estat/a/1 29/02/2016 02:16 slide: 1 european commission - eurostat discussion on methodological...

ESTAT/A/1 05/08/23 15:11 Slide: 1

European Commission - Eurostat

Discussion on methodological problems and solutions

Practical approaches of the Members States

Agenda Item 4Agenda Item 4


ESTAT/ 05/08/23 15:11 Slide: 2

Overview

I. Internal and External Reference Rates

II. FISIM allocation into Domestic User sectorsAustria’s Experience

III. Intermediate and Final Consumption of Household sector,Lithuania’s Experience

IV. Treatment of central banks

V. Exports and Imports of FISIM,Germany’s Experience

VI. FISIM at constant prices

VII. FISIM allocation among Industries


ESTAT/ 05/08/23 15:11 Slide: 3

I Reference Rates

• The calculations of FISIM start with collecting the data on stocks and interest flows for loans and deposits, and constructing matrices “from whom to whom”.

• Then, these matrices on stock and interests must be check against one Then, these matrices on stock and interests must be check against one another, and adjusted for the FISIM allocation concepts. another, and adjusted for the FISIM allocation concepts.

• The compilation of the Reference Rates are based on the matrices for The compilation of the Reference Rates are based on the matrices for interests and stocks, which cover all Inter-bank relationships for all interests and stocks, which cover all Inter-bank relationships for all units: units:

within S.122; within S.122; within S.123; within S.123; between S.122 and S.123.between S.122 and S.123.


ESTAT/ 05/08/23 15:11 Slide: 4

Date used to compile FISIMDate used to compile FISIM

Liabilities and Liabilities and Pay.Int.Pay.Int. Assets and Assets and Rec. Int. Rec. Int.

Resident FIsResident FIs(1)(1)

Resident Resident Non-FIsNon-FIs

(2)(2)

Non-Non-Resident Resident Non-FIsNon-FIs

(3)(3)

Non-Non-Resident Resident

FIsFIs(4)(4)

TOTALTOTALLiabilities Liabilities

and Pay.Int.and Pay.Int.

Resident Resident FIsFIs

Inter-BInter-B Depos.Depos. Depos.Depos. Inter-BInter-B

Resident Resident Non-FIsNon-FIs

LoansLoans xx xx LoansLoans

Non-Resident Non-Resident Non-FIsNon-FIs

LoansLoans xx 00 00

Non-Resident Non-Resident FIsFIs

Inter-BInter-B Depos.Depos. 00 00

TOTAL Assets TOTAL Assets and and

Rec. Int. Rec. Int.

The bank The bank point of viewpoint of view


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I Reference RatesI Reference Rates

Assets Liabilities

Bank A 90 10Bank B 10 90Total inter-bank 100 100

• Bank A makes a transfer of a financial asset of Bank A makes a transfer of a financial asset of 9090 (stock value) to Bank (stock value) to Bank B. This transaction must be recorded in the accounts of both banks, i.e., B. This transaction must be recorded in the accounts of both banks, i.e., 90 must be recorded on assets side of Bank A and on the liabilities side 90 must be recorded on assets side of Bank A and on the liabilities side of Bank B.of Bank B.

• Bank B makes a transfer of financial asset of Bank B makes a transfer of financial asset of 1010 (stock value) to Bank A. (stock value) to Bank A.


ESTAT/ 05/08/23 15:11 Slide: 6

Internal Reference Rate

I Reference Rates

S.123 and .122between loans of stocks averageS.123 and .122between loanson receivableinterest accrued

SS

resident-non FIs andresident FIsbetween deposits of stocks average

resident-non FIs andresident FIsbetween loans of stocks averageresident-non FIs andresident FIsbetween depositson payableinterest accrued

resident-non FIs andresident FIsbetween loanson receivableinterest accrued

External Reference Rate


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• Data is taken from the matrices “from whom to whom”, which consists of detailed breakdown of FISIM Producer sectors (S.122 and S.123) by counterpart sectors which are the FISIM Consumer sectors. The latter sectors can be either Resident sectors (S.11, S.124, S.125, S.13, S.14, and S.15) or Non-resident sectors (S.2 FIs and S.2 Non-FIs).

• The calculation and allocation of FISIM among Domestic User sectors is based on the difference between the Actual Interest payable/receivable and the Internal Reference Rate.

II FISIM allocation to domestic sectors


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• Although FISIM Regulation does not explicitly mention S.122 and S.123 sectors as Consumers of FISIM, these types of FISIM transactions might occur in some rare cases ..

• FISIM is a net concept. In the Inter-bank relationship FISIM is a net concept. In the Inter-bank relationship one Financial one Financial Institution (FIInstitution (FI) is a net FISIM Producer and the other one is a net FISIM ) is a net FISIM Producer and the other one is a net FISIM Intermediate Consumer. The rule is that the value of the FI should be Intermediate Consumer. The rule is that the value of the FI should be recorded as Net FISIM Producer or Net FISIM Intermediate-Consumer, recorded as Net FISIM Producer or Net FISIM Intermediate-Consumer, depending on the sign of the result.depending on the sign of the result.

