- 14.4
1.6
6.7
-16.1
-1.0
-37.2
- 31.2
C9 Total deposits by sector 2)
C10 Total deposits and deposits included in M3
(annual growth rates)
by sector 2) (annual growth rates)
insurance corporations and pension funds (total)
insurance corporations and pension funds (total)
other financial intermediaries (total)
other financial intermediaries (total)
insurance corporations and pension funds (included in M3)4)
other financial intermediaries (included in M3) 5)
40
40
40
40
30
30
30
30
20
20
20
20
10
10
10
10
0
0
0
0
-10
-10
-10
-10
-20
-20
2000
2002
2004
2006
2008
2004
2005
2006
2007
2008
2009
Source: ECB.
1)
MFI sector excluding the Eurosystem; sectoral classification is based on the ESA 95.
2)
Data refer to the changing composition of the euro area. For further information, see the General Notes.
3)
Includes investment funds.
4)
Covers deposits in columns 2, 3, 5 and 7.
5)
Covers deposits in columns 9, 10, 12 and 14.
ECB
Monthly Bulletin
August 2010 S 17

2.5 Deposits held with MFIs: breakdown 1), 2)
(EUR billions and annual growth rates; outstanding amounts and growth rates at end of period; transactions during period)
2. Deposits by non-financial corporations and households

Non-financial corporations
Households 3)

Total Overnight With an agreed maturity of: Redeemable at notice of:
Repos
Total Overnight With an agreed maturity of: Redeemable at notice of:
Repos
Up to
Over 2
Up to
Over
Up to
Over
Up to
Over
2 years
years
3 months
3 months
2 years
2 years
3 months
3 months
1
2
3
4
5
6
7
8
9
10
11
12
13
14
Outstanding amounts
2008
1,502.8
883.4
502.2
64.4
27.9
1.3
23.7 5,368.6
1,813.3
1,350.0
517.9
1,490.2
113.6
83.7

2009
1,603.3
1,001.2
434.7
80.7
68.7
1.7
16.3 5,590.9
2,155.6
988.5
605.6
1,680.2
123.7
37.3

2010 Q1
1,576.3
982.1
424.4
82.6
72.9
1.8
12.6 5,594.4
2,157.8
924.8
631.7
1,722.3
121.7
36.1
Q2 (p) 1,587.7
1,004.9
413.5
84.8
70.8
1.5
12.3 5,648.0
2,229.7
895.9
643.2
1,729.3
117.1
32.8
2010 Feb. 1,534.7
954.1
414.8
81.7
70.7
1.8
11.7 5,611.7
2,176.5
935.8
625.0
1,715.9
121.6
37.0
Mar. 1,576.3
982.1
424.4
82.6
72.9
1.8
12.6 5,594.4
2,157.8
924.8
631.7
1,722.3
121.7
36.1
Apr. 1,587.9
995.3
417.9
86.3
73.7
1.9
12.8 5,609.2
2,182.7
908.1
636.0
1,728.7
119.8
33.9
May 1,596.1
1,004.0
415.5
88.1
74.1
1.8
12.7 5,618.8
2,191.1
902.1
641.1
1,734.2
118.1
32.3

June (p) 1,587.7
1,004.9
413.5
84.8
70.8
1.5
12.3 5,648.0
2,229.7
895.9
643.2
1,729.3
117.1
32.8
Transactions
2008
7.8
-5.1
13.3
3.2
-3.4
-0.3
0.0
347.5
28.7
335.5
-43.1
28.1
1.7
-3.4

2009
93.0
114.2
-70.1
15.0
40.8
0.4
-7.4
187.6
320.5
-371.3
85.6
190.5
8.6
-46.3
2010 Q1
-28.6
-20.5
-10.8
2.1
4.2
0.1
-3.7
1.2
2.1
-64.7
25.9
41.2
-2.0
-1.2

Q2 (p)
4.8
21.0
-17.5
2.1
-0.1
-0.3
-0.3
48.0
65.2
-33.3
12.6
12.7
-6.0
-3.3
2010 Feb.
-14.2
-11.0
-4.0
0.2
2.0
0.0
-1.4
-0.8
2.1
-18.7
9.5
6.9
-0.6
0.0
Mar.
42.9
28.4
10.5
0.9
2.2
0.1
0.8
-17.1
-18.7
-10.8
6.7
6.5
0.1
-0.9
Apr.
11.3
13.2
-6.7
3.7
0.8
0.0
0.2
14.6
24.9
-16.7
4.3
6.2
-1.8
-2.2

May
2.0
5.7
-5.2
1.4
0.2
0.0
-0.1
6.6
7.2
-7.5
4.9
5.3
-1.7
-1.6
June (p)
-8.5
2.1
-5.7
-3.0
-1.2
-0.3
-0.4
26.7
33.1
-9.1
3.4
1.2
-2.4
0.6

Growth rates
2008
0.5
-0.6
2.8
5.4
-11.0
-16.2
0.0
6.9
1.6
33.2
-7.7
1.9
1.5
-3.9
2009
6.2
12.9
-13.9
23.1
146.6
28.3
-31.2
3.5
17.5
-27.3
16.4
12.8
7.5
-55.4
2010 Q1
6.9
12.7
-10.6
17.2
89.7
37.2
-29.8
2.7
13.6
-27.8
20.5
10.0
5.3
-41.2
Q2 (p)
4.1
9.3
-11.3
18.2
46.3
2.1
-37.5
2.5
10.6
-24.9
20.2
8.1
-2.1
-35.5
2010 Feb.
5.1
11.3
-12.9
18.1
100.9
32.4
-45.1
3.1
15.6
-28.4
19.7
10.8
5.8
-47.1
Mar.
6.9
12.7
-10.6
17.2
89.7
37.2
-29.8
2.7
13.6
-27.8
20.5
10.0
5.3
-41.2
Apr.
6.6
13.8
-12.7
20.5
68.0
33.7
-35.2
2.3
11.6
-26.8
20.5
9.1
3.5
-40.3
May
5.7
12.2
-12.2
21.7
56.8
30.4
-37.8
2.1
10.3
-25.9
20.5
8.7
0.7
-40.4

June (p)
4.1
9.3
-11.3
18.2
46.3
2.1
-37.5
2.5
10.6
-24.9
20.2
8.1
-2.1
-35.5
C11 Total deposits by sector 2)
C12 Total deposits and deposits included in M3
(annual growth rates)
by sector 2) (annual growth rates)
non-financial corporations (total)
non-financial corporations (total)
households (total)
households (total)
non-financial corporations (included in M3)4)
households (included in M3)5)
14
14
20
20
12
12
15
15
10
10
8
8
10
10
6
6
4
4
5
5
2
2
0
0
0
0
-2
-2
-5
-5
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
2004
2005
2006
2007
2008
2009
Source: ECB.
1)
MFI sector excluding the Eurosystem; sectoral classification is based on the ESA 95.
2)
Data refer to the changing composition of the euro area. For further information, see the General Notes.
3)
Including non-profit institutions serving households.
4)
Covers deposits in columns 2, 3, 5 and 7.
5)
Covers deposits in columns 9, 10, 12 and 14.
ECB
S Monthly Bulletin
18 August 2010

2.6 MFI holdings of securities: breakdown 1), 2)
(EUR billions and annual growth rates; outstanding amounts and growth rates at end of period; transactions during period)

Securities other than shares
Shares and other equity

Total
MFIs
General
Other euro
Non-euro area
Total
MFIs
Non-MFIs
Non-euro area

government
area residents
residents
residents
Euro
Non-euro
Euro
Non-euro
Euro
Non-euro
1
2
3
4
5
6
7
8
9
10
11
12
Outstanding amounts
2008
5,857.6
1,884.9
92.4
1,226.6
19.3
1,355.6
51.2
1,227.5
1,473.3
421.7
774.4
277.2
2009
6,209.6
1,971.7
109.2
1,467.9
16.1
1,457.3
39.4
1,148.0
1,515.9
434.7
800.2
281.0
2010 Q1
6,301.7
1,979.4
113.8
1,534.8
16.7
1,442.7
40.0
1,174.2
1,517.0
446.5
781.8
288.6
Q2 (p)
6,322.8
1,913.2
117.2
1,551.3
18.5
1,492.7
29.8
1,200.2
1,528.6
456.3
775.0
297.3
2010 Feb.
6,275.5
1,964.1
109.6
1,507.4
16.3
1,456.8
40.6
1,180.7
1,516.0
442.6
790.1
283.2
Mar.
6,301.7
1,979.4
113.8
1,534.8
16.7
1,442.7
40.0
1,174.2
1,517.0
446.5
781.8
288.6
Apr.
6,308.5
1,965.3
113.9
1,544.5
17.0
1,449.8
40.3
1,177.6
1,561.4
457.5
813.7
290.2
May
6,272.2
1,942.5
115.7
1,535.2
17.8
1,440.6
28.4
1,192.0
1,544.3
465.7
789.6
289.0

June (p)
6,322.8
1,913.2
117.2
1,551.3
18.5
1,492.7
29.8
1,200.2
1,528.6
456.3
775.0
297.3
Transactions
2008
696.1
214.4
5.9
38.3
1.9
389.7
19.0
26.9
-84.8
22.4
-56.5
-50.7
2009
353.3
83.0
16.6
230.7
-3.2
102.7
-12.0
-64.6
43.2
29.3
12.0
1.9
2010 Q1
46.5
6.3
-0.4
65.1
-0.3
-17.3
-2.1
-4.8
10.2
13.3
-13.1
10.0
Q2 (p)
-105.8
-67.8
-7.7
15.2
-0.4
5.2
-13.8
-36.4
22.1
12.2
1.0
9.0
2010 Feb.
9.0
-14.3
-2.7
26.4
-3.1
3.8
-1.3
0.3
-15.0
-4.0
-12.1
1.1
Mar.
22.8
15.6
3.6
28.7
0.4
-13.7
-1.2
-10.5
6.3
4.5
-6.0
7.8
Apr.
-3.6
-12.6
-1.4
10.3
-0.1
6.9
-0.2
-6.5
48.8
12.7
34.9
1.2
May
-85.4
-21.4
-5.1
-9.8
-0.6
-7.3
-14.4
-26.6
-10.8
9.4
-20.6
0.3

June (p)
-16.8
-33.8
-1.1
14.7
0.3
5.6
0.8
-3.4
-15.9
-10.0
-13.4
7.4
Growth rates
2008
13.4
12.8
8.1
3.2
9.9
39.9
57.2
2.2
-5.3
5.3
-6.7
-15.3

2009
6.0
4.4
17.5
18.7
-16.0
7.6
-23.2
-5.3
2.9
7.0
1.5
0.7
2010 Q1
2.3
-0.5
7.7
12.0
-19.1
3.1
-23.2
-4.1
3.5
7.5
0.6
5.8

Q2 (p)
-2.2
-5.5
-3.3
6.6
-23.2
-0.4
-47.9
-7.0
3.6
8.5
-0.4
7.7
2010 Feb.
2.8
-0.7
5.4
13.5
-18.5
5.8
-24.8
-5.1
2.4
6.8
0.4
1.3
Mar.
2.3
-0.5
7.7
12.0
-19.1
3.1
-23.2
-4.1
3.5
7.5
0.6
5.8
Apr.
1.2
-2.6
9.6
11.4
-19.8
1.7
-23.1
-4.1
4.8
9.0
2.2
5.5

May
-1.2
-4.9
-2.0
8.9
-19.8
0.3
-49.1
-6.4
4.0
10.0
0.1
5.7
June (p)
-2.2
-5.5
-3.3
6.6
-23.2
-0.4
-47.9
-7.0
3.6
8.5
-0.4
7.7
C14 MFI holdings of securities 2)
(annual growth rates)
securities other than shares
shares and other equity
30
30
25
25
20
20
15
15
10
10
5
5
0
0
-5
-5
-10
-10
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
Source: ECB.
1)
MFI sector excluding the Eurosystem; sectoral classification is based on the ESA 95.
2)
Data refer to the changing composition of the euro area. For further information, see the General Notes.
ECB
S Monthly Bulletin
20 August 2010

EURO AREA
STATISTICS
Money,
banking
and
investment
funds
2.7 Revaluation of selected MFI balance sheet items 1), 2)
(EUR billions)
1. Write-offs/write-downs of loans to households 3)

Consumer credit
Lending for house purchase
Other lending
Total
Up to
Over 1
Over
Total
Up to
Over 1
Over
Total
Up to
Over 1
Over
1 year
and up to
5 years
1 year
and up to
5 years
1 year
and up to
5 years
5 years
5 years
5 years
1
2
3
4
5
6
7
8
9
10
11
12
2007
-4.2
-1.2
-1.4
-1.6
-2.7
-0.2
-0.2
-2.3
-6.9
-0.8
-2.3
-3.7
2008
-4.6
-1.1
-1.5
-1.9
-2.7
0.0
-0.2
-2.5
-6.7
-1.2
-2.3
-3.2
2009
-7.5
-1.8
-2.3
-3.4
-4.0
-0.1
-0.2
-3.7
-7.4
-1.6
-1.3
-4.5
2009 Q4
-2.5
-0.8
-0.8
-0.9
-1.1
0.0
-0.1
-1.0
-2.3
-0.4
-0.6
-1.2
2010 Q1
-1.9
-1.1
-0.6
-0.2
-1.1
0.0
0.0
-1.1
-2.3
-0.5
-0.3
-1.4
Q2 (p)
-1.6
-0.4
-0.4
-0.8
-1.5
0.0
-0.5
-1.0
-2.0
-0.2
-0.5
-1.3
2010 Apr.
-0.3
0.0
-0.1
-0.2
-0.2
0.0
0.0
-0.2
-0.5
-0.1
-0.1
-0.3
May
-0.4
-0.1
-0.1
-0.2
-0.4
0.0
0.0
-0.4
-0.5
-0.1
-0.1
-0.3

June (p)
-0.9
-0.3
-0.2
-0.4
-0.9
0.0
-0.5
-0.4
-1.0
-0.1
-0.3
-0.6
2. Write-offs/write-downs of loans to non-financial corporations and non-euro area residents

Non-financial corporations
Non-euro area residents
Total
Up to
Over 1
Over
Total
Up to
Over 1
1 year
and up to
5 years
1 year
year
5 years
1
2
3
4
5
6
7
2007
-12.5
-2.1
-5.4
-4.9
-5.2
-3.4
-1.8
2008
-17.8
-4.1
-9.1
-4.6
-6.6
-3.4
-3.2
2009
-35.4
-12.7
-12.5
-10.2
-6.8
-2.6
-4.2
2009 Q4
-15.2
-5.3
-6.3
-3.7
-2.1
-0.5
-1.6
2010 Q1
-11.4
-7.1
-4.0
-0.3
-1.0
-0.4
-0.6
Q2 (p)
-16.7
-4.8
-6.1
-5.9
-1.0
-0.2
-0.8
2010 Apr.
-6.5
-1.2
-2.4
-3.0
-0.1
-0.1
-0.1
May
-5.3
-2.2
-1.6
-1.4
-0.5
-0.1
-0.3

June (p)
-5.0
-1.4
-2.1
-1.5
-0.4
0.0
-0.4
3. Revaluation of securities held by MFIs

Securities other than shares
Shares and other equity

Total
MFIs
General
Other euro
Non-euro area
Total
MFIs
Non-MFIs
Non-euro area

government
area residents
residents
residents
Euro
Non-euro
Euro
Non-euro
Euro
Non-euro
1
2
3
4
5
6
7
8
9
10
11
12
2007
-14.2
-3.3
0.1
-0.4
-0.2
-3.2
-0.6
-6.7
27.6
3.8
11.7
12.1
2008
-60.5
-12.1
0.0
4.5
0.0
-19.1
-2.2
-31.7
-63.6
-9.2
-46.2
-8.2
2009
4.3
8.2
0.2
-0.8
-0.1
-1.0
0.8
-2.9
1.0
-5.9
3.4
3.5
2009 Q4
1.1
1.2
0.1
-1.5
-0.1
0.2
-0.1
1.2
-0.4
-1.7
0.6
0.8
2010 Q1
14.3
3.2
0.3
4.5
0.1
2.4
0.1
3.7
0.4
-1.0
-0.2
1.7
Q2 (p)
-10.1
-1.9
0.7
-8.0
0.5
-4.2
0.2
2.7
-9.8
-3.2
-4.9
-1.7
2010 Apr.
-4.0
-1.7
0.0
-3.6
0.2
-0.1
0.0
1.2
-4.3
-1.7
-3.0
0.4
May
-0.8
-1.2
0.3
0.1
0.3
-1.6
0.0
1.4
-6.4
-1.2
-3.6
-1.6

June (p)
-5.3
1.0
0.4
-4.4
0.1
-2.5
0.1
0.0
0.8
-0.3
1.7
-0.5
Source: ECB.
1)
MFI sector excluding the Eurosystem; sectoral classification is based on the ESA 95.
2)
Data refer to the changing composition of the euro area. For further information, see the General Notes.
3)
Including non-profit institutions serving households.
ECB
Monthly Bulletin
August 2010 S 21

2.8 Currency breakdown of selected MFI balance sheet items 1), 2)
(percentages of total; outstanding amounts in EUR billions; end of period)
1. Deposits

MFIs 3)
Non-MFIs

All
Euro 4)
Non-euro currencies
All
Euro 4)
Non-euro currencies
currencies

currencies

(outstanding
Total

(outstanding
Total

amount)
amount)
USD
JPY
CHF
GBP
USD
JPY
CHF
GBP
1
2
3
4
5
6
7
8
9
10
11
12
13
14
By euro area residents
2007
6,087.5
92.1
7.9
4.8
0.4
1.1
1.0
9,054.4
95.8
4.2
2.2
0.4
0.1
0.5

2008
6,858.8
89.7
10.3
7.3
0.4
1.2
0.8
9,881.4
96.9
3.1
1.9
0.5
0.1
0.4
2009 Q2
6,625.7
92.2
7.8
5.1
0.3
1.1
0.8
10,145.9
97.0
3.0
1.9
0.3
0.1
0.5
Q3
6,287.5
92.4
7.6
4.8
0.4
1.1
0.8
10,061.2
97.0
3.0
1.9
0.3
0.1
0.4
Q4
6,287.1
93.0
7.0
4.4
0.3
1.1
0.7
10,178.7
97.0
3.0
1.9
0.2
0.1
0.4

2010 Q1 (p)
6,226.5
93.1
6.9
4.1
0.3
1.2
0.8
10,192.5
97.0
3.0
2.0
0.2
0.1
0.4
By non-euro area residents
2007
2,953.9
47.0
53.0
33.5
2.9
2.4
11.0
908.2
50.1
49.9
32.9
1.6
1.8
9.9

2008
2,818.1
48.3
51.7
33.4
2.8
2.6
10.2
897.4
54.9
45.1
28.7
1.4
1.9
9.4
2009 Q2
2,685.4
49.0
51.0
33.2
1.6
2.6
10.7
879.8
51.9
48.1
32.5
1.8
1.8
7.8
Q3
2,564.0
49.1
50.9
34.3
1.5
2.5
9.5
858.5
54.1
45.9
30.6
1.5
1.6
7.7
Q4
2,534.2
49.2
50.8
34.2
1.8
2.2
9.6
836.3
53.5
46.5
31.4
1.1
1.8
7.5

2010 Q1 (p)
2,640.4
50.1
49.9
32.9
2.2
2.2
9.4
903.8
54.9
45.1
31.9
1.1
1.3
6.1
2. Debt securities issued by euro area MFIs

All
Euro 4)
Non-euro currencies
currencies

(outstanding
Total

amount)
USD
JPY
CHF
GBP
1
2
3
4
5
6
7
2007
4,933.2
81.5
18.5
9.2
1.7
1.9
3.4

2008
5,111.7
83.3
16.7
8.4
2.0
1.9
2.5
2009 Q2
5,225.1
83.6
16.4
8.3
1.8
1.8
2.7
Q3
5,203.1
84.0
16.0
8.2
1.8
1.9
2.3
Q4
5,179.1
83.3
16.7
8.7
1.7
1.9
2.5

2010 Q1 (p)
5,294.8
82.5
17.5
9.5
1.6
1.9
2.5
Source: ECB.
1)
MFI sector excluding the Eurosystem; sectoral classification is based on the ESA 95.
2)
Data refer to the changing composition of the euro area. For further information, see the General Notes.
3)
For non-euro area residents, the term ‘‘MFIs’’ refers to institutions similar to euro area MFIs.
4)
Including items expressed in the national denominations of the euro.
ECB
S Monthly Bulletin
22 August 2010

EURO AREA
STATISTICS
Money,
banking
and
investment
funds
2.8 Currency breakdown of selected MFI balance sheet items 1), 2)
(percentages of total; outstanding amounts in EUR billions; end of period)
3. Loans

MFIs 3)
Non-MFIs

All
Euro 4)
Non-euro currencies
All
Euro 4)
Non-euro currencies
currencies

currencies

(outstanding
Total

(outstanding
Total

amount)
amount)
USD
JPY
CHF
GBP
USD
JPY
CHF
GBP
1
2
3
4
5
6
7
8
9
10
11
12
13
14
To euro area residents
2007
5,794.2
- - - - - -
11,098.9
96.2
3.8
1.8
0.2
0.9
0.6

2008
6,312.0
- - - - - -
11,740.6
95.9
4.1
2.1
0.3
1.0
0.4
2009 Q2
6,215.5
- - - - - -
11,835.0
96.1
3.9
2.0
0.2
1.0
0.5
Q3
5,911.3
- - - - - -
11,763.1
96.2
3.8
1.9
0.2
1.0
0.4
Q4
5,921.1
- - - - - -
11,782.6
96.2
3.8
1.9
0.2
1.0
0.4

2010 Q1 (p)
5,919.3
- - - - - -
11,830.1
96.1
3.9
2.0
0.2
1.0
0.4
To non-euro area residents
2007
2,344.5
48.2
51.8
28.8
2.3
2.4
12.7
955.7
40.9
59.1
41.2
1.2
3.7
8.2

2008
2,282.0
45.8
54.2
31.8
3.0
2.6
11.3
965.8
40.5
59.5
41.9
1.4
4.3
7.4
2009 Q2
1,999.9
45.2
54.8
29.6
2.8
3.2
13.5
949.3
40.2
59.8
42.5
1.1
3.9
7.6
Q3
1,894.1
45.5
54.5
29.9
2.7
3.1
12.6
914.0
40.4
59.6
41.9
1.5
3.8
7.6
Q4
1,917.4
45.8
54.2
29.4
2.7
2.9
12.6
908.9
40.1
59.9
42.0
1.2
3.7
8.0

2010 Q1 (p)
1,987.8
46.6
53.4
29.8
2.6
3.0
11.2
966.9
40.2
59.8
42.5
1.3
3.4
7.5
4. Holdings of securities other than shares

Issued by MFIs 3)
Issued by non-MFIs

All
Euro 4)
Non-euro currencies
All
Euro 4)
Non-euro currencies
currencies

currencies

(outstanding
Total

(outstanding
Total

amount)
amount)
USD
JPY
CHF
GBP
USD
JPY
CHF
GBP
1
2
3
4
5
6
7
8
9
10
11
12
13
14
Issued by euro area residents
2007
1,740.3
95.2
4.8
2.4
0.3
0.3
1.5
2,210.3
97.7
2.3
1.4
0.2
0.1
0.5

2008
1,977.4
95.3
4.7
2.6
0.4
0.2
1.2
2,652.7
97.3
2.7
1.7
0.3
0.1
0.4
2009 Q2
2,123.6
95.0
5.0
2.5
0.5
0.4
1.4
2,961.9
97.7
2.3
1.5
0.2
0.1
0.3
Q3
2,118.3
95.1
4.9
2.9
0.2
0.3
1.3
2,998.1
97.9
2.1
1.4
0.2
0.1
0.4
Q4
2,080.8
94.8
5.2
3.1
0.2
0.3
1.4
2,980.7
98.1
1.9
1.2
0.2
0.1
0.3

2010 Q1 (p)
2,093.2
94.6
5.4
3.2
0.2
0.3
1.4
3,034.2
98.1
1.9
1.2
0.2
0.1
0.3
Issued by non-euro area residents
2007
582.4
53.9
46.1
27.3
0.7
0.4
14.4
652.3
35.9
64.1
39.3
4.5
0.8
12.6

2008
580.7
54.1
45.9
28.6
0.9
0.5
13.3
646.8
39.0
61.0
37.1
6.4
0.8
11.0
2009 Q2
571.0
55.3
44.7
24.6
1.7
1.4
14.6
633.1
33.5
66.5
41.4
4.0
0.9
15.0
Q3
562.7
56.3
43.7
25.3
0.6
0.5
14.7
618.5
34.8
65.2
39.3
4.2
0.9
15.1

Q4
547.2
55.8
44.2
26.3
0.4
0.5
14.8
600.9
34.9
65.1
38.5
4.2
0.9
15.2
2010 Q1 (p)
562.4
55.3
44.7
28.0
0.4
0.5
14.8
611.8
32.9
67.1
39.9
4.2
0.9
14.9
Source: ECB.
1)
MFI sector excluding the Eurosystem; sectoral classification is based on the ESA 95.
2)
Data refer to the changing composition of the euro area. For further information, see the General Notes.
3)
For non-euro area residents, the term ‘‘MFIs’’ refers to institutions similar to euro area MFIs.
4)
Including items expressed in the national denominations of the euro.
ECB
Monthly Bulletin
August 2010 S 23

2.9 Aggregated balance sheet of euro area investment funds 1)
(EUR billions; outstanding amounts at end of period; transactions during period)
1. Assets
Total
Deposits and
Securities other
Shares and other
Investment fund/
Non-financial
Other assets
loan claims
than shares
equity (excl. money market fund
assets
(incl. financial
investment fund/
shares
derivatives)
money market fund
shares)
1
2
3
4
5
6
7
Outstanding amounts
2009 Nov.
5,240.8
340.4
2,043.5
1,562.3
693.6
208.2
392.8
Dec.
5,370.6
343.7
2,076.7
1,673.4
709.0
212.6
355.2
2010 Jan.
5,453.5
353.3
2,120.1
1,650.3
726.7
215.5
387.7
Feb.
5,527.4
355.6
2,146.3
1,670.2
741.5
216.8
397.0
Mar.
5,779.1
350.5
2,209.7
1,802.9
767.0
233.7
415.4
Apr.
5,863.9
358.2
2,232.7
1,817.7
780.6
235.1
439.6

May (p)
5,818.5
367.1
2,253.1
1,751.6
772.5
236.3
438.0
Transactions
2009 Q3
173.1
-9.0
69.9
112.6
9.1
2.7
-12.1
Q4
87.2
-11.9
58.2
42.7
15.5
5.9
-23.2

2010 Q1
184.6
-3.3
65.9
30.5
29.9
17.8
43.8
2. Liabilities

Total
Loans and
Investment fund shares issued
Other
deposits

liabilities
received
Total
Held by euro area residents
Held by
(incl. financial
non-euro area
derivatives)
Investment
residents
funds
1
2
3
4
5
6
7
Outstanding amounts
2009 Nov.
5,240.8
98.2
4,808.0
3,911.5
528.8
896.5
334.6
Dec.
5,370.6
101.2
4,965.2
4,020.1
539.6
945.1
304.2
2010 Jan.
5,453.5
101.1
5,014.7
4,042.9
546.7
971.8
337.7
Feb.
5,527.4
101.0
5,077.1
4,082.1
559.3
995.0
349.3
Mar.
5,779.1
113.1
5,293.0
4,221.8
582.6
1,071.2
373.0
Apr.
5,863.9
120.7
5,354.3
4,234.9
594.0
1,119.4
389.0

May (p)
5,818.5
115.6
5,298.4
4,173.7
582.3
1,124.6
404.5
Transactions
2009 Q3
173.1
0.8
186.2
94.7
16.7
91.4
-13.9
Q4
87.2
4.0
107.7
77.1
15.3
30.6
-24.5

2010 Q1
184.6
5.4
132.4
96.2
22.2
36.2
46.8
3. Investment fund shares issued broken down by investment policy and type of fund

Total
Funds by investment policy
Funds by type
Memo item:
Money market
Bond
Equity
Mixed
Real estate
Hedge
Other
Open-end
Closed-end
funds
funds
funds
funds
funds
funds
funds
funds
funds
1
2
3
4
5
6
7
8
9
10
Outstanding amounts
2009 Oct.
4,747.0
1,547.8
1,323.7
1,178.3
232.3
78.8
386.2
4,679.3
67.7
1,246.2
Nov.
4,808.0
1,561.5
1,350.4
1,194.1
234.9
78.8
388.3
4,740.5
67.5
1,223.7
Dec.
4,965.2
1,577.6
1,451.1
1,215.6
240.3
84.4
396.1
4,893.8
71.4
1,201.6
2010 Jan.
5,014.7
1,613.9
1,422.4
1,237.8
242.5
93.7
404.4
4,944.7
70.0
1,215.5
Feb.
5,077.1
1,639.3
1,441.4
1,248.5
244.3
95.6
408.0
5,006.4
70.7
1,202.0
Mar.
5,293.0
1,701.7
1,551.6
1,272.3
250.5
97.9
419.1
5,218.4
74.6
1,174.8
Apr.
5,354.3
1,727.1
1,569.1
1,286.6
249.3
99.7
422.4
5,279.7
74.6
1,182.5

May (p)
5,298.4
1,741.4
1,501.8
1,281.2
249.1
104.9
420.0
5,222.1
76.3
1,190.1
Transactions
2009 Nov.
20.0
8.6
5.3
4.4
1.2
-0.5
1.0
20.0
-0.1
-18.6
Dec.
51.1
4.9
18.8
15.4
7.0
2.7
2.2
47.3
3.7
-36.7
2010 Jan.
60.9
20.2
10.6
11.2
7.9
7.3
3.8
60.2
0.8
3.0
Feb.
21.8
13.3
4.1
3.0
1.1
0.2
0.0
21.6
0.1
-16.7
Mar.
49.7
39.4
2.5
-5.6
1.2
3.6
8.6
48.3
1.4
-30.1
Apr.
28.6
15.3
-0.9
11.6
0.5
-0.1
2.2
28.9
-0.3
-2.2

May (p)
-6.0
2.3
-12.3
1.7
-1.4
1.6
2.1
-7.6
1.6
-15.7
Source: ECB.
1) Other than money market funds (which are shown as a memo item in column 10 in Table 3 of this section). For further details, see the General Notes.
ECB
S Monthly Bulletin
24 August 2010

EURO AREA
STATISTICS
Money,
banking
and
investment
funds
2.10 Securities held by investment funds 1) broken down by issuer of securities
(EUR billions; outstanding amounts at end of period; transactions during period)
1. Securities other than shares

Total
Euro area
Rest of the world
Total
MFIs
General
Other
Insurance
Non-financial
EU
United
Japan
government
financial
corporations
corporations
Member States
States
intermediaries
and pension
outside the
funds
euro area
1
2
3
4
5
6
7
8
9
10
11
Outstanding amounts
2009 Q2
1,872.9
1,293.8
357.9
635.7
173.3
4.0
122.9
579.1
161.9
234.6
21.8
Q3
1,998.6
1,384.6
388.6
669.0
186.0
4.9
136.2
614.0
180.2
234.4
21.8
Q4
2,076.7
1,413.3
387.7
689.1
186.8
5.5
144.3
663.3
198.8
252.0
15.9

2010 Q1 (p)
2,209.7
1,463.1
392.5
710.1
199.5
5.9
155.1
746.6
211.4
290.2
15.3
Transactions
2009 Q3
69.9
47.6
10.6
20.9
6.1
0.3
9.7
22.2
11.2
3.5
-1.0
Q4
58.2
23.9
-2.9
19.0
0.2
0.5
7.1
34.3
15.9
13.3
-6.2

2010 Q1 (p)
65.9
24.4
0.3
9.0
8.2
0.0
6.8
41.5
10.7
16.4
-1.6
2. Shares and other equity (other than investment fund and money market fund shares)

Total
Euro area
Rest of the world
Total
MFIs
General
Other
Insurance
Non-financial
EU
United
Japan
government
financial
corporations
corporations
Member States
States
intermediaries
and pension
outside the
funds
euro area
1
2
3
4
5
6
7
8
9
10
11
Outstanding amounts
2009 Q2
1,251.3
565.6
69.5
- 28.7
16.8
450.4
685.8
110.8
210.9
59.7
Q3
1,544.6
701.4
97.2
- 35.8
24.8
543.4
843.2
127.0
265.1
61.8
Q4
1,673.4
723.3
97.5
- 36.1
23.8
565.7
950.1
138.4
295.4
65.8

2010 Q1 (p)
1,802.9
742.3
92.8
- 37.5
28.3
583.5
1,060.5
147.2
327.8
75.3
Transactions
2009 Q3
112.6
34.6
7.5
- 4.1
2.3
20.6
78.0
2.4
34.0
1.4
Q4
42.7
3.4
4.6
- 1.0
-0.7
-1.5
39.3
3.2
7.4
3.5

2010 Q1 (p)
30.5
8.7
-0.1
- 0.6
1.8
6.4
21.8
0.2
1.8
0.9
3. Investment fund/money market fund shares

Total
Euro area
Rest of the world
Total
MFIs 2)
General
Other
Insurance
Non-financial
EU
United
Japan
government
financial
corporations
corporations
Member States
States
intermediaries 2)
and pension
outside the
funds
euro area
1
2
3
4
5
6
7
8
9
10
11
Outstanding amounts
2009 Q2
628.0
540.2
82.9
- 457.3
-
-
87.9
12.9
16.2
0.4
Q3
680.4
592.0
78.1
- 514.0
-
-
88.4
14.5
18.9
0.3
Q4
709.0
614.1
74.4
- 539.6
-
-
95.0
15.7
19.0
0.3

2010 Q1 (p)
767.0
654.1
71.5
- 582.6
-
-
112.9
18.2
33.5
0.5
Transactions
2009 Q3
9.1
10.5
-6.2
- 16.7
- -
-1.5
0.9
-0.3
0.0
Q4
15.5
10.9
-4.4
- 15.3
- -
4.6
0.9
-0.4
0.1

2010 Q1 (p)
29.9
18.4
-3.7
- 22.2
- -
11.5
1.3
12.2
0.2
Source: ECB.
1) Other than money market funds. For further details, see the General Notes.
2) Investment fund shares (other than money market fund shares) are issued by other financial intermediaries. Money market fund shares are issued by MFIs.
ECB
Monthly Bulletin
August 2010 S 25

3 EURO AREA ACCOUNTS
3.1 Integrated economic and financial accounts by institutional sector
(EUR billions)
Uses
Euro
Households Non-financial
Financial
General
Rest of
area
corporations corporations
government the world
2010 Q1
External account
Exports of goods and services

461.8
Trade balance 1)

-4.3
Generation of income account
Gross value added (basic prices)

Taxes less subsidies on products
Gross domestic product (market prices)
Compensation of employees
1,049.1
105.7
658.8
52.7
232.0

Other taxes less subsidies on production
17.6
3.3
7.3
3.2
3.8

Consumption of fixed capital
353.1
97.5
197.3
11.6
46.7

Net operating surplus and mixed income 1)
557.5
279.9
237.3
39.7
0.5

Allocation of primary income account
Net operating surplus and mixed income
Compensation of employees

4.9
Taxes less subsidies on production
Property income
623.5
36.4
234.3
290.8
62.0
86.2
Interest
363.9
34.0
62.6
205.4
62.0
48.2
Other property income
259.6
2.4
171.7
85.4
0.0
38.0
Net national income 1)
1,843.1
1,521.1
78.8
42.3
200.8

Secondary distribution of income account
Net national income
Current taxes on income, wealth, etc.
221.4
197.8
19.0
4.5
0.2
1.5
Social contributions
404.4
404.4

0.7
Social benefits other than social transfers in kind
444.0
1.5
15.9
33.0
393.6
1.1
Other current transfers
199.2
70.6
26.8
46.4
55.4
8.1
Net non-life insurance premiums
44.7
32.3
10.8
0.9
0.7
1.5
Non-life insurance claims
44.8

44.8

0.6
Other
109.7
38.2
16.0
0.7
54.7
6.0
Net disposable income 1)
1,806.5
1,380.3
44.4
51.4
330.4

Use of income account
Net disposable income
Final consumption expenditure
1,774.1
1,295.3

478.7

Individual consumption expenditure
1,587.8
1,295.3

292.5

Collective consumption expenditure
186.3

186.3

Adjustment for the change in the net equity of households in pension fund reserves
14.0
0.1
0.4
13.5
0.0
0.0
Net saving/current external account 1)
32.5
98.9
44.0
38.0
-148.4
38.4
Capital account
Net saving/current external account
Gross capital formation
424.0
130.0
237.1
10.1
46.9

Gross fixed capital formation
407.6
127.8
223.3
10.0
46.6

Changes in inventories and acquisitions less disposals of valuables
16.4
2.2
13.8
0.1
0.2

Consumption of fixed capital
Acquisitions less disposals of non-produced non-financial assets
-0.1
-1.6
1.1
-0.1
0.5
0.1
Capital transfers
40.2
7.9
-0.8
1.0
32.1
4.8
Capital
taxes
5.5
5.3
0.2
0.0
0.0
Other capital transfers
34.8
2.6
-1.0
1.0
32.1
4.8
Net lending (+)/net borrowing (-) (from capital account) 1)
-35.9
73.7
19.6
48.6
-177.8
35.9
Statistical discrepancy
0.0
3.5
-3.5
0.0
0.0
0.0
Sources: ECB and Eurostat.
1) For details of the calculation of the balancing items, see the Technical Notes.
ECB
S Monthly Bulletin
26 August 2010

EURO AREA
STATISTICS
Euro area
accounts
3.1 Integrated economic and financial accounts by institutional sector (cont'd)
(EUR billions)
Resources
Euro
Households Non-financial
Financial
General
Rest of
area
corporations corporations
government the world
2010 Q1
External account
Imports of goods and services

457.5
Trade balance
Generation of income account
Gross value added (basic prices)
1,977.3
486.4
1,100.7
107.3
283.0

Taxes less subsidies on products
225.1

Gross domestic product (market prices)2)
2,202.4

Compensation of employees
Other taxes less subsidies on production

Consumption of fixed capital

Net operating surplus and mixed income
Allocation of primary income account
Net operating surplus and mixed income
557.5
279.9
237.3
39.7
0.5

Compensation of employees
1,051.7
1,051.7

2.4
Taxes less subsidies on production
241.7

241.7
1.0
Property income
615.8
225.9
75.7
293.4
20.7
93.9
Interest
348.3
54.0
32.8
254.6
6.9
63.8
Other property income
267.5
172.0
42.9
38.9
13.7
30.1
Net national income
Secondary distribution of income account
Net national income
1,843.1
1,521.1
78.8
42.3
200.8

Current taxes on income, wealth, etc.
222.0

222.0
0.9
Social contributions
404.0
1.2
16.2
47.2
339.4
1.2
Social benefits other than social transfers in kind
442.3
442.3

2.8
Other current transfers
164.2
89.9
11.0
45.8
17.4
43.1
Net non-life insurance premiums
44.8

44.8

1.5
Non-life insurance claims
43.7
34.6
8.1
0.6
0.3
1.6
Other
75.7
55.3
2.9
0.4
17.1
40.0
Net disposable income
Use of income account
Net disposable income
1,806.5
1,380.3
44.4
51.4
330.4

Final consumption expenditure
Individual consumption expenditure
Collective consumption expenditure
Adjustment for the change in the net equity of households in pension fund reserves
14.0
14.0

0.0
Net saving/current external account
Capital account
Net saving/current external account
32.5
98.9
44.0
38.0
-148.4
38.4
Gross capital formation
Gross fixed capital formation
Changes in inventories and acquisitions less disposals of valuables
Consumption of fixed capital
353.1
97.5
197.3
11.6
46.7

Acquisitions less disposals of non-produced non-financial assets
Capital transfers
42.7
13.7
15.7
9.9
3.4
2.3
Capital
taxes
5.5

5.5
0.0
Other capital transfers
37.2
13.7
15.7
9.9
-2.1
2.3
Net lending (+)/net borrowing (-) (from capital account)
Statistical discrepancy
Sources: ECB and Eurostat.
2) Gross domestic product is equal to the gross value added of all domestic sectors plus net taxes (i.e. taxes less subsidies) on products.
ECB
Monthly Bulletin
August 2010 S 27

3.1 Integrated economic and financial accounts by institutional sector (cont'd)
(EUR billions)
Assets
Euro
Households Non-financial
MFIs
Other
Insurance
General
Rest of
area
corporations
financial corporations
govern-
the world
inter-
and pension
ment
2010 Q1
mediaries
funds
Opening balance sheet, financial assets
Total financial assets

18,162.0
15,952.6
32,354.5
13,018.5
6,468.6
3,420.4
15,248.2
Monetary gold and special drawing rights (SDRs)

316.9

Currency and deposits

6,425.4
1,827.9
9,428.6
1,978.6
852.3
652.7
3,634.9
Short-term debt securities

45.0
141.1
611.0
291.7
386.2
35.2
833.9
Long-term debt securities

1,374.6
216.6
6,301.6
2,122.0
2,074.6
350.3
3,226.1
Loans

73.9
2,885.2
12,686.7
3,199.5
421.6
452.0
1,766.0

of which: Long-term
57.0
1,632.6
9,819.9
2,324.3
317.1
366.5
.
Shares and other equity

4,264.5
7,333.3
2,062.8
5,173.6
2,272.3
1,286.0
5,210.7
Quoted
shares

737.5
1,261.5
503.5
1,797.9
423.3
283.8
.

Unquoted shares and other equity

2,117.2
5,692.8
1,224.4
2,694.7
481.3
854.9
.

Mutual fund shares

1,409.9
379.0
334.9
681.0
1,367.7
147.4
.
Insurance technical reserves

5,475.8
145.1
1.9
0.0
198.8
3.9
181.3
Other accounts receivable and financial derivatives

502.8
3,403.4
945.0
253.2
262.8
640.2
395.2
Net financial worth
Financial account, transactions in financial assets
Total transactions in financial assets

105.0
99.8
155.4
153.6
123.6
-13.2
241.9
Monetary gold and SDRs

-0.2

0.2
Currency and deposits

-3.5
-30.9
3.2
-20.4
-2.9
7.4
89.1
Short-term debt securities

-6.5
9.1
17.0
-4.0
0.6
-9.1
2.3
Long-term debt securities

-9.2
12.5
57.5
69.2
75.9
-4.5
79.8
Loans

-1.7
76.5
26.9
83.7
6.8
-2.5
-15.1

of which: Long-term
-1.7
30.9
27.1
38.4
6.0
-1.1
.
Shares and other equity

27.9
24.8
-11.0
24.1
31.0
9.6
70.3
Quoted
shares

11.0
15.8
8.1
16.6
-1.7
0.3
.

Unquoted shares and other equity

13.7
12.6
-15.7
-21.6
2.4
6.1
.

Mutual fund shares

3.1
-3.6
-3.4
29.1
30.3
3.2
.
Insurance technical reserves

87.6
2.1
0.0
0.0
6.7
0.0
4.4
Other accounts receivable and financial derivatives

10.5
5.7
62.1
0.9
5.6
-14.0
10.9
Changes in net financial worth due to transactions
Other changes account, financial assets
Total other changes in financial assets

108.3
262.6
179.8
235.7
102.5
14.0
375.9
Monetary gold and SDRs

23.3

Currency and deposits

3.8
4.3
53.7
29.0
2.2
-0.2
84.3
Short-term debt securities

1.6
4.5
3.2
11.1
0.8
0.6
2.7
Long-term debt securities

-4.0
3.0
30.4
35.4
18.6
4.0
96.3
Loans

0.0
26.3
45.4
2.7
0.1
-0.3
12.1

of which: Long-term
0.0
15.5
15.3
6.4
-0.5
-5.3
.
Shares and other equity

52.0
211.2
23.2
155.6
74.9
8.8
176.2
Quoted
shares

29.0
34.3
11.0
88.8
14.7
8.0
.

Unquoted shares and other equity

3.9
160.2
8.9
59.4
6.2
-2.7
.

Mutual fund shares

19.1
16.7
3.4
7.4
54.0
3.5
.
Insurance technical reserves

58.2
0.1
0.0
0.0
3.9
0.0
-1.5
Other accounts receivable and financial derivatives

-3.3
13.1
0.5
2.0
2.0
1.0
5.8
Other changes in net financial worth
Closing balance sheet, financial assets
Total financial assets

18,375.2
16,315.0
32,689.7
13,407.8
6,694.7
3,421.2
15,865.8
Monetary gold and SDRs

340.0

Currency and deposits

6,425.6
1,801.3
9,485.5
1,987.2
851.6
659.9
3,808.3
Short-term debt securities

40.0
154.7
631.2
298.8
387.6
26.7
838.9
Long-term debt securities

1,361.4
232.1
6,389.5
2,226.6
2,169.1
349.8
3,402.1
Loans

72.3
2,988.0
12,759.0
3,285.8
428.5
449.1
1,763.0

of which: Long-term
55.2
1,679.0
9,862.4
2,369.1
322.7
360.2
.
Shares and other equity

4,344.4
7,569.3
2,075.1
5,353.3
2,378.3
1,304.5
5,457.1
Quoted
shares

777.5
1,311.6
522.6
1,903.3
436.4
292.1
.

Unquoted shares and other equity

2,134.8
5,865.6
1,217.6
2,732.5
489.9
858.2
.

Mutual fund shares

1,432.1
392.1
334.9
717.4
1,452.0
154.1
.
Insurance technical reserves

5,621.6
147.3
1.9
0.0
209.3
3.9
184.2
Other accounts receivable and financial derivatives

510.0
3,422.3
1,007.5
256.0
270.4
627.2
411.9
Net financial worth
Source: ECB.
ECB
S Monthly Bulletin
28 August 2010

EURO AREA
STATISTICS
Euro area
accounts
3.1 Integrated economic and financial accounts by institutional sector (cont'd)
(EUR billions)
Liabilities
Euro
Households
Non-financial
MFIs
Other
Insurance
General
Rest of
area
corporations
financial
corporations
govern-
the world
inter-
and pension
ment
2010 Q1
mediaries
funds
Opening balance sheet, liabilities
Total liabilities

6,571.1
24,743.7
31,589.9
12,908.3
6,557.3
8,206.3
13,731.2
Monetary gold and special drawing rights (SDRs)
Currency and deposits

29.2
22,013.3
23.8
0.0
233.9
2,500.2
Short-term debt securities

303.0
688.0
69.0
9.6
1,007.6
266.9
Long-term debt securities

524.1
4,561.1
2,604.2
40.7
5,166.7
2,768.9
Loans

5,891.5
8,206.0

2,894.0
244.6
1,351.6
2,897.3

of which: Long-term
5,532.1
5,788.7

1,586.4
96.5
1,167.3
.
Shares and other equity

12,242.3
2,917.5
7,121.6
491.6
6.3
4,817.3
Quoted
shares

3,398.8
573.4
192.0
171.8
0.0
.

Unquoted shares and other equity

6.7
8,843.6
1,142.8
2,174.2
318.8
6.3
.

Mutual fund shares

1,201.3
4,755.3

.
Insurance technical reserves

34.1
331.5
65.6
0.8
5,574.3
0.5

Other accounts payable and financial derivatives

638.8
3,107.6
1,344.5
195.0
196.4
439.6
480.6
Net financial worth 1)
-1,200.1
11,590.8
-8,791.1
764.6
110.2
-88.6
-4,785.9

Financial account, transactions in liabilities
Total transactions in liabilities

27.8
83.8
143.8
124.3
115.9
164.6
206.0
Monetary gold and SDRs
Currency and deposits

0.1
40.7
-0.4
0.0
-11.3
12.9
Short-term debt securities

7.9
28.4
0.3
1.2
-15.2
-13.2
Long-term debt securities

27.6
45.9
-18.1
0.1
178.5
47.0
Loans

13.9
21.8

4.7
12.3
18.6
103.2

of which: Long-term
19.6
18.1

-12.0
0.9
3.4
.
Shares and other equity

50.7
-41.3
125.7
0.7
0.0
40.8
Quoted
shares

10.3
5.7
0.3
0.0
0.0
.

Unquoted shares and other equity

0.0
40.4
-3.2
-4.6
0.7
0.0
.

Mutual fund shares

-43.9
130.0

.
Insurance technical reserves

0.1
1.0
-1.6
0.0
101.3
0.0

Other accounts payable and financial derivatives

13.7
-25.5
71.8
12.1
0.3
-6.1
15.2
Changes in net financial worth due to transactions 1)
-35.9
77.2
16.1
11.6
29.3
7.7
-177.8
35.9
Other changes account, liabilities
Total other changes in liabilities

-0.8
252.9
129.6
319.7
77.3
46.2
430.6
Monetary gold and SDRs
Currency and deposits

0.0
112.0
0.0
0.0
0.0
65.0
Short-term debt securities

6.3
7.7
1.3
0.1
0.7
8.5
Long-term debt securities

7.7
36.6
31.6
0.8
42.9
64.1
Loans

-9.3
10.4

29.7
-0.2
1.1
54.7

of which: Long-term
-8.2
5.9

11.3
-0.3
1.3
.
Shares and other equity

188.5
21.5
246.5
20.1
-0.1
225.5
Quoted
shares

81.3
-27.0
14.5
6.7
0.0
.

Unquoted shares and other equity

0.1
107.2
31.1
38.8
13.4
-0.1
.

Mutual fund shares

17.4
193.2

.
Insurance technical reserves

0.0
0.0
0.0
0.0
60.8
0.0

Other accounts payable and financial derivatives

8.5
40.0
-48.3
10.6
-4.2
1.6
12.9
Other changes in net financial worth 1)
78.0
109.1
9.7
50.3
-84.0
25.2
-32.2
-54.7
Closing balance sheet, liabilities
Total liabilities

6,598.1
25,080.4
31,863.2
13,352.3
6,750.5
8,417.1
14,367.8
Monetary gold and SDRs
Currency and deposits

29.4
22,166.0
23.4
0.0
222.7
2,578.1
Short-term debt securities

317.3
724.1
70.6
10.8
993.1
262.2
Long-term debt securities

559.5
4,643.6
2,617.8
41.6
5,388.2
2,880.0
Loans

5,896.1
8,238.2

2,928.3
256.7
1,371.3
3,055.2

of which: Long-term
5,543.6
5,812.7

1,585.7
97.1
1,171.9
.
Shares and other equity

12,481.5
2,897.6
7,493.8
512.5
6.2
5,083.5
Quoted
shares

3,490.3
552.0
206.8
178.5
0.0
.

Unquoted shares and other equity

6.8
8,991.2
1,170.7
2,208.4
332.9
6.2
.

