The growth rates of the other two main asset classes were lower – but still impressive: Insurance and pensions reached a plus of 8.1%, mainly reflecting the rise of underlying assets, and bank deposits increased by 6.4%. In fact, all asset classes clocked growth significantly above their long term averages since the Great Financial Crisis (GFC). Another peculiarity of 2019: Through all the years, the regional growth league table used to be dominated by Emerging Markets. Not so in 2019. The regions that saw the fastest growth were by far the richest: North America and Oceania where the gross financial assets of households increased by a record 11.9% each. As a consequence, for the third year in a row, Emerging Markets were not able to outgrow their much richer peers. The catch-up process has stalled.
The same story is about to repeat itself in 2020 – but only in extreme. As Covid-19 plunged the world economy to its deepest recession in 100 years, central banks and fiscal authorities around the world fired up unprecedented monetary and fiscal bazookas, shielding households and their financial assets from the consequences of a world in disarray. We estimate that private households have been able to recoup their losses of the first quarter and recorded a slight 1.5% increase in global financial assets by the end of the second quarter 2020 as bank deposits, fueled by generous public support schemes and precautionary savings, increased by a whopping 7.0%. Very likely, private households’ financial assets can end 2020, the year of the pandemic, in the black.