Institutional Sector Accounts Non-Financial and Financial 2016

Excluding the Central Bank (S.121), the balance sheet of the Other Monetary Financial Institutions sector (S.122+S.123) contracted during the period 2009-2013, where its assets fell by €742.5bn and its liabilities by €752.6bn. From 2014 to 2016 this trend was reversed as financial assets in 2016 grew by 6.4% and liabilities by 3.0% over their 2013 values.

The balance sheet of the non-Money Market Investment Funds sector (S.124) continued to grow during 2016. Figure 4.1 shows the change in contribution by S.124 to the overall size of the financial sector balance sheet. Apart from a drop in balance sheet size during 2008, relating to the financial crisis, the sector has exhibited continuous growth in the intervening period, where its financial assets have grown cumulatively by €1,569.1bn – an increase of 458.8%. This growth in the value of total assets has been significantly influenced by holding gains across a range of asset classes during this period.

The year-on-year percentage change in total liabilities of the financial sector is illustrated in Figure 4.2. The corresponding MIP Scoreboard threshold of 16.5% for this indicator is also shown in the same figure. The positive growth seen between 2006 and 2008 was largely dominated by the expansion of the balance sheet of the banking sector related to the housing boom. In the ensuing period of 2009-2013 there has been a deleveraging effect in the banking sector which has been offset by significant expansion of the investment funds sector. The marked reverse in trend during the period 2014-2016 has been caused by simultaneous growth in both the banking and investment funds sectors. Here the newly revised data shows a year-on-year change of 19.5% in 2014 which is above the 16.5% MIP threshold. The year-on-year changes of 9.7% in 2015 and 2.5% in 2016 are below the MIP threshold. These trends are also shown in Figure 4.3.