Sunday

25th Sep 2022

Crisis makes Europe the richest region in the world, study says

Europe has emerged as the richest region in the world, pushing North America, where wealth has declined by more than 20 percent due to the economic crisis, off the top spot, a study has shown.

The world's richest also feel the recession biting, especially in North America, where the financial crisis first unfolded a year ago, reveals a survey on global wealth carried out by the Boston Consulting Group, a global management consulting firm.

Read and decide

Join EUobserver today

Become an expert on Europe

Get instant access to all articles — and 20 years of archives. 14-day free trial.

... or subscribe as a group

  • The old continent has surpassed the United States in terms of wealth due to the financial crisis (Photo: Wikipedia)

North America's wealth, measured in assets under management, plummeted by 21.8 percent, the steepest decline in the world. A lesser fall was registered in Europe, where assets shrunk by 5.8 percent compared to last year, down to €22.2 trillion – a quarter of the globe's total wealth.

The number of millionaire households worldwide fell from 11 million to about 9 million - a drop of 17.8 percent. The decline was steepest in North America and Europe, at 22 percent in both regions, although the United States continues to have the most millionaire households - nearly 4 million.

The crisis also narrowed the gap between the wealthy and non-wealthy. Wealth owned by households with less than €90,000 in assets under management increased by two percent in 2008, but it declined in all other segments. Among households with more than €4.5 million in assets under management, wealth fell by 21.5 percent.

Switzerland remained the largest offshore financial centre, accounting for more than €1.5 trillion or 28 percent of the world's tax havens. But increased regulatory scrutiny is putting pressure on offshores that have based their edge primarily on tax avoidance. "Once their tax and legal advantages evaporate, so too will their appeal," Peter Damisch, co-author of the report, said in a press release.

Some nontraditional offshore centres - including several outside Europe - remain poised for growth. Singapore and Hong Kong, in particular, will continue to benefit from their proximity to other Asian countries, where wealth is expected to stage a faster recovery.

The wealth management industry has weathered the storm better than most other financial-services sectors, but still their profits fell by more than six percent compared to last year. Stung by losses and scandals, clients shifted their assets to basic, low-margin investments.

"Dazzling product complexity is no longer seen as a positive attribute - if it ever really was," said Bruce Holley, another co-author of the study.

Analysis

Investors in renewables face uncertainty due to EU profits cap

While a cap on revenues from renewables is aimed at redirecting excess profits from low-cost electricity generation back to consumers, analysts and industry groups argue such measures come with risks — and at a bad time.

EU sanctions hamstrung by threat to food security

The EU has lifted some restrictions on the trade and financing of Russian coal and chemical to avoid an energy and food security crisis in poorer countries, but the upcoming ban on oil may have an even deeper impact.

News in Brief

  1. More Russians now crossing Finnish land border
  2. Report: EU to propose €584bn energy grid upgrade plan
  3. Morocco snubs Left MEPs probing asylum-seeker deaths
  4. EU urges calm after Putin's nuclear threat
  5. Council of Europe rejects Ukraine 'at gunpoint' referendums
  6. Lithuania raises army alert level after Russia's military call-up
  7. Finland 'closely monitoring' new Russian mobilisation
  8. Flights out of Moscow sell out after Putin mobilisation order

Stakeholders' Highlights

  1. UNESDA - Soft Drinks EuropeCall for EU action – SMEs in the beverage industry call for fairer access to recycled material
  2. Nordic Council of MinistersNordic prime ministers: “We will deepen co-operation on defence”
  3. EFBWW – EFBH – FETBBConstruction workers can check wages and working conditions in 36 countries
  4. Nordic Council of MinistersNordic and Canadian ministers join forces to combat harmful content online
  5. European Centre for Press and Media FreedomEuropean Anti-SLAPP Conference 2022
  6. Nordic Council of MinistersNordic ministers write to EU about new food labelling

Latest News

  1. Ireland joins EU hawks on Russia, as outrage spreads
  2. Editor's weekly digest: Plea for support edition
  3. Investors in renewables face uncertainty due to EU profits cap
  4. How to apply the Nuremberg model for Russian war crimes
  5. 'No big fish left' for further EU sanctions on Russians
  6. Meloni's likely win will not necessarily strengthen Orbán
  7. France latest EU member to step up government spending in 2023
  8. Big Tech now edges out Big Energy in EU lobbying

Join EUobserver

Support quality EU news

Join us