Allianz report reveals limits to global monetary policy

ANKARA (AA) – Global gross financial assets advanced 4.9 percent last year, the slowest pace since 2011, according to a report from international financial services provider Allianz on Wednesday.

The Global Wealth Report released by Allianz revealed global gross financial assets rose just shy of five percent last year, suggesting global accommodative monetary policies nearing their limits.

Allianz Chief Economist Michael Heise said: “Obviously, extreme monetary policy is losing its impact even on asset prices. As a consequence, an important driver of asset growth no longer exists.

“At the same time, interest rates continue their remorseless slide, deep into negative territory. Savers face a real dilemma.

“For savers, making the right investment decisions is getting harder and harder,” he added.

Wednesday’s report indicated the middle class in developed countries -- many of which adopt extremely expansive monetary policies -- shrunk while the number of middle-class people in developing economies rose, suggesting more-balanced wealth distribution.

In around half of developing economies, the share of wealth attributable to the middle class has increased, according to report.

Chairman of the Board of Management of Allianz SE, Oliver Bate, said: "In the majority of the world’s up-and-coming economies, on the other hand, where monetary policy is less expansive, economic growth is higher and asset growth is being driven more by savings efforts than by share price gains, wealth distribution has not become more unequal.”

The Asia region excluding Japan held the largest proportion of global financial assets, estimated at 155 trillion euros ($172 trillion) and also was the best performer regarding annual growth.

"Of the total global financial assets of 155 trillion euros, Asia ex-Japan accounted for 18.5 percent in 2015; this not only means that the proportion of assets held by this region has more than trebled since 2000 but also that the region's share now far outstrips that of the eurozone's 14.2 percent," Allianz said in its report.

Last year Asia recorded growth of 14.8 percent, much faster than Western Europe's 3.2 percent and North America's 2.6 percent.