Polish households’ savings in the financial intersectoral linkages

Abstract

Research background: Savings of households are accumulated as a result of individual propensity to save. Simultaneously, they provide the sources of financing investments in the economy through financial institutions as intermediaries in the flow of funds, between entities with a surplus and those with a demand for them.
 Purpose of the article: The paper aims at indicating the changes in the structure of house-holds’ financial savings in Poland in the period 2003–2015, as well as at exploring them as a source of financing the activities of other sectors through institutional mechanisms of the financial system.
 Methods: Intersectoral financial flows were estimated using input-output methods for com-piling “sector by instrument” tables of financial assets and liabilities into “sector by sector” matrices of intersectoral flows of each financial instrument. The research is based on statistical data published in the Eurostat database, i.e. annual accounts — financial balance sheets by institutional sectors and subsectors. The role of households’ financial savings in the network of intersectoral linkages in the financial system has been examined on the basis of financial input-output model.
 Findings & Value added: The comparison of the significance of particular institutional sectors’ supply of funds clearly indicates that the increase in households’ financial assets causes the largest increase in financial flows both as a result of direct effect and indirect effects reflecting the size of these flows’ feedback in the financial system. The study presented herein is the first application of the input-output approach for the Polish financial system. The idea of financial input-output model proposed by Tsujimura & Mizoshita (2003) is extended to disaggregate intersectoral flows in the form of individual financial instruments.