Sectoral Accounts, Balance Sheets, and Flow of Funds: Progress and Future Plans

Manik ShresthaIMF Statistics Department

Joint Session of the OECD Working Party on Financial Joint Session of the OECD Working Party on Financial Statistics and the OECD Working Party on National Statistics and the OECD Working Party on National

AccountsAccountsParis, October 25Paris, October 25–27, 201127, 2011

The views expressed herein are those of the author and should not be attributed to the IMF, its Executive Board, or its management.

Background

2

In November 2009, the IMF/FSB report to the G-20, The Financial Crisis and Information Gaps, identified a need to address data gaps, grouped into four main inter-related areas: Build-up of risk in the financial sector Cross-border financial linkages Vulnerability of domestic economies to shocks Improving communications of official statistics Latest report in June 2011:

http://www.imf.org/external/np/g20/pdf/063011.pdf

20 Recommendations to address data gaps were identified Although initiatives started with G-20 endorsement and periodic

reports submitted to G-20, the data gaps initiatives have global perspectives and implications

Inter-Agency Group on Economic and Financial Statistics, created in December 2008, oversees and coordinates the implementation of recommendations Members are BIS, ECB, Eurostat, IMF (Chair) OECD, World Bank, and

UN

G-20 Recommendation #15

3

The IAG, which includes all agencies represented in the Inter-Secretariat Working Group on National Accounts, to develop a strategy to promote the compilation and dissemination of the balance sheet approach (BSA), flow of funds, and sectoral data more generally, starting with the G-20 economies. Data on nonbank financial institutions should be a particular priority. The experience of the ECB and Eurostat within Europe and the OECD should be drawn upon. In the medium term, including more sectoral balance sheet data in the data categories of the Special Data Dissemination Standard could be considered.

Work to date and progress

4

An IAG Working Group leads and takes forward work on implementation Members are BIS, ECB, Eurostat, IMF (Chair) OECD,

and UN

A joint IMF-OECD Conference on Strengthening Sectoral Position and Flow Data in the Macroeconomic Accounts at IMF Headquarters during February 28 – March 2, 2011

A meeting of the IAG WG during September 12 – 23, 2011 at OECD Headquarters

IMF-OECD Conference

5

An important milestone in taking forward the work on implementing Rec. 15

Provided guidance towards a minimum set of internationally comparable sectoral accounts (Template)

Discussed priorities for compilation and dissemination of sectoral accounts by the G-20 economies and non-G-20 advanced economies

Reached common understanding for improvements of sectoral national accounts

Attended by about 70 professionals from central banks and national statistical offices of G-20 economies and some non-G-20 advanced economies and international organizations

Papers and conclusions at http://www.imf.org/external/np/seminars/eng/2011/sta/index.htm

Conference: Template for sectoral accounts

6

The conference provided sufficient guidance for developing a Template for ensuring dissemination of minimum set of internationally comparable sectoral accounts and on the encouraged details

Minimum and encouraged sector and sub-sector breakdowns

Transaction breakdowns in current and capital accounts

Classification of financial instruments Classification of nonfinancial assets Move towards quarterly frequency Encourage financial positions and flows on a

from-whom-to-whom basis IAG WG to finalize the Template

Conference: Other topics on the implementation

7

Time frame for implementation Initial phase within 3 years to coincide with 2008 SNA

implementation by many advanced economies by 2014 Priorities

Start with the minimum set of internationally comparable sectoral accounts

Expand the sector, financial instrument, and nonfinancial asset details

Compile financial positions and flows on a from-whom-to-whom basis (starting with positions for specific sectors and instruments)

Outreach, technical assistance and training For countries with good statistical systems – outreach through

workshops and meetings For countries with less developed statistical systems – technical

assistance and training Arrangements for collection and dissemination of sectoral

accounts Eurostat, ECB, OECD and IMF to coordinate work for collecting data

from countries using existing efforts of Eurostat, ECB and OECD

IAG WG Meeting in September 2011

8

Focused on the way forward for implementation of the work on sectoral accounts, balance sheets and flow of funds International collaboration, including consultation with

countries Priorities Time tables Outputs Allocation of responsibilities

Four main areas Posting of available sectoral accounts and balance sheets on

the IAG’s Principal Global Indicators website (PGI) Developing a data reporting template Promoting the compilation of flow of funds (positions and

flows on a from-whom-to-whom basis) SDMX and data collection, sharing, and dissemination

Posting of available sectoral accounts

9

Initial focus on G-20 economies and other five FSB members

Data reported to Eurostat, ECB and OECD Quarterly non-financial accounts reported to

Eurostat for some countries are for internal use only

Quarterly sectoral accounts and balance sheets reported to OECD are to be finalized for dissemination

