Finnish residents’ foreign assets exceed foreign liabilities

Statistics on foreign assets in their current form date back to 1975; ever since then, Finnish residents have had more in foreign liabilities than foreign assets. In April 2010 Finland’s net international investment position turned positive for the first time. At the end of October 2010 Finnish resident’s foreign assets exceeded their foreign liabilities by about EUR 10 bn. This change was attributable to several factors, but primarily to equity capital-related items¹.

Non-financial corporations’ foreign liabilities related to shares contracted by about EUR 73 bn between the start of 2008 and October 2010. The contraction is largely attributable to a fall in share prices, but also partly to real sales of shares. Non-financial corporations’ total foreign liabilities decreased in the same period by about EUR 68 bn.

In recent months, employment pension funds’ ² foreign assets have returned to the level prevailing prior to the financial crisis. Foreign investment in this sector consists almost entirely of portfolio investment. Looking at the various investment instruments, investment fund shares and debt securities each account for about 40% of the portfolio investment stock, and shares comprise the remaining portion of nearly 20%. Employment pension funds have clearly changed their investment strategy by increasing the portion of investment fund shares in their portfolios.