working paper 190 - allianz · the ecb's zero interest rate policy is having a direct impact...
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GROUP ECONOMIC RESEARCH
Working
Paper 190 August 4, 2015
Arne Holzhausen, Sabina Sikova
Low interest rates, incomes and assets: The winners and the losers
M A C R O E C O N O M I C S F I N A N C I A L M A R K E T S E C O N O M I C P O L I C Y S E C T O R S
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Working Paper No. 190
Low interest rates, incomes and assets: The winners and the losers
1 Introduction .............................................................................................................3
2 Income effects: redistribution between EMU countries ..........................5
3 Asset effects: For unto every one that hath shall be given? ................. 16
4 Distribution effects: Not only the usual suspects ................................... 27
5 Summary of results ............................................................................................ 39
Appendix I: Methods .............................................................................................. 41
Appendix II: Countries .......................................................................................... 43
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Group Economic Research Working Paper/No. 190/August 4, 2015
1 Introduction
The founding fathers of the euro dreamed that the single currency would pave the way
for political union in Europe. More than five years into the euro crisis, this dream is in
danger of turning into a nightmare: the political rifts between the individual
governments are deeper than ever before, the European Commission is finding it
increasingly difficult to set a common economic policy course and citizens are flocking
to euroskeptic parties on the extreme left and right of the political spectrum in droves. In
this sort of environment, there is one institution in particular that is holding monetary
union together: the European Central Bank (ECB).
Since the outbreak of the crisis, the ECB has been doing everything in its power to stop
the spiral of mistrust and the increasing fragmentation of the euro financial market: by
making unlimited liquidity available to banks in the long term, with the first, limited ad
hoc purchase program for government bonds (SMP) and with the promise to buy up an
unlimited volume of government bonds if need be (OMT). All of these measures have
borne fruit and at least allowed the markets to calm back down. And yet although some
of the "crisis countries", such as Ireland, Spain or Portugal, have managed to claw their
way out of recession, largely by dint of their own reform efforts, the situation in the
eurozone remains tense against the backdrop of record debt levels and unemployment
figures. The drama surrounding Greece has called even this progress into question again.
This is what set the scene for the ECB's decision to launch a large-scale government bond
purchase program (quantitative easing, or QE for short): it is the central bank's last and
also its most potent weapon in the fight to get the euro area back on to a sustainable
growth path. At the moment, it looks like the move could well pay off: the latest economic
indicators paint a fairly favorable picture, although a "Grexit" could soon turn the mood
sour. But it will take some years before we can reach a definitive conclusion on the
success or failure of the QE measures anyway.
One thing that we can already say for sure is that the ECB's continued bailout policy
certainly comes at a cost. Zero interest rates are eating away at capital gains, putting
long-term obstacles in the way of anyone trying to build up savings. In this era of
demographic change, which is forcing us to make additional private provisions for old
age, there is a risk that the price to be paid in the future, when the lost years start to
surface in our social security systems, will be a hefty one.
This paper aims to "measure" the collateral damage caused by monetary policy, to the
extent that it can already be identified. While we have taken the results of last year's
analysis1 as a basis, we have also expanded the scope of our analysis considerably: this
time round, we are looking not just at the direct income effects, which consist of "interest
gains" (interest payments relating to loans that individuals have saved) and "interest
losses" (interest payments on deposits that have been lost), but also at asset effects. This
is not without good reason: whereas to date, the ECB's response to the crisis has largely
taken the form of conventional moves aimed at controlling short-term interest rates -
meaning that the main impact was on bank interest rates – its QE program is now
looking to target interest rates at the long end directly. This gives the ECB much more
power to influence asset prices, even though it naturally cannot control long-term
interest rates entirely; the yield surges seen in recent months only serve to highlight this.
1 Holzhausen, Sikova (2014), The impact of the low interest rate policy on private households in the eurozone, Working Paper 176, Allianz SE.
A U T H O R S :
DR. ARNE HOLZHAUSEN Tel.: +49.89.3800-17947 [email protected] SABINA SIKOVA Tel.: +49.89.3800-56242 [email protected]
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Group Economic Research Working Paper/No. 190/August 4, 2015
As well as looking at the asset effects, we will also be investigating how monetary policy
impacts different income groups. In other words: we want to look at the distributional
effects of monetary policy.
So why are we performing this analysis? We are certainly not on a quest to indulge in
"ECB-bashing" ("the ECB is expropriating savers") or to try to persuade the ECB to change
its monetary policy course. Passing judgment on the ECB's policy choices is neither the
intention, nor is it even possible within the conceptual framework of this paper: the
benchmark against which European monetary policy is measured is not how much
interest income savers can generate, but purely to what extent the policy provides
monetary stability. It is also, however, clear that monetary policy measures have an
impact on more than monetary stability alone, and that there are always certain "side
effects": each and every interest rate decision has distributional implications, as well as
its winners and losers. This relatively banal statement is anything but trivial within the
context of the euro area. While distribution policy measures are part of "everyday
business" within individual economies – with any corresponding monetary policy effects
paling in significance 2 – redistribution among the eurozone states is not (actually) part
of the plan: the eurozone is not designed to be a transfer union. This explains why the
inter-state effects of monetary policy are not a (popular) topic of discussion.
Of course, this does not mean that they do not exist. As is generally the case: a currency
area without transfers is an illusion – or is at least doomed to fail. The recent years of
crisis have taught us this all-too-painful lesson. But while Target balances, for example,
are now a matter that is discussed out in the open, many of the other effects of the ECB's
policies remain in the dark. We hope that this paper will shed at least some light on this
corner of obscurity. The aim is not to name and shame the ECB. Quite the contrary, we
firmly believe that the sort of trust that monetary union needs to survive can only be
created if all of the effects of a common monetary policy are made transparent.
The rest of the paper is organized as follows: the next chapter analyzes the income effects
in a number of EMU countries; we have also taken the differences between nominal and
real interest rate effects into account. The third chapter focuses on the asset effects: we
have used performance indices for the various different asset classes to try to estimate
the impact that monetary policy, and QE in particular, has had on the assets of private
households in the eurozone. Finally, the fourth chapter is dedicated to distribution
effects: based on the ECB's asset study, which can be used to compile ideal asset
portfolios for various income groups, we have calculated the monetary policy impact on
different income groups. The last chapter contains a summary of the results.
2 This is corroborated by the fact that, as Demary and Niehues (2015) also emphasize, interest rate cuts and hikes alternated on a fairly regular basis prior to the major financial crisis; it is only now, in the current
environment of sustained zero interest rates, that one-sided burdens are starting to come to the fore. Cf.
Demary and Niehues (2015), Die Auswirkungen von Niedrigzinsen und unkonventionellen geldpolitischen Maßnahmen auf die Vermögensverteilung, IW policy paper 15/2015.
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Group Economic Research Working Paper/No. 190/August 4, 2015
2 Income effects: Redistribution between EMU countries
The ECB's zero interest rate policy is having a direct impact on bank interest rates – and a
knock-on effect on the wallets of private households: lower interest on credit balances
means less income while, on the other hand, lower interest on loans translates into less
expenditure, which increases income by implication. The question as to which effects
dominate in individual cases depends to a large extent on the development of interest
rates on deposits and loans, and on their volume.
For the eurozone as a whole, the trend is clear-cut: both deposit and loan interest rates
have fallen considerably and are currently languishing well below the pre-crisis level, our
yardstick (see Figure 1).3 What is more, the developments are astonishingly
synchronized at first glance; deposit interest rates, however, have more than halved over
the period analyzed, while loan interest rates have only fallen by around one-third.
Figure 1: Bank interest rates in the eurozone, actual development and reference interest
rate
Source: ECB, own calculations.
The section below analyzes the income effects on both the deposit and credit side,
separately to begin with, for the eurozone and its four largest member states4, before
offsetting the positive and negative effects against each other.
Bank deposits
Looking at the eurozone on average, bank deposits account for 67 percent of GDP (see
Figure 2). The figures in the majority of countries are roughly consistent with this
average, with only Spain, Portugal and Luxembourg reporting much higher levels. In
Slovakia and Slovenia, on the other hand, the percentages come in at less than 50%. All in
all, however, the picture is relatively homogenous.
3 There are also, however, a handful of countries in which things have been moving in the opposite direction:
in Portugal, Greece and Cyprus, deposit interest rates have been edging up, while in Slovakia, loan interest
rates have been on the rise. 4 The results for all EMU countries can be found in Appendix 2.
3,7%
5,5%
0,8%
2,0%
0%
1%
2%
3%
4%
5%
6%
7%
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Loans
Deposits
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Group Economic Research Working Paper/No. 190/August 4, 2015
Figure 2: Bank deposits as a percentage of GDP and total financial assets
Source: Eurostat, AGWR 2015, own calculations.
By contrast, the development in bank deposits over the past ten years paints a very mixed
picture (see Figure 3). Although private household deposits have been on a steady
upward trajectory everywhere – with the exception of Luxembourg and, of late, Greece –
the pace of growth has varied considerably. In Italy, private deposits have more than
doubled, whereas in Germany and France, the increase has come in at only around 50
percent. On the whole, bank deposits have risen by two-thirds in the euro area.
Figure 3: Development in private household bank deposits, 2003 = 100
Source: ECB, own calculations.
Figure 4 shows the development of deposit interest rates in the four largest eurozone
countries. The most drastic slide in interest rates has been witnessed in Germany, with a
drop of around three-quarters. The only other countries in which interest rates have
taken such a mighty tumble are Luxembourg, Belgium and Austria. Another fact that
stands out: German deposit interest is now below the eurozone average after being ahead
of the EMU average before the crisis hit. The explanation lies in the relative strength of
Germany’s banks, which generally rank among the most stable in the eurozone. German
banks were able to pass the low interest rates on to their customers fairly early on,
whereas other banks were prepared to continue offering customers relatively high
interest rates on their deposits for some time due to a lack of other financing
alternatives. In this respect, the recent drastic interest rate slumps in Italy and Spain –
0%
10%
20%
30%
40%
50%
60%
70%
80%
Euro area Germany France Spain Italy
Deposits per GDP
Deposits per totalfinancial assets
0%
50%
100%
150%
200%
250%
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Germany
France
Spain
Italy
Euro area
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Group Economic Research Working Paper/No. 190/August 4, 2015
while hardly a welcome development for savers – send out a positive signal: they reflect
the renewed growth in confidence in these countries' banking systems.
German savers also reacted to these low interest rates by fleeing ever further "towards
liquidity". The proportion of overnight deposits, measured against total bank deposits,
increased by 20 percentage points to 56% during this period (as at the end of 2014). This
preference for liquidity added even further fuel to the fire, encouraging the downward
spiral in interest rates.
Figure 4: Annual average interest rates for bank deposits
Source: ECB, own calculations.
This data allows us to calculate the actual and hypothetical interest income (based on
the reference interest rate) both for all private households and per capita (see Figure 5
and Figure 6).
Figure 5: Actual and hypothetical interest income in 2014 in EUR million
Source: ECB, own calculations.
0,0%
0,5%
1,0%
1,5%
2,0%
2,5%
3,0%
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Germany
France
Spain
Italy
Euro area
0
20.000
40.000
60.000
80.000
100.000
120.000
140.000
Euro area Germany France Spain Italy
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Group Economic Research Working Paper/No. 190/August 4, 2015
Figure 6: Actual and hypothetical interest income in 2014 per capita in EUR
Source: ECB, own calculations.
The "income gap" that emerges from this analysis is massive, particularly in Germany's
case: while the actual interest income comes in at EUR 12.3bn or EUR 153 per capita, the
hypothetical interest income totals EUR 41.5bn or EUR 514 per capita; this puts the "loss"
at 70 percent - or EUR 361 for each individual saver. The loss for the eurozone as a whole
comes in at "only" 57 percent (EUR 199). The dramatic development in Germany also
becomes evident if we consider that, in 2014 for example, even Spanish households were
generating higher interest income per capita (EUR 166), although their average deposits
were worth almost 30 percent less.
The situation does not show any signs of easing in 2015, on the contrary: based on the
data for the first four months, the "income losses" for German savers are actually
expected to increase further to around EUR 409 per capita or EUR 33bn in total.5
Bank loans
Fortunately, the "losses" on the income side only tell half the story as far as the income
effects of the low interest rates are concerned; for information on the other half, we have
to look at the loan side of things – and this is where households can look forward to
substantial relief. So how much relief is actually on offer?
Unlike deposits, debt levels vary considerably between the individual EMU countries.
Whereas in Germany and France, private household loans make up "only" a good 50
percent of GDP, the values in Spain (76 percent) or Portugal (80 percent) are much
higher. But it would be wrong to assume that the "good old" North-South divide within
the eurozone also applies to personal debt. Debt levels in the Netherlands, for example,
are above-average, while Italy ranks among the countries with the lowest levels of
personal debt (see Figure 7).
5 The figures for all other countries can be found in Appendix 2.
0
100
200
300
400
500
600
Euro area Germany France Spain Italy
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Group Economic Research Working Paper/No. 190/August 4, 2015
Figure 7: Loans as a percentage of GDP and deposits, 2014
Source: ECB, Eurostat, AGWR 2015.
Contrary to popular perception, private household deposits outstrip their loans almost
everywhere. The only exceptions are Spain, where deposits are roughly on a par with
loans, and, in particular, the Netherlands (109 percent) and Finland (144 percent). This
once again challenges the stereotype of the over-indebted south and the thrifty north.
The trend witnessed over the past ten years also differs from that seen on the deposit
side. Not only are the differences between the individual countries more pronounced; no
consistent trend emerges either. In many countries, from Spain to Greece and Ireland,
loans rose rapidly for the first few years, but have been on a downward trend, to varying
degrees, ever since the financial crisis hit. German households ultimately make up a
category of their own: here, debt has remained virtually unchanged over the past decade
(see Figure 8).
Figure 8: Development in private household loans, 2003 = 100
Source: ECB, own calculations.
Finally, interest rates paint a very similar picture to deposits, at least at first glance:
interest rates have been on a fairly stable downward trend (see Figure 9).
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
110%
Euro area Germany France Spain Italy
Loans per GDP
Loans per deposits
0%
50%
100%
150%
200%
250%
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Germany
France
Spain
Italy
Euro area
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Group Economic Research Working Paper/No. 190/August 4, 2015
Figure 9: Annual average interest rates on bank loans
Source: ECB, own calculations.
