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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:

Studies on the money market http://www.ecb.europa.eu/stats/money/mmss/html/index.en.html
ECB Monthly Bulletin article “The analysis of the euro money market from a monetary policy perspective”, February 2008 en

Debt market

The amount outstanding of euro-denominated short-term debt securities issued by euro area residents totalled around 15% of GDP at the end of 2011, showing a slight decline compared with the end of 2010. After a decline in 2010, MFIs and non-financial corporations in the euro area increased their outstanding amount of short-term debt securities issued in 2011. The outstanding amount of short-term debt issued by the public sector decreased for the first time in the last 10 years.

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
Total	475 (11.6)	605 (10.8)	582 (8.6)	700 (9.5)	1120 (12.4)	1454 (15.7)	1432 (16.1)	1347 (14.7)	1379 (14.6)
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)
Non-monetary financial corporations	4 (0.1)	9.6 (0.2)	6 (0.1)	19 (0.3)	52 (0.6)	90 (1.0)	77 (0.9)	109 (1.2)	95 (1.0)
Non-financial corporations	44 (1.1)	33.7 (0.6)	87 (1.3)	75 (1.0)	98 (1.1)	119 (1.3)	70 (0.8)	64 (0.7)	76 (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)

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Long-term debt securities accounted for more than 100% of GDP at the end of 2011. 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
Total	2,307 (56.5)	4,133 (74.1)	5,913 (87.1)	6,755 (92.1)	9,648 (106.8)	10,617 (115)	12,217 (137.0)	12,765 (139.2)	13,307 (141.3)
MFIs	961 (23.5)	1,463 (26.2)	2,179 (32.1)	2,401 (32.7)	3,484 (38.6)	3,695 (40.0)	3,918 (43.9)	3,891 (42.4)	4,032 (42.8)
Non-monetary financial corporations	54 (1.3)	86 (1.5)	262 (3.9)	474 (6.5)	1316 (14.6)	1862 (20.2)	2660 (29.8)	2651 (28.9)	2632 (28.0)
Non-financial corporations	152 (3.7)	221 (4.0)	280 (4.1)	363 (4.9)	462 (5.1)	483 (5.2)	607 (6.8)	638 (7.0)	638 (6.8)
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 (60.9)	6,005 (63.8)

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.
(end of year, as a percentage of GDP)	1990	1995	1998	2000	2002	2007	2008	2009	2010	2011
Euro area	20	27	63	86	50	84	38	55	55	42
United States	54	93	144	153	104	142	82	108	119	104
Japan	96	67	63	68	53	99	64	66	70	57

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