• It is worth noting differences between EU countries in the classification of It is worth noting differences between EU countries in the classification of some FIs. Depending on the national regulations of the financial institutions some FIs. Depending on the national regulations of the financial institutions or financial activities, it could be that the same FI could be classified in the or financial activities, it could be that the same FI could be classified in the S.122 sector in one country and in the S.123 sector in another country. S.122 sector in one country and in the S.123 sector in another country.



ESTAT/ 05/08/23 15:11 Slide: 9

Treatment of Non-Market units


6

6Output = SUM of costs

T O T A L

U S E S

GG

Final consumption

GG

6FISIM

Intermediate consumption

GG

HH, GCF, etc


ESTAT/ 05/08/23 15:11 Slide: 10

III Intermediate and Final Consumption by Households

• Some of the Member States had problems in properly identifying Intermediate and Final Consumption of the Household sector, due to difficulties with the data of Households as Owners of Dwellings.

• The Regulation, in the case of deposits, suggests allocating the corresponding The Regulation, in the case of deposits, suggests allocating the corresponding FISIM estimates into final consumption.FISIM estimates into final consumption.

• Important alternative data sources are the ECB statistics on retail bankingImportant alternative data sources are the ECB statistics on retail banking

• Banking statistics on loans by purpose of dwellings or construction can be used Banking statistics on loans by purpose of dwellings or construction can be used to calculate a proxy for the above-mentioned breakdown of Household sector to calculate a proxy for the above-mentioned breakdown of Household sector Alternatively method could be as in table belowAlternatively method could be as in table below

Households as: Loans Deposits

Owners of dwellings 55 10

Owners of unincorporated enterprises 20 -

Consumers 25 90


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• Although Central Bank is a market unit, by convention (according to the Regulation) its total output (FISIM and non-FISIM) is measured as a sum of costs, for example

(316) P1= 120 (P.2) + 180 (D.1) + 1 (D.29 less D.39) + 15 (K.1)

• By convention the output Central Bank is entirely allocated to intermediate consumption of S.122 and S.123

IV Treatment of Central Bank (S.121)


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• In the old recording systems (FISIM not allocated), Interest Received (D.41) consisted of all Interest Received (including FISIM charges), whereas Interest Paid did not include FISIM.

• In the new system (FISIM allocated), Interest Received must be recorded as free of FISIM. Therefore, in the allocation of primary income account, Interest Received is reduced by the amount of FISIM.

IV Treatment of Central Bank (S.121)

P1 (FISIM + non-FISIM) = 316P1 (non-FISIM, measured on the bases of fees and commissions) = 20Old D.41 received = 2100New D.41 received (free from FISIM) = 2100 - 296 (P.1 FISIM)

= 1804


ESTAT/ 05/08/23 15:11 Slide: 13

• Important data source to construct the the matrices “from whom to whom” are International Investment Position data from the Balance of Payment statistics.

The same data source is also use to compile Financial Accounts. So, theoretically, data should be available with the required breakdown.

• A possible supplementary data source could be data from the Bank for International Settlements (BIS) on deposits and loans of banks around the world by country of counterpart.

• Exports and Imports of FISIM are be calculated based on the Exports and Imports of FISIM are be calculated based on the difference between the Actual Interest payable/ receivable and the difference between the Actual Interest payable/ receivable and the External Reference Rate.External Reference Rate.

V Export and Import of FISIM


ESTAT/ 05/08/23 15:11 Slide: 14


Negative Export of FISIM must be recorded as Positive Import. This follows the concept of net FISIM, where the relation between two banks is that one is net Producer and the other one is net Intermediate Consumer. In international relations residents banks producing FISIM are exporters, whereas the non-resident consumers of FISIM are importers.

The Inter-bank transaction (FISIM) between Resident and Non-resident is recorded as Import or Export depending of the sign of the result.


ESTAT/ 05/08/23 15:11 Slide: 15


Uses Resources S.1 S.2 (RoW) Total Total S.1 S.2 (RoW)P1 (Output) 7324- of which 6488

968

- 132P2 (Int.Cons.) 4631

P3 (Fin.Cons.) 3067

P6 (Exp FIs)

P6 (Exp NFIs) 968

P7 (Imp FIs) + 132P7 (Imp NFIs) 1210

Balance 8666 8666


ESTAT/ 05/08/23 15:11 Slide: 16

FISIM at constant prices

Eurostat recommends two methods to calculate FISIM at constant prices

• Method 1 uses detailed output indicators, which covers the activities Method 1 uses detailed output indicators, which covers the activities that generate FISIM that generate FISIM

• Method 2 uses deflated stocks of loans and deposits as a volume Method 2 uses deflated stocks of loans and deposits as a volume indicator. Recommender deflators are: the GDP deflator; the deflator indicator. Recommender deflators are: the GDP deflator; the deflator of domestic final demand; the overall CPI.of domestic final demand; the overall CPI.

DeflatorStock*margin FISIM 1t

year baset


ESTAT/ 05/08/23 15:11 Slide: 17

Eurostat proposed two methods of allocating FISIM among industries:

• Method I - based on stocks of loans and deposits for each industry

• Method II - based on the output for each industry

17 EU countries gave information on which method they used:

• Method I was used by 3 countries - CZ FI SE

• Method II was used by 8 countries – ES IT LT HU NL PL PT

• Combination of Methods I and II was used by 6 - BE DK DE EE FR AT

Allocation of FISIM among industries

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