At second glance, however, it becomes clear that the development has been less
dramatic than in the case of deposits. Looking at the eurozone as a whole, interest rates
have fallen by around one-third, and even in those countries where the dip in loan
interest rates has been the most dramatic, namely Portugal and Austria, we are talking
about a drop of "only" around 50 percent, compared with up to 80 percent on the deposit
side. This yet again shows that banks tend to be much more hesitant in passing on low
interest rates on the assets side of their balance sheets than they are on the liabilities
side.
Another characteristic of the interest rate trend on the loans side is that there have been
no shifts in the relative interest rate structure between the individual countries. The
development is fairly synchronous throughout the entire eurozone. It is only if we look at
individual interest rate models – largely variable or fixed rates – that we may observe
some differences in short-term gyrations. For instance, in Germany, which has
traditionally a fixed-rate model, the development is far steadier than in Italy or Spain,
where variable rates are more widespread. In contrast to the situation on the deposit
side, German loan rates are also above the eurozone average. This would appear to
contradict the popular assertion (made by banks) that the German market is embroiled
in intense competition.
As with deposits, this data allows us to calculate the actual and hypothetical interest
payments made by private households (see Figure 10 and Figure 11).
Due to the relatively high interest rates on loans in Germany, the annual interest
payment burden on the shoulders of Germany's households is also one of the highest in
the eurozone at EUR 776 per capita (2014). Nevertheless, the average German borrower
still has to cough up 37 percent (EUR 286 per capita) less than in the hypothetical
reference scenario; all in all, this income relief comes to EUR 23.1bn in total (2014). This
means that the relative relief on the loans side is less pronounced than on the deposit
side. At the same time, however, the differences between the individual countries are
also less pronounced; the "income gain" for the entire eurozone, for example, comes to
EUR 256.
0,0%
1,0%
2,0%
3,0%
4,0%
5,0%
6,0%
7,0%
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Germany
France
Spain
Italy
Euro area
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Group Economic Research Working Paper/No. 190/August 4, 2015
Based on the interest rate developments witnessed in the first few months of this year,
the "gains" on the loans side are actually likely to be even higher this year and are tipped
to surpass the EUR 300 mark in Germany.6
Figure 10: Actual and hypothetical interest expenditure in 2014 in EUR million
Source: ECB, own calculations.
Figure 11: Actual and hypothetical interest expenditure in 2014 per capita in EUR
Source: ECB, own calculations.
Overall effects
Naturally, what matters to private households is not an isolated analysis of "interest
gains" on the one hand and "interest losses" on the other, but rather the figure that is left
on balance, i.e. the total income effect.
For the eurozone as a whole, the result is an encouraging one: in general, the average
saver/borrower is profiting from the current interest rate levels (see Figure 12). Over the
past six years (2010–2015, inclusive), the average cumulative “gains” in the eurozone
amount to EUR 400 per capita. These "gains" have, however, been dwindling year after
year of late; while in 2012, they came in at almost EUR 100, the figure for 2015 looks set to
be not even half as high. This decline can be explained by two developments: while the
fall in loan rates is slowly leveling off, the rise in debt is also less steep than in previous
years; this limits the potential advantages of the low interest rates.
6 The figures for all other countries can be found in Appendix 2.
0
50.000
100.000
150.000
200.000
250.000
300.000
Euro area Germany France Spain Italy
Actual IRpayments
Hypothetical IRpayments
0
200
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800
1.000
1.200
Euro area Germany France Spain Italy
Actual IRpayments
Hypothetical IRpayments
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Even more importantly, however, not all EMU countries are reaping the benefits.
Germany ranks among the biggest losers, with German savers/borrowers having to
digest "losses" year in, year out over the past six years: the cumulative "losses" since 2010
(including 2015) come in at EUR 367 per capita or EUR 29.8bn in total. Alongside
Germany, Belgian and Slovakian households, which have low levels of debt, can also
count themselves among the "losers".
Figure 12: Overall income effect: “losses” or “gains” per capital in EUR
Source: ECB, own calculations.
The peripheral countries such as Portugal, Greece and Spain, on the other hand, rank
among the biggest winners. In all of these countries, the cumulative "gains" have
exceeded EUR 1,200 per capita since 2010; the total figures range from EUR 18.9bn in
Greece to EUR 59.9bn in Spain. In relative terms, however, the country that has benefited
the most from the zero interest rate policy is one located in the very north of Europe:
Finland. Here, the "gains" come in at more than EUR 2000 per capita. This comes as no
surprise given the high debt levels of Finnish households, whose loan volume is around
50 percent higher than their deposits; this situation is compounded by extremely low
interest rates on residential construction loans, which had already fallen to below the 2%
mark in 2013.7
The income effects of the zero interest rate policy are also significant in a comparison
with total economic output, especially in the smaller countries on Europe's periphery.
Whereas the positive effect for the entire eurozone comes in at “only” 1.4 percent, the
figure for Portugal and Greece is in the double digits. In other words: had it not been for
the ECB's monetary policy, gross domestic product in these two countries would have
been 12 percent lower than it actually was in 2014; in Spain, this effect accounts for no
less than 6 percent (see Figure 13). This means that the low interest rate policy has
boosted economic development in these countries considerably by fostering an indirect
improvement in the income situation of private households.
7 The figures for all other countries can be found in Appendix 2.
-600
-400
-200
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200
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800
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Euro area Germany France Spain Italy
2015
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2010
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Figure 13: Total income effects as a percentage of GDP, 2014
Source: ECB, Eurostat, own calculations.
So from a pragmatic angle, the ECB's policy can certainly be said to have had a positive
effect overall. Private households have reaped the benefits, at least on average. Although
the impact of the policy varies from country to country, the bulk of the support was
provided where it was most urgently required: in the periphery states blighted by
recession. German households, on the other hand, have had additional costs to bear. So
the monetary policy cannot be said to have the same impact across the board. Rather,
the redistribution effect of the zero interest rate policy within the EMU countries is
striking.
1,4%
-1,1%
1,1%
6,0%
3,6%
11,9% 12,0%
-2,0%
0,0%
2,0%
4,0%
6,0%
8,0%
10,0%
12,0%
14,0%
Euro area Germany France Spain Italy Portugal Greece
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Group Economic Research Working Paper/No. 190/August 4, 2015
BOX 1: Real income effects
While the calculations to date have been based on the development of nominal interest
rates, it is often argued that only real interest rates, i.e. after adjustments for inflation,
are relevant.
There is no doubt that an entirely different picture emerges if the interest rates are
"adjusted" to reflect the national rates of inflation. The more or less continuous drop in
inflation over the observation period causes the yield curve to flatten considerably. But
the trend not only becomes less dramatic, it also becomes less clear-cut: recently, while
the eurozone was flirting with deflation, real interest rates actually increased, with both
deposit and lending rates coming in above the reference value (see Figure 14).
Figure 14: Bank interest rates in the eurozone after adjustments for inflation – actual
development and reference interest rate
Source: ECB, Eurostat, own calculations.
Naturally, this also has implications for the calculation of "interest gains and losses". In
actual fact, positive income effects can now be observed on the deposit side, too: instead
of "losing out" on around EUR 290bn (on a cumulative basis from 2010 until 2015
(inclusive)), private households in the eurozone can now enjoy higher real interest
income of EUR 65bn. Incidentally, this does not apply to German households.8 Because
inflation trends were much less volatile in Germany, households are ultimately left in
the red even after adjustments for inflation, namely by just under EUR 70bn. This "loss"
is, nonetheless, only around half as substantial as it is in nominal terms.
Unlike on the deposit side, the figures remain in the black on the lending side, at least
for the eurozone as a whole.9 The interest gains are, however, much less generous,
dropping from a good EUR 420bn in nominal terms to "only" EUR 130bn in real terms;
German households also see their interest gains sliced more or less in two to EUR 53bn.
All in all, these divergent trends on the deposit and lending side mean that the positive
income effect for the eurozone is actually increased, namely from EUR 132bn to EUR
8 The other countries that are still left with "losses" on the deposit side are Austria, Belgium, Finland and
Luxembourg. 9 In Spain, Greece and Ireland, on the other hand private households are now left with "losses" on the lending side due to the marked drop in prices in these crisis countries.
3,9%
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2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Loans
Deposits
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195bn, or from EUR 400 per capita to EUR 587 per capita (in each case on a cumulative
basis for the period from 2010 to 2015); this is an increase of no less than almost 50
percent. So the impact of the zero interest rate policy certainly does not vanish into thin
air when we look at real interest rates. Rather, it is merely the direction and dimension
of the channels of action that change (see Figure 15).
Nevertheless, not all private households are better placed in "real" terms. In Spain and
the Netherlands, the income gains are slightly, and in Ireland significantly, lower; in
Ireland's case, this is primarily due to the country's descent into deflation in the first few
years of the crisis. The biggest winners, on the other hand, include both German
households, whose income losses are virtually halved in real terms, and Belgian
households, whose "losses" are wiped out completely; Italian households also rank
among the biggest winners, with their "gains" rising - due to extremely positive effects
on the deposit side - by more than one third.
Figure 15: Real overall income effect: “Losses” or “gains” per capita in EUR
Source: ECB, Eurostat, own calculations.
So ultimately, although the variations between the EMU countries are evened out
somewhat if we focus on real interest rates, this does little to change the fundamental
nature of the zero interest rate policy as a form of redistribution between countries.
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3 Asset effects: For unto every one that hath shall be given?
Assessing the impact of zero interest rates and QE on the assets of private households is
exceptionally tricky for both practical and theoretical reasons.
First, there is only limited data available. While the ECB's interest rate statistics provide
fairly precise information on which deposits and loans households have and which
terms and interest rates apply to them, the asset statistics are much less detailed.
Although financial assets can be split into different categories – shares, bonds,
investment funds, life insurance and pension funds – information on portfolio structures
such as securities classes, terms, credit ratings or country of origin is few and far
between. As a result, the information provided in the asset statistics only allows us to
arrive at a rough estimate.
In addition to these practical problems, there are also theoretical difficulties: to what
extent are asset prices influenced by monetary policy at all? There is no question that
bank interest rates are closely linked to monetary policy. After all, the transfer of key
interest rates by banks to their customers is the stated aim of monetary policy ("interest
rate channel"). The long end of the interest rate curve, however, is already largely out of
the central bank's control and this applies all the more to share prices. The latter are
influenced primarily by a combination of real economic factors such as growth
momentum, inflationary pressure or demographic trends. (Conventional) monetary
policy is only one of many potential factors.10 But at least since the launch of the QE
program, the ECB could now also be accused of consciously targeting long-term interest
rates with the aim of influencing asset prices. To use the central bank's language: the
idea is for large-scale government bond purchases to encourage investors to put their
money into other assets instead, e.g. to buy corporate bonds or equities; this results in
higher prices and, on the other hand, in a (further) improvement in financing conditions
for the corporate sector ("portfolio balance effect").11 As a result, our further analysis
below will also focus primarily on the most recent market developments, which are
under the spell of QE. The analysis will concentrate on financial assets, with real estate
being left out of the spotlight (see box).
BOX 2: Low interest rates and real estate prices
There is no doubt that low interest rates have a positive impact on real estate prices:
more favorable financing conditions make property more affordable, meaning that they
should serve to boost demand, all other things being equal, of course. Since, at the same
time, the supply of real estate is less elastic, or only adjusts to reflect rising demand
after a considerable time lag, this sort of development tends to push prices up. This link
is largely undisputed in literature sources.12
At the same time, real estate assets (insofar as households have them at all) tend to
10 Cf. also ECB (2015), Critique of accommodating central bank policies and the "expropriation of the saver",
Occasional Paper Series No 161. 11 "(…) encourages investors to shift holdings into other asset classes – e.g. from sovereign to corporate bonds, from debt to equity, and across jurisdictions, reflected in a falling of the exchange rate. In combination, a lower
cost of debt finance, a lower cost of equity and lower exchange rate all contribute to making investment
projects profitable that were previously deemed unattractive.” in: Mario Draghi (2015), The ECB’s recent monetary policy measures: Effectiveness and challenges, Camdessus lecture, Washington 14 May 2015. 12 For a good overview of studies examining the link between low interest rates and real estate prices, see
McKinsey Global Institute (2013), QE and ultra-low interest rates: Distributional effects and risks, Discussion paper, page 30.
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make up the biggest individual item in the asset balance sheets of private households.
In theory, this should automatically translate into substantial asset gains. There are,
however, a number of special factors that have to be borne in mind.
First of all: the overwhelming majority of homeowners only own the house that they
actually live in. In the eurozone, for example, almost 95% of homeowners can "only" call
their own four walls their own.13 So in this sense, real estate assets are sui generis assets,
which – unlike the variety of financial assets – have less to do with saving, i.e.
postponing consumption until the future, e.g. old age, but rather, in the vast majority of
cases, are more similar to commodities whose "real" value is ultimately an emotional
one and lies primarily in the (long-term) use of the property. This is also highlighted by
the fact that, if properties are sold, then the intention in the vast majority of cases is to
buy another property elsewhere. So even in old age, the property ownership ratio only
dips marginally. Price increases cancel each other out and do not imply any real asset
growth.
Second: unlike in the US, particularly in the pre-crisis years, the concept of "home equity
loans", which allow increases in value to be easily converted into new loans, is a
virtually unknown practice in Europe. And even in the US, this method of using one's
own four walls as a sort of "ATM" has fallen out of favor since the crisis hit, not least now
that banks have become much more restrictive in their lending practices. As a result,
rising house prices remain largely "paper gains" that are virtually impossible to convert
into additional consumption opportunities; they are of more theoretical than practical
relevance.
Third: although house prices are rising again on a large number of markets, it is at the
very least doubtful whether this trend can be referred to wholeheartedly as an "asset
gain". After all, the increase merely reflects the (tentative) recovery following the slump
that came during the financial crisis. In Europe, the German real estate market is the
only one that has reported any (real) value increases to speak of since the outbreak of
the crisis/the launch of the low interest rate policy14, with most other markets still
lagging well behind their previous highs. As a result, many homeowners, whose
properties are often still worth less than their mortgages, are likely to be rather cynical
about the idea that the low interest rates have resulted in "asset gains" – even if the
rebound is likely to have received a (far from insignificant) boost from the low interest
rates.