Mutual fund shares

1,174.8
5,078.6

.
Insurance technical reserves

34.2
332.5
64.0
0.8
5,736.4
0.6

Other accounts payable and financial derivatives

661.0
3,122.1
1,368.0
217.7
192.5
435.2
508.8
Net financial worth 1)
-1,158.0
11,777.2
-8,765.4
826.5
55.5
-55.7
-4,995.9

Source: ECB.
ECB
Monthly Bulletin
August 2010 S 29

3.2 Euro area non-financial accounts
(EUR billions; four-quarter cumulated flows)
Uses
2008 Q2-
2008 Q3-
2008 Q4-
2009 Q1-
2009 Q2-
2006
2007
2008
2009 Q1
2009 Q2
2009 Q3
2009 Q4
2010 Q1
Generation of income account

Gross value added (basic prices)

Taxes less subsidies on products

Gross domestic product (market prices)

Compensation of employees
4,070.7
4,256.3
4,433.0
4,438.0
4,434.4
4,424.7
4,415.8
4,417.3
Other taxes less subsidies on production
128.5
136.2
133.1
129.7
122.7
117.2
110.8
106.6
Consumption of fixed capital
1,251.9
1,318.9
1,382.2
1,391.8
1,397.7
1,401.7
1,405.1
1,408.3
Net operating surplus and mixed income 1)
2,186.0
2,334.9
2,344.8
2,279.0
2,198.7
2,154.5
2,138.7
2,159.0

Allocation of primary income account

Net operating surplus and mixed income

Compensation
of
employees

Taxes less subsidies on production

Property income
3,021.4
3,591.9
3,878.9
3,747.2
3,486.1
3,208.9
2,964.6
2,850.3
Interest
1,649.2
2,067.4
2,322.6
2,222.8
2,057.9
1,839.3
1,641.7
1,538.8
Other property income
1,372.1
1,524.5
1,556.3
1,524.4
1,428.2
1,369.6
1,322.9
1,311.5
Net national income 1)
7,327.2
7,715.1
7,795.9
7,707.9
7,612.4
7,547.8
7,530.5
7,554.7

Secondary distribution of income account

Net national income

Current taxes on income, wealth, etc.
1,028.3
1,112.1
1,123.4
1,106.0
1,068.4
1,038.0
1,012.5
1,010.7
Social contributions
1,540.7
1,594.6
1,660.7
1,667.8
1,667.2
1,668.7
1,669.6
1,672.4
Social benefits other than social transfers in kind
1,554.0
1,600.1
1,667.4
1,691.8
1,723.5
1,754.7
1,783.9
1,803.9
Other current transfers
722.9
752.9
786.0
782.4
777.8
772.2
772.1
776.8
Net non-life insurance premiums
179.9
184.3
187.8
185.6
183.2
179.9
176.9
177.6
Non-life insurance claims
180.2
184.1
188.8
186.6
183.9
180.4
177.1
177.7
Other
362.8
384.5
409.4
410.2
410.7
412.0
418.2
421.6
Net disposable income 1)
7,234.7
7,619.8
7,690.4
7,603.0
7,506.7
7,440.6
7,422.1
7,441.1

Use of income account

Net disposable income

Final consumption expenditure
6,635.2
6,898.5
7,162.4
7,168.0
7,159.8
7,151.4
7,167.2
7,196.1
Individual consumption expenditure
5,948.2
6,186.0
6,411.0
6,403.2
6,385.8
6,368.0
6,376.3
6,405.0
Collective consumption expenditure
687.0
712.5
751.4
764.8
774.0
783.4
791.0
791.1
Adjustment for the change in the net equity of households

in pension fund reserves
63.4
60.4
65.1
64.9
63.2
61.2
59.9
59.2
Net saving 1)
599.7
721.4
528.0
435.0
346.8
289.2
254.9
245.1

Capital account

Net saving

Gross capital formation
1,878.5
2,021.7
2,057.1
1,989.0
1,890.5
1,809.5
1,734.7
1,715.6
Gross fixed capital formation
1,855.7
1,991.3
2,022.5
1,969.7
1,898.2
1,836.7
1,791.5
1,767.1
Changes in inventories and acquisitions less disposals of valuables
22.9
30.4
34.6
19.3
-7.7
-27.2
-56.8
-51.4
Consumption of fixed capital

Acquisitions less disposals of non-produced non-financial assets
-0.4
-1.2
0.7
1.1
0.7
0.3
1.4
1.2
Capital transfers
169.6
151.9
160.5
159.4
171.1
174.2
182.3
187.3
Capital
taxes
22.5
24.3
23.8
23.6
28.6
29.0
33.9
34.3
Other capital transfers
147.1
127.7
136.7
135.8
142.5
145.2
148.4
153.0
Net lending (+)/net borrowing (-) (from capital account) 1)
-11.9
34.3
-137.3
-155.4
-138.5
-110.3
-67.3
-53.8

Sources: ECB and Eurostat.
1) For details of the calculation of the balancing items, see the Technical Notes.
ECB
S Monthly Bulletin
30 August 2010

EURO AREA
STATISTICS
Euro area
accounts
3.2 Euro area non-financial accounts (cont'd)
(EUR billions; four-quarter cumulated flows)
Resources
2008 Q2-
2008 Q3-
2008 Q4-
2009 Q1-
2009 Q2-
2006
2007
2008
2009 Q1
2009 Q2
2009 Q3
2009 Q4
2010 Q1
Generation of income account

Gross value added (basic prices)
7,637.1
8,046.3
8,293.1
8,238.5
8,153.4
8,098.1
8,070.3
8,091.2
Taxes less subsidies on products
914.8
960.0
946.0
929.5
912.5
901.3
894.5
894.4
Gross domestic product (market prices)2)
8,551.9
9,006.3
9,239.2
9,168.1
9,065.9
8,999.4
8,964.8
8,985.6

Compensation
of
employees

Other taxes less subsidies on production

Consumption of fixed capital

Net operating surplus and mixed income

Allocation of primary income account

Net operating surplus and mixed income
2,186.0
2,334.9
2,344.8
2,279.0
2,198.7
2,154.5
2,138.7
2,159.0
Compensation of employees
4,078.2
4,264.3
4,441.4
4,446.2
4,442.6
4,432.7
4,423.2
4,424.7
Taxes less subsidies on production
1,055.4
1,104.0
1,085.6
1,065.5
1,042.8
1,027.9
1,022.2
1,018.4
Property income
3,029.0
3,603.9
3,803.0
3,664.4
3,414.4
3,141.6
2,911.1
2,802.8
Interest
1,619.5
2,027.8
2,259.8
2,157.1
1,990.4
1,768.2
1,571.3
1,472.0
Other property income
1,409.6
1,576.1
1,543.2
1,507.3
1,424.0
1,373.4
1,339.8
1,330.8
Net national income

Secondary distribution of income account

Net national income
7,327.2
7,715.1
7,795.9
7,707.9
7,612.4
7,547.8
7,530.5
7,554.7
Current taxes on income, wealth, etc.
1,033.0
1,119.5
1,131.6
1,114.0
1,074.8
1,043.7
1,018.4
1,016.2
Social contributions
1,539.9
1,593.8
1,660.1
1,666.9
1,666.1
1,667.7
1,668.8
1,671.7
Social benefits other than social transfers in kind
1,545.9
1,591.1
1,659.4
1,684.0
1,715.9
1,747.3
1,776.6
1,796.7
Other current transfers
634.5
660.0
681.0
678.2
674.2
667.7
665.9
665.7
Net non-life insurance premiums
180.2
184.1
188.8
186.6
183.9
180.4
177.1
177.7
Non-life insurance claims
177.1
181.4
185.2
182.9
180.4
176.9
173.8
174.2
Other
277.2
294.4
307.0
308.7
310.0
310.5
315.0
313.8
Net disposable income

Use of income account

Net disposable income
7,234.7
7,619.8
7,690.4
7,603.0
7,506.7
7,440.6
7,422.1
7,441.1
Final consumption expenditure

Individual consumption expenditure

Collective consumption expenditure

Adjustment for the change in the net equity of households

in pension fund reserves
63.6
60.6
65.1
64.9
63.2
61.2
59.9
59.2
Net saving

Capital account

Net saving
599.7
721.4
528.0
435.0
346.8
289.2
254.9
245.1
Gross capital formation

Gross fixed capital formation

Changes in inventories and acquisitions less disposals of valuables

Consumption of fixed capital
1,251.9
1,318.9
1,382.2
1,391.8
1,397.7
1,401.7
1,405.1
1,408.3
Acquisitions less disposals of non-produced non-financial assets

Capital transfers
184.2
166.4
170.8
167.2
179.2
182.8
191.1
197.0
Capital
taxes
22.5
24.3
23.8
23.6
28.6
29.0
33.9
34.3
Other capital transfers
161.7
142.2
146.9
143.6
150.7
153.8
157.2
162.7
Net lending (+)/net borrowing (-) (from capital account)

Sources: ECB and Eurostat.
2) Gross domestic product is equal to the gross value added of all domestic sectors plus net taxes (i.e. taxes less subsidies) on products.
ECB
Monthly Bulletin
August 2010 S 31

3.3 Households
(EUR billions; four-quarter cumulated flows; outstanding amounts at end of period)
2008 Q2-
2008 Q3-
2008 Q4-
2009 Q1-
2009 Q2-
2006
2007
2008
2009 Q1
2009 Q2
2009 Q3
2009 Q4
2010 Q1
Income, saving and changes in net worth

Compensation of employees (+)
4,078.2
4,264.3
4,441.4
4,446.2
4,442.6
4,432.7
4,423.2
4,424.7
Gross operating surplus and mixed income (+)
1,416.1
1,497.5
1,547.5
1,538.5
1,523.2
1,509.9
1,502.8
1,504.3
Interest receivable (+)
263.6
308.8
343.4
328.9
305.0
273.5
246.2
231.4
Interest payable (-)
165.7
213.3
238.6
223.5
200.1
172.9
149.7
141.3
Other property income receivable (+)
748.4
793.4
799.3
790.0
763.0
743.3
733.7
725.3
Other property income payable (-)
9.8
10.0
10.1
10.2
10.3
10.3
10.2
10.2
Current taxes on income and wealth (-)
794.4
851.7
892.6
890.0
877.5
870.5
859.3
855.6
Net social contributions (-)
1,536.6
1,590.4
1,656.3
1,663.3
1,662.6
1,664.0
1,664.8
1,667.6
Net social benefits (+)
1,540.4
1,585.4
1,653.5
1,678.1
1,710.0
1,741.4
1,770.7
1,790.7
Net current transfers receivable (+)
66.9
69.5
70.5
72.3
75.3
79.2
82.2
81.8
= Gross disposable income
5,607.1
5,853.6
6,058.0
6,066.9
6,068.5
6,062.2
6,074.8
6,083.5
Final consumption expenditure (-)
4,900.9
5,094.5
5,268.8
5,247.7
5,220.2
5,190.0
5,189.3
5,209.5
Changes in net worth in pension funds (+)
63.2
60.1
64.8
64.5
62.9
60.9
59.6
58.9

= Gross saving
769.4
819.3
854.0
883.7
911.2
933.1
945.1
932.8

Consumption of fixed capital (-)
345.9
367.3
385.4
387.4
388.5
389.1
389.1
389.3

Net capital transfers receivable (+)
19.0
11.6
13.1
12.8
13.8
15.2
10.0
7.8

Other changes in net worth 1) (+)
524.2
70.9
-1,534.2
-1,207.3
-651.4
21.9
486.0
870.3

= Changes in net worth 1)
966.7
534.4
-1,052.5
-698.2
-114.9
581.1
1,052.0
1,421.7
Investment, financing and changes in net worth

Net acquisition of non-financial assets (+)
606.2
641.6
639.3
619.9
594.3
571.2
553.4
542.9
Consumption of fixed capital (-)
345.9
367.3
385.4
387.4
388.5
389.1
389.1
389.3
Main items of financial investment (+)

Short-term
assets
327.0
440.4
437.1
365.8
263.9
153.4
-23.2
-97.5

Currency and deposits
284.1
349.8
436.7
397.4
335.2
256.8
121.3
64.6

Money market fund shares
7.3
58.0
-17.3
-12.2
-28.5
-30.1
-61.8
-89.0
Debt
securities
2)
35.5
32.7
17.8
-19.3
-42.8
-73.3
-82.7
-73.1
Long-term
assets
306.5
142.4
39.6
80.0
189.8
343.3
496.3
574.8
Deposits
1.0
-31.5
-35.1
-13.3
15.5
56.9
95.3
121.3
Debt
securities
33.9
52.0
41.3
22.9
13.7
8.9
-9.5
-23.7

Shares and other equity
-26.8
-100.5
-94.6
-65.0
-3.7
86.7
167.2
202.6

Quoted and unquoted shares and other equity
-3.8
-2.7
30.2
35.8
51.5
88.6
77.9
91.3

Mutual fund shares
-23.0
-97.8
-124.8
-100.8
-55.1
-1.8
89.3
111.3

Life insurance and pension fund reserves
298.4
222.5
128.0
135.4
164.2
190.7
243.2
274.7
Main items of financing (-)

Loans
401.5
357.9
210.0
153.7
126.1
96.6
96.1
119.7

of which: From euro area MFIs
355.3
283.7
82.7
20.4
10.6
-15.8
63.1
74.0
Other changes in financial assets (+)

Shares and other equity
463.8
44.9
-1,267.7
-970.0
-574.8
-106.1
271.1
532.0
Life insurance and pension fund reserves
46.5
24.9
-250.8
-199.9
-97.5
59.4
155.6
254.6
Remaining net flows (+)
-35.9
-34.5
-54.8
-52.9
23.9
45.6
84.1
123.9
= Changes in net worth 1)
966.7
534.4
-1,052.5
-698.2
-114.9
581.1
1,052.0
1,421.7
Financial balance sheet

Financial assets (+)

Short-term
assets
4,838.2
5,308.8
5,825.1
5,886.6
5,891.5
5,828.6
5,798.1
5,757.4

Currency and deposits
4,454.2
4,843.0
5,312.3
5,373.9
5,429.7
5,397.7
5,465.7
5,438.6

Money market fund shares
290.9
347.3
371.5
389.6
354.3
348.6
276.3
268.3
Debt
securities
2)
93.1
118.4
141.3
123.1
107.5
82.3
56.1
50.5
Long-term
assets
11,849.5
12,025.6
10,460.7
10,212.4
10,651.8
11,207.5
11,447.1
11,690.4
Deposits
1,015.5
953.5
886.1
863.7
882.6
914.4
959.6
987.0
Debt
securities
1,247.2
1,291.9
1,321.1
1,292.4
1,313.4
1,372.3
1,363.5
1,350.9

Shares and other equity
4,974.4
4,920.4
3,516.6
3,309.2
3,572.7
3,874.5
3,988.2
4,076.1

Quoted and unquoted shares and other equity
3,581.2
3,607.4
2,588.1
2,417.3
2,595.4
2,830.1
2,854.7
2,912.3

Mutual fund shares
1,393.2
1,313.0
928.5
892.0
977.3
1,044.4
1,133.5
1,163.8

Life insurance and pension fund reserves
4,612.4
4,859.8
4,737.0
4,747.1
4,883.0
5,046.3
5,135.8
5,276.4
Remaining net assets (+)
243.0
228.5
234.1
223.0
248.2
237.6
237.1
225.4
Liabilities (-)

Loans
5,247.7
5,597.0
5,802.8
5,795.7
5,831.6
5,851.9
5,891.5
5,896.1

of which: From euro area MFIs
4,553.1
4,825.5
4,901.1
4,879.0
4,899.3
4,916.2
4,955.4
4,941.8
= Net financial wealth
11,683.0
11,965.8
10,717.1
10,526.4
10,959.9
11,421.8
11,590.8
11,777.2
Sources: ECB and Eurostat.
1) Excluding changes in net worth which are due to other changes in non-financial assets, such as revaluations of residential property.
2) Securities issued by MFIs with a maturity of less than two years and securities issued by other sectors with a maturity of less than one year.
ECB
S Monthly Bulletin
32 August 2010

EURO AREA
STATISTICS
Euro area
accounts
3.4 Non-financial corporations
(EUR billions; four-quarter cumulated flows; outstanding amounts at end of period)
2008 Q2-
2008 Q3-
2008 Q4-
2009 Q1-
2009 Q2-
2006
2007
2008
2009 Q1
2009 Q2
2009 Q3
2009 Q4
2010 Q1
Income and saving

Gross value added (basic prices) (+)
4,372.9
4,629.1
4,758.7
4,696.9
4,610.7
4,550.1
4,514.8
4,524.0
Compensation of employees (-)
2,585.2
2,713.5
2,832.4
2,827.6
2,816.2
2,798.4
2,782.2
2,779.0
Other taxes less subsidies on production (-)
75.0
79.6
77.2
74.8
69.2
64.0
59.8
55.0
= Gross operating surplus (+)
1,712.7
1,836.1
1,849.1
1,794.5
1,725.3
1,687.7
1,672.8
1,690.1
Consumption of fixed capital (-)
702.2
738.0
773.3
779.1
782.4
784.8
787.4
789.0
= Net operating surplus (+)
1,010.5
1,098.0
1,075.8
1,015.4
942.9
902.9
885.4
901.1

Property income receivable (+)
507.4
587.1
590.3
565.3
529.5
503.0
478.3
469.2
Interest
receivable
170.3
201.6
219.2
206.9
189.9
169.3
151.6
141.7

Other property income receivable
337.1
385.6
371.1
358.4
339.6
333.7
326.7
327.4

Interest and rents payable (-)
285.3
348.7
403.5
388.0
360.5
324.2
292.2
275.7

= Net entrepreneurial income (+)
1,232.6
1,336.4
1,262.6
1,192.7
1,112.0
1,081.6
1,071.5
1,094.6

Distributed income (-)
927.6
990.0
1,022.0
1,006.2
963.5
926.2
900.4
885.6

Taxes on income and wealth payable (-)
189.8
212.0
193.6
181.3
159.0
137.5
125.0
126.0

Social contributions receivable (+)
74.8
63.5
65.8
65.5
65.4
65.3
65.3
65.5

Social benefits payable (-)
60.6
61.8
63.3
63.5
63.7
64.0
64.0
64.0

Other net transfers (-)
65.4
56.4
58.3
57.9
58.3
60.1
61.2
62.1

= Net saving
64.1
79.8
-8.7
-50.7
-67.1
-40.8
-13.7
22.4
Investment, financing and saving

Net acquisition of non-financial assets (+)
313.4
369.6
356.8
299.4
215.9
154.7
97.3
89.7
Gross fixed capital formation (+)
990.6
1,077.3
1,096.3
1,060.4
1,007.6
968.0
941.1
929.6
Consumption of fixed capital (-)
702.2
738.0
773.3
779.1
782.4
784.8
787.4
789.0
Net acquisition of other non-financial assets (+)
24.9
30.4
33.8
18.1
-9.3
-28.4
-56.4
-51.0
Main items of financial investment (+)

Short-term
assets
168.7
169.8
61.7
2.7
38.2
84.0
110.2
99.1

Currency and deposits
146.2
154.4
15.5
-5.5
10.4
37.5
89.8
97.3

Money market fund shares
10.3
-15.1
27.5
27.2
38.0
45.6
40.4
8.9
Debt
securities
1)
12.1
30.5
18.7
-18.9
-10.1
0.9
-20.0
-7.2
Long-term
assets
510.5
758.8
659.0
661.7
528.6
343.4
130.9
142.7
Deposits
29.4
-12.3
27.9
40.3
47.5
28.7
17.1
5.0
Debt
securities
13.9
-21.5
-71.1
4.7
21.3
0.3
12.1
13.9

Shares and other equity
263.2
451.4
347.6
358.5
331.6
253.1
98.0
65.3

Other (mainly intercompany loans)
204.0
341.2
354.6
258.2
128.1
61.3
3.6
58.5
Remaining net assets (+)
103.7
127.6
29.1
-114.9
-91.8
-45.5
-46.2
22.5
Main items of financing (-)

Debt
740.1
864.4
730.8
533.8
360.3
187.6
4.5
48.1

of which: Loans from euro area MFIs
457.9
543.7
392.7
251.6
97.6
-35.5
-152.9
-114.5

of which: Debt securities
39.6
36.8
59.4
65.4
78.3
88.7
78.5
97.8
Shares and other equity
219.5
413.1
306.5
284.0
315.6
305.8
217.2
200.8
Quoted
shares
38.2
70.3
2.6
13.3
47.1
57.8
59.6
60.4

Unquoted shares and other equity
181.3
342.8
303.8
270.8
268.5
247.9
157.6
140.3
Net capital transfers receivable (-)
72.0
69.4
75.6
78.1
77.2
78.8
81.0
80.5
= Net saving
64.1
79.8
-8.7
-50.7
-67.1
-40.8
-13.7
22.4
Financial balance sheet

Financial assets

Short-term
assets
1,703.7
1,855.3
1,915.5
1,902.6
1,935.4
1,980.7
2,024.8
2,000.6

Currency and deposits
1,367.2
1,507.6
1,539.2
1,511.8
1,552.6
1,581.1
1,635.5
1,605.2

Money market fund shares
208.7
188.8
212.8
236.8
242.7
247.9
232.8
226.0
Debt
securities
1)
127.8
158.9
163.5
154.0
140.0
151.7
156.5
169.4
Long-term
assets
10,148.6
11,087.9
9,396.9
9,112.5
9,481.5
10,102.9
10,379.2
10,744.8
Deposits
149.7
169.4
193.4
199.1
192.8
192.5
192.4
196.1
Debt
securities
281.2
257.7
190.5
192.1
167.8
159.7
201.2
217.4

Shares and other equity
7,507.5
8,135.1
6,127.4
5,813.9
6,242.9
6,879.6
7,100.5
7,343.3

Other (mainly intercompany loans)
2,210.1
2,525.8
2,885.6
2,907.4
2,878.0
2,871.1
2,885.2
2,988.0
Remaining net assets
353.7
390.8
444.8
434.1
457.0
442.5
470.2
476.8
Liabilities

Debt
7,883.6
8,645.8
9,375.7
9,393.0
9,409.8
9,387.7
9,364.6
9,447.4

of which: Loans from euro area MFIs
3,983.0
4,508.3
4,896.7
4,859.6
4,826.3
4,759.7
4,700.9
4,699.3

of which: Debt securities
685.6
685.8
744.4
749.6
780.8
823.2
827.1
876.8
Shares and other equity
13,187.9
14,378.1
10,768.6
10,107.9
10,830.6
11,934.2
12,242.3
12,481.5
Quoted
shares
4,511.4
4,997.0
2,840.4
2,483.7
2,827.5
3,267.0
3,398.8
3,490.3

Unquoted shares and other equity
8,676.6
9,381.1
7,928.2
7,624.2
8,003.1
8,667.2
8,843.6
8,991.2
Sources: ECB and Eurostat.
1) Securities issued by MFIs with a maturity of less than two years and securities issued by other sectors with a maturity of less than one year.
ECB
Monthly Bulletin
August 2010 S 33

3.5 Insurance corporations and pension funds
(EUR billions; four-quarter cumulated flows; outstanding amounts at end of period)
2008 Q2-
2008 Q3-
2008 Q4-
2009 Q1-
2009 Q2-
2006
2007
2008
2009 Q1
2009 Q2
2009 Q3
2009 Q4
2010 Q1
Financial account, financial transactions

Main items of financial investment (+)

Short-term
assets
68.2
76.4
116.8
66.8
51.3
40.4
16.8
0.3

Currency and deposits
10.6
6.4
57.0
18.6
11.8
-0.7
-33.1
-20.8

Money market fund shares
7.2
6.8
19.2
16.8
10.9
6.1
7.7
-9.4
Debt
securities
1)
50.4
63.1
40.7
31.5
28.6
35.0
42.2
30.5
Long-term
assets
290.1
162.8
66.6
69.4
92.7
126.0
206.2
276.4
Deposits
67.4
49.8
0.8
13.5
13.0
19.9
16.2
-0.3
Debt
securities
112.3
45.9
17.3
44.8
-0.2
10.9
70.2
95.3
Loans
-1.2
-15.2
22.4
1.1
11.1
8.7
6.0
9.5
Quoted
shares
-2.7
-0.7
-14.3
-19.8
-24.4
-99.9
-86.9
-80.8

Unquoted shares and other equity
30.2
21.5
30.0
23.0
15.4
3.9
-7.1
0.2

Mutual fund shares
84.1
61.5
10.4
6.7
77.8
182.4
207.9
252.6
Remaining net assets (+)
10.1
-7.8
26.6
14.5
36.3
34.1
34.6
46.4
Main items of financing (-)

Debt
securities
5.8
3.0
11.7
13.9
9.9
10.1
1.0
-0.1
Loans
44.3
-5.0
27.2
2.9
14.9
9.5
-24.1
-14.2
Shares and other equity
9.3
1.0
3.3
5.5
4.9
6.2
5.1
3.9
Insurance technical reserves
312.0
247.5
142.6
143.1
171.4
198.3
272.5
319.1

Net equity of households in life insurance and pension fund reserves
304.6
243.2
125.3
133.3
164.7
194.3
259.9
304.4

Prepayments of insurance premiums and reserves for

outstanding
claims
7.4
4.3
17.2
9.8
6.7
4.0
12.6
14.7
= Changes in net financial worth due to transactions
-2.9
-15.1
25.3
-14.7
-20.9
-23.6
3.1
14.4
Other changes account

Other changes in financial assets (+)

Shares and other equity
180.1
18.1
-566.1
-431.0
-265.3
-31.0
208.8
354.4
Other net assets
-41.5
-41.4
43.5
24.5
44.9
78.3
65.3
104.3
Other changes in liabilities (-)

Shares and other equity
41.4
-32.5
-180.1
-189.0
-123.8
-52.6
15.6
96.7
Insurance technical reserves
51.2
22.2
-243.0
-199.9
-95.1
64.5
159.3
263.0

Net equity of households in life insurance and pension fund reserves
47.7
23.7
-242.8
-193.4
-91.4
65.4
162.0
260.2

Prepayments of insurance premiums and reserves for

outstanding
claims
3.5
-1.5
-0.2
-6.4
-3.7
-1.0
-2.7
2.8
= Other changes in net financial worth
46.0
-13.1
-99.6
-17.6
-1.6
35.4
99.1
99.0
Financial balance sheet

Financial assets (+)

Short-term
assets
515.6
586.2
707.7
726.9
723.1
711.1
732.5
729.7

Currency and deposits
156.6
163.1
223.9
212.9
195.6
189.8
194.7
195.7

Money market fund shares
92.1
96.8
113.6
127.1
117.7
115.9
111.6
108.3
Debt
securities
1)
266.8
326.3
370.2
386.9
409.8
405.4
426.3
425.6
Long-term
assets
5,114.8
5,255.5
4,785.4
4,743.6
4,913.8
5,137.8
5,274.5
5,485.4
Deposits
590.6
640.8
644.1
657.9
660.7
664.3
657.7
655.9
Debt
securities
1,852.9
1,854.4
1,897.4
1,932.3
1,913.1
1,986.1
2,034.5
2,131.1
Loans
407.8
394.3
415.6
419.2
422.1
422.0
421.6
428.5
Quoted
shares
721.8
716.7
420.4
376.4
438.3
414.4
423.3
436.4

Unquoted shares and other equity
489.7
528.7
452.1
434.1
442.5
473.5
481.3
489.9

Mutual fund shares
1,052.1
1,120.6
955.8
923.7
1,037.1
1,177.5
1,256.1
1,343.6
Remaining net assets (+)
213.8
197.1
245.6
246.8
261.2
267.5
265.2
287.2
Liabilities (-)

Debt
securities
35.9
29.4
46.4
45.6
45.0
48.8
50.3
52.4
Loans
244.0
235.2
269.8
274.6
273.0
263.3
244.6
256.7
Shares and other equity
679.2
647.7
470.9
411.9
438.1
492.2
491.6
512.5
Insurance technical reserves
4,973.3
5,243.0
5,142.5
5,154.3
5,301.4
5,473.3
5,574.3
5,736.4

Net equity of households in life insurance and pension fund reserves
4,263.2
4,530.1
4,412.6
4,423.7
4,567.1
4,735.9
4,834.5
4,988.3

Prepayments of insurance premiums and reserves

for outstanding claims
710.1
712.9
729.9
730.5
734.3
737.4
739.8
748.0
= Net financial wealth
-88.3
-116.5
-190.9
-169.2
-159.3
-161.2
-88.6
-55.7
Source: ECB.
1) Securities issued by MFIs with a maturity of less than two years and securities issued by other sectors with a maturity of less than one year.
ECB
S Monthly Bulletin
34 August 2010

FINANCIAL MARKETS
4
4.1 Securities other than shares by original maturity, residency of the issuer and currency
(EUR billions and period growth rates; seasonally adjusted; transactions during the month and end-of-period outstanding amounts; nominal values)

By euro area residents
Total in euro 1)

In euro
In all currencies

Outstanding Gross issues
Net issues Outstanding Gross issues
Net issues Outstanding Gross issues
Net issues
Annual Seasonally adjusted 2)
amounts
amounts
amounts
growth rates
6-month
Net issues growth rates
1
2
3
4
5
6
7
8
9
10
11
12
Total
2009 May
15,072.4
1,165.6
209.3
12,837.8
1,076.3
175.4
14,216.3
1,157.2
177.6
11.8
118.0
12.6
June
15,163.0
1,098.0
89.7
12,898.8
1,015.8
59.7
14,287.1
1,096.7
74.1
11.7
92.8
10.3
July
15,193.7
1,129.6
31.2
12,953.5
1,074.9
55.3
14,354.7
1,154.3
68.9
11.5
103.3
10.2
Aug.
15,242.1
888.4
47.4
12,983.1
832.6
28.6
14,371.9
898.9
20.1
10.7
58.6
8.8
Sep.
15,346.8
970.4
105.5
13,060.9
887.2
78.6
14,440.7
971.5
84.2
11.7
150.9
9.0
Oct.
15,348.6
956.4
2.0
13,091.5
906.8
30.7
14,475.9
978.4
38.1
10.8
10.3
7.8
Nov.
15,400.4
894.3
51.0
13,145.4
852.0
53.2
14,534.9
918.1
64.0
9.5
39.1
6.5
Dec.
15,929.5
942.5
-59.2
13,676.3
889.0
-57.4
15,311.7
980.2
-57.4
7.9
14.3
5.1
2010 Jan.
15,976.5
1,094.6
45.8
13,725.7
1,032.0
48.0
15,407.6
1,148.7
68.4
7.2
44.9
4.2
Feb.
16,012.3
874.4
37.7
13,763.1
825.5
39.3
15,452.8
920.3
33.0
5.9
-20.0
3.1
Mar.
16,157.8
1,037.7
143.9
13,866.6
933.8
101.9
15,567.8
1,045.9
108.2
5.6
98.4
2.3
Apr.
.
.
.
13,926.5
953.8
58.3
15,659.9
1,063.6
79.1
5.3
64.1
3.0

May
.
.
.
13,959.3
848.0
34.0
15,765.9
958.6
46.4
4.3
-20.0
2.2
Long-term
2009 May
13,432.5
339.4
204.9
11,311.2
281.5
172.0
12,501.2
301.9
179.5
10.4
116.2
12.9
June
13,553.7
314.2
119.0
11,420.4
275.6
106.7
12,632.5
309.5
129.6
10.6
101.8
11.7
July
13,580.7
269.2
27.2
11,453.9
247.8
33.7
12,675.9
272.7
44.0
10.6
86.9
11.0
Aug.
13,639.1
131.5
58.0
11,497.2
108.9
43.0
12,716.5
121.8
46.9
10.3
96.7
10.3
Sep.
13,711.1
223.7
71.7
11,571.6
197.1
74.0
12,778.8
222.6
75.3
11.2
124.3
9.9
Oct.
13,777.3
245.1
64.0
11,633.6
216.7
59.9
12,841.5
236.1
66.1
11.5
61.0
9.7
Nov.
13,860.7
200.8
81.4
11,712.9
180.0
77.2
12,918.1
195.2
81.6
10.6
46.8
8.5
Dec.
14,372.6
169.5
-32.7
12,234.8
154.0
-22.8
13,663.8
166.0
-32.8
8.9
-35.8
5.9
2010 Jan.
14,417.3
309.3
44.8
12,272.8
277.8
38.1
13,744.3
315.7
56.5
8.6
102.8
6.0
Feb.
14,471.3
212.2
56.2
12,333.4
193.7
62.8
13,814.6
211.7
58.7
7.5
16.8
4.7
Mar.
14,605.5
310.1
132.8
12,442.5
250.1
107.7
13,932.3
281.5
112.6
7.2
118.4
4.5
Apr.
.
.
.
12,498.7
223.3
53.3
14,018.2
255.1
72.0
7.1
69.3
4.5

May
.
.
.
12,529.7
148.5
31.0
14,125.2
183.4
50.3
5.9
-20.3
3.4
C15 Total outstanding amounts and gross issues of securities other than shares issued by euro area residents
(EUR billions)
total gross issues (right-hand scale)
total outstanding amounts (left-hand scale)
outstanding amounts in euro (left-hand scale)
18000
1600
16000
1400
14000
1200
12000
1000
10000
800
8000
600
6000
400
4000
200
2000
0
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
Sources: ECB and BIS (for issues by non-euro area residents).
1)
Total euro-denominated securities other than shares issued by euro area residents and non-euro area residents.
2)
For details of the calculation of the growth rates, see the Technical Notes. The six-month growth rates have been annualised.
ECB
Monthly Bulletin
August 2010 S 35

4.2 Securities other than shares issued by euro area residents, by sector of the issuer and instrument type
(EUR billions ; transactions during the month and end-of-period outstanding amounts; nominal values)
1. Outstanding amounts and gross issues

Outstanding amounts
Gross issues 1)

Total
MFIs Non-MFI corporations
General government
Total
MFIs Non-MFI corporations
General government
(including
(including
Eurosystem)
Financial Non-financial
Central
Other
Eurosystem)
Financial Non-financial
Central
Other
corporations corporations
government
general
corporations corporations
government
general
other than
government
other than
government
MFIs
MFIs
1
2
3
4
5
6
7
8
9
10
11
12
Total
2008
13,461
5,272
2,196
715
4,938
340
1,190
817
82
105
162
24
2009
15,312
5,378
3,235
815
5,510
373
1,130
739
63
86
221
22
2009 Q2
14,287
5,438
2,378
771
5,349
351
1,170
750
68
92
241
20
Q3
14,441
5,431
2,398
801
5,452
358
1,008
652
48
85
212
12
Q4
15,312
5,378
3,235
815
5,510
373
959
630
53
73
182
20
2010 Q1
15,568
5,471
3,200
853
5,656
389
1,038
653
61
74
230
20
2010 Feb.
15,453
5,418
3,206
841
5,612
375
920
575
37
71
215
22
Mar.
15,568
5,471
3,200
853
5,656
389
1,046
664
61
81
215
25
Apr.
15,660
5,496
3,215
869
5,686
394
1,064
674
63
85
219
23

May
15,766
5,484
3,246
885
5,748
404
959
614
58
77
191
18
Short-term
2008
1,627
822
92
123
566
25
975
722
34
97
101
19
2009
1,648
733
96
73
725
21
880
639
19
69
137
15
2009 Q2
1,655
785
67
88
699
16
874
631
20
71
139
13
Q3
1,662
751
56
84
752
19
802
569
15
72
139
8
Q4
1,648
733
96
73
725
21
760
551
19
60
116
13
2010 Q1
1,636
747
87
77
708
17
769
547
28
61
123
10
2010 Feb.
1,638
734
86
78
723
17
709
499
28
55
115
12
Mar.
1,636
747
87
77
708
17
764
545
31
66
111
12
Apr.
1,642
754
91
79
699
20
809
571
31
69
121
16

May
1,641
752
96
82
689
21
775
553
34
67
106
17
Long-term 2)
2008
11,834
4,450
2,105
593
4,371
316
216
95
48
8
61
4
2009
13,664
4,645
3,139
742
4,784
353
250
99
44
16
84
6
2009 Q2
12,632
4,652
2,311
683
4,650
335
296
119
48
21
102
7
Q3
12,779
4,681
2,342
716
4,701
339
206
83
33
14
72
4
Q4
13,664
4,645
3,139
742
4,784
353
199
79
35
13
66
6
2010 Q1
13,932
4,724
3,113
776
4,948
371
270
106
33
13
107
10
2010 Feb.
13,815
4,683
3,120
763
4,890
358
212
76
10
17
100
10
Mar.
13,932
4,724
3,113
776
4,948
371
282
119
30
14
104
13
Apr.
14,018
4,743
3,124
790
4,987
375
255
103
32
16
98
7

May
14,125
4,732
3,150
802
5,058
382
183
61
24
11
85
2

of which: Long-term fixed rate
2008
7,721
2,306
755
454
3,955
250
120
49
9
6
53
3
2009
8,839
2,587
1,034
609
4,338
271
172
60
18
16
74
4
2009 Q2
8,357
2,471
867
548
4,211
260
210
72
23
20
90
5
Q3
8,491
2,507
893
581
4,251
259
139
49
14
13
61
3
Q4
8,839
2,587
1,034
609
4,338
271
132
46
10
12
59
5
2010 Q1
9,101
2,657
1,048
636
4,482
277
185
61
10
12
95
7
2010 Feb.
8,996
2,628
1,039
624
4,435
271
160
41
4
14
93
8
Mar.
9,101
2,657
1,048
636
4,482
277
191
62
14
13
92
10
Apr.
9,187
2,678
1,056
650
4,525
280
181
62
14
15
87
4

May
9,277
2,672
1,073
660
4,590
282
117
22
6
8
80
1

of which: Long-term variable rate
2008
3,601
1,744
1,301
128
363
64
81
36
38
1
5
1
2009
4,386
1,771
2,038
123
374
81
62
28
25
1
6
2
2009 Q2
3,736
1,761
1,401
125
374
74
65
31
24
1
7
2
Q3
3,730
1,746
1,408
125
372
79
49
21
18
1
7
1
Q4
4,386
1,771
2,038
123
374
81
58
26
24
1
5
2
2010 Q1
4,377
1,778
1,995
129
382
93
70
38
20
1
7
3
2010 Feb.
4,368
1,766
2,012
129
374
86
41
30
3
3
3
2
Mar.
4,377
1,778
1,995
129
382
93
77
50
14
1
8
4
Apr.
4,382
1,774
1,998
129
388
94
60
33
16
1
7
3

May
4,390
1,768
2,003
129
391
99
52
33
15
1
3
1

Source: ECB.
1)
Monthly data on gross issues refer to transactions during the month. For the purposes of comparison, quarterly and annual data refer to the respective monthly averages.
2)
The residual difference between total long-term debt securities and fixed and variable rate long-term debt securities consists of zero coupon bonds and revaluation effects.
ECB
S Monthly Bulletin
36 August 2010

EURO AREA
STATISTICS
Financial
markets
4.2 Securities other than shares issued by euro area residents, by sector of the issuer and instrument type
(EUR billions unless otherwise indicated; transactions during the period; nominal values)
2. Net issues

Non-seasonally adjusted 1)
Seasonally adjusted 1)

Total
MFIs Non-MFI corporations
General government
Total
MFIs Non-MFI corporations
General government
(including
(including
Eurosystem)
Financial Non-financial
Central
Other
Eurosystem)
Financial Non-financial
Central
Other
corporations corporations
government
general
corporations corporations
government
general
other than
government
other than
government
MFIs
MFIs
1
2
3
4
5
6
7
8
9
10
11
12
Total
2008
96.2
22.9
35.9
4.5
31.8
1.1
96.9
23.1
35.1
4.6
33.1
1.0
2009
88.4
10.2
20.8
8.2
46.4
2.8
88.2
10.0
20.3
7.9
47.3
2.8
2009 Q2
119.3
21.9
28.3
12.5
53.8
2.8
99.8
21.2
28.4
8.3
39.0
2.8
Q3
57.7
0.3
8.9
10.8
35.4
2.3
104.3
9.8
30.2
13.6
47.1
3.5
Q4
14.9
-21.6
15.3
3.6
12.5
5.1
21.2
-11.8
-19.4
5.7
44.3
2.5
2010 Q1
69.9
25.7
-16.4
11.1
46.4
3.1
41.1
7.9
1.0
10.7
17.0
4.5
2010 Feb.
33.0
-20.9
-29.9
16.6
60.7
6.6
-20.0
-46.6
-33.1
17.8
34.6
7.3
Mar.
108.2
54.7
-8.7
11.2
42.8
8.3
98.4
50.8
1.9
12.9
25.1
7.6
Apr.
79.1
21.0
9.4
13.7
29.3
5.7
64.1
10.3
16.8
9.9
22.1
5.0

May
46.4
-25.1
11.8
9.6
52.8
-2.7
-20.0
-52.2
9.4
0.4
24.1
-1.7
Long-term
2008
65.4
16.0
32.7
2.8
13.4
0.6
64.7
16.1
31.9
2.8
13.3
0.5
2009
88.2
15.0
23.2
12.3
34.5
3.1
87.8
15.1
22.7
12.4
34.6
3.1
2009 Q2
127.1
36.2
28.7
17.1
41.3
3.7
95.9
25.5
27.7
13.4
25.7
3.5
Q3
55.4
12.2
12.4
12.0
17.4
1.4
102.6
22.4
34.0
13.9
29.8
2.5
Q4
38.3
-13.9
13.2
7.3
27.3
4.4
24.0
-4.3
-21.1
7.8
38.1
3.5
2010 Q1
75.9
22.4
-13.2
9.6
52.8
4.3
79.4
13.7
4.6
11.4
45.4
4.3
2010 Feb.
58.7
-18.1
-19.7
13.8
79.5
3.2
16.8
-40.6
-19.8
15.1
57.9
4.3
Mar.
112.6
44.0
-9.1
12.0
58.0
7.5
118.4
38.0
3.4
14.7
55.5
6.8
Apr.
72.0
12.8
5.7
12.2
37.9
3.4
69.3
3.2
14.0
10.4
39.2
2.5

May
50.3
-22.5
7.1
5.9
64.3
-4.4
-20.3
-46.6
0.9
-2.1
31.5
-4.0
C16 Net issues of securities other than shares: seasonally adjusted and non-seasonally adjusted
(EUR billions; transactions during the month; nominal values)
net issues
seasonally adjusted net issues
250
250
200
200
150
150
100
100
50
50
0
0
-50
-50
-100
-100
2003
2004
2005
2006
2007
2008
2009

Source: ECB.
1)
Monthly data on net issues refer to transactions during the month. For the purposes of comparison, quarterly and annual data refer to the respective monthly averages.
ECB
Monthly Bulletin
August 2010 S 37

4.3 Growth rates of securities other than shares issued by euro area residents 1)
(percentage changes)

Annual growth rates (non-seasonally adjusted)
6-month seasonally adjusted growth rates

Total
MFIs Non-MFI corporations
General government
Total
MFIs Non-MFI corporations
General government
(including
(including
Eurosystem)
Financial Non-financial
Central
Other
Eurosystem)
Financial Non-financial
Central
Other
corporations corporations
government
general
corporations corporations
government
general
other than
government
other than
government
MFIs
MFIs
1
2
3
4
5
6
7
8
9
10
11
12
Total
2009 May
11.8
5.4
30.6
10.2
12.8
9.5
12.6
5.8
30.5
15.1
13.0
11.9
June
11.7
4.8
27.5
11.9
13.7
9.6
10.3
4.8
20.5
10.3
12.0
9.7
July
11.5
4.1
28.0
13.4
13.6
9.4
10.2
4.8
20.5
14.4
11.1
10.3
Aug.
10.7
3.5
24.3
13.1
13.4
9.0
8.8
3.2
16.1
13.4
10.7
10.8
Sep.
11.7
4.1
24.5
15.7
14.9
10.6
9.0
3.5
16.0
18.6
10.2
11.3
Oct.
10.8
2.9
24.0
16.5
13.6
10.4
7.8
0.1
12.7
18.1
12.1
9.4
Nov.
9.5
2.5
19.3
16.1
12.1
10.6
6.5
-0.6
9.1
17.2
11.3
9.3
Dec.
7.9
2.3
11.1
13.7
11.3
9.8
5.1
-0.2
2.4
15.8
10.7
10.5
2010 Jan.
7.2
2.3
10.1
13.0
10.2
9.2
4.2
0.0
0.6
11.4
9.4
7.9
Feb.
5.9
0.7
6.8
14.4
9.8
10.8
3.1
-1.7
-2.0
15.3
8.8
11.0
Mar.
5.6
1.5
5.1
15.5
8.6
11.6
2.3
-0.4
-4.8
12.6
6.9
11.9
Apr.
5.3
1.3
4.1
15.5
8.5
11.0
3.0
2.7
-3.9
13.3
5.0
12.4

May
4.3
-0.2
2.9
14.5
8.0
10.2
2.2
0.2
-3.0
12.2
4.9
11.2
Long-term
2009 May
10.4
5.1
32.3
16.1
7.2
8.5
12.9
5.7
35.4
30.5
9.1
14.2
June
10.6
4.8
29.4
19.2
8.5
8.4
11.7
5.7
23.8
29.9
9.8
12.6
July
10.6
4.5
30.9
21.9
7.8
8.0
11.0
6.2
21.9
28.1
8.6
12.0
Aug.
10.3
4.8
27.6
21.4
7.8
8.0
10.3
6.8
17.6
24.0
8.3
13.2
Sep.
11.2
5.1
27.8
23.8
9.6
9.3
9.9
6.4
17.4
27.3
7.5
11.4
Oct.
11.5
4.9
27.0
26.0
10.4
10.4
9.7
4.7
13.3
25.9
11.0
9.0
Nov.
10.6
5.0
21.7
27.2
9.6
10.8
8.5
4.3
9.6
24.1
10.1
7.6
Dec.
8.9
4.0
13.0
24.9
9.5
11.8
5.9
2.4
3.1
20.3
9.0
10.9
2010 Jan.
8.6
4.7
10.7
21.8
9.5
11.4
6.0
3.3
0.3
15.8
10.5
10.7
Feb.
7.5
3.3
7.4
21.8
9.7
12.3
4.7
-0.1
-2.0
19.5
11.2
11.5
Mar.
7.2
3.7
5.8
21.9
9.2
12.7
4.5
1.2
-4.7
16.6
10.9
14.0
Apr.
7.1
3.2
4.7
21.0
10.4
10.9
4.5
1.7
-3.2
16.2
9.8
12.6

May
5.9
1.6
3.2
18.2
10.1
8.8
3.4
-1.1
-2.9
12.6
10.2
10.0
C17 Annual growth rates of long-term debt securities, by sector of the issuer, in all currencies combined
(annual percentage changes)
general government
MFIs (including Eurosystem)
non-MFI corporations
35
35
30
30
25
25
20
20
15
15
10
10
5
5
0
0
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009

Source: ECB.
1)
For details of the calculation of the growth rates, see the Technical Notes. The six-month growth rates have been annualised.
ECB
S Monthly Bulletin
38 August 2010

EURO AREA
STATISTICS
Financial
markets
4.3 Growth rates of securities other than shares issued by euro area residents 1) (cont'd)
(percentage changes)

Long-term fixed rate
Long-term variable rate

Total
MFIs Non-MFI corporations
General government
Total
MFIs Non-MFI corporations
General government
(including
(including
Eurosystem)
Financial Non-financial
Central
Other
Eurosystem)
Financial Non-financial
Central
Other
corporations corporations
government
general
corporations corporations
government
general
other than
government
other than
government
MFIs
MFIs
13
14
15
16
17
18
19
20
21
22
23
24
In all currencies combined
2008
3.1
4.9
5.7
4.8
1.5
1.4
12.8
5.4
33.4
7.0
7.6
3.2

2009
9.4
7.0
18.1
23.8
8.1
4.2
12.1
1.9
36.0
-1.9
0.1
20.7
2009 Q2
8.9
6.8
17.8
20.9
7.5
4.8
14.4
3.1
43.0
-1.1
-0.6
19.9
Q3
10.5
7.2
21.1
28.0
9.0
3.9
11.3
0.9
35.2
-3.2
-1.6
25.1

Q4
12.2
9.0
21.3
33.5
10.3
6.6
7.5
-1.6
24.0
-4.1
2.0
26.2
2010 Q1
11.1
9.7
14.0
27.8
9.6
8.1
1.3
-3.8
6.2
-2.3
4.6
26.7
2009 Dec.
11.9
9.7
19.3
32.3
9.7
8.3
2.5
-3.9
10.1
-4.2
3.0
25.2
2010 Jan.
11.4
10.7
16.1
27.6
9.3
7.0
2.4
-3.2
7.5
-3.2
7.3
28.2
Feb.
10.8
8.9
11.5
26.7
10.0
8.3
0.5
-4.4
4.8
-1.5
3.2
27.1
Mar.
10.4
9.2
10.1
26.3
9.4
9.5
-0.1
-3.6
2.6
-0.2
3.5
24.4
Apr.
10.6
8.8
8.3
24.9
10.7
7.8
-0.4
-4.3
1.6
-0.5
7.7
22.1

May
9.3
6.0
6.9
20.9
10.5
5.8
-1.0
-4.2
0.2
-0.5
6.1
20.0
In euro
2008
2.9
4.8
6.1
2.9
1.7
1.3
14.3
6.6
35.1
7.2
7.9
2.0

2009
10.0
8.9
21.4
22.4
8.2
3.6
14.5
3.9
38.5
-2.5
-0.4
21.8
2009 Q2
9.5
8.8
21.8
19.3
7.7
4.2
17.2
5.3
46.3
-1.8
-0.7
21.7
Q3
11.2
9.4
24.4
27.0
9.2
3.3
13.6
2.9
37.9
-3.8
-2.4
27.4

Q4
12.8
11.3
23.5
33.1
10.4
6.1
9.1
-0.2
25.6
-4.9
0.7
26.8
2010 Q1
11.4
10.7
15.3
28.8
9.7
7.8
1.8
-3.4
6.7
-2.5
3.2
26.7
2009 Dec.
12.2
11.2
20.5
33.0
9.8
8.0
3.4
-3.0
11.1
-4.7
1.7
25.1
2010 Jan.
11.7
11.7
17.8
28.4
9.3
6.6
2.9
-2.8
8.1
-3.6
5.9
28.3
Feb.
11.1
9.9
12.5
27.8
10.1
8.0
0.8
-4.1
5.2
-1.7
1.8
27.0
Mar.
10.7
9.7
11.3
27.4
9.4
9.4
0.3
-3.3
3.0
0.0
2.1
24.5
Apr.
10.8
9.0
8.8
26.1
10.7
7.5
-0.2
-3.8
1.4
-0.5
6.3
22.0

May
9.4
5.9
7.6
21.3
10.5
5.3
-1.4
-4.2
-0.6
-0.5
4.7
19.8
C18 Annual growth rates of short-term debt securities, by sector of the issuer, in all currencies combined
(annual percentage changes)
general government
MFIs (including Eurosystem)
non-MFI corporations
80
80
60
60
40
40
20
20
0
0
-20
-20
-40
-40
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009

Source: ECB.
1)
Annual percentage changes for monthly data refer to the end of the month, whereas those for quarterly and yearly data refer to the annual change in the period average.

