Ranks Of Europe's Monetary Financial Institutions Shrank In 2012

Sally Ling

1 February 2013

The European Central Bank has revealed that the number of monetary financial institutions in the eurozone fell by 6 per cent during 2012. With a few exceptions, declines occurred across the whole of the euro area.

Broadly, the ECB defines MFIs as central banks, resident credit institutions and other resident financial institutions whose business is to receive deposits from entities other than MFIs and to grant credits and/or make investments in securities. Money market funds are also classified as MFIs.

On 1 January 2013 there were 7,059 MFIs resident in the euro area, compared with 7,533 on 1 January 2012. In relative terms, the decrease was particularly pronounced in Slovakia (down by 30 per cent), Luxembourg (22 per cent), France (9 per cent) and Spain and Finland (both 8 per cent). Two countries bucked this trend – Malta - where the number of MFIs increased by 3 per cent - and Portugal, which saw a net increase of 0.6 per cent. In absolute terms, the biggest declines were in Luxembourg, with a net loss of 124 MFIs, France (105) and Italy (55).

Despite the enlargement of the euro area through the accession of Greece, Slovenia, Cyprus, Malta, Slovakia, and Estonia, the number of MFIs in the euro area has decreased by 28 per cent or 2,797 institutions since 1 January 1999. On 1 January 2013 Germany and France accounted for 42 per cent of all euro area MFIs, approximately the same share as recorded on 1 January 2012.

On 1 January 2013 there were 9,076 MFIs resident in the EU, a net decrease of 511 units (5 per cent) since 1 January 2012. Since 1 January 1999, when there were 10,909 MFIs in the EU, there has been a net decrease of 1,833 units (17 per cent). This is despite the addition of 1,608 MFIs on 1 May 2004, when 10 new member states acceded, and of a further 72 MFIs on 1 January 2007, when Bulgaria and Romania joined the EU.

Since 2011 there has been a substantial decrease in the number of money market funds (an MFI sub-sector) in the EU, with a net loss of 519 over two years. However, this is partly due to their redefinition under ECB guidelines.