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MFIs include the Eurosystem (ECB and the NCBs of those countries that have adopted the euro), credit institutions (the most important financial intermediaries in the euro area) and non-credit institutions (mainly money market funds) whose business is to receive deposits from entities other than MFIs and to grant credit and/or invest in securities
| Number of euro area monetary financial institutions | |||||||
|---|---|---|---|---|---|---|---|
| Source: ECB. | |||||||
| (end of year) |
1998 |
2000 |
2002 |
2004 |
2006 |
2008 |
2010 |
| Credit institutions | 8,320 | 7,521 | 6,906 | 6,406 | 6,130 | 6,570 | 6,334 |
| Money market funds | 1,516 | 1,599 | 1,620 | 1,670 | 1,470 | 1,721 | 1,474 |
| Central banks and other institutions | 20 | 21 | 18 | 19 | 16 | 19 | 20 |
| All MFIs | 9,856 | 9,193 | 8,544 | 8,095 | 7,616 | 8,310 | 7,828 |
MFIs regularly report data on their assets and liabilities to the ECB and the NCBs. These data are used to compute the consolidated balance sheet of the MFI sector.
The chart below shows the composition of the consolidated balance sheet of the euro area MFI sector at the end of 2010. Deposits are the most important liability item, while loans represent the largest share of total MFI assets. Deposits are the most important liability item, while loans represent the largest share of total MFI assets.
The consolidated MFI balance sheet is very useful. It represents the basis for the computation of some of the key monetary and credit variables regularly monitored at the ECB. In particular, this balance sheet is used to calculate the euro area monetary aggregates.
| Schematic consolidated balance sheet of the MFI sector for the euro area( 1 ) | |
|---|---|
| ( 1 ) A detailed description of the instrument categories is provided in Annex 4 of the ECB publication: "The single monetary policy in Stage Three: General documentation on ESCB monetary policy instruments and procedures". | |
| Assets | Liabilities |
| 1. Loans | 1. Currency in circulation |
| 2. Securities other than shares | 2. Deposits of central government |
| 3. Shares and other equities | 3. Deposits of other general government and other euro area residents |
| 4. External assets | 4. Money market fund shares/units |
| 5. Fixed assets | 5. Debt securities issued |
| 6. Remaining assets | 6. Capital and reserves |
| 7. External liabilities | |
| 8. Remaining liabilities | |
Trends in monetary aggregates are important sources of information about future inflation and economic activity.
The chart below shows the composition of the monetary aggregate M3 at the end of 2010.
As the definition of monetary aggregates adopted by the ECB only includes liabilities of MFIs located in the euro area vis-à-vis euro area residents, the monetary aggregate M3 comprises:
Holdings of these instruments by non-residents are not included in M3. Currency in circulation is entirely included in the monetary aggregates, irrespective of whether it is held by euro area residents or non-residents, given the difficulty of deriving accurate and timely measures of the amounts of banknotes and coins held by non-residents.
back to topOFIs form a broad category comprising insurance corporations, pension funds, financial auxiliaries, mutual funds, securities and derivatives dealers and financial corporations engaged in lending (see definition and sub-categories of OFIs).
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