Plan to publish by early 2012 on the PGI

Developing a data reporting template

10

Refine the Template discuss at the IMF-OECD Conference

Develop data reporting template in Excel Circulate to countries in early 2012 to

facilitate their implementation of the 2008 SNA/ESA 2010 Eurostat – Quarterly current and capital

accounts ECB – Quarterly financial account and

positions OECD – Annual stock of non-financial assets

Template: Quarterly current and capital accounts

11

Transactions details are at a more aggregated level than in 2008 SNA

Sector details Non-financial corporations

Of which public corporations Financial corporations

Of which public corporations Monetary financial institutions Insurance and pension funds Other financial corporations

General government Households and NPISHs ROW

12

Template: Minimum and Encouraged Sectors for Financial Account and Positions

Non-financial corporations (S11) Of which: Public non financial corporationsFinancial corporations (S12) Monetary financial institutions (S121+S122 +S123) Central bank (S121) Other depository-taking corporations (S122) Money market funds (S123) Insurance corp. and pension funds (S128+ S129) Insurance corp. (S128) Pension funds (S129) Other financial corporations (S124+ S125+ S126+ S127) Of which: Non money market investment funds (S124) Of which: Other financial intermediaries except insurance and pensions (S125) Of which: Financial Auxiliaries (S126) Of which: Captive financial institutions and money lenders (S127) Of which: Public financial corporations General government (S13) Of which: General Government Social Security (S1314)Households and NPISHs (S14+S15) Households (S14) NPISH (S15)Rest of the World (S2)

Minimum

Encouraged

13

Template: Minimum and Encouraged Instruments for Financial Account and Positions

F1 Monetary gold and SDRs F11 Monetary gold F12 SDRsF2 Currency and deposits Of which: Domestic currency F21 Currency F22 Transferable deposits F221 Interbank positions F229 Other transferable deposits F29 Other depositsF3 Debt securities Of which: Domestic currency F31 Short-term F32 Long-term With remaining maturity of one year and less With remaining maturity of more than a yearF4 Loans Of which: Domestic currency F41 Short-term F42 Long-term With remaining maturity of one year and less With remaining maturity of more than a year

Minimum

Encouraged

14

Template: Minimum and Encouraged Instruments for Financial Account and PositionsF5 Equity and investment fund shares F51 Equity F511 Listed shares F512 Unlisted shares F519 Other equity F52 Investment fund shares/units F521 Money market fund shares/units F522 Non MMF investment fund shares/unitsF6 Insurance, pension and standardized guarantee schemes F61 Non-life insurance technical reserves F62 Life insurance and annuity entitlements F63+F64+F65 Retirement entitlements F63 Pension entitlements F64 Claim of pension fund on pension managers F65 Entitlements to non-pension benefits F66 Provisions for calls under standardized guaranteesF7 Financial derivatives and employee stock options F71 Financial derivatives F711 Options F712 Forwards F72 Employee stock optionsF8 Other accounts receivable/payable Of which: Domestic currency F81 Trade credits and advances F89 Other accounts receivable/payable

Minimum

Encouraged

Template: Annual stocks of non-financial assets

15

Sector details: same as for current and capital accounts Non-financial corporations

Of which public corporations Financial corporations

Of which public corporations Monetary financial institutions Insurance and pension funds Other financial corporations

General government Households and NPISHs ROW

16

Template: Minimum and Encouraged Non-Financial Asset Details

AN1 Produced non-financial assets AN11 Fixed assets of which, AN111 Dwellings AN112 Other buildings and structures AN12 Inventories AN13 ValuablesAN2 Non-produced non-financial assets AN21 Natural resources of which, AN211 Land of which, AN. 2111 Land underlying buildings and structures AN212 Mineral and energy reserves AN22 Contracts, leases and licenses AN23 Goodwill and marketing assets

Minimum

Encouraged

Flow of Funds (financial positions and flows on a from-whom-to-whom basis)

17

Acknowledged that until countries implement 2008 SNA and the recommendations on sectoral accounts and balance sheets, progress would be slow Priority until 2014 is completion of 2008 SNA implementation Work on flow of funds is expected to intensify after 2014

Agreed to continue work on promoting the development of flow of funds Broader conceptual framework (including dealing with

counterparty sectors and economies in ROW) Implementation priorities and steps Compilation issues

Agreed to explore the possibility of forming a small informal international group including the IAG WG on sectoral accounts and representatives from a few countries

SDMX and data collection, sharing, and dissemination

18

SDMX work for national accounts is being led by ECB, Eurostat and OECD Aims to complete the work ahead of the 2008

SNA-based data transmission in EU Coordination with SDMX projects for other

macroeconomic statistics domains Data collection, sharing, and

dissemination ECB, Eurostat, IMF and OECD to work

together Objective is to ask a country to submit sectoral

accounts data to one international agency only