The people in Germany lost billions in total in the first quarter due to the fall in prices on the stock exchanges as a result of the Ukraine war. For the first time in two years, the financial assets of private households from cash, securities, bank deposits and claims against insurance companies fell compared to the previous quarter, as the Deutsche Bundesbank said on Friday in Frankfurt communicated.
Accordingly, the assets decreased compared to the record value of the final quarter of 2021 by 36 billion euros or 0.5 percent to 7588 billion euros. The Bundesbank data does not show how this enormous sum is distributed.
According to the information, valuation losses in the billions contributed significantly to the decline. The Bundesbank announced: “While private households built up claims worth 84 billion euros, they suffered valuation losses of 121 billion euros at the same time.” And further: “These valuation losses were mainly due to the price falls on the capital market and particularly affected shares and other equity rights (minus 50 billion euros) and shares in investment funds (minus 42 billion euros),” explained the Bundesbank. The leading German index, the Dax, had lost ten percent in the first quarter.
Last year, private investors had benefited from rising stock prices. Financial assets had risen to a record value of around 7625 billion euros at the end of 2021, also thanks to people’s diligence in saving. After the end of many corona restrictions at the beginning of the year, people also put comparatively little on the high edge. The stocks of cash and sight deposits, for example on the current and overnight accounts, rose by 12.5 billion euros to a total of around 2161 billion euros. In the previous quarter, an increase of 32 billion euros was recorded.
Insurance and other retirement products remain popular, according to Bundesbank figures. Inventories increased by a good 24 billion euros in the first quarter. People put 23 billion euros in fresh money into investment funds. On the other hand, private investors were reluctant to buy shares and other equity rights and invested eight billion euros. In the fourth quarter of 2021 it was still 14 billion euros. After deducting debt, the net financial assets of private households fell in the first quarter of 2022 compared to the previous quarter by 55 billion euros to 5,527 billion euros. Real estate is not included in the data.