Statistics of accounts on the movement of capital and loans are an integral part of the general, published information on the balance of payments of the EU countries.
The European Central Bank is engaged in the total calculation of figures on the movement of funds and the calculation of loans issued, receiving data from branches located in the countries of the union.
The movement of capital indicates the size and availability of foreign direct investment, shows the activity of external investments of the European Union, the redistribution of capital investments across the 28 countries of the alliance.
Features of Capital and financial account statistics
European The central Bank divides the data obtained on capital investments on the property of residents of the 28 EU countries and non-residents, as well as accounting for loans issued.
This allows investors and traders to see due to what there is an increase or decrease in the total flow of capital investments during the reporting period – the activity of residents or the inflow/outflow of foreign capital.
The same thing happens with the assessment of lending – the data may be distorted by internal support measures. During the crisis, banks will reduce the issuance of subsidies to foreign businesses or non-residents will reduce the volume of loans due to high rates, while the ECB may increase lending at preferential rates within the EU as anti-crisis measures or as part of the supply liquidity for banks of individual countries.
Financial flows in the European Union are not divided into sub-accounts, the ECB only shows the balance of capital inflows or outflows. The total account accounts for both international investments and loans, as well as the withdrawal of funds in the form of profits or investments of residents of the 28 EU countries.
Foreign trade activity is reflected by funds aimed at paying for materials, raw materials, components, as well as business goods and services and consumer costs associated with tourism or cross-border transfers between relatives, etc.
The movement of accounts takes into account, among other things, the write-off of debts, losses of enterprises, cross-border transfers of individuals, the transfer of property rights, the purchase and sale of bonds, and securities on the EU stock exchanges, real estate transactions.
The general account of the movement of financial resources reflects government transactions, including the acquisition of so – called "general drawing rights" - special securities of the IMF.
Frequency and format of output of statistics of movement on capital and credit accounts
The indicator is published around the middle of each month, but it covers statistics with a 50-day time lag. The time of the data output is 9-00 GMT/12-00 Moscow time.
Impact of capital and credit account movement statistics on the Forex market
In the short term on the course euro reflects the dynamics of the positive or negative balance of financial flows. The inflow of funds exceeding the outflow shows the demand for the European currency and strengthens its exchange rate.
Indirectly, the situation has a favorable effect on Swiss franc and pound sterling, as well as currencies of the future members of the EU and the Scandinavian countries.
Despite the fact that the growth of the negative balance requires an analysis of the reasons for such an event (for example, it may be associated with active external investments), traders prefer to sell euros at the time of publication news.
Part of the statistics on the movement of capital of the European Union registers investments in foreign securities and the inflow of funds of non-residents into bonds and shares of exchanges in the territory of the European Union. Investors use this data as an important informer of the state of the global market.
For example, the growth of the euro in 2016-17 coincided with a 30-fold increase in EU Asian investment, and a decrease in the flow of investors ' funds to emerging markets causes a fall in national currencies.
The structure of investments also plays an important role – foreign investments strengthen the economy, while the purchase of a large number of exchange-traded assets can increase the impact of the crisis on the stock and foreign exchange markets. This is a rapidly liquidated capital, the sale of a large volume of shares and bonds by investors will lead to a deep correction of stock indices and exchange rate growth US dollar, as the main currency.