Official Statistics

The UK Flow of Funds Project: Identifying Sectoral Interconnectedness in the UK Economy

The 2007 financial crisis re-emphasised the importance of monitoring the build-up of financial risks in the economy and since then, there have been renewed calls for identifying balance sheet exposures between different institutional sectors. Building on previously published Flow of Funds experimental statistics by the ONS, in partnership with the Bank of England, this article takes a further step in exploring sectoral interconnectedness within the UK economy and analyses these lender-borrower relationships in the context of risk exposures. Using data visualisation techniques, we illustrate how financial counterparty relationships have changed over time and what this tells us about the transmission of financial risks.