BRATISLAVA, March 4, (WEBNOVINY) – Slovaks withdrew significant part of their savings from risky assets and transferred them into safer bank deposit products. An analysis by the Financial Policy Institute at the Finance Ministry shows that possession of securities dropped in Q3 2008 in quarterly terms and hit the bottom in Q2 2009. The aggregate decline for this period reached 43 percent. Net of asset repricing (decline in equity values on world’s markets), Slovaks held 34 percent less securities and mutual fund units. In Q2 2010, securities owned by households were 18 percent below pre-crisis levels, according to the analysis.
Bank deposit products capitalized on stronger aversion towards risks, going up by EUR 5.7 billion. This figure however was significantly influenced by cash deposited by households before the euro adoption. These deposits could have amounted to some EUR 3.9 billion. Surprisingly, dynamics of long-term financial instruments remained unaffected by the crisis and preserved a stable quarterly growth.
Based on the solvency indicator, the institute concludes that households were most hit by the global economic crisis in Q2-Q3 2008. The indicator continued to fall until Q4 2009 and the first signs of improvement appear in Q1 2010. The institute expects that the solvency of households will further improve. Development of households’ wealth has undergone profound changes in the past decade. Compared to other EU member states, Slovak households show a high portion of non-financial assets.
SITA
