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16 February 2017

CEPS: Recent developments in European Capital Markets – Key findings from the 2016 ECMI Statistical Package

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This paper presents the key findings reported in the 2016 ECMI Statistical Package, a comprehensive and up-to-date database compiled annually on the dynamics of European and global capital markets.

1. Equity markets

The analysis of the data collected in the 2016 ECMI Statistical Package suggests the existence of encouraging trends in the global equity markets. In Europe, supported by the launch of the European Capital Market Union by the European Commission and the beginning of the Asset Purchase Programme carried out by the ECB, equity markets have consolidated the positive trend started in 2011. In 2015, domestic capitalisation in the EU-28 markets has increased by 6.3% to the level of 2014. Overall, after having contracted twice in 2008 and in 2011, the equity market in the EU28 has expanded by 45%, returning to the pre-crisis level. On the other side of the Atlantic, over the period 2011-15, the US equity market has recorded an outstanding performance, expanding by 90.5%. In 2015, the total market capitalisation of the companies listed in the US has increased by 6.2% to the level of 2014. [...]

2. Debt securities

The total amount of outstanding of debt securities has steadily increased during 2015 and reached €23.8 trillion in Europe, €7.1 trillion in China, €10.3 trillion in Japan and €33.4 trillion in the US. As shown in Figure 6, the evolution of the aggregate level of debt-to-GDP ratio suggests the existence of different trends across the economies. Indeed, as the EU28 has entered a deleveraging phase, the level of debt to GDP has been gradually declining since 2011. Conversely, in China, whose data show an extremely low level of debt, has been experienced a remarkable increase in its debt level. Finally, in both Japan and the US, following a pronounced decline in 2011, the average level of debt has been increasing again since 2012.

3. Exchange-traded derivatives (ETDs) markets

The nominal value of outstanding OTC derivatives contracts declined from an all-time-high of €519 trillion in 2014 to €465.9 trillion at the end of 2015. At the same time, listed derivatives (i.e. ETD) reached a new historical peak in 2015, estimated at €68.2 trillion, up by 20.7% compared to 2014 and by 41.1% compared to 2012. This change at derivatives market it is also observed when looking at the market share of OTC and ETDs and how it evolved since 2012.

 The notional principal of ETDs in Europe in 2015 was 2.3 times smaller than in the US (Figure 11). Even though their share increased by 49.2% from 2014 (€11.4 trillion) to 2015 (€17 trillion), they accounted for only 43.7% of the total in the US. Moreover, since 2007 listed derivative markets in the US rose by 46.6%, while the corresponding European figure declined marginally by 6.3%.

4. Over-the-counter cerivatives markets

The overall size of the over-the-counter (OTC) derivatives market contracted by 13.3% at the end 2015, following two years of consecutive growth (by 10.4% between 2012 and 2013 and by 0.7% between 2013 and 2014). The notional amount of outstanding OTC derivatives contracts fell 13.3% from €500.4 trillion in 2014 to €433.8 trillion in 2015. Looking back further, the market has increased 21.7% from €356.3 trillion as of year-end 2007. 

5. Mutual Funds

In 2015 the total number of European investment funds increased by 4.6% to 54,230, while the combined assets increased by 16.6% to €12.6 trillion (Figure 18). Undertakings for collective investment in transferable securities (UCITS) funds numbered 27,326 or 50.4% of the European investment fund market, while alternative investment funds (AIF) numbered 26,904, or 49.6% of the market. By the end of 2015, €7.7 trillion were invested in UCITS (61% of total European investment fund assets), with the remaining €5 trillion (39%) coming from AIF.

Full paper

© CEPS - Centre for European Policy Studies

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