Antonio Colangelo (European Central Bank)

Banks’ Balance Sheet Statistics and Financial Flows in the Euro Area

The analysis of money and credit developments is core to the conduct of monetary policy. Those statistics are constructed in the euro area starting from the balance sheets of resident banks. By appropriately netting banks’ cross-positions in the euro area, aggregated positions are identified with euro area resident non-banks, leading to the main credit and monetary aggregates, as well as with non-euro area residents. Financial innovation (e.g. securitisation, activities with central counterparties, …) poses many challenges in this framework as the balance sheets of banks continuously change to reflect new developments in financial markets. In particular, aggregated macro-economic statistics may deliver wrong messages if they were not corrected for the impact of these factors, thus making new data requirements and flexible aggregation procedures core to monetary analysis.