C il U d t Council Update:
Finance February 2012
Adrian Blundell-Wignall
Special Advisor to the Secretary-General of the OECD on Financial Markets
February, 2012
Council
16 February 2012
Figure 1: Sovereign Spreads
18 20
Fra
8 10 12 14 16
Fra Ita Spa Ire Por
0 2 4 6
8 Gre
Source: Datastream, OECD 2
Figure 2: Bank CDS
450
500 SGE
CAR
250 300 350 400
450 CAR
BNP DBK Barclays Commerz
0 50 100 150
200 RBS
Bayerische West LB
Source: Datastream, OECD 3
Jan‐08 May‐08 Sep‐08 Jan‐09 May‐09 Sep‐09 Jan‐10 May‐10 Sep‐10 Jan‐11 May‐11 Sep‐11 Jan‐12 May‐12
Figure 3:
Funding Trends in Europe
20 25 %
5 10 15
‐15
‐10
‐5 0
7 7 8 9 0 0 1 02 3 3 4 05 6 6 7 08 9 9 0 1 2 2
Debt Issued Fin. Sector Deposits Non‐fin Sector.Dep.
Total
Source: ECB, OECD 4
Jan‐9 Oct‐9 Jul‐9 Apr‐9 Jan‐0 Oct‐0 Jul‐0 Apr‐0 Jan‐0 Oct‐0 Jul‐0 Apr‐0 Jan‐0 Oct‐0 Jul‐0 Apr‐0 Jan‐0 Oct‐0 Jul‐1 Apr‐1 Jan‐1 Oct‐1
Figure 4: Money Supply Selected OECD Countries
14
%pa USA M2
6 8 10
12 %pa
Japan M2+CD"
EU M3
‐2 0 2 4
Source: Datastream, OECD 5
Figure 5:
Lending and Activity in Europe
15
20 %
‐5 0 5 10 15
‐25
‐20
‐15
‐10
8 8 9 0 1 1 2 3 4 4 5 6 7 7 8 9 0 0 1 2
Credit Non Fin Corp IP
Credit to H‐H
Source: Datastream, ECB, OECD 6
Jan‐98 Oct‐9 Jul‐99 Apr‐0 Jan‐0 Oct‐0 Jul‐02 Apr‐0 Jan‐04 Oct‐0 Jul‐05 Apr‐0 Jan‐0 Oct‐0 Jul‐08 Apr‐0 Jan‐10 Oct‐1 Jul‐1 Apr‐1
Figure 6: Credit to Non-Financial Corporations, Larger EU
20 Europe
GER
5 10
15 FRA
ITA
‐10
‐5 0
‐04 ‐04 ‐04 ‐05 ‐05 ‐06 ‐06 ‐06 ‐07 ‐07 ‐08 ‐08 ‐09 ‐09 ‐09 ‐10 ‐10 ‐11 ‐11 ‐11 ‐12 ‐12
Source: Datastream, ECB, OECD 7
Jan‐ Jun Nov‐ Apr Sep Feb Jul Dec May‐ Oct Mar Aug Jan‐ Jun Nov‐ Apr Sep Feb Jul Dec May‐ Oct
Figure 7: Credit to Non-Financial Corporations, Smaller EU
40 %
‐10 0 10 20 30
Europe
‐50
‐40
‐30
‐20 10
4 4 4 5 5 6 6 6 7 7 8 8 9 9 9 0 0 1 1 1 2 2
Europe Gre Por IRE SPA
Source: Datastream, ECB, OECD 8
Jan‐04 Jun‐04 Nov‐04 Apr‐05 Sep‐05 Feb‐06 Jul‐06 Dec‐06 May‐07 Oct‐07 Mar‐08 Aug‐08 Jan‐09 Jun‐09 Nov‐09 Apr‐10 Sep‐10 Feb‐11 Jul‐11 Dec‐11 May‐12 Oct‐12
Figure 8: Credit to Households, Larger EU
14
16 % Europe
GER
4 6 8 10
12 FRA
ITA
‐4
‐2 0 2 4
4 4 4 5 5 6 6 6 7 7 8 8 9 9 9 0 0 1 1 1 2 2
Source: Datastream, ECB, OECD 9