For these three reasons, we believe that it makes sense to leave any calculation of the
possible asset effects relating to real estate aside, and to concentrate on financial assets
instead.
13 Cf. ECB (2011), Eurosystem Household Finance and Consumption Survey. 14 According to the Economist House Price Index, German property prices have increased by around 30% since
the end of 2008. Obviously, the low interest rates are not the only factor behind this increase. Catch-up effects,
positive economic development and migration flows (immigration, rural exodus) have also played a role. But even if we only attribute one-third of the increase to the zero interest rate policy, the asset gains for German
households as a whole are immense: with real estate assets worth just under EUR 5300bn at the end of 2008
(buildings and developed land, from the Bundesbank balance sheets), the asset effect of the low interest rates would come in at more than EUR 500bn.
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Insurance and pension funds
At the end of 2014, the receivables of private households in the eurozone from insurance
companies and pension funds came in at just under EUR 7,000bn. 85% of this amount
was attributable to the four biggest markets – Germany, France, the Netherlands and
Italy.15
These receivables are secured by a large number of securities and assets; the vast
majority of them, however, are interest-bearing securities. In addition, the investments
tend to be very long-term ones – as is the nature of the products. This means that short-
term price fluctuations are virtually irrelevant and merely result in a temporary increase
in hidden reserves (in the insurers' accounts). What is more, the premature sale of these
investments is either an option that is not open to the beneficiaries, namely the private
households, at all, or one that involves hefty markdowns for them. In other words: it is
not price developments that are the decisive factor in determining the asset effects, but
rather the annual return that can be generated. This annual return is what fuels asset
growth in the long term. The annual return on the investments provides customers with
information on which payments they can expect to receive in the future, e.g. in old age.
Obviously, the actual return on the receivables from insurance companies and pension
funds varies considerably from provider to provider. There is no doubt, however, that
returns have fallen since the start of the low interest rate policy in general. We have
arrived at an approximate estimate of this general development based on the average
return on eurozone bonds. In a comparison with the reference rate for the pre-crisis
years of 2003 to 2008, this calculation once again produces hypothetical losses (or gains)
for the years from 2010 to 2015 (inclusive) based on the existing receivables from
insurance companies and pension funds (see Figure 16).16
Figure 16: Cumulative losses and gains from receivables from insurance companies and
pension funds in EUR bn17
Source: ECB, 2015 AGWR, own calculations.
In the euro area as a whole, these lost returns ("losses") come to more than EUR 400bn; it
comes as little surprise that the heftiest losses have been sustained in Germany and
15 All figures on the financial assets of private households are taken from the "2015 Allianz Global Wealth
Report". 16 A detailed description of our methods can be found in Appendix 1. 17 2015 extrapolated based on the first half of the year.
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France, the two biggest markets.18 What really stands out, however, is that the "losses" are
concentrated on this and last year; in the first few years of low interest rates, on the other
hand, they were much lower. This reflects the impact of monetary policy: conventional
measures only have a relatively muted effect on long-term bond yields. But the more
monetary policy resorts to unconventional measures, the greater the impact becomes; it
was felt in full force with the advent of QE. It is also important to remember that the
impact of QE did not just start to unfold in March 2015, when the program was officially
launched, but had already started to emerge much earlier on: clear anticipation effects
were already rearing their heads on the markets back in August 2014, when the ECB's
President Mario Draghi made his first "announcement" during a speech made in Jackson
Hole.
All in all, however, these "losses" would not yet appear to be too dramatic, coming in at an
average of around 1 percent of the annual amount invested since 2010. If we assume that
the current extreme low interest rate environment will continue, however, a different
picture emerges. Based on an extrapolation of the half-yearly figures, the expected
"losses" for 2015 alone would come in at around 3 percent of the total amount invested,
or a good EUR 200bn. This equates to around half of the gross written premiums that the
entire eurozone life insurance market is expected to generate this year. Losses on this
sort of scale are more than difficult to swallow.
Obviously, any forecasts regarding how long the low interest rates will last for, and
indeed how low they will be – and, as a result, any attempts to estimate the gaps in
retirement provision, for example, that are likely to emerge in the future – are mere
speculation at the moment. One thing, however, should be remembered: at the end of the
day – despite money illusion – it is not so much the nominal, but rather the real returns
that count for investors. After all, by their very nature, receivables from insurance
companies and pension funds, in particular, constitute real savings that postpone
consumption until the (distant) future; the main purpose of the payouts to be received
later down the line is to maintain the standard of living that an individual has become
accustomed to in old age. So if the cost of living rises more slowly, lower returns will be
sufficient. And a look at real returns tells a less dramatic story across the board (see
Figure 17).
For the eurozone as a whole, the cumulative "losses" are reduced considerably in real
terms, dropping to less than one-tenth. For a number of countries such as Spain or
Ireland, an analysis performed in real terms actually results in hypothetical interest
gains, while for France and Italy the interest losses are virtually negligible. In this
analysis, Germany and the Netherlands now report the most substantial losses, with a
fairly moderate drop compared with the analysis based on nominal terms of 56% and 35%
respectively.
Obviously, these figures reflect the differences in inflation trends among the EMU
countries. While inflation has been on a downward trajectory in general over the past few
years, the pace of the decline has varied. Germany, for example, had a fairly low rate of
inflation before the crisis but a relatively high one after the crisis hit – the drop in
nominal interest rates is only cushioned somewhat as a result, but is not compensated
for in full. The real return on investments in Germany is still much lower than it was
18 The full figures for all EMU countries for insurance policies and pension funds (as for all other securities
classes) can be found in the Appendix. One comment on the Netherlands: in this case, our approach would
likely overestimate the "losses", because the popularity of company pension funds means that the proportion of interest-bearing securities is lower than in other markets (in favor of securities).
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before the crisis. Spain, on the other hand, is currently "benefitting" from mild deflation
after reporting average inflation above the 3 percent mark prior to the crisis – this
translates into an increase in real interest rates.
Figure 17: Real cumulative losses and gains from receivables from insurance companies
and pension funds for the period from 2010 to 2015 (inclusive), in EUR bn
Source: ECB, Eurostat, AGWR 2015, own calculations.
So ultimately, we can again draw two conclusions: when it comes to receivables from
insurance companies and pension funds, it is yet again the case that German
households, in particular, are bearing the brunt of the (extremely) low interest rates,
while other countries have escaped any losses altogether, at least in real terms. Once
more, the disparity in the impact of the uniform monetary policy on the real eurozone,
which is characterized by variations in economic output, becomes apparent.
Bonds
At the end of 2014, private households in the eurozone had direct bond holdings worth a
total of EUR 970bn. This amount is not only much lower than the amount of receivables
from insurance companies and pension funds; it is also distributed extremely unevenly:
real "bond fans" would appear to have always been something of a rarity in the eurozone.
Most of them can be found in Italy, which is responsible for more than 50 percent and (to
a lesser extent) in Germany, which accounts for a further 20 percent. Another special
feature of this asset class: its volume has dropped considerably in recent years, namely
by 30 percent or EUR 420bn since the end of 2008. There is no need to ponder for very long
on the motives behind this development. In an environment characterized by low and
falling interest rates, the prospect of buying new bonds loses its appeal. As a result,
investors are unlikely to replace many maturing bonds with new ones. What is more, a
large number of households are likely to have sold their bonds at above their par value
before they reached maturity and then invested the proceeds in other assets instead – or
used them for consumption.
Although returns are the determining factor for bonds – as for receivables from
insurance companies and pension funds – there is one key difference: directly held
bonds can be sold at any time, meaning that they are liquid investments. Consequently,
price changes are also significant because private households can realize price gains at
any time. As a result, when calculating the hypothetical losses and gains associated with
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this asset class, we have opted to look at overall performance, i.e. price and interest rate
developments.19
Not surprisingly, bonds have benefitted from the low interest rates in terms of their
overall performance; lower coupons have been more than compensated for by
considerable price increases. All in all, the "gains" for private households come in at
EUR 125bn over the past six years (see Figure 18). At this point, however, it is important to
bear in mind that these gains are hypothetical in two respects. First, they are calculated
based on a comparison with "normal" developments based on our reference period.
Second, they rest on the assumption that the annual increases in value are actually
realized, i.e. that the bonds are not held to maturity. In reality, however, this is unlikely to
always be the case – which once again highlights the ephemeral nature of asset gains:
they exist first and foremost (on paper) and can disappear as quickly as they emerged.
Figure 18: Cumulative losses and gains from direct bond holdings in EUR bn
Source: ECB, 2015 AGWR, own calculations.
Another striking feature is how the "gains" are distributed over time: they were generated
for the most part in two individual years, 2012 and 2014. These two years have one thing
in common: these are the years in which the ECB announced new, unconventional
measures: in 2012, it was the OMT program in Draghi's famous "whatever it takes" speech,
and in 2014, it was the QE program. So it would appear that monetary policy measures
have the biggest impact on the markets before they are implemented, whereas their
actual implementation is no longer of much interest. This very same explanation can be
used for the weak bond performance in the first six months of this year – in which the
ECB finally launched its large-scale bond-purchasing program, which has actually
resulted in "losses" for bondholders to date due to the abrupt increase in yields.
So the impact of the zero interest rate policy on bonds can be summarized as follows:
positive in general, but the only households that can really benefit are those in Germany
and Italy. For everyone else, the "lever", namely the bonds they hold in their own asset
portfolios, is simply too small.
Equities
At the end of 2014, the equities held directly by private households in the eurozone came
to a total volume of EUR 3,850bn; exactly half of this amount was attributable to French
and Italian households, followed – albeit quite a way behind – by households in Germany
19 A detailed description of our methods can be found in Appendix 1.
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and Spain. At first glance, developments in this asset class appear to be encouraging,
with their value rising by EUR 785bn (+26 percent) since the end of 2008.
As with the other asset forms, however, the potential "gains" associated with the zero
interest rate policy are calculated by way of a comparison with the reference period;
positive development is not unusual per se, but rather is consistent with historical
experience and theoretical considerations ("equity premium"): we cannot attribute every
increase in share prices to the impact of the zero interest rate policy.20
At first glance, the analysis would appear to return surprising results: at the end of the
day, private households in the eurozone have not reaped any benefits to speak of from
their direct equity holdings in the period from 2010 to 2015 (inclusive). The gains come
in at only EUR 50bn (see Figure 19). In relation to the equity portfolio as a whole (as at the
end of 2014), this equates to a paltry 1.4 percent. Italian households are actually left with
slight losses to the tune of just under EUR 5bn, whereas French households can report
"gains" of around EUR 22bn.
Obviously, investors have also been able to generate substantial price gains during this
period as well by putting their equity portfolios together in a skillful fashion, e.g. by
significantly overweighting German equities. Logically, however, our analysis focuses on
the European market as a whole, where the impact of the ECB's low interest rate policy
should be the most pronounced, where possible free of national and specific effects on
share price performance.
If we take a closer look, however, we can see that the majority of the "losses" relate to 2010
and 2011, the early years of the low interest rates in which some European economies
were still grappling with recession. As the low interest rate policy persisted and became
more aggressive, however, the European stock market turned around and moved into the
black, with 2012 and 2013 allowing investors to enjoy the most substantial "gains". After
the 2014 "gap year", which was more or less a lost year for shares across Europe, this
effect becomes particularly apparent in 2015. Despite the turbulence in Greece, investors
enjoyed significant price gains in the first six months of this year thanks to the QE
program. The total "gains", i.e. the "excess returns" achieved over and above the "normal"
returns for the reference period, come in at EUR 250bn. If this trend is extrapolated to
cover the year as a whole, the "losses" incurred in the first few years will have been more
than compensated for by the time this year is out.
20 The reference period for shares has been shifted forward one year (2002 – 2007), because the data would
otherwise be excessively distorted by the dramatic stock market slump in the wake of the Lehman crisis; details on our methods can be found in Appendix 1.
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Figure 19: Cumulative losses and gains from direct equity holdings in EUR bn
Source: ECB, 2015 AGWR, own calculations.
We can, nevertheless, conclude that equity exposure for private households in the
eurozone was certainly not a recipe for automatic success over the entire low interest
rate policy period. Investors certainly could not expect automatic gains. This only applies
to the last few years of the unconventional monetary policy, mainly for 2015 and the
launch of the QE program. But even here, the lost stock market year of 2014 shows that,
even when monetary policy is extremely expansive, the stock markets are not a one-way
street. It is important not to overestimate the impact of monetary policy on the stock
markets.21
Investment funds
At the end of 2014, private households in the eurozone held investment funds worth
EUR 1,700bn; the most enthusiastic buyers were the Germans (just under EUR 500bn)
followed by Italian households (EUR 370bn). Investment fund holdings have swollen by
EUR 440bn or 35 percent since the end of 2008. This is not, however, solely attributable to
value gains, but largely to new fund inflows. After all, unlike direct equity and bond
holdings, investment funds often form part of savings plans into which regular deposits
are made. At the same time, investment funds offer investors access to a wide range of
asset classes. In addition to conventional funds such as equity and bond funds, funds are
now available to cover all sorts of investment, ranging from real estate and
infrastructure, to currencies and commodities and investments in emerging markets.
Measuring the performance, i.e. the value gains leaving fund inflows out of the equation,
of an asset class that is as varied as this one is anything but a trivial matter. As a result,
we have calculated a hybrid performance indicator for our analysis, based on the
weightings of the individual fund categories that we have used to approximate the actual
development; this, in turn, is compared against the reference period.22
All in all, this calculation results in "gains" of just under EUR 100bn for private
households in the eurozone since 2010 (up to and including 2015). This moderate trend
on the whole is attributable to 2010 and, in particular to 2011; in 2011, investment funds
21 This view is also reflected in numerous studies on this issue which, quite rightly, produce different results -
and are often unable to prove any link between monetary policy and QE on the one hand, and the stock markets
on the other. See also FAZ "Anleihekaufprogramme wirken am ehesten international", July 22, 2015, p.25.
22 Detailed information on our methods can be found in Appendix 1.
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reported very negative performance across the board. The years that followed, on the
other hand, went hand-in-hand with value growth (see Figure 20).
Figure 20: Cumulative losses and gains from investment funds in EUR bn
Source: ECB, 2015 AGWR, own calculations.
So ultimately, it is yet again the case that the years of unconventional monetary policy
were the most worthwhile, but nevertheless did not produce gains exorbitant enough to
make up for the first few lean years.
