Sunday 25 September 2016

We lost the most during financial crash, says ECB

Published 21/10/2015 | 02:30

In an analysis of the years between 2009 and 2013, European Central Bank experts discovered that Irish people were the biggest losers
In an analysis of the years between 2009 and 2013, European Central Bank experts discovered that Irish people were the biggest losers

More personal wealth was destroyed in this country in the aftermath of the financial crash than in any other part of the eurozone.

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A new report found that the Irish suffered while the Dutch and Germans prospered after the financial crisis struck.

We lost almost €18,500 per person.

In an analysis of the years between 2009 and 2013, European Central Bank experts discovered that Irish people were the biggest losers.

Even the Greeks did not lose out as much - with a notional wealth decline of €17,000.

Spaniards saw wealth dwindle by almost €13,000 as property in both countries plummeted.

But in the Netherlands and Germany the wealth per capita grew by about €33,600 and €19,000 respectively, partly due to a boost to financial investments over that time.

Stock markets surged in the period, while the Dutch have a comprehensive pensions system. The data was complied before the recent economic upswing in Spain and Ireland.

Household wealth is the value of all the assets owned by a household, less the value of all its borrowings.

The crash in property values here is the main reason for the sharp decline in household wealth.

Trinity College Dublin Professor of Finance, Brian Lucey, said: "This should surely show to Irish households the danger of concentrating savings in home ownership.

"We need to become much more diversified in how we save and when we can save."

UCD economist Colm McCarthy said it stood to reason that the country in the eurozone with the biggest fall in property prices would see the biggest fall in household wealth.

Irish Independent

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