The balance sheet of the monetary financial institutions sector (S.121+S.122+S.123) contracted during the period 2009-2013, where its assets fell by €759.5bn and its liabilities by €764.8bn. During 2014 and 2015 this trend was reversed as financial assets and liabilities grew over their 2013 values. However, in 2017 the assets decreased by 1.8% and the liabilities by 1.3% over the 2016 values.

The balance sheet of the non-money market investment funds sector (S.124) continued to grow during 2017. Figure 4.1 shows the change in contribution by S.124 to the overall size of the financial sector balance sheet. Aside 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 €1,881.2bn – an increase of 550.0%. 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 2007 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 2014-2017 has been caused by simultaneous growth in both the investment funds and financial intermediaries sectors. Here the newly revised data shows a year-on-year change of 19.6% in 2014 which is above the 16.5% MIP threshold. The subsequent year-on-year changes are below the MIP threshold, with a growth rate of 4.3% in 2017. These trends are also shown in the sector breakdown of Figure 4.3.

This year's publication also includes data in the current and capital non-financial accounts for subsectors of the financial corporations. There are three groups of subsectors: monetary financial institutions (S.121+S.122+S.123), financial intermediaries and funds (S.124+S.125+S.126+S.127), and insurance corporations and pension funds (S.128+S.129).

Figure 4.4 shows indices of key variables for the monetary financial institutions subsector (S.121+S.122+S.123, mainly banks). Pay to employees (D.1) has decreased, as institutions have rationalised or left this economy entirely. The loan assets (AF.4) of this subsector have declined in volume as the private sector has deleveraged, and their interest income (D.41) has also declined. However, as the ECB marginal lending rate has also declined, these institutions receive a higher margin on their loans, and this is reflected in steady or increasing profit.