Summary and Conclusions

The analysis of size and the evolution of the financial balance sheets in the Eurozone countries confirms the hypothesis of a variegated financial- ization process. The analysis of the performance of the financial balance sheets of the Eurozone countries shows the existence of significant differences among countries. These differences arise not only when we have analysed the financial sheets of the total economy but also when we have analysed the performance of the different sectoral financial balance sheets.

Moreover, what is really important to confirm is the existence of a variegated financialization process; this is due to the fact that these differences have increased during the last decades.

The existence of these differences arise again when we have studied the performance of the total and sectoral financial balance sheets both in the years previous to the onset of the Great Recession and in the subsequent years, that is, since 2008. In this sense, although there are, in some sectors at least, common trends with regard to the changes registered before and after 2008 in the net financial assets; however, we have been able to detect strong differences related to the main determinant of this change, that is, whether changes in net financial assets are mainly explained by changes in financial assets of by changes in financial liabilities.

Initially, it could be expected that given the structural differences between the Western and the Central and Eastern countries that joined the Eurozone after the creation of the European Monetary Union, the analysis shows that the groupings resulting of the changes in the net financial assets (at a national and at a sectoral level) include in most cases ‘old’ and ‘new’ Eurozone countries. Therefore, differences in the level of development, and even in the dimension of the financialization process, exist between and within old and new countries.

Finally, the empirical analysis carried out in the last section has shown that we cannot argue that the financialization process (before and during the Great Recession) has had any impact on the level of general economic activity. In other words, we cannot say that the changes in the size of the national financial balance sheets and in the size of their component have been a significant determinant of the changes in the gross domestic product and the total gross fixed capital formation. However, the different estimations show that financialization has affected the economic decisions made in relation to private non-financial assets, that is, by non-financial corporations and households. Thus, the change in the size of financial assets and liabilities has influenced the performance of gross capital fixed formations of non-financial corporations since the year 2008. In the case of households, in the period 1999-2008, the change in the size of financial assets and liabilities affected the performance of private final consumption. Finally, the change in the size of net financial assets was a determinant of the changes in the gross saving rate before the recession, while the change of financial assets has affected the performance of gross saving rates since the year 2008.

This result does not necessarily imply that the financialization process has not had a true impact on the economic activity of the economies of the Eurozone and on their corresponding sectors, in the periods and variables for which we have not found a statistically significant relation. To reach a clear-cut conclusion about this hypothesis, we should make an individual study of each Eurozone economy. However, this analysis is outside the scope of this paper.

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