See the Technical Notes for details.
ECB
Monthly Bulletin
August 2010 S 39

4.4 Quoted shares issued by euro area residents 1)
(EUR billions, unless otherwise indicated; market values)
1. Outstanding amounts and annual growth rates
(outstanding amounts as at end of period)

Total
MFIs
Financial corporations other than MFIs
Non-financial corporations
Total
Index:
Annual
Total
Annual
Total
Annual
Total
Annual
Dec. 2001 = 100
growth
growth
growth
growth
rates (%)
rates (%)
rates (%)
rates (%)
1
2
3
4
5
6
7
8
9
2008 May
5,747.7
104.5
0.9
772.3
1.8
497.1
2.5
4,478.4
0.6
June
5,100.2
104.5
0.6
666.5
1.8
435.8
2.5
3,997.9
0.2
July
4,991.5
104.7
0.6
692.8
2.7
428.2
2.5
3,870.5
0.0
Aug.
5,017.9
104.6
0.7
666.7
2.8
438.4
2.7
3,912.7
0.0
Sep.
4,448.1
104.7
0.7
613.3
3.6
382.3
2.6
3,452.5
0.0
Oct.
3,760.0
105.0
0.7
452.9
4.2
280.5
2.8
3,026.6
-0.1
Nov.
3,504.9
105.2
0.9
395.6
5.9
265.4
2.3
2,843.9
-0.1
Dec.
3,512.7
105.4
1.0
378.1
5.8
282.5
2.7
2,852.1
-0.1
2009 Jan.
3,315.7
105.6
1.1
343.7
7.4
259.0
2.8
2,712.9
-0.1
Feb.
2,943.5
105.6
1.1
275.9
7.3
206.3
2.8
2,461.3
-0.1
Mar.
3,027.4
106.1
1.5
315.5
7.9
223.9
2.9
2,488.0
0.4
Apr.
3,461.0
106.2
1.6
413.7
8.2
274.6
3.0
2,772.7
0.5
May
3,609.3
106.5
1.9
454.1
8.9
283.3
2.9
2,871.9
0.8
June
3,560.2
107.3
2.7
449.5
9.8
279.4
3.9
2,831.4
1.5
July
3,846.1
107.5
2.7
510.4
9.5
301.1
3.6
3,034.6
1.6
Aug.
4,044.3
107.5
2.7
573.3
9.4
321.7
4.0
3,149.3
1.6
Sep.
4,213.9
107.6
2.8
594.0
8.4
351.6
4.1
3,268.3
1.8
Oct.
4,068.7
107.8
2.7
569.0
9.0
326.2
1.3
3,173.6
1.9
Nov.
4,082.3
108.1
2.7
568.5
8.8
317.9
2.2
3,195.9
1.9
Dec.
4,428.9
108.5
3.0
572.1
9.1
348.8
5.3
3,508.0
1.8
2010 Jan.
4,261.5
108.7
2.9
522.5
8.3
338.7
5.3
3,400.3
1.9
Feb.
4,179.3
108.7
3.0
503.6
8.2
337.2
5.4
3,338.4
2.0
Mar.
4,492.7
109.0
2.8
548.3
7.4
363.3
5.4
3,581.1
1.8
Apr.
4,427.9
109.0
2.7
512.7
7.0
343.8
5.3
3,571.4
1.7

May
4,110.2
109.1
2.4
449.6
6.3
320.9
5.3
3,339.7
1.5
C19 Annual growth rates for quoted shares issued by euro area residents
(annual percentage changes)
MFIs
financial corporations other than MFIs
non-financial corporations
12.0
12.0
10.0
10.0
8.0
8.0
6.0
6.0
4.0
4.0
2.0
2.0
0.0
0.0
-2.0
-2.0
-4.0
-4.0
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
Source: ECB.
1)
For details of the calculation of the index and the growth rates, see the Technical Notes.
ECB
S Monthly Bulletin
40 August 2010

EURO AREA
STATISTICS
Financial
markets
4.4 Quoted shares issued by euro area residents 1)
(EUR billions; market values)
2. Transactions during the month

Total
MFIs
Financial corporations other than MFIs
Non-financial corporations
Gross issues Redemptions
Net issues Gross issues Redemptions
Net issues Gross issues Redemptions
Net issues Gross issues Redemptions
Net issues
1
2
3
4
5
6
7
8
9
10
11
12
2008 May
7.3
6.0
1.4
4.1
0.1
4.1
1.5
0.3
1.2
1.7
5.6
-3.9
June
3.9
4.8
-0.9
1.3
0.0
1.3
0.5
0.1
0.4
2.1
4.7
-2.6
July
12.7
3.4
9.4
6.7
0.0
6.7
1.5
0.5
1.0
4.5
2.9
1.6
Aug.
1.6
3.0
-1.4
0.3
0.0
0.3
0.1
0.0
0.1
1.1
3.0
-1.9
Sep.
7.8
2.9
5.0
7.0
0.0
7.0
0.0
0.1
-0.1
0.8
2.8
-2.0
Oct.
12.9
0.6
12.2
1.4
0.0
1.4
10.7
0.0
10.7
0.8
0.6
0.1
Nov.
10.6
2.9
7.7
8.4
0.5
8.0
0.5
2.1
-1.6
1.7
0.3
1.4
Dec.
8.5
2.6
6.0
0.0
0.0
0.0
0.5
0.0
0.4
8.0
2.5
5.5
2009 Jan.
6.3
0.5
5.8
5.7
0.0
5.7
0.1
0.0
0.0
0.5
0.4
0.1
Feb.
0.2
0.9
-0.7
0.0
0.0
0.0
0.0
0.1
-0.1
0.2
0.8
-0.6
Mar.
13.7
0.2
13.4
3.6
0.0
3.6
0.2
0.0
0.1
9.9
0.2
9.7
Apr.
3.7
0.3
3.4
1.2
0.0
1.2
0.1
0.0
0.0
2.4
0.3
2.1
May
11.4
0.3
11.1
4.4
0.0
4.4
0.2
0.0
0.1
6.8
0.3
6.5
June
27.8
2.0
25.8
4.8
0.0
4.8
3.3
0.3
3.0
19.7
1.8
18.0
July
7.2
0.2
7.0
3.0
0.0
3.0
0.0
0.0
0.0
4.1
0.2
4.0
Aug.
4.0
3.3
0.7
0.0
0.0
0.0
1.3
0.0
1.3
2.7
3.3
-0.6
Sep.
5.0
0.3
4.7
0.6
0.0
0.6
0.2
0.0
0.1
4.2
0.2
3.9
Oct.
7.7
0.3
7.4
4.5
0.0
4.5
0.1
0.0
0.1
3.1
0.2
2.8
Nov.
11.6
0.2
11.4
9.0
0.0
9.0
1.0
0.0
1.0
1.6
0.2
1.4
Dec.
16.2
0.2
16.1
1.9
0.0
1.9
10.4
0.1
10.3
4.0
0.1
3.9
2010 Jan.
6.4
0.0
6.4
4.1
0.0
4.1
0.1
0.0
0.1
2.3
0.0
2.3
Feb.
2.2
0.3
1.9
0.0
0.0
0.0
0.2
0.0
0.2
2.0
0.3
1.7
Mar.
9.6
0.2
9.4
2.6
0.0
2.6
0.1
0.0
0.1
6.9
0.2
6.7
Apr.
1.8
0.4
1.5
0.1
0.0
0.0
0.0
0.0
0.0
1.8
0.3
1.5

May
3.2
0.8
2.4
1.9
0.0
1.9
0.1
0.0
0.1
1.3
0.8
0.4
C20 Gross issues of quoted shares by sector of the issuer
(EUR billions; transactions during the month; market values)
non-financial corporations
MFIs
financial corporations other than MFIs
40
40
35
35
30
30
25
25
20
20
15
15
10
10
5
5
0
0
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
Source: ECB.
1)
For details of the calculation of the index and the growth rates, see the Technical Notes.
ECB
Monthly Bulletin
August 2010 S 41

4.5 MFI interest rates on euro-denominated deposits from and loans to euro area residents 1)
(percentages per annum; outstanding amounts as at end of period, new business as period average, unless otherwise indicated)
1. Interest rates on deposits (new business)

Deposits from households
Deposits from non-financial corporations
Repos

Overnight 2)
With an agreed maturity of:
Redeemable at notice of: 2), 3) Overnight 2)
With an agreed maturity of:
Up to 1 year
Over 1 and
Over 2 years
Up to 3 months Over 3 months
Up to 1 year
Over 1 and
Over 2 years
up to 2 years
up to 2 years
1
2
3
4
5
6
7
8
9
10
11
2009 July
0.52
1.86
2.41
2.61
1.86
3.38
0.57
0.82
2.41
2.92
0.68
Aug.
0.50
1.72
2.32
2.64
1.64
3.23
0.54
0.71
2.06
2.93
0.57
Sep.
0.49
1.61
2.27
2.52
1.60
3.12
0.52
0.69
2.10
2.74
0.58
Oct.
0.46
1.68
2.11
2.55
1.55
2.97
0.49
0.66
1.99
2.72
0.56
Nov.
0.46
1.67
2.23
2.56
1.52
2.76
0.48
0.70
2.11
2.92
0.58
Dec.
0.45
1.67
2.31
2.40
1.53
2.45
0.47
0.77
2.00
2.53
0.64
2010 Jan.
0.43
1.74
2.33
2.52
1.47
2.23
0.45
0.72
1.95
2.44
0.53
Feb.
0.42
1.75
2.24
2.36
1.45
2.11
0.44
0.73
2.11
2.39
0.53
Mar.
0.42
1.90
2.38
2.24
1.45
2.05
0.44
0.80
2.73
2.34
0.50
Apr.
0.41
2.02
2.64
2.14
1.42
2.01
0.43
0.78
2.78
2.30
0.58
May
0.40
2.04
2.73
2.24
1.40
1.98
0.43
0.77
2.78
2.26
0.52

June
0.42
2.15
2.10
2.48
1.41
1.95
0.43
0.87
1.81
2.40
0.66
2. Interest rates on loans to households (new business)

Revolving
Consumer credit
Lending for house purchase
Other lending
loans and

by initial rate fixation
overdrafts,
By initial rate fixation
Annual
By initial rate fixation
Annual

convenience
percentage
percentage
and extended
Floating rate
Over 1
Over
rate of
Floating rate
Over 1
Over 5
Over
rate of
Floating rate
Over 1
Over
credit card
and up to
and up to
5 years
charge 4)
and up to
and up to
and up to
10 years
charge 4)
and up to
and up to
5 years
debt 2)
1 year
5 years
1 year
5 years
10 years
1 year
5 years
1
2
3
4
5
6
7
8
9
10
11
12
13
2009 July
9.31
7.63
6.49
8.03
8.02
3.03
4.10
4.54
4.54
4.02
3.35
4.77
4.91
Aug.
9.26
7.93
6.54
7.96
8.17
3.00
4.10
4.54
4.45
4.06
3.24
4.74
4.82
Sep.
9.26
7.69
6.45
7.91
8.00
2.81
4.05
4.48
4.45
3.92
3.13
4.66
4.74
Oct.
9.16
7.32
6.38
7.94
7.87
2.77
4.02
4.45
4.40
3.85
3.21
4.73
4.72
Nov.
9.07
7.03
6.29
7.87
7.76
2.71
3.97
4.46
4.32
3.78
3.16
4.57
4.66
Dec.
8.99
6.42
6.26
7.56
7.43
2.71
3.96
4.42
4.26
3.81
3.08
4.40
4.35
2010 Jan.
8.94
6.83
6.42
8.04
7.86
2.71
3.94
4.38
4.26
3.79
3.13
4.45
4.46
Feb.
9.01
6.72
6.25
7.98
7.78
2.68
3.83
4.32
4.18
3.74
3.17
4.48
4.74
Mar.
8.82
6.35
6.21
7.94
7.59
2.63
3.72
4.21
4.15
3.66
3.05
4.61
4.55
Apr.
8.77
6.77
6.12
7.92
7.66
2.62
3.70
4.18
4.12
3.67
3.06
4.32
4.53
May
8.78
6.69
6.14
7.84
7.62
2.58
3.65
4.14
4.01
3.58
3.09
4.45
4.50

June
9.02
5.23
6.06
7.89
7.14
2.55
3.60
4.08
3.90
3.52
3.03
4.25
4.27
3. Interest rates on loans to non-financial corporations (new business)

Revolving
Other loans of up to EUR 1 million
Other loans of over EUR 1 million
loans and
by initial rate fixation
by initial rate fixation
overdrafts,
convenience
Floating rate and
Over 1 and
Over 5 years
Floating rate and
Over 1 and
Over 5 years
and extended
up to 1 year
up to 5 years
up to 1 year
up to 5 years
credit card
debt 2)1
2
3
4
5
6
7
2009 July
4.34
3.56
4.78
4.32
2.37
2.89
3.90
Aug.
4.23
3.42
4.67
4.24
2.30
2.80
3.83
Sep.
4.25
3.36
4.54
4.16
2.06
2.89
3.64
Oct.
4.18
3.33
4.49
4.18
2.14
2.73
3.64
Nov.
4.11
3.34
4.49
4.10
2.22
2.74
3.80
Dec.
4.06
3.28
4.22
3.96
2.19
3.15
3.58
2010 Jan.
4.05
3.25
4.20
3.99
2.02
2.88
3.65
Feb.
4.03
3.25
4.22
4.05
1.94
2.90
3.61
Mar.
3.98
3.24
4.21
4.00
1.99
2.54
3.44
Apr.
3.98
3.19
4.17
3.90
2.00
2.72
3.45
May
3.97
3.25
4.12
3.86
1.96
2.83
3.41

June
3.73
3.25
4.10
3.81
2.17
2.92
3.33

Source: ECB.
1)
Data refer to the changing composition of the euro area. For further information, see the General Notes.
2)
For this instrument category, new business and outstanding amounts coincide. End of period. Data as of June 2010 may not be fully comparable with those prior to that date
owing to methodological changes arising from the implementation of Regulations ECB/2008/32 and ECB/2009/7 (amending Regulation ECB/2001/18).
3)
For this instrument category, households and non-financial corporations are merged and allocated to the household sector, since the outstanding amounts of non-financial
corporations are negligible compared with those of the household sector when all participating Member States are combined.
4)
The annual percentage rate of charge covers the total cost of a loan. The total cost comprises both an interest rate component and a component incorporating
other (related) charges, such as the cost of inquiries, administration, preparation of documents and guarantees.
ECB
S Monthly Bulletin
42 August 2010

EURO AREA
STATISTICS
Financial
markets
4.5 MFI interest rates on euro-denominated deposits from and loans to euro area residents 1)
(percentages per annum; outstanding amounts as at end of period, new business as period average, unless otherwise indicated)
4. Interest rates on deposits (outstanding amounts)

Deposits from households
Deposits from non-financial corporations
Repos

Overnight 2)
With an agreed maturity of:
Redeemable at notice of: 2),3) Overnight 2)
With an agreed maturity of:
Up to 2 years
Over 2 years
Up to 3 months
Over 3 months
Up to 2 years
Over 2 years
1
2
3
4
5
6
7
8
9
2009 July
0.52
3.07
3.03
1.86
3.38
0.57
1.97
3.52
1.53
Aug.
0.50
2.94
3.01
1.64
3.23
0.54
1.89
3.39
1.53
Sep.
0.49
2.83
3.01
1.60
3.12
0.52
1.80
3.39
1.45
Oct.
0.46
2.64
2.96
1.55
2.97
0.49
1.70
3.34
1.35
Nov.
0.46
2.50
2.95
1.52
2.76
0.48
1.62
3.37
1.28
Dec.
0.45
2.36
2.91
1.53
2.45
0.47
1.56
3.30
1.21
2010 Jan.
0.43
2.20
2.80
1.47
2.23
0.45
1.45
3.23
1.20
Feb.
0.42
2.15
2.84
1.45
2.11
0.44
1.42
3.31
1.20
Mar.
0.42
2.13
2.75
1.45
2.05
0.44
1.38
3.26
1.16
Apr.
0.41
2.13
2.75
1.42
2.01
0.43
1.37
3.24
1.16
May
0.40
2.13
2.71
1.40
1.98
0.43
1.42
3.22
1.14

June
0.42
2.13
2.72
1.41
1.95
0.43
1.45
3.11
1.26
5. Interest rates on loans (outstanding amounts)

Loans to households
Loans to non-financial corporations

Lending for house purchase
Consumer credit and other loans
With a maturity of:
with a maturity of:
with a maturity of:

Up to 1 year
Over 1 and
Over 5 years
Up to 1 year
Over 1 and
Over 5 years
Up to 1 year
Over 1 and
Over 5 years
up to 5 years
up to 5 years
up to 5 years
1
2
3
4
5
6
7
8
9
2009 July
4.31
4.31
4.36
7.82
6.79
5.70
3.72
3.59
3.81
Aug.
4.23
4.25
4.28
7.82
6.74
5.65
3.65
3.50
3.73
Sep.
4.18
4.26
4.25
7.80
6.71
5.63
3.62
3.43
3.68
Oct.
4.05
4.19
4.18
7.69
6.66
5.54
3.56
3.37
3.60
Nov.
4.01
4.15
4.12
7.56
6.66
5.51
3.53
3.36
3.57
Dec.
4.07
4.11
4.07
7.55
6.57
5.43
3.46
3.35
3.50
2010 Jan.
3.99
4.05
4.00
7.51
6.52
5.38
3.47
3.31
3.45
Feb.
4.04
4.11
4.03
7.49
6.61
5.43
3.45
3.33
3.43
Mar.
3.98
4.04
3.98
7.44
6.52
5.36
3.43
3.26
3.37
Apr.
3.89
4.01
3.92
7.38
6.51
5.30
3.42
3.21
3.33
May
3.87
3.97
3.89
7.40
6.46
5.29
3.41
3.20
3.31

June
3.79
3.96
3.83
7.59
6.43
5.25
3.27
3.20
3.29
C21 New deposits with an agreed maturity
C22 New loans with a floating rate and up to 1 year's initial
(percentages per annum excluding charges; period averages)
rate fixation (percentages per annum excluding charges; period averages)
by households, up to 1 year
to households for consumption
by non-financial corporations, up to 1 year
to households for house purchase
by households, over 2 years
to non-financial corporations, up to EUR 1 million
by non-financial corporations, over 2 years
to non-financial corporations, over EUR 1 million
5.00
5.00
9.00
9.00
4.50
4.50
8.00
8.00
4.00
4.00
7.00
7.00
3.50
3.50
6.00
6.00
3.00
3.00
5.00
5.00
2.50
2.50
4.00
4.00
2.00
2.00
3.00
3.00
1.50
1.50
1.00
1.00
2.00
2.00
0.50
0.50
1.00
1.00
2003
2004
2005
2006
2007
2008
2009
2003
2004
2005
2006
2007
2008
2009
Source: ECB.
1)
Data refer to the changing composition of the euro area. For further information, see the General Notes.
ECB
Monthly Bulletin
August 2010 S 43

4.6 Money market interest rates
(percentages per annum; period averages)

Euro area 1), 2) United
States
Japan
Overnight
1-month
3-month
6-month
12-month
3-month
3-month
deposits
deposits
deposits
deposits
deposits
deposits
deposits
(EONIA)
(EURIBOR)
(EURIBOR)
(EURIBOR)
(EURIBOR)
(LIBOR)
(LIBOR)
1
2
3
4
5
6
7
2007
3.87
4.08
4.28
4.35
4.45
5.30
0.79
2008
3.87
4.28
4.64
4.73
4.83
2.93
0.93

2009
0.71
0.89
1.22
1.43
1.61
0.69
0.47
2009 Q2
0.77
0.94
1.31
1.51
1.67
0.84
0.53
Q3
0.36
0.53
0.87
1.13
1.34
0.41
0.40
Q4
0.36
0.45
0.72
1.00
1.24
0.27
0.31

2010 Q1
0.34
0.42
0.66
0.96
1.22
0.26
0.25
Q2
0.35
0.43
0.69
0.98
1.25
0.44
0.24
2009 July
0.36
0.61
0.97
1.21
1.41
0.52
0.43
Aug.
0.35
0.51
0.86
1.12
1.33
0.42
0.40
Sep.
0.36
0.46
0.77
1.04
1.26
0.30
0.36
Oct.
0.36
0.43
0.74
1.02
1.24
0.28
0.33
Nov.
0.36
0.44
0.72
0.99
1.23
0.27
0.31
Dec.
0.35
0.48
0.71
1.00
1.24
0.25
0.28
2010 Jan.
0.34
0.44
0.68
0.98
1.23
0.25
0.26
Feb.
0.34
0.42
0.66
0.96
1.23
0.25
0.25
Mar.
0.35
0.41
0.64
0.95
1.22
0.27
0.25
Apr.
0.35
0.40
0.64
0.96
1.23
0.31
0.24
May
0.34
0.42
0.69
0.98
1.25
0.46
0.24
June
0.35
0.45
0.73
1.01
1.28
0.54
0.24

July
0.48
0.58
0.85
1.10
1.37
0.51
0.24
C23 Euro area money market rates 1), 2)
C24 3-month money market rates
(monthly averages; percentages per annum)
(monthly averages; percentages per annum)
1-month rate
euro area 1), 2)
3-month rate
Japan
12-month rate
United States
9.00
9.00
9.00
9.00
8.00
8.00
8.00
8.00
7.00
7.00
7.00
7.00
6.00
6.00
6.00
6.00
5.00
5.00
5.00
5.00
4.00
4.00
4.00
4.00
3.00
3.00
3.00
3.00
2.00
2.00
2.00
2.00
1.00
1.00
1.00
1.00
0.00
0.00
0.00
0.00
1994
1996
1998
2000
2002
2004
2006
2008
2010
1994
1996
1998
2000
2002
2004
2006
2008
2010

Source: ECB.
1)
Before January 1999 synthetic euro area rates were calculated on the basis of national rates weighted by GDP. For further information, see the General Notes.
2)
Data refer to the changing composition of the euro area. For further information, see the General Notes.
ECB
S Monthly Bulletin
44 August 2010

EURO AREA
STATISTICS
Financial
markets
4.7 Euro area yield curves 1)
(AAA-rated euro area central government bonds; end of period; rates in percentages per annum; spreads in percentage points)

Spot rates
Instantaneous forward rates
3 months
1 year
2 years
5 years
7 years
10 years
10 years
10 years
1 year
2 years
5 years
10 years
- 3 months
- 2 years
(spread)
(spread)
1
2
3
4
5
6
7
8
9
10
11
12
2007
3.85
4.00
4.01
4.11
4.23
4.38
0.52
0.36
4.06
4.02
4.40
4.78
2008
1.75
1.85
2.14
2.95
3.32
3.69
1.94
1.55
2.09
2.76
4.04
4.60
2009
0.38
0.81
1.38
2.64
3.20
3.76
3.38
2.38
1.41
2.44
4.27
5.20
2009 Q2
0.62
0.90
1.50
2.85
3.42
3.99
3.37
2.49
1.47
2.67
4.54
5.42
Q3
0.41
0.70
1.33
2.59
3.12
3.64
3.23
2.31
1.34
2.47
4.14
4.96
Q4
0.38
0.81
1.38
2.64
3.20
3.76
3.38
2.38
1.41
2.44
4.27
5.20
2010 Q1
0.33
0.60
1.05
2.28
2.86
3.46
3.13
2.41
1.02
1.98
3.96
5.02
Q2
0.34
0.42
0.69
1.79
2.41
3.03
2.68
2.33
0.62
1.35
3.54
4.52
2009 July
0.49
0.74
1.43
2.68
3.21
3.74
3.26
2.31
1.49
2.62
4.21
5.13
Aug.
0.44
0.74
1.46
2.69
3.19
3.68
3.24
2.22
1.55
2.66
4.16
4.95
Sep.
0.41
0.70
1.33
2.59
3.12
3.64
3.23
2.31
1.34
2.47
4.14
4.96
Oct.
0.50
0.81
1.43
2.61
3.13
3.68
3.18
2.25
1.49
2.50
4.12
5.11
Nov.
0.44
0.80
1.34
2.49
3.01
3.57
3.13
2.23
1.38
2.32
4.00
5.04
Dec.
0.38
0.81
1.38
2.64
3.20
3.76
3.38
2.38
1.41
2.44
4.27
5.20
2010 Jan.
0.28
0.71
1.25
2.48
3.06
3.66
3.38
2.42
1.28
2.25
4.15
5.23
Feb.
0.30
0.54
1.02
2.29
2.88
3.49
3.19
2.46
0.98
2.01
3.99
5.08
Mar.
0.33
0.60
1.05
2.28
2.86
3.46
3.13
2.41
1.02
1.98
3.96
5.02
Apr.
0.32
0.60
1.01
2.18
2.78
3.40
3.07
2.39
1.00
1.85
3.89
4.94
May
0.21
0.28
0.57
1.75
2.39
3.00
2.78
2.43
0.47
1.28
3.58
4.46
June
0.34
0.42
0.69
1.79
2.41
3.03
2.68
2.33
0.62
1.35
3.54
4.52

July
0.45
0.59
0.87
1.88
2.44
3.01
2.56
2.14
0.82
1.51
3.45
4.43
C25 Euro area spot yield curves
C26 Euro area spot rates and spreads
(percentages per annum; end of period)
(daily data; rates in percentages per annum; spreads in percentage points)
1-year rate (left-hand scale)
July 2010
10-year rate (left-hand scale)
June 2010
spread between 10-year and 3-month rates (right-hand scale)
May 2010
spread between 10-year and 2-year rates (right-hand scale)
5.0
5.0
5.0
4.5
4.5
4.5
4.0
4.0
4.0
3.5
3.5
3.5
3.0
3.0
3.0
2.5
2.5
2.5
2.0
2.0
2.0
1.5
1.5
1.5
1.0
1.0
1.0
0.5
0.5
0.5
0.0
0.0
0.0
-0.5
-0.5
-0.5
0
5yrs
10yrs
15yrs
20yrs
25yrs
30yrs
2008
2009
2010

Sources: ECB calculations based on underlying data provided by EuroMTS and ratings provided by Fitch Ratings.
1)
Data refer to the changing composition of the euro area. For further information, see the General Notes.
ECB
Monthly Bulletin
August 2010 S 45

4.8 Stock market indices
(index levels in points; period averages)

Dow Jones EURO STOXX indices 1) United
Japan

States
Benchmark
Main industry indices
Broad
50
Basic
Consumer
Consumer
Oil and Financials Industrials Technology
Utilities
Telecoms Health care
Standard
Nikkei
index
materials
services
goods
gas
& Poor’s
225
500
1
2
3
4
5
6
7
8
9
10
11
12
13
14
2007
416.4
4,315.8
543.8
235.4
366.5
449.6
408.3
488.4
383.4
561.4
492.7
519.2
1,476.5
16,984.4
2008
313.7
3,319.5
480.4
169.3
290.7
380.9
265.0
350.9
282.5
502.0
431.5
411.5
1,220.7
12,151.6

2009
234.2
2,521.0
353.2
140.5
244.5
293.5
172.1
269.7
200.7
353.7
380.4
363.5
946.2
9,321.6
2009 Q2
220.5
2,376.6
326.9
136.6
229.5
287.3
158.6
251.0
201.1
337.7
351.5
343.8
892.0
9,274.8
Q3
247.2
2,660.6
369.0
142.0
257.1
296.8
192.7
286.0
211.3
361.1
386.0
365.1
994.2
10,117.3
Q4
268.1
2,872.7
422.1
151.5
282.8
316.9
209.7
317.7
214.1
375.3
416.5
399.3
1,088.7
9,969.2
2010 Q1
268.0
2,849.0
445.0
159.3
294.9
320.0
195.5
326.7
229.9
372.4
398.8
426.3
1,123.6
10,511.2

Q2
261.1
2,735.7
446.3
163.7
312.9
305.0
178.8
334.3
229.1
349.6
372.2
412.0
1,134.6
10,345.9
2009 July
228.0
2,462.1
337.9
134.8
243.7
288.6
170.6
256.8
198.8
334.7
364.8
352.9
934.1
9,678.3
Aug.
250.7
2,702.7
377.6
142.1
261.8
293.2
198.6
290.3
208.5
365.7
387.2
364.1
1,009.7
10,430.4
Sep.
264.0
2,827.9
393.3
149.5
266.5
308.7
210.2
312.5
227.2
384.4
407.0
378.8
1,044.6
10,302.9
Oct.
268.7
2,865.5
403.7
150.1
277.5
314.2
216.0
318.4
221.3
375.4
415.0
393.6
1,067.7
10,066.2
Nov.
265.4
2,843.8
415.4
149.5
280.0
315.3
208.7
313.6
209.9
369.8
414.5
391.5
1,088.1
9,641.0
Dec.
270.1
2,907.6
447.0
155.0
290.9
321.1
204.3
321.0
211.0
380.5
419.8
412.4
1,110.4
10,169.0
2010 Jan.
273.5
2,922.7
449.4
158.9
295.7
329.8
204.6
331.6
223.1
384.1
407.4
425.5
1,123.6
10,661.6
Feb.
257.0
2,727.5
427.9
154.3
285.3
309.8
183.9
312.3
222.7
360.9
386.8
415.0
1,089.2
10,175.1
Mar.
272.6
2,890.5
456.0
164.0
302.4
320.3
197.7
335.0
242.2
372.2
401.9
436.8
1,152.0
10,671.5
Apr.
278.6
2,937.3
470.9
171.7
313.8
328.6
199.7
349.0
248.8
378.9
396.7
430.0
1,197.3
11,139.8
May
252.7
2,642.1
431.4
159.6
305.2
295.4
170.8
324.8
221.9
341.7
360.0
401.0
1,125.1
10,104.0
June
253.2
2,641.7
438.1
160.4
319.5
292.7
167.5
330.0
218.3
330.5
361.6
406.1
1,083.4
9,786.1

July
255.1
2,669.5
435.0
160.8
320.8
289.3
178.0
324.2
212.3
320.3
369.7
389.2
1,079.8
9,456.8
C27 Dow Jones EURO STOXX broad index, Standard & Poor's 500 and Nikkei 225
(January 1994 = 100; monthly averages)
1)
Dow Jones EURO STOXX broad index
Standard & Poor’s 500
Nikkei 225
350
350
300
300
250
250
200
200
150
150
100
100
50
50
0
0
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010

Source: ECB.
1)
Data refer to the changing composition of the euro area. For further information, see the General Notes.
ECB
S Monthly Bulletin
46 August 2010

PRICES, OUTPUT, DEMAND AND
5
LABOUR MARKETS
5.1 HICP, other prices and costs
(annual percentage changes, unless otherwise indicated)
1. Harmonised Index of Consumer Prices 1)

Total
Total (s.a.; percentage change vis-à-vis previous period)
Memo item:

Administered prices 2)
Index:
Total
Goods Services
Total
Processed Unprocessed
Non-energy
Energy
Services
2005 = 100
food
food
industrial
(n.s.a.)
Total HICP Administered
Total excl.
goods
excluding
prices
unprocessed
administered
food and energy
prices
% of total 3)
100.0
100.0
83.1
58.0
42.0
100.0
11.9
7.3
29.3
9.6
42.0
88.9
11.1
1
2
3
4
5
6
7
8
9
10
11
12
13
2006
102.2
2.2
1.5
2.3
2.0
-
-
-
-
-
-
2.1
2.5
2007
104.4
2.1
2.0
1.9
2.5
-
-
-
-
-
-
2.1
2.3
2008
107.8
3.3
2.4
3.8
2.6
-
-
-
-
-
-
3.4
2.7

2009
108.1
0.3
1.3
-0.9
2.0
-
-
-
-
-
-
0.1
1.7
2009 Q2
108.3
0.2
1.5
-1.2
2.2
0.3
0.1
-0.8
0.1
0.7
0.5
0.0
1.8
Q3
108.0
-0.4
1.2
-1.9
1.8
0.2
0.3
-0.9
0.0
0.8
0.4
-0.6
1.2
Q4
108.6
0.4
1.0
-0.4
1.7
0.2
0.1
0.1
0.0
0.3
0.4
0.4
0.8
2010 Q1
108.6
1.1
0.9
0.9
1.5
0.4
0.0
0.7
0.0
3.0
0.3
1.2
0.4

Q2
110.0
1.5
0.8
1.7
1.2
0.6
0.3
0.7
0.2
3.9
0.3
1.5
1.3
2010 Feb.
108.4
0.9
0.8
0.6
1.3
0.1
0.0
0.3
0.0
-0.1
0.1
1.0
0.4
Mar.
109.4
1.4
0.9
1.3
1.6
0.4
0.0
0.6
0.0
2.6
0.3
1.6
0.4
Apr.
109.9
1.5
0.8
1.8
1.2
0.2
0.1
0.5
0.1
2.0
-0.1
1.6
1.2
May
110.0
1.6
0.9
1.9
1.3
0.1
0.2
-0.6
0.1
0.6
0.1
1.6
1.4

June
110.0
1.4
0.9
1.5
1.3
0.1
0.3
0.2
0.1
-0.4
0.1
1.4
1.4
July 4)
.
1.7
. . . .
.
.
. . .
.
.

Goods
Services

Food (incl. alcoholic beverages and tobacco)
Industrial goods
Housing
Transport Communication
Recreation Miscellaneous
and
Total
Processed
Unprocessed
Total
Non-energy
Energy
Rents
personal
food
food
industrial
goods
% of total 3)
19.2
11.9
7.3
38.9
29.3
9.6
10.2
6.0
6.6
3.3
14.9
7.1
14
15
16
17
18
19
20
21
22
23
24
25
2006
2.4
2.1
2.8
2.3
0.6
7.7
2.5
2.1
2.5
-3.3
2.3
2.3
2007
2.8
2.8
3.0
1.4
1.0
2.6
2.7
2.0
2.6
-1.9
2.9
3.2
2008
5.1
6.1
3.5
3.1
0.8
10.3
2.3
1.9
3.9
-2.2
3.2
2.5

2009
0.7
1.1
0.2
-1.7
0.6
-8.1
2.0
1.8
2.9
-1.0
2.1
2.1
2009 Q2
1.0
1.1
0.8
-2.3
0.7
-10.7
2.1
1.8
3.1
-1.2
2.7
2.0
Q3
-0.1
0.6
-1.2
-2.8
0.5
-11.9
2.0
1.8
2.5
-0.6
1.8
2.1
Q4
-0.2
0.5
-1.5
-0.5
0.3
-3.2
1.9
1.7
2.5
-0.6
1.4
2.2

2010 Q1
0.0
0.6
-0.8
1.3
0.1
4.8
1.9
1.6
2.5
-0.5
1.1
1.6
Q2
0.7
0.8
0.7
2.2
0.3
8.1
1.8
1.5
2.3
-0.9
0.8
1.5
2010 Jan.
-0.1
0.6
-1.3
1.1
0.1
4.0
1.9
1.7
2.6
-0.9
1.0
1.6
Feb.
-0.1
0.6
-1.2
0.9
0.1
3.3
1.9
1.6
2.2
-0.4
0.9
1.6
Mar.
0.3
0.5
-0.1
1.8
0.1
7.2
1.9
1.6
2.7
-0.3
1.4
1.5
Apr.
0.7
0.6
0.7
2.3
0.2
9.1
1.9
1.5
2.4
-0.6
0.4
1.4
May
0.7
0.9
0.4
2.5
0.3
9.2
1.8
1.5
2.2
-1.1
0.9
1.5

June
0.9
0.9
0.9
1.8
0.4
6.2
1.8
1.5
2.3
-1.1
1.0
1.5
Sources: Eurostat and ECB calculations.
1)
Data refer to the changing composition of the euro area. For further information, see the General Notes.
2)
These experimental statistics can only provide an approximate measure of price administration, since changes in administered prices cannot be fully isolated from other

influences. Please refer to Eurostat’s website (http://epp.eurostat.ec.europa.eu/portal/page/portal/hicp/introduction) for a note explaining the methodology used in the

compilation of this indicator.
3)
Weighting used in 2010.
4)
Estimate based on provisional national releases, which usually cover around 95% of the euro area, as well as on early information on energy prices.
ECB
Monthly Bulletin
August 2010 S 47

5.1 HICP, other prices and costs
(annual percentage changes, unless otherwise indicated)
2. Industry, construction and residential property prices

Industrial producer prices excluding construction
Construct-
Residential

ion 1)
property
Total
Total
Industry excluding construction and energy
Energy
prices 2)
(index:

2005 = 100)
Manu-
Total
Intermediate
Capital
Consumer goods
facturing
goods
goods
Total
Durable
Non-durable
% of total 3)
100.0
100.0
83.0
75.8
30.1
21.9
23.7
2.7
21.0
24.2
1
2
3
4
5
6
7
8
9
10
11
12
2006
105.1
5.1
3.5
2.7
4.6
1.6
1.5
1.4
1.4
13.5
4.6
6.6
2007
107.9
2.7
3.0
3.2
4.6
2.2
2.2
2.4
2.2
1.2
4.1
4.5
2008
114.4
6.1
4.8
3.4
3.9
2.1
3.9
2.8
4.1
14.2
3.8
1.5

2009
108.6
-5.1
-5.4
-2.8
-5.3
0.4
-2.0
1.2
-2.5
-11.7
0.1
-3.1
2009 Q2
108.3
-5.8
-6.8
-3.0
-5.8
0.7
-2.0
1.5
-2.5
-13.6
-0.2
-3.1 4)
Q3
108.0
-7.9
-7.4
-4.1
-7.5
-0.1
-2.6
1.0
-3.1
-18.2
-1.7
-
Q4
108.4
-4.6
-3.0
-3.1
-5.0
-0.6
-2.4
0.5
-2.8
-9.5
-0.2
-3.0 4)
2010 Q1
109.6
-0.1
1.7
-0.5
-0.4
-0.5
-0.5
0.3
-0.7
0.3
0.2
-

Q2
111.5
3.0
3.8
1.6
3.6
0.2
0.0
0.6
-0.1
7.0
. .
2010 Jan.
109.3
-1.0
0.9
-1.0
-1.5
-0.6
-0.7
0.5
-0.8
-1.5
- -
Feb.
109.4
-0.4
1.5
-0.5
-0.4
-0.5
-0.5
0.2
-0.6
-0.6
- -
Mar.
110.1
0.9
2.7
0.1
0.8
-0.3
-0.4
0.3
-0.5
3.0
- -
Apr.
111.1
2.8
3.7
1.0
2.7
0.0
-0.3
0.4
-0.4
7.8
- -
May
111.5
3.1
4.1
1.7
3.9
0.3
0.0
0.7
-0.2
7.3
- -

June
111.8
3.0
3.5
1.9
4.3
0.3
0.2
0.8
0.1
6.0
- -
3. Commodity prices and gross domestic product deflators 1)

Oil prices 5)
Non-energy commodity prices
GDP deflators
(EUR per

barrel)
Import-weighted 6)
Use-weighted 7)
Total
Total
Domestic demand
Exports 8)
Imports 8)
(s.a.; index:
Total
Food Non-food
Total
Food Non-food 2000 = 100)
Total
Private Government
Gross
consump-
consump-
fixed
tion
tion
capital
formation
% of total
100.0
35.0
65.0
100.0
45.0
55.0
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
2006
52.9
27.7
5.8
37.9
24.5
5.9
38.2
113.8
1.9
2.4
2.2
2.0
2.9
2.6
3.8
2007
52.8
7.8
14.3
5.5
5.3
9.4
2.9
116.5
2.4
2.3
2.3
1.6
2.7
1.6
1.4
2008
65.9
2.0
18.5
-4.4
-1.7
9.7
-8.6
119.0
2.2
2.7
2.8
2.6
2.4
2.6
3.7

2009
44.6
-18.5
-8.9
-23.1
-18.0
-11.5
-22.8
120.2
1.0
0.0
-0.2
1.8
-0.9
-3.1
-5.6
2009 Q1
35.1
-29.3
-15.0
-36.1
-28.7
-17.7
-36.9
120.1
1.8
0.9
0.3
2.4
0.6
-1.9
-4.2
Q2
43.8
-24.5
-11.2
-30.9
-22.5
-10.0
-31.4
120.0
1.0
-0.2
-0.4
1.3
-0.9
-3.4
-6.6
Q3
48.1
-18.7
-12.7
-21.5
-18.9
-15.3
-21.4
120.2
0.8
-0.6
-0.8
2.2
-1.8
-4.3
-8.0

Q4
51.2
3.2
5.8
1.9
2.5
-0.9
5.1
120.3
0.2
0.0
0.2
1.4
-1.4
-2.7
-3.5
2010 Q1
56.0
29.0
7.5
42.7
27.4
7.5
46.6
120.8
0.5
0.2
1.3
1.6
-0.4
2.3
1.3
2010 Feb.
54.5
25.4
5.0
38.4
25.0
7.1
42.3
-
-
- - -
- - -
Mar.
59.1
34.5
8.9
50.5
31.5
7.7
54.5
-
-
- - -
- - -
Apr.
64.0
51.9
8.1
78.7
43.8
8.9
76.2
-
-
- - -
- - -
May
61.6
52.1
11.5
77.8
43.6
12.0
73.8
-
-
- - -
- - -
June
62.2
50.9
17.6
71.4
44.0
20.9
64.8
-
-
- - -
- - -

July
58.9
56.0
24.9
73.6
49.4
31.1
64.5
-
-
- - -
- - -
Sources: Eurostat, ECB calculations based on Eurostat data (column 7 in Table 2 in Section 5.1 and columns 8-15 in Table 3 in Section 5.1), ECB calculations based on
Thomson Financial Datastream data (column 1 in Table 3 in Section 5.1) and ECB calculations (column 12 in Table 2 in Section 5.1 and columns 2-7 in Table 3 in Section 5.1).
1)
Input prices for residential buildings.
2)
Experimental data based on non-harmonised national sources (see http://www.ecb.europa.eu/stats/intro/html/experiment.en.html for further details).
3)
In 2005.
4)
The quarterly data for the second and fourth quarters refer to biannual averages for the first and second halves of the year respectively. Since some national data are only
available annually, the biannual estimate is partially derived from annual results; consequently, the accuracy of biannual data is lower than the accuracy of annual data.
5)
Brent Blend (for one-month forward delivery).
6)
Refers to prices expressed in euro. Weighted according to the structure of euro area imports in the period 2004-06.
7)
Refers to prices expressed in euro. Weighted according to euro area domestic demand (domestic production plus imports minus exports) in the period 2004-06. Experimental data
(see http://www.ecb.europa.eu/stats/intro/html/experiment.en.html for details).
8)
Deflators for exports and imports refer to goods and services and include cross-border trade within the euro area.
ECB
S Monthly Bulletin
48 August 2010

EURO AREA
STATISTICS
Prices, output,
demand and
labour markets
5.1 HICP, other prices and costs
(annual percentage changes, unless otherwise indicated)
4. Unit labour costs, compensation per labour input and labour productivity
(seasonally adjusted)

Total
Total
By economic activity
(index:
2000 = 100)
Agriculture, hunting,
Mining,
Construction
Trade, repairs, hotels and
Financial, real estate,
Public administration,
forestry and fishing
manufacturing
restaurants, transport and
renting and business
education, health
and energy
communication
services
and other services
1
2
3
4
5
6
7
8
Unit labour costs 1)
2008
115.4
3.3
0.4
3.7
2.9
3.1
3.6
2.8

2009
119.8
3.8
-1.2
10.1
1.1
4.9
0.8
2.7
2009 Q2
120.2
4.7
-0.2
14.0
0.8
6.1
1.3
1.9
Q3
119.7
3.5
-2.2
8.7
0.2
3.8
0.4
3.5
Q4
119.7
1.3
-1.0
1.5
1.2
2.2
0.7
2.0

2010 Q1
119.7
-0.5
-0.7
-6.8
1.9
-0.1
1.1
1.4
Compensation per employee
2008
121.5
3.1
3.9
3.0
4.4
2.7
2.7
3.4

2009
123.3
1.5
2.2
0.2
2.1
1.4
1.4
2.6
2009 Q2
122.9
1.4
2.4
0.0
2.6
2.0
1.9
1.9
Q3
123.6
1.5
2.0
0.4
2.1
0.4
1.4
3.3
Q4
124.0
1.3
2.3
0.4
1.7
1.0
1.8
2.1

2010 Q1
124.3
1.5
1.4
2.1
0.4
1.3
2.0
1.3
Labour productivity per person employed 2)
2008
105.3
-0.2
3.5
-0.7
1.4
-0.4
-0.8
0.6

2009
102.9
-2.3
3.5
-8.9
1.1
-3.3
0.6
-0.1
2009 Q2
102.3
-3.1
2.6
-12.4
1.8
-3.8
0.5
0.0
Q3
103.3
-1.9
4.2
-7.6
1.9
-3.3
1.0
-0.3

Q4
103.6
0.0
3.4
-1.1
0.5
-1.1
1.0
0.1
2010 Q1
103.9
1.9
2.2
9.5
-1.4
1.4
0.9
-0.1
Compensation per hour worked
2008
123.7
3.1
2.8
3.5
3.8
2.7
2.3
3.1

2009
127.5
3.1
3.2
4.5
4.2
2.2
2.6
3.0
2009 Q2
127.5
3.5
2.5
5.9
4.6
2.9
3.2
2.6
Q3
127.8
3.1
2.7
4.8
4.0
1.2
2.6
3.6

Q4
127.8
2.1
3.2
1.5
3.8
1.4
2.5
2.3
2010 Q1
128.0
0.7
2.0
0.0
-0.9
0.2
1.9
1.1
Hourly labour productivity 2)
2008
108.0
-0.1
3.7
-0.2
1.2
-0.2
-1.2
0.2

2009
107.0
-0.9
3.5
-5.3
2.8
-2.7
1.8
0.2
2009 Q2
106.6
-1.4
1.6
-7.4
3.5
-3.0
2.0
0.4
Q3
107.4
-0.6
4.4
-3.9
3.5
-2.7
2.4
-0.1
Q4
107.4
0.5
3.3
-0.2
1.9
-1.1
1.9
0.2

2010 Q1
107.6
1.3
3.4
7.3
-2.6
0.6
0.7
-0.6
5. Labour cost indices 3)

Total
Total
By component
For selected economic activities
Memo item:
(s.a.; index:
Indicator
2008 = 100)
Wages and
Employers’ social
Mining,
Construction
Services
of
salaries
contributions
manufacturing
negotiated
and energy
wages 4)
% of total 5)
100.0
100.0
75.2
24.8
32.4
9.0
58.6
1
2
3
4
5
6
7
8
2008
100.0
3.5
3.6
3.4
3.8
4.7
3.1
3.3

2009
102.6
2.7
2.6
3.0
3.1
3.7
2.3
2.7
2009 Q2
102.5
3.3
3.2
3.4
4.3
4.5
2.6
2.8
Q3
102.9
2.6
2.7
2.6
3.5
2.5
2.2
2.4

Q4
103.3
1.7
1.6
2.0
0.6
3.3
2.1
2.2
2010 Q1
104.0
2.1
2.0
2.1
1.8
2.1
2.2
1.8
Sources: Eurostat, ECB calculations based on Eurostat data (Table 4 in Section 5.1) and ECB calculations (column 8 in Table 5 in Section 5.1).
1)
Compensation (at current prices) per employee divided by value added (volumes) per person employed.
2)
Value added (volumes) per labour input (persons employed and hours worked).
3)
Hourly labour cost indices for the whole economy, excluding agriculture, public administration, education, health and services not classified elsewhere. Owing to
differences in coverage, the estimates for the components may not be consistent with the total.
4)
Experimental data (see http://www.ecb.europa.eu/stats/intro/html/experiment.en.html for further details).
5)
In 2008.
ECB
Monthly Bulletin
August 2010 S 49

5.2 Output and demand
1. GDP and expenditure components

GDP

Total
Domestic demand
External balance 1)
Total
Private
Government
Gross fixed
Changes in
Total
Exports 1)
Imports 1)
consumption
consumption
capital
inventories 2)
formation
1
2
3
4
5
6
7
8
9
Current prices (EUR billions; seasonally adjusted)
2006
8,562.4
8,466.0
4,872.9
1,733.6
1,834.4
25.2
96.3
3,453.2
3,356.9
2007
9,013.3
8,874.2
5,067.5
1,802.8
1,970.5
33.4
139.2
3,734.7
3,595.5
2008
9,258.2
9,160.0
5,228.6
1,891.8
2,000.5
39.2
98.2
3,862.7
3,764.5
2009
8,967.8
8,849.3
5,158.8
1,979.1
1,769.0
-57.7
118.5
3,249.6
3,131.1
2009 Q1
2,237.1
2,221.6
1,285.4
488.7
452.9
-5.5
15.5
807.7
792.2
Q2
2,233.8
2,204.5
1,287.5
492.7
444.2
-19.9
29.4
791.4
762.0
Q3
2,246.3
2,212.0
1,287.6
499.8
438.2
-13.6
34.3
815.1
780.8
Q4
2,250.5
2,211.2
1,298.2
498.0
433.7
-18.7
39.3
835.5
796.2

2010 Q1
2,263.4
2,232.3
1,302.2
503.3
429.4
-2.6
31.1
873.2
842.1

percentage of GDP

2009
100.0
98.7
57.5
22.1
19.7
-0.6
1.3
- -

Chain-linked volumes (prices for the previous year; seasonally adjusted 3) )

quarter-on-quarter percentage changes
2009 Q1
-2.5
-2.4
-0.6
0.8
-5.3
- -
-8.4
-8.0
Q2
-0.1
-0.7
0.1
0.7
-1.5
- -
-1.1
-2.8
Q3
0.4
0.3
-0.2
0.7
-1.1
- -
2.9
2.8
Q4
0.1
-0.1
0.2
-0.2
-1.2
- -
1.8
1.2

2010 Q1
0.2
0.8
-0.1
0.2
-1.2
- -
2.1
3.8

annual percentage changes
2006
3.0
2.9
2.0
2.1
5.4
- -
8.6
8.5
2007
2.8
2.4
1.6
2.3
4.6
- -
6.3
5.5

2008
0.6
0.6
0.3
2.2
-0.6
- -
0.9
1.0
2009
-4.1
-3.5
-1.2
2.7
-10.9
- -
-13.3
-12.0
2009 Q1
-5.2
-3.7
-1.7
3.0
-11.5
- -
-16.4
-13.3
Q2
-4.9
-3.8
-1.2
2.9
-11.5
- -
-17.0
-14.7
Q3
-4.1
-3.5
-1.3
3.0
-11.4
- -
-13.6
-12.4
Q4
-2.1
-2.8
-0.5
2.0
-8.7
- -
-5.2
-7.0

2010 Q1
0.6
0.3
0.0
1.4
-4.8
- -
5.7
4.9

contributions to quarter-on-quarter percentage changes in GDP; percentage points
2009 Q1
-2.5
-2.4
-0.3
0.2
-1.1
-1.1
-0.2
- -
Q2
-0.1
-0.7
0.1
0.1
-0.3
-0.6
0.6
- -
Q3
0.4
0.3
-0.1
0.1
-0.2
0.5
0.1
- -

Q4
0.1
-0.1
0.1
0.0
-0.2
0.0
0.2
- -
2010 Q1
0.2
0.8
-0.1
0.0
-0.2
1.0
-0.6
- -

contributions to annual percentage changes in GDP; percentage points
2006
3.0
2.8
1.2
0.4
1.1
0.1
0.1
- -
2007
2.8
2.4
0.9
0.5
1.0
0.0
0.4
- -

2008
0.6
0.6
0.2
0.4
-0.1
0.1
0.0
- -
2009
-4.1
-3.4
-0.7
0.5
-2.3
-0.9
-0.7
- -
2009 Q1
-5.2
-3.7
-1.0
0.6
-2.5
-0.8
-1.5
- -
Q2
-4.9
-3.7
-0.7
0.6
-2.5
-1.1
-1.2
- -
Q3
-4.1
-3.4
-0.7
0.6
-2.5
-0.8
-0.7
- -
Q4
-2.1
-2.8
-0.3
0.4
-1.8
-1.1
0.7
- -

2010 Q1
0.6
0.3
0.0
0.3
-1.0
1.0
0.3
- -
Sources: Eurostat and ECB calculations.
1)
Exports and imports cover goods and services and include cross-border intra-euro area trade. They are not fully consistent with: Section 3.1; Table 1 of Section 7.1; Table 3 of

Section 7.2; or Tables 1 or 3 of Section 7.5.
2)
Including acquisitions less disposals of valuables.
3)
Annual data are not working day-adjusted.
ECB
S Monthly Bulletin
50 August 2010

EURO AREA
STATISTICS
Prices, output,
demand and
labour markets
5.2 Output and demand
2. Value added by economic activity