Financial assets overall
So what sort of impact has the zero interest rate policy had on financial assets as a
whole, excluding bank deposits and loans? For the entire period since 2010, private
households are left with losses to the tune of EUR 130bn (see Figure 21). This
corresponds to precisely 1 percent of the assets included in our analysis, as at the end of
2014. This means that financial assets (excl. bank deposits) would be one percent higher
today if the ECB had not pursued a systematic low interest rate policy since the outbreak
of the crisis. In other words: all in all, the impact of monetary policy on assets is not really
worth mentioning.
These negative "returns" are, however, distributed fairly unevenly among households.
Households in the Netherlands have been forced to shoulder the heaviest losses of
EUR 78bn, which corresponds to no less than 4.7 percent of the assets included in our
analysis. The only other country where households have sustained relative "losses" on a
similar scale is Ireland. German and French households have lost out on EUR 53bn (1.7
percent). But there are also "winners": in Italy, Belgium and Spain, for example, the "gains"
range from EUR 10bn to EUR 36bn; in relative terms, Greek households fare particularly
well (+2.7 percent). These variations naturally reflect differences in the investment
behavior of private households from country to country.
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Figure 21: Cumulative losses and gains on the financial assets (excl. deposits) of private
households in the eurozone, in EUR bn
Source: ECB, 2015 AGWR, own calculations.
Nevertheless, it may come as a surprise to see that the zero interest rate policy led to any
asset losses at all in some countries. Two main reasons are behind this: first, the rising
"losses" due to the drop in the returns on insurance policies and pension funds and,
second, the weak stock markets in the early years of the crisis. If, on the other hand, 2010
and 2011 are left out of the equation, the outcome is quite different: private households
are then left with "gains" of EUR 1100bn or 8.2 percent of the assets included in our
analysis – all thanks to the booming stock markets (see Figure 22). Savers with a
penchant for securities, like the Italians, benefit the most, while conservative savers like
German households benefit less in relative terms: while in Italy – just like in the other
southern periphery states of Spain, Portugal and Greece – the "gains" come to more than
13 percent, the figure for Germany is only just under 5 percent; France (almost 8 percent)
and, in particular, Ireland (2 percent), also report only below-average "gains". The
households that fare the worst, however, are those in the Netherlands. Even if the
shortened period is taken as a basis, these households are still left with "losses" of around
EUR 13bn (0.8 percent). This is the price that the Dutch pay for their strong preference for
interest-sensitive insurance policies and pension funds.
These figures once again highlight the uncertainty surrounding estimates of possible
asset losses and gains: the question as to whether the zero interest rate policy has
resulted in more gains than losses ends up being a matter of perspective more than
anything else – i.e. it is all about selecting the "right" observation period. The situation is
exacerbated by a further difficulty: these "gains" only exist "on paper". For the majority of
private households, the situation generally remains the same. This is because, unlike the
impact of the zero interest rate policy on deposits and loans, which result in direct
income effects, the effect on other assets is merely a valuation effect. These effects can,
however, also influence day-to-day spending decisions, although there is much debate in
the pertinent literature as to how strong this influence is.23 If we use a common approach
and assume an asset effect of 3 percent – meaning that assets that are valued EUR 1000
higher result in an additional EUR 3 being spent – this effect would correspond, based on
annual asset gains of just under EUR 300bn in the entire eurozone, to an average of
around EUR 10bn a year over the past four years – or 0.1 percent of economic output.
23 For a brief overview of empirical studies on asset effects, please see McKinsey Global Institute (2013), QE
and ultra-low interest rates: Distributional effects and risks, Discussion paper, page 32.
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Figure 22: Cumulative losses and gains on financial assets (excl. deposits) in EUR bn
Source: ECB, 2015 AGWR, own calculations.
So the overall conclusion is a rather sobering one: the question as to whether the zero
interest rate policy has benefitted or harmed asset owners in general is largely
determined by the window of time that is taken as a basis. This alone speaks volumes
about the sustainability of any "gains" or "losses". It does, however, highlight the fact that
asset owners have benefitted less from the low interest rate policy as such, but primarily
from the ECB's moves to save the euro. The scale of any impact, however, is certainly not
anything to worry about (as yet), especially if we look at the actual impact, i.e. not at the
valuation effects per se, but at the possible resulting consumer spending. Looking at
households as a whole, these effects have been negligible to date. So when it comes to
the impact of the zero interest rate policy on assets, the motto would appear to be: much
ado about (virtually) nothing.
This does not, however, mean that clear winners or losers cannot emerge from the group
of private households as a whole. This is the question that the following chapter
addresses.
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4 Distribution effects: Not only the usual suspects
So far, our calculations have looked at private households as a whole, or at a simple
average (per capita analysis). Since, however, assets tend to be distributed relatively
unevenly, the average impact can easily mask huge differences in the effects on
individual household groups.
With the help of data from the ECB's large-scale asset survey entitled, “The Eurosystem
Household Finance and Consumption Survey” (HFCS)24, these varying effects on
individual income groups can be investigated in greater detail. The same procedure as
the one used to analyze the total assets of private households has been used, but instead
of looking at a single asset portfolio, for example for the German household sector, we
have now examined five different portfolios for the individual income groups.25
Income effects: Bank deposits
It comes as little surprise that the "interest losses" on the deposit side rise in line with
incomes. After all, the amount of bank deposits also tends to rise on average in line with
incomes (see Figure 23).
Figure 23: Distribution of average "interest losses" per income group on a cumulative
basis from 2010 to 2015 (inclusive), per capita in EUR
Source: ECB, own calculations.
There is no doubt that a relative analysis that looks at "interest losses" in relation to
average income is more interesting. The picture is then turned on its head entirely, and
the people on the lowest incomes are hit the hardest. This asymmetrical impact is the
most pronounced in Germany: in relation to income, the lowest income group bears
twice the burden of the highest income group. So on the deposit side, it is certainly a
case of "distribution from the bottom to the top". In other countries, mainly on the
southern periphery, this effect is much less pronounced, if visible at all (see Figure 24).
24 ECB (2014), The Eurosystem Household Finance and Consumption Survey, Statistics Paper Series No. 2, European Central Bank.
25 For details on the methods used, please refer to Appendix 1. There are two reasons, however, why a direct
comparison with the previous calculations is impossible: first, the analysis is static, i.e. it ignores changes in the portfolios over time, and second, different data is taken as a basis, because the asset data for each income
group is based on surveys - and deviates, sometimes substantially so, from the "official" wealth account data.
Nevertheless, this allows us to arrive at a satisfactory estimate of the different effects on the various income groups.
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Figure 24: Distribution of average "interest losses" per income group on a cumulative
basis from 2010 to 2015 (inclusive), in basis points of average annual income
Source: ECB, own calculations.
Income effects: Bank loans
As with deposits, the absolute "interest gains" are also concentrated in the higher income
classes: high incomes are a prerequisite for substantial loans, meaning that they act as a
major lever for income gains on the loans side (see Figure 25).
Figure 25: Distribution of average "interest gains" per income group on a cumulative
basis from 2010 to 2015 (inclusive), per capita in EUR
Source: ECB, own calculations.
If we look at the relative "interest gains" (as a percentage of income), however, the picture
that emerges is completely different to the one on the deposit side. At least in the
eurozone, the income effects vary only slightly, with virtually no clear "winners" among
the individual income groups. The group that comes closest to being classed as a
"winner" is the upper middle class, who take out home loans on a significant scale
without having exorbitantly high incomes. In turn, the lower middle class ranks among
the losers; here, the lending volume is low, while income levels are already relatively
high. This pattern is repeated with (slight) variations in the majority of eurozone
countries, also in Germany; one country in which it is particularly pronounced is Spain,
for example (see Figure 26). In some countries, for example the Netherlands and Greece,
on the other hand, the lowest income group reaps the most benefits. The "interest gains"
in the Netherlands come in at 1.8 percent of income, an effect that is almost three times
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as strong as in the highest income group. This example once again shows that,
particularly when it comes to household debt and the resulting income effects, the
North-South stereotypes do not stand the test of reality.
Figure 26: Distribution of average "interest gains" per income group on a cumulative
basis from 2010 to 2015 (inclusive), in basis points of average annual income
Source: ECB, own calculations.
Income effects: Overall effects
If we look at the "interest gains and losses" on balance, then the following picture
emerges for private households in the eurozone: while the positive absolute income
effects continue to increase the further up the income ladder we go, it is the upper-mid
income group that is benefiting the most in relative terms (see Figure 27).
Nevertheless, the effects on the individual income groups vary considerably from country
to country.26 In Germany, for example, the distribution effect is something of an
"inverted" one: the highest income group is also the group that benefits the most in
relative terms, while the lowest income group either benefits the least or actually loses
out. No other EMU country shows the same sort of "redistribution from the bottom to the
top" (see Figure 28).
In Germany's neighboring country, the Netherlands, for example, the effect is the exact
opposite: here, the lowest income group is enjoying by far the biggest income effects in
relative terms, with the highest group benefiting the least. In Greece (as well as Cyprus
and Slovenia), it is also the low-income groups that are reaping the most benefits from
the zero interest rate policy.
In Spain and Portugal and (to a lesser extent) in France, on the other hand, the positive
income effects are concentrated in the middle class, with the top ten percent of earners
benefiting much less from the zero interest rate policy. Finally, Italy and Austria stand
out based on their relatively egalitarian distribution of income effects.
26 See Appendix 2 for all data on the EMU countries.
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Figure 27: Distribution of average total income effects per income group in the eurozone
on a cumulative basis from 2010 to 2015 (inclusive), per capita in EUR and expressed in
basis points of average annual income
Source: ECB, own calculations.
Figure 28: Distribution of average total income effects per income group on a cumulative
basis from 2010 to 2015 (inclusive), expressed in basis points of average annual income
Source: ECB, own calculations
So at the end of the day, although the zero interest rate policy is having a real impact in
terms of distribution policy, the effects are not as prominent if we look at the EMU region
as a whole, even though the positive income effect, for example, is twice as high,
expressed as a percentage of average income, for the upper middle class as it is for the
lower middle class. The differences at country level, on the other hand, are significant,
although no uniform pattern can be identified. In some countries, the lower income
groups are benefiting the most, whereas in others, it is the income groups in the mid-
field that are reaping the benefits. But there is only one country in which the top income
decile is benefiting the most in relative terms, and that country is Germany.
Asset effects
So what do the assets effects on the individual income groups look like? As with the
calculation of the income effects, the impact of the zero interest rate policy on the
individual asset classes based on the individual asset portfolios can also be calculated
for each income group separately.
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In the case of insurance policies and pension funds, the asset effects are negative for all
income groups and increase in line with incomes (see Figure 29). Looking at things in
relative terms and assessing asset losses in relation to average incomes does little to
change this picture. Here, once again, the "losses" continue to rise in line with incomes, at
least at European level. From a distribution policy perspective, this outcome may come
as reassurance. But it also shows that only higher income groups are taking active
measures to set money aside for retirement, which is anything but reassuring from a
social policy perspective.
Figure 29: Distribution of average asset effects per income group in the eurozone on a
cumulative basis from 2010 to 2015 (inclusive), per capita in EUR and expressed in basis
points of average annual income, insurance policies and pension funds
Source: ECB, own calculations.
A look at the individual countries, on the other hand, sometimes tells a different story
(see Figure 30). This applies first and foremost to the Netherlands, where the lowest
income group is hit the hardest in relative terms. At almost 2 percent of annual income,
these "asset losses" also reach a relevant size. This explanation lies in the popularity of
company retirement provision, which means that this form of saving for retirement is
extremely common, even in lower income groups.
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Figure 30: Distribution of average asset effects per income group on a cumulative basis
from 2010 to 2015 (inclusive), expressed in basis points of average annual income,
insurance policies and pension funds
Source: ECB, own calculations.
When it comes to the direct bond holdings of private households, our method produces
positive asset effects. Compared with the "losses" associated with insurance policies and
pension funds, however, they are much less substantial, fluctuating at around 0.1 of
incomes in relative terms (see Figure 31). Another striking fact is that all income groups
are affected to more or less the same extent, with no visible distribution policy effects to
speak of at European level. This only applies to a handful of countries, such as Italy –
where the highest income group benefits the most – or the Netherlands and Belgium,
where the main winners can be found in the lowest income group.27
Figure 31: Distribution of average asset effects per income group in the eurozone on a
cumulative basis from 2010 to 2015 (inclusive), per capita in EUR and expressed in basis
points of average annual income, bonds
Source: ECB, own calculations
As with insurance policies and pension funds, direct equity holdings also produce
negative asset effects for private households, at least if we look at the entire period since
27 For information on the asset effects for bonds (and all other asset classes) at country level, please refer to Appendix 2.
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2010. These effects are, however, very subtle. Even for the top income group, which has
the most substantial equity holdings, the "loss" only comes in at around EUR 140 (see
Figure 32). In relation to income, these effects are negligible, not just for the eurozone as
a whole but also in the individual countries. All the same, we can see (if we look closer)
that the upper income groups are hit harder in relative terms. This is consistent with the
idea that equities only tend to play any significant role in an individual's personal asset
balance sheet as income levels rise.
Figure 32: Distribution of average asset effects per income group in the eurozone on a
cumulative basis from 2010 to 2015 (inclusive), per capita in EUR and expressed in basis
points of average annual income, equities
Source: ECB, own calculations
Finally, the asset effects associated with investment funds are positive on balance and
correspond roughly to those associated with direct equity holdings (see Figure 33). There
is no clear distribution policy pattern, with only marginal effects in relation to income in
all income groups. The "fringe groups", however, i.e. the highest and lowest income
groups, seem to benefit the most. Incidentally, this also applies to a large number of
countries, for example Germany, Spain and the Netherlands (see Appendix 2).
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Figure 33: Distribution of average asset effects per income group in the eurozone on a
cumulative basis from 2010 to 2015 (inclusive), per capita in EUR and expressed in basis
points of average annual income, investment funds
Source: ECB, own calculations
If all of these individual effects are grouped to arrive at a "total asset effect", the following
picture emerges (see Figure 34): while all income groups have to accept losses, the effect
is relatively weak on balance due to the differences in how the zero interest rate policy
has affected the individual asset classes; even in the top income group, it comes in at less
than EUR 1000 – on a cumulative basis over the last six years. The effects are hardly
significant in relative terms, too, coming in at only around 0.1 percent of annual income
at the most – hardly worthy of being described as real distribution effects. It would,
however, appear that the upper income groups tend to bear the brunt of the "burden". So
at least in a long-term analysis, the zero interest rate policy cannot be said to be first and
foremost to the benefit of the "rich".
