Global financial wealth sees $28 trillion loss

Ever since the credit crunch surfaced in late 2007, there has been a dramatic fall in the prices of financial assets amounting to a total wealth erosion of $28 trillion across the world, economic forecasting consultancy Oxford Economics has said.

Oxford Economics estimates that the "total financial wealth has fallen some $28 trillion, or 14 per cent, from its peak. In absolute terms, this has taken wealth back to the level prevailing in third quarter of 2006."

However, the losses this time were rapid and much larger than seen when the dotcom bubble burst in 2000-02, it added.

In the US, financial wealth losses were huge at $8.1 trillion, thanks to the six consecutive quarters of declining financial wealth.

Substantial losses also occurred in the Eurozone and in emerging markets. "Wealth losses in both these areas have totalled around $11 trillion, equivalent to closer to 20 per cent of total financial wealth," the Oxford Economics report said.

Though the losses in the Eurozone and emerging markets got exaggerated as the US dollar has gained grounds against the euro and many emerging market currencies. But even in local currency terms the losses have been substantial indeed.

Wealth losses were concentrated mainly in the household sector as the US household financial wealth losses have reached $11.4 trillion, Oxford Economics said.