Gross value added (basic prices)
Taxes less
subsidies on
Total
Agriculture,
Mining,
Construction
Trade, repairs,
Financial, real
Public
products
hunting,
manufacturing
hotels and
estate, renting
administration,
forestry
and energy
restaurants,
and business
education,
and fishing
transport and
activities
health and
activities
communication
other services
1
2
3
4
5
6
7
8
Current prices (EUR billions; seasonally adjusted)
2006
7,648.5
140.8
1,565.3
477.8
1,596.8
2,137.2
1,730.4
913.9
2007
8,054.7
151.4
1,644.5
511.1
1,671.0
2,273.8
1,802.9
958.7
2008
8,312.4
147.0
1,656.5
534.2
1,731.3
2,361.7
1,881.7
945.8
2009
8,074.5
130.7
1,431.8
516.0
1,670.5
2,370.5
1,955.0
893.2
2009 Q1
2,013.9
34.1
356.2
131.5
416.9
591.4
483.8
223.3
Q2
2,012.1
32.8
353.1
129.6
417.1
592.3
487.1
221.8
Q3
2,022.7
31.7
360.2
128.4
418.5
592.7
491.1
223.6
Q4
2,025.9
32.1
362.3
126.5
417.9
594.1
493.0
224.6

2010 Q1
2,041.6
33.0
369.1
124.0
419.3
599.5
496.6
221.9

percentage of value added

2009
100.0
1.6
17.7
6.4
20.7
29.4
24.2
-

Chain-linked volumes (prices for the previous year; seasonally adjusted 1) )

quarter-on-quarter percentage changes
2009 Q1
-2.6
0.9
-8.7
-1.1
-3.2
-1.0
0.2
-1.8
Q2
-0.1
-0.1
-1.0
-1.2
0.0
0.0
0.6
0.4
Q3
0.3
0.8
2.1
-1.4
0.0
-0.1
0.2
0.9
Q4
0.1
-0.5
0.6
-1.4
0.0
0.1
0.2
0.7

2010 Q1
0.5
0.4
1.9
-2.3
0.1
0.5
0.4
-2.2

annual percentage changes
2006
2.9
0.0
3.6
2.8
2.7
4.2
1.4
3.3
2007
3.0
0.4
2.5
2.4
3.4
4.1
2.1
0.9

2008
0.8
1.6
-0.7
-0.9
0.8
1.4
1.6
-1.2
2009
-4.3
1.2
-13.6
-5.8
-5.0
-1.6
1.2
-2.5
2009 Q1
-5.3
1.2
-16.7
-6.5
-6.0
-1.6
1.2
-4.5
Q2
-5.1
0.7
-16.7
-5.6
-5.6
-1.9
1.4
-3.2
Q3
-4.3
1.6
-13.2
-5.5
-5.1
-1.8
1.1
-2.3
Q4
-2.4
1.1
-7.1
-5.0
-3.3
-1.1
1.2
0.1

2010 Q1
0.7
0.6
3.6
-6.2
0.0
0.5
1.4
-0.3

contributions to quarter-on-quarter percentage changes in value added; percentage points
2009 Q1
-2.6
0.0
-1.7
-0.1
-0.7
-0.3
0.0
-
Q2
-0.1
0.0
-0.2
-0.1
0.0
0.0
0.1
-
Q3
0.3
0.0
0.4
-0.1
0.0
0.0
0.0
-

Q4
0.1
0.0
0.1
-0.1
0.0
0.0
0.0
-
2010 Q1
0.5
0.0
0.3
-0.1
0.0
0.2
0.1
-

contributions to annual percentage changes in value added; percentage points
2006
2.9
0.0
0.7
0.2
0.6
1.1
0.3
-
2007
3.0
0.0
0.5
0.1
0.7
1.2
0.5
-

2008
0.8
0.0
-0.1
-0.1
0.2
0.4
0.4
-
2009
-4.3
0.0
-2.7
-0.4
-1.1
-0.5
0.3
-
2009 Q1
-5.3
0.0
-3.4
-0.4
-1.3
-0.5
0.3
-
Q2
-5.1
0.0
-3.4
-0.4
-1.2
-0.5
0.3
-
Q3
-4.3
0.0
-2.6
-0.4
-1.1
-0.5
0.3
-
Q4
-2.4
0.0
-1.4
-0.3
-0.7
-0.3
0.3
-

2010 Q1
0.7
0.0
0.6
-0.4
0.0
0.1
0.3
-
Sources: Eurostat and ECB calculations.
1)
Annual data are not working day-adjusted.
ECB
Monthly Bulletin
August 2010 S 51

5.2 Output and demand
(annual percentage changes, unless otherwise indicated)
3. Industrial production

Total
Industry excluding construction
Construction

Total
Total
Industry excluding construction and energy
Energy
(s.a.; index:

2005 = 100)
Manu-
Total
Intermediate
Capital
Consumer goods
facturing
goods
goods
Total
Durable
Non-durable
% of total 1)
100.0
78.0
78.0
69.4
68.8
28.2
22.1
18.5
2.6
15.9
9.1
22.0
1
2
3
4
5
6
7
8
9
10
11
12
2007
3.2
108.1
3.7
4.1
4.3
3.7
6.6
2.4
1.4
2.5
-0.9
1.2
2008
-2.3
106.2
-1.7
-1.9
-1.9
-3.4
-0.1
-2.0
-5.7
-1.4
0.3
-4.6

2009
-13.8
90.4
-14.9
-15.9
-16.4
-19.2
-20.9
-5.0
-17.5
-3.0
-5.5
-8.1
2009 Q2
-16.7
88.6
-18.7
-19.5
-20.0
-24.2
-24.2
-5.9
-21.2
-3.4
-8.9
-7.4
Q3
-13.6
90.9
-14.4
-15.2
-15.7
-18.3
-21.0
-4.0
-18.4
-1.9
-5.7
-9.1
Q4
-7.3
92.1
-7.4
-8.0
-8.4
-6.6
-14.0
-2.6
-10.1
-1.4
-3.8
-6.0

2010 Q1
2.0
94.4
4.8
5.1
5.2
8.2
2.8
3.5
0.1
3.9
2.9
-9.7
2009 Dec.
-3.8
92.1
-3.7
-4.2
-4.6
0.0
-11.0
-0.9
-7.3
0.0
-1.6
-3.6
2010 Jan.
-0.2
94.3
2.1
2.3
2.6
4.9
0.0
1.7
-2.5
2.3
0.8
-10.3
Feb.
0.8
93.7
4.4
4.6
4.7
7.3
3.1
2.6
1.0
2.9
2.4
-14.0
Mar.
5.1
95.3
7.8
8.1
7.8
12.0
4.8
5.9
1.6
6.5
5.8
-5.4
Apr.
6.5
96.1
9.5
9.6
9.7
15.8
9.2
2.8
0.4
3.1
5.2
-5.7

May
6.3
97.1
9.6
9.8
9.9
14.9
9.0
4.0
7.3
3.5
5.4
-6.0

month-on-month percentage changes (s.a.)
2009 Dec.
-1.0
- -0.8
0.2
1.1
-2.2
-2.1
0.4
-2.9
0.6
2.8
0.4
2010 Jan.
1.7
- 2.3
1.9
0.9
2.3
3.2
1.1
2.7
1.0
3.0
-1.9
Feb.
-1.1
- -0.6
0.6
0.9
0.6
-1.3
-0.1
-0.5
-0.1
0.0
-6.2
Mar.
2.4
- 1.8
1.7
1.6
2.5
1.9
1.5
0.5
1.7
-1.6
6.5
Apr.
0.6
- 0.8
0.5
1.0
2.1
1.7
-1.3
-0.3
-1.4
-0.7
-0.3

May
0.5
- 1.0
0.7
0.6
0.9
1.3
0.8
3.4
0.5
0.6
-0.9
4. Industrial new orders and turnover, retail sales and new passenger car registrations

Industrial new orders Industrial turnover
Retail sales (excluding automotive fuel)
New passenger car

registrations
Manufacturing 2)
Manufacturing
Current prices
Constant prices

(current prices)
(current prices)

Total
Total
Total
Total
Total
Total
Total
Food,
Non-food
Total (s.a.;
Total
(s.a.; index:
(s.a.; index:
(s.a.; index:
beverages,
thousands) 3)
2005 = 100)
2005 = 100)
2005 = 100)
tobacco
Textiles,
Household
clothing,
equipment
footwear
% of total 1)
100.0
100.0
100.0
100.0
100.0
100.0
100.0
42.9
57.1
9.9
13.9
1
2
3
4
5
6
7
8
9
10
11
12
13
2007
119.9
8.6
115.0
6.5
2.6
104.3
1.8
0.0
3.1
4.0
3.1
968
-0.6
2008
113.0
-5.3
116.9
1.9
1.7
103.4
-0.8
-1.9
-0.1
-1.8
-1.9
896
-7.0

2009
87.7
-22.8
95.5
-18.5
-2.7
101.6
-1.8
-1.6
-1.9
-1.2
-3.9
926
3.2
2009 Q3
90.4
-21.4
95.9
-18.9
-3.5
101.4
-2.0
-1.4
-2.5
-2.8
-3.2
962
10.1
Q4
92.1
-2.8
97.5
-9.3
-1.5
101.7
-0.6
-0.4
-0.7
0.4
-0.8
965
20.7
2010 Q1
95.3
13.8
101.1
6.3
0.6
102.1
0.7
1.3
0.5
3.3
0.9
892
7.4

Q2
. .
. .
0.8
102.0
0.5
0.0
0.8
.
. 826
-10.6
2010 Jan.
91.6
7.5
99.4
1.1
-1.0
101.9
-0.3
0.7
-0.8
2.2
-1.5
859
8.3
Feb.
94.8
12.5
100.5
6.0
0.2
101.9
0.4
0.6
0.5
2.2
0.6
878
2.9
Mar.
99.4
20.5
103.5
11.0
2.5
102.5
2.1
2.7
1.8
5.5
3.5
938
10.2
Apr.
100.1
22.0
101.4
10.0
-0.1
101.6
-0.3
-0.9
0.0
-0.5
1.0
839
-10.1

May
103.7
22.6
106.0
13.1
1.2
102.2
1.0
0.9
1.0
-1.7
4.4
786
-13.1
June
. .
. .
1.3
102.1
0.8
0.1
1.4
.
. 853
-8.8

month-on-month percentage changes (s.a.)
2010 Feb.
- 3.5
- 1.1
0.2
- 0.0
-0.1
0.1
-0.9
0.6
-
2.3
Mar.
- 4.9
- 3.0
0.9
- 0.6
0.5
0.6
1.8
1.3
-
6.8
Apr.
- 0.6
- -2.0
-1.0
- -0.9
-1.0
-0.7
-2.7
-0.9
-
-10.6

May
- 3.7
- 4.5
0.6
- 0.6
0.8
0.4
-0.7
1.4
-
-6.3
June
- .
- .
0.0
-
-0.1
-0.7
0.3
.
.
-
8.5
Sources: Eurostat, except columns 12 and 13 in Table 4 in Section 5.2 (which comprise ECB calculations based on data from the European Automobile Manufacturers’ Association).
1)
In 2005.
2)
Includes manufacturing industries working mainly on the basis of orders, which represented 61.2% of total manufacturing in 2005.
3)
Annual and quarterly figures are averages of monthly figures in the period concerned.
ECB
S Monthly Bulletin
52 August 2010

EURO AREA
STATISTICS
Prices, output,
demand and
labour markets
5.2 Output and demand
(percentage balances, 1) unless otherwise indicated; seasonally adjusted)
5. Business 2) and Consumer Surveys

Economic
Manufacturing industry
Consumer confidence indicator
sentiment

indicator 3)
Industrial confidence indicator
Capacity
Total 5)
Financial
Economic Unemployment
Savings
(long-term
utilisation 4)
situation
situation
situation
over next
average
Total 5)
Order
Stocks of
Production
(%)
over next
over next
over next
12 months
= 100)
books
finished
expectations
12 months
12 months
12 months
products
1
2
3
4
5
6
7
8
9
10
11
2006
107.3
2
0
6
13
83.2
-9
-3
-9
15
-9
2007
109.2
5
5
5
13
84.2
-5
-2
-4
5
-8
2008
93.5
-9
-15
11
-2
81.8
-18
-10
-25
24
-14

2009
80.8
-28
-56
14
-15
71.1
-25
-7
-26
56
-10
2009 Q2
75.6
-33
-62
18
-20
69.9
-28
-9
-34
59
-11
Q3
84.1
-26
-58
12
-9
70.3
-21
-5
-20
51
-9
Q4
91.9
-19
-50
7
1
71.7
-17
-3
-11
48
-7

2010 Q1
96.6
-12
-41
2
7
73.9
-17
-4
-11
46
-7
Q2
99.3
-6
-28
0
9
76.5
-17
-6
-18
34
-9
2010 Feb.
95.9
-13
-42
4
7
- -17
-4
-12
47
-7
Mar.
97.9
-10
-39
0
9
- -17
-5
-12
46
-7
Apr.
100.6
-7
-32
-1
9
75.5
-15
-5
-12
36
-8
May
98.4
-6
-28
1
10
- -18
-7
-21
34
-10
June
99.0
-6
-26
0
9
- -17
-7
-20
32
-9

July
101.3
-4
-21
-1
10
77.4
-14
-7
-14
27
-9

Construction confidence indicator
Retail trade confidence indicator
Services confidence indicator
Total 5)
Order
Employment
Total 5)
Present
Volume of
Expected
Total 5)
Business
Demand in
Demand in
books
expectations
business
stocks
business
climate
recent
the months
situation
situation
months
ahead
12
13
14
15
16
17
18
19
20
21
22
2006
1
-4
6
1
3
14
13
18
13
18
24
2007
0
-7
7
1
5
15
13
20
16
19
24
2008
-13
-20
-6
-7
-6
17
2
2
-5
4
7

2009
-31
-40
-22
-15
-21
11
-15
-16
-22
-16
-9
2009 Q2
-33
-42
-24
-17
-23
9
-19
-22
-29
-23
-15
Q3
-31
-41
-22
-14
-19
10
-13
-12
-18
-13
-5
Q4
-28
-40
-16
-12
-19
10
-7
-4
-8
-8
3

2010 Q1
-27
-37
-17
-7
-9
8
-2
0
-4
-2
7
Q2
-28
-40
-16
-4
-5
8
0
4
1
4
8
2010 Feb.
-29
-39
-18
-9
-12
9
-5
1
-2
-3
7
Mar.
-25
-35
-14
-6
-9
9
-1
1
-3
-1
8
Apr.
-25
-37
-13
-1
-1
8
4
6
0
5
11
May
-28
-40
-17
-6
-7
10
-1
4
-1
4
8
June
-30
-43
-17
-6
-7
7
-3
4
2
4
5

July
-29
-42
-16
-4
-6
7
0
6
5
8
6
Source: European Commission (Economic and Financial Affairs DG).
1)
Difference between the percentages of respondents giving positive and negative replies.
2)
From May 2010 onwards, data refer to the new version of the classification of economic activitites in the European Union ("NACE Revision 2").
3)
The economic sentiment indicator is composed of the industrial, services, consumer, construction and retail trade confidence indicators; the industrial confidence indicator has
a weight of 40%, the services confidence indicator a weight of 30%, the consumer confidence indicator a weight of 20% and the two other indicators a weight of 5% each.
Values for the economic sentiment indicator of above (below) 100 indicate above-average (below-average) economic sentiment, calculated for the period 1990 to 2008.
4)
Data are collected in January, April, July and October each year. The quarterly figures shown are averages of two successive surveys. Annual data are derived from quarterly
averages.
5)
The confidence indicators are calculated as simple averages of the components shown; the assessments of stocks (columns 4 and 17) and unemployment (column 10) are used
with inverted signs for the calculation of confidence indicators.
ECB
Monthly Bulletin
August 2010 S 53

5.3 Labour markets 1)
(annual percentage changes, unless otherwise indicated)
1. Employment in terms of persons employed

Whole economy
By employment status
By economic activity
Total
Total Employees
Self-
Agriculture,
Mining, Construction
Trade, repairs,
Financial, real
Public
(s.a.; millions)
employed
hunting,
manufacturing
hotels and
estate, renting
administration,
forestry
and energy
restaurants,
and business
education, health
and fishing
transport and
services
and other services
communication
% of total 2)
100.0
100.0
85.3
14.7
3.8
17.1
7.5
25.5
16.1
30.0
1
2
3
4
5
6
7
8
9
10
2007
146.754
1.8
2.0
0.7
-1.6
0.3
3.6
1.9
4.3
1.3
2008
147.846
0.7
0.9
-0.3
-1.8
0.0
-2.3
1.2
2.3
1.1

2009
145.079
-1.9
-1.8
-2.1
-2.2
-5.1
-6.7
-1.8
-2.2
1.3
2009 Q2
145.362
-1.9
-1.9
-2.1
-2.0
-4.9
-7.2
-1.9
-2.4
1.4
Q3
144.587
-2.3
-2.3
-2.3
-2.6
-6.4
-7.3
-1.9
-2.8
1.4
Q4
144.258
-2.0
-2.0
-2.1
-2.0
-6.1
-5.4
-2.0
-2.1
1.0

2010 Q1
144.261
-1.2
-1.2
-0.9
-1.1
-5.3
-4.3
-1.3
-0.4
1.5

quarter-on-quarter percentage changes (s.a.)
2009 Q2
-0.752
-0.5
-0.5
-0.5
-0.7
-1.7
-1.3
-0.5
-0.7
0.4
Q3
-0.775
-0.5
-0.5
-0.6
-1.2
-1.7
-1.7
-0.3
-0.5
0.3
Q4
-0.329
-0.2
-0.2
-0.3
0.3
-1.1
-0.4
-0.6
0.2
0.2

2010 Q1
0.004
0.0
-0.1
0.4
0.1
-0.9
-1.5
0.0
0.5
0.5
2. Employment in terms of hours worked

Whole economy
By employment status
By economic activity
Total
Total Employees
Self-
Agriculture,
Mining, Construction
Trade, repairs,
Financial, real
Public
(s.a.; millions)
employed
hunting,
manufacturing
hotels and
estate, renting
administration,
forestry
and energy
restaurants,
and business
education, health
and fishing
transport and
services
and other services
communication
% of total 2)
100.0
100.0
80.4
19.6
5.0
17.1
8.4
26.9
15.6
27.0
1
2
3
4
5
6
7
8
9
10
2007
237,005.4
1.8
2.0
0.8
-2.3
0.6
3.6
1.9
4.3
1.1
2008
238,642.1
0.7
1.0
-0.6
-2.0
-0.5
-2.0
1.0
2.6
1.4

2009
230,970.5
-3.2
-3.3
-2.7
-2.2
-8.7
-8.3
-2.5
-3.4
1.1
2009 Q2
57,761.5
-4.1
-4.5
-2.7
-1.3
-11.1
-9.3
-3.1
-4.3
0.6
Q3
57,578.7
-3.5
-3.7
-2.8
-2.6
-9.9
-8.6
-2.6
-4.2
1.3

Q4
57,653.2
-2.2
-2.3
-1.8
-1.8
-6.2
-6.0
-1.7
-2.6
1.1
2010 Q1
57,622.3
-0.4
-0.5
-0.2
-2.6
-3.1
-3.7
-0.3
-0.1
2.1

quarter-on-quarter percentage changes (s.a.)
2009 Q2
-215.7
-0.4
-0.5
0.1
0.0
-1.9
-0.2
-0.2
-0.7
0.5
Q3
-182.8
-0.3
-0.3
-0.6
-1.3
-0.8
-1.1
-0.4
-0.5
0.5
Q4
74.5
0.1
0.2
0.0
-0.2
-0.3
-0.5
0.0
0.6
0.4

2010 Q1
-30.9
-0.1
0.0
-0.1
-1.1
-0.5
-1.9
0.0
0.4
0.6
3. Hours worked per person employed

Whole economy
By employment status
By economic activity
Total
Total Employees
Self-
Agriculture,
Mining, Construction
Trade, repairs,
Financial, real
Public
(s.a.; thousands)
employed
hunting,
manufacturing
hotels and
estate, renting
administration,
forestry
and energy
restaurants,
and business
education, health
and fishing
transport and
services
and other services
communication
1
2
3
4
5
6
7
8
9
10
2007
1.615
0.0
0.0
0.2
-0.7
0.3
0.0
0.0
0.0
-0.1
2008
1.614
-0.1
0.1
-0.3
-0.2
-0.5
0.3
-0.2
0.3
0.3

2009
1.592
-1.4
-1.5
-0.6
-0.1
-3.8
-1.7
-0.7
-1.2
-0.3
2009 Q2
0.397
-2.3
-2.7
-0.7
0.7
-6.6
-2.3
-1.2
-1.9
-0.9
Q3
0.398
-1.3
-1.5
-0.5
-0.1
-3.8
-1.4
-0.7
-1.4
-0.1
Q4
0.400
-0.1
-0.3
0.3
0.2
-0.1
-0.6
0.3
-0.5
0.1

2010 Q1
0.399
0.8
0.8
0.7
-1.5
2.3
0.6
1.0
0.4
0.6
Source: Eurostat.
1)
Data for employment are based on the ESA 95.
2)
In 2009.
ECB
S Monthly Bulletin
54 August 2010

EURO AREA
STATISTICS
Prices, output,
demand and
labour markets
5.3 Labour markets
4. Unemployment 1)
(seasonally adjusted)

Total
By age 3)
By gender 4)

Millions
% of labour
Adult
Youth
Male
Female
force
Millions % of labour
Millions
% of labour
Millions
% of labour
Millions
% of labour
force
force
force
force
% of total 2)
100.0
78.4
21.6
53.8
46.2
1
2
3
4
5
6
7
8
9
10
2006
12.877
8.3
10.053
7.3
2.824
16.4
6.389
7.5
6.488
9.4
2007
11.679
7.5
9.126
6.6
2.553
14.9
5.737
6.7
5.942
8.5
2008
11.890
7.6
9.265
6.6
2.625
15.4
5.997
6.9
5.893
8.3

2009
14.866
9.4
11.646
8.2
3.220
19.4
7.997
9.3
6.869
9.6
2009 Q2
14.784
9.4
11.546
8.2
3.237
19.4
7.959
9.2
6.825
9.5
Q3
15.295
9.7
11.996
8.5
3.299
20.0
8.258
9.6
7.038
9.8
Q4
15.502
9.8
12.241
8.7
3.261
20.0
8.421
9.8
7.082
9.9
2010 Q1
15.666
9.9
12.422
8.8
3.244
20.0
8.479
9.8
7.187
10.0

Q2
15.753
10.0
12.586
8.9
3.167
19.8
8.465
9.8
7.288
10.1
2010 Jan.
15.595
9.9
12.352
8.7
3.243
20.0
8.460
9.8
7.135
10.0
Feb.
15.672
9.9
12.406
8.8
3.266
20.1
8.498
9.9
7.174
10.0
Mar.
15.732
10.0
12.509
8.8
3.224
20.0
8.479
9.8
7.253
10.1
Apr.
15.724
10.0
12.519
8.8
3.205
19.9
8.469
9.8
7.256
10.1

May
15.765
10.0
12.591
8.9
3.174
19.8
8.470
9.8
7.295
10.1
June
15.771
10.0
12.648
8.9
3.123
19.6
8.457
9.8
7.313
10.2
Source: Eurostat.
1)
Data for unemployment refer to persons and follow ILO recommendations.
2)
In 2009.
3)
Adult: 25 years of age and over; youth: below 25 years of age; rates are expressed as a percentage of the labour force for the relevant age group.
4)
Rates are expressed as a percentage of the labour force for the relevant gender.
ECB
Monthly Bulletin
August 2010 S 55

6 GOVERNMENT FINANCE
6.1 Revenue, expenditure and deficit/surplus 1)
(as a percentage of GDP)
1. Euro area _ revenue

Total
Current revenue
Capital revenue
Memo

item:
Direct
Indirect
Social
Sales
Capital
Fiscal
taxes Households Corporations
taxes Received by EU contributions Employers Employees
taxes burden 2)
institutions
1
2
3
4
5
6
7
8
9
10
11
12
13
14
2001
45.7
45.4
12.2
9.4
2.8
13.5
0.5
15.6
8.1
4.7
2.1
0.2
0.3
41.6
2002
45.1
44.8
11.8
9.2
2.5
13.5
0.4
15.6
8.1
4.6
2.1
0.3
0.3
41.1
2003
45.0
44.3
11.4
9.0
2.3
13.5
0.4
15.7
8.2
4.6
2.1
0.6
0.5
41.1
2004
44.5
44.0
11.3
8.7
2.5
13.5
0.3
15.5
8.1
4.5
2.1
0.5
0.4
40.7
2005
44.8
44.3
11.5
8.7
2.7
13.7
0.3
15.4
8.1
4.5
2.2
0.4
0.3
40.9
2006
45.3
45.0
12.1
8.9
3.0
13.9
0.3
15.3
8.0
4.5
2.1
0.3
0.3
41.5
2007
45.4
45.1
12.4
9.1
3.2
13.8
0.3
15.1
8.0
4.4
2.1
0.3
0.3
41.6
2008
44.9
44.7
12.2
9.3
2.8
13.3
0.3
15.3
8.0
4.5
2.1
0.2
0.3
41.0

2009
44.5
44.2
11.3
9.2
2.0
13.1
0.3
15.7
8.2
4.5
2.2
0.3
0.4
40.5
2. Euro area _ expenditure

Total
Current expenditure
Capital expenditure
Memo

item:
Total Compensation Intermediate Interest
Current

Investment
Capital
Primary
of consumption
transfers
Social Subsidies
transfers
Paid by EU expenditure 3)
employees
payments
Paid by EU
institutions
institutions
1
2
3
4
5
6
7
8
9
10
11
12
13
14
2001
47.5
43.6
10.3
4.8
3.8
24.7
21.7
1.9
0.5
3.9
2.5
1.4
0.0
43.7
2002
47.7
43.9
10.4
4.9
3.5
25.1
22.2
1.9
0.5
3.8
2.4
1.4
0.1
44.2
2003
48.1
44.1
10.5
5.0
3.3
25.4
22.5
1.9
0.5
3.9
2.5
1.4
0.1
44.8
2004
47.5
43.5
10.4
5.0
3.1
25.1
22.3
1.7
0.5
3.9
2.5
1.5
0.1
44.4
2005
47.3
43.4
10.4
5.1
3.0
25.0
22.3
1.7
0.5
3.9
2.5
1.4
0.0
44.3
2006
46.7
42.8
10.2
5.0
2.9
24.8
22.0
1.7
0.5
3.8
2.5
1.4
0.0
43.8
2007
46.0
42.3
10.0
5.0
3.0
24.3
21.6
1.6
0.4
3.8
2.6
1.2
0.0
43.1
2008
46.9
43.0
10.1
5.1
3.0
24.8
22.0
1.6
0.4
3.8
2.5
1.3
0.0
43.9

2009
50.7
46.5
10.8
5.6
2.8
27.3
24.2
1.8
0.5
4.2
2.8
1.4
0.0
47.9
3. Euro area _ deficit/surplus, primary deficit/surplus and government consumption

Deficit (-)/surplus (+)
Primary
Government consumption 4)
deficit (-)/

Total Central
State
Local
Social surplus (+)
Total
Collective
Individual
gov.
gov.
gov. security
Compensation Intermediate
Transfers Consumption
Sales consumption consumption
funds
of employees consumption
in kind
of fixed
(minus)
via market
capital
producers
1
2
3
4
5
6
7
8
9
10
11
12
13
14
2001
-1.9
-1.7
-0.4
-0.1
0.3
1.9
19.8
10.3
4.8
4.9
1.8
2.1
8.2
11.7
2002
-2.6
-2.1
-0.5
-0.2
0.2
0.9
20.2
10.4
4.9
5.1
1.8
2.1
8.3
12.0
2003
-3.1
-2.4
-0.5
-0.2
0.0
0.2
20.5
10.5
5.0
5.2
1.9
2.1
8.3
12.2
2004
-3.0
-2.5
-0.4
-0.3
0.1
0.1
20.4
10.4
5.0
5.1
1.9
2.1
8.3
12.1
2005
-2.6
-2.2
-0.3
-0.2
0.2
0.4
20.4
10.4
5.1
5.1
1.9
2.2
8.2
12.3
2006
-1.3
-1.5
-0.1
-0.2
0.4
1.6
20.3
10.2
5.0
5.2
1.9
2.1
8.0
12.2
2007
-0.6
-1.1
0.0
-0.1
0.5
2.3
20.0
10.0
5.0
5.2
1.9
2.1
7.9
12.1
2008
-2.0
-2.0
-0.2
-0.2
0.4
1.0
20.4
10.1
5.1
5.3
1.9
2.1
8.1
12.3

2009
-6.2
-5.0
-0.5
-0.3
-0.4
-3.4
22.1
10.8
5.6
5.8
2.0
2.2
8.8
13.2
4. Euro area countries _ deficit (-)/surplus (+) 5)
BE
DE
IE
GR
ES
FR
IT
CY
LU
MT
NL
AT
PT
SI
SK
FI
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
2006
0.3
-1.6
3.0
-3.6
2.0
-2.3
-3.3
-1.2
1.4
-2.6
0.5
-1.5
-3.9
-1.3
-3.5
4.0
2007
-0.2
0.2
0.1
-5.1
1.9
-2.7
-1.5
3.4
3.6
-2.2
0.2
-0.4
-2.6
0.0
-1.9
5.2
2008
-1.2
0.0
-7.3
-7.7
-4.1
-3.3
-2.7
0.9
2.9
-4.5
0.7
-0.4
-2.8
-1.7
-2.3
4.2

2009
-6.0
-3.3
-14.3
-13.6
-11.2
-7.5
-5.3
-6.1
-0.7
-3.8
-5.3
-3.4
-9.4
-5.5
-6.8
-2.2
Sources: ECB for euro area aggregated data; European Commission for data relating to countries’ deficit/surplus.
1)
Data refer to the Euro 16. The concepts "revenue", "expenditure" and "deficit/surplus" are based on the ESA 95. Transactions involving the EU budget are included and
consolidated. Transactions among Member States’ governments are not consolidated.
2)
The fiscal burden comprises taxes and social contributions.
3)
Comprises total expenditure minus interest expenditure.
4)
Corresponds to final consumption expenditure (P.3) of general government in the ESA 95.
5)
Includes proceeds from the sale of UMTS licences and settlements under swaps and forward rate agreements.
ECB
S Monthly Bulletin
56 August 2010

EURO AREA
STATISTICS
Government
finance
6.2 Debt 1)
(as a percentage of GDP)
1. Euro area _ by financial instrument and sector of the holder

Total
Financial instruments
Holders

Currency
Loans
Short-term
Long-term
Domestic creditors 2) Other
and
securities
securities
creditors 3)
deposits
Total
MFIs
Other
Other
financial
sectors
corporations
1
2
3
4
5
6
7
8
9
10
2000
69.2
2.7
13.2
3.7
49.6
43.8
22.1
12.3
9.5
25.4
2001
68.2
2.8
12.4
4.0
48.9
42.0
20.6
11.0
10.4
26.2
2002
67.9
2.7
11.8
4.6
48.9
40.5
19.4
10.6
10.5
27.4
2003
69.0
2.1
12.4
5.0
49.6
39.7
19.6
11.0
9.1
29.3
2004
69.4
2.2
12.0
5.0
50.3
38.2
18.5
10.7
9.0
31.2
2005
70.0
2.4
11.8
4.7
51.1
36.3
17.2
11.1
7.9
33.8
2006
68.2
2.4
11.5
4.1
50.2
34.4
17.4
9.3
7.7
33.8
2007
65.9
2.2
10.8
4.2
48.7
32.6
16.7
8.5
7.3
33.4
2008
69.3
2.3
11.0
6.7
49.4
32.4
16.6
7.9
7.8
37.0

2009
78.7
2.4
11.9
8.6
55.8
36.6
19.6
8.7
8.2
42.2
2. Euro area _ by issuer, maturity and currency denomination

Total
Issued by: 4)
Original maturity
Residual maturity
Currencies

Central
State
Local
Social
Up to
Over
Up to
Over 1 and
Over
Euro or
Other
gov.
gov.
gov.
security
1 year
1 year
Variable
1 year
up to 5 years
5 years
participating
currencies
funds
interest rate
currencies
1
2
3
4
5
6
7
8
9
10
11
12
13
2000
69.2
58.1
5.8
4.8
0.4
6.5
62.7
6.2
13.4
27.8
28.0
67.4
1.8
2001
68.2
57.0
6.0
4.7
0.4
7.0
61.1
5.3
13.7
26.6
27.9
66.6
1.5
2002
67.9
56.6
6.2
4.7
0.4
7.6
60.3
5.2
15.5
25.3
27.2
66.7
1.3
2003
69.0
56.9
6.5
5.1
0.6
7.8
61.2
5.0
14.9
26.0
28.2
68.1
0.9
2004
69.4
57.3
6.6
5.1
0.4
7.8
61.6
4.6
14.8
26.2
28.4
68.6
0.9
2005
70.0
57.6
6.7
5.2
0.5
7.9
62.1
4.6
14.8
25.5
29.6
69.0
1.0
2006
68.2
55.9
6.5
5.3
0.5
7.4
60.8
4.3
14.4
24.0
29.8
67.6
0.6
2007
65.9
53.9
6.2
5.2
0.5
7.4
58.5
4.3
14.6
23.5
27.8
65.4
0.5
2008
69.3
57.1
6.6
5.2
0.4
10.2
59.2
4.4
17.7
23.3
28.3
68.6
0.8

2009
78.7
64.9
7.5
5.6
0.6
12.2
66.5
4.5
19.8
26.7
32.2
78.0
0.8
3. Euro area countries
BE
DE
IE
GR
ES
FR
IT
CY
LU
MT
NL
AT
PT
SI
SK
FI
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
2006
88.1
67.6
24.9
97.8
39.6
63.7
106.5
64.6
6.5
63.7
47.4
62.2
64.7
26.7
30.5
39.7
2007
84.2
65.0
25.0
95.7
36.2
63.8
103.5
58.3
6.7
61.9
45.5
59.5
63.6
23.4
29.3
35.2
2008
89.8
66.0
43.9
99.2
39.7
67.5
106.1
48.4
13.7
63.7
58.2
62.6
66.3
22.6
27.7
34.2

2009
96.7
73.2
64.0
115.1
53.2
77.6
115.8
56.2
14.5
69.1
60.9
66.5
76.8
35.9
35.7
44.0
Sources: ECB for euro area aggregated data; European Commission for data relating to countries’ debt.
1)
Data refer to the Euro 16. Gross general government debt at nominal value and consolidated between sub-sectors of government. Holdings by non-resident governments are
not consolidated. Data are partially estimated.
2)
Holders resident in the country whose government has issued the debt.
3)
Includes residents of euro area countries other than the country whose government has issued the debt.
4)
Excludes debt held by general government in the country whose government has issued it.
ECB
Monthly Bulletin
August 2010 S 57

6.3 Change in debt 1)
(as a percentage of GDP)
1. Euro area _ by source, financial instrument and sector of the holder

Total
Source of change
Financial instruments
Holders

Borrowing
Valuation
Other
Currency
Loans Short-term
Long-term
Domestic
Other
requirement 2)
effects 3)
changes
and
securities
securities
creditors 5)
MFIs
Other
creditors 6)
in
deposits
financial
volume 4)
corporations
1
2
3
4
5
6
7
8
9
10
11
12
2001
1.9
1.9
-0.1
0.1
0.2
-0.2
0.5
1.5
0.0
-0.5
-0.8
1.9
2002
2.1
2.7
-0.5
0.0
0.0
-0.2
0.7
1.6
0.0
-0.5
-0.1
2.1
2003
3.1
3.3
-0.2
0.0
-0.6
0.9
0.6
2.1
0.4
0.8
0.8
2.7
2004
3.1
3.2
-0.1
0.0
0.2
0.1
0.1
2.7
0.1
-0.3
0.1
3.1
2005
3.1
3.0
0.0
0.0
0.3
0.3
-0.1
2.6
-0.6
-0.7
0.8
3.6
2006
1.5
1.4
0.1
0.0
0.2
0.2
-0.4
1.5
-0.1
1.0
-1.2
1.6
2007
1.1
1.1
0.0
0.0
-0.1
-0.1
0.3
1.0
-0.2
0.2
-0.3
1.2
2008
5.2
5.1
0.1
0.0
0.1
0.4
2.6
2.0
0.7
0.4
-0.4
4.5

2009
7.1
7.3
-0.2
0.0
0.1
0.6
1.6
4.8
3.1
2.5
0.5
4.0
2. Euro area _ deficit-debt adjustment

Change in
Deficit (-) /
Deficit-debt adjustment 8)
debt surplus (+) 7)

Total
Transactions in main financial assets held by general government
Valuation
Other
Other 9)

effects
Exchange
changes in
Total
Currency
Loans
Securities 10)
Shares and
rate
volume
and
other Privatisations
Equity
effects
deposits
equity
injections
1
2
3
4
5
6
7
8
9
10
11
12
13
14
2001
1.9
-1.9
0.0
-0.5
-0.6
0.1
0.1
-0.1
-0.3
0.1
-0.1
0.0
0.1
0.6
2002
2.1
-2.6
-0.5
0.1
0.1
0.0
0.0
-0.1
-0.4
0.1
-0.5
-0.1
0.0
0.0
2003
3.1
-3.1
0.0
0.1
0.1
0.0
0.0
0.1
-0.2
0.1
-0.2
-0.1
0.0
0.1
2004
3.1
-3.0
0.2
0.2
0.2
0.0
0.1
0.0
-0.5
0.2
-0.1
0.0
0.0
0.1
2005
3.1
-2.6
0.5
0.6
0.3
0.1
0.2
0.1
-0.3
0.2
0.0
0.0
0.0
-0.1
2006
1.5
-1.3
0.2
0.3
0.3
-0.1
0.3
-0.2
-0.4
0.1
0.1
0.0
0.0
-0.2
2007
1.1
-0.6
0.4
0.6
0.2
0.0
0.2
0.1
-0.2
0.2
0.0
0.0
0.0
-0.1
2008
5.2
-2.0
3.3
3.1
0.8
0.7
0.8
0.8
0.0
0.6
0.1
0.0
0.0
0.1

2009
7.1
-6.2
0.9
1.0
0.4
0.0
0.2
0.4
-0.2
0.5
-0.2
0.0
0.0
0.0
Source: ECB.
1)
Data refer to the Euro 16 and are partially estimated. Annual change in gross nominal consolidated debt is expressed as a percentage of GDP, i.e. [debt(t) - debt(t-1)] ÷ GDP(t).
2)
The borrowing requirement is by definition equal to transactions in debt.
3)
Includes, in addition to the impact of foreign exchange movements, effects arising from measurement at nominal value (e.g. premia or discounts on securities issued).
4)
Includes, in particular, the impact of the reclassification of units and certain types of debt assumption.
5)
Holders resident in the country whose government has issued the debt.
6)
Includes residents of euro area countries other than the country whose government has issued the debt.
7)
Including proceeds from sales of UMTS licences.
8)
The difference between the annual change in gross nominal consolidated debt and the deficit as a percentage of GDP.
9)
Mainly composed of transactions in other assets and liabilities (trade credits, other receivables/payables and financial derivatives).
10) Excluding financial derivatives.
ECB
S Monthly Bulletin
58 August 2010

EURO AREA
STATISTICS
Government
finance
6.4 Quarterly revenue, expenditure and deficit/surplus 1)
(as a percentage of GDP)
1. Euro area _ quarterly revenue

Total
Current revenue
Capital revenue
Memo
item:
Direct taxes
Indirect taxes
Social
Sales
Property
Capital
Fiscal
contributions
income
taxes
burden 2)
1
2
3
4
5
6
7
8
9
10
2004 Q1
41.3
40.9
9.5
12.9
15.3
1.7
0.6
0.4
0.3
38.0
Q2
44.7
43.9
11.9
12.9
15.3
2.0
1.1
0.8
0.6
40.7
Q3
42.8
42.3
10.7
12.8
15.3
1.9
0.7
0.5
0.3
39.1
Q4
48.9
48.0
12.9
14.2
16.1
2.9
0.7
1.0
0.4
43.7
2005 Q1
42.0
41.5
10.0
13.0
15.2
1.7
0.6
0.5
0.3
38.5
Q2
44.3
43.6
11.5
13.2
15.1
2.0
1.1
0.6
0.3
40.1
Q3
43.5
42.8
11.1
13.0
15.2
1.9
0.7
0.7
0.3
39.7
Q4
49.0
48.2
13.3
14.2
16.1
2.9
0.8
0.7
0.3
43.9
2006 Q1
42.4
42.0
10.3
13.4
15.1
1.6
0.8
0.4
0.3
39.0
Q2
45.3
44.9
12.2
13.5
15.1
1.9
1.3
0.5
0.3
41.1
Q3
43.8
43.3
11.6
13.0
15.1
2.0
0.8
0.5
0.3
40.0
Q4
49.3
48.7
14.0
14.2
15.8
2.9
0.9
0.6
0.3
44.4
2007 Q1
42.1
41.7
10.2
13.5
14.8
1.7
0.8
0.4
0.3
38.8
Q2
45.6
45.2
12.7
13.5
15.0
1.8
1.5
0.4
0.3
41.4
Q3
43.7
43.3
12.2
12.8
14.8
1.9
0.8
0.5
0.3
40.1
Q4
49.6
49.1
14.4
14.1
15.7
3.0
0.9
0.5
0.3
44.6
2008 Q1
42.2
41.9
10.7
12.9
14.8
1.7
1.0
0.3
0.2
38.6
Q2
44.9
44.5
12.6
12.8
15.0
1.9
1.5
0.4
0.3
40.7
Q3
43.2
42.9
11.9
12.4
15.0
1.9
0.8
0.3
0.3
39.7
Q4
48.8
48.3
13.6
13.6
16.2
3.0
1.0
0.5
0.3
43.7
2009 Q1
41.9
41.8
10.3
12.5
15.4
1.8
1.0
0.2
0.2
38.4
Q2
44.4
43.8
11.5
12.6
15.5
2.0
1.5
0.6
0.5
40.1
Q3
42.6
42.2
10.9
12.3
15.5
2.0
0.8
0.3
0.3
39.0
Q4
48.5
47.9
12.7
13.7
16.4
3.2
1.0
0.7
0.5
43.2

2010 Q1
41.4
41.3
10.0
12.3
15.3
1.8
0.9
0.2
0.2
38.0
2. Euro area _ quarterly expenditure and deficit/surplus

Total
Current expenditure
Capital expenditure
Deficit (-)/
Primary

surplus (+)
deficit (-)/
Total Compensation
Intermediate
Interest
Current
Investment
Capital
surplus (+)
of consumption
transfers
Social Subsidies
transfers
employees
benefits
1
2
3
4
5
6
7
8
9
10
11
12
13
2004 Q1
46.3
42.9
10.3
4.6
3.2
24.9
21.3
1.2
3.4
1.9
1.5
-5.0
-1.8
Q2
46.6
43.2
10.4
4.8
3.2
24.7
21.4
1.3
3.4
2.3
1.1
-1.9
1.4
Q3
46.0
42.6
9.9
4.7
3.1
24.9
21.5
1.3
3.4
2.4
1.0
-3.2
-0.1
Q4
50.8
45.6
11.0
5.7
2.9
26.0
22.6
1.4
5.2
3.1
2.1
-1.9
1.0
2005 Q1
46.7
43.0
10.2
4.6
3.1
25.1
21.3
1.2
3.7
1.9
1.8
-4.8
-1.7
Q2
46.1
42.8
10.2
4.9
3.2
24.5
21.3
1.1
3.4
2.3
1.1
-1.9
1.3
Q3
45.7
42.3
9.9
4.8
3.0
24.6
21.3
1.2
3.4
2.5
1.0
-2.2
0.8
Q4
50.5
45.7
11.1
5.8
2.7
26.0
22.5
1.3
4.8
3.1
1.7
-1.5
1.2
2006 Q1
45.3
42.1
10.0
4.6
3.0
24.6
21.1
1.2
3.1
1.9
1.2
-2.9
0.1
Q2
45.4
42.2
10.2
4.9
3.1
24.0
21.0
1.1
3.2
2.3
0.9
-0.1
3.0
Q3
45.3
41.9
9.8
4.7
2.9
24.5
21.1
1.2
3.4
2.4
1.0
-1.5
1.4
Q4
50.3
45.0
10.7
5.7
2.7
25.9
22.2
1.4
5.3
3.2
2.2
-1.0
1.7
2007 Q1
44.3
41.1
9.8
4.5
2.9
23.9
20.5
1.2
3.2
2.0
1.2
-2.2
0.8
Q2
44.6
41.4
9.9
4.8
3.2
23.5
20.5
1.1
3.2
2.3
0.9
1.0
4.2
Q3
44.5
41.1
9.5
4.7
2.9
23.9
20.6
1.2
3.4
2.5
0.9
-0.8
2.1
Q4
50.3
45.2
10.6
5.8
2.8
26.0
22.2
1.5
5.1
3.4
1.7
-0.7
2.1
2008 Q1
44.6
41.4
9.7
4.6
3.0
24.1
20.5
1.2
3.2
2.0
1.2
-2.4
0.6
Q2
45.2
41.9
10.1
4.9
3.2
23.7
20.6
1.1
3.3
2.3
1.0
-0.3
2.9
Q3
45.4
41.9
9.6
4.8
3.1
24.4
21.2
1.2
3.5
2.5
1.0
-2.2
0.9
Q4
51.8
46.8
11.0
6.1
2.8
26.9
23.0
1.4
5.0
3.4
1.6
-3.0
-0.2
2009 Q1
48.4
44.9
10.5
5.3
2.9
26.3
22.4
1.3
3.4
2.2
1.2
-6.4
-3.6
Q2
50.1
46.1
10.9
5.5
3.2
26.6
23.1
1.3
4.0
2.7
1.3
-5.7
-2.6
Q3
49.2
45.3
10.3
5.2
2.7
27.0
23.4
1.4
3.8
2.6
1.1
-6.6
-3.9
Q4
54.7
49.4
11.4
6.3
2.5
29.1
24.8
1.6
5.4
3.4
1.9
-6.2
-3.7

2010 Q1
49.5
45.9
10.5
5.2
2.8
27.4
23.3
1.4
3.6
2.1
1.5
-8.0
-5.2
Sources: ECB calculations based on Eurostat and national data.
1)
The concepts "revenue", "expenditure" and "deficit/surplus" are based on the ESA 95. Transactions between the EU budget and entities outside the government sector
are not included. Otherwise, except for different data transmission deadlines, the quarterly data are consistent with the annual data. The data are not seasonally adjusted.
2)
The fiscal burden comprises taxes and social contributions.
ECB
Monthly Bulletin
August 2010 S 59

6.5 Quarterly debt and change in debt
(as a percentage of GDP)
1. Euro area _ Maastricht debt by financial instrument 1)

Total
Financial instruments
Currency and deposits
Loans
Short-term securities
Long-term securities
1
2
3
4
5
2007 Q2
68.6
2.2
11.2
5.1
50.2
Q3
67.6
2.1
11.1
5.1
49.3
Q4
65.9
2.2
10.8
4.2
48.7
2008 Q1
67.0
2.1
11.2
5.0
48.7
Q2
67.3
2.1
11.2
4.9
49.0
Q3
67.4
2.1
11.1
5.5
48.6
Q4
69.3
2.3
11.0
6.7
49.4
2009 Q1
72.8
2.3
11.3
7.9
51.4
Q2
76.1
2.3
11.6
8.4
53.7
Q3
77.9
2.3
11.8
9.2
54.6
Q4
78.7
2.4
11.9
8.6
55.8

2010 Q1
80.5
2.4
12.2
8.4
57.6
2. Euro area _ deficit-debt adjustment

Change in
Deficit (-)/
Deficit-debt adjustment
Memo
debt
surplus (+)

item:
Total
Transactions in main financial assets held by general government
Valuation effects
Other
Borrowing
and other changes
requirement
Total
Currency
Loans
Securities
Shares and
in volume
and deposits
other equity
1
2
3
4
5
6
7
8
9
10
11
2007 Q2
4.2
1.0
5.2
4.9
4.1
0.0
0.5
0.3
0.6
-0.3
3.5
Q3
-0.6
-0.8
-1.4
-1.4
-2.1
0.0
0.4
0.2
0.1
-0.1
-0.6
Q4
-3.6
-0.7
-4.2
-2.9
-2.1
0.0
-0.6
-0.2
-0.1
-1.2
-3.4
2008 Q1
6.7
-2.4
4.3
3.4
2.0
0.0
1.1
0.3
0.1
0.9
6.6
Q2
4.0
-0.3
3.7
3.9
1.8
0.3
1.3
0.4
0.0
-0.2
3.9
Q3
2.2
-2.2
0.0
-0.9
-1.6
0.0
0.2
0.5
0.5
0.4
1.8
Q4
7.9
-3.0
5.0
5.8
0.8
2.6
0.5
1.9
-0.1
-0.8
8.0
2009 Q1
12.1
-6.4
5.6
6.5
5.1
-0.1
0.8
0.7
-1.1
0.2
13.2
Q2
9.9
-5.7
4.2
3.3
2.5
-0.6
0.1
1.2
0.6
0.3
9.3
Q3
4.7
-6.6
-1.9
-2.9
-3.1
0.7
-0.1
-0.4
0.2
0.8
4.5
Q4
2.1
-6.2
-4.1
-2.6
-2.7
0.0
0.0
0.1
-0.3
-1.1
2.4

2010 Q1
8.3
-8.0
0.2
0.7
0.7
0.0
-0.4
0.4
-0.1
-0.4
8.4
C28 Deficit, borrowing requirement and change in debt
C29 Maastricht debt
(four-quarter moving sum as a percentage of GDP)
(annual change in the debt-to-GDP ratio and underlying factors)
deficit-debt adjustment
deficit
primary deficit/surplus
change in debt
growth/interest rate differential
borrowing requirement
change in debt-to-GDP ratio
9.0
9.0
12.0
12.0
8.0
8.0
10.0
10.0
7.0
7.0
8.0
8.0
6.0
6.0
6.0
6.0
5.0
5.0
4.0
4.0
4.0
4.0
2.0
2.0
3.0
3.0
0.0
0.0
2.0
2.0
1.0
1.0
-2.0
-2.0
0.0
0.0
-4.0
-4.0
2001
2002
2003
2004
2005
2006
2007
2008
2009
2001
2002
2003
2004
2005
2006
2007
2008
2009
Sources: ECB calculations based on Eurostat and national data.
1)
The stock data in quarter t are expressed as a percentage of the sum of GDP in t and the previous three quarters.
ECB
S Monthly Bulletin
60 August 2010

EXTERNAL TRANSACTIONS AND POSITIONS
7
7.1 Summary balance of payments 1)
(EUR billions; net transactions)

Current account
Net
Financial account
Capital
lending/
Errors and
Total
Goods Services
Income
Current account
borrowing
Total
Direct
Portfolio
Financial
Other
Reserve
omissions
transfers
to/from
investment investment derivatives investment
assets
rest of
the world
(columns
1+6)
1
2
3
4
5
6
7
8
9
10
11
12
13
14
2007
13.5
48.0
49.6
2.9
-87.0
5.0
18.5
-10.7
-73.7
151.5
-63.7
-19.6
-5.1
-7.8
2008
-153.8
-19.1
41.4
-76.6
-99.5
9.8
-144.0
163.2
-198.7
344.1
-62.5
83.7
-3.4
-19.2
2009
-55.9
40.7
29.9
-38.2
-88.2
6.2
-49.7
43.0
-78.9
308.7
42.1
-233.3
4.5
6.8
2009 Q1
-37.2
-7.6
1.8
-3.0
-28.4
1.5
-35.8
50.9
-64.6
105.8
15.8
-11.8
5.6
-15.1
Q2
-22.0
14.0
6.9
-25.5
-17.3
2.2
-19.8
10.9
0.3
70.8
22.9
-81.7
-1.4
8.9
Q3
-3.6
13.8
12.2
-6.7
-22.8
1.4
-2.2
-12.6
-23.7
78.2
-4.5
-62.9
0.3
14.8
Q4
6.8
20.5
9.1
-3.1
-19.7
1.2
8.0
-6.2
9.0
53.9
7.9
-76.9
-0.1
-1.8
2010 Q1
-25.4
2.8
3.3
3.3
-34.8
2.6
-22.9
24.4
-34.9
22.4
1.8
39.8
-4.6
-1.6
2009 May
-13.7
2.6
3.0
-12.7
-6.7
0.2
-13.5
9.4
17.5
33.8
9.4
-49.1
-2.2
4.1
June
1.5
7.3
1.8
-6.2
-1.3
0.3
1.8
-16.6
-24.8
42.3
0.5
-34.2
-0.4
14.8
July
8.1
14.1
3.9
-3.0
-6.9
0.9
9.0
-19.4
7.2
-26.5
6.4
-2.9
-3.7
10.4
Aug.
-6.1
-1.9
4.1
0.0
-8.3
0.5
-5.5
-10.8
1.7
25.7
-9.8
-29.2
0.8
16.3
Sep.
-5.6
1.5
4.1
-3.7
-7.5
0.0
-5.6
17.6
-32.6
78.9
-1.1
-30.8
3.3
-11.9
Oct.
-1.3
8.7
2.9
0.2
-13.2
-0.3
-1.6
1.1
3.8
6.2
1.6
-9.8
-0.6
0.5
Nov.
-2.4
5.5
1.2
-3.1
-6.0
1.0
-1.4
3.4
-3.5
-7.3
-0.1
13.0
1.4
-2.0
Dec.
10.6
6.4
4.9
-0.2
-0.6
0.5
11.0
-10.6
8.8
55.1
6.4
-80.1
-0.8
-0.4
2010 Jan.
-14.4
-7.7
0.8
0.9
-8.5
1.6
-12.8
32.0
9.2
21.4
3.6
-3.6
1.5
-19.2
Feb.
-8.7
4.2
1.2
1.9
-16.1
0.8
-7.9
-8.4
-17.6
2.4
-0.7
11.3
-3.7
16.3
Mar.
-2.2
6.2
1.3
0.4
-10.2
0.1
-2.1
0.8
-26.5
-1.4
-1.0
32.1
-2.5
1.3
Apr.
-7.5
2.9
3.2
-5.8
-7.7
-0.2
-7.7
8.6
-11.4
32.3
0.3
-12.5
0.0
-1.0

May
-16.7
0.6
3.7
-15.6
-5.4
2.0
-14.7
17.8
-17.2
63.9
-2.2
-26.6
-0.1
-3.1

12-month cumulated transactions

2010 May
-44.8
47.9
33.2
-34.1
-91.8
7.2
-37.6
15.4
-103.1
292.8
3.9
-173.3
-4.9
22.2

12-month cumulated transactions as a percentage of GDP

2010 May
-0.5
0.5
0.4
-0.4
-1.0
0.1
-0.4
0.2
-1.1
3.3
0.0
-1.9
-0.1
0.2
C30 Euro area b.o.p.: current account
C31 Euro area b.o.p.: direct and portfolio investment
(seasonally adjusted; 12-month cumulated transactions as a percentage of GDP)
(12-month cumulated transactions as a percentage of GDP)
net direct investment
current account balance
net portfolio investment
1.0
1.0
6.0
6.0
5.0
5.0
0.5
0.5
4.0
4.0
0.0
0.0
3.0
3.0
2.0
2.0
-0.5
-0.5
1.0
1.0
-1.0
-1.0
0.0
0.0
-1.0
-1.0
-1.5
-1.5
-2.0
-2.0
-2.0
-2.0
-3.0
-3.0
2001
2002
2003
2004
2005
2006
2007
2008
2009
2001
2002
2003
2004
2005
2006
2007
2008
2009
Source: ECB.
1)
The sign convention is explained in the General Notes.
ECB
Monthly Bulletin
August 2010 S 61

7.2 Current and capital accounts
(EUR billions; transactions)
1. Summary current and capital accounts

Current account
Capital account

Total
Goods
Services
Income
Current transfers

Credit
Debit
Net
Credit
Debit
Credit
Debit
Credit
Debit
Credit
Debit
Credit
Debit
Workers’
Workers’
remit-
remit-
tances
tances
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
2007
2,702.7 2,689.2
13.5
1,518.0
1,470.1
494.9
445.3
598.7
595.8
91.0
6.4 178.1
20.7
25.7
20.7
2008
2,732.5 2,886.3
-153.8
1,580.4
1,599.5
517.6
476.2
546.1
622.6
88.5
6.7 188.0
21.4
24.2
14.5
2009
2,269.9 2,325.8
-55.9
1,291.2
1,250.5
469.8
439.9
416.0
454.2
92.9
6.1 181.1
21.6
19.0
12.8
2009 Q1
557.1
594.4
-37.2
307.5
315.1
110.4
108.6
113.5
116.4
25.8
1.4
54.2
5.0
4.1
2.6
Q2
559.5
581.4
-22.0
312.5
298.5
114.8
107.9
111.2
136.7
21.0
1.6
38.3
5.4
4.9
2.8
Q3
556.0
559.6
-3.6
322.5
308.7
124.0
111.9
95.1
101.8
14.3
1.6
37.2
5.5
3.9
2.4
Q4
597.3
590.4
6.8
348.8
328.2
120.6
111.5
96.2
99.2
31.7
1.5
51.4
5.7
6.0
4.9

2010 Q1
579.0
604.4
-25.4
348.7
346.0
110.1
106.8
99.1
95.7
21.0
1.4
55.8
5.0
5.1
2.5
2010 Mar.
215.7
218.0
-2.2
136.6
130.3
39.2
37.9
35.8
35.3
4.2
. 14.4
.
1.1
0.9
Apr.
195.4
202.9
-7.5
122.9
120.0
38.2
35.0
30.2
36.0
4.1
. 11.8
.
0.7
0.9

May
206.2
222.9
-16.7
124.0
123.4
40.1
36.4
34.6
50.2
7.5
. 12.9
.
2.7
0.8
Seasonally adjusted
2009 Q3
550.6
561.4
-10.8
316.2
302.6
115.2
107.1
97.5
109.4
21.8
. 42.3
.
.
.
Q4
568.6
575.7
-7.1
332.7
317.6
117.3
108.5
92.1
101.8
26.5
. 47.8
.
.
.
2010 Q1
606.5
616.0
-9.6
363.6
353.2
120.7
111.5
102.5
104.7
19.7
. 46.6
.
.
.
2010 Mar.
206.9
208.8
-1.9
127.2
123.3
40.7
37.5
33.1
34.8
5.8
. 13.2
.
.
.
Apr.
200.2
205.8
-5.6
124.4
123.8
40.3
36.3
30.2
33.1
5.3
. 12.5
.
.
.