Figure 34: Distribution of average asset effects per income group in the eurozone on a
cumulative basis from 2010 to 2015 (inclusive), per capita in EUR and expressed in basis
points of average annual income, all asset classes
Source: ECB, own calculations.
A look at the individual countries, on the other hand, sometimes tells a very different
story (see Figure 35). In Germany, for example, the top income group fares relatively well;
this is likely due to the fact that the Germans tend not to hold a great deal of shares, even
in high income groups. France stands in stark contrast to the German situation. Here, the
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upper income groups tend to be the ones suffering the heftiest "asset losses" precisely
because of their considerable equity holdings. In the Netherlands, on the other hand, the
lowest income group is shouldering the heaviest "losses" due to the impact of insurance
policies and pension funds.
Italy emerges as a special case: here, all income groups are benefiting from the zero
interest rate policy. This is likely to be due primarily to Italian savers' love of bonds: there
is no other EMU country in which private households hold as many bonds – and bonds,
in particular, have emerged as the winners of the low interest rates (so far). In Spain, on
the other hand, only the very lowest income group has reported any positive asset effects.
This once again reflects specific local savings habits: the clear Spanish preference for
buying investment funds; at the same time, insurance policies and pension funds are
relatively uncommon.
Despite these interesting "isolated cases", two conclusions can still be drawn from the
analysis of these asset effects: first of all, these effects are, all in all, fairly insignificant for
the vast majority of the private households in the eurozone; it is only in a handful cases
that the "losses" or "gains" come to more than 0.5 percent of annual income. Second,
there is no clear distribution effect; with the exception, perhaps, of Italy, no evidence can
be found to support the theory that the higher income groups have reaped above-
average benefits from the zero interest rate policy in terms of their asset holdings.
Figure 35: Distribution of average asset effects per income group on a cumulative basis
from 2010 to 2015 (inclusive), expressed in basis points of average annual income, all
asset classes
Source: ECB, own calculations
Total distribution effects: Income and asset effects
Although income effects – which are felt directly by households – cannot really be
grouped together with asset effects, which primarily constitute a temporary revaluation
of assets, doing so does, however, prove an informative exercise (see Figure 36).
Grouping the two effects makes it clear that the positive income effects more than
compensate for the negative asset effects in all income classes. What is more, the
consolidated distribution effects are extremely limited, although on the whole, the
groups that benefit the most, as with the income effects, are the income groups in the
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mid field. In other words: in a long-term analysis, the asset effects are virtually
insignificant.
Figure 36: Distribution of average income and asset effects per income group in the
eurozone on a cumulative basis from 2010 to 2015 (inclusive), per capita in EUR and
expressed in basis points of average annual income, equities
Source: ECB, EMU interest rate statistics, HFCS.
BOX 3: Distribution impact of asset effects in the long and short term
The previous chapter, which looked at asset effects on the whole, already showed that
the magnitude of these effects depends to a considerable degree on the observation
period selected. In a longer-term analysis, since 2010, "losses" – albeit minor ones – tend
to emerge on balance. The picture is turned completely on its head if we only look at the
years since 2012, which have been characterized by moves to save the euro. This
analysis results in significant "gains". This can be explained by the development of the
European stock markets, which did not bounce back as soon as the low interest rate
policy was implemented, but only once the ECB had laid any fears as to the survival of
the eurozone to rest. This means that, in the short term, excluding the two bad stock
market years of 2010 and 2011, the effects for shares and investment funds are clearly
positive. For insurance policies, pension funds and bonds, on the other hand, virtually
nothing changes, as both of these asset classes remained virtually unaffected by the low
interest rate policy in the first few years.
This naturally also changes the direction and scale of the asset effects for the individual
income groups in the short term, too (see Figure 37). From this angle, it is not only the
case that all income groups can now benefit from "gains". Rather, the effects are no
longer merely marginal either. On the contrary, the highest income group is left with
gains of around EUR 8000, more than one percent of their annual income. In addition,
the short-term analysis would also appear to tell the "feared" distribution story, namely
that it is first and foremost richer households that are benefiting considerably, and
indeed more than most, from the zero interest rate policy and QE as asset prices rise.
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Wealth effect
Relatively toaverage income
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37
Group Economic Research Working Paper/No. 190/August 4, 2015
Figure 37: Distribution of average asset effects per income group in the eurozone on a
cumulative basis from 2012 to 2015 (inclusive), per capita in EUR and expressed in
basis points of average annual income, all asset classes
Source: ECB, own calculations.
This pattern is repeated at national level, albeit with a number of interesting deviations
(see Figure 38). In Germany, for example, it is mainly low-income households, together
with the top income group, that have been able to report significant positive asset
effects. This is due to the above-average popularity of investment funds among this
income group. This applies all the more so in Spain's case – where the lower income
group holds more investment funds than their counterparts in the middle income class
– meaning that the "poorest" are evidently benefiting the most from the zero interest
rate policy, at least in relative terms. In France and Italy, on the other hand, it is the rich
households that are able to enjoy substantial increases in the value of their asset
portfolios. The same applies to the Netherlands, albeit with one major handicap: here,
the "asset gains" are much lower and the Dutch preference for insurance policies and
pension funds has a negative impact.
Figure 38: Distribution of average asset effects per income group on a cumulative basis
from 2012 to 2015 (inclusive), expressed in basis points of average annual income, all
asset classes
Source: ECB, EMU interest rate statistics, HFCS
0
25
50
75
100
125
0
2.000
4.000
6.000
8.000
10.000
<20 20-39 40-59 60-79 80-89 90-100
Absolute terms
Relatively toaverage income
-75
-50
-25
0
25
50
75
100
125
150
175
Germany France Spain Italy Netherlands
<20
20-39
40-59
60-79
80-90
90-100
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38
Group Economic Research Working Paper/No. 190/August 4, 2015
But the restriction mentioned above also applies to the asset effects for each income
group: these "gains" largely exist on paper and, unlike the income effects, have no
immediate impact on the spending of - and, as a result, on the prosperity actually
experienced by - private households. With asset effects on spending corresponding to 3
percent (see above, page 27), the gains generated by the top income group in the
eurozone, which correspond to around EUR 8000 since 2012, translate into consumer
spending of EUR 60 a year. At any rate, social cohesion is unlikely to be threatened due
to growing inequality emerging from the asset effects of the ECB’s monetary policy
alone.
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Group Economic Research Working Paper/No. 190/August 4, 2015
5 Summary of results
The low interest rate policy pursued by the ECB and, in particular, the purchase of
securities (QE) are having a direct and indirect impact on the incomes and assets of
private households in the euro area. As a result, they automatically have implications for
distribution policy, both within and between countries. This paper is an attempt to
quantify these effects. Our approach involved three steps: first, we looked at the direct
impact that changes in the interest rates for bank deposits and loans are having on
incomes; second, we examined the effect the low interest rates are having on asset prices
and finally, we took a closer look at the individual implications for the portfolios of
different income groups. The results of this analysis can be summarized as follows.
Income effects
All in all, private households in the euro area are benefiting from the low
interest rate policy: over the past six years (2010 to 2015, inclusive), the
cumulative "gains" have come in at EUR 130bn (1.4 percent of GDP) or EUR 400
per capita.
Among the biggest winners are the peripheral countries such as Portugal,
Greece and Spain: in all of these countries, the cumulative "interest gains" have
exceeded EUR 1,200 per capita since 2010; in Portugal and Greece, these gains
came in at around 12 percent of GDP, compared with 6 percent in Spain.
Germany, on the other hand (together with Belgium and Slovakia), ranks
among the losers: German households have certainly had to digest "losses" over
the past six years, with the figure amounting to a total of EUR 367 per capita or
EUR 29.8bn (-1.1 percent of GDP).
Conclusion: the ECB's zero interest rate policy is having a clear redistribution effect
between the EMU countries via the income channel.
Asset effects
For the entire period since 2010, private households in the eurozone are left
with losses to the tune of EUR 130bn. This corresponds to precisely one percent
of the assets included in our analysis (as at the end of 2014). Different
investment preferences, however, mean that the effects also vary from country
to country.
As monetary policy has gradually been expanded to include unconventional
measures, the stronger the negative impact on insurance policies and pension
funds has become: for this year alone, we expect this asset class to report losses
of around EUR 200bn; this is around half the gross written premiums that all
eurozone life insurers are expected to generate.
In a shorter-term analysis, namely since the ECB launched its explicit euro
rescue policy, the overall picture is a different one: since 2012, eurozone private
households in all asset classes have been generating "gains" of EUR 1100bn (8.2
percent); this is primarily due to the positive developments on the stock market.
But these "gains" should also be taken with a pinch of salt: the increases in value
only exist "on paper" for the time being, and the direct consumption effects –
and, as a result, prosperity effects – are likely to be much lower. If we use a
common approach and assume an asset effect on spending of 3 percent, then
this effect would correspond to an average of around EUR 10bn a year over the
past four years – or 0.1 percent of the eurozone's economic output.
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Group Economic Research Working Paper/No. 190/August 4, 2015
So all in all, the asset effects resulting from the zero interest rate policy are fairly
insignificant in a longer-term comparison. Positive effects only become clearly visible
from the start of the explicit euro rescue policy.
Distribution effects
At European level, while the positive income effects continue to increase the
further up the income ladder we go, it is the upper-mid income group that is
benefiting the most in relative terms.
The effects on the individual income groups vary considerably from country to
country. In Germany, the highest income group is also the group that benefits
the most in relative terms, while the lowest income group either benefits the
least or actually loses out. No other EMU country shows the same sort of
"redistribution from the bottom to the top".
When it comes to the asset effects, all income groups have been hit by "losses".
At 0.1 percent of the respective average incomes, however, they can hardly be
described as significant, meaning that there are no distribution effects to speak
of. In the shorter term, however, the higher income groups reap above-average
benefits.
In summary, there is no evidence suggesting that the higher income groups are being
favored by the low interest rate policy; Germany is the country where this theory is
closest to being turned into a reality.
The actual implications of the ECB's zero interest rate policy only emerge upon closer
inspection, namely when we compare countries, wealth classes and income groups; if we
restrict ourselves to the overall picture, they remain hidden. This applies to the direct
income effects, which are positive on the whole, but differ enormously from country to
country. It also applies to the asset effects, which not only vary depending on the period
of time we choose to examine, but, first and foremost, also vary considerably from asset
class to asset class. And it also applies to the different income groups, where the winners
and losers of the zero interest rate policy are certainly not always found on the rungs of
the income ladder you would expect to find them on.
So all in all, the impact of the zero interest rate policy is an inconsistent one. Particularly
for Germany, however, private households rank among the "losers" in terms of both
income and asset effects; what is more, the zero interest rate policy is favoring the
country's higher income groups – albeit not to too great an extent. So it comes as little
surprise that the ECB is a frequent target of criticism in Germany, in particular, with its
monetary policy.
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Group Economic Research Working Paper/No. 190/August 4, 2015
Appendix I: Methods
Bank deposits and loans
The calculation of the "interest gains and losses" is based on the ECB's EMU statistics,
which stretch back to 2003.
The annual interest rates are calculated as the average of the weighted monthly interest
rates. The following deposit and loan categories are taking into account:
Loans for house purchases (mortgage loans)
Consumer loans
Other loans
Savings deposits
Term deposits
Overnight money deposits
Overdraft loans and credit lines for credit cards have not been taken into account for
both systematic and statistical reasons.
Certain time series of deposit categories had to be excluded due to a lack of available
data.28 For those EMU countries included in the survey that only joined the single
currency in 200329, the data series is shorter30. In the event that the data series for interest
rates and volumes do not match, the longest available period of time for which both sets
of data are available is used. Smaller gaps within time series were interpolated. 31 If data
is not reported by the ECB, the national databases are used. 32
For the years from 2010 onwards, we have calculated hypothetical interest payments
(made and received) based on the average interest rates in the pre-crisis years of 2003 -
2008. The differences between these payments and the actual interest payments (made
and received) correspond to the "gains" (interest payments saved on loans) and "losses"
(interest payments on deposits that have been missed out on) of private households.
These "gains" and "losses" are cumulated for the years from 2010 to 2015 (inclusive), with
the figures for 2015 being extrapolated based on the data for the first four months of the
year.
Insurance and pension funds
The effect of the low interest rates on insurance policies and pension funds is calculated
based on the average annual asset bases; the data taken as a basis comes from the 2015
Allianz Global Wealth Report. To arrive at an approximate estimate of returns, we have
used the average yield on 10-year euro government bonds; this is based on the implicit
assumption that the insurers and pension funds have well diversified portfolios. As with
bank deposits and loans, the average return for the years from 2003 to 2008 acts as the
point of reference. "Gains" and "losses" are the difference between current and
hypothetical returns. The projection for 2015 is based on the current returns for the first
six months and on a forward projection of asset values based on historical growth
figures.
28 Austria, Greece and Portugal: interest rates for savings deposits are reported neither by the ECB nor by the
national central bank either because this deposit category is not relevant or for reasons relating to the
protection of legitimate expectations. 29 All EMU countries with the exception of Cyprus, Malta and the Baltic states. 30 Slovakia and Slovenia. 31 Slovenia: Savings deposits for November and December 2005. 32 Belgium: Overnight money deposits; Italy: Savings deposits; Ireland: Overnight money deposits.
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Group Economic Research Working Paper/No. 190/August 4, 2015
Bonds, equities and investment funds
For the other asset classes, we have used the year-end levels in private household
portfolios; this data was once again taken from the 2015 Allianz Global Wealth Report. In
order to approximate the annual performance, we have used the Dow Jones Euro Stoxx
50 Price Index (DJES50I) for shares and the Barclays Euro Aggregate Government Index
(LHAGOVE) for bonds. This, in turn, implies that private households also have a fairly
broadly diversified portfolio. Although this is unlikely to be the case across the board, this
approach allows us to arrive at a more systematic assessment of the impact of the low
interest rates, as the impact of the ECB's policy was largely designed to be felt at
European level and not so much at national level, which is more exposed to special
effects. For the cosmos of investment funds, we have approximated performance by
creating a hybrid indicator that mirrors the current structure of the European fund
industry. In all cases, the value gains or losses arise by multiplying the year-end levels by
the performance indicators. The 2015 figures are based on a simple extrapolation of the
values for the first half-year. The "gains" and "losses" are once again the difference
between the current and the hypothetical changes in value based on the average
performance in the period from 2003 to 2008 (shares: 2002 to 2007).
