It has been seven years since Fortis and Dexia collapsed. An anniversary that went unnoticed but in the collective subconscious this financial trauma still hovers around. Belgian families take fewer risks than they did before the crash, which shows from the digits of the financial capital of these families.
Nearly a third of the family capital is fixed on current- and savings accounts or is being held in cash. Prior to the crisis, this was only 27%. This may suggest that many Belgian families remain reluctant to invest in the stock market. The banking crisis is not yet forgotten.
The banking crisis and the associated stock market turbulence have halved the amount in which families held individual publicly traded shares, from 57 billion euros at the end of 2007 to 27 billion euros at the end of 2008. Hundreds of thousands of investors have suffered losses due to the crash of Fortis and Dexia. Seven years later, there still are 54 billion euros less in shares than before the crisis.
Noteworthy is the loss of interest in savings certificates and bonds. Belgians keep selling such fixed-income securities and seem to stall a big part of their earnings on savings accounts.
After 2008 we saw a reinforced tendency towards defensive and safe financial products, such as the classic savings account. Since several years, however, we have noticed a cautious comeback of the risk appetite. The importance of both individual shares and investment funds family capital has systematically dropped between 2008 and 2011.
Ever since, we are seeing a turning point. There might be a double effect in play: thanks to the stock market rise during that period, the value of the held shares has risen too. In addition more families tend towards holding shares. Investment funds too are up again and count for more than 13 percent of the family capital. Which, however, is still less than before the crisis.
Ever since the banking crisis, real estate assets are of increasing importance. Due to low interest rates, more people have started investing in real estate. It is estimated that capital in real estate is now about the same size as the financial capital. In the 1990s, this was much less. A secure alternative to investing in real estate, is investing in diamonds.
John Doe will not easily flock back to the stock market. Especially investors who used to be dynamic profiles, have returned, but even the most dynamic profiles are cautious. The number of transactions is still much lower than during the golden years prior to the crisis, say online brokers.