Progress report on the OECD Financial Accounts Databases: Consolidation practices regarding sectors S13 and S12 Working Party on Financial Statistics Paris, 2-3 October 2007 Michèle Chavoix-Mannato National Accounts and Financial Statistics OECD Statistics Directorate

2 Main objectives of this document To inform delegates on the work carried out by the Secretariat to comply with a decision regarding the consolidation of specific sectors reached at the last meeting, To report to delegates the results of the survey on consolidation of sectors S12 and S13, carried out during the summer.

3 Remind of some rules and recommendations Rules: At sector (and respectively sub-sector) levels, all transactions and stock positions between institutional units within the boundaries of the sector (and respectively sub-sector) are eliminated. Recommendations: –non-consolidated data should be based on a complete picture of all financial transactions and positions of units classified in the same sub-sector/sector. Basic information should therefore consist preferably of the aggregation of data for individual units. –financial accounts should rely as much as possible on direct information, including counterpart information.

4 Decision reached in October 2006 A specific effort on the consolidation of two sectors, General Government (S13) as a first priority and Financial Corporations (S12) at a later stage, is considered as necessary for policy makers and analysts. The Secretariat will ask countries to transmit detailed information on the consolidation of their financial accounts and to provide the reasons for consolidation or for non consolidation, even when there is no room for consolidation.

5 Current situation EU countries  Czech Republic and United-Kingdom: non-consolidated accounts only  Ireland and Luxembourg: consolidated data only for S13 (and its sub-sectors)  All other EU countries (incl. Norway): both consolidated and non consolidated tables Non European countries  Canada, Japan, Korea and Switzerland: non-consolidated accounts only  USA: consolidated data only for S13 (and its sub- sectors); Turkey: consolidated data only for S122  Australia: consolidated accounts only  Mexico: both sets of accounts

6 Requests on consolidation practices for sectors S12 and S13 The request on consolidation practices for S12 and S13 was sent to all OECD financial experts on 6 August with a short deadline (15 September); it was composed of a survey and tables. The tables, based on 2005 data, included checks and calculations to be commented by countries. Specific questions included in the request were based on the findings of the tables. In addition, countries which do not provide any consolidated data were asked to compile and send consolidated accounts for S13 as a first priority and for S12 at a second stage.

7 Replies to the OECD request  Eighteen countries filled the survey and answered the questions  Three countries which do consolidate financial accounts did not reply: Australia, Luxembourg and Mexico  Among non-European countries which do not consolidate financial accounts: Japan replied it cannot compile consolidated accounts; Canada, Korea and Switzerland did not reply yet  No request was sent to two EU Countries (Czech Republic and United-Kingdom) which do not consolidate financial accounts: they have derogations from Eurostat (respectively up to 2008 and up to 2010).

8 Results of the survey on consolidation Structure of the sectors  Most countries have provided a very detailed or quite detailed list of institutional units belonging to sector S12 (and its sub-sectors) and to sector S13 (and its sub-sectors)  Six countries have not given any information (or only few details) either for one or for the other sector  For four countries, this information is available in other sources  For seven countries, the structure of these two sectors is not available

9 Results of the survey on consolidation Primary sources  For most countries, the primary sources of their financial data are based on reports from legal entities  Two countries also use information got from Supervisors or Associations  Four countries give no precise indication on the primary sources of their financial data  No countries explicitly reply that the primary sources of their financial data are based on reports from consolidated groups

10 Results of the survey on consolidation Counterpart information ♦ In most cases, OECD countries use direct counterpart information ♦ Some countries also use indirect counterpart information ♦ In one country, either consolidated data are compiled from unconsolidated data and intra-sectoral relationships (only direct counterpart) or they are de facto consolidated because of missing intra-sectoral linkages or lack of information.

11 Results of the survey on consolidation Specific surveys  In ten countries, no specific survey is conducted  Specific surveys are carried out in five countries  to collect counterpart information relating to specific instruments (Belgium, France, Hungary)  or to collect information for specific sectors (Finland, Greece)  Three countries (Austria, Italy, Turkey) do not explicitely reply to this question

12 Results of the survey on consolidation Estimates Seven countries do not resort to any estimate If needed, few estimations can be done in four countries (Belgium, France, Hungary, Spain) Different kinds of estimates are regularly done either for one or two instruments (Finland, Norway, Poland, Portugal, Turkey), or for one or two sectors (Turkey, USA)

Conclusion There are already a substantial amount of OECD countries which consolidate financial accounts of sectors S13 (General Government) and S12 (Financial Corporations). Sources of data and practices are not very different between countries. Non-European countries which do not yet consolidate their financial accounts are sharply encouraged to compile S13 consolidated data as a very first priority, and then S12 consolidated data as soon as possible. All information available at OECD on consolidation will be enter into Metastore, and accessible in OECD.Stat as metadata of the OECD financial accounts databases.