Huge net holding gains in 2009
National accounts and business cycles
finsek, Financial accounts, financial investments, households and non-profit organisations, general government, abroad, balance sheets, FINSEFinancial accounts , National accounts and business cycles

Financial accountsQ4 2009



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Huge net holding gains in 2009

The central government and households both had huge holding gains in 2009. The central government’s holding loss since autumn in 2007 has been reduced by almost 60 per cent during 2009.

Net holding gains were significant in the last three quarters of 2009. In the three quarters period, the net holding gains amounted to NOK 526 billion for the central government and NOK 52 billion for the households. The accrued net holding loss in the period from the third quarter of 2007 to the first quarter of 2009 was NOK -927 billion and NOK -165 billion for the central government and the households respectively.

Households’ strengthened their financial position

Households and NISHs reduced their borrowing last year. Net lending was calculated to NOK -13 billion in 2009 compared with NOK -36 billion in 2008. Households net holding gains amounted to NOK 38 billion last year. Their net financial assets increased by NOK 25 billion during 2009, and are calculated to NOK 266 billion at the end of the year.

Households’ borrowing fell significantly in the first half of 2009, but the development has flattened out and at the end of the year borrowing recovered slightly. Loans from financial corporations increased and can be explained by more optimistic households. In 2009, the households’ acquisition of quoted shares and mutual funds in particular increased. At the same time, they also net sold bonds and money market fund shares. Bank deposits, notes and coins improved by NOK 23 billion in 2009 compared with NOK 61 billion in 2008. The deposits increased significantly at the end of 2008, partly due to a fall in securities prices and uncertainty concerning the financial turmoil. The moderate increase in bank deposits is probably due to the recovery in security markets and a greater tendency among households to take new financial positions in the markets.

Household net lending and change in net financial assets over the last four quarters. NOK billion. Net financial assets as ratio of disposable income.

Significant fall in central government’s net lending

Central government’s net lending declined in 2009. This is due to a considerable fall in the State’s income, which was caused by a significant weakening of the oil revenues in 2009. The central government’s net lending was calculated to NOK 277 billion in 2009. This is almost half the amount of 2008 when net lending was NOK 509 billion. In the last year, the central government’s net holding gains amounted to NOK 256 billion, which is a major improvement from the year before when net holding losses were NOK -532 billion. The development led to a top level in central government’s net financial assets. Net financial assets amounted to NOK 3 824 billion at the end of 2009, where NOK 2 637 billion is invested in the Government Pension Fund Global.

Local governments’ net lending improved

The local government’s net lending in 2009 is estimated at NOK -23 billion, compared to NOK -26 billion in 2008. The improvement is due to a decrease in borrowing at the end of 2009. The total borrowing was NOK 34 billion in the last year, which is almost NOK 1 billion higher than in 2008. The local government’s net holding gains amounted to NOK 4.5 billion in 2009, but the negative net lending led to a weakening in the local government’s financial position of NOK 19 billion. At the end of 2009, the local government had a net debt of NOK 132 billion.

Norway’s net financial assets abroad are NOK 2 129 billion

Norway’s net foreign assets were calculated to NOK 2 129 billion at the end of the fourth quarter of 2009. This is up by almost NOK 99 billion from the end of the third quarter of 2009. In the last quarter, Norway’s net lending abroad was NOK 98 billion, while net holding gains due to exchange rate developments in foreign exchange and global security markets were only NOK 0.6 billion in the fourth quarter of 2009.

Net financial assets and net lending to the rest of the world. Quarterly data. NOK billion
  3. quarter 2007 4. quarter 2007 1. quarter 2008 2. quarter 2008 3. quarter 2008 4. quarter 2008 1. quarter 2009 2. quarter 2009 3. quarter 2009 4. quarter 2009
Financial assets 5 382 5 520 5 386 5 539 5 877 6 578 6 028 6 235 6 249 6 304
Liabillities 4 128 4 296 4 147 4 279 4 379 4 924 4 553 4 410 4 219 4 175
Net financial assets / net financial wealth 1 254 1 224 1 238 1 260 1 498 1 654 1 475 1 825 2 031 2 129
Change in net financial assets / net financial wealth -73 -30 14 23  237  156 -179  351  205 99
Other changes -166 -135 -86 -95  123 15 -248  259  132 1
Net lending 93  105  100  117  114  141 68 92 74 98


Net lending as defined in non-financial accounts (capital account) =

savings + net capital transfers - net acquisition of non-financial assets


Net lending as defined in financial accounts =

net acquisition of financial assets - net incurrence of liabilities


Savings is non-consumed income and can be invested in financial or non-financial assets. If savings exceed non-financial investments, a sector has a surplus of funds and becomes a net lender to other sectors. In the financial transaction account, this means that the sector acquires more financial assets than liabilities. On the other hand, if savings are less than non-financial investments, investments have to be funded either by selling financial assets or incurring debts. Household investments in non-financial assets mainly reflect the purchase of new housing and fixed investments by unincorporated enterprises. They typically finance substantial parts of these investments by incurring debt in the form of loans.


Net financial assets (net financial wealth) = total financial assets - total liabilities


The financial balance sheet shows the financial position of a sector at the end of the reference period and is broken down into the categories of financial assets and liabilities. Insurance technical reserves, currency and deposits are the predominant assets held by households, while loans provided by financial corporations (banks etc.) constitute the main proportion of liabilities.


Changes in net financial assets = net lending + other changes in assets, net


The change in the financial balance sheet during the reference period is a result of accumulated financial transactions and other changes in assets. The latter category mainly reflects revaluations due to changes in market prices of financial instruments.



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