Tuesday

2nd Jun 2020

America leapfrogs Europe as world's richest region

  • Global wealth hit a historic high (Photo: snorski)

At $241trillion, global wealth has reached an historic high as the gap between income disparities widen.

“We expect global wealth to rise by nearly 40 percent over the next five years, reaching $334 trillion by 2018,” noted the 2013 Credit Suisse Wealth Report on Wednesday (9 October).

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Half the world’s population own less than 1 percent of the global wealth while over 86 percent of global wealth is in the hands of the richest ten percent.

The top one percent account for 46 percent of global assets.

The report states China now has more people in the top 10 percent of global wealth holders than any other country except for the USA and Japan. China has moved into third place in the rankings, by overtaking Italy and Germany.

Despite some gains in Europe, total wealth in North America overtook European holdings to become the leading region for the first time since 2005.

The United States tops the list with five successive years in rises of personal wealth and added $8.1 trillion to the global wealth index. At the bottom is Japan, which at $5.8 trillion, lost 20 percent of its net worth in 2013 alone.

China, Germany and France are the only other countries where wealth exceeded $1 trillion between 2012-13, followed by Italy, the UK and Spain.

Despite the Eurozone crisis, a handful of member states saw an increase in the number of millionaires. France topped the list in the EU by adding 287 millionaires in 2012, followed by Germany at 221, and Italy at 127. Spain also gained 47 new millionaires.

European Central Bank data not reliable

The report states that the European Central Bank (ECB) has also understated “the household wealth per adult in most Eurozone countries, with the notable exceptions of Cyprus and Malta.”

An ECB Household Finance and Consumer Survey suggested that the average wealth in Germany was lower than that in Cyprus and Malta.

Credit Suisse dispute the result because the bank’s country comparisons are framed in terms of wealth per household, which vary in size across member states. Credit Suisse says a better comparison is wealth per individual.

They also estimate that the ECB uncovered only 79 percent of non-financial assets in France and exaggerated non-financial assets in Cyprus by a factor of almost five and in Malta by a factor of almost eight.

“Our value is about 20 percent higher for Finland, Germany and Greece, about 35 percent higher for Italy and the Netherlands, and 50 percent above the ECB level for France,” says Credit Suisse.

Risk of poverty greatest in Bulgaria

Bulgaria has the highest percentage of citizens at risk of poverty in the EU while the UK is home to the greatest wealth disparity between regions.

Vestager hits back at Lufthansa bailout criticism

Commission vice-president in charge of competition Margarethe Vestager argued that companies getting large capital injections from the state during the corona crisis still have to offset their competitive advantage.

German court questions bond-buying and EU legal regime

The German Constitutional court ordered the European Central Bank to explain its 2015 bond-buying scheme that helped eurozone stay afloat - otherwise the German Bundesbank will not be allowed to take part.

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