Monthly Bulletin July 2009 - Banque de France

ECONOMIC
AND MONETARY
DEVELOPMENTS
Monetary and
financial
developments
April 2009, following a rebound in the first months of 2009 in the context of government guarantees
for the issuance of bank bonds. A shift from long-term to short-term net debt issuance, in particular
at variable rates, was recorded in April. The seasonally adjusted six-month annualised growth rate
of short-term debt securities issued by MFIs jumped to 19.4%, up from 11.1% in March 2009,
compared with a relatively small monthly increase of 0.3 percentage point to 4.2% in April 2009
for long-term debt securities.
Turning to non-monetary financial corporations, the annual growth rate of debt securities issued
moderated to 30.6% in April after 31.1% in March 2009. Nevertheless, the sector remained by far the
fastest-growing component of overall debt securities issuance and the six-month annualised growth
rate continued to increase, reflecting significant ongoing retained securitisation. In contrast to MFIs,
issuance activity continued to focus on longer-term maturities, in particular at variable rates.
The annual growth rate of debt securities issued by the general government sector remained strong,
rising to 12.5% in April 2009, well above the average rate of around 4% between 1999 and 2008.
The seasonally adjusted six-month annualised growth rate of debt securities issued in this sector
moderated to 17.5% in April after 21.3% in March 2009. Overall, the high level of issuance reflects
substantial funding needs of euro area governments.
QUOTED SHARES
The annual growth rate of quoted shares issued by euro area residents continued to increase
moderately overall, reaching 1.7% in April 2009, a level last seen in 2001. While all sectors
contributed to this increase, the annual growth rates of equity issuance for monetary and
non-monetary financial institutions remained particularly high, at 8.2% and 3.4% respectively,
reflecting the use of rights issues by many
euro area financial institutions to strengthen
their balance sheets. In addition, the annual
growth rate of quoted shares issued by nonfinancial
corporations rose to 0.5% in April
after six months of negative growth rates until
February 2009, fostered by positive stock market
developments in this month (see Chart 8).
Chart 8 Sectoral breakdown of quoted
shares issued by euro area residents
(annual growth rates)
10.0
total
monetary financial institutions
non-monetary financial institutions
non-financial corporations
10.0
2.3 MONEY MARKET INTEREST RATES
8.0
8.0
Unsecured money market interest rates generally
declined in June, whereas developments were
mixed for secured money market interest rates.
As a result, mixed developments were also
observed for spreads between unsecured and
secured rates, with the spread derived from
three-month interest rates increasing slightly
in June. The Eurosystem continued to provide
the fi nancial system with abundant amounts of
liquidity in June by means of fi xed rate tender
procedures with full allotment in its main and
longer-term refi nancing operations.
6.0
4.0
2.0
0.0
-2.0
-4.0
1999200020012002200320042005200620072008
6.0
4.0
2.0
0.0
-2.0
-4.0
Source: ECB.
Note: Growth rates are calculated on the basis of financial
transactions.
ECB
Monthly Bulletin
July 2009
23