Income and wealth of euro area households in times of ultra-loose monetary policy: stylised facts from new national and financial accounts data

It is often purported that the ECB's ultra-loose monetary policy significantly affects household income and financial wealth. Considering selected euro area countries, this paper addresses two questions: first, how did households net interest income develop in recent years? Second, did portfolio structures change? Based on recently extended national accounts data, I derive stylised facts suggesting that net interest income indeed changed with monetary policy. However, patterns differ across countries. Whereas households in some countries suffered from declining incomes, in other countries they achieved incomes which, considered in real terms, were substantially higher than before. Tentative links to household balance sheets and their interest rate fixation suggest that these factors outweigh the significance of monetary policy. Regarding portfolios, however, less divergence is observed. Risk-taking did not increase in any country, despite the low yields of safe assets. General statements claiming that the ECB's monetary policy has solely negative effects for household finances therefore seem to be inadequate.