Increase in outstanding money market paper

Statistical news
Datum 15 mei 2018

In the first quarter of 2018, money market paper issued by Dutch institutions increased by EUR 31 billion to EUR 152 billion. Outstanding capital market paper declined by EUR 23 billion to EUR 1,674 billion. At the same time, the value of listed shares dropped slightly, to EUR 1,111 billion.

Substantial increase in money market paper

The total amount of outstanding money market paper in the first quarter of 2018 rose EUR 31 billion to EUR 152 billion, the highest level observed since the second half of 2013 (see Chart 1).

In the first quarter of 2018, Dutch institutions issued new money market paper totalling EUR 213 billion, while redeeming for an amount of EUR 176 billion. On balance, net issuance of Dutch institutions amounted to EUR 37 billion, a level not seen since end-2008. The upward effect of the high net emissions on the outstanding money market paper was partly offset by the downward impact of the euro appreciation. Money market paper denominated in other currencies declined in value.

In the current funding strategies of Dutch institutions, money market paper plays a relatively modest role. The share in total debt paper at the end of the first quarter of 2018 was a mere 8.3%. At the moment only a limited number of issuers is active in the money market. The lion's share of Dutch money market paper – almost 95% – is on the balance sheet of banks, large financial holding companies and the Dutch government. Of all outstanding money market paper at the end of the first quarter, more than half (EUR 91 billion) was denominated in foreign currencies. Of this subcategory, EUR 67 billion was issued by banks and well over EUR 20 billion by financial holding companies. As in the previous quarter, the Dutch government did not have any short-term paper in foreign currencies outstanding.

Slightly less capital market paper

In the first quarter of 2018, the outstanding amount of capital market paper decreased by more than EUR 23 billion, from EUR 1,697 billion to EUR 1,674 billion. For five quarters in a row now, the total value of outstanding capital market paper has been declining (see Chart 2). Compared to the peak seen in the fourth quarter of 2016, the decrease has amounted to over EUR 230 billion. Just under half of this is for the account of the banking sector and is related to its balance sheet condensation.

At approximately EUR 1,175 billion, the outstanding capital market paper denominated in euros remained almost unchanged compared to the previous quarter. The fact that the total value of capital market paper did decline was entirely due to capital market paper denominated in other currencies. The value of this category went down, from EUR 522 billion in the fourth quarter of 2017 to around EUR 500 billion at the end of the first quarter of 2018, the lowest level since the end of 2014. Dutch institutions issued less new longer-term paper in other currencies than they redeemed, EUR 32 billion compared to EUR 36 billion. In addition, the strong euro depressed the value of the capital market paper in other currencies.

Lower value of listed shares

The slight drop of EUR 16 billion in the first quarter of 2018 resulted in a lower value of listed shares of EUR 1,111 billion. The decline was driven by lower stock exchange prices. Issues were at a level comparable to that seen in the past few quarters. An amount of EUR 2.5 billion was raised, partly as a result of the IPO of investment bank NIBC.