the household sector accountsthe household sector accounts bank of algeria – ifc seminar on...

The household sector accounts

Bank of Algeria – IFC seminar on Developing and Improving Sectoral Financial Accounts 20 – 21 January 2016, Bank of Algeria, Algiers

Gabriel Quirós Head of Division Macroeconomic Statistics European Central Bank

www.ecb.europa.eu NFCs AND HOUSEHOLDS

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1 Household sector: definitions and delineation

Data sources and compilation challenges 2

3 The household sector in the euro area, Household Sector Report

Outline

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Households (S.14)

Individuals or groups of individuals as consumers and as entrepreneurs producing market goods and non-financial and financial services (market producers). It also includes individuals or groups of individuals as producers of goods and nonfinancial services for exclusively own final use.

Persons living in retirement homes, prisons etc. are households

Sole proprietors and partnerships without legal status are households, unless they are quasi corporations.

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Institutional Sectors

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Non-profit institutions serving households (S.15) Private non-market producers serving households and which are separate legal entities. Their principal resources are voluntary contributions in cash or in kind from households, from payments made by general government and from property income. Small entities belonging to this group should be considered together with the household sector (S.14). This sector does not include entities whose membership gives right to a predefined set of goods or services. Some examples of this subsector are: – Trade unions – Political parties – Charities – Relief of aid organisations financed on a voluntary basis

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Institutional Sectors

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Household versus Corporation

Does a sole proprietorship or partnership (unincorporated unit) belong to household or corporation sector?

Having the following two characteristics is determinant to be a corporation

– Full set of accounts or ability to draw up set of accounts

(e.g. are asset and liabilities separate from household)

– Sufficient autonomy of decision

• Having employees and compensation of employees is a good indicator of autonomy (a threshold based on national specificities can be set as a practical rule)

• Large number of partners for the case of partnerships is also an indicator of autonomy

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Practical rules for sectorisation

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The Non-financial corporate sector and the households sector in SNA 2008

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Are incorporated business own by households part of NFCs or of Households?: a decision tree (TF QSA)

www.ecb.europa.eu NFCs AND HOUSEHOLDS

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2 Data sources and compilation challenges

Household sector: definitions and delineation

1


Outline

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Data sources and compilation challenges

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• Financial accounts are derived statistics based on other financial statistics (source statistics) – BSI MFI balance sheet statistics – IF Investment Fund statistics – FVC Financial Vehicle Corp. statistics – SEC, SHS Security issues and Holding statistics – ICPF Insurance Corporation and Pension Fund statistics – BoP Balance of Payments and IIP statistics – QFAGG Quarterly FA for General Government statistics – NFC Non-financial corporate balance sheet statistics

• The compilation of financial accounts consists in putting data sources in a common, comprehensive, integrated accounting framework;

• In case of missing source statistics residual estimation is employed

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Households

• Direct sector data (e.g. surveys) generally not suitable (timeliness!)

• Counterpart sector information:

- MFI BSI: deposits (assets)

- MFI BSI, FVC, ICPF: loan (liabilities)

- IF: Investment fund shares (assets)

- ICPF: Insurance technical reserves (assets)

- SHS: Security (debt securities, quoted shares) holdings (assets)

- NFC balance sheets: loans, other equity, trade credit

• Residual calculations in some countries, in particular

- for debt securities but also for other equity holdings

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BSI F.1 Monetary gold and special drawing rightsR* R* QFAGG ICPF OFIFA BSI =0 F.21 Currency BOP, BSI BSI QFAGG

Counterpart information: BOP, BSI, QFAGG

Counterpart information: BOP, BSI, QFAGG

BSI, BOP, QFAGG

BSI, BOPBSI, QFAGG,

BOP BOP,BSI

BOP, BSI

F.2M Transferable Deposits and Other Deposits

BOP, BSI BOP,BSI

— —QFAGG (<=BOP) =0

R*, SHS R*, SHSSHS,

QFAGG, BOPSHS, ICPF,

BOPSHS, OFIFA,

BOPBSI, SHS BOP F.331

Short-term securities other than shares, except financial derivatives

BOP SEC SEC SECQFAGG (<=SEC)

SEC

R*, SHS R*, SHSSHS,

QFAGG, BOPSHS, ICPF,

BOPSHS, OFIFA,

BOPBSI, SHS BOP F.332

Long-term securities other than shares, except financial derivatives

BOP SEC SEC SECQFAGG (<=SEC)