May
215.2
221.0
-5.8
131.6
128.5
41.4
38.4
34.0
38.4
8.2
. 15.8
.
.
.

12-month cumulated transactions

2010 May
2,329.3 2,373.2
-43.9
1,375.8
1,328.2
472.4
439.0
390.4
426.8
90.6
. 179.2
.
.
.

12-month cumulated transactions as a percentage of GDP

2010 May
25.9
26.4
-0.5
15.3
14.8
5.3
4.9
4.3
4.7
1.0
. 2.0
.
.
.
C32 Euro area b.o.p.: goods
C33 Euro area b.o.p.: services
(seasonally adjusted; 12-month cumulated transactions as a percentage of GDP)
(seasonally adjusted; 12-month cumulated transactions as a percentage of GDP)
exports (credit)
exports (credit)
imports (debit)
imports (debit)
20.0
20.0
6.0
6.0
5.5
5.5
18.0
18.0
5.0
5.0
16.0
16.0
4.5
4.5
14.0
14.0
4.0
4.0
12.0
12.0
3.5
3.5
10.0
10.0
3.0
3.0
8.0
8.0
2.5
2.5
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
2000 2001 2002 2003 2004 2005 2006 2007
2008 2009
Source: ECB.
ECB
S Monthly Bulletin
62 August 2010

EURO AREA
STATISTICS
External
transactions
and
positions
7.2 Current and capital accounts
(EUR billions)
2. Income account
(transactions)

Compensation

of employees
Investment income

Credit
Debit
Total
Direct investment
Portfolio investment
Other investment

Credit
Debit
Equity
Debt
Equity
Debt
Credit
Debit

Credit
Debit
Credit
Debit
Credit
Debit
Credit
Debit
Reinv.
Reinv.
earnings
earnings
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
2007
18.8
10.3
579.9
585.5
208.7
70.9
137.7
44.2
26.6
25.2
45.3
113.7
118.8
111.1
180.5
197.8
2008
18.9
10.4
527.1
612.2
154.4
17.9
147.0
50.0
29.9
24.8
43.0
119.0
125.2
125.3
174.5
196.1
2009
19.0
11.6
397.0
442.7
129.1
21.9
104.8
31.9
20.3
20.7
30.9
79.6
108.6
139.8
108.2
97.8
2009 Q1
4.7
2.1
108.8
114.4
34.1
7.8
26.7
15.2
5.2
5.1
6.9
13.3
29.4
37.5
33.3
31.9
Q2
4.6
2.6
106.6
134.2
33.1
1.5
25.6
4.3
5.6
5.9
10.6
38.8
27.5
36.6
29.8
27.2
Q3
4.6
3.5
90.5
98.4
29.0
7.5
25.1
8.5
4.1
4.7
7.1
13.9
27.4
34.8
22.9
19.9
Q4
5.1
3.5
91.1
95.8
32.9
5.0
27.4
3.8
5.4
5.0
6.3
13.7
24.3
30.9
22.2
18.8
2010 Q1
4.9
2.1
94.2
93.6
37.8
2.8
28.2
12.3
4.5
4.3
5.8
12.0
25.0
31.7
21.0
17.3
3. Geographical breakdown
(cumulated transactions)

Total
EU Member States outside the euro area
Brazil Canada
China
India
Japan
Russia Switzer-
United
Other
land
States
Total
Den- Sweden
United Other EU
EU
mark
Kingdom countries
insti-
2009 Q2 to
tutions
2010 Q1
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16

Credits
Current account
2,291.7
802.5
45.1
67.5
391.9
237.5
60.4
36.6
30.8
93.5
31.3
46.8
71.4
168.5
307.6
702.8
Goods
1,332.5
440.0
27.4
42.9
188.3
181.2
0.2
20.2
15.8
76.0
23.3
29.7
51.3
84.7
156.6
434.9
Services
469.6
157.6
10.9
12.5
101.8
26.8
5.5
7.1
6.5
12.8
6.3
10.4
13.0
50.0
70.6
135.2
Income
401.6
140.6
6.2
10.8
89.9
26.2
7.6
8.9
7.6
4.5
1.6
6.5
6.7
26.7
75.7
122.9

Investment income
382.4
133.8
6.1
10.7
88.2
25.5
3.4
8.9
7.5
4.4
1.5
6.5
6.7
19.3
73.8
119.9
Current transfers
88.1
64.3
0.7
1.2
11.9
3.3
47.2
0.4
0.8
0.2
0.0
0.2
0.3
7.1
4.8
9.9
Capital account
19.9
16.1
0.0
0.0
0.8
0.3
14.8
0.0
0.0
0.0
0.0
0.0
0.0
0.4
0.4
2.9

Debits
Current account
2,335.8
751.3
39.7
66.9
332.5
212.8
99.4
- 24.3
-
- 84.4
-
157.3
315.6
-
Goods
1,281.4
369.8
25.7
37.8
140.5
165.8
0.0
20.5
10.3
157.7
18.8
42.1
85.1
71.7
117.0
388.5
Services
438.1
132.6
7.0
10.3
83.2
31.9
0.2
5.5
5.5
10.1
4.4
7.8
7.8
42.0
92.3
130.1

Income
433.5
136.8
6.2
17.7
96.4
10.9
5.7
- 6.9
-
- 34.2
- 37.3
99.7
-

Investment income
421.9
129.3
6.1
17.6
94.8
5.2
5.7
-
6.8
-
-
34.1
-
36.7
98.8
-
Current transfers
182.7
112.1
0.8
1.1
12.5
4.2
93.5
1.4
1.8
2.9
0.7
0.4
0.5
6.2
6.7
50.0
Capital account
12.6
2.4
0.1
0.1
1.0
0.2
1.0
0.2
0.1
0.1
0.1
0.1
0.1
0.5
1.3
7.8

Net
Current account
-44.1
51.1
5.4
0.6
59.4
24.7
-39.0
- 6.4
- -
-37.6
-
11.2
-8.0
-
Goods
51.1
70.2
1.6
5.1
47.8
15.4
0.2
-0.3
5.5
-81.6
4.5
-12.4
-33.8
13.0
39.6
46.3
Services
31.4
24.9
3.9
2.2
18.7
-5.0
5.2
1.7
1.1
2.7
1.9
2.6
5.3
7.9
-21.7
5.1

Income
-32.0
3.8
0.0
-6.9
-6.5
15.3
1.9
- 0.7
-
- -27.6
- -10.6
-24.0
-

Investment income
-39.6
4.5
0.0
-6.9
-6.5
20.3
-2.3
-
0.8
-
-
-27.6
-
-17.4
-25.1
-
Current transfers
-94.6
-47.8
-0.1
0.1
-0.6
-0.9
-46.3
-1.1
-0.9
-2.7
-0.6
-0.2
-0.2
0.9
-1.9
-40.1
Capital account
7.3
13.7
-0.1
-0.1
-0.1
0.1
13.8
-0.1
-0.1
-0.1
-0.1
-0.1
0.0
-0.1
-0.8
-4.9
Source: ECB.
ECB
Monthly Bulletin
August 2010 S 63

7.3 Financial account
(EUR billions and annual growth rates; outstanding amounts and growth rates at end of period; transactions and other changes during period)
1. Summary financial account

Total 1)
Total
Direct
Portfolio
Net
Other
Reserve

as a % of GDP
investment
investment
financial
investment
assets
derivatives
Assets Liabilities
Net
Assets Liabilities
Net
Assets Liabilities
Assets Liabilities
Assets Liabilities
1
2
3
4
5
6
7
8
9
10
11
12
13
14
Outstanding amounts (international investment position)
2006
12,384.3
13,399.8
-1,015.5
144.7
156.6
-11.9
3,153.4
2,729.4
4,372.1
5,950.0
-20.8
4,553.8
4,720.4
325.8
2007
13,908.5
15,155.8
-1,247.3
154.4
168.2
-13.8
3,572.8
3,130.7
4,631.6
6,556.5
-26.0
5,382.9
5,468.6
347.2

2008
13,315.2
14,949.2
-1,634.0
143.7
161.4
-17.6
3,744.4
3,217.0
3,763.9
6,078.6
-36.2
5,468.8
5,653.6
374.2
2009 Q3
13,381.5
14,979.0
-1,597.5
148.6
166.3
-17.7
4,042.1
3,345.1
4,059.8
6,626.7
-60.1
4,908.9
5,007.2
430.8
Q4
13,717.2
15,105.7
-1,388.5
152.9
168.4
-15.5
4,174.6
3,423.8
4,196.6
6,761.8
-45.6
4,929.1
4,920.1
462.4

2010 Q1
14,365.3
15,701.3
-1,336.0
159.7
174.5
-14.8
4,318.6
3,469.4
4,453.4
7,102.0
-37.4
5,132.1
5,129.9
498.7
Changes to outstanding amounts
2005
2,209.7
2,070.3
139.3
27.1
25.4
1.7
522.1
209.0
842.5
1,012.3
16.0
790.0
849.1
39.1
2006
1,545.8
1,845.7
-299.9
18.1
21.6
-3.5
362.6
285.1
484.6
892.2
0.6
692.3
668.4
5.7
2007
1,524.2
1,756.0
-231.9
16.9
19.5
-2.6
419.4
401.3
259.5
606.5
-5.2
829.1
748.1
21.4

2008
-593.3
-206.6
-386.6
-6.4
-2.2
-4.2
171.7
86.3
-867.7
-478.0
-10.2
85.9
185.1
27.0
2009 Q4
335.7
126.7
209.0
14.4
5.4
9.0
132.6
78.7
136.8
135.1
14.5
20.3
-87.1
31.5

2010 Q1
648.2
595.6
52.6
29.3
26.9
2.4
144.0
45.6
256.8
340.2
8.2
202.9
209.8
36.3
Transactions
2006
1,728.6
1,719.1
9.4
20.2
20.1
0.1
417.6
257.4
519.8
708.5
0.6
789.3
753.2
1.3
2007
1,946.6
1,935.9
10.7
21.6
21.5
0.1
476.5
402.9
438.5
589.9
63.7
962.8
943.1
5.1
2008
464.8
628.0
-163.2
5.0
6.8
-1.8
323.8
125.1
-10.2
333.9
62.5
85.3
169.0
3.4

2009
-170.6
-121.7
-48.9
-1.9
-1.4
-0.5
289.8
210.9
68.2
391.8
-42.1
-482.1
-724.3
-4.5
2009 Q3
20.8
8.1
12.6
0.9
0.4
0.6
62.0
38.2
45.6
123.7
4.5
-91.0
-153.8
-0.3

Q4
41.1
34.9
6.2
1.8
1.5
0.3
38.3
47.3
32.0
85.9
-7.9
-21.4
-98.3
0.1
2010 Q1
192.5
216.9
-24.4
8.7
9.8
-1.1
40.4
5.5
64.9
87.3
-1.8
84.4
124.2
4.6
2010 Jan.
85.6
117.6
-32.0
.
.
.
-6.2
2.9
31.3
52.6
-3.6
65.7
62.1
-1.5
Feb.
56.2
47.9
8.4
.
.
.
16.1
-1.6
8.4
10.7
0.7
27.4
38.7
3.7
Mar.
50.6
51.4
-0.8
.
.
.
30.6
4.1
25.2
23.9
1.0
-8.7
23.4
2.5
Apr.
128.9
137.5
-8.6
.
.
.
15.7
4.3
17.3
49.6
-0.3
96.2
83.7
0.0

May
87.0
104.8
-17.8
.
.
.
14.3
-2.9
-12.3
51.6
2.2
82.7
56.1
0.1
Other changes
2005
851.4
749.6
101.7
10.4
9.2
1.2
163.7
56.5
426.3
487.7
-1.4
205.7
205.4
57.1
2006
-182.7
126.6
-309.3
-2.1
1.5
-3.6
-55.0
27.7
-35.2
183.7
0.0
-97.0
-84.8
4.4
2007
-422.5
-179.9
-242.5
-4.7
-2.0
-2.7
-57.1
-1.5
-179.0
16.6
-69.0
-133.6
-195.0
16.3

2008
-1,058.0
-834.6
-223.4
-11.4
-9.0
-2.4
-152.1
-38.8
-857.5
-811.8
-72.7
0.6
16.1
23.6

Other changes due to exchange rate changes
2005
394.2
245.0
149.2
4.8
3.0
1.8
89.8
5.7
158.3
101.4
. 129.2
137.9
17.0
2006
-343.3
-228.5
-114.8
-4.0
-2.7
-1.3
-72.1
-4.2
-151.6
-101.1
. -105.7
-123.2
-13.9
2007
-531.1
-291.5
-239.6
-5.9
-3.2
-2.7
-113.3
-5.9
-219.2
-106.0
. -185.0
-179.6
-13.7

2008
-40.3
59.3
-99.6
-0.4
0.6
-1.1
-17.3
-0.2
1.8
42.0
. -34.0
17.5
9.2

Other changes due to price changes
2005
284.5
430.3
-145.8
3.5
5.3
-1.8
45.0
40.8
199.0
389.5
-1.4
. .
41.9
2006
288.6
298.4
-9.8
3.4
3.5
-0.1
45.4
33.5
226.0
264.9
0.0
. .
17.1
2007
82.4
124.7
-42.4
0.9
1.4
-0.5
46.5
12.5
75.0
112.2
-69.8
. .
30.7

2008
-1,013.8
-1,102.1
88.3
-10.9
-11.9
1.0
-155.6
-138.4
-803.6
-963.7
-75.9
. .
21.2

Other changes due to other adjustments
2005
172.7
74.3
98.3
2.1
0.9
1.2
29.0
10.0
69.0
-3.1
. 76.5
67.4
-1.8
2006
-128.1
56.7
-184.7
-1.5
0.7
-2.2
-28.3
-1.6
-109.6
19.8
. 8.7
38.4
1.2

2007
30.7
-16.9
47.6
0.3
-0.2
0.5
5.0
-13.6
-33.0
12.4
. 59.5
-15.7
-0.8
2008
-20.9
191.6
-212.5
-0.2
2.1
-2.3
18.0
87.4
-56.9
102.2
. 25.4
2.0
-7.3
Growth rates of outstanding amounts
2005
15.2
13.4
- . . .
15.2
6.8
13.1
12.1
.
18.5
19.5
-5.9
2006
16.1
14.8
- . . .
15.0
10.5
13.6
13.7
.
20.5
18.7
0.3
2007
15.7
14.3
- . . .
15.1
14.7
10.0
9.8
.
21.2
20.0
1.6

2008
3.3
4.2
- . . .
9.2
4.0
-0.5
5.3
.
1.6
3.2
1.0
2009 Q3
-4.0
-3.0
- . . .
7.9
4.9
-3.0
4.4
.
-12.2
-14.9
-1.1
Q4
-1.3
-0.8
- . . .
7.7
6.6
1.7
6.3
.
-9.0
-12.7
-1.2

2010 Q1
1.9
1.5
- . . .
5.8
5.5
5.3
6.4
.
-3.0
-6.5
1.3
Source: ECB.
1)
Net financial derivatives are included in assets.
ECB
S Monthly Bulletin
64 August 2010

EURO AREA
STATISTICS
External
transactions
and
positions
7.3 Financial account
(EUR billions and annual growth rates; outstanding amounts and growth rates at end of period, transactions during period)
2. Direct investment

By resident units abroad
By non-resident units in the euro area

Total
Equity capital
Other capital
Total
Equity capital
Other capital
and reinvested earnings
(mostly inter-company loans)
and reinvested earnings
(mostly inter-company loans)
Total
MFIs
Non-
Total
MFIs
Non-
Total Into MFIs
Into
Total
To MFIs
To
MFIs
MFIs
non-MFIs
non-MFIs
1
2
3
4
5
6
7
8
9
10
11
12
13
14
Oustanding amounts (international investment position)
2007
3,572.8
2,886.7
240.8
2,645.9
686.1
6.4
679.7
3,130.7
2,401.0
69.5
2,331.5
729.8
15.4
714.4

2008
3,744.4
2,946.9
234.8
2,712.1
797.5
9.3
788.2
3,217.0
2,405.5
77.0
2,328.5
811.6
16.4
795.1

2009 Q4
4,174.6
3,251.5
252.3
2,999.2
923.1
14.6
908.5
3,423.8
2,550.2
77.9
2,472.3
873.6
14.7
858.9
2010 Q1
4,318.6
3,362.2
264.9
3,097.3
956.4
15.3
941.1
3,469.4
2,640.3
80.0
2,560.2
829.1
14.9
814.2
Transactions
2008
323.8
195.1
-4.8
199.9
128.7
-0.2
128.9
125.1
93.0
-1.3
94.3
32.1
1.6
30.4
2009
289.8
214.6
23.2
191.4
75.2
3.4
71.9
210.9
207.7
7.9
199.8
3.2
-0.7
3.9
2009 Q3
62.0
37.0
-1.6
38.7
24.9
0.3
24.6
38.2
35.4
2.4
33.0
2.8
-1.1
3.9
Q4
38.3
52.0
0.0
52.0
-13.7
1.7
-15.4
47.3
56.3
2.8
53.5
-9.0
-0.1
-9.0

2010 Q1
40.4
8.4
6.2
2.2
32.0
0.2
31.7
5.5
67.5
1.4
66.1
-62.1
-0.2
-61.9
2010 Jan.
-6.2
-12.3
0.7
-12.9
6.0
0.0
6.0
2.9
7.1
1.2
5.9
-4.2
-2.5
-1.6
Feb.
16.1
6.9
3.9
2.9
9.2
0.2
9.0
-1.6
49.3
0.0
49.3
-50.9
4.5
-55.3
Mar.
30.6
13.8
1.6
12.2
16.8
0.0
16.8
4.1
11.2
0.2
11.0
-7.1
-2.1
-5.0
Apr.
15.7
1.3
0.8
0.5
14.4
0.3
14.1
4.3
5.3
0.4
4.9
-1.0
1.5
-2.5

May
14.3
3.4
-1.4
4.8
10.9
0.2
10.6
-2.9
1.5
0.8
0.8
-4.5
0.3
-4.7
Growth rates
2007
15.1
14.4
8.3
15.0
18.5
-55.0
18.7
14.7
14.6
8.8
14.7
15.3
6.3
15.4

2008
9.2
6.8
-2.0
7.6
18.9
-2.0
19.1
4.0
3.9
-1.8
4.1
4.5
9.9
4.4
2009 Q3
7.9
6.3
8.5
6.1
14.2
13.8
14.2
4.9
7.2
7.1
7.2
-1.9
-5.0
-1.8

Q4
7.7
7.2
9.9
7.0
9.4
36.9
9.1
6.6
8.7
11.0
8.6
0.4
-4.5
0.5
2010 Q1
5.8
5.6
4.6
5.7
6.8
27.2
6.5
5.5
9.7
11.5
9.7
-6.3
-6.8
-6.3
C34 Euro area international investment position
C35 Euro area direct and portfolio investment position
(outstanding amounts at end of period; as a percentage of GDP)
(outstanding amounts at end of period; as a percentage of GDP)
net direct investment
net international investment position
net portfolio investment
-4.0
-4.0
20.0
20.0
-6.0
-6.0
10.0
10.0
-8.0
-8.0
0.0
0.0
-10.0
-10.0
-12.0
-12.0
-10.0
-10.0
-14.0
-14.0
-20.0
-20.0
-16.0
-16.0
-30.0
-30.0
-18.0
-18.0
-20.0
-20.0
-40.0
-40.0
2001
2002
2003
2004
2005
2006
2007
2008
2009
2001
2002
2003
2004
2005
2006
2007
2008
2009
Source: ECB.
ECB
Monthly Bulletin
August 2010 S 65

7.3 Financial account
(EUR billions and annual growth rates; outstanding amounts and growth rates at end of period; transactions during period)
3. Portfolio investment assets

Total
Equity
Debt instruments

Bonds and notes
Money market instruments

Total
MFIs
Non-MFIs
Total
MFIs
Non-MFIs
Total
MFIs
Non-MFIs
Euro-
General
Euro-
General
Euro-
General
system
government
system
government
system
government
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
Outstanding amounts (international investment position)
2007
4,631.6 1,961.8
136.7
2.8
1,825.1
44.6 2,279.7
990.2
16.4
1,289.5
17.2
390.1
297.3
34.6
92.8
0.5

2008
3,763.9 1,162.7
68.4
3.0
1,094.3
27.3 2,179.1
970.9
19.9
1,208.2
18.4
422.1
353.3
61.6
68.8
1.3
2009 Q4
4,196.6 1,474.4
79.2
3.4
1,395.2
34.4 2,327.7
916.7
17.0
1,411.0
38.3
394.5
329.3
44.9
65.2
2.0

2010 Q1
4,453.4 1,635.6
90.2
3.6
1,545.3
39.1 2,431.9
939.0
17.3
1,492.9
35.7
385.9
316.7
41.0
69.2
0.6
Transactions
2007
438.5
64.7
26.7
0.0
38.0
8.2
290.5
148.0
4.9
142.4
3.3
83.3
63.3
26.3
20.0
0.8
2008
-10.2
-103.9
-38.4
0.6
-65.6
-0.2
96.7
44.1
3.2
52.6
2.6
-3.0
26.8
15.1
-29.8
0.4
2009
68.2
45.1
-2.9
-0.2
48.0
1.6
24.3 -101.5
-3.5
125.8
17.2
-1.2
3.1
-12.7
-4.3
1.0
2009 Q3
45.6
39.6
3.7
0.0
35.9
0.2
27.4
-7.0
-0.8
34.4
-1.4
-21.4
-10.1
-11.8
-11.2
-0.1
Q4
32.0
34.3
-0.5
-0.2
34.9
0.4
20.1
-12.2
-0.5
32.3
-1.5
-22.4
-20.3
1.3
-2.1
0.8

2010 Q1
64.9
34.5
9.2
0.0
25.3
1.0
51.7
3.7
0.2
48.0
-1.8
-21.4
-20.2
-6.1
-1.1
-1.5
2010 Jan.
31.3
12.2
0.6
0.0
11.6
. 4.2
-5.4
0.0
9.6
.
14.9
12.5
2.3
2.4
.
Feb.
8.4
4.0
2.0
0.0
1.9
. 14.1
4.1
0.0
9.9
. -9.6
-10.2
-1.0
0.5
.
Mar.
25.2
18.4
6.5
0.0
11.8
. 33.5
5.0
0.1
28.5
. -26.6
-22.6
-7.4
-4.0
.

Apr.
17.3
6.4
2.7
-0.2
3.7
. 14.3
5.3
0.6
9.0
. -3.4
-6.9
0.7
3.4
.
May
-12.3
-14.6
-1.0
0.0
-13.6
. -2.0
-14.4
1.0
12.5
. 4.3
-0.4
7.8
4.7
.
Growth rates
2007
10.0
3.3
22.3
-0.5
2.0
21.3
13.9
16.6
38.9
11.9
23.2
23.9
23.7
272.7
29.4
277.4

2008
-0.5
-6.2
-30.0
24.6
-4.5
-0.5
4.3
4.6
20.4
4.1
15.6
-0.6
9.1
41.9
-32.3
71.6
2009 Q3
-3.0
-3.0
-8.6
12.4
-2.6
0.5
-2.5
-10.6
-20.1
4.0
96.8
-6.7
-0.2
-30.8
-31.4
69.4

Q4
1.7
3.3
-4.5
-7.2
3.7
5.8
1.0
-10.3
-17.7
10.3
93.2
-0.9
0.1
-22.0
-5.9
73.2
2010 Q1
5.3
9.3
16.5
-7.0
8.9
7.4
5.9
-5.2
-5.6
14.6
93.7
-11.1
-11.4
-32.1
-9.8
-67.0
4. Portfolio investment liabilities

Total
Equity
Debt instruments

Bonds and notes
Money market instruments

Total
MFIs
Non-MFIs
Total
MFIs
Non-MFIs
Total
MFIs
Non-MFIs
General
General
government
government
1
2
3
4
5
6
7
8
9
10
11
12
Outstanding amounts (international investment position)
2007
6,556.5
3,272.5
594.6
2,677.9
3,041.1
1,143.5
1,897.6
1,118.5
243.0
141.5
101.5
76.1

2008
6,078.6
2,168.7
640.7
1,528.0
3,466.5
1,263.8
2,202.8
1,357.1
443.3
108.9
334.4
272.9

2009 Q4
6,761.8
2,692.9
689.3
2,003.6
3,510.1
1,150.0
2,360.1
1,519.3
558.8
86.9
471.8
418.5
2010 Q1
7,102.0
2,813.9
663.2
2,150.7
3,733.5
1,189.5
2,544.0
1,656.9
554.6
113.4
441.1
389.4
Transactions
2008
333.9
-107.1
94.8
-201.9
236.3
26.3
210.0
196.7
204.7
-20.1
224.8
194.6
2009
376.9
123.7
9.3
114.4
119.1
-16.3
135.4
127.8
134.1
1.2
132.9
156.4
2009 Q3
123.7
89.5
11.7
77.7
-19.2
-9.1
-10.1
-8.7
53.5
10.0
43.5
59.2
Q4
85.9
34.2
-4.2
38.4
27.3
5.4
22.0
11.1
24.4
18.2
6.2
4.4

2010 Q1
87.3
4.9
-21.5
26.4
72.2
13.6
58.6
84.4
10.2
35.5
-25.3
-18.2
2010 Jan.
52.6
-17.2
-9.8
-7.4
52.5
30.9
21.6
. 17.3
9.0
8.4
.
Feb.
10.7
22.1
-8.5
30.6
-11.4
-17.5
6.2
. 0.0
13.5
-13.5
.
Mar.
23.9
-0.1
-3.3
3.2
31.1
0.2
30.9
. -7.1
13.1
-20.2
.
Apr.
49.6
-3.9
1.0
-4.9
49.7
17.9
31.8
. 3.8
5.7
-2.0
.

May
51.6
7.2
-10.6
17.7
37.4
-6.5
43.9
. 7.1
-5.5
12.6
.
Growth rates
2007
9.8
5.5
4.4
5.8
13.3
15.5
12.1
13.9
29.6
55.3
10.1
32.0

2008
5.3
-4.7
16.2
-9.8
7.8
2.3
11.1
17.6
81.5
-13.3
215.6
271.7
2009 Q3
4.4
-0.1
4.6
-1.3
1.7
-5.6
6.0
11.6
59.5
-23.2
111.6
168.4

Q4
6.3
5.6
1.4
7.3
3.4
-1.3
6.1
9.4
30.2
7.7
39.3
58.0
2010 Q1
6.4
6.6
-1.7
9.7
3.4
0.8
4.7
10.0
29.7
89.1
20.5
29.3
Source: ECB.
ECB
S Monthly Bulletin
66 August 2010

EURO AREA
STATISTICS
External
transactions
and
positions
7.3 Financial account
(EUR billions and annual growth rates; outstanding amounts and growth rates at end of period; transactions during period)
5. Other investment assets

Total
Eurosystem
MFIs
General
Other sectors

(excluding Eurosystem)
government

Total
Loans/
Other
Total
Loans/
Other
Trade Loans/currency
Trade Loans/currency
currency
assets
currency
assets
credits
and deposits
credits and deposits
and
and
deposits
deposits
Currency
Currency
and
and
deposits
deposits
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
Outstanding amounts (international investment position)
2007
5,382.9
36.9
35.6
1.4
3,354.4
3,283.2
71.2
107.8
12.7
48.8
13.7
1,883.7
196.2 1,520.0
473.1

2008
5,468.8
28.8
27.7
1.0
3,280.7
3,221.6
59.1
101.0
12.1
40.9
7.2
2,058.3
186.1 1,647.7
461.7
2009 Q4
4,929.1
29.7
29.4
0.3
2,842.3
2,811.7
30.6
123.8
8.4
62.2
10.0
1,933.3
184.9 1,514.8
409.3

2010 Q1
5,132.1
24.1
23.8
0.3
2,966.9
2,933.1
33.8
122.2
8.4
58.3
6.5
2,018.9
187.0 1,584.5
425.4
Transactions
2007
962.8
22.0
22.0
0.0
546.7
539.5
7.2
-7.8
-1.4
-7.4
-5.5
401.9
14.1
344.9
54.9
2008
85.3
-9.4
-9.4
0.0
-48.4
-64.8
16.5
-7.0
-1.1
-7.2
-6.0
150.0
2.8
88.3
-41.1
2009
-491.0
-2.4
-2.4
0.0
-417.4
-396.9
-20.5
9.6
-0.3
8.0
1.1
-80.9
3.0
-86.6
-21.3
2009 Q3
-91.0
-6.7
-6.7
0.0
-83.6
-81.3
-2.3
0.0
-0.3
0.1
-4.0
-0.6
0.4
2.1
14.7
Q4
-21.4
5.5
5.5
0.0
-7.3
-5.2
-2.1
6.7
0.0
6.3
1.1
-26.2
0.5
-28.3
-20.3

2010 Q1
84.4
-7.0
-7.0
0.0
55.7
52.6
3.2
-7.3
-0.1
-8.0
-3.7
43.0
-1.0
31.4
-0.8
2010 Jan.
65.7
-5.1
.
. 62.6
.
. -4.2
.
. -2.9
12.4
. . -0.7
Feb.
27.4
-1.7
. .
15.3
. .
-1.0
.
.
0.9
14.9
.
.
4.0
Mar.
-8.7
-0.2
.
. -22.1
.
. -2.2
.
. -1.6
15.8
. . -4.1

Apr.
96.2
1.2
.
. 70.7
.
. 4.9
. . 4.9
19.4
. . 5.7
May
82.7
-3.9
.
. 74.3
.
. 0.5
. . 0.6
11.7
. . 1.8
Growth rates
2007
21.2
157.3
173.7
-1.7
18.6
18.8
11.3
-6.5
-9.8
-12.6
-28.6
27.2
7.5
29.6
13.9

2008
1.6
-26.2
-26.9
5.0
-1.4
-2.0
23.4
-6.5
-8.9
-14.7
-43.8
8.0
1.4
5.9
-8.9
2009 Q3
-12.2
-42.5
-43.9
4.1
-18.3
-18.4
-23.1
3.5
-4.7
7.8
-13.4
-1.6
-3.8
-1.6
0.6

Q4
-9.0
-10.6
-11.7
0.2
-12.7
-12.3
-36.8
9.0
-2.4
16.5
16.2
-3.9
1.5
-5.5
-3.7
2010 Q1
-3.0
-4.7
-4.8
1.6
-4.0
-3.6
-27.8
-3.7
-3.5
-11.1
-67.2
-1.2
2.8
-3.0
-3.2
6. Other investment liabilities

Total
Eurosystem
MFIs
General
Other sectors

(excluding Eurosystem)
government

Total
Loans/
Other
Total
Loans/
Other
Total
Trade
Loans
Other
Total
Trade
Loans
Other
currency
liabilities
currency
liabilities
credits
liabilities
credits
liabilities
and
and
deposits
deposits
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
Outstanding amounts (international investment position)
2007
5,468.6
201.7
201.4
0.2
3,935.1
3,872.6
62.5
52.3
0.0
46.9
5.4
1,279.5
156.9
1,009.7
112.8

2008
5,653.6
482.3
481.9
0.4
3,751.8
3,698.1
53.6
61.9
0.0
58.0
3.9
1,357.6
170.2
1,069.6
117.8
2009 Q4
4,920.1
251.9
251.6
0.3
3,398.0
3,359.7
38.3
55.1
0.0
51.1
4.0
1,215.1
175.1
927.0
113.0

2010 Q1
5,129.9
252.1
251.4
0.8
3,578.1
3,534.8
43.2
60.7
0.0
56.5
4.1
1,239.1
174.2
938.4
126.5
Transactions
2007
943.1
89.6
89.6
0.0
625.1
620.4
4.6
-1.0
0.0
-2.0
1.0
229.5
10.0
220.5
-1.1
2008
169.0
280.7
280.6
0.1
-178.9
-190.0
11.1
9.4
0.0
10.8
-1.4
57.8
10.9
47.3
-0.4
2009
-724.3
-228.2
-233.0
4.7
-357.1
-345.8
-11.3
-6.9
0.0
-6.8
-0.1
-132.1
0.9
-110.6
-22.4
2009 Q3
-153.8
-43.5
-43.7
0.3
-79.5
-80.1
0.6
0.7
0.0
1.2
-0.5
-31.5
1.0
-20.8
-11.7
Q4
-98.3
-13.3
-13.1
-0.2
-84.0
-84.7
0.8
-3.9
0.0
-4.6
0.7
2.9
1.1
7.1
-5.3

2010 Q1
124.2
-5.3
-5.7
0.4
100.6
95.7
4.9
5.8
0.0
6.1
-0.3
23.0
-1.9
15.9
9.0
2010 Jan.
62.1
-6.9
. .
72.1
. .
1.1
. . .
-4.3
. . .
Feb.
38.7
3.3
. .
30.5
. .
4.9
. . .
0.0
. . .
Mar.
23.4
-1.7
. .
-2.0
. .
-0.2
. . .
27.3
. . .

Apr.
83.7
2.0
. .
90.4
. .
1.0
. . .
-9.7
. . .
May
56.1
9.6
. .
34.9
. .
7.0
. . .
4.7
. . .
Growth rates
2007
20.0
68.1
68.2
-6.9
18.0
18.2
9.2
-1.8
27.4
-4.0
20.7
20.9
6.8
26.4
0.5

2008
3.2
141.3
141.4
20.8
-4.5
-4.9
17.8
18.1
-20.1
23.0
-25.1
4.5
6.8
4.6
-0.9
2009 Q3
-14.9
-27.7
-29.0
935.0
-16.3
-16.4
-13.9
11.8
234.7
13.2
-9.0
-8.0
-3.1
-8.8
-8.7

Q4
-12.7
-47.1
-48.1
644.2
-9.5
-9.3
-20.3
-11.0
-148.2
-11.6
-3.9
-9.6
0.3
-10.3
-18.1
2010 Q1
-6.5
-37.6
-38.4
114.0
-3.9
-3.8
-8.0
0.4
-141.7
-0.4
14.5
-4.5
2.2
-5.4
-7.9
Source: ECB.
ECB
Monthly Bulletin
August 2010 S 67

7.3 Financial account
(EUR billions and annual growth rates; outstanding amounts and growth rates at end of period; transactions during period)
7. Reserve assets

Reserve assets
Memo

items

Total Monetary gold
SDR Reserve
Foreign exchange
Other
Other
Pre-
SDR
holdings position

claims
foreign determined
allo-
In
In fine
in the
Total
Currency and
Securities
Financial
currency
short-term cations
EUR
troy
IMF
deposits

derivatives
assets
net
billions
ounces
drains
(millions)
With
With
Total
Equity Bonds
Money
on
monetary banks
and
market
foreign
authorities
notes instruments
currency
and the BIS
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
Outstanding amounts (international investment position)
2006
325.8
176.3
365.213
4.6
5.2 139.7
6.3
22.5
110.7
0.5
79.3
30.8
0.3
0.0
24.6
-21.5
5.6
2007
347.2
201.0
353.688
4.6
3.6 138.0
7.2
22.0
108.5
0.4
87.8
20.3
0.3
0.0
44.3
-38.5
5.3

2008
374.2
217.0
349.207
4.7
7.3 145.1
7.6
8.0
129.5
0.6 111.3
17.6
0.0
0.1
262.8
-245.7
5.5
2009 Q3
430.8
236.1
347.217
49.8
11.7 133.2
12.7
7.1
113.2
0.5
89.8
22.9
0.2
0.0
56.7
-42.4
50.9
Q4
462.4
266.1
347.180
50.8
10.5 134.9
11.7
8.1
115.2
0.5
92.0
22.7
-0.1
0.0
32.1
-24.2
51.2

2010 Q1
498.7
287.3
347.176
52.7
12.4 146.3
9.9
10.6
126.1
0.6
99.6
26.0
-0.3
0.0
28.8
-23.0
53.0

2010 May
569.7
340.6
347.163
55.6
16.2 157.3
5.0
16.5
136.4
- -
- -0.5
0.0
36.3
-28.2
55.9
June
583.3
351.9
347.156
56.3
16.3 158.8
9.2
13.0
136.8
- -
- -0.3
0.0
32.5
-24.2
56.7
Transactions
2007
5.1
-3.2
- 0.3
-0.9
8.8
1.0
1.6
6.2
0.0
14.5
-8.3
0.0
0.0
-
- -
2008
3.4
-2.7
- -0.1
3.8
2.4
5.0
-15.7
11.8
0.1
15.8
-4.1
1.3
0.0
-
- -

2009
-4.5
-2.0
- 0.5
3.4
-6.3
3.3
-1.2
-9.5
0.0
-14.1
4.6
1.2
0.0
-
- -
2009 Q3
-0.3
-0.2
- 0.3
0.6
-1.0
2.3
0.3
-3.8
0.0
-7.0
3.2
0.2
0.0
-
- -

Q4
0.1
0.0
- 0.7
-1.4
0.8
-0.9
0.5
1.1
0.0
1.5
-0.4
0.1
0.0
-
- -
2010 Q1
4.6
0.0
- -0.2
1.8
3.1
-2.5
2.0
3.6
0.0
1.9
1.7
-0.1
0.0
-
- -
Growth rates
2006
0.3
-2.4
- 11.6
-49.0
7.7
-48.4
12.7
13.4
0.0
29.2
-15.3
- -
-
- -
2007
1.6
-1.7
- 7.3
-18.3
6.3
14.9
6.4
5.7
1.1
18.6
-27.6
- - -
- -

2008
1.0
-1.3
- -2.6
105.3
1.7
67.7
-68.9
10.8
28.0
17.9
-20.6
- - -
- -
2009 Q3
-1.1
-1.3
- -2.9
200.8
-6.2
60.3
-70.1
-2.7
1.3
-8.9
34.6
- - -
- -
Q4
-1.2
-0.9
- -2.6
44.6
-4.3
43.1
-22.6
-7.3
1.0
-12.8
25.6
- - -
- -

2010 Q1
1.3
-0.5
- -3.8
51.2
1.9
-12.8 147.7
-1.6
1.0
-5.3
15.7
- -
-
- -
8. Gross external debt

Total
By instrument
By sector (excluding direct investment)

Loans,
Money
Bonds
Trade
Other debt
Direct investment:
General
Eurosystem
MFIs
Other
currency
market
and notes
credits
liabilities
inter-company government
(excluding
sectors
and
instruments
lending
Eurosystem)
deposits
1
2
3
4
5
6
7
8
9
10
11
Outstanding amounts (international investment position)
2006
8,683.9
4,425.5
217.5
2,697.9
144.1
150.8
1,048.0
1,115.2
116.3
4,586.8
1,817.5
2007
9,972.8
5,130.6
243.0
3,041.1
157.0
181.0
1,220.2
1,246.8
201.7
5,220.1
2,084.0

2008
10,941.3
5,307.6
443.3
3,466.5
170.2
175.8
1,377.8
1,692.0
482.3
5,124.4
2,264.7
2009 Q3
10,461.0
4,677.0
546.8
3,502.3
179.4
150.8
1,404.6
1,934.4
264.3
4,691.5
2,166.1
Q4
10,388.7
4,589.4
558.8
3,510.1
175.1
155.7
1,399.7
1,992.9
251.9
4,635.0
2,109.2

2010 Q1
10,781.6
4,781.1
554.6
3,733.5
174.3
174.6
1,363.7
2,106.9
252.1
4,881.0
2,177.9
Outstanding amounts as a percentage of GDP
2006
101.4
51.7
2.5
31.5
1.7
1.8
12.2
13.0
1.4
53.6
21.2
2007
110.6
56.9
2.7
33.7
1.7
2.0
13.5
13.8
2.2
57.9
23.1

2008
118.2
57.3
4.8
37.4
1.8
1.9
14.9
18.3
5.2
55.4
24.5
2009 Q3
116.1
51.9
6.1
38.9
2.0
1.7
15.6
21.5
2.9
52.1
24.0
Q4
115.8
51.2
6.2
39.1
2.0
1.7
15.6
22.2
2.8
51.7
23.5

2010 Q1
119.9
53.2
6.2
41.5
1.9
1.9
15.2
23.4
2.8
54.3
24.2
Source: ECB.
ECB
S Monthly Bulletin
68 August 2010

EURO AREA
STATISTICS
External
transactions
and
positions
7.3 Financial account
(EUR billions; outstanding amounts at end of period; transactions during period)
9. Geographical breakdown

Total
EU Member States outside the euro area
Canada China Japan Switzer- United Offshore
Interna-
Other
land
States financial
tional countries
Total Denmark Sweden
United Other EU
EU
centres organisa-
Kingdom countries institutions
tions
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15

2008

Outstanding amounts (international investment position)

Direct investment
527.4
-93.0
-2.1
-30.2
-293.9
233.6
-0.3
41.1
35.2
-9.5
126.2
-68.7
-7.1
-0.2
503.3
Abroad
3,744.4 1,255.3
34.9
93.9
865.7
260.8
0.0
104.1
38.8
71.7
384.5
734.6
418.5
0.1
736.8

Equity/reinvested earnings 2,946.9
967.5
30.1
60.3
660.1
216.9
0.0
83.3
32.0
53.6
335.3
551.3
386.7
0.0
537.4

Other capital
797.5
287.9
4.8
33.6
205.7
43.8
0.0
20.7
6.9
18.1
49.2
183.4
31.9
0.0
199.4
In the euro area
3,217.0 1,348.3
37.0
124.1
1,159.7
27.1
0.3
63.0
3.6
81.2
258.3
803.3
425.6
0.3
233.4

Equity/reinvested earnings 2,405.5 1,096.8
28.3
97.4
956.9
13.9
0.2
50.6
0.8
68.7
191.1
590.8
284.1
0.1
122.5

Other capital
811.6
251.5
8.7
26.7
202.8
13.2
0.1
12.4
2.9
12.5
67.2
212.5
141.6
0.2
110.9
Portfolio investment assets
3,763.9 1,242.2
63.7
122.4
895.5
80.7
80.0
82.8
25.6
213.4
95.4 1,225.8
458.4
30.5
389.8
Equity
1,162.7
228.7
6.4
19.9
191.7
9.8
0.9
18.2
22.8
84.5
81.3
378.8
197.8
2.0
148.6
Debt instruments
2,601.3 1,013.6
57.3
102.5
703.7
71.0
79.1
64.6
2.9
128.8
14.1
847.0
260.6
28.5
241.3

Bonds and notes
2,179.1
849.1
50.3
81.5
569.1
70.3
77.8
61.6
2.3
61.7
12.6
705.4
238.2
28.4
219.9

Money market instruments
422.1
164.5
6.9
21.0
134.6
0.6
1.3
3.0
0.6
67.1
1.5
141.5
22.4
0.1
21.4
Other investment
-184.8
-91.1
51.1
28.0
-110.4
108.8
-168.6
-6.2
-16.0
-10.2
-131.2
-286.3
-0.4
1.8
354.8
Assets
5,468.8 2,419.7
100.9
83.3
2,020.2
201.8
13.4
25.7
34.0
109.4
276.5
852.5
638.2
58.7
1,054.0

General government
101.0
15.0
0.7
0.4
3.6
0.7
9.7
0.0
1.8
0.2
0.1
3.4
1.4
40.1
39.1

MFIs
3,309.5 1,731.1
83.9
58.3
1,419.1
167.9
1.9
16.8
14.5
79.0
164.5
418.9
367.7
18.2
498.8

Other sectors
2,058.3
673.5
16.4
24.6
597.5
33.3
1.8
8.9
17.7
30.3
111.9
430.2
269.2
0.5
516.2
Liabilities
5,653.6 2,510.8
49.8
55.3
2,130.6
93.0
182.0
32.0
50.0
119.5
407.7 1,138.8
638.6
57.0
699.2

General government
61.9
32.5
0.0
0.1
2.5
0.0
29.7
0.0
0.0
0.6
0.5
7.0
0.3
17.7
3.3

MFIs
4,234.1 1,907.6
38.9
33.5
1,664.9
70.0
100.2
24.4
32.1
91.2
328.7
751.1
535.1
36.8
527.2

Other sectors
1,357.6
570.8
10.8
21.7
463.2
23.0
52.0
7.5
17.9
27.8
78.6
380.8
103.2
2.5
168.7

