The “Pie,” below, a visual representation of the Federal Reserve’s Flow of Funds data, provides users with an overview of financial markets. It answers the questions, “Who lends how much to whom and through which markets?” Read More about how to read the pie below.

How to Read the Financial Map

Each ring of the pie represents a market and the incremental radius of a ring represents the size of that market relative to the size of other markets. Each wedge of the pie represents a sector (i.e., a set of market participants) and the size of each wedge represents the size of that sector relative to the size of other sectors. It is important to realize that the pie includes only financial assets, so the value of homes and cars, for example, are not included in computing the size of the wedge representing the “Households & Nonprofits“ sector.

Moving the cursor over the name of a sector or wedge reveals the financial balance sheet of that sector, with net assets represented by positive numbers and bars to the right and with net liabilities represented by negative numbers and bars to the left.

• Hovering over “Households & Nonprofits,“ for example, shows that the financial assets of this sector consist mostly of stocks and bonds while the financial liabilities are dominated by mortgages.
• Hovering over “Banking“ shows that this sector finances itself mostly with deposits and somewhat with bonds and invests mostly in mortgages and to a lesser extent in agency and GSE securities and in corporate and foreign bonds.

Moving the cursor over a market or ring reveals the sectors or participants that borrow or lend in that market.

• Hovering over the “Government, Agency, GSE & Muni Securities“ market, for example, shows that a significant portion of government and government-related debt is purchased by the “Rest of the World.“ (GSE is an acronym for Government-Sponsored Entities, e.g., FNMA and FHLMC.)
• Hovering over the mortgage market reveals a more complex story. Mortgages are liabilities of “Households & Nonprofits“ and of “Nonfinancial Business“ while they are assets of “Banking“ and of “Other Financial Companies“ (which in this case are mostly issuers of asset-backed paper). Following the trail further, hovering over “Other Financial Companies“ shows that their liabilities, by means of which they finance the purchases of the mortgages, are largely composed of “Government, Agency, GSE, & Muni Securities.“
• Finally, hovering over that market, “Government, Agency, GSE & Muni Securities“ are held by banks and the “Rest of the World.“

Hence, in summary, households and nonfinancial businesses borrow money to buy homes and business property directly from banks and indirectly through the intermediation of government-related entities.

Back to the Pie Above