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Financial markets

Financial markets can be divided into
  • money,
  • debt, and
  • equity markets.

Money market

The money market consists of the unsecured and secured ‘cash’ segments and derivatives segments. The money market in a broader sense also includes the market for short-term debt securities.

For more details please see:

Debt market

The amount outstanding of euro-denominated short-term debt securities issued by euro area residents totalled around 13% of GDP at the end of 2012, showing a decline compared with the end of 2011. While the outstanding amount of short-term debt securities issued by non-financial corporations in 2012 remained broadly stable, it declined for MFIs. The outstanding amount of short-term debt issued by the public sector decreased slightly in 2012 compared to the previous year.

Amounts outstanding of euro-denominated short-term debt securities issued by euro area residents
Source: ECB.
(end of year; EUR billions; (% of GDP)) 1990 1995 2000 2002 2007 2008 2009 2010 2011 2012
Total
475
(11.6)
605
(10.8)
582
(8.6)
700
(9.5)
1120
(12.4)
1454
(15.7)
1429
(16.0)
1344
(14.7)
1376
(14.6)
1260
(13.3)
MFIs 104
(2.6)
165.9
(3.0)
244
(3.6)
281
(3.8)
610
(6.7)
686
(7.4)
573
(6.4)
422
(4.6)
562
(6.0)
454
(4.8)
Non-monetary financial corporations 4
(0.1)
9.6
(0.2)
6
(0.1)
19
(0.3)
52
(0.6)
90
(1.0)
71
(0.8)
106
(1.2)
91
(1.0)
124
(1.3)
Non-financial corporations 44
(1.1)
33.7
(0.6)
87
(1.3)
75
(1.0)
98
(1.1)
119
(1.3)
72
(0.8)
64
(0.7)
77
(0.8)
79
(0.8)
Public sector 322
(7.9)
395.9
(7.1)
246
(3.6)
325
(4.4)
361
(4.0)
559
(6.1)
713
(8.0)
752
(8.2)
645
(6.9)
603
(6.4)

Long-term debt securities accounted for around 142% of GDP at the end of 2012. In this market, the public sector is the most important issuer, followed by the MFI sector and the other issuers of the private sector.

Amounts outstanding of euro-denominated long-term debt securities issued by euro area residents
Source: ECB.
(end of year; EUR billions; (% of GDP)) 1990 1995 2000 2002 2007 2008 2009 2010 2011 2012
Total
2,307
(56.5)
4,133
(74.1)
5,914
(87.1)
6,755
(92.1)
9,650
(106.8)
10,617
(114.9)
12,155
(136.3)
12,688
(138.5)
13,227
(140.4)
13,447
(141.8)
MFIs 961
(23.5)
1,463
(26.2)
2,179
(32.1)
2,401
(32.7)
3,485
(38.6)
3,696
(40.0)
3,915
(43.9)
3,874
(42.3)
4,012
(42.6)
4,032
(42.5)
Non-monetary financial corporations 54
(1.3)
86
(1.5)
262
(3.9)
474
(6.5)
1314
(14.5)
1858
(20.1)
2596
(29.1)
2587
(28.2)
2568
(27.3)
2529
(26.7)
Non-financial corporations 152
(3.7)
221
(4.0)
280
(4.1)
363
(5.0)
465
(5.1)
487
(5.3)
610
(6.8)
641
(7.0)
641
(6.8)
738
(7.8)
Public sector 1,140
(27.9)
2,362
(42.3)
3,191
(47.0)
3,516
(47.9)
4,386
(48.6)
4,577
(49.6)
5,033
(56.4)
5,585
(61.0)
6,006
(63.8)
6149
(64.8)

Equity market

Turning to the equity market, a commonly used indicator of its importance is the market capitalisation of stocks traded in terms of GDP. This indicator, albeit affected by movements in stock prices, shows that the equity market is less important than the debt securities market in the euro area.

Stock market capitalisation in the euro area, the United States and Japan
Source: World Federation of Exchanges and ECB calculations.
(end of year, as a percentage of GDP) 1990 1995 1998 2000 2002 2007 2008 2011 2012
Euro area 20 27 63 86 50 84 38 42 52
United States 54 93 144 153 104 142 82 104 119
Japan 96 67 63 68 53 99 64 57 58