2009 Q2 to 2010 Q1

Cumulated transactions

Direct investment
49.3
1.8
1.7
-7.3
3.2
4.2
0.0
0.6
2.1
1.9
13.7
-28.8
44.3
-0.2
14.0
Abroad
227.8
37.3
2.8
5.8
29.9
-1.2
0.0
8.5
2.4
2.0
34.8
56.4
42.3
0.0
44.2

Equity/reinvested earnings
168.8
30.4
1.6
5.6
22.8
0.3
0.0
9.4
-0.7
2.4
13.5
51.8
32.8
0.0
29.1

Other capital
59.0
6.9
1.2
0.2
7.1
-1.5
0.0
-1.0
3.0
-0.5
21.3
4.6
9.5
0.0
15.1
In the euro area
178.5
35.4
1.0
13.1
26.7
-5.4
0.0
7.9
0.3
0.1
21.1
85.2
-2.0
0.2
30.3

Equity/reinvested earnings
233.8
56.3
1.1
19.5
40.0
-4.3
0.0
7.6
0.3
2.3
11.8
87.2
51.1
0.2
16.9

Other capital
-55.2
-20.9
-0.1
-6.4
-13.3
-1.1
0.0
0.3
0.0
-2.2
9.3
-1.9
-53.2
0.0
13.4
Portfolio investment assets
203.7
102.9
12.2
28.1
28.0
13.2
21.4
5.5
8.4
-15.7
5.1
26.2
-33.9
-0.2
105.3
Equity
117.9
24.9
1.1
3.1
20.1
0.7
0.0
2.8
8.9
13.6
5.8
21.7
-7.4
0.0
47.7
Debt instruments
85.7
78.0
11.2
25.0
7.9
12.5
21.4
2.7
-0.5
-29.4
-0.7
4.5
-26.4
-0.2
57.6

Bonds and notes
131.3
98.9
7.9
27.5
34.7
11.1
17.7
1.8
-0.6
-17.8
0.9
8.8
-16.3
-0.3
56.0

Money market instruments
-45.6
-20.9
3.2
-2.5
-26.8
1.4
3.7
0.9
0.2
-11.5
-1.6
-4.3
-10.1
0.1
1.6
Other investment
181.8
-65.9
0.6
-6.1
-40.9
-22.7
3.2
6.2
24.7
-5.2
55.0
150.7
79.6
-0.5
-62.7
Assets
-175.2
-38.9
9.2
0.6
-42.1
-8.5
2.0
-0.4
5.1
-10.2
-34.4
-83.2
25.4
1.6
-40.1

General government
-4.2
-5.8
-0.3
5.0
-10.7
0.0
0.1
0.0
-0.1
0.0
-0.1
0.0
-0.1
1.1
0.8

MFIs
-126.3
-33.4
8.5
-7.0
-27.3
-8.6
1.0
-0.7
2.4
-8.0
-10.8
-39.4
14.1
0.4
-50.9

Other sectors
-44.8
0.3
1.0
2.5
-4.2
0.1
1.0
0.3
2.7
-2.2
-23.6
-43.8
11.5
0.0
10.0
Liabilities
-357.0
27.1
8.6
6.7
-1.2
14.1
-1.1
-6.6
-19.6
-5.0
-89.4
-233.9
-54.2
2.1
22.6

General government
0.2
1.1
0.0
0.0
0.7
0.0
0.4
0.1
0.0
-0.1
0.0
0.2
0.0
-1.2
0.1

MFIs
-295.6
57.4
9.5
5.2
39.5
9.6
-6.4
-4.2
-19.3
-7.3
-93.3
-172.0
-58.6
3.4
-1.7

Other sectors
-61.6
-31.4
-0.9
1.5
-41.4
4.6
4.9
-2.4
-0.3
2.4
3.8
-62.1
4.4
-0.1
24.2
Source: ECB.
ECB
Monthly Bulletin
August 2010 S 69

7.4 Monetary presentation of the balance of payments 1)
(EUR billions; transactions)

B.o.p. items mirroring net transactions by MFIs

Total
Current
Transactions by non-MFIs
Financial
Errors
and

derivatives
and
capital
Direct investment
Portfolio investment
Other investment
omissions
account

balance
By
By non-
Assets
Liabilities
Assets
Liabilities
resident
resident
units
units in
Equity
Debt
Equity
Debt
abroad
euro area
instruments
instruments
1
2
3
4
5
6
7
8
9
10
11
12
2007
-114.3
25.6
-459.4
395.0
-38.8
-162.6
144.5
218.4
-394.3
228.5
-64.0
-7.4
2008
-224.1
-137.0
-329.3
124.5
65.5
-22.4
-202.2
435.4
-143.8
67.7
-62.4
-20.2
2009
85.0
-49.7
-263.2
203.7
-48.0
-121.5
114.4
268.3
71.3
-139.0
42.1
6.8
2009 Q1
-38.4
-35.8
-83.6
36.5
32.5
4.9
-48.1
116.5
-13.3
-48.8
15.8
-15.1
Q2
77.9
-19.8
-79.7
85.7
-9.7
-73.1
46.3
90.2
64.5
-58.3
22.9
8.9
Q3
3.5
-2.2
-63.3
36.9
-35.9
-23.2
77.7
33.4
0.7
-30.9
-4.5
14.8
Q4
42.0
8.0
-36.6
44.6
-34.9
-30.2
38.4
28.1
19.5
-1.0
7.9
-1.8

2010 Q1
-71.7
-22.9
-34.0
4.2
-25.3
-46.9
26.4
33.3
-35.7
28.8
1.8
-1.6
2009 May
6.3
-13.5
-5.3
20.6
-1.9
-33.9
26.5
29.9
83.7
-113.4
9.4
4.1
June
53.6
1.8
-15.7
-7.6
-13.1
6.7
45.8
18.0
-11.8
14.1
0.5
14.8
July
0.6
9.0
-10.8
18.9
-16.5
-21.2
35.3
-33.5
2.2
0.3
6.4
10.4
Aug.
20.4
-5.5
-13.9
17.1
-12.1
-22.1
48.3
5.1
9.4
-12.2
-9.8
16.3
Sep.
-17.5
-5.6
-38.6
0.9
-7.3
20.1
-5.9
61.8
-10.9
-18.9
-1.1
-11.9
Oct.
14.6
-1.6
-18.9
23.8
-13.1
-9.8
-21.2
46.4
-28.0
35.0
1.6
0.5
Nov.
-7.9
-1.4
-11.9
10.6
-14.7
-18.3
6.7
10.8
2.6
9.6
-0.1
-2.0
Dec.
35.3
11.0
-5.9
10.2
-7.1
-2.0
53.0
-29.1
44.9
-45.7
6.4
-0.4
2010 Jan.
-29.5
-12.8
6.9
4.3
-11.6
-12.0
-7.4
30.0
-8.2
-3.2
3.6
-19.2
Feb.
-8.4
-7.9
-11.9
-6.0
-1.9
-10.5
30.6
-7.4
-13.9
4.9
-0.7
16.3
Mar.
-33.7
-2.1
-29.0
6.0
-11.8
-24.4
3.2
10.7
-13.6
27.1
-1.0
1.3
Apr.
-44.8
-7.7
-14.6
2.3
-3.7
-12.4
-4.9
29.8
-24.3
-8.7
0.3
-1.0

May
30.8
-14.7
-15.4
-4.0
13.6
-17.1
17.7
56.5
-12.2
11.6
-2.2
-3.1

12-month cumulated transactions

2010 May
13.4
-37.6
-179.6
76.4
-99.3
-123.1
201.3
199.2
-63.9
14.0
3.9
22.2
C36 Main b.o.p. items mirroring developments in MFI net external transactions 1)
(EUR billions; 12-month cumulated transactions)
total mirroring net external transactions by MFIs
current and capital account balance
direct and portfolio equity investment abroad by non-MFIs
portfolio investment liabilities of non-MFIs in the form of debt instruments
600
600
400
400
200
200
0
0
-200
-200
-400
-400
-600
-600
2007
2008
2009
Source: ECB.
1)
Data refer to the changing composition of the euro area. For further information, see the General Notes.
ECB
S Monthly Bulletin
70 August 2010

EURO AREA
STATISTICS
External
transactions
and
positions
7.5 Trade in goods
1. Values and volumes by product group 1)
(seasonally adjusted, unless otherwise indicated)

Total (n.s.a.)
Exports (f.o.b.)
Imports (c.i.f.)

Total
Memo item:
Total
Memo items:
Exports
Imports
Intermediate
Capital Consumption Manufacturing
Intermediate
Capital Consumption Manufacturing
Oil
1
2
3
4
5
6
7
8
9
10
11
12
13
Values (EUR billions; annual percentage changes for columns 1 and 2)
2008
3.9
8.1
1,561.7
771.0
338.0
414.0
1,305.8
1,610.5
1,019.3
233.3
334.0
1,021.4
293.6

2009
-18.1
-22.1
1,275.6
625.5
261.7
352.9
1,062.5
1,258.7
725.7
191.9
313.6
838.5
174.4
2009 Q2
-22.9
-26.8
310.1
153.2
63.7
85.2
258.2
304.5
172.5
47.4
77.3
204.0
41.6
Q3
-19.6
-25.7
318.8
157.1
64.6
88.6
266.3
313.1
179.6
47.5
78.8
207.2
47.5
Q4
-8.6
-14.5
330.3
163.2
67.3
92.5
275.7
320.8
189.4
47.3
78.1
211.5
49.2

2010 Q1
12.7
9.6
353.7
175.3
68.4
98.4
292.9
349.8
209.0
51.7
81.8
231.7
53.2
2009 Dec.
-0.8
-5.6
112.2
55.4
23.5
30.9
93.7
109.3
64.4
16.3
26.6
71.6
16.5
2010 Jan.
4.1
1.1
112.3
56.5
20.5
31.4
92.3
111.1
66.9
16.4
27.0
74.5
17.4
Feb.
9.7
6.4
115.9
57.6
22.5
32.2
94.6
113.5
68.2
16.3
26.4
74.7
16.1
Mar.
22.6
20.8
125.5
61.3
25.5
34.8
106.0
125.1
74.0
19.0
28.4
82.4
19.6
Apr.
17.4
20.1
121.6
61.0
23.5
33.4
100.7
121.4
73.6
17.3
27.1
79.6
19.2

May
23.5
29.8
123.6
. .
. 103.0
126.5
. .
.
82.1
.
Volume indices (2000 = 100; annual percentage changes for columns 1 and 2)
2008
1.4
0.1
143.4
136.7
154.2
147.0
142.3
126.9
119.3
140.4
144.5
133.3
108.1

2009
-16.7
-14.6
119.2
114.7
117.8
126.7
115.5
108.8
99.7
113.8
135.0
110.4
97.1
2009 Q2
-21.6
-19.3
116.6
113.3
115.1
122.5
112.7
106.1
96.4
110.6
133.4
107.0
97.5
Q3
-17.5
-15.9
119.0
115.4
116.0
126.7
115.9
107.1
96.5
114.3
135.5
109.9
95.3
Q4
-6.0
-7.9
123.8
119.8
121.8
133.5
120.7
110.8
102.1
115.1
137.9
114.1
95.4

2010 Q1
11.3
4.0
129.7
125.5
123.3
138.1
126.1
115.2
106.2
121.5
140.1
121.1
94.9
2009 Dec.
1.0
-2.7
125.3
121.5
126.5
132.2
122.5
112.1
102.4
118.5
140.0
115.3
94.3
2010 Jan.
3.5
-3.2
124.6
121.8
111.3
134.1
119.8
111.4
104.1
116.9
138.0
117.5
95.2
Feb.
8.9
1.6
127.4
123.7
121.5
134.7
121.9
112.5
104.1
115.9
136.2
117.5
87.7
Mar.
20.1
13.3
137.2
131.0
137.3
145.4
136.5
121.9
110.4
131.9
146.2
128.3
101.8
Apr.
12.5
8.1
131.8
128.6
126.2
138.7
128.9
115.6
106.6
120.6
136.2
121.9
92.6

May
. . .
. .
.
. .
. .
.
. .
2. Prices 2)
(annual percentage changes, unless otherwise indicated)

Industrial producer export prices (f.o.b.) 3)
Industrial import prices (c.i.f.)

Total
Total
Memo
Total
Total
Memo
(index:
item:
(index:
item:
2005 = 100)
Intermediate
Capital Consumer
Energy Manufac-
2005 = 100)
Intermediate
Capital Consumer
Energy Manufac-
goods
goods
goods
turing
goods
goods
goods
turing
% of total
100.0
100.0
32.2
46.3
17.7
3.8
99.4
100.0
100.0
28.4
27.9
22.1
21.6
81.1
1
2
3
4
5
6
7
8
9
10
11
12
13
14
2008
103.5
1.6
1.5
-0.4
2.4
25.2
1.5
112.7
6.5
0.2
-3.4
2.4
28.2
0.8

2009
100.9
-2.5
-4.1
0.6
0.5
-26.5
-2.5
102.2
-9.4
-5.8
-0.8
0.2
-26.5
-3.8
2009 Q4
100.6
-2.0
-5.2
-1.1
-0.5
6.8
-1.9
103.4
-3.3
-4.9
-2.1
-2.9
-2.9
-3.2
2010 Q1
102.5
1.3
-0.3
-0.2
0.7
37.8
1.4
107.6
6.1
2.5
-1.1
-0.9
26.7
1.5

Q2
104.9
3.9
5.0
0.8
2.4
. 4.0
. .
. 0.7
. . .
2010 Jan.
101.8
0.4
-1.7
-0.7
0.4
32.2
0.5
106.2
4.6
0.5
-1.4
-1.3
22.9
0.4
Feb.
102.6
1.2
-0.5
-0.1
0.4
36.5
1.3
107.3
5.5
2.0
-1.1
-1.2
25.3
1.1
Mar.
103.3
2.3
1.3
0.3
1.1
44.4
2.4
109.3
8.1
5.0
-0.8
-0.3
31.8
2.9
Apr.
104.3
3.5
3.6
0.2
1.6
47.9
3.6
112.0
11.4
8.5
-0.5
0.7
41.4
4.6

May
105.2
4.3
5.4
0.9
2.7
35.3
4.3
112.9
11.7
11.4
0.9
2.9
33.6
6.4
June
105.2
4.0
5.9
1.3
2.9
. 4.0
. .
. 1.8
. . .
Source: Eurostat.
1)
Product groups as classified in the Broad Economic Categories. Unlike the product groups shown in Table 2, intermediate and consumption product groups include
agricultural and energy products.
2)
Product groups as classified in the Main Industrial Groupings. Unlike the product groups shown in Table 1, intermediate and consumer goods do not include
energy products, and agricultural goods are not covered. Manufacturing has a different composition compared with the data shown in columns 7 and 12 of Table 1. Data shown
are price indices which follow the pure price change for a basket of products and are not simple ratios of the value and volume data shown in Table 1, which are affected
by changes in the composition and quality of traded goods. These indices differ from the GDP deflators for imports and exports (shown in Table 3 in Section 5.1), mainly
because those deflators include all goods and services and cover cross-border trade within the euro area.
3)
Industrial producer export prices refer to direct transactions between domestic producers and non-domestic customers. Contrary to the data shown for values and volumes in
Table 1, exports from wholesalers and re-exports are not covered.
ECB
Monthly Bulletin
August 2010 S 71

7.5 Trade in goods
(EUR billions, unless otherwise indicated; seasonally adjusted)
3. Geographical breakdown

Total EU Member States outside the euro area
Russia Switzer-
Turkey
United
Asia
Africa
Latin
Other
land
States
America countries
Denmark
Sweden
United
Other EU
China
Japan
Kingdom
countries
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
Exports (f.o.b.)
2008
1,561.7
35.1
53.9
220.4
233.7
78.5
86.7
42.7
187.2
309.5
65.7
33.7
100.2
68.1
145.5

2009
1,275.6
27.5
41.1
174.7
177.3
49.4
78.7
34.4
152.3
282.2
68.0
28.7
91.5
53.9
112.8
2008 Q4
362.6
8.1
11.5
48.6
52.6
17.8
21.2
8.4
44.3
74.1
15.8
8.1
24.9
17.2
33.9
2009 Q1
316.4
7.3
10.0
42.7
43.7
12.6
20.2
7.7
39.5
66.6
15.2
7.1
23.3
13.0
29.8
Q2
310.1
6.7
9.8
42.7
42.8
12.2
19.1
8.3
38.3
69.5
16.8
7.0
22.6
12.5
25.8
Q3
318.8
6.9
10.5
44.5
44.9
12.1
19.3
9.1
36.4
70.9
17.4
7.2
22.4
14.0
27.8
Q4
330.3
6.7
10.8
44.8
45.9
12.5
20.1
9.3
38.1
75.2
18.6
7.4
23.1
14.4
29.4

2010 Q1
353.7
6.9
11.7
46.5
47.8
13.4
21.4
10.7
41.5
81.5
22.2
8.0
24.9
16.7
30.8
2009 Dec.
112.2
2.2
3.6
15.3
15.3
4.2
6.7
3.2
12.9
26.1
6.2
2.6
7.8
4.9
9.9
2010 Jan.
112.3
2.2
3.7
15.3
15.4
4.1
7.0
3.4
12.8
25.7
6.9
2.6
7.9
4.8
9.9
Feb.
115.9
2.3
3.8
14.8
15.6
4.2
6.9
3.5
12.8
26.7
7.4
2.7
8.4
5.8
11.0
Mar.
125.5
2.4
4.1
16.4
16.8
5.1
7.4
3.8
15.8
29.0
7.9
2.8
8.6
6.1
9.8
Apr.
121.6
2.4
4.1
15.7
16.3
5.1
7.4
3.8
14.6
27.9
7.5
2.8
8.6
5.7
9.9

May
123.6
. . . .
5.1
7.5
3.5
14.3
28.8
7.8
2.9
8.4
6.3
.

Percentage share of total exports

2009
100.0
2.2
3.2
13.7
13.9
3.9
6.2
2.7
11.9
22.1
5.3
2.3
7.2
4.2
8.8
Imports (c.i.f.)
2008
1,610.5
30.7
52.2
164.8
184.9
122.0
70.0
32.4
135.8
480.0
185.5
57.4
141.2
81.7
114.9

2009
1,258.7
26.5
37.8
126.1
162.3
81.4
64.9
26.2
116.0
376.1
159.3
42.9
93.6
59.1
88.5
2008 Q4
373.5
7.4
11.5
36.6
43.1
24.8
17.5
7.1
33.2
113.9
47.7
13.3
30.9
20.2
27.4
2009 Q1
320.3
6.9
9.5
31.4
39.0
17.8
16.7
6.6
31.8
97.0
41.6
11.5
23.8
14.7
25.1
Q2
304.5
6.5
9.0
30.7
39.4
18.1
16.0
6.3
30.1
92.2
39.3
10.1
22.9
14.2
19.2
Q3
313.1
6.8
9.7
31.8
41.1
21.8
16.1
6.6
26.0
93.1
39.0
10.7
22.6
14.8
22.6
Q4
320.8
6.4
9.6
32.2
42.9
23.7
16.0
6.8
28.0
93.8
39.4
10.6
24.3
15.5
21.5

2010 Q1
349.8
6.4
10.4
34.9
44.9
24.4
17.1
7.4
28.9
108.9
46.3
11.7
26.8
16.5
23.1
2009 Dec.
109.3
2.1
3.4
11.0
14.5
7.9
5.5
2.1
9.5
31.8
13.7
3.5
8.5
5.3
7.7
2010 Jan.
111.1
2.1
3.2
11.4
14.5
8.2
5.6
2.5
9.6
34.0
13.4
3.8
8.2
5.2
6.6
Feb.
113.5
2.1
3.3
11.5
14.9
7.3
5.7
2.3
9.4
34.2
14.3
3.6
8.9
5.4
8.6
Mar.
125.1
2.3
3.9
12.0
15.4
8.9
5.9
2.6
9.9
40.7
18.7
4.2
9.7
5.9
8.0
Apr.
121.4
2.1
3.6
11.6
15.3
8.7
6.0
2.5
9.9
39.0
16.4
4.0
10.0
5.8
7.0

May
126.5
. . . .
9.8
6.3
2.4
9.8
40.3
17.4
4.1
9.7
5.8
.

Percentage share of total imports

2009
100.0
2.1
3.0
10.0
12.9
6.5
5.2
2.1
9.2
29.9
12.7
3.4
7.4
4.7
7.0
Balance
2008
-48.8
4.4
1.7
55.7
48.8
-43.5
16.8
10.4
51.4
-170.5
-119.8
-23.6
-41.0
-13.6
30.6

2009
17.0
0.9
3.3
48.6
15.0
-32.0
13.8
8.1
36.3
-93.9
-91.3
-14.2
-2.2
-5.3
24.3
2008 Q4
-10.9
0.7
0.0
12.0
9.5
-7.1
3.7
1.3
11.1
-39.7
-31.9
-5.2
-6.0
-2.9
6.5
2009 Q1
-3.9
0.4
0.4
11.3
4.8
-5.1
3.5
1.1
7.6
-30.4
-26.3
-4.4
-0.5
-1.7
4.7
Q2
5.6
0.2
0.8
12.0
3.4
-5.9
3.0
2.0
8.2
-22.7
-22.5
-3.1
-0.3
-1.7
6.5
Q3
5.8
0.1
0.8
12.8
3.8
-9.7
3.2
2.5
10.4
-22.1
-21.6
-3.6
-0.2
-0.8
5.2
Q4
9.5
0.3
1.2
12.6
3.0
-11.2
4.1
2.5
10.1
-18.7
-20.8
-3.2
-1.2
-1.1
7.9

2010 Q1
4.0
0.5
1.3
11.6
2.9
-11.0
4.3
3.3
12.6
-27.4
-24.1
-3.6
-1.9
0.2
7.6
2009 Dec.
2.8
0.1
0.3
4.3
0.8
-3.7
1.2
1.1
3.3
-5.7
-7.5
-0.9
-0.7
-0.4
2.2
2010 Jan.
1.2
0.2
0.5
3.8
0.9
-4.1
1.5
0.9
3.2
-8.3
-6.4
-1.2
-0.3
-0.4
3.4
Feb.
2.4
0.2
0.5
3.3
0.7
-3.1
1.3
1.2
3.4
-7.5
-6.9
-1.0
-0.5
0.4
2.4
Mar.
0.3
0.1
0.3
4.4
1.3
-3.8
1.6
1.2
6.0
-11.6
-10.8
-1.4
-1.1
0.3
1.8
Apr.
0.1
0.3
0.5
4.2
1.0
-3.6
1.4
1.3
4.7
-11.0
-8.9
-1.2
-1.4
0.0
2.9

May
-3.0
. . . .
-4.7
1.2
1.1
4.5
-11.5
-9.6
-1.2
-1.3
0.5
.
Source: Eurostat.
ECB
S Monthly Bulletin
72 August 2010

EXCHANGE RATES
8
8.1 Effective exchange rates 1)
(period averages; index: 1999 Q1=100)

EER-21
EER-41
Nominal
Real
Real
Real
Real
Real
Nominal
Real
CPI
PPI
GDP
ULCM
ULCT
CPI
deflator
1
2
3
4
5
6
7
8
2007
106.3
106.8
105.2
102.6
106.8
100.8
113.0
104.2
2008
110.5
110.1
107.4
105.4
112.6
104.6
118.0
107.0

2009
111.7
110.6
105.9
106.3
119.1
106.9
120.6
107.8
2009 Q2
111.1
110.2
105.3
106.0
120.1
106.3
119.8
107.4
Q3
112.1
110.9
106.2
106.8
118.9
106.8
121.0
108.1
Q4
113.8
112.2
107.3
107.5
120.2
109.4
122.5
108.8
2010 Q1
108.7
106.9
102.3
102.4
114.5
104.1
116.9
103.2

Q2
103.1
101.8
97.5
. .
.
110.4
97.5
2009 July
111.6
110.5
105.8
- -
-
120.5
107.7
Aug.
111.7
110.6
106.0
- -
-
120.6
107.8
Sep.
112.9
111.6
106.9
- -
-
122.0
108.7
Oct.
114.3
112.8
108.2
- -
-
123.0
109.5
Nov.
114.0
112.5
107.6
- -
-
122.9
109.2
Dec.
113.0
111.2
106.2
- -
-
121.7
107.8
2010 Jan.
110.8
108.9
104.1
- -
-
119.1
105.4
Feb.
108.0
106.1
101.6
- -
-
116.2
102.5
Mar.
107.4
105.7
101.1
- -
-
115.2
101.8
Apr.
106.1
104.5
100.1
- -
-
113.5
100.3
May
102.8
101.4
97.0
- -
-
109.9
97.1
June
100.7
99.4
95.3
- -
-
107.7
95.2

July
102.5
101.2
97.2
- -
-
109.9
97.1

Percentage change versus previous month

2010 July
1.8
1.8
2.0
- -
- 2.1
2.0

Percentage change versus previous year

2010 July
-8.2
-8.5
-8.2
- -
- -8.8
-9.8
C37 Effective exchange rates
C38 Bilateral exchange rates
(monthly averages; index: 1999 Q1=100)
(monthly averages; index: 1999 Q1=100)
USD/EUR
nominal EER-21
JPY/EUR
real CPI-deflated EER-21
GBP/EUR
150
150 150
150
140
140 140
140
130
130 130
130
120
120 120
120
110
110 110
110
100
100 100
100
90
90
90
90
80
80
80
80
70
70
70
70
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Source: ECB.
1)
For a definition of the trading partner groups and other information, please refer to the General Notes.
ECB
Monthly Bulletin
August 2010 S 73

8.2 Bilateral exchange rates
(period averages; units of national currency per euro)
Danish
Swedish
Pound
US
Japanese
Swiss South Korean Hong Kong
Singapore
Canadian
Norwegian
Australian
krone
krona
sterling
dollar
yen
franc
won
dollar
dollar
dollar
krone
dollar
1
2
3
4
5
6
7
8
9
10
11
12
2007
7.4506
9.2501
0.68434
1.3705
161.25
1.6427
1,272.99
10.6912
2.0636
1.4678
8.0165
1.6348
2008
7.4560
9.6152
0.79628
1.4708
152.45
1.5874
1,606.09
11.4541
2.0762
1.5594
8.2237
1.7416

2009
7.4462
10.6191
0.89094
1.3948
130.34
1.5100
1,772.90
10.8114
2.0241
1.5850
8.7278
1.7727
2009 Q4
7.4424
10.3509
0.90483
1.4779
132.69
1.5088
1,725.91
11.4555
2.0604
1.5604
8.3932
1.6250
2010 Q1
7.4426
9.9464
0.88760
1.3829
125.48
1.4632
1,581.41
10.7364
1.9395
1.4383
8.1020
1.5293

Q2
7.4416
9.6313
0.85239
1.2708
117.15
1.4086
1,481.01
9.8857
1.7674
1.3054
7.9093
1.4403
2010 Jan.
7.4424
10.1939
0.88305
1.4272
130.34
1.4765
1,624.76
11.0783
1.9930
1.4879
8.1817
1.5624
Feb.
7.4440
9.9505
0.87604
1.3686
123.46
1.4671
1,582.70
10.6305
1.9326
1.4454
8.0971
1.5434
Mar.
7.4416
9.7277
0.90160
1.3569
123.03
1.4482
1,542.59
10.5313
1.8990
1.3889
8.0369
1.4882
Apr.
7.4428
9.6617
0.87456
1.3406
125.33
1.4337
1,494.53
10.4065
1.8505
1.3467
7.9323
1.4463
May
7.4413
9.6641
0.85714
1.2565
115.83
1.4181
1,465.81
9.7843
1.7503
1.3060
7.8907
1.4436
June
7.4409
9.5723
0.82771
1.2209
110.99
1.3767
1,483.22
9.5091
1.7081
1.2674
7.9062
1.4315

July
7.4522
9.4954
0.83566
1.2770
111.73
1.3460
1,538.85
9.9308
1.7588
1.3322
8.0201
1.4586

Percentage change versus previous month

2010 July
0.2
-0.8
1.0
4.6
0.7
-2.2
3.8
4.4
3.0
5.1
1.4
1.9

Percentage change versus previous year

2010 July
0.1
-12.3
-2.9
-9.4
-16.1
-11.5
-13.5
-9.0
-13.9
-15.8
-10.4
-16.7
Czech
Estonian
Latvian
Lithuanian
Hungarian
Polish
Bulgarian
New Roma-
Croatian New Turkish
koruna
kroon
lats
litas
forint
zloty
lev
nian leu
kuna
lira
13
14
15
16
17
18
19
20
21
22
2007
27.766
15.6466
0.7001
3.4528
251.35
3.7837
1.9558
3.3353
7.3376
1.7865
2008
24.946
15.6466
0.7027
3.4528
251.51
3.5121
1.9558
3.6826
7.2239
1.9064

2009
26.435
15.6466
0.7057
3.4528
280.33
4.3276
1.9558
4.2399
7.3400
2.1631
2009 Q4
25.923
15.6466
0.7084
3.4528
270.88
4.1745
1.9558
4.2680
7.2756
2.2029
2010 Q1
25.868
15.6466
0.7087
3.4528
268.52
3.9869
1.9558
4.1135
7.2849
2.0866

Q2
25.591
15.6466
0.7078
3.4528
274.85
4.0171
1.9558
4.1854
7.2477
1.9560
2010 Jan.
26.133
15.6466
0.7088
3.4528
269.43
4.0703
1.9558
4.1383
7.2938
2.1028
Feb.
25.979
15.6466
0.7090
3.4528
271.21
4.0144
1.9558
4.1196
7.3029
2.0756
Mar.
25.541
15.6466
0.7083
3.4528
265.40
3.8906
1.9558
4.0866
7.2616
2.0821
Apr.
25.308
15.6466
0.7076
3.4528
265.53
3.8782
1.9558
4.1306
7.2594
1.9983
May
25.663
15.6466
0.7075
3.4528
276.78
4.0567
1.9558
4.1767
7.2630
1.9459

June
25.780
15.6466
0.7082
3.4528
281.49
4.1055
1.9558
4.2434
7.2225
1.9274
July
25.328
15.6466
0.7090
3.4528
283.75
4.0814
1.9558
4.2608
7.2198
1.9669

Percentage change versus previous month

2010 July
-1.8
0.0
0.1
0.0
0.8
-0.6
0.0
0.4
0.0
2.1

Percentage change versus previous year

2010 July
-1.8
0.0
1.2
0.0
4.3
-5.0
0.0
1.0
-1.5
-8.0
Brazilian
Chinese Icelandic
Indian Indonesian
Malaysian
Mexican New Zealand Philippine
Russian South African
Thai
real 1)
yuan renminbi
krona 2)
rupee 3)
rupiah
ringgit
peso 1)
dollar
peso
rouble
rand
baht
23
24
25
26
27
28
29
30
31
32
33
34
2007
2.6633
10.4178
87.63
56.4186
12,528.33
4.7076
14.9743
1.8627
63.026
35.0183
9.6596
44.214
2008
2.6737
10.2236
143.83
63.6143
14,165.16
4.8893
16.2911
2.0770
65.172
36.4207
12.0590
48.475

2009
2.7674
9.5277
- 67.3611
14,443.74
4.9079
18.7989
2.2121
66.338
44.1376
11.6737
47.804
2009 Q4
2.5703
10.0905
- 68.9088
13,999.42
5.0275
19.3003
2.0297
69.080
43.5740
11.0757
49.221
2010 Q1
2.4917
9.4417
- 63.4796
12,809.32
4.6590
17.6555
1.9510
63.593
41.2697
10.3852
45.472

Q2
2.2762
8.6717
- 57.9879
11,581.24
4.1172
15.9583
1.8145
57.848
38.5027
9.5974
41.152
2010 Jan.
2.5383
9.7436
- 65.5361
13,263.60
4.8170
18.2820
1.9646
65.702
42.5749
10.6492
47.150
Feb.
2.5237
9.3462
- 63.4291
12,786.05
4.6743
17.7154
1.9615
63.317
41.2845
10.4964
45.360
Mar.
2.4233
9.2623
- 61.7352
12,434.53
4.5083
17.0587
1.9301
61.999
40.1219
10.0589
44.111
Apr.
2.3550
9.1505
- 59.6203
12,101.70
4.2935
16.3957
1.8814
59.788
39.1335
9.8658
43.279
May
2.2750
8.5794
- 57.6166
11,517.01
4.0874
15.9856
1.8010
57.315
38.2707
9.6117
40.714

June
2.2057
8.3245
- 56.8582
11,169.39
3.9853
15.5346
1.7667
56.594
38.1507
9.3398
39.635
July
2.2600
8.6538
- 59.8100
11,546.78
4.0924
16.3699
1.7925
59.072
39.1317
9.6351
41.273

Percentage change versus previous month

2010 July
2.5
4.0
- 5.2
3.4
2.7
5.4
1.5
4.4
2.6
3.2
4.1

Percentage change versus previous year

2010 July
-17.0
-10.1
- -12.3
-18.9
-18.1
-13.0
-18.0
-12.8
-11.8
-14.0
-14.0
Source: ECB.
1)
For these currencies the ECB computes and publishes euro reference exchange rates as from 1 January 2008. Previous data are indicative.
2)
The most recent rate for the Icelandic krona refers to 3 December 2008.
3)
For this currency the ECB computes and publishes euro reference exchange rates as from 1 January 2009. Previous data are indicative.
ECB
S Monthly Bulletin
74 August 2010

DEVELOPMENTS OUTSIDE THE EURO AREA
9
9.1 In other EU Member States
(annual percentage changes, unless otherwise indicated)
1. Economic and financial developments
Bulgaria
Czech
Denmark
Estonia
Latvia
Lithuania
Hungary
Poland
Romania
Sweden
United
Republic
Kingdom
1
2
3
4
5
6
7
8
9
10
11
HICP
2008
12.0
6.3
3.6
10.6
15.3
11.1
6.0
4.2
7.9
3.3
3.6

2009
2.5
0.6
1.1
0.2
3.3
4.2
4.0
4.0
5.6
1.9
2.2
2010 Q1
1.9
0.4
1.9
0.0
-3.9
-0.4
5.8
3.4
4.6
2.7
3.3

Q2
2.9
0.9
2.0
2.9
-2.3
0.5
5.2
2.5
4.3
1.8
3.4
2010 Apr.
3.0
0.9
2.4
2.5
-2.8
0.2
5.7
2.7
4.2
2.1
3.7

May
3.0
1.0
1.9
2.8
-2.4
0.5
4.9
2.3
4.4
1.9
3.4
June
2.5
1.0
1.7
3.4
-1.6
0.9
5.0
2.4
4.3
1.6
3.2
General government deficit (-)/surplus (+) as a percentage of GDP
2007
0.1
-0.7
4.8
2.6
-0.3
-1.0
-5.0
-1.9
-2.5
3.8
-2.8
2008
1.8
-2.7
3.4
-2.7
-4.1
-3.3
-3.8
-3.7
-5.4
2.5
-4.9

2009
-3.9
-5.9
-2.7
-1.7
-9.0
-8.9
-4.0
-7.1
-8.3
-0.5
-11.5
General government gross debt as a percentage of GDP
2007
18.2
29.0
27.4
3.8
9.0
16.9
65.9
45.0
12.6
40.8
44.7
2008
14.1
30.0
34.2
4.6
19.5
15.6
72.9
47.2
13.3
38.3
52.0

2009
14.8
35.4
41.6
7.2
36.1
29.3
78.3
51.0
23.7
42.3
68.1
Long-term government bond yield as a percentage per annum; period average
2010 Jan.
6.65
4.28
3.57
- 13.76
8.15
7.62
6.13
9.05
3.37
4.01
Feb.
6.05
4.33
3.50
- 13.62
7.15
7.69
6.09
7.92
3.28
4.02
Mar.
5.82
4.02
3.40
- 10.54
5.15
7.16
5.72
7.11
3.20
3.98
Apr.
5.94
3.84
3.34
- 10.13
5.15
6.57
5.57
6.97
3.14
3.96
May
6.13
4.10
2.93
- 10.13
5.15
7.07
5.74
7.27
2.73
3.60

June
6.21
4.26
2.70
- 10.12
5.15
7.60
5.83
7.10
2.61
3.14
3-month interest rate as a percentage per annum; period average
2010 Jan.
4.44
1.55
1.46
2.74
4.77
3.07
6.78
4.24
8.56
0.48
0.61
Feb.
4.27
1.52
1.39
2.12
3.16
2.24
6.59
4.17
6.93
0.48
0.63
Mar.
4.21
1.43
1.37
1.86
2.33
1.87
6.65
4.13
6.01
0.49
0.65
Apr.
4.21
1.42
1.28
1.79
2.14
1.57
6.14
3.69
4.99
0.52
0.66
May
4.19
1.27
1.25
1.67
2.26
1.47
6.23
3.85
6.38
0.60
0.70

June
4.18
1.24
1.15
1.47
2.09
1.64
5.43
3.86
6.60
0.70
0.73
Real GDP
2008
6.0
2.5
-0.9
-3.6
-4.2
2.8
0.6
5.1
7.3
-0.4
-0.1

2009
-5.0
-4.1
-4.7
-14.1
-18.0
-14.8
-6.3
1.8
-7.1
-5.1
-4.9
2009 Q4
-5.9
-3.2
-2.9
-9.5
-16.8
-12.5
-4.6
2.8
-6.5
-1.5
-2.9
2010 Q1
-3.6
1.1
-0.6
-2.0
-5.1
-2.7
-0.9
2.8
-2.6
3.0
-0.2

Q2
. . . . .
1.1
. . .
3.6
.
Current and capital account balance as a percentage of GDP
2008
-23.2
0.2
2.0
-8.4
-11.6
-10.1
-5.9
-3.9
-11.1
9.2
-1.3

2009
-8.0
0.1
3.9
7.4
12.0
7.2
1.5
0.0
-4.0
7.3
-1.1
2009 Q3
3.0
-2.0
5.4
10.9
11.9
8.0
2.8
-0.9
-2.8
7.0
-1.6
Q4
-7.1
0.9
5.0
9.9
14.8
13.2
2.2
-1.2
-3.9
5.5
-0.2

2010 Q1
-6.4
2.1
2.7
4.3
12.6
3.2
2.4
0.2
-6.1
8.2
-2.2
Gross external debt as a percentage of GDP
2007
100.4
44.5
170.3
111.0
127.6
71.9
115.1
48.4
50.9
176.2
399.6

2008
108.8
50.0
178.4
118.5
129.2
71.6
155.0
56.5
56.0
203.8
432.2
2009 Q3
107.8
46.7
190.8
124.0
147.9
82.9
170.0
60.2
66.7
203.2
412.2

Q4
111.3
50.8
189.6
126.7
156.6
86.5
164.4
59.6
69.0
203.8
405.9
2010 Q1
109.8
49.0
200.4
124.7
161.8
. 169.8
58.4
71.7
205.5
.
Unit labour costs
2008
16.2
5.1
6.5
14.1
22.0
9.3
4.5
6.8
14.5
2.6
2.3

2009
10.6
3.6
4.5
1.7
-7.1
0.9
0.9
2.3
5.1
4.8
5.5
2009 Q3
10.2
2.9
4.8
1.5
-12.9
-6.5
- 4.5
- 5.3
4.3

Q4
3.7
2.2
-1.6
-7.5
-20.2
-11.4
- -3.5
- 0.2
4.6
2010 Q1
6.6
-2.7
0.9
-8.9
-19.8
-12.6
- . -
-1.1
3.3
Standardised unemployment rate as a percentage of labour force (s.a.)
2008
5.6
4.4
3.3
5.5
7.5
5.9
7.8
7.2
5.8
6.2
5.7

2009
6.9
6.7
6.0
13.8
17.1
13.7
10.0
8.2
6.9
8.3
7.6
2010 Q1
9.3
7.8
7.1
19.0
20.0
17.3
11.2
9.7
7.4
8.8
7.9

Q2
9.7
7.5
6.8
. . .
10.6
9.7
. . .
2010 Apr.
9.7
7.6
7.0
- 22.5
. 10.9
9.8
. 9.1
7.8
May
9.7
7.5
6.7
- . .
10.4
9.7
.
8.8
.

June
9.7
7.4
6.6
- . .
10.4
9.6
. . .
Sources: European Commission (Economic and Financial Affairs DG and Eurostat), national data, Reuters and ECB calculations.
ECB
Monthly Bulletin
August 2010 S 75

9.2 In the United States and Japan
(annual percentage changes, unless otherwise indicated)
1. Economic and financial developments
Consumer
Unit labour
Real GDP
Industrial Unemployment
Broad
3-month
10-year
Exchange
Fiscal
Gross
price index
costs 1)
production
rate
money 2)
interbank
zero coupon
rate 4)
deficit (-)/
public
index
as a % of
deposit
government
as national
surplus (+)
debt 5)
(manufacturing)
labour force
rate 3) bond yield; 3)
currency
as a % of
as a % of
(s.a.)
end of
per euro
GDP
GDP
period
1
2
3
4
5
6
7
8
9
10
11
United States
2006
3.2
2.8
2.7
2.7
4.6
5.3
5.20
5.26
1.2556
-2.2
47.8
2007
2.9
2.3
1.9
3.2
4.6
6.3
5.30
4.81
1.3705
-2.8
48.4
2008
3.8
1.0
0.0
-4.4
5.8
7.1
2.93
2.70
1.4708
-6.5
56.3

2009
-0.4
-1.9
-2.6
-10.9
9.3
7.8
0.69
4.17
1.3948
-11.1
67.6
2009 Q2
-1.2
0.4
-4.1
-14.7
9.3
8.9
0.84
3.95
1.3632
-11.6
62.7
Q3
-1.6
-2.7
-2.7
-10.0
9.6
7.8
0.41
3.61
1.4303
-11.6
65.8
Q4
1.4
-5.2
0.2
-3.7
10.0
5.1
0.27
4.17
1.4779
-11.1
67.6
2010 Q1
2.4
-4.2
2.4
3.9
9.7
1.9
0.26
4.01
1.3829
-10.9
70.7

Q2
1.8
. 3.2
8.4
9.7
1.7
0.44
3.13
1.2708
. .
2010 Mar.
2.3
- -
5.7
9.7
1.4
0.27
4.01
1.3569
- -
Apr.
2.2
- -
7.2
9.9
1.6
0.31
3.84
1.3406
- -
May
2.0
- -
9.0
9.7
1.7
0.46
3.52
1.2565
- -

June
1.1
- -
8.9
9.5
1.8
0.54
3.13
1.2209
- -
July
. -
- . .
.
0.51
3.03
1.2770
-
-
Japan
2006
0.2
-0.5
2.0
4.5
4.1
1.0
0.30
1.85
146.02
-1.6
159.9
2007
0.1
-1.0
2.3
2.8
3.8
1.6
0.79
1.70
161.25
-2.4
156.3
2008
1.4
2.6
-1.2
-3.4
4.0
2.1
0.93
1.21
152.45
-2.1
162.2

2009
-1.4
0.4
-5.3
-21.9
5.1
2.7
0.47
1.42
130.34
. .
2009 Q2
-1.0
0.9
-6.0
-27.4
5.1
2.6
0.53
1.41
132.59
. .
Q3
-2.2
1.0
-4.9
-19.4
5.4
2.8
0.40
1.45
133.82
. .
Q4
-2.0
-4.0
-1.4
-4.2
5.2
3.3
0.31
1.42
132.69
. .

2010 Q1
-1.2
. 4.2
27.6
4.9
2.8
0.25
1.48
125.48
. .
Q2
-0.9
. . 20.9
.
3.0
0.24
1.18
117.15
. .
2010 Mar.
-1.1
- - 31.9
5.0
2.7
0.25
1.48
123.03
- -
Apr.
-1.2
- - 25.9
5.1
2.9
0.24
1.37
125.33
- -
May
-0.9
- - 20.4
5.2
3.1
0.24
1.37
115.83
- -
June
-0.7
- - 17.1
.
2.9
0.24
1.18
110.99
- -

July
. -
- . .
.
0.24
1.13
111.73
-
-
C39 Real gross domestic product
C40 Consumer price indices
(annual percentage changes; quarterly data)
(annual percentage changes; monthly data)
euro area
euro area 6)
United States
United States
Japan
Japan
6
6
6
6
4
4
4
4
2
2
0
0
2
2
-2
-2
-4
-4
0
0
-6
-6
-2
-2
-8
-8
-10
-10
-4
-4
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Sources: National data (columns 1, 2 (United States), 3, 4, 5 (United States), 6, 9 and 10); OECD (column 2 (Japan)); Eurostat (column 5 (Japan), euro area chart data); Reuters
(columns 7 and 8); ECB calculations (column 11).
1)
Seasonally adjusted. The data for the United States refer to the private non-agricultural business sector.
2)
Period averages; M2 for the United States, M2+CDs for Japan.
3)
Percentages per annum. For further information on the three-month interbank deposit rate, see Section 4.6.
4)
For more information, see Section 8.2.
5)
Gross consolidated general government debt (end of period).
6)
Data refer to the changing composition of the euro area. For further information, see the General Notes.
ECB
S Monthly Bulletin
76 August 2010

LIST OF CHARTS
C1 Monetary aggregates
S 1 2
C2 Counterparts
S 1 2
C3 Components of monetary aggregates
S 1 3
C4 Components of longer-term ﬁ nancial liabilities
S 1 3
C5 Loans to other ﬁ nancial intermediaries and non-ﬁ nancial corporations
S 1 4
C6 Loans to households
S 1 4
C7 Loans to government
S 1 6
C8 Loans to non-euro area residents
S 1 6
C9 Total deposits by sector (ﬁ nancial intermediaries)
S 1 7
C10 Total deposits and deposits included in M3 by sector (ﬁ nancial intermediaries)
S 1 7
C11 Total deposits by sector (non-ﬁ nancial corporations and households)
S 1 8
C12 Total deposits and deposits included in M3 by sector (non-ﬁ nancial corporations and households)
S 1 8
C13 Deposits by government and non-euro area residents
S 1 9
C14 MFI holdings of securities
S 2 0
C15 Total outstanding amounts and gross issues of securities other than shares issued by euro area residents
S 3 5
C16 Net issues of securities other than shares: seasonally adjusted and non-seasonally adjusted
S 3 7
C17 Annual growth rates of long-term debt securities, by sector of the issuer, in all currencies combined
S 3 8
C18 Annual growth rates of short-term debt securities, by sector of the issuer, in all currencies combined
S 3 9
C19 Annual growth rates for quoted shares issued by euro area residents
S 4 0
C20 Gross issues of quoted shares by sector of the issuer
S 4 1
C21 New deposits with an agreed maturity
S 4 3
C22 New loans with a ﬂ oating rate and up to 1 year’s initial rate ﬁ xation
S 4 3
C23 Euro area money market rates
S 4 4
C24 3-month money market rates
S 4 4
C25 Euro area spot yield curves
S 4 5
C26 Euro area spot rates and spreads
S 4 5
C27 Dow Jones EURO STOXX broad index, Standard & Poor’s 500 and Nikkei 225
S 4 6
C28 Deﬁ cit, borrowing requirement and change in debt
S 6 0
C29 Maastricht debt
S 6 0
C30 Euro area b.o.p: current account
S 6 1
C31 Euro area b.o.p: direct and portfolio investment
S 6 1
C32 Euro area b.o.p: goods
S 6 2
C33 Euro area b.o.p: services
S 6 2
C34 Euro area international investment position
S 6 5
C35 Euro area direct and portfolio investment position
S 6 5
C36 Main b.o.p. items mirroring developments in MFI net external transactions
S 7 0
C37 Effective exchange rates
S 7 3
C38 Bilateral exchange rates
S 7 3
C39 Real gross domestic product
S 7 6
C40 Consumer price indices
S 7 6
ECB
Monthly Bulletin
August 2010 S 77

TECHNICAL NOTES
EURO AREA OVERVIEW
and, for example, C
Q is the reclassiﬁ cation
t
adjustment in the quarter ending in month t.
CALCULATION OF GROWTH RATES FOR MONETARY
DEVELOPMENTS
For those quarterly series for which monthly
observations are now available (see below), the
The average growth rate for the quarter ending quarterly transactions can be derived as the sum
in month t is calculated as:
of the three monthly transactions in the quarter.
⎞
2
⎞
⎟
0.5I +
+ 0.5I
t
∑ It−i
t−3
⎟
a)
⎟
i=1
⎟ ×100
CALCULATION OF GROWTH RATES FOR MONTHLY
−1
⎟
2
⎟
SERIES
⎟ 0.5I
+
+ 0.5I
⎟
t
∑ It
t
⎠
−12
−i−12
−15
i=1
⎠
Growth rates can be calculated from transactions
where I is the index of adjusted outstanding or from the index of adjusted outstanding
t
amounts as at month t (see also below). amounts. If F
M and L are deﬁ ned as above,
t
t
Likewise, for the year ending in month t, the the index I of adjusted outstanding amounts in
t
average growth rate is calculated as:
month t is deﬁ ned as:
⎞
11
⎞
0.5I + ∑ I + 0.5I
FM
⎛
⎞
b)
⎟
t
t−i
t−12
⎟
e)
I
t
1
⎟
= I × +
i
⎜
⎟
=1
⎟
−1 ×100
t
t−1
L
⎟
11
⎟
⎝
t−1 ⎠
⎟ 0.5I
+
+ 0.5I
t
∑ It
t
⎟
−12
−i−12
−24
⎠
i=1
⎠
The base of the index (for the non-seasonally
SECTIONS 2.1 TO 2.6
adjusted series) is currently set as December
2006 = 100. Time series for the index of
CALCULATION OF TRANSACTIONS
adjusted outstanding amounts are available on
the ECB’s website (www.ecb.europa.eu) in the
Monthly transactions are calculated from “Monetary and ﬁ nancial statistics” sub-section
monthly differences in outstanding amounts of the “Statistics” section.
adjusted for reclassiﬁ cations, other revaluations,
exchange rate variations and any other changes The annual growth rate a for month t – i.e. the
t
which do not arise from transactions.
change in the 12 months ending in month t – can
be calculated using either of the following two
If L represents the outstanding amount at the end
formulae:
t
of month t, C M the reclassiﬁ cation adjustment
t
⎡ 11 ⎛
F M
⎞
⎤
in month t, E M the exchange rate adjustment
f)
a =
t−i
t
t
⎢
⎜
L
⎟
⎥ ×100
∏ 1 +
−1
and V M the other revaluation adjustments, the
t−1−i
⎣ i=0 ⎝
⎠
⎦
t
transactions F M in month t are deﬁ ned as:
t
⎛ I
c) F
M = (L – L ) – C – E
M
– V
M
M
g)
t
⎞
t
t
t–1
t
t
t
a =
−1
t
⎜
I
⎟ × 100
⎝
t−12
⎠
Similarly, the quarterly transactions F Q for the
t
quarter ending in month t are deﬁ ned as:
Unless otherwise indicated, the annual growth
rates refer to the end of the indicated period.
d)
F
Q = (L – L ) – C – E
Q
– V
Q
Q
For example, the annual percentage change for
t
t
t–3
t
t
t
the year 2002 is calculated in g) by dividing
where L is the amount outstanding at the end the index for December 2002 by the index for
t-3
of month t-3 (the end of the previous quarter) December 2001.
ECB
Monthly Bulletin
August 2010 S 79

