Money market plays less prominent role in raising new market funding
The second quarter of 2015 saw gross money market and capital market paper issuance rise to EUR 162 billion (up 4% q-o-q). The quarter saw a net EUR 25 billion rise in total outstanding debt paper to EUR 1,872 billion, a record high for the eighth consecutive quarter. The net rise comprises a EUR 38 billion increase in total outstanding capital market paper and a EUR 13 billion decline in total outstanding money market paper (with relatively short maturities).
Bonds overtake money market paper as source of new market funding
The composition of the market funding raised by Dutch institutions has structurally changed over the past three years (see Chart 1). In recent years, the share of short-term money market paper in total outstanding funding has shown a trend decline, from 11.2% in the first quarter of 2012 to 6.8% in the second quarter of 2015. This is principally the result of a rise in outstanding longer-term bonds since 2014, and a trend decline in new money market funding (see Charts 2 and 3). Between 2012 and 2013, money market funding still accounted for 60% of total new market funding raised. This percentage came out at 52% on average in 2014, while falling to 42% in the first half of 2015. The money market funding raised is often used to roll over outstanding money market paper, resulting in relatively large issuance and repayment volumes. Overall, recent years have seen a net decline in total outstanding money market paper.
Chart 1: Share of money market paper in total market funding
Rise in capital market issuance
In the second quarter of 2015, Dutch institutions issued capital market paper worth EUR 95 billion (up 8% q-o-q, see Chart 2). Given a low level of maturing debt paper, the total amount of outstanding bonds rose to a new record high of EUR 1,754 billion.
Chart 2: Gross Dutch capital market issuance
Decline in money market paper issuance
In the second quarter of 2015, gross money market paper issuance came to EUR 67 billion (down 1% q-o-q, see Chart 3). Together with the issuance volumes in the previous two quarters, this was the lowest Dutch money market issuance volume in more than a decade. Total outstanding money market paper declined to EUR 119 billion (down 11% q-o-q), the lowest level since 2008.
Chart 3: Gross Dutch money market issuance