Real effects
All calculations are based on nominal figures, i.e. no adjustments are made for inflation.
In some areas, however, it would also appear to make sense to look at the real figures,
after adjustments for inflation. In order to arrive at these figures, we have used the
national rate of inflation for consumer prices, as published by Eurostat. This does
nothing to change the calculation method; for bank deposits and loans, for example, only
the real interest rate is used, i.e. (nominal) interest less national inflation.
Distribution effects
In order to assess the distribution effects, we have used the data from the ECB's large-
scale asset survey entitled, “The Eurosystem Household Finance and Consumption
Survey” (HFCS), which was published in 2013. We were able to use this data to create an
ideal, typical asset portfolio for each income group and country. "Gains" and "losses" are
calculated as set out above and we have shown the results both as absolute figures in
euros and expressed as a percentage of the average income for each group. Unlike the
data for the entire household sector, the detailed data for each income group is only
available for one cut-off date. As a result, the calculations of the "gains" and "losses" are
static, i.e. they ignore changes in the portfolios over time due to fund inflows and
outflows. Another major difference relates to the data taken as a basis: distribution data
is collected using surveys. This results, in some cases, in considerable deviations from
the values set out in the official wealth accounts (and to which the Allianz Global Wealth
Report also refers).
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Economic Research Working Paper / Nr. 190 / 04.08.2015
Appendix II: Countries
EURO AREA
Gains and losses (EUR m, %)
Gains and losses per asset class (EUR m)
Income effects per income group (EUR, bp)
Gains and losses per year
Year Gains
(EUR m) Losses
(EUR m) Balance (EUR m)
Balance per capita (EUR)
2010 51 299 -38 269 13 030 40
2011 53 266 -30 075 23 191 70
2012 61 554 -28 424 33 130 100
2013 77 523 -48 601 28 921 87
2014 85 572 -66 502 19 070 57
2015 94 574 -79 449 15 125 45
Sum 423 787 -291 320 132 467 400
Gains and losses per year (EUR m)
Year Insurance/ pensions
Bonds Equity Mutual funds 2010 -22 250 -15 859 -326 364 -66 051
2011 21 119 6 320 -700 532 -128 157
2012 -7 940 94 227 271 838 93 195
2013 -64 741 -16 283 443 313 83 789
2014 -131 063 108 795 -131 601 38 707
2015 -202 572 -52 225 497 347 75 715
Sum -407 448 124 975 54 001 97 197
Asset effects per income group (EUR, bp)
1,4%
0,0%
1,0%
2,0%
3,0%
4,0%
0
50.000
100.000
150.000
200.000
Loans and deposits Per GDP 2014
2015
2014
2013
2012
2011
2010
-2.000.000
-1.000.000
0
1.000.000
2.000.000
Insuranceand
pensions
Bonds Equity MutualFunds
2015
2014
2013
2012
2011
2010
0
20
40
60
80
0
1.000
2.000
3.000
4.000
<20 20-39 40-59 60-79 80-89 90-100
Absolute terms (left scale) Relatively to income (right scale)
-20
-15
-10
-5
0
-1.000
-750
-500
-250
0
<20 20-39 40-59 60-79 80-89 90-100
Absolute terms (left scale) Relatively to income (right scale)
Income effects
Asset effects
Distribution effects
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Economic Research Working Paper / Nr. 190 / 04.08.2015
AUSTRIA
Gains and losses (EUR m, %)
Gains and losses per asset class (EUR m)
Income effects per income group (EUR, bp)
Gains and losses per year
Year Gains
(EUR m) Losses
(EUR m) Balance (EUR m)
Balance per capita (EUR)
2010 2 315 -2 400 -85 -10
2011 2 365 -2 248 117 14
2012 2 921 -2 411 509 61
2013 3 582 -3 325 257 30
2014 3 667 -3 771 -103 -12
2015 4 060 -4 129 -69 -8
Sum 18 910 -18 284 626 75
Gains and losses per year (EUR m)
Year Insurance/ pensions
Bonds Equity Mutual funds 2010 -431 -503 -9 849 -1 884
2011 399 218 -22 265 -4 054
2012 -148 3 260 9 111 2 914
2013 -1 194 -591 14 231 2 594
2014 -2 354 4 323 -3 932 1 147
2015 -3 537 -2 262 14 611 2 232
Sum -7 265 4 445 1 907 2 949
Asset effects per income group (EUR, bp)
0,2%
-1,0%
0,0%
1,0%
2,0%
3,0%
-500
0
500
1.000
1.500
Loans and deposits Per GDP 2014
2015
2014
2013
2012
2011
2010
-50.000
-25.000
0
25.000
50.000
Insuranceand
pensions
Bonds Equity MutualFunds
2015
2014
2013
2012
2011
2010
-50.000
-25.000
0
25.000
50.000
V&P Anleihen Aktien IF
2015
2014
2013
2012
2011
2010
-30
-20
-10
0
10
-1.200
-800
-400
0
400
<20 20-39 40-59 60-79 80-89 90-100
Absolute terms (left scale) Relatively to income (right scale)
0
10
20
30
40
0
400
800
1.200
1.600
<20 20-39 40-59 60-79 80-89 90-100
Absolute terms (left scale) Relatively to income (right scale)
Income effects
Asset effects
Distribution effects
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Economic Research Working Paper / Nr. 190 / 04.08.2015
BELGIUM
Gains and losses (EUR m, %)
Gains and losses per asset class (EUR m)
Income effects per income group (EUR, bp)
Gains and losses per year
Year Gains
(EUR m) Losses
(EUR m) Balance (EUR m)
Balance per capita (EUR )
2010 709 -1 625 -916 -85
2011 867 -1 804 -936 -85
2012 967 -2 258 -1 291 -116
2013 1 405 -3 109 -1 704 -153
2014 1 925 -3 815 -1 890 -169
2015 2 632 -4 609 -1 978 -174
Sum 8 504 -17 219 -8 715 -782
Gains and losses per year (EUR m)
Year Insurance/ pensions
Bonds Equity Mutual funds 2010 -927 -1 157 -24 349 -5 460
2011 885 459 -53 078 -10 151
2012 -332 7 421 23 905 7 821
2013 -2 711 -1 238 36 378 6 956
2014 -5 346 8 219 -10 885 3 233
2015 -8 163 -4 090 40 729 6 581
Sum -16 594 9 614 12 701 8 980
Asset effects per income group (EUR, bp)
-2,3%
-4,0%
-3,0%
-2,0%
-1,0%
0,0%
-10.000
-7.500
-5.000
-2.500
0
Loans and deposits Per GDP 2014
2015
2014
2013
2012
2011
2010
-120.000
-60.000
0
60.000
120.000
Insuranceand
pensions
Bonds Equity MutualFunds
2015
2014
2013
2012
2011
2010
-100
-50
0
50
100
-2.000
-1.000
0
1.000
2.000
<20 20-39 40-59 60-79 80-89 90-100
Absolute terms (left scale) Relatively to income (right scale)
-100
0
100
200
300
-1.000
0
1.000
2.000
3.000
<20 20-39 40-59 60-79 80-89 90-100
Absolute terms (left scale) Relatively to income (right scale)
Income effects
Asset effects
Distribution effects
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Economic Research Working Paper / Nr. 190 / 04.08.2015
FINLAND
Gains and losses (EUR m, %)
Gains and losses per asset class (EUR m)
Income effects per income group (EUR, bp)
Gains and losses per year
Year Gains
(EUR m) Losses
(EUR m) Balance (EUR m)
Balance per capita (EUR)
2010 2 092 -501 1 591 297
2011 1 860 -409 1 450 270
2012 2 301 -470 1 832 339
2013 2 969 -773 2 196 405
2014 2 964 -867 2 097 385
2015 3 095 -913 2 182 398
Sum 15 281 -3 932 11 349 2 094
Gains and losses per year (EUR m)
Year Insurance/ pensions
Bonds Equity Mutual funds 2010 -166 -61 -7 612 -812
2011 153 31 -18 471 -1 853
2012 -56 427 6 668 1 230
2013 -472 -82 11 384 1 177
2014 -949 785 -3 392 563
2015 -1 436 -463 12 422 1 114
Sum -2 926 638 1 000 1 419
Asset effects per income group (EUR, bp)
6,1%
0,0%
5,0%
10,0%
15,0%
20,0%
0
3.000
6.000
9.000
12.000
Loans and deposits Per GDP 2014
2015
2014
2013
2012
2011
2010
-40.000
-20.000
0
20.000
40.000
Insuranceand
pensions
Bonds Equity MutualFunds
2015
2014
2013
2012
2011
2010
0
60
120
180
240
0
3.000
6.000
9.000
12.000
<20 20-39 40-59 60-79 80-89 90-100
Absolute terms (left scale) Relatively to income (right scale)
-10
-5
0
5
10
-120
-60
0
60
120
<20 20-39 40-59 60-79 80-89 90-100
Absolute terms (left scale) Relatively to income (right scale)
-10
-5
0
5
10
-120
-60
0
60
120
<20 20-39 40-59 60-79 80-89 90-100
Absolute Werte in Euro (linke Skala)
In Bp des Jahresdurchschnittseinkommens (rechte Skala)
Income effects
Asset effects
Distribution effects
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Economic Research Working Paper / Nr. 190 / 04.08.2015
FRANCE
Gains and losses (EUR m, %)
Gains and losses per asset class (EUR m)
Income effects per income group (EUR, bp)
Gains and losses per year
Year Gains
(EUR m) Losses
(EUR m) Balance (EUR m)
Balance per capita (EUR)
2010 7 980 -8 459 -479 -8
2011 10 332 -6 279 4 053 64
2012 11 943 -5 583 6 359 100
2013 14 900 -9 751 5 149 81
2014 16 739 -12 773 3 967 60
2015 18 355 -14 200 4 156 63
Sum 80 250 -57 045 23 205 361
Gains and losses per year (EUR m)
Year Insurance/ pensions
Bonds Equity Mutual funds 2010 -5 835 -1 076 -76 877 -14 063
2011 5 499 408 -173 838 -26 299
2012 -2 031 5 870 68 115 20 232
2013 -16 527 -1 144 112 623 18 553
2014 -32 946 8 184 -32 797 8 002
2015 -50 100 -4 226 124 377 13 257
Sum -101 941 8 016 21 603 19 683
Asset effects per income group (EUR, bp)
1,1%
-1,0%
0,0%
1,0%
2,0%
3,0%
-10.000
0
10.000
20.000
30.000
Loans and deposits Per GDP 2014
2015
2014
2013
2012
2011
2010
6,1%
0,0%
5,0%
10,0%
15,0%
20,0%
0
3.000
6.000
9.000
12.000
Loans and deposits Per GDP 2014
2015
2014
2013
2012
2011
2010
1,1%
-1,0%
0,0%
1,0%
2,0%
3,0%
-10.000
0
10.000
20.000
30.000
Bankkredite und -einlagen
In Prozent des BIP
2015
2014
2013
2012
2011
2010
-400.000
-200.000
0
200.000
400.000
Insuranceand
pensions
Bonds Equity MutualFunds
2015
2014
2013
2012
2011
2010
-40.000
-20.000
0
20.000
40.000
Insuranceand
pensions
Bonds Equity MutualFunds
2015
2014
2013
2012
2011
2010
-400.000
-200.000
0
200.000
400.000
V&P Anleihen Aktien IF
2015
2014
2013
2012
2011
2010
0
20
40
60
80
0
1.000
2.000
3.000
4.000
<20 20-39 40-59 60-79 80-89 90-100
Absolute terms (left scale) Relatively to income (right scale)
0
60
120
180
240
0
3.000
6.000
9.000
12.000
<20 20-39 40-59 60-79 80-89 90-100
Absolute terms (left scale) Relatively to income (right scale)
1,1%
-1,0%
0,0%
1,0%
2,0%
3,0%
-10.000
0
10.000
20.000
30.000
Loans and deposits Per GDP 2014
2015
2014
2013
2012
2011
2010
0
20
40
60
80
0
1.000
2.000
3.000
4.000
<20 20-39 40-59 60-79 80-89 90-100
Absolute Werte in Euro (linke Skala)
In Bp des Jahresdurchschnittseinkommens (rechte Skala)
-100
-75
-50
-25
0
-8.000
-6.000
-4.000
-2.000
0
<20 20-39 40-59 60-79 80-89 90-100
Absolute terms (left scale) Relatively to income (right scale)
-100
-75
-50
-25
0
-8.000
-6.000
-4.000
-2.000
0
<20 20-39 40-59 60-79 80-89 90-100
Absolute Werte in Euro (linke Skala)
In Bp des Jahresdurchschnittseinkommens (rechte Skala)
Income effects
Asset effects
Distribution effects
![Page 48: Working Paper 190 - Allianz · The ECB's zero interest rate policy is having a direct impact on bank interest rates – and a knock-on effect on the wallets of private households:](https://reader033.vdocuments.net/reader033/viewer/2022042807/5f80a543451ccd2db81e332c/html5/thumbnails/48.jpg)
48
Economic Research Working Paper / Nr. 190 / 04.08.2015
GERMANY
Gains and losses (EUR m, %)
Gains and losses per asset class (EUR m)
Income effects per income group (EUR, bp)
Gains and losses per year
Year Gains
(EUR m) Losses
(EUR m) Balance (EUR m)
Balance per capita (EUR)
2010 9 007 -14 645 -5 637 -69
2011 11 189 -14 360 -3 171 -39
2012 14 592 -17 340 -2 748 -34
2013 19 120 -24 565 -5 445 -66
2014 23 086 -29 190 -6 104 -76
2015 26 253 -32 978 -6 725 -83
Sum 103 247 -133 077 -29 830 -367
Gains and losses per year (EUR m)
Year Insurance/ pensions
Bonds Equity Mutual funds 2010 -6 375 -3 098 -42 599 -20 217
2011 5 997 1 228 -93 270 -40 747
2012 -2 254 17 261 37 078 29 541
2013 -18 617 -2 927 60 404 26 090
