Eurosystem Balance Sheet Charts

As mentioned in our recent article about the international effects of dollar debasement, we will start posting updates of many more central bank balance sheets over the coming months. We’ll try to present them in a similar way to our Federal Reserve balance sheet charts and — as always — we’re open to requests, suggestions and criticisms. Here I present several charts relating to the balance sheet of the Eurosystem.

 

Eurosystem (ECB) Total Balance Sheet Size Chart

Eurosystem Total Balance Sheet Size Chart - Click to enlarge. Source: European Central Bank

 

The total assets/liabilities of the Eurosystem have predictably proceeded ever higher since its establishment. That being said, we didn’t see a spike analogous to that seen in the Federal Reserve System in 2007/2008. However, because of the ECB’s holding of foreign exchange reserves, the Fed’s policies of debasement were nevertheless transposed to the Euro.

 

Eurosystem (ECB) Balance Sheet Chart (ASSETS)

Eurosystem Balance Sheet Chart - ASSETS - Click to enlarge. Source: European Central Bank

 

The Eurosystem’s assets have expanded in favor of ‘Loans to Monetary Financial Institutions’ (red) in recent years. It should be clear that the quality of these loans have deteriorated significantly. Be this as it may, this mechanism of debasement works somewhat belatedly (at least compared to the US and the UK). As was articulated by Jesús Huerta de Soto in a recent(ish) speech at the GoldMoney Foundation, active monetary debasement in the Eurosystem operates in a lagging fashion:

 

 

Eurosystem (ECB) Balance Sheet Chart (ASSETS) PROPORTIONAL BASIS

Eurosystem Balance Sheet Chart - ASSETS (PROPORTIONAL BASIS) - Click to enlarge. Source: European Central Bank

 

On a proportional basis, external assets have declined significantly over the years. Interestingly, the ‘Loans to MFIs’ portion of the Eurosystem’s assets remains below the level seen in late-2008 / early-2009.

 

Eurosystem (ECB) Balance Sheet Chart (LIABILITIES)

Eurosystem Balance Sheet Chart - LIABILITIES - Click to enlarge. Source: European Central Bank

 

In a similar fashion to the Federal Reserve System, the liabilities of the Eurosystem have expanded in favor of deposit liabilities to MFIs.

 

Eurosystem (ECB) Balance Sheet Chart (LIABILITIES) PROPORTIONAL BASIS

Eurosystem Balance Sheet Chart - LIABILITIES (PROPORTIONAL BASIS) - Click to enlarge. Source: European Central Bank

See here for our collection of rare historical economic data.

Posted Sep 2, 2011
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  • eric

    what is the effect in future of explosion of the balance sheet of all central banks, as we know inflation is low now. looking for reply

    • Greshamslawcom

      Two words: Monetary dilution…