Sunday, January 1, 2012

1/1/2012: Groundhog Year 2012 - part 2

And on with another summary of 2011. One side of the euro area economy had a boom year in 2011, unlike the rest of us. The boom, of course, was of a very dubious nature, but it is set to continue through 2012. That side was the ECB balance sheet.

Check out the following charts to spot the 'up year' for ECB's 'assets':

But what about ECB's capacity to carry these? Well, of course, ECB doesn't really function like a regular bank, but were it, with capital and reserves finishing 2012 at €81.481bn against total assets of €2,733.2 billion, ECB's leverage currently stands at 3,354%, which is well above 2000-2004 average of 1,372% and 2005-2008 average of 2,180% and 2009 level of 2,609% and 2010 level of leverage of 2,565%.

And, of course, more financial wizardry to come in 2012, folks. So brace yourselves for another 'up-and-up they go' year at ECB.
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