2014 -37 381 20 317 -17 618 11 537
2015 -56 372 -10 619 67 141 22 151
Sum -115 002 22 162 11 136 28 354
Asset effects per income group (EUR, bp)
-1,1%
-4,0%
-3,0%
-2,0%
-1,0%
0,0%
-40.000
-30.000
-20.000
-10.000
0
Loans and deposits Per GDP 2014
2015
2014
2013
2012
2011
2010
-1,1%
-4,0%
-3,0%
-2,0%
-1,0%
0,0%
-40.000
-30.000
-20.000
-10.000
0
Bankkredite und -einlagen
In Prozent des BIP
2015
2014
2013
2012
2011
2010
-200.000
-100.000
0
100.000
200.000
Insuranceand
pensions
Bonds Equity MutualFunds
2015
2014
2013
2012
2011
2010
-200.000
-100.000
0
100.000
200.000
V&P Anleihen Aktien IF
2015
2014
2013
2012
2011
2010
-50
0
50
100
150
-1.000
0
1.000
2.000
3.000
<20 20-39 40-59 60-79 80-89 90-100
Absolute terms (left scale) Relatively to income (right scale)
-50
0
50
100
150
-1.000
0
1.000
2.000
3.000
<20 20-39 40-59 60-79 80-89 90-100
Absolute Werte in Euro (linke Skala)
In Bp des Jahresdurchschnittseinkommens (rechte Skala)
-20
-15
-10
-5
0
-1.000
-750
-500
-250
0
<20 20-39 40-59 60-79 80-89 90-100
Absolute terms (left scale) Relatively to income (right scale)
-20
-15
-10
-5
0
-1.000
-750
-500
-250
0
<20 20-39 40-59 60-79 80-89 90-100
Absolute Werte in Euro (linke Skala)
In Bp des Jahresdurchschnittseinkommens (rechte Skala)
Income effects
Asset effects
Distribution effects
![Page 49: Working Paper 190 - Allianz · The ECB's zero interest rate policy is having a direct impact on bank interest rates – and a knock-on effect on the wallets of private households:](https://reader033.vdocuments.net/reader033/viewer/2022042807/5f80a543451ccd2db81e332c/html5/thumbnails/49.jpg)
49
Economic Research Working Paper / Nr. 190 / 04.08.2015
GREECE
Gains and losses (EUR m, %)
Gains and losses per asset class (EUR m)
Income effects per income group (EUR, bp)
Gains and losses per year
Year Gains
(EUR m) Losses
(EUR m) Balance (EUR m)
Balance per capita (EUR)
2010 1 606 55 1 661 148
2011 1 255 840 2 095 188
2012 1 682 1 418 3 099 280
2013 3 935 1 121 5 056 460
2014 4 283 -131 4 151 381
2015 4 270 -760 3 509 320
Sum 17 030 2 542 19 572 1 777
Gains and losses per year (EUR m)
Year Insurance/ pensions
Bonds Equity Mutual funds 2010 -46 -188 -3 494 -267
2011 42 74 -4 400 -325
2012 -15 860 1 337 147
2013 -121 -180 2 754 149
2014 -231 857 -2 516 71
2015 -334 -163 7 965 289
Sum -705 1 260 1 645 64
Asset effects per income group (EUR, bp)
12,0%
0,0%
5,0%
10,0%
15,0%
20,0%
0
5.000
10.000
15.000
20.000
Loans and deposits Per GDP 2014
2015
2014
2013
2012
2011
2010
12,0%
0,0%
5,0%
10,0%
15,0%
20,0%
0
5.000
10.000
15.000
20.000
Bankkredite und -einlagen
In Prozent des BIP
2015
2014
2013
2012
2011
2010
-20.000
-10.000
0
10.000
20.000
Insuranceand
pensions
Bonds Equity MutualFunds
2015
2014
2013
2012
2011
2010
-20.000
-10.000
0
10.000
20.000
V&P Anleihen Aktien IF
2015
2014
2013
2012
2011
2010
0
50
100
150
200
0
1.250
2.500
3.750
5.000
<20 20-39 40-59 60-79 80-89 90-100
Absolute terms (left scale) Relatively to income (right scale)
0
50
100
150
200
0
1.250
2.500
3.750
5.000
<20 20-39 40-59 60-79 80-89 90-100
Absolute Werte in Euro (linke Skala)
In Bp des Jahresdurchschnittseinkommens (rechte Skala)
-12
-8
-4
0
4
-120
-80
-40
0
40
<20 20-39 40-59 60-79 80-89 90-100
Absolute terms (left scale) Relatively to income (right scale)
-12
-8
-4
0
4
-120
-80
-40
0
40
<20 20-39 40-59 60-79 80-89 90-100
Absolute Werte in Euro (linke Skala)
In Bp des Jahresdurchschnittseinkommens (rechte Skala)
Income effects
Asset effects
Distribution effects
![Page 50: Working Paper 190 - Allianz · The ECB's zero interest rate policy is having a direct impact on bank interest rates – and a knock-on effect on the wallets of private households:](https://reader033.vdocuments.net/reader033/viewer/2022042807/5f80a543451ccd2db81e332c/html5/thumbnails/50.jpg)
50
Economic Research Working Paper / Nr. 190 / 04.08.2015
IRELAND
Gains and losses (EUR m, %)
Gains and losses per asset class (EUR m)
Income effects per income group (EUR, bp)
Gains and losses per year
Year Gains
(EUR m) Losses
(EUR m) Balance (EUR m)
Balance per capita (EUR)
2010 1 762 -182 1 580 347
2011 987 -92 894 196
2012 1 111 -60 1 051 229
2013 1 161 -530 630 137
2014 1 431 -899 532 115
2015 1 344 -1 049 296 64
Sum 7 796 -2 813 4 982 1 089
Gains and losses per year (EUR m)
Year Insurance/ pensions
Bonds Equity Mutual funds 2010 -520 -2 -5 285 n/a
2011 490 1 -10 596 n/a
2012 -186 14 4 279 n/a
2013 -1 575 -2 6 590 n/a
2014 -3 348 20 -1 717 n/a
2015 -5 424 -44 6 266 n/a
Sum -10 564 -15 -462 n/a
Asset effects per income group (EUR, bp)
2,9%
0,0%
1,0%
2,0%
3,0%
4,0%
0
2.000
4.000
6.000
8.000
Loans and deposits Per GDP 2014
2015
2014
2013
2012
2011
2010
2,9%
0,0%
1,0%
2,0%
3,0%
4,0%
0
2.000
4.000
6.000
8.000
Bankkredite und -einlagen
In Prozent des BIP
2015
2014
2013
2012
2011
2010
-20.000
-10.000
0
10.000
20.000
Insuranceand
pensions
Bonds Equity MutualFunds
2015
2014
2013
2012
2011
2010
-20.000
-10.000
0
10.000
20.000
V&P Anleihen Aktien IF
2015
2014
2013
2012
2011
2010
Not available Not available
Income effects
Asset effects
Distribution effects
n/a
![Page 51: Working Paper 190 - Allianz · The ECB's zero interest rate policy is having a direct impact on bank interest rates – and a knock-on effect on the wallets of private households:](https://reader033.vdocuments.net/reader033/viewer/2022042807/5f80a543451ccd2db81e332c/html5/thumbnails/51.jpg)
51
Economic Research Working Paper / Nr. 190 / 04.08.2015
ITALY
Gains and losses (EUR m, %)
Gains and losses per asset class (EUR m)
Income effects per income group (EUR, bp)
Gains and losses per year
Year Gains
(EUR m) Losses
(EUR m) Balance (EUR m)
Balance per capita (EUR)
2010 8 577 -3 339 5 238 88
2011 9 239 -2 009 7 230 122
2012 10 605 1 207 11 812 199
2013 11 784 47 11 831 198
2014 11 744 -1 782 9 962 164
2015 12 604 -3 498 9 106 149
Sum 64 553 -9 374 55 179 921
Gains and losses per year (EUR m)
Year Insurance/ pensions
Bonds Equity Mutual funds 2010 -2 654 -8 787 -86 437 -12 405
2011 2 472 3 451 -182 274 -25 034
2012 -905 50 703 62 901 17 636
2013 -7 383 -8 682 111 251 16 829
2014 -15 181 58 529 -32 317 7 728
2015 -23 565 -27 598 122 307 16 479
Sum -47 217 67 616 -4 569 21 233
Asset effects per income group (EUR, bp)
3,6%
0,0%
1,0%
2,0%
3,0%
4,0%
0
20.000
40.000
60.000
80.000
Loans and deposits Per GDP 2014
2015
2014
2013
2012
2011
2010
3,6%
0,0%
1,0%
2,0%
3,0%
4,0%
0
20.000
40.000
60.000
80.000
Bankkredite und -einlagen
In Prozent des BIP
2015
2014
2013
2012
2011
2010
-400.000
-200.000
0
200.000
400.000
Insuranceand
pensions
Bonds Equity MutualFunds
2015
2014
2013
2012
2011
2010
-400.000
-200.000
0
200.000
400.000
Anleihen Aktien IF MutualFunds
2015
2014
2013
2012
2011
2010
0
20
40
60
80
0
1.000
2.000
3.000
4.000
<20 20-39 40-59 60-79 80-89 90-100
Absolute terms (left scale) Relatively to income (right scale)
0
20
40
60
80
0
1.000
2.000
3.000
4.000
<20 20-39 40-59 60-79 80-89 90-100
Absolute Werte in Euro (linke Skala)
In Bp des Jahresdurchschnittseinkommens (rechte Skala)
0
20
40
60
80
0
1.000
2.000
3.000
4.000
<20 20-39 40-59 60-79 80-89 90-100
Absolute terms (left scale) Relatively to income (right scale)
0
20
40
60
80
0
1.000
2.000
3.000
4.000
<20 20-39 40-59 60-79 80-89 90-100
Absolute Werte in Euro (linke Skala)
In Bp des Jahresdurchschnittseinkommens (rechte Skala)
Income effects
Asset effects
Distribution effects
![Page 52: Working Paper 190 - Allianz · The ECB's zero interest rate policy is having a direct impact on bank interest rates – and a knock-on effect on the wallets of private households:](https://reader033.vdocuments.net/reader033/viewer/2022042807/5f80a543451ccd2db81e332c/html5/thumbnails/52.jpg)
52
Economic Research Working Paper / Nr. 190 / 04.08.2015
LUXEMBOURG
Gains and losses (EUR m, %)
Gains and losses per asset class (EUR m)
Income effects per income group (EUR, bp)
Gains and losses per year
Year Gains
(EUR m) Losses
(EUR m) Balance (EUR m)
Balance per capita (EUR)
2010 499 -644 -145 -289
2011 439 -582 -143 -280
2012 547 -677 -130 -247
2013 610 -812 -202 -376
2014 657 -855 -198 -361
2015 751 -905 -154 -274
Sum 3 502 -4 475 -973 -1 827
Gains and losses per year (EUR m)
Year Insurance/ pensions
Bonds Equity Mutual funds 2010 n/a n/a n/a n/a
2011 n/a n/a n/a n/a
2012 n/a n/a n/a n/a
2013 n/a n/a n/a n/a
2014 n/a n/a n/a n/a
2015 n/a n/a n/a n/a
Sum n/a n/a n/a n/a
Asset effects per income group (EUR, bp)
a
-2,1%
-4,0%
-3,0%
-2,0%
-1,0%
0,0%
-1.000
-750
-500
-250
0
Loans and deposits Per GDP 2014
2015
2014
2013
2012
2011
2010
-2,1%
-4,0%
-3,0%
-2,0%
-1,0%
0,0%
-1.000
-750
-500
-250
0
Bankkredite und -einlagen
In Prozent des BIP
2015
2014
2013
2012
2011
2010Not available
0
50
100
150
200
0
2.500
5.000
7.500
10.000
<20 20-39 40-59 60-79 80-89 90-100
Absolute terms (left scale) Relatively to income (right scale)
0
50
100
150
200
0
2.500
5.000
7.500
10.000
<20 20-39 40-59 60-79 80-89 90-100
Absolute Werte in Euro (linke Skala)
In Bp des Jahresdurchschnittseinkommens (rechte Skala)
-20
0
20
40
60
-2.000
0
2.000
4.000
6.000
<20 20-39 40-59 60-79 80-89 90-100
Absolute terms (left scale) Relatively to income (right scale)
-20
0
20
40
60
-2.000
0
2.000
4.000
6.000
<20 20-39 40-59 60-79 80-89 90-100
Absolute Werte in Euro (linke Skala)
In Bp des Jahresdurchschnittseinkommens (rechte Skala)
Income effects
Asset effects
Distribution effects
![Page 53: Working Paper 190 - Allianz · The ECB's zero interest rate policy is having a direct impact on bank interest rates – and a knock-on effect on the wallets of private households:](https://reader033.vdocuments.net/reader033/viewer/2022042807/5f80a543451ccd2db81e332c/html5/thumbnails/53.jpg)
53
Economic Research Working Paper / Nr. 190 / 04.08.2015
NETHERLANDS
Gains and losses (EUR m, %)
Gains and losses per asset class (EUR m)
Income effects per income group (EUR, bp)
Gains and losses per year
Year Gains
(EUR m) Losses
(EUR m) Balance (EUR m)
Balance per capita (EUR)
2010 1 220 -315 906 55
2011 1 217 234 1 451 87
2012 1 515 557 2 072 124
2013 2 200 -1 307 893 53
2014 3 049 -2 289 760 45
2015 3 733 -2 949 784 46
Sum 12 934 -6 068 6 866 410
Gains and losses per year (EUR m)
Year Insurance/ pensions
Bonds Equity Mutual funds 2010 -3 813 -294 -18 286 -2 536
2011 3 856 108 -39 027 -5 416
2012 -1 537 1 336 16 175 3 419
2013 -12 257 -207 22 765 3 069
2014 -25 383 1 142 -6 561 1 382
2015 -41 541 -520 23 322 2 750
Sum -80 674 1 566 -1 612 2 668
Asset effects per income group (EUR, bp)
1,1%
0,0%
1,0%
2,0%
3,0%
4,0%
0
2.500
5.000
7.500
10.000
Loans and deposits Per GDP 2014
2015
2014
2013
2012
2011
2010
1,1%
0,0%
1,0%
2,0%
3,0%
4,0%
0
2.500
5.000
7.500
10.000
Bankkredite und -einlagen
In Prozent des BIP
2015
2014
2013
2012
2011
2010
-100.000
-50.000
0
50.000
100.000
Insuranceand
pensions
Bonds Equity MutualFunds
2015
2014
2013
2012
2011
2010
-100.000
-50.000
0
50.000
100.000
V&P Anleihen Aktien IF
2015
2014
2013
2012
2011
2010
0
50
100
150
200
0
1.000
2.000
3.000
4.000
<20 20-39 40-59 60-79 80-89 90-100
Absolute terms (left scale) Relatively to income (right scale)
0
50
100
150
200
0
1.000
2.000
3.000
4.000
<20 20-39 40-59 60-79 80-89 90-100
Absolute Werte in Euro (linke Skala)
In Bp des Jahresdurchschnittseinkommens (rechte Skala)