Growth rates for intra-annual periods can be adjustments arising from reclassiﬁ cations and
derived by adapting formula g). For example, revaluations, in turn yielding seasonally adjusted
the month-on-month growth rate aM
can be transactions. Seasonal (and trading day) factors
t
calculated as:
are revised at annual intervals or as required.
⎛
⎞
h)
M
It
a
⎜
⎟
SECTIONS 3.1 TO 3.5
=
−1 ×100
t
I
⎝
t−1
⎠
EQUALITY OF USES AND RESOURCES
Finally, the three-month moving average In Section 3.1 the data conform to a basic
(centred) for the annual growth rate of M3 is accounting identity. For non-ﬁ nancial
obtained as (a + a + a )/3, where a is deﬁ ned transactions, total uses equal total resources
t+1
t
t-1
t
as in f) or g) above.
for each transaction category. This accounting
identity is also reﬂ
ected in the ﬁ nancial
account – i.e. for each ﬁ nancial instrument
CALCULATION OF GROWTH RATES FOR
category, total transactions in ﬁ nancial assets
QUARTERLY SERIES
equal total transactions in liabilities. In the
other changes in assets account and the ﬁ nancial
If F Q and L are deﬁ ned as above, the index I balance sheets, total ﬁ nancial assets equal total
t
t-3
t
of adjusted outstanding amounts for the quarter liabilities for each ﬁ nancial instrument category,
ending in month t is deﬁ ned as:
with the exception of monetary gold and special
drawing rights, which are by deﬁ nition not a
liability of any sector.
⎛
F Q ⎞
i) I = I ×
t
1+
t
t
⎜
⎟
−3
⎝
Lt−3 ⎠
CALCULATION OF BALANCING ITEMS
The annual growth rate in the four quarters The balancing items at the end of each account in
ending in month t (i.e. a ) can be calculated Sections 3.1 and 3.2 are computed as follows.
t
using formula g).
The trade balance equals euro area imports
minus exports vis-à-vis the rest of the world for
SEASONAL ADJUSTMENT OF THE EURO AREA
goods and services.
MONETARY STATISTICS 1
The approach used is based on multiplicative 1 For details, see “Seasonal adjustment of monetary aggregates and
HICP for the euro area”, ECB (August 2000) and the “Monetary
decomposition using X-12-ARIMA.2 The
and ﬁ nancial statistics” sub-section of the “Statistics” section of
seasonal adjustment may include a day-of-the-
the ECB’s website (www.ecb.europa. eu).
week adjustment, and for some series it is carried
2 For details, see Findley, D., Monsell, B., Bell, W., Otto,
M. and Chen, B. C. (1998), “New Capabilities and Methods
out indirectly by means of a linear combination
of the X-12-ARIMA Seasonal Adjustment Program”, Journal
of components. This is the case for M3, which is
of Business and Economic Statistics, 16, 2, pp.127-152, or
“X-12-ARIMA Reference Manual”, Time Series Staff, Bureau
derived by aggregating the seasonally adjusted
of the Census, Washington, D.C.
series for M1, M2 less M1, and M3 less M2.
For internal purposes, the model-based approach of
TRAMO-SEATS is also used. For details of TRAMO-SEATS,
see Gomez, V. and Maravall, A. (1996), “Programs TRAMO and
The seasonal adjustment procedures are ﬁ rst
SEATS: Instructions for the User”, Banco de España, Working
applied to the index of adjusted outstanding
Paper No 9628, Madrid.
3 It follows that for the seasonally adjusted series, the level of the
amounts.3 The resulting estimates of seasonal
index for the base period (i.e. December 2001) generally differs
factors are then applied to the levels and to the
from 100, reﬂ ecting the seasonality of that month.
ECB
Monthly Bulletin
S 80 August 2010

E U R O A R E A
STATISTICS
Technical Notes
Net operating surplus and mixed income Changes in net worth (wealth) are calculated
is deﬁ ned for resident sectors only and is as changes in net worth (wealth) due to savings
calculated as gross value added (gross domestic and capital transfers plus other changes in net
product at market prices for the euro area) minus
ﬁ nancial worth (wealth). They currently exclude
compensation of employees (uses) minus other other changes in non-ﬁ nancial assets owing to
taxes less subsidies on production (uses) minus the unavailability of data.
consumption of ﬁ xed capital (uses).
Net ﬁ nancial worth (wealth) is calculated as
Net national income is deﬁ ned for resident total ﬁ nancial assets minus total liabilities,
sectors only and is computed as net operating whereas changes in net ﬁ nancial worth (wealth)
surplus and mixed income plus compensation of are equal to the sum of changes in net ﬁ nancial
employees (resources) plus taxes less subsidies worth (wealth) due to transactions (lending/net
on production (resources) plus net property borrowing from the ﬁ nancial account) and other
income (resources minus uses).
changes in net ﬁ nancial worth (wealth).
Net disposable income is also deﬁ ned only Finally, changes in net ﬁ nancial worth (wealth)
for resident sectors and equals net national due to transactions are computed as total
income plus net current taxes on income and transactions in ﬁ
nancial assets minus total
wealth (resources minus uses) plus net social transactions in liabilities, and other changes in
contributions (resources minus uses) plus net net ﬁ nancial worth (wealth) are calculated as
social beneﬁ ts other than social transfers in kind total other changes in ﬁ nancial assets minus
(resources minus uses) plus net other current total other changes in liabilities.
transfers (resources minus uses).
Net saving is deﬁ ned for resident sectors and SECTIONS 4.3 AND 4.4
is calculated as net disposable income plus
the net adjustment for the change in the net CALCULATION OF GROWTH RATES FOR DEBT
equity of households in pension fund reserves SECURITIES AND QUOTED SHARES
(resources minus uses) minus ﬁ nal consumption
expenditure (uses). For the rest of the world, the Growth rates are calculated on the basis of
current external account is compiled as the trade ﬁ nancial transactions and therefore exclude
balance plus all net income (resources minus reclassiﬁ
cations, revaluations, exchange rate
uses).
variations and any other changes which do not
arise from transactions. They can be calculated
Net lending/net borrowing is computed from from transactions or from the index of notional
the capital account as net saving plus net capital stocks. If N
M represents the transactions
t
transfers (resources minus uses) minus gross (net issues) in month t and L the level outstanding
t
capital formation (uses) minus acquisitions at the end of month t, the index I of notional
t
less disposals of non-produced non-ﬁ nancial stocks in month t is deﬁ ned as:
assets (uses) plus consumption of ﬁ xed capital
(resources). It can also be calculated in the
⎛
N ⎞
ﬁ nancial account as total transactions in ﬁ nancial
j) I = I ×
t
1+
t
t−1 ⎜
⎟
assets minus total transactions in liabilities
L
⎝
t−1 ⎠
(also known as changes in net ﬁ nancial worth
(wealth) due to transactions). For the household As a base, the index is set equal to 100 in
and non-ﬁ nancial corporation sectors, there is December 2001. The growth rate a for month
t
a statistical discrepancy between the balancing t, corresponding to the change in the 12 months
items computed from the capital account and ending in month t, can be calculated using either
the ﬁ nancial account.
of the following two formulae:
ECB
Monthly Bulletin
August 2010 S 81

k)
11
M
seasonal adjustment of total securities issues
⎡
⎛
⎞
a
N
⎤
=
t−i
t
⎢
⎜
L
⎟
⎥×100
∏ 1 +
−1
is carried out indirectly by means of a linear
t−1−i
⎣ i=0 ⎝
⎠
⎦
combination of sector and maturity component
breakdowns.
⎛ I
l)
a =
t
⎞
−1
t
⎜
I
⎟ ×100
⎝
t−12
⎠
The seasonal adjustment procedures are
applied to the index of notional stocks. The
The method used to calculate the growth rates resulting estimates of seasonal factors are then
for securities other than shares is the same as applied to the outstanding amounts, from which
that used for the monetary aggregates, the only seasonally adjusted net issues are derived.
difference being that an “N” is used instead of Seasonal factors are revised at annual intervals
an “F”. This is to show that the method used to or as required.
obtain “net issues” for securities issues statistics
differs from that used to calculate equivalent As in formulae k) and l), the growth rate a for
t
“transactions” for the monetary aggregates.
month t, corresponding to the change in the six
months ending in month t, can be calculated
The average growth rate for the quarter ending using either of the following two formulae:
in month t is calculated as:
⎞
2
⎞
5
M
0.5I
⎡
⎛
N
⎞
⎤
+
+ 0.5I
o)
⎟
a
t−i
t
∑ It
=
−i
t−3
⎟
t
⎢
⎜
L
⎟
⎥×100
∏ 1 +
−1
m)
⎟
i=1
t
−1 ⎟ ×100
−1−i
⎣ i=0 ⎝
⎠
⎦
⎟
2
⎟
⎟ 0.5I
+
+ 0.5I
⎟
t
∑ It
t
⎠
−12
−i−12
−15
i=1
⎠
⎛ I
p)
a =
t
⎞
−1
t
⎜
I
⎟ ×100
where I is the index of notional stocks as at
⎝
t−6
⎠
t
month t. Likewise, for the year ending in month
t, the average growth rate is calculated as:
11
TABLE 1 IN SECTION 5.1
⎞
⎞
⎟
0.5I +
+ 0.5I
t
∑ It−i
t−12
⎟
n)
⎟
i=1
⎟
SEASONAL ADJUSTMENT OF THE HICP 4
−1 ×100
⎟
11
⎟
⎟ 0.5I
+
+ 0.5I
t
∑ It
t
⎟
−12
−i−12
−24
⎠
i=1
⎠
The approach used is based on multiplicative
decomposition using X-12-ARIMA (see
The calculation formula used for Section 4.3 is footnote 2 on page S78). The seasonal
also used for Section 4.4 and is likewise based on adjustment of the overall HICP for the euro
that used for the monetary aggregates. Section 4.4
area is carried out indirectly by aggregating
is based on market values, and the calculations the seasonally adjusted euro area series for
are based on ﬁ
nancial transactions, which processed food, unprocessed food, industrial
exclude reclassiﬁ cations, revaluations and any goods excluding energy, and services. Energy
other changes that do not arise from transactions. is added without adjustment, since there is no
Exchange rate variations are not included, as all statistical evidence of seasonality. Seasonal
quoted shares covered are denominated in euro.
factors are revised at annual intervals or as
required.
SEASONAL ADJUSTMENT OF SECURITIES ISSUES
STATISTICS 4
4 For details, see “Seasonal adjustment of monetary aggregates and
HICP for the euro area”, ECB (August 2000) and the “Monetary
The approach used is based on multiplicative
and ﬁ nancial statistics” sub-section of the “Statistics” section of
decomposition using X-12-ARIMA. The
the ECB’s website (www.ecb.europa.eu).
ECB
Monthly Bulletin
S 82 August 2010

E U R O A R E A
STATISTICS
Technical Notes
TABLE 2 IN SECTION 7.1
SEASONAL ADJUSTMENT OF THE BALANCE OF
PAYMENTS CURRENT ACCOUNT
The approach used is based on multiplicative
decomposition using X-12-ARIMA
(see footnote 2 on page S78). The raw data for
goods, services and income are preadjusted
to take a working day effect into account. The
working day adjustment in goods and services
is corrected for national public holidays. The
seasonal adjustment of these items is carried
out using these preadjusted series. The seasonal
adjustment of the total current account is carried
out by aggregating the seasonally adjusted euro
area series for goods, services, income and
current transfers. Seasonal (and trading day)
factors are revised at biannual intervals or as
required.
SECTION 7.3
CALCULATION OF GROWTH RATES FOR THE
QUARTERLY AND ANNUAL SERIES
The annual growth rate for quarter t is calculated
on the basis of quarterly transactions (F ) and
t
positions (L ) as follows:
t
t
⎛
⎛
Fi ⎞ ⎞
a = ⎜
⎜
— ⎟
⎟
−1 ×100
t
∏ 1 +
⎝
L
i=t-3 ⎝
i-l
⎠ ⎠
The growth rate for the annual series is equal to
the growth rate in the last quarter of the year.
ECB
Monthly Bulletin
August 2010 S 83

GENERAL NOTES
The “Euro area statistics” section of the 11 EU Member States: Belgium, Germany,
Monthly Bulletin focuses on statistics for the Ireland, Spain, France, Italy, Luxembourg,
euro area as a whole. More detailed and longer the Netherlands, Austria, Portugal and Finland.
runs of data, with further explanatory notes, are Data from 2001 to 2006 refer to the Euro 12,
available in the “Statistics” section of the ECB’s i.e. the Euro 11 plus Greece. Data for 2007 refer
website (www.ecb.europa.eu). This allows user-
to the Euro 13, i.e. the Euro 12 plus Slovenia.
friendly access to data via the ECB’s Statistical Data for 2008 refer to the Euro 15, i.e. the Euro 13
Data Warehouse (http://sdw.ecb.europa.eu), plus Cyprus and Malta, and data as of 2009 refer
which includes search and download facilities. to the Euro 16, i.e. the Euro 15 plus Slovakia.
Further services available in the “Data services”
sub-section include subscriptions to different Given that the composition of the European
datasets and a repository of compressed Comma currency unit (ECU) does not coincide with the
Separated Value (CSV) ﬁ
les. For further former currencies of the countries that have
information, please contact us at: statistics@
adopted the single currency, pre-1999 amounts
ecb.europa.eu.
originally expressed in the participating
currencies and converted into ECU at current
In general, the cut-off date for the statistics ECU exchange rates are affected by movements
included in the Monthly Bulletin is the day in the currencies of EU Member States that have
preceding the Governing Council of the ECB’s not adopted the euro. To avoid this effect on the
ﬁ rst meeting of the month. For this issue, monetary statistics, pre-1999 data 1 are expressed
the cut-off date was 4 August 2010.
in units converted from national currencies at
the irrevocable euro exchange rates established
Unless otherwise indicated, all data series on 31 December 1998. Unless otherwise
including observations for 2009 and beyond indicated, price and cost statistics before 1999
relate to the Euro 16 (the euro area including are based on data expressed in national
Slovakia) for the whole time series. For interest
currency terms.
rates, monetary statistics and the HICP
(and, for consistency reasons, the components Methods of aggregation and/or consolidation
and counterparts of M3 and the components (including cross-country consolidation) have
of the HICP), statistical series refer to the been used where appropriate.
changing composition of the euro area
(see below for details). Where applicable, Recent data are often provisional and may be
this is indicated in the tables by means of a revised. Discrepancies between totals and their
footnote. In such cases, where underlying data components may arise from rounding.
are available, absolute and percentage changes
for the respective year of entry into the euro The group “Other EU Member States” comprises
area of Greece (2001), Slovenia (2007), Cyprus
Bulgaria, the Czech Republic, Denmark,
(2008), Malta (2008) and Slovakia (2009), Estonia, Latvia, Lithuania, Hungary, Poland,
calculated from bases covering the year prior Romania, Sweden and the United Kingdom.
to the year of entry, use a series in which the
impact of these countries’ joining the euro area In most cases, the terminology used within the
is taken into account.
tables follows international standards, such
as those contained in the European System
The statistical series referring to the changing
composition of the euro area are based on 1 Data on monetary statistics in Sections 2.1 to 2.8 are available
the euro area composition at the time to
for periods prior to January 1999 on the ECB’s website
(http://www.ecb.europa.eu/stats/services/downloads/html/index.
which the statistics relate. Thus, data prior to
en.html) and in the SDW (http://sdw.ecb.europa.eu/browse.
2001 refer to the Euro 11, i.e. the following
do?node=2018811).
ECB
Monthly Bulletin
August 2010 S 85

of Accounts 1995 and the IMF Balance Table 2 in Section 1.4 contains average data
of Payments Manual. Transactions refer to for completed maintenance periods. First,
voluntary exchanges (measured directly or the reserve requirement of each individual
derived), while ﬂ ows also encompass changes credit institution is calculated by applying the
in outstanding amounts owing to price reserve ratios for the corresponding categories
and exchange rate changes, write-offs and of liability to the eligible liabilities, using the
other changes.
balance sheet data from the end of each calendar
month. Subsequently, each credit institution
In the tables, the wording “up to (x) years” deducts from this ﬁ gure a lump-sum allowance
means “up to and including (x) years”.
of €100,000. The resulting required reserves are
then aggregated at the euro area level (column 1).
Current account holdings (column 2) are the
OVERVIEW
aggregate average daily current account holdings
of credit institutions, including those that serve
Developments in key indicators for the euro area
to fulﬁ l reserve requirements. Excess reserves
are summarised in an overview table.
(column 3) are the average current account
holdings over the maintenance period in excess
of the required reserves. Deﬁ ciencies (column 4)
MONETARY POLICY STATISTICS
are deﬁ ned as the average shortfalls of current
account holdings from required reserves over
Section 1.4 shows statistics on minimum reserve
the maintenance period, computed on the basis
and liquidity factors. Maintenance periods for of those credit institutions that have not fulﬁ lled
minimum reserve requirements start every month
their reserve requirements. The interest rate on
on the settlement day of the main reﬁ nancing minimum reserves (column 5) is equal to the
operation (MRO) following the Governing average, over the maintenance period, of the
Council meeting for which the monthly ECB’s rate (weighted according to the number
assessment of the monetary policy stance is of calendar days) on the Eurosystem’s MROs
scheduled. They end on the day preceding the (see Section 1.3).
corresponding settlement day in the following
month. Annual/quarterly observations refer to Table 3 in Section 1.4 shows the banking
averages for the last reserve maintenance period system’s liquidity position, which is deﬁ ned
of the year/quarter.
as euro area credit institutions’ current account
holdings with the Eurosystem in euro. All
Table 1 in Section 1.4 shows the components amounts are derived from the consolidated
of the reserve base of credit institutions ﬁ nancial statement of the Eurosystem. Other
subject to reserve requirements. Liabilities liquidity-absorbing operations (column 7)
vis-à-vis other credit institutions subject to exclude the issuance of debt certiﬁ cates
the ESCB’s minimum reserve system, the initiated by NCBs in Stage Two of EMU. Net
ECB and participating national central banks other factors (column 10) represent the netted
are excluded from the reserve base. When a remaining items in the consolidated ﬁ nancial
credit institution cannot provide evidence of statement of the Eurosystem. Credit institutions’
the amount of its issues of debt securities with current accounts (column 11) are equal to
a maturity of up to two years which are held the difference between the sum of liquidity-
by the institutions mentioned above, it may providing factors (columns 1 to 5) and the sum
deduct a certain percentage of these liabilities of liquidity-absorbing factors (columns 6 to 10).
from its reserve base. The percentage used Base money (column 12) is calculated as the
to calculate the reserve base was 10% until sum of the deposit facility (column 6), banknotes
November 1999 and has been 30% since in circulation (column 8) and credit institutions’
that date.
current account holdings (column 11).
ECB
Monthly Bulletin
S 86 August 2010

E U R O A R E A
STATISTICS
General Notes
MONEY, BANKING AND INVESTMENT FUNDS
the euro area banking system. Section 2.6 shows
the securities held by the euro area banking
Section 2.1 shows the aggregated balance sheet system, broken down by type of issuer.
of the monetary ﬁ nancial institution sector,
i.e. the sum of the harmonised balance sheets of Sections 2.2 to 2.6 include data on transactions,
all MFIs resident in the euro area. MFIs comprise
which are derived as differences in outstanding
central banks, credit institutions as deﬁ ned amounts adjusted for reclassiﬁ cations,
under Community law, money market funds and revaluations, exchange rate variations and any
other institutions whose business it is to receive other changes that do not arise from transactions.
deposits and/or close substitutes for deposits Section 2.7 shows selected revaluations that
from entities other than MFIs and, for their own are used in the derivation of transactions.
account (at least in economic terms), to grant Sections 2.2 to 2.6 also provide growth rates
credit and/or make investments in securities. based on those transactions in the form of
A complete list of MFIs is published on the annual percentage changes. Section 2.8 shows a
ECB’s website.
quarterly currency breakdown of selected MFI
balance sheet items.
Section 2.2 shows the consolidated balance
sheet of the MFI sector, which is obtained by Details of sector deﬁ nitions are set out in the
netting the aggregated balance sheet positions of
third edition of the “Monetary ﬁ nancial
MFIs in the euro area. Owing to a small amount institutions and markets statistics sector manual –
of heterogeneity in recording practices, the sum Guidance for the statistical classiﬁ cation of
of the inter-MFI positions is not necessarily customers” (ECB, March 2007). The publication
zero; the balance is shown in column 10 of “Guidance Notes to the Regulation ECB/2001/13
the liabilities side of Section 2.2. Section 2.3 on the MFI Balance Sheet Statistics” (ECB,
sets out the euro area monetary aggregates November 2002) explains practices that
and counterparts. These are derived from the NCBs are recommended to follow. Since
consolidated MFI balance sheet and include 1 January 1999 statistical information has been
positions of non-MFIs resident in the euro area collected and compiled on the basis of various
held with MFIs resident in the euro area; they ECB regulations concerning the balance sheet
also take account of some monetary assets/
of the monetary ﬁ nancial institution sector.
liabilities of central government. Statistics Since July 2010 this has been carried out on
on monetary aggregates and counterparts are the basis of Regulation ECB/2008/32 2.
adjusted for seasonal and trading day effects.
The external liabilities item in Sections 2.1 In line with this Regulation, the balance sheet
and 2.2 shows the holdings by non-euro area item “money market paper” has been merged
residents of: (i) shares/units issued by money with the item “debt securities” on both the assets
market funds located in the euro area; and and liabilities sides of the MFI balance sheet.
(ii) debt securities issued with a maturity of up
to two years by MFIs located in the euro area. Section 2.9 shows outstanding amounts and
In Section 2.3, however, these holdings are transactions on the balance sheet of euro area
excluded from the monetary aggregates and investment funds (other than money market
contribute to the item “net external assets”.
funds, which are included in the MFI balance
sheet statistics). An investment fund is a
Section 2.4 provides analysis, broken down collective investment undertaking that invests
by sector, type and original maturity, of loans capital raised from the public in ﬁ nancial and/
granted by MFIs other than the Eurosystem or non-ﬁ nancial assets. A complete list of euro
(i.e. the banking system) resident in the euro area investment funds is published on the ECB’s
area. Section 2.5 provides analysis, broken down
by sector and instrument, of deposits held with 2 OJ L 15, 20.01.2009, p.14.
ECB
Monthly Bulletin
August 2010 S 87

website. The balance sheet is aggregated, so whole; the balancing item of the primary income
investment funds' assets include their holdings account is national income); (3) the secondary
of shares/units issued by other investment distribution of income account, which shows
funds. Shares/units issued by investment funds how the national income of an institutional
are also broken down by investment policy sector changes because of current transfers;
(i.e. into bond funds, equity funds, mixed (4) the use of income account, which shows how
funds, real estate funds, hedge funds and other disposable income is spent on consumption or
funds) and by type (i.e. into open-end funds and saved; (5) the capital account, which shows how
closed-end funds). Section 2.10 provides further savings and net capital transfers are spent in the
details on the main types of asset held by euro acquisition of non-ﬁ nancial assets (the balancing
area investment funds. This Section contains item of the capital account is net lending/
a geographical breakdown of the issuers of net borrowing); and (6) the ﬁ nancial account,
securities held by investment funds, as well which records the net acquisitions of ﬁ nancial
as breaking issuers down by economic sector assets and the net incurrence of liabilities. As
where they are resident in the euro area.
each non-ﬁ nancial transaction is mirrored by a
ﬁ nancial transaction, the balancing item of the
Further information on these investment fund ﬁ nancial account conceptually also equals net
statistics can be found in the “Manual on lending/net borrowing as calculated from the
investment fund statistics”. Since December 2008
capital account.
harmonised statistical information has been
collected and compiled on the basis of In addition, opening and closing ﬁ nancial
Regulation ECB/2007/8 concerning statistics on balance sheets are presented, which provide a
the assets and liabilities of investment funds.
picture of the ﬁ nancial wealth of each individual
sector at a given point in time. Finally, other
changes in ﬁ
nancial assets and liabilities
EURO AREA ACCOUNTS
(e.g. those resulting from the impact of changes
in asset prices) are also shown.
Section 3.1 shows quarterly integrated euro area
accounts data, which provide comprehensive The sectoral coverage of the ﬁ nancial account
information on the economic activities of and the ﬁ nancial balance sheets is more detailed
households (including non-proﬁ t institutions for the ﬁ
nancial corporation sector, which
serving households), non-ﬁ nancial corporations, is broken down into MFIs, other ﬁ nancial
ﬁ nancial corporations and general government, intermediaries (including ﬁ nancial auxiliaries),
as well as on the interaction between these and insurance corporations and pension funds.
sectors and both the euro area and the rest of the
world. Non-seasonally adjusted data on current Section 3.2 shows four-quarter cumulated ﬂ ows
prices are displayed for the last available quarter, (transactions) for the “non-ﬁ nancial accounts”
following a simpliﬁ ed sequence of accounts in of the euro area (i.e. accounts (1) to (5) above),
accordance with the methodological framework also following the simpliﬁ
ed sequence of
of the European System of Accounts 1995.
accounts.
In short, the sequence of accounts (transactions) Section 3.3 shows four-quarter cumulated ﬂ ows
comprises: (1) the generation of income account, (transactions and other changes) for households’
which shows how production activity translates income, expenditure and accumulation accounts,
into various categories of income; (2) the as well as outstanding amounts for the ﬁ nancial
allocation of primary income account, which balance sheet accounts, presenting data in
records receipts and expenses relating to various a more analytical manner. Sector-speciﬁ c
forms of property income (for the economy as a transactions and balancing items are arranged
ECB
Monthly Bulletin
S 88 August 2010

E U R O A R E A
STATISTICS
General Notes
in a way that more clearly depicts the ﬁ nancing with an original maturity of one year or less
and investment decisions of households, while (in exceptional cases, two years or less).
respecting the accounting identities presented in Securities with (i) a longer maturity, (ii) optional
Sections 3.1 and 3.2.
maturity dates, the latest of which is more than
one year away, or (iii) indeﬁ nite maturity dates
Section 3.4 displays four-quarter cumulated ﬂ ows are classiﬁ ed as “long-term”. Long-term debt
(transactions) for non-ﬁ nancial corporations’ securities issued by euro area residents are
income and accumulation accounts, as well as broken down further into ﬁ xed and variable rate
outstanding amounts for the ﬁ nancial balance issues. Fixed rate issues consist of issues where
sheet accounts, presenting data in a more the coupon rate does not change during the life
analytical manner.
of the issue. Variable rate issues comprise all
issues where the coupon is periodically reﬁ xed
Section 3.5 shows four-quarter cumulated with reference to an independent interest rate
ﬁ nancial ﬂ ows (transactions and other changes) or index. The euro-denominated securities
and outstanding amounts for the ﬁ nancial indicated in Sections 4.1, 4.2 and 4.3 also include
balance sheets of insurance corporations and items expressed in national denominations of
pension funds.
the euro.
Section 4.1 shows securities other than shares,
FINANCIAL MARKETS
broken down by original maturity, residency of
the issuer and currency. It presents outstanding
The series on ﬁ nancial market statistics for the amounts, gross issues and net issues of
euro area cover those EU Member States that securities other than shares, broken down into:
had adopted the euro at the time to which the (i) issues denominated in euro and issues in all
statistics relate (i.e. a changing composition), currencies; (ii) issues by euro area residents
with the exception of statistics on securities and total issues; and (iii) total and long-term
issues (Sections 4.1 to 4.4), which relate to the maturities. Net issues differ from the changes
Euro 16 for the whole time series (i.e. a ﬁ xed in outstanding amounts owing to valuation
composition).
changes, reclassiﬁ cations and other adjustments.
This section also presents seasonally adjusted
Statistics on securities other than shares and statistics, including six-month annualised
statistics on quoted shares (Sections 4.1 to seasonally adjusted growth rates for total and
4.4) are produced by the ECB using data from long-term debt securities. Seasonally adjusted
the ESCB and the BIS. Section 4.5 presents data are derived from the index of notional
MFI interest rates on euro-denominated stocks, from which the seasonal effects have
deposits from and loans to euro area residents. been removed. See the Technical Notes for
Statistics on money market interest rates, long-
details.
term government bond yields and stock market
indices (Sections 4.6 to 4.8) are produced by Section 4.2 contains a sectoral breakdown
the ECB using data from wire services.
of outstanding amounts, gross issues and net
issues for issuers resident in the euro area in line
Statistics on securities issues cover: (i) securities with the ESA 95. The ECB is included in the
other than shares, excluding ﬁ nancial derivatives; Eurosystem.
and (ii) quoted shares. The former are presented
in Sections 4.1, 4.2 and 4.3, while the latter The total outstanding amounts for total and
are presented in Section 4.4. Debt securities are long-term debt securities in column 1 of Table 1 in
broken down into short-term and long-term Section 4.2 correspond to the data on outstanding
securities. “Short-term” means securities amounts for total and long-term debt securities
ECB
Monthly Bulletin
August 2010 S 89

issued by euro area residents in column 7 of Section 4.5 presents statistics on all the interest
Section 4.1. The outstanding amounts for total rates that MFIs resident in the euro area apply
and long-term debt securities issued by MFIs in to euro-denominated deposits and loans vis-à-vis
column 2 of Table 1 in Section 4.2 are broadly households and non-ﬁ nancial corporations
comparable with the data on debt securities issued resident in the euro area. Euro area MFI interest
on the liabilities side of the aggregated MFI rates are calculated as a weighted average
balance sheet in column 8 of Table 2 in Section 2.1.
(by corresponding business volume) of the euro
The total net issues for total debt securities in area countries’ interest rates for each category.
column 1 of Table 2 in Section 4.2 correspond to
the data on total net issues by euro area residents MFI interest rate statistics are broken down by
in column 9 of Section 4.1. The residual difference
type of business coverage, sector, instrument
between long-term debt securities and total ﬁ xed category and maturity, period of notice or initial
and variable rate long-term debt securities in period of interest rate ﬁ xation. These MFI
Table 1 of Section 4.2 consists of zero coupon interest rate statistics replaced the ten transitional
bonds and revaluation effects.
statistical series on euro area retail interest rates
that had been published in the Monthly Bulletin
Section 4.3 shows seasonally adjusted and as of January 1999.
non-seasonally adjusted growth rates for debt
securities issued by euro area residents (broken Section 4.6 presents money market interest rates
down by maturity, type of instrument, sector for the euro area, the United States and Japan.
of the issuer and currency), which are based For the euro area, a broad spectrum of money
on ﬁ nancial transactions that occur when an market interest rates is covered, ranging from
institutional unit incurs or redeems liabilities. The
interest rates on overnight deposits to those on
growth rates therefore exclude reclassiﬁ cations, twelve-month deposits. Before January 1999,
revaluations, exchange rate variations and any synthetic euro area interest rates were calculated
other changes that do not arise from transactions.
on the basis of national rates weighted by
The seasonally adjusted growth rates have been GDP. With the exception of the overnight rate
annualised for presentational purposes. See the prior to January 1999, monthly, quarterly and
Technical Notes for details.
yearly values are period averages. Overnight
deposits are represented by end-of-period
Columns 1, 4, 6 and 8 in Table 1 of Section 4.4 interbank deposit bid rates up to and including
show the outstanding amounts of quoted shares December 1998 and period averages for the euro
issued by euro area residents broken down by overnight index average (EONIA) thereafter.
issuing sector. The monthly data for quoted As of January 1999, euro area interest rates on
shares issued by non-ﬁ nancial corporations one, three, six and twelve-month deposits are
correspond to the quarterly series shown in euro interbank offered rates (EURIBOR); prior
Section 3.4 (ﬁ nancial balance sheet; quoted to that date, they are London interbank offered
shares).
rates (LIBOR) where available. For the United
States and Japan, interest rates on three-month
Columns 3, 5, 7 and 9 in Table 1 of Section 4.4 deposits are represented by LIBOR.
show annual growth rates for quoted shares
issued by euro area residents (broken down by Section 4.7 shows end-of-period rates estimated
the sector of the issuer), which are based on from nominal spot yield curves based on
ﬁ nancial transactions that occur when an issuer AAA-rated euro-denominated bonds issued by
issues or redeems shares for cash, excluding euro area central governments. The yield curves
investments in the issuer’s own shares. are estimated using the Svensson model 3.
The calculation of annual growth rates excludes 3 Svensson, L. E., “Estimating and Interpreting Forward Interest
reclassiﬁ cations, revaluations and any other
Rates: Sweden 1992-1994”, Centre for Economic Policy
changes that do not arise from transactions.
Research, Discussion Paper No 1051, 1994.
ECB
Monthly Bulletin
S 90 August 2010

E U R O A R E A
STATISTICS
General Notes
Spreads between the ten-year rates and the three-
(NACE Revision 2), as covered by Regulation
month and two-year rates are also released. (EC) No 1893/2006 of the European Parliament
Additional yield curves (daily releases, including
and of the Council of 20 December 2006
charts and tables) and the corresponding establishing the statistical classiﬁ cation
methodological information are available at: of economic activities NACE Revision 2 and
http://www.ecb.europa.eu/stats/money/yc/html/
amending Council Regulation (EEC)
index.en.html. Daily data can also be No 3037/90, as well as certain EC Regulations
downloaded.
on speciﬁ c statistical domains,5 has been applied
in the production of short-term statistics. The
Section 4.8 shows stock market indices for the breakdown by end-use of product for industrial
euro area, the United States and Japan.
producer prices and industrial production is the
harmonised sub-division of industry excluding
construction (NACE Revision 2, sections B
PRICES, OUTPUT, DEMAND AND LABOUR MARKETS
to E) into Main Industrial Groupings (MIGs)
as deﬁ ned by Commission Regulation (EC)
Most of the data described in this section are No 656/2007 of 14 June 2007 6. Industrial
produced by the European Commission (mainly producer prices reﬂ ect the ex-factory gate prices
Eurostat) and national statistical authorities. Euro
of producers. They include indirect taxes except
area results are obtained by aggregating data VAT and other deductible taxes. Industrial
for individual countries. As far as possible, the production reﬂ ects the value added of the
data are harmonised and comparable. Statistics industries concerned.
on labour costs indices, GDP and expenditure
components, value added by economic activity, The two non-energy commodity price indices
industrial production, retail sales passenger car shown in Table 3 in Section 5.1 are compiled
registrations and employment in terms of hours with the same commodity coverage, but using
worked are working day-adjusted.
two different weighting schemes: one based on
the respective commodity imports of the euro
The Harmonised Index of Consumer Prices area (columns 2-4), and the other (columns 5-7)
(HICP) for the euro area (Table 1 in Section 5.1) based on estimated euro area domestic demand,
is available from 1995 onwards. It is based or “use”, taking into account information on
on national HICPs, which follow the same imports, exports and the domestic production
methodology in all euro area countries. The of each commodity (ignoring, for the sake of
breakdown into goods and services components simplicity, inventories, which are assumed to
is derived from the classiﬁ cation of individual be relatively stable over the observed period).
consumption by purpose (Coicop/HICP). The import-weighted commodity price index is
The HICP covers monetary expenditure by appropriate for analysing external developments,
households on ﬁ nal consumption in the economic
while the use-weighted index is suitable for
territory of the euro area. The table includes the speciﬁ c purpose of analysing international
seasonally adjusted HICP data and experimental commodity price pressures on euro area inﬂ ation.
HICP-based estimates of administered prices, The use-weighted commodity price indices are
which are compiled by the ECB.
experimental data. For more details as regards
the compilation of the ECB commodity price
Industrial producer prices (Table 2 in indices, see Box 1 in the December 2008 issue
Section 5.1), industrial production, industrial of the Monthly Bulletin.
new orders, industrial turnover and retail sales
(Section 5.2) are covered by Council Regulation
(EC) No 1165/98 of 19 May 1998 concerning 4 OJ L 162, 5.6.1998, p. 1.
short-term statistics4. Since January 2009 the 5 OJ L 393, 30.12.2006, p. 1.
revised classiﬁ cation of economic activities 6 OJ L 155, 15.6.2007, p. 3.
ECB
Monthly Bulletin
August 2010 S 91

The labour cost indices (Table 5 in Section 5.1) Unemployment rates (Table 4 in Section 5.3)
measure the changes in labour costs per hour conform to International Labour Organization
worked in industry (including construction) and guidelines. They refer to persons actively
market services. Their methodology is laid down
seeking work as a share of the labour force,
in Regulation (EC) No 450/2003 of the European
using harmonised criteria and deﬁ nitions.
Parliament and of the Council of 27 February The labour force estimates underlying the
2003 concerning the labour cost index 7 and in unemployment rate are different from the sum
the implementing Commission Regulation (EC) of the employment and unemployment levels
No 1216/2003 of 7 July 2003 8. A breakdown published in Section 5.3.
of the labour cost indices for the euro area is
available by labour cost component (wages and
salaries, and employers’ social contributions plus
GOVERNMENT FINANCE
employment-related taxes paid by the employer
less subsidies received by the employer) and by Sections 6.1 to 6.5 show the general government
economic activity. The ECB calculates the ﬁ scal position in the euro area. The data are
indicator of negotiated wages (memo item mainly consolidated and are based on the
in Table 3 of Section 5.1) on the basis of ESA 95 methodology. The annual euro area
non-harmonised, national-deﬁ nition data.
aggregates in Sections 6.1 to 6.3 are compiled
by the ECB on the basis of harmonised data
Unit labour cost components (Table 4 in provided by the NCBs, which are regularly
Section 5.1), GDP and its components (Tables 1 updated. The deﬁ cit and debt data for the euro
and 2 in Section 5.2), GDP deﬂ ators (Table 3 area countries may therefore differ from those
in Section 5.1) and employment statistics used by the European Commission within the
(Tables 1, 2 and 3 in Section 5.3) are derived excessive deﬁ cit procedure. The quarterly euro
from the ESA 95 quarterly national accounts.
area aggregates in Sections 6.4 and 6.5 are
compiled by the ECB on the basis of Eurostat
Industrial new orders (Table 4 in Section 5.2) and national data.
measure the orders received during the reference
period and cover industries working mainly on Section 6.1 presents annual ﬁ gures on general
the basis of orders – in particular the textile, pulp
government revenue and expenditure on the
and paper, chemical, metal, capital goods and basis of deﬁ nitions laid down in Commission
durable consumer goods industries. The data are Regulation (EC) No 1500/2000 of 10 July 2000 9
calculated on the basis of current prices.
amending the ESA 95. Section 6.2 shows details
of general government gross consolidated debt
Indices for turnover in industry and for the at nominal value in line with the Treaty
retail trade (Table 4 in Section 5.2) measure the provisions on the excessive deﬁ cit procedure.
turnover, including all duties and taxes (with Sections 6.1 and 6.2 include summary data for
the exception of VAT), invoiced during the the individual euro area countries owing to their
reference period. Retail trade turnover covers all importance within the framework of the Stability
retail trade (excluding sales of motor vehicles and Growth Pact. The deﬁ cits/surpluses
and motorcycles), except automotive fuel. New presented for the individual euro area countries
passenger car registrations cover registrations of correspond to excessive deﬁ cit procedure B.9,
both private and commercial passenger cars. The
as deﬁ
ned by Council Regulation (EC)
euro area series excludes Cyprus and Malta.
No 479/2009 as regards references to the
ESA 95. Section 6.3 presents changes in general
Qualitative business and consumer survey data
7 OJ L 69, 13.3.2003, p. 1.
(Table 5 in Section 5.2) draw on the European 8 OJ L 169, 8.7.2003, p. 37.
Commission Business and Consumer Surveys.
9 OJ L 172, 12.7.2000, p. 3.
ECB
Monthly Bulletin
S 92 August 2010

E U R O A R E A
STATISTICS
General Notes
government debt. The difference between the Monetary, Financial and Balance of Payments
change in the government debt and the Statistics (www.cmfb.org). The annual quality
government deﬁ cit – the deﬁ cit-debt adjustment – report on the euro area b.o.p./i.i.p., which is
is mainly explained by government transactions based on the Task Force’s recommendations
in ﬁ nancial assets and by foreign exchange and follows the basic principles of the ECB
valuation effects. Section 6.4 presents quarterly Statistics Quality Framework published in
ﬁ gures on general government revenue and April 2008, is available on the ECB’s website.
expenditure on the basis of deﬁ nitions laid down
in Regulation (EC) No 1221/2002 of the The tables in Sections 7.1 and 7.4 follow
European Parliament and of the Council of the sign convention in the IMF Balance of
10 June 2002 on quarterly non-ﬁ nancial accounts Payments Manual – i.e. surpluses in the current
for general government 10. Section 6.5 presents account and the capital account have a plus
quarterly
ﬁ
gures on gross consolidated sign, while in the ﬁ nancial account a plus sign
government debt, the deﬁ cit-debt adjustment denotes an increase in liabilities or a decrease
and the government borrowing requirement. in assets. In the tables in Section 7.2, both credit
These ﬁ gures are compiled using data provided and debit transactions are presented with a plus
by the Member States under Regulation (EC) sign. Furthermore, as of the February 2008
No 501/2004 and Regulation (EC) No 222/2004 issue of the Monthly Bulletin, the tables in
and data provided by the NCBs.
Section 7.3 have been restructured in order to
allow the data on the balance of payments, the
international investment position and related
EXTERNAL TRANSACTIONS AND POSITIONS
growth rates to be presented together; in the new
tables, transactions in assets and liabilities that
The concepts and deﬁ nitions used in balance of correspond to increases in positions are shown
payments and international investment position with a plus sign.
(i.i.p.) statistics (Sections 7.1 to 7.4) are
generally in line with the IMF Balance of The euro area b.o.p. is compiled by the ECB.
Payments Manual (ﬁ fth edition, October 1993), Recent monthly ﬁ gures should be regarded as
the ECB Guideline of 16 July 2004 on the provisional. Data are revised when ﬁ gures for
statistical reporting requirements of the ECB the following month and/or the detailed quarterly
(ECB/2004/15)11 and the amending ECB b.o.p. are published. Earlier data are revised
Guideline of 31 May 2007 (ECB/2007/3) 12. periodically or as a result of methodological
Additional information regarding the
changes in the compilation of the source data.
methodologies and sources used in the euro area
b.o.p. and i.i.p. statistics can be found in the Table 1 in Section 7.2 also contains seasonally
ECB publication entitled “European Union adjusted data for the current account. Where
balance of payments/international investment appropriate, the adjustment also covers working
position statistical methods” (May 2007) and in day, leap year and/or Easter-related effects.
the reports of the Task Force on Portfolio Table 3 in Section 7.2 and Table 9 in Section 7.3
Investment Collection Systems (June 2002), the present a breakdown of the euro area b.o.p. and
Task Force on Portfolio Investment Income i.i.p. vis-à-vis major partner countries, both
(August 2003) and the Task Force on Foreign individually and as a group, distinguishing
Direct Investment (March 2004), all of which between EU Member States outside the euro
can be downloaded from the ECB’s website. In area and countries or areas outside the European
addition, a report by the ECB/European Union. The breakdown also shows transactions
Commission (Eurostat) Task Force on Quality and positions vis-à-vis EU institutions (which,
looking at balance of payments and international
10 OJ L 179, 9.7.2002, p. 1.
investment position statistics (June 2004) is 11 OJ L 354, 30.11.2004, p. 34.
available on the website of the Committee on 12 OJ L 159, 20.6.2007, p. 48.
ECB
Monthly Bulletin
August 2010 S 93

with the exception of the ECB, are considered In Table 5 in Section 7.3, the breakdown into
to be outside the euro area for statistical “loans” and “currency and deposits” is based
purposes, regardless of their physical location) on the sector of the non-resident counterpart –
and, for some purposes, offshore centres and i.e. assets vis-à-vis non-resident banks are
international organisations. The breakdown does
classiﬁ ed as deposits, whereas assets vis-à-vis
not cover transactions or positions in portfolio other non-resident sectors are classiﬁ ed as loans.
investment liabilities, ﬁ nancial derivatives or This breakdown follows the distinction made in
international reserves. In addition, separate data other statistics, such as the MFI consolidated
are not provided for investment income payable balance sheet, and conforms to the IMF Balance
to Brazil, mainland China, India or Russia. The of Payments Manual.
geographical breakdown is described in the
article entitled “Euro area balance of payments The outstanding amounts for the Eurosystem’s
and international investment position vis-à-vis international reserves and related assets and
main counterparts” in the February 2005 issue liabilities are shown in Table 7 of Section 7.3.
of the Monthly Bulletin.
These ﬁ gures are not fully comparable with
those in the Eurosystem’s weekly ﬁ nancial
The data on the euro area b.o.p. ﬁ nancial account statement owing to differences in coverage
and i.i.p. in Section 7.3 are based on transactions
and valuation. The data in Table 7 are in line
and positions vis-à-vis non-residents of the euro with the recommendations for the template on
area, regarding the euro area as a single economic international reserves and foreign currency
entity (see also Box 9 in the December 2002 liquidity. Changes in the gold holdings of the
issue of the Monthly Bulletin, Box 5 in the Eurosystem (column 3) are due to transactions
January 2007 issue of the Monthly Bulletin and in gold within the terms of the Central Bank
Box 6 in the January 2008 issue of the Monthly Gold Agreement of 26 September 1999, which
Bulletin). The i.i.p. is valued at current market was updated on 27 September 2009. More
prices, with the exception of direct investment, information on the statistical treatment of the
where book values are used for unquoted shares, Eurosystem’s international reserves can be found
and other investments (e.g. loans and deposits). in a publication entitled “Statistical treatment
The quarterly i.i.p. is compiled on the basis of the
of the Eurosystem’s international reserves”
same methodological framework as the annual (October 2000), which can be downloaded from
i.i.p. As some data sources are not available on the ECB’s website. The website also contains
a quarterly basis (or are available with a delay), more comprehensive data in accordance with the
the quarterly i.i.p. is partly estimated on the template on international reserves and foreign
basis of ﬁ nancial transactions, asset prices and currency liquidity.
foreign exchange developments.
The euro area’s gross external debt statistics
Table 1 in Section 7.3 summarises the i.i.p. and in Table 8 of Section 7.3 represent outstanding
ﬁ nancial transactions in the euro area b.o.p. actual (rather than contingent) liabilities vis-à-vis
The breakdown of the change in the annual non-euro area residents that require the payment
i.i.p. is obtained by applying a statistical model of principal and/or interest by the debtor at one
to i.i.p. changes other than transactions, using or more points in the future. Table 8 shows a
information from the geographical breakdown breakdown of gross external debt by instrument
and currency composition of assets and and institutional sector.
liabilities, as well as price indices for different
ﬁ nancial assets. In this table, columns 5 and Section 7.4 contains a monetary presentation
6 refer to direct investment by resident units of the euro area balance of payments, showing
abroad and direct investment by non-resident the transactions by non-MFIs that mirror the net
units in the euro area.
external transactions by MFIs. Included in the
ECB
Monthly Bulletin
S 94 August 2010

E U R O A R E A
STATISTICS
General Notes
transactions by non-MFIs are b.o.p. transactions reﬂ ects the cost, insurance and freight price
for which a sectoral breakdown is not available. excluding import duties and taxes, and refers to
These concern the current and capital accounts actual transactions in euro recorded at the point
(column 2) and ﬁ nancial derivatives (column 11).
when ownership of the goods is transferred.
An up-to-date methodological note on the The industrial producer export prices cover all
monetary presentation of the euro area balance industrial products exported directly by euro
of payments is available in the “Statistics” area producers to the extra-euro area market
section of the ECB’s website. See also Box 1 in under sections B to E of NACE Revision 2.
the June 2003 issue of the Monthly Bulletin.
Exports from wholesalers and re-exports are
not covered. The indices reﬂ ect the free on
Section 7.5 shows data on euro area external board price expressed in euro and calculated
trade in goods. The source is Eurostat. Value data
at the euro area frontier, including any indirect
and volume indices are seasonally and working taxes except VAT and other deductible taxes.
day-adjusted. The breakdown by product Industrial import prices and industrial producer
group in columns 4 to 6 and 9 to 11 of Table 1 export prices are available by Main Industrial
in Section 7.5 is in line with the classiﬁ cation Grouping as deﬁ ned by Commission Regulation
contained in the Broad Economic Categories (EC) No 656/2007 of 14 June 2007. For more
and corresponds to the basic classes of goods in details, see Box 11 in the December 2008 issue
the System of National Accounts. Manufactured of the Monthly Bulletin.
goods (columns 7 and 12) and oil (column 13)
are in line with the SITC Rev. 4 deﬁ nition. The
geographical breakdown (Table 3 in Section 7.5)
EXCHANGE RATES
shows major trading partners both individually
and in regional groups. China excludes Hong Section 8.1 shows nominal and real effective
Kong. On account of differences in deﬁ nitions, exchange rate indices for the euro, which are
classiﬁ cation, coverage and time of recording, calculated by the ECB on the basis of weighted
external trade data, in particular for imports, are averages of the euro’s bilateral exchange rates
not fully comparable with the goods item in the against the currencies of the selected trading
b.o.p. statistics (Sections 7.1 and 7.2). Part of the
partners of the euro area. A positive change
difference arises from the inclusion of insurance denotes an appreciation of the euro. Weights
and freight services in the recording of imported are based on trade in manufactured goods with
goods in external trade data.
those trading partners in the periods 1995-1997,
1998-2000, 2001-2003 and 2004-2006, and are
Industrial import prices and industrial producer calculated to account for third-market effects.
export prices (or industrial output prices for The EER indices are obtained by chain-linking
the non-domestic market) shown in Table 2 the indicators based on each of these four sets
in Section 7.5 were introduced by Regulation of trade weights at the end of each three-year
(EC) No 1158/2005 of the European Parliament period. The base period of the resulting EER
and of the Council of 6 July 2005 amending index is the ﬁ rst quarter of 1999. The EER-21
Council Regulation (EC) No 1165/98, which is group of trading partners is composed of the
the principal legal basis for short-term statistics. 11 non-euro area EU Member States plus
The industrial import price index covers Australia, Canada, China, Hong Kong, Japan,
industrial products imported from outside the Norway, Singapore, South Korea, Switzerland
euro area under sections B to E of the Statistical and the United States. The EER-41 group
Classiﬁ cation of Products by Activity in the comprises the EER-21 plus the following
European Economic Community (CPA) and all countries: Algeria, Argentina, Brazil, Chile,
institutional import sectors except households, Croatia, Iceland, India, Indonesia, Israel,
governments and non-proﬁ
t institutions. It Malaysia, Mexico, Morocco, New Zealand,
ECB
Monthly Bulletin
August 2010 S 95

the Philippines, Russia, South Africa, Taiwan,
Thailand, Turkey and Venezuela. Real EERs
are calculated using consumer price indices,
producer price indices, gross domestic product
deﬂ ators and unit labour costs, both for the
manufacturing sector and for the total economy.
For more detailed information on the calculation
of the EERs, see Box 5, entitled “International
trade developments and revision of the effective
exchange rates of the euro”, in the January 2010
issue of the Monthly Bulletin, the relevant
methodological note and ECB Occasional
Paper No 2 (“The effective exchange rates of
the euro” by Luca Buldorini, Stelios Makrydakis
and Christian Thimann, February 2002), which
can be downloaded from the ECB’s website.
The bilateral rates shown in Section 8.2 are
monthly averages of those published daily as
reference rates for these currencies.
DEVELOPMENTS OUTSIDE THE EURO AREA
Statistics on other EU Member States
(Section 9.1) follow the same principles as data
relating to the euro area. As a result, data on
current and capital accounts and gross external
debt include special-purpose vehicles. The data
for the United States and Japan contained in
Section 9.2 are obtained from national sources.
ECB
Monthly Bulletin
S 96 August 2010