SEC

BOP, BSI, QFAGG F.34 Financial Derivatives

BOP BOP,BSI

OFIFA, BSI, BOP, ICPF

ICPF, BSI, OFIFA, BOP

QFAGG (<= BOP+BSI)

R* R*

Other1) NFC QFAGG ICPF OFI BSIBOP-(BOP-

BSI)2) F.41 Short-term LoansBOP-(BOP-

BSI)2)BSI BSI QFAGG

BSI-(QFAGG-BSI)3)

BSI

Other1) NFC QFAGG ICPF OFI BSIBOP-(BOP-

BSI)2) F.42 Long-term LoansBOP-(BOP-

BSI)2)BSI BSI BSI QFAGG

BSI-(QFAGG-BSI)3)

BSI

R*, SHS R*, SHS

QFAGG, SHS (total); NFC,

BSI, OFI, BOP

(counterparts)

SHS, ICPF, BOP

SHS, OFIFA, BOP

BSI, SHS BOP F.511 Quoted shares BOP SEC SEC SEC SEC

R*, NFC R*, NFC

QFAGG, SHS (total); NFC,

BSI, OFI, BOP

(counterparts)

SHS, ICPF, BOP

SHS, OFIFA, BOP

BSI, SHS BOPF.512 F.513

Unquoted shares and other equity BOP BSI OFIFA ICPF NFC

R* R*OFI, BOP,

QFAGG, SHSSHS, ICPF,

BOPSHS, OFIFA,

BOPBSI, SHS BOP F.52 Mutual funds shares BOP SEC SEC —

R* =0 F.61Net equity of households in life insurance reserves and in pension funds reserves =0 BSI OFIFA ICPF NFC =0

R* ICPF ICPF ICPF ICPF BSI, ICPF ICPF F.62Prepayments of insurance premiums and reserves for outstanding claims

ICPF OFIFA ICPF

R*, NFC, CCR

R*, NFC, CCR

QFAGGICPF, BSI,

BOPOFIFA, BOP,

BSI BOP,BSI

BOP F.71 Trade credits and advances BOP BOP,BSI

OFIFA, BSI, ICPF, BOP

ICPF, BSI, OIFAF, BOP

QFAGGR*, NFC,

CCRR*, NFC,

CCR

Households including

NPISH (S.14+S.15)

Insurance corporations and pension

funds (ICPFs) (S.125)

OFIs and f inancial

auxiliaries (S.123+S.124)

Rest of the w orld (S.2)

Monetary f inancial

institutions (MFIs)

(S.121+S.122)

OFIs and f inancial

auxiliaries (S.123+S.124)

Insurance corporations and pension

funds (ICPFs) (S.125)

Monetary f inancial

institutions (MFIs)

(S.121+S.122)

Rest of the w orld (S.2)

General government

(S.13)

Non-financial corporations

(S.11)

Assets

Financial account (quarterly non-seasonal adjusted)

Liabilities

Households including

NPISH (S.14+S.15)

Non-financial corporations

(S.11)

General government

(S.13)

Examples for balancing adjustments: R* Residual calculation. 1) Household loan assets are taken from NFC loan liabilities vis-à-vis households. 2) Differences for S.121/122 from BSI and BOP are reconciled in S.2. 3) Differences for S.13 from QFAGG and BSI are offset in S.11.

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Household sector: definitions and delineation

1

2 Data sources and compilation challenges

Outline

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The economic lifecycle of a household

The household sector in the euro area, Household Sector Report

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Labour market

Household income and components

Consumption and saving

Financial investment

Non-financial investment (housing)

External financing

Net worth

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Household investments in financial assets

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Labour market and compensation

Household income and components

Consumption and saving

Financial investment

Non-financial investment (housing)

External financing

Net worth


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Household investments in financial assets Euro area, (2003 – 2015 Q1, EUR per capita - annual transactions and transactions over four quarters)

• Households are selling their debt securities in net terms, instead increasing their investment in equity as well as life insurance and pension schemes.


Household investments in financial assets – country perspective EURO AREA AGGREGATE Financial investment across countries

(EUR per capita, in the four quarters to 15Q1)

• Heterogeneity of financial

investment

• Reflecting income differences …

• …but also institutional

differences (e.g. NL pension

system)

• Note: Housing wealth not

included!



Country perspective Across euro area countries, total, euro per capita and % of disposable income

• Heterogeneity of portfolio size

and composition across

countries

• Reflecting income differences …

• …but also institutional

differences (e.g. NL pension

system)

• Note: Housing wealth not

included!

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Thank you for your attention

the household sector accountsthe household sector accounts bank of algeria – ifc seminar on...

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