Three extensions of the map of the euro area financial system

Antonio Sánchez Serrano

No 27, ESRB Occasional Paper Series from European Systemic Risk Board

Abstract: Andersen and Sánchez Serrano (2024) define a methodology for building a map of the euro area financial system using data from the quarterly sectoral accounts of the euro area (complemented with data from other sources). This map can be useful for macroprudential authorities in regularly monitoring interconnections, contagion channels and systemic risk dynamics. We develop three extensions to the map that should increase its relevance: (i) the use of euro area Distributional Wealth Accounts to consider households according to their wealth; (ii) a breakdown of the other financial institutions sector into other financial intermediaries, financial auxiliaries, and captive financial institutions and money lenders; and (iii) using international investment position data to compute exposures to the rest of the world by country. In addition to the series codes on the ECB Data Portal to retrieve the relevant data, we illustrate the potential analytical application of each of the three extensions. In a nutshell, our analysis of the euro area household sector according to wealth shows that the aggregate figures conceal significant heterogeneity. Using data from the quarterly sectoral accounts, we are able to gain a clearer overview of other financial institutions, identifying the links with banks through securitisation vehicles and with non-financial corporations through captive financial institutions. Finally, although we cannot match exactly all the financial instruments in the balance sheet, data on the institutional investment position shows, among others, a continuous increase in the portfolio investments of euro area residents in the United States since 2013. JEL Classification: F30, G20, G50

Keywords: flow of funds; household finance; interconnections; international finance; non-bank financial intermediation (search for similar items in EconPapers)
Date: 2025-08
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