Jan‐04 Jun‐04 Nov‐04 Apr‐05 Sep‐05 Feb‐06 Jul‐06 Dec‐06 May‐07 Oct‐07 Mar‐08 Aug‐08 Jan‐09 Jun‐09 Nov‐09 Apr‐10 Sep‐10 Feb‐11 Jul‐11 Dec‐11 May‐12 Oct‐12
Figure 9: Credit to Households, Smaller EU
35 % Europe
10 15 20 25
30 SPA
GRE IRE POR
‐15
‐10
‐5 0 5
Source: Datastream, ECB, OECD 10
Jan‐04 Jun‐04 Nov‐04 Apr‐05 Sep‐05 Feb‐06 Jul‐06 Dec‐06 May‐07 Oct‐07 Mar‐08 Aug‐08 Jan‐09 Jun‐09 Nov‐09 Apr‐10 Sep‐10 Feb‐11 Jul‐11 Dec‐11 May‐12 Oct‐12
Figure 10: US & EU Shares of Cross-Border Lending to Emerging Markets
0.35 Ratio US Banks ratio to Em Mkts
0.2 0.25
0.3 EU Banks ratio to Em Mkts
0 0.05 0.1 0.15
Source: BIS, OECD 11
0
Mar‐05 Aug‐05 Jan‐06 Jun‐06 Nov‐06 Apr‐07 Sep‐07 Feb‐08 Jul‐08 Dec‐08 May‐09 Oct‐09 Mar‐10 Aug‐10 Jan‐11 Jun‐11 Nov‐11 Apr‐12 Sep‐12
Figure 11: European Bank Cross Border Lending to Emerging Regions
75 Em. Mkts
35 55
Asis Pac Lat. Am.
Africa ME Em. Eur.
‐25
‐5 15
Source: BIS, OECD 12
Mar‐06 Jul‐06 Nov‐06 Mar‐07 Jul‐07 Nov‐07 Mar‐08 Jul‐08 Nov‐08 Mar‐09 Jul‐09 Nov‐09 Mar‐10 Jul‐10 Nov‐10 Mar‐11 Jul‐11 Nov‐11 Mar‐12 Jul‐12 Nov‐12
Figure 12: China: M2, IP and Inflation
27
31 CPI
Indust Prod.(3ma)
% yoy % yoy
15 19 23
M2
3 7 11
Source: Datastream, OECD 13
-1
Jan/01 May/02 Sep/03 Jan/05 May/06 Sep/07 Jan/09 May/10 Sep/11 Jan/13
Figure 13: India: Money supply Credit and Inflation
40.0 % M3
20 0 25.0 30.0 35.0
% CPI
Comm. Bank Credit
5.0 10.0 15.0 20.0
Source: Datastream, OECD 14
0.0
Jan‐99 Sep‐99 May‐00 Jan‐01 Sep‐01 May‐02 Jan‐03 Sep‐03 May‐04 Jan‐05 Sep‐05 May‐06 Jan‐07 Sep‐07 May‐08 Jan‐09 Sep‐09 May‐10 Jan‐11 Sep‐11 May‐12
Figure 14: Credit Multipliers China and India
5.5
6 Ratio India
China
3 5 4 4.5 5
China
2 2.5 3 3.5
02 02 03 03 04 04 05 05 06 06 07 07 08 08 09 09 10 10 11 11 12 12
Source: Datastream, OECD 15
Jan‐0 Jul‐0 Jan‐0 Jul‐0 Jan‐0 Jul‐0 Jan‐0 Jul‐0 Jan‐0 Jul‐0 Jan‐0 Jul‐0 Jan‐0 Jul‐0 Jan‐0 Jul‐0 Jan‐1 Jul‐1 Jan‐1 Jul‐1 Jan‐1 Jul‐1
Figure 15: Equity Prices: Global
5.8 Japan
3.8 4.8
EU USA China Korea Aust India
1.8 2.8
India
Source: Datastream, OECD 16
0.8
Mar/03 Jun/04 Sep/05 Dec/06 Mar/08 Jun/09 Sep/10 Dec/11 Mar/13 Jun/14
Figure 16: China: Tailwinds vs Global Demand
65
%yoy
25 45 65
-35 -15 5
Imports Fin Instit Loans Exports
Source: Datastream, OECD 17
-55
Jan/99 Sep/00 May/02 Jan/04 Sep/05 May/07 Jan/09 Sep/10 May/12 p