-160
-120
-80
-40
0
-2.400
-1.800
-1.200
-600
0
<20 20-39 40-59 60-79 80-89 90-100
Absolute terms (left scale) Relatively to income (right scale)
-160
-120
-80
-40
0
-2.400
-1.800
-1.200
-600
0
<20 20-39 40-59 60-79 80-89 90-100
Absolute Werte in Euro (linke Skala)
In Bp des Jahresdurchschnittseinkommens (rechte Skala)
Income effects
Asset effects
Distribution effects
![Page 54: Working Paper 190 - Allianz · The ECB's zero interest rate policy is having a direct impact on bank interest rates – and a knock-on effect on the wallets of private households:](https://reader033.vdocuments.net/reader033/viewer/2022042807/5f80a543451ccd2db81e332c/html5/thumbnails/54.jpg)
54
Economic Research Working Paper / Nr. 190 / 04.08.2015
PORTUGAL
Gains and losses (EUR m, %)
Gains and losses per asset class (EUR m)
Income effects per income group (EUR, bp)
Gains and losses per year
Year Gains
(EUR m) Losses
(EUR m) Balance (EUR m)
Balance per capita (EUR)
2010 3 070 -686 2 384 225
2011 2 346 435 2 781 263
2012 2 682 1 037 3 719 353
2013 3 376 490 3 866 369
2014 3 244 58 3 302 317
2015 3 356 -519 2 836 274
Sum 18 074 814 18 888 1 800
Gains and losses per year (EUR m)
Year Insurance/ pensions
Bonds Equity Mutual funds 2010 -311 -199 -7 770 -886
2011 264 97 -16 599 -1 580
2012 -85 1 231 6 353 910
2013 -674 -275 9 364 789
2014 -1 356 1 908 -2 742 348
2015 -2 064 -768 9 716 584
Sum -4 228 1 994 -1 679 164
Asset effects per income group (EUR, bp)
11,9%
0,0%
5,0%
10,0%
15,0%
20,0%
0
5.000
10.000
15.000
20.000
Loans and deposits Per GDP 2014
2015
2014
2013
2012
2011
2010
11,9%
0,0%
5,0%
10,0%
15,0%
20,0%
0
5.000
10.000
15.000
20.000
Bankkredite und -einlagen
In Prozent des BIP
2015
2014
2013
2012
2011
2010
-40.000
-20.000
0
20.000
40.000
Insuranceand
pensions
Bonds Equity MutualFunds
2015
2014
2013
2012
2011
2010
-40.000
-20.000
0
20.000
40.000
V&P Anleihen Aktien IF
2015
2014
2013
2012
2011
2010
0
100
200
300
400
0
2.000
4.000
6.000
8.000
<20 20-39 40-59 60-79 80-89 90-100
Absolute terms (left scale) Relatively to income (right scale)
0
100
200
300
400
0
2.000
4.000
6.000
8.000
<20 20-39 40-59 60-79 80-89 90-100
Absolute Werte in Euro (linke Skala)
In Bp des Jahresdurchschnittseinkommens (rechte Skala)
-12
-8
-4
0
4
-300
-200
-100
0
100
<20 20-39 40-59 60-79 80-89 90-100
Absolute terms (left scale) Relatively to income (right scale)
-12
-8
-4
0
4
-300
-200
-100
0
100
<20 20-39 40-59 60-79 80-89 90-100
Absolute Werte in Euro (linke Skala)
In Bp des Jahresdurchschnittseinkommens (rechte Skala)
Income effects
Asset effects
Distribution effects
![Page 55: Working Paper 190 - Allianz · The ECB's zero interest rate policy is having a direct impact on bank interest rates – and a knock-on effect on the wallets of private households:](https://reader033.vdocuments.net/reader033/viewer/2022042807/5f80a543451ccd2db81e332c/html5/thumbnails/55.jpg)
55
Economic Research Working Paper / Nr. 190 / 04.08.2015
SLOVAKIA
Gains and losses (EUR m, %)
Gains and losses per asset class (EUR m)
Income effects per income group (EUR, bp)
Gains and losses per year
Year Gains
(EUR m) Losses
(EUR m) Balance (EUR m)
Balance per capita (EUR)
2010 -240 -239 -479 -89
2011 -210 -225 -435 -81
2012 -196 -188 -384 -71
2013 -168 -256 -424 -78
2014 -83 -346 -429 -79
2015 -5 -410 -414 -76
Sum -901 -1 665 -2 566 -475
Gains and losses per year (EUR m)
Year Insurance/ pensions
Bonds Equity Mutual funds 2010 -33 -1 -13 -131
2011 34 3 -27 -283
2012 -14 67 11 190
2013 -116 -11 20 178
2014 -239 93 -4 86
2015 -412 -41 16 184
Sum -780 111 1 224
Asset effects per income group (EUR, bp)
-3,8% -4,0%
-3,0%
-2,0%
-1,0%
0,0%
-4.000
-3.000
-2.000
-1.000
0
Loans and deposits Per GDP 2014
2015
2014
2013
2012
2011
2010
-3,8% -4,0%
-3,0%
-2,0%
-1,0%
0,0%
-4.000
-3.000
-2.000
-1.000
0
Bankkredite und -einlagen
In Prozent des BIP
2015
2014
2013
2012
2011
2010
-1.000
-500
0
500
1.000
Insuranceand
pensions
Bonds Equity MutualFunds
2015
2014
2013
2012
2011
2010
-1.000
-500
0
500
1.000
V&P Anleihen Aktien IF
2015
2014
2013
2012
2011
2010
-100
-75
-50
-25
0
-1.200
-900
-600
-300
0
<20 20-39 40-59 60-79 80-89 90-100
Absolute terms (left scale) Relatively to income (right scale)
-100
-75
-50
-25
0
-1.200
-900
-600
-300
0
<20 20-39 40-59 60-79 80-89 90-100
Absolute Werte in Euro (linke Skala)
In Bp des Jahresdurchschnittseinkommens (rechte Skala)
-12
-8
-4
0
4
-150
-100
-50
0
50
<20 20-39 40-59 60-79 80-89 90-100
Absolute terms (left scale) Relatively to income (right scale)
-12
-8
-4
0
4
-150
-100
-50
0
50
<20 20-39 40-59 60-79 80-89 90-100
Absolute Werte in Euro (linke Skala)
In Bp des Jahresdurchschnittseinkommens (rechte Skala)
Income effects
Asset effects
Distribution effects
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56
Economic Research Working Paper / Nr. 190 / 04.08.2015
SLOVENIA
Gains and losses (EUR m, %)
Gains and losses per asset class (EUR m)
Income effects per income group (EUR, bp)
Gains and losses per year
Year Gains
(EUR m) Losses
(EUR m) Balance (EUR m)
Balance per capita (EUR)
2010 151 -16 135 66
2011 143 7 149 73
2012 181 30 211 102
2013 231 4 236 114
2014 227 -91 136 66
2015 243 -160 83 40
Sum 1 176 -226 950 462
Gains and losses per year (EUR m)
Year Insurance/ pensions
Bonds Equity Mutual funds 2010 -21 -6 -960 -68
2011 20 2 -1 929 -137
2012 -7 34 707 84
2013 -60 -5 1 059 71
2014 -122 31 -290 30
2015 -197 -14 1 099 62
Sum -388 43 -315 41
Asset effects per income group (EUR, bp)
2,8%
0,0%
0,5%
1,0%
1,5%
2,0%
2,5%
3,0%
0
100
200
300
400
500
600
700
800
900
1.000
Loans and deposits Per GDP 2014
2015
2014
2013
2012
2011
2010
2,8%
0,0%
1,0%
2,0%
3,0%
4,0%
0
250
500
750
1.000
Bankkredite und -einlagen
In Prozent des BIP
2015
2014
2013
2012
2011
2010
-4.000
-2.000
0
2.000
4.000
Insuranceand
pensions
Bonds Equity MutualFunds
2015
2014
2013
2012
2011
2010
-4.000
-2.000
0
2.000
4.000
V&P Anleihen Aktien IF
2015
2014
2013
2012
2011
2010
0
50
100
150
200
0
400
800
1.200
1.600
<20 20-39 40-59 60-79 80-89 90-100
Absolute terms (left scale) Relatively to income (right scale)
0
50
100
150
200
0
400
800
1.200
1.600
<20 20-39 40-59 60-79 80-89 90-100
Absolute Werte in Euro (linke Skala)
In Bp des Jahresdurchschnittseinkommens (rechte Skala)
-30
-20
-10
0
10
-300
-200
-100
0
100
<20 20-39 40-59 60-79 80-89 90-100
Absolute terms (left scale) Relatively to income (right scale)
-30
-20
-10
0
10
-300
-200
-100
0
100
<20 20-39 40-59 60-79 80-89 90-100
Absolute Werte in Euro (linke Skala)
In Bp des Jahresdurchschnittseinkommens (rechte Skala)
Income effects
Asset effects
Distribution effects
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57
Economic Research Working Paper / Nr. 190 / 04.08.2015
SPAIN
Gains and losses (EUR m, %)
Gains and losses per asset class (EUR m)
Income effects per income group (EUR, bp)
Gains and losses per year
Year Gains
(EUR m) Losses
(EUR m) Balance (EUR m)
Balance per capita (EUR)
2010 10 909 -1 042 9 867 212
2011 10 024 632 10 657 228
2012 9 742 385 10 128 216
2013 13 358 -968 12 390 265
2014 13 663 -4 534 9 128 196
2015 14 641 -6 900 7 741 167
Sum 72 337 -12 427 59 910 1 285
Gains and losses per year (EUR m)
Jahr Versicherungen/ Pensionsfonds
Anleihen Aktien Investment-fonds
2010 -1 117 -489 -42 833 -7 321
2011 1 005 239 -84 756 -12 278
2012 -367 5 741 34 382 9 062
2013 -3 011 -939 53 057 7 324
2014 -6 148 4 384 -16 395 4 577
2015 -9 448 -1 403 66 716 10 022
Summe -19 085 7 534 10 171 11 387
Asset effects per income group (EUR, bp)
6,0%
0,0%
5,0%
10,0%
15,0%
20,0%
0
20.000
40.000
60.000
80.000
Loans and deposits Per GDP 2014
2015
2014
2013
2012
2011
2010
6,0%
0,0%
5,0%
10,0%
15,0%
20,0%
0
20.000
40.000
60.000
80.000
Bankkredite und -einlagen
In Prozent des BIP
2015
2014
2013
2012
2011
2010
-200.000
-100.000
0
100.000
200.000
Insuranceand
pensions
Bonds Equity MutualFunds
2015
2014
2013
2012
2011
2010
-200.000
-100.000
0
100.000
200.000
V&P Anleihen Aktien IF
2015
2014
2013
2012
2011
2010
0
60
120
180
240
0
2.000
4.000
6.000
8.000
<20 20-39 40-59 60-79 80-89 90-100
Absolute terms (left scale) Relatively to income (right scale)
0
60
120
180
240
0
2.000
4.000
6.000
8.000
<20 20-39 40-59 60-79 80-89 90-100
Absolute Werte in Euro (linke Skala)
In Bp des Jahresdurchschnittseinkommens (rechte Skala)
-120
-80
-40
0
40
-600
-400
-200
0
200
<20 20-39 40-59 60-79 80-89 90-100
Absolute terms (left scale) Relatively to income (right scale)
Income effects
Asset effects
Distribution effects
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Group Economic Research Working Paper/no. xy/July 31, 2015
These assessments are, as always, subject to the disclaimer provided below.
ABOUT ALLIANZ
Together with its customers and sales partners, Allianz is one of the strongest financial communities. About
85 million private and corporate customers insured by Allianz rely on its knowledge, global reach, capital strength and
solidity to help them make the most of financial opportunities and to avoid and safeguard themselves against risks. In
2014, around 147,000 employees in over 70 countries achieved total revenues of 122.3 billion euros and an operating
profit of 10.4 billion euros. Benefits for our customers reached 104.6 billion euros.
This business success with insurance, asset management and assistance services is based increasingly on customer
demand for crisis-proof financial solutions for an aging society and the challenges of climate change. Transparency
and integrity are key components of sustainable corporate governance at Allianz SE.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
The statements contained herein may include prospects, statements of future expectations and other forward -looking
statements that are based on management's current views and assumptions and involve known and unknown risks
and uncertainties. Actual results, performance or events may differ materially from those expressed or implied in such
forward-looking statements.
Such deviations may arise due to, without limitation, (i) changes of the general economic conditions and competitive
situation, particularly in the Allianz Group's core business and core markets, (ii) performance of financial markets
(particularly market volatility, liquidity and credit events), (iii) frequency and severity of insured loss events,
including from natural catastrophes, and the development of loss expenses, (iv) mortality and morbidity levels and
trends, (v) persistency levels, (vi) particularly in the banking business, the extent of credit defaults, (vii) interest rate
levels, (viii) currency exchange rates including the euro/US-dollar exchange rate, (ix) changes in laws and regulations,
including tax regulations, (x) the impact of acquisitions, including related integration issues, and reorganization
measures, and (xi) general competitive factors, in each case on a local, regional , national and/or global basis. Many of
these factors may be more likely to occur, or more pronounced, as a result of terrorist activities and their
consequences.
NO DUTY TO UPDATE
The company assumes no obligation to update any information or forward -looking statement contained herein, save
for any information required to be disclosed by law.