A N N E X E S
CHRONOLOGY OF MONETARY POLICY
MEASURES OF THE EUROSYSTEM1
11 JANUARY AND 8 FEBRUARY 2007
5 JULY, 2 AUGUST, 6 SEPTEMBER, 4 OCTOBER,
8 NOVEMBER AND 6 DECEMBER 2007, AND
The Governing Council of the ECB decides 10 JANUARY, 7 FEBRUARY, 6 MARCH, 10 APRIL,
that the minimum bid rate on the main 8 MAY AND 5 JUNE 2008
reﬁ nancing operations and the interest rates on
the marginal lending facility and the deposit The Governing Council of the ECB decides that
facility will remain unchanged at 3.50%, the minimum bid rate on the main reﬁ nancing
4.50% and 2.50% respectively.
operations and the interest rates on the marginal
lending facility and the deposit facility will
remain unchanged at 4.00%, 5.00% and 3.00%
8 MARCH 2007
respectively.
The Governing Council of the ECB decides
to increase the minimum bid rate on the main 3 JULY 2008
reﬁ nancing operations by 25 basis points to
3.75%, starting from the operation to be settled The Governing Council of the ECB decides
on 14 March 2007. In addition, it decides to to increase the minimum bid rate on the main
increase the interest rates on both the marginal reﬁ nancing operations by 25 basis points
lending facility and the deposit facility by to 4.25%, starting from the operation to be
25 basis points, to 4.75% and 2.75%, both with settled on 9 July 2008. In addition, it decides
effect from 14 March 2007.
to increase by 25 basis points the interest
rates on both the marginal lending facility
and the deposit facility, to 5.25% and 3.25%
12 APRIL AND 10 MAY 2007
respectively, with effect from 9 July 2008.
The Governing Council of the ECB decides
that the minimum bid rate on the main 7 AUGUST, 4 SEPTEMBER AND
reﬁ nancing operations and the interest rates on 2 OCTOBER 2008
the marginal lending facility and the deposit
facility will remain unchanged at 3.75%, 4.75%
The Governing Council of the ECB decides that
and 2.75% respectively.
the minimum bid rate on the main reﬁ nancing
operations and the interest rates on the marginal
lending facility and the deposit facility will
6 JUNE 2007
remain unchanged at 4.25%, 5.25% and 3.25%
respectively.
The Governing Council of the ECB decides
to increase the minimum bid rate on the main
reﬁ nancing operations by 25 basis points to 8 OCTOBER 2008
4%, starting from the operation to be settled on
13 June 2007. In addition, it decides to increase The Governing Council of the ECB decides
by 25 basis points the interest rates on both to decrease the minimum bid rate on the main
the marginal lending facility and the deposit reﬁ nancing operations by 50 basis points to
facility, to 5% and 3% respectively, with effect 3.75%, starting from the operations to be settled
from 13 June 2007.
on 15 October 2008. In addition, it decides to
decrease by 50 basis points the interest rates on
1 The chronology of monetary policy measures taken by the
Eurosystem between 1999 and 2006 can be found in the ECB’s
Annual Report for the respective years.
ECB
Monthly Bulletin
August 2010
I

both the marginal lending facility and the deposit operations of the Eurosystem by 75 basis points
facility, to 4.75% and 2.75% respectively, with to 2.50%, starting from the operations to be
immediate effect. Moreover, the Governing settled on 10 December 2008. In addition,
Council decides that, as from the operation settled
it decides to decrease by 75 basis points the
on 15 October, the weekly main reﬁ nancing interest rates on both the marginal lending
operations will be carried out through a ﬁ xed-
and the deposit facility to 3.00% and 2.00%
rate tender procedure with full allotment at the respectively, with effect from 10 December
interest rate on the main reﬁ nancing operation. 2008.
Furthermore, as of 9 October, the ECB will
reduce the corridor of standing facilities from
200 basis points to 100 basis points around the 18 DECEMBER 2008
interest rate on the main reﬁ nancing operation.
The two measures will remain in place for as The Governing Council of the ECB decides
long as needed, and at least until the end of the that the main reﬁ
nancing operations will
ﬁ rst maintenance period of 2009, on 20 January.
continue to be carried out through a ﬁ xed rate
tender procedure with full allotment beyond the
maintenance period ending on 20 January 2009.
15 OCTOBER 2008
This measure will be in place for as long as
needed, and at least until the last allotment of the
The Governing Council of the ECB decides to third maintenance period in 2009 on 31 March.
further expand the collateral framework and Moreover, as of 21 January 2009, the corridor of
enhance the provision of liquidity. To do so, the standing facility rates, which on 9 October 2008
Governing Council decides: (i) to expand the was reduced to 100 basis points around the
list of assets eligible as collateral in Eurosystem prevailing interest rate of the main reﬁ nancing
credit operations, with this expansion remaining operation, will be re-widened symmetrically to
in force until the end of 2009, (ii) to enhance 200 basis points.
the provision of longer-term reﬁ nancing, with
effect from 30 October 2008 and until the end of
the ﬁ rst quarter of 2009, and (iii) to provide US 15 JANUARY 2009
dollar liquidity through foreign exchange swaps.
The Governing Council of the ECB decides
to decrease the interest rate on the main
6 NOVEMBER 2008
reﬁ nancing operations by 50 basis points to
2.00%, starting from the operations to be settled
The Governing Council of the ECB decides on 21 January 2009. In addition, it decides that
to decrease the interest rate on the main the interest rates on the marginal lending and
reﬁ nancing operations by 50 basis points to the deposit facility will be 3.00% and 1.00%
3.25%, starting from the operations to be settled respectively, with effect from 21 January 2009,
on 12 November 2008. In addition, it decides to in line with the decision of 18 December 2008.
decrease by 50 basis points the interest rates on
both the marginal lending facility and the deposit
facility, to 3.75% and 2.75% respectively, with 5 FEBRUARY 2009
effect from 12 November 2008.
The Governing Council of the ECB decides
that the interest rate on the main reﬁ nancing
4 DECEMBER 2008
operations and the interest rates on the marginal
lending facility and the deposit facility will
The Governing Council of the ECB decides to remain unchanged at 2.00%, 3.00% and 1.00%
decrease the interest rate on the main reﬁ nancing respectively.
ECB
Monthly Bulletin
II
August 2010

C H R O N O L O G Y
5 MARCH 2009
on the deposit facility unchanged at 0.25%.
In addition, the Governing Council of the ECB
The Governing Council of the ECB decides decides to proceed with its enhanced credit
to decrease the interest rate on the main support approach. In particular, it decides that
reﬁ nancing operations by 50 basis points to the Eurosystem will conduct liquidity-providing
1.50%, starting from the operations to be settled longer-term reﬁ
nancing operations with a
on 11 March 2009. In addition, it decides that maturity of one year as ﬁ xed rate tender
the interest rates on the marginal lending and procedure with full allotment. In addition, it
the deposit facility will be 2.50% and 0.50% decides in principle that the Eurosystem will
respectively, with effect from 11 March 2009.
purchase euro-denominated covered bonds
issued in the euro area.
Moreover, the Governing Council decides
to continue the ﬁ xed rate tender procedure
with full allotment for all main reﬁ nancing 4 JUNE 2009
operations, special-term reﬁ nancing operations
and supplementary and regular longer-term The Governing Council of the ECB decides
reﬁ nancing operations for as long as needed, that the interest rate on the main reﬁ nancing
and in any case beyond the end of 2009. In operations and the interest rates on the marginal
addition, the Governing Council decides lending facility and the deposit facility will
to continue with the current frequency and remain unchanged at 1.00%, 1.75% and 0.25%
maturity proﬁ
le of supplementary longer-
respectively. In addition, the Governing Council
term reﬁ nancing operations and special-term of the ECB decides upon the technical modalities
reﬁ nancing operations for as long as needed, related to the purchase of euro-denominated
and in any case beyond the end of 2009.
covered bonds issued in the euro area decided
on 7 May 2009.
2 APRIL 2009
2 JULY, 6 AUGUST, 3 SEPTEMBER, 8 OCTOBER,
The Governing Council of the ECB decides 5 NOVEMBER AND 3 DECEMBER 2009, AND
to decrease the interest rate on the main 14 JANUARY, 4 FEBRUARY, 4 MARCH, 8 APRIL AND
reﬁ nancing operations by 25 basis points to 6 MAY 2010
1.25%, starting from the operations to be settled
on 8 April 2009. In addition, it decides that The Governing Council of the ECB decides
the interest rates on the marginal lending and that the interest rate on the main reﬁ nancing
the deposit facility will be 2.25% and 0.25% operations and the interest rates on the marginal
respectively, with effect from 8 April 2009.
lending facility and the deposit facility will
remain unchanged at 1.00%, 1.75% and 0.25%
respectively.
7 MAY 2009
The Governing Council of the ECB decides to 10 MAY 2010
decrease the interest rate on the main reﬁ nancing
operations by 25 basis points to 1.00%, starting The Governing Council of the ECB decides on
from the operation to be settled on 13 May several measures to address severe tensions in
2009. In addition, it decides to decrease the ﬁ nancial markets. In particular, it decides to
interest rate on the marginal lending facility conduct interventions in the euro area public
by 50 basis points to 1.75% with effect from and private debt securities markets (Securities
13 May 2009, and to leave the interest rate Markets Programme).
ECB
Monthly Bulletin
August 2010
III

10 JUNE 2010
The Governing Council of the ECB decides
that the interest rate on the main reﬁ nancing
operations and the interest rates on the marginal
lending facility and the deposit facility will
remain unchanged at 1.00%, 1.75% and 0.25%
respectively. In addition, it decides to adopt a
ﬁ xed rate tender procedure with full allotment in
the regular three-month longer-term reﬁ nancing
operations to be allotted during the third quarter
of 2010.
8 JULY AND 5 AUGUST 2010
The Governing Council of the ECB decides
that the interest rate on the main reﬁ nancing
operations and the interest rates on the marginal
lending facility and the deposit facility will
remain unchanged at 1.00%, 1.75% and 0.25%
respectively.
ECB
Monthly Bulletin
IV August 2010

DOCUMENTS PUBLISHED BY THE
EUROPEAN CENTRAL BANK SINCE 2009
This list is designed to inform readers about selected documents published by the European Central
Bank since January 2009. For Working Papers, which as of January 2009 (from Working Paper
No 989 onwards) are available online only, the list only refers to publications released between
May and July 2010. As of November 2009 (from Legal Working Paper No 9 onwards) Legal
Working Papers are also available online only. Unless otherwise indicated, hard copies can be
obtained or subscribed to free of charge, stock permitting, by contacting info@ecb.europa.eu.
For a complete list of documents published by the European Central Bank and by the European
Monetary Institute, please visit the ECB’s website (http://www.ecb.europa.eu).
ANNUAL REPORT
“Annual Report 2008”, April 2009.
“Annual Report 2009”, April 2010.
CONVERGENCE REPORT
“Convergence Report 2010”, May 2010.
MONTHLY BULLETIN ARTICLES
“Housing wealth and private consumption in the euro area”, January 2009.
“Foreign asset accumulation by authorities in emerging markets”, January 2009.
“New survey evidence on wage setting in Europe”, February 2009.
“Assessing global trends in protectionism”, February 2009.
“The external ﬁ nancing of households and non-ﬁ nancial corporations: a comparison of the euro
area and the United States”, April 2009.
“Revisions to GDP estimates in the euro area”, April 2009.
“The functional composition of government spending in the European Union”, April 2009.
“Expectations and the conduct of monetary policy”, May 2009.
“Five years of EU membership”, May 2009.
“Credit rating agencies: developments and policy issues”, May 2009.
“The impact of government support to the banking sector on euro area public ﬁ nances”, July 2009.
“The implementation of monetary policy since August 2007”, July 2009.
“Rotation of voting rights in the Governing Council of the ECB”, July 2009.
“Housing ﬁ nance in the euro area”, August 2009.
“Recent developments in the retail bank interest rate pass-through in the euro area”, August 2009.
“Monetary policy and loan supply in the euro area”, October 2009.
“Recent developments in the balance sheets of the Eurosystem, the Federal Reserve System and
the Bank of Japan”, October 2009.
“Financial development in emerging economies – stock-taking and policy implications”, October 2009.
“Central bank communication in periods of heightened uncertainty”, November 2009.
“Monetary analysis in an environment of ﬁ nancial turmoil”, November 2009.
“The latest euro area recession in a historical context”, November 2009.
“The ECB’s monetary policy stance during the ﬁ nancial crisis”, January 2010.
“The ECB’s relations with European Union institutions and bodies: trends and prospects”,
January 2010.
“Entitlements of households under government pension schemes in the euro area – results on the
basis of the new system of national accounts”, January 2010.
ECB
Monthly Bulletin
August 2010
V

“Euro repo markets and the ﬁ nancial market turmoil”, February 2010.
“Euro area commercial property markets and their impact on banks”, February 2010.
“Update on developments in general economic statistics for the euro area”, February 2010.
“Tools for preparing short-term projections of euro area inﬂ ation”, April 2010.
“Measures taken by euro area governments in support of the ﬁ nancial sector”, April 2010.
“Prospects for real and ﬁ nancial imbalances and a global rebalancing”, April 2010.
“Monetary policy transmission in the euro area, a decade after the introduction of the euro”, May 2010.
“The ‘Great Inﬂ ation’: lessons for monetary policy”, May 2010.
“Labour market adjustments to the recession in the euro area”, July 2010.
“The effectiveness of euro area ﬁ scal policies”, July 2010.
“The impact of the ﬁ nancial crisis on the central and eastern European countries”, July 2010.
“Oil prices – their determinants and impact on euro area inﬂ ation and the macroeconomy”, August 2010.
“Recent developments in global and euro area trade”, August 2010.
“Harmonised ECB statistics on euro area investment funds and their analytical use for monetary
policy purposes”, August 2010.
STATISTICS POCKET BOOK
Available monthly since August 2003.
LEGAL WORKING PAPER SERIES
8
“National rescue measures in response to the current ﬁ nancial crisis” by A. Petrovic and
R. Tutsch, July 2009.
9
“The legal duty to consult the European Central Bank – national and EU consultations”
by S. E. Lambrinoc, November 2009.
10
“Withdrawal and expulsion from the EU and EMU: some reﬂ ections” by P. Athanassiou,
December 2009.
11
“The role of national central banks in banking supervision in selected central and
eastern European countries” by M. Apinis, M. Bodzioch, E. Csongrádi, T. Filipova,
Z. Foit, J. Kotkas, M. Porzycki and M. Vetrák, March 2010.
OCCASIONAL PAPER SERIES
100
“Survey
data on household ﬁ nance and consumption: research summary and policy use” by the
Eurosystem Household Finance and Consumption Network, January 2009.
101
“Housing
ﬁ nance in the euro area” by the Task Force of the Monetary Policy Committee of
the European System of Central Banks, March 2009.
102
“Domestic
ﬁ nancial development in emerging economies: evidence and implications”
by E. Dorrucci, A. Meyer-Cirkel and D. Santabárbara, April 2009.
103 “Transnational governance in global ﬁ nance: the principles for stable capital ﬂ ows and fair
debt restructuring in emerging markets” by R. Ritter, April 2009.
104 “Fiscal policy challenges in oil-exporting countries: a review of key issues” by M. Sturm,
F. Gurtner and J. González Alegre, June 2009.
105 “Flow-of-funds analysis at the ECB – framework and applications” by L. Bê Duc
and G. Le Breton, August 2009.
106 “Monetary policy strategy in a global environment” by P. Moutot and G. Vitale,
August 2009.
ECB
Monthly Bulletin
VI August 2010

D O C U M E N T S
P U B L I S H E D
107 “The collateral frameworks of the Eurosystem, the Federal Reserve System and the Bank
of England and the ﬁ nancial market turmoil” by S. Cheun, I. von Köppen-Mertes and
B. Weller, December 2009.
108 “Trade consistency in the context of the Eurosystem projection exercises – an overview”
by K. Hubrich and T. Karlsson, March 2010.
109 “Euro
area
ﬁ scal policies and the crisis” edited by A. van Riet, April 2010.
110 “Protectionist responses to the crisis: global trends and implications” by M. Bussière,
E. Pérez-Barreiro, R. Straub and D. Taglioni, April 2010.
111 “Main drivers of the ECB ﬁ nancial accounts and ECB ﬁ nancial strength over the ﬁ rst
11 years” by O. Vergote, W. Studener, I. Efthymiadis and N. Merriman, May 2010.
112 “Public wages in the euro area: towards securing stability and competitiveness”
by F. Holm-Hadulla, K. Kamath, A. Lamo, J. J. Pérez and L. Schuknecht, June 2010.
113 “Energy markets and the euro area macroeconomy” by Task Force of the Monetary Policy
Committee of the European System of Central Banks, June 2010.
114 “The impact of the global economic and ﬁ nancial crisis on central, eastern and south-eastern
Europe: a stock-taking exercise” by S. Gardó and R. Martin, June 2010.
115 “Financial stability challenges in EU candidate countries. Financial systems in the aftermath
of the global ﬁ nancial crisis” by an IRC expert team of the ESCB, July 2010.
116 “Securities clearing and settlement in China – markets, infrastructures and policy-making”
by P. Hess, July 2010.
117 “Extraordinary measures in extraordinary times: public measures in support of the ﬁ nancial
sector in the EU and the United States”, by S. M. Stolz and M. Wedow, July 2010.
RESEARCH BULLETIN
“Research Bulletin”, No 8, March 2009.
“Research Bulletin”, No 9, March 2010.
“Research Bulletin”, No 10, June 2010.
WORKING PAPER SERIES
1185 “Forecasting with DSGE models” by K. Christoffel, G. Coenen and A. Warne, May 2010.
1186
“Modelling anti-inﬂ ationary monetary targeting: with an application to Romania”
by M. Sánchez, May 2010.
1187 “Substitution between domestic and foreign currency loans in central Europe: do central
banks matter?” by M. Brzoza-Brzezina, T. Chmielewski and J. Niedźwiedzińska, May 2010.
1188 “Are policy counterfactuals based on structural VARs reliable?” by L. Benati, May 2010.
1189 “Maximum likelihood estimation of factor models on datasets with arbitrary pattern
of missing data” by M. Bańbura and M. Modugno, May 2010.
1190 “Booms and busts in China’s stock market: estimates based on fundamentals”
by G. J. de Bondt, T. A. Peltonen and D. Santabárbara, May 2010.
1191 “Money in monetary policy design: monetary cross-checking in the New Keynesian model”
by G. W. Beck and V. Wieland, May 2010.
1192 “Financial factors in economic ﬂ uctuations” by L. Christiano, R. Motto and M. Rostagno,
May 2010.
1193 “Should larger reserve holdings be more diversiﬁ ed?” by R. Beck and S. Weber, May 2010.
1194 “Econometric analysis of high dimensional VARs featuring a dominant unit”
by M. H. Pesaran and A. Chudik, May 2010.
ECB
Monthly Bulletin
August 2010
VII

1195 “The EAGLE: a model for policy analysis of macroeconomic interdependence in the
euro area” by S. Gomes, P. Jacquinot and M. Pisani, May 2010.
1196 “Reputational contagion and optimal regulatory forbearance” by A. D. Morrison
and L. White, May 2010.
1197 “Investors with too many options?” by D. Dorn, May 2010.
1198 “Wage and price-setting behaviour of Lithuanian ﬁ rms” by E. Virbickas, May 2010.
1199 “Changes in the wage structure in EU countries” by R. Christopoulou, J. F. Jimeno
and A. Lamo, May 2010.
1200 “Testing the asset pricing model of exchange rates with survey data” by A. Naszodi,
May 2010.
1201 “Growth strategies and value creation: what works best for stock exchanges?” by I. Hasan,
H. Schmiedel and L. Song, June 2010.
1202 “Involuntary unemployment and the business cycle” by L. Christiano, M. Trabandt
and K. Walentin, June 2010.
1203 “Cross-border banking and the international transmission of ﬁ nancial distress during the
crisis of 2007-08” by A. Popov and G. F. Udell, June 2010.
1204 “Banking sector output measurement in the euro area − a modiﬁ ed approach” by A. Colangelo
and R. Inklaar, June 2010.
1205
“Nelson-Siegel, afﬁ ne and quadratic yield curve speciﬁ cations: which one is better at
forecasting?” by K. Nyholm and R. Vidova-Koleva, June 2010.
1206 “Relative house price dynamics across euro area and US cities: convergence or
divergence?” by P. Hiebert and M. Roma, June 2010.
1207 “Money growth and inﬂ ation: a regime switching approach” by G. Amisano and G. Fagan,
June 2010.
1208 “Reverse causality in global current accounts” by G. Schnabl and S. Freitag, June 2010.
1209 “Epstein-Zin preferences and their use in macro-ﬁ nance models: implications for optimal
monetary policy” by M. Darracq Pariès and A. Loublier, June 2010.
1210 “Towards a robust monetary policy rule for the euro area” by T. Blattner and E. Margaritov,
June 2010.
1211
“Efﬁ ciency and risk in European banking” by F. Fiordelisi, D. Marqués-Ibáñez,
and P. Molyneux, June 2010.
1212 “Multimarket trading and the cost of debt: evidence from global bonds” by L. Petrasek,
June 2010.
1213 “The incidence of nominal and real wage rigidity: an individual-based sectoral approach”
by J. Messina, M. Izquierdo, P. Du Caju, C. F. Duarte and N. Lynggård Hansen, June 2010.
1214 “Detecting and interpreting ﬁ nancial stress in the euro area” by M. Blix Grimaldi,
June 2010.
1215 “Formal education, mismatch and wages after transition: assessing the impact of unobserved
heterogeneity using matching estimators” by A. Lamo and J. Messina, June 2010.
1216 “What lies beneath the euro’s effect on ﬁ nancial integration? Currency risk, legal
harmonisation, or trade?” by S. Kalemli-Ozcan, E. Papaioannou, J.-L. Peydró, June 2010.
1217 “Fiscal policy and growth: do ﬁ nancial crises make a difference?” by C. Kolerus,
H. P. Grüner and A. Afonso, June 2010.
1218 “Sectoral money demand and the great disinﬂ ation in the United States” by A. Calza and
A. Zaghini, June 2010.
1219 “Transmission of government spending shocks in the euro area: time variation and driving
forces” by M. Kirchner, J. Cimadomo and S. Hauptmeier, July 2010.
1220 “The gains from early intervention in Europe: ﬁ scal surveillance and ﬁ scal planning using
cash data” by A. H. Hallett, M. Kuhn and T. Warmedinger, July 2010.
ECB
Monthly Bulletin
VIII
August 2010

D O C U M E N T S
P U B L I S H E D
1221
“Financial regulation, ﬁ nancial globalisation and the synchronisation of economic activity”,
by S. Kalemli-Ozcan, E. Papaioannou and J.-L. Peydró, July 2010.
1222 “Monetary policy and capital regulation in the United States and Europe” by E. Cohen-Cole
and J. Morse, July 2010.
1223 “The dark side of bank wholesale funding” by R. Huang and L. Ratnovski, July 2010.
1224 “Wages, labour or prices: how do ﬁ rms react to shocks?” by E. Dhyne and M. Druant,
July 2010.
1225 “Price and wage formation in Portugal” by C. R. Marques, F. Martins and P. Portugal,
July 2010.
1226 “Chronicle of currency collapses: re-examining the effects on output” by M. Bussière,
S. C. Saxena and C. E. Tovar, July 2010.
1227 “Exports and sectoral ﬁ nancial dependence: evidence on French ﬁ rms during the great
global crisis” by J.-C. Bricongne, L. Fontagné, G. Gaulier, D. Taglioni and V. Vicard,
July 2010.
1228 “Trusting the bankers: a new look at the credit channel of monetary policy”, by M. Ciccarelli,
A. Maddaloni and J.-L. Peydró, July 2010.
1229
“Inﬂ ation and inﬂ ation uncertainty in the euro area” by G. M. Caporale, L. Onorante
and P. Paesani, July 2010.
1230 “Time variation in US wage dynamics” by B. Hofmann, R. Straub and G. Peersman,
July 2010.
OTHER PUBLICATIONS
“Letter from the ECB President to Mr Robert Sturdy, Member of the European Parliament”,
January 2009 (online only).
“Euro money market study 2008”, February 2009 (online only).
“Eurosystem oversight policy framework”, February 2009 (online only).
“Harmonised oversight approach and oversight standards for payment instruments”, February 2009
(online only).
“European Commission’s consultation on hedge funds – Eurosystem contribution”, February 2009
(online only).
“Guiding principles for bank asset support schemes”, March 2009 (online only).
“Letter from the ECB President to Mr José Ribeiro e Castro, Member of the European
Parliament”, March 2009 (online only).
“Letter from the ECB President to Mr Dimitrios Papadimoulis, Member of the European
Parliament”, March 2009 (online only).
“Letter from the ECB President to Mr Manolis Mavrommatis, Member of the European Parliament,
regarding the issuance of low denomination euro banknotes”, March 2009 (online only).
“Letter from the ECB President to Mr Eoin Ryan, Member of the European Parliament, concerning the
recent widening of spreads between euro area government bond yields”, March 2009 (online only).
“Eurosystem’s SEPA expectations”, March 2009 (online only).
“Housing ﬁ nance in the euro area”, March 2009 (online only).
“Euro area monetary and ﬁ nancial statistics: 2008 quality report”, March 2009 (online only).
“Euro area balance of payments and international investment position statistics: 2008 quality report”,
March 2009 (online only).
“Manual on investment fund statistics”, May 2009 (online only).
“EU banks’ funding structures and policies”, May 2009 (online only).
“Letter from the ECB President to Mr Ashley Mote, Member of the European Parliament”,
May 2009 (online only).
ECB
Monthly Bulletin
August 2010
IX

“TARGET2 oversight assessment report”, May 2009 (online only).
“TARGET Annual Report”, May 2009 (online only).
“The ECB’s advisory role – overview of opinions (1994-2008)”, May 2009.
“Financial Stability Review”, June 2009.
“Recommendations for securities settlement systems and recommendations for central
counterparties in the European Union – European Central Bank (ECB) and the Committee of
European Securities Regulators (CESR)”, June 2009 (online only).
“The international role of the euro”, July 2009.
“Monthly report on the Eurosystem’s covered bond purchase programme – July 2009”, August 2009
(online only).
“Oversight framework for direct debit schemes”, August 2009 (online only).
“Oversight framework for credit transfer schemes”, August 2009 (online only).
“The Eurosystem’s stance on the Commission’s consultation document on the review of Directive
94/19/EC on deposit-guarantee schemes”, August 2009 (online only).
“Legal framework of the Eurosystem and the European System of Central Banks. ECB legal acts
and instruments. 2009 update”, August 2009.
“EU banking sector stability”, August 2009 (online only).
“Credit default swaps and counterparty risk”, August 2009 (online only).
“OTC derivatives and post-trading infrastructures”, September 2009 (online only).
“Monthly report on the Eurosystem’s covered bond purchase programme – August 2009”,
September 2009 (online only).
“Consultation of the European Commission on ‘Possible initiatives to enhance the resilience of
OTC derivatives markets’: Eurosystem contribution”, September 2009 (online only).
“ECB survey on access to ﬁ nance for small and medium-sized enterprises in the euro area”,
September 2009 (online only).
“The euro at ten – lessons and challenges”, Fifth ECB Central Banking Conference volume,
September 2009.
“Euro money market survey”, September 2009 (online only).
“Monthly report on the Eurosystem’s covered bond purchase programme – September 2009”,
October 2009 (online only).
“Letter from the ECB President to Mr Jim Higgins, Member of the European Parliament,
concerning consumer protection and banking practices in Spain”, October 2009 (online only).
“Letter from the ECB President to Mr Jim Higgins, Member of the European Parliament,
concerning the ECB’s considerations on issuing a €30 banknote”, October 2009 (online only).
“Monthly report on the Eurosystem’s covered bond purchase programme – October 2009”,
November 2009 (online only).
“Consultation of the Committee of European Securities Regulators on trade repositories in the
European Union – ECB contribution”, November 2009 (online only).
“Eurosystem oversight report 2009”, November 2009 (online only).
“Glossary of terms related to payment clearing and settlement systems”, December 2009 (online only).
“Monthly report on the Eurosystem’s covered bond purchase programme – November 2009”,
December 2009 (online only).
“New procedure for constructing Eurosystem and ECB staff projection ranges”, December 2009
(online only).
“Financial Stability Review”, December 2009.
“Retail payments – integration and innovation”, December 2009 (online only).
“Recent advances in modelling systemic risk using network analysis“, January 2010 (online only).
“Contribution of the Eurosystem to the public consultation of the European Commission on the
future ‘EU 2020’ strategy”, January 2010 (online only).
ECB
Monthly Bulletin
X
August 2010

D O C U M E N T S
P U B L I S H E D
“Monthly report on the Eurosystem’s covered bond purchase programme – December 2009”,
January 2010 (online only).
“Structural indicators for the EU banking sector”, January 2010 (online only).
“Correspondent central banking model (CCBM) – procedure for Eurosystem counterparties”,
January 2010 (online only).
“Letter from the ECB President to Mr Nuno Melo, Member of the European Parliament, concerning
the increase in the capital of Banco Português de Negócios (BPN)”, February 2010 (online only).
“The ‘Centralised Securities Database’ in brief”, February 2010 (online only).
“Monthly report on the Eurosystem’s covered bond purchase programme – January 2010”,
February 2010 (online only).
“Commission communication on ‘An EU framework for cross-border crisis management in the
banking sector’: Eurosystem’s reply to the public consultation”, February 2010 (online only).
“Survey on the access to ﬁ nance of small and medium-sized enterprises in the euro area – second
half of 2009”, February 2010 (online only).
“MFI balance sheet and interest rate statistics and CEBS’ guidelines on FINREP and COREP”,
February 2010 (online only).
“Letter from the ECB President to Mr Nikolaos Chountis, Member of the European Parliament,
related to the income of Mr Provopoulos, Governor of the Bank of Greece”, February 2010
(online only).
“ECB-Eurostat workshop on pensions”, February 2010 (online only).
“Monthly report on the Eurosystem’s covered bond purchase programme – February 2010”,
March 2010 (online only).
“Letter from the ECB President to Mr Diogo Feio, Member of the European Parliament, regarding
the economic situation in Portugal”, March 2010 (online only).
“Strengthening macro and micro-prudential supervision in EU candidates and potential
candidates”, March 2010 (online only).
“Letter from the ECB President to Mr Nuno Melo, Member of the European Parliament,
concerning the increase in the capital of Banco Português de Negócios (BPN)”, March 2010
(online only).
“Government ﬁ nance statistics guide”, March 2010 (online only).
“Letter from the ECB President to Mr Nikolaos Chountis, Member of the European Parliament,
regarding credit rating agencies”, March 2010 (online only).
“Euro area balance of payments and international investment position statistics – 2009 quality
report”, March 2010 (online only).
“Euro area monetary and ﬁ nancial statistics – 2009 quality report”, March 2010 (online only).
“Monthly report on the Eurosystem’s covered bond purchase programme – March 2010”, April 2010
(online only).
“Financial integration in Europe”, April 2010.
“Report on the lessons learned from the ﬁ nancial crisis with regard to the functioning of European
ﬁ nancial market infrastructures”, April 2010 (online only).
“Results of the public consultation on ABS loan-level information in the Eurosystem collateral
framework”, April 2010 (online only).
“ECB statistics – an overview”, April 2010 (online only).
“European statistics provided by the ESCB – the governance structure”, April 2010 (online only).
“Memorandum of understanding on the exchange of information among national central credit
registers for the purpose of passing it on to reporting institutions”, April 2010 (online only).
“Monthly report on the Eurosystem’s covered bond purchase programme – April 2010”,
May 2010 (online only).
“TARGET Annual Report 2009”, May 2010 (online only).
ECB
Monthly Bulletin
August 2010
XI

“Letter from the ECB President to Mr Paulo Rangel, Member of the European Parliament,
regarding structural reforms”, May 2010.
“Financial Stability Review”, June 2010.
“Structural Issues Report 2010 − Energy markets and the euro area macroeconomy”, June 2010
(online only).
“Monthly report on the Eurosystem’s covered bond purchase programme – May 2010”, June 2010
(online only).
“Reinforcing economic governance in the euro area – The ECB Governing Council’s proposals
to strengthen decisively governance and enforcement structures in the economic policy framework
of the euro area”, June 2010 (online only).
“Letter from the ECB President to the President of the European Council, Mr Herman Van Rompuy,
presenting the ECB Governing Council’s proposals for reinforcing economic governance in the
euro area”, June 2010 (online only).
“Letter from the ECB President to Mr Andreas Mölzer, Member of the European Parliament,
regarding questions related to the governance of the euro area”, June 2010 (online only).
“Letter from the ECB President to Mr Ioannis A. Tsoukalas, Member of the European Parliament,
on questions related to the Greek crisis”, July 2010 (online only).
“Monthly report on the Eurosystem’s covered bond purchase programme – June 2010”, July 2010
(online only).
“European Commission’s public consultation on derivatives and market infrastructures – Eurosystem
contribution, July 2010 (online only).
“The international role of the euro”, July 2010.
“EU stress-test exercise: key message on methodological issues”, July 2010 (online only).
“EU stress-test exercise: technical note on the macroeconomic scenarios and reference risk
parameters”, July 2010 (online only).
“2010 EU stress-test exercise: questions and answers”, July 2010 (online only).
INFORMATION BROCHURES
“The European Central Bank, the Eurosystem, the European System of Central Banks”,
April 2009.
“Price stability – why is it important for you?”, April 2009.
“The Single Euro Payments Area (SEPA): an integrated retail payments market”, July 2009.
“T2S – settling without borders”, January 2010.
“ECB statistics: a brief overview”, April 2010.
ECB
Monthly Bulletin
XII
August 2010

GLOSSARY
This glossary contains selected items that are frequently used in the Monthly Bulletin. A more
comprehensive and detailed glossary can be found on the ECB’s website (www.ecb.europa.eu/
home/glossary/html/index.en.html).
Autonomous liquidity factors: liquidity factors that do not normally stem from the use of monetary
policy instruments. Such factors are, for example, banknotes in circulation, government deposits
with the central bank and the net foreign assets of the central bank.
Balance of payments (b.o.p.): a statistical statement that summarises, for a speciﬁ c period of
time, the economic transactions of an economy with the rest of the world.
Bank lending survey (BLS): a quarterly survey on lending policies that has been conducted by
the Eurosystem since January 2003. It addresses qualitative questions on developments in credit
standards, terms and conditions of loans and loan demand for both enterprises and households to a
predeﬁ ned sample group of banks in the euro area.
Borrowing requirement (general government): net incurrence of debt by the general government.
Break-even inflation rate: the spread between the yield on a nominal bond and that on an inﬂ ation-
linked bond of the same (or as similar as possible) maturity.
Capital account: a b.o.p. account that covers all capital transfers and acquisitions/disposals of
non-produced, non-ﬁ nancial assets between residents and non-residents.
Capital accounts: part of the system of national (or euro area) accounts consisting of the change in
net worth that is due to net saving, net capital transfers and net acquisitions of non-ﬁ nancial assets.
Central parity (or central rate): the exchange rate of each ERM II member currency vis-à-vis the
euro, around which the ERM II ﬂ uctuation margins are deﬁ ned.
Compensation per employee or per hour worked: the total remuneration, in cash or in kind, that
is payable by employers to employees, i.e. gross wages and salaries, as well as bonuses, overtime
payments and employers’ social security contributions, divided by the total number of employees
or by the total number of employees’ hours worked.
Consolidated balance sheet of the MFI sector: a balance sheet obtained by netting out inter-
MFI positions (e.g. inter-MFI loans and deposits) in the aggregated MFI balance sheet. It provides
statistical information on the MFI sector’s assets and liabilities vis-à-vis residents of the euro area
not belonging to this sector (i.e. the general government and other euro area residents) and vis-à-vis
non-euro area residents. It is the main statistical source for the calculation of monetary aggregates,
and it provides the basis for the regular analysis of the counterparts of M3.
Current account: a b.o.p. account that covers all transactions in goods and services, income and
current transfers between residents and non-residents.
Debt (financial accounts): loans taken out by households, as well as the loans, debt securities
and pension fund reserves (resulting from employers’ direct pension commitments on behalf
of their employees) of non-ﬁ nancial corporations, valued at market prices at the end of the period.
ECB
Monthly Bulletin
August 2010
XIII

Debt (general government): the gross debt (currency and deposits, loans and debt securities)
at nominal value outstanding at the end of the year and consolidated between and within the sectors
of general government.
Debt security: a promise on the part of the issuer (i.e. the borrower) to make one or more
payment(s) to the holder (the lender) on a speciﬁ ed future date or dates. Such securities usually
carry a speciﬁ c rate of interest (the coupon) and/or are sold at a discount to the amount that will
be repaid at maturity. Debt securities issued with an original maturity of more than one year are
classiﬁ ed as long-term.
Debt-to-GDP ratio (general government): the ratio of general government debt to GDP at
current market prices. It is the subject of one of the ﬁ scal criteria laid down in Article 126(2) of the
Treaty on the Functioning of the European Union to deﬁ ne the existence of an excessive deﬁ cit.
Deficit (general government): the general government’s net borrowing, i.e. the difference between
total government revenue and total government expenditure.
Deficit-debt adjustment (general government): the difference between the general government
deﬁ cit and the change in general government debt.
Deficit ratio (general government): the ratio of the general government deﬁ cit to GDP at current
market prices. It is the subject of one of the ﬁ scal criteria laid down in Article 126(2) of the Treaty
on the Functioning of the European Union to deﬁ ne the existence of an excessive deﬁ cit. It is also
referred to as the budget deﬁ cit ratio or the ﬁ scal deﬁ cit ratio.
Deflation: a generalised, persistent and self-reinforcing decline in a broad set of prices that results
from a drop in aggregate demand and becomes entrenched in expectations.
Deposit facility: a standing facility of the Eurosystem which counterparties may use to make
overnight deposits, remunerated at a pre-speciﬁ ed interest rate, at an NCB.
Disinflation: a process of decelerating inﬂ ation that may lead to negative inﬂ ation rates of
a temporary nature.
Direct investment: cross-border investment for the purpose of obtaining a lasting interest in an
enterprise resident in another economy (assumed, in practice, for ownership of at least 10% of the
ordinary shares or voting power). Included are equity capital, reinvested earnings and other capital
associated with inter-company operations. The direct investment account records net transactions/
positions in assets abroad by euro area residents (as “direct investment abroad”) and net transactions/
positions in euro area assets by non-residents (as “direct investment in the euro area”).
Effective exchange rates (EERs) of the euro (nominal/real): weighted averages of bilateral
euro exchange rates against the currencies of the euro area’s main trading partners. The EER indices
of the euro are calculated against two groups of trading partners: the EER-21 (comprising the
11 non-euro area EU Member States and 10 trading partners outside the EU) and the EER-41
(composed of the EER-21 and 20 additional countries). The weights used reﬂ ect the share of each
partner country in the euro area’s trade in manufactured goods and account for competition in
third markets. Real EERs are nominal EERs deﬂ ated by a weighted average of foreign, relative to
domestic, prices or costs. They are thus measures of price and cost competitiveness.
ECB
Monthly Bulletin
XIV August 2010

G L O S S A R Y
Enhanced credit support: the non-standard measures taken by the ECB/Eurosystem during the
ﬁ nancial crisis with a view to supporting ﬁ nancing conditions and credit ﬂ ows above and beyond
what could be achieved through reductions in key ECB interest rates alone.
EONIA (euro overnight index average): a measure of the effective interest rate prevailing in the
euro interbank overnight market. It is calculated as a weighted average of the interest rates on unsecured
overnight lending transactions denominated in euro, as reported by a panel of contributing banks.
Equities: securities representing ownership of a stake in a corporation. They comprise shares traded
on stock exchanges (quoted shares), unquoted shares and other forms of equity. Equities usually
produce income in the form of dividends.
ERM II (exchange rate mechanism II): the exchange rate arrangement that provides the
framework for exchange rate policy cooperation between the euro area countries and the
EU Member States not participating in Stage Three of EMU.
EURIBOR (euro interbank offered rate): the rate at which a prime bank is willing to lend funds
in euro to another prime bank, computed daily for interbank deposits with different maturities of up
to 12 months.
Euro area: the area formed by those EU Member States in which the euro has been adopted as the
single currency in accordance with the Treaty on the Functioning of the European Union.
European Commission surveys: harmonised surveys of business and/or consumer sentiment
conducted on behalf of the European Commission in each of the EU Member States. Such
questionnaire-based surveys are addressed to managers in the manufacturing, construction, retail
and services industries, as well as to consumers. From each monthly survey, composite indicators
are calculated that summarise the replies to a number of different questions in a single indicator
(conﬁ dence indicators).
Eurosystem: the central banking system made up of the ECB and the NCBs of those EU Member
States that have already adopted the euro.
Eurozone Purchasing Managers’ Surveys: surveys of business conditions in manufacturing and
in services industries conducted for a number of countries in the euro area and used to compile
indices. The Eurozone Manufacturing Purchasing Managers’ Index (PMI) is a weighted indicator
calculated from indices of output, new orders, employment, suppliers’ delivery times and stocks
of purchases. The services sector survey asks questions on business activity, expectations of future
business activity, the amount of business outstanding, incoming new business, employment, input
prices and prices charged. The Eurozone Composite Index is calculated by combining the results
from the manufacturing and services sector surveys.
External trade in goods: exports and imports of goods with countries outside the euro area,
measured in terms of value and as indices of volume and unit value. External trade statistics are
not comparable with the exports and imports recorded in the national accounts, as the latter include
both intra-euro area and extra-euro area transactions, and also combine goods and services. Nor are
they fully comparable with the goods item in b.o.p. statistics. Besides methodological adjustments,
the main difference is that imports in external trade statistics are recorded including insurance and
freight services, whereas they are recorded free on board in the goods item in the b.o.p. statistics.
ECB
Monthly Bulletin
August 2010
XV

Financial account: a b.o.p. account that covers transactions between residents and non-residents in
direct investment, portfolio investment, other investment, ﬁ nancial derivatives and reserve assets.
Financial accounts: part of the system of national (or euro area) accounts showing the ﬁ nancial
positions (stocks or balance sheets), ﬁ nancial transactions and other changes of the different
institutional sectors of an economy by type of ﬁ nancial asset.
Fixed rate tender: a tender procedure in which the interest rate is speciﬁ ed in advance by the
central bank and in which participating counterparties bid the amount of money they wish to
transact at the ﬁ xed interest rate.
Fixed rate full-allotment tender procedure: a tender procedure in which the interest rate is
speciﬁ ed by the central bank and in which counterparties bid the amount of money they want to
transact at that rate, knowing in advance that all their bids will be satisﬁ ed.
General government: a sector deﬁ ned in the ESA 95 as comprising resident entities that are
engaged primarily in the production of non-market goods and services intended for individual and
collective consumption and/or in the redistribution of national income and wealth. Included are
central, regional and local government authorities as well as social security funds. Excluded are
government-owned entities that conduct commercial operations, such as public enterprises.
Gross domestic product (GDP): the value of an economy’s total output of goods and services less
intermediate consumption, plus net taxes on products and imports. GDP can be broken down by
output, expenditure or income components. The main expenditure aggregates that make up GDP are
household ﬁ nal consumption, government ﬁ nal consumption, gross ﬁ xed capital formation, changes
in inventories, and imports and exports of goods and services (including intra-euro area trade).
Harmonised Index of Consumer Prices (HICP): a measure of the development of consumer
prices that is compiled by Eurostat and harmonised for all EU Member States.
Hourly labour cost index: a measure of labour costs, including gross wages and salaries
(in cash and in kind, including bonuses) and other labour costs (employers’ social contributions
plus employment-related taxes paid by the employer minus subsidies received by the employer),
per hour actually worked (including overtime).
Implied volatility: the expected volatility (i.e. standard deviation) in the rates of change of the
price of an asset (e.g. a share or a bond). It can be derived from the asset’s price, maturity date and
exercise price of its options, as well as from a riskless rate of return, using an option pricing model
such as the Black-Scholes model.
Index of negotiated wages: a measure of the direct outcome of collective bargaining in terms of
basic pay (i.e. excluding bonuses) at the euro area level. It refers to the implied average change in
monthly wages and salaries.
Industrial producer prices: factory-gate prices (transportation costs are not included) of all
products sold by industry excluding construction on the domestic markets of the euro area countries,
excluding imports.
Industrial production: the gross value added created by industry at constant prices.
ECB
Monthly Bulletin
XVI August 2010

G L O S S A R Y
Inflation: an increase in the general price level, e.g. in the consumer price index.
Inflation-indexed government bonds: debt securities issued by the general government, the
coupon payments and principal of which are linked to a speciﬁ c consumer price index.
International investment position (i.i.p.): the value and composition of an economy’s outstanding
net ﬁ nancial claims on (or ﬁ nancial liabilities to) the rest of the world.
International reserves: external assets readily available to and controlled by monetary authorities
for directly ﬁ nancing or regulating the magnitude of payments imbalances through intervention
in exchange markets. The international reserves of the euro area comprise non-euro denominated
claims on non-euro area residents, gold, special drawing rights and the reserve positions in the IMF
which are held by the Eurosystem.
Investment funds (except money market funds): ﬁ nancial institutions that pool capital raised
from the public and invest it in ﬁ nancial and non-ﬁ nancial assets. See also MFIs.
Job vacancies: a collective term covering newly created jobs, unoccupied jobs or jobs about to
become vacant in the near future, for which the employer has recently taken active steps to ﬁ nd a
suitable candidate.
Key ECB interest rates: the interest rates, set by the Governing Council, which reﬂ ect the
monetary policy stance of the ECB. They are the rates at the main reﬁ nancing operations, on the
marginal lending facility and on the deposit facility.
Labour force: the sum total of persons in employment and the number of unemployed.
Labour productivity: the output that can be produced with a given input of labour. It can be
measured in several ways, but is commonly measured as GDP (volume) divided by either total
employment or total hours worked.
Longer-term refinancing operations: credit operations with a maturity of more than one week that
are executed by the Eurosystem in the form of reverse transactions. The regular monthly operations
are conducted with a maturity of three months. During the ﬁ nancial market turmoil that started in
August 2007, supplementary operations with maturities ranging from one maintenance period to
one year were conducted, the frequency of which varied.
M1: a narrow monetary aggregate that comprises currency in circulation plus overnight deposits
held with MFIs and central government (e.g. at the post ofﬁ ce or treasury).
M2: an intermediate monetary aggregate that comprises M1 plus deposits redeemable at a period
of notice of up to and including three months (i.e. short-term savings deposits) and deposits with an
agreed maturity of up to and including two years (i.e. short-term time deposits) held with MFIs and
central government.
M3: a broad monetary aggregate that comprises M2 plus marketable instruments, in particular
repurchase agreements, money market fund shares and units, and debt securities with a maturity of
up to and including two years issued by MFIs.
ECB
Monthly Bulletin
August 2010
XVII

Main refinancing operation: a regular open market operation executed by the Eurosystem in the
form of reverse transactions. Such operations are carried out through a weekly standard tender and
normally have a maturity of one week.
Marginal lending facility: a standing facility of the Eurosystem which counterparties may use to
receive overnight credit from an NCB at a pre-speciﬁ ed interest rate against eligible assets.
MFI credit to euro area residents: MFI loans granted to non-MFI euro area residents (including
general government and the private sector) and MFI holdings of securities (shares, other equity and
debt securities) issued by non-MFI euro area residents.
MFI interest rates: the interest rates that are applied by resident credit institutions and other MFIs,
excluding central banks and money market funds, to euro-denominated deposits and loans vis-à-vis
households and non-ﬁ nancial corporations resident in the euro area.
MFI longer-term financial liabilities: deposits with an agreed maturity of over two years,
deposits redeemable at a period of notice of over three months, debt securities issued by euro area
MFIs with an original maturity of more than two years and the capital and reserves of the euro area
MFI sector.
MFI net external assets: the external assets of the euro area MFI sector (such as gold, foreign
currency banknotes and coins, securities issued by non-euro area residents and loans granted to
non-euro area residents) minus the external liabilities of the euro area MFI sector (such as non-euro
area residents’ deposits and repurchase agreements, as well as their holdings of money market fund
shares/units and debt securities issued by MFIs with a maturity of up to and including two years).
MFIs (monetary financial institutions): ﬁ nancial institutions which together form the money-
issuing sector of the euro area. These include the Eurosystem, resident credit institutions (as deﬁ ned
in Community law) and all other resident ﬁ nancial institutions whose business is to receive deposits
and/or close substitutes for deposits from entities other than MFIs and, for their own account
(at least in economic terms), to grant credit and/or invest in securities. The latter group consists
predominantly of money market funds, i.e. funds that invest in short-term and low-risk instruments
usually with a maturity of one year or less.
Minimum bid rate: the lower limit to the interest rates at which counterparties may submit bids in
the variable tenders.
Other investment: an item in the b.o.p. and the i.i.p. that covers the ﬁ nancial transactions/positions
with non-residents in trade credits, deposits and loans, and other accounts receivable and payable.
Portfolio investment: euro area residents’ net transactions and/or positions in securities issued
by non-residents of the euro area (“assets”) and non-residents’ net transactions and/or positions in
securities issued by euro area residents (“liabilities”). Included are equity securities and debt securities
(bonds and notes, and money market instruments). Transactions are recorded at the effective price
paid or received, less commissions and expenses. To be regarded as a portfolio asset, ownership in
an enterprise must be equivalent to less than 10% of the ordinary shares or voting power.
Price stability: the maintenance of price stability is the primary objective of the Eurosystem. The
Governing Council deﬁ nes price stability as a year-on-year increase in the HICP for the euro area
ECB
Monthly Bulletin
XVIII
August 2010

G L O S S A R Y
of below 2%. The Governing Council has also made it clear that, in the pursuit of price stability,
it aims to maintain inﬂ ation rates below, but close to, 2% over the medium term.
Purchasing power parity (PPP): the rate at which one currency is converted into another so as
to equalise the purchasing power of the two currencies by eliminating the differences in the price
levels prevailing in the countries concerned. In their simplest form, PPPs show the ratio of the
prices in national currency of the same good or service in different countries.
Reference value for M3 growth: the annual growth rate of M3 over the medium term that is
consistent with the maintenance of price stability. At present, the reference value for annual M3
growth is 4½%.
Reserve requirement: the minimum amount of reserves a credit institution is required to hold
with the Eurosystem over a predeﬁ ned maintenance period. Compliance with the requirement
is determined on the basis of the average of the daily balances in the reserve accounts over the
maintenance period.
Survey of Professional Forecasters (SPF): a quarterly survey that has been conducted by the
ECB since 1999 to collect macroeconomic forecasts on euro area inﬂ ation, real GDP growth and
unemployment from a panel of experts afﬁ liated to ﬁ nancial and non-ﬁ nancial organisations based
in the EU.
Unit labour costs: a measure of total labour costs per unit of output calculated for the euro area as
the ratio of total compensation per employee to labour productivity (deﬁ ned as GDP (volume) per
person employed).
Variable rate tender: a tender procedure where the counterparties bid both the amount of money
they wish to transact with the central bank and the interest rate at which they wish to enter into the
transaction.
Volatility: the degree of ﬂ uctuation in a given variable.
Write-down: a downward adjustment to the value of loans recorded in the balance sheets of MFIs
when it is recognised that the loans have become partly unrecoverable.
Write-off: the removal of the value of loans from the balance sheets of MFIs when the loans are
considered to be totally unrecoverable.
Yield curve: a graphical representation of the relationship between the interest rate or yield and the
residual maturity at a given point in time for sufﬁ ciently homogenous debt securities with different
maturity dates. The slope of the yield curve can be measured as the difference between the interest
rates or yield at two selected maturities.
ECB
Monthly Bulletin
August 2010
XIX