Manik Shrestha IMF Statistics Department Sectoral Accounts, Balance Sheets, and Flow of Funds: Progress and Future Plans Joint Session of the OECD Working Party on Financial Statistics and the OECD Working Party on National Accounts Paris, October 25–27, 2011 Manik Shrestha IMF Statistics Department The views expressed herein are those of the author and should not be attributed to the IMF, its Executive Board, or its management.

Background 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 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 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 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 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 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 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 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 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 Transactions details are at a more aggregated level than in 2008 SNA Sector details Non-financial corporations Of which public corporations Financial corporations Monetary financial institutions Insurance and pension funds Other financial corporations General government Households and NPISHs ROW

Template: Minimum and Encouraged Sectors for Financial Account and Positions Non-financial corporations (S11)   Of which: Public non­ financial corporations Financial 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: Non­money 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

Template: Minimum and Encouraged Instruments for Financial Account and Positions Monetary gold and SDRs   F11 Monetary gold F12 SDRs F2 Currency and deposits Of which: Domestic currency F21 Currency F22 Transferable deposits F221 Interbank positions F229 Other transferable deposits F29 Other deposits F3 Debt securities F31 Short-term F32 Long-term With remaining maturity of one year and less With remaining maturity of more than a year F4 Loans F41 Short-term F42 Long-term Minimum Encouraged

Template: Minimum and Encouraged Instruments for Financial Account and Positions 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/units F6 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 guarantees F7 Financial derivatives and employee stock options F71 Financial derivatives F711 Options F712 Forwards F72 Employee stock options F8 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 Sector details: same as for current and capital accounts Non-financial corporations Of which public corporations Financial corporations Monetary financial institutions Insurance and pension funds Other financial corporations General government Households and NPISHs ROW

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 Valuables AN2 Non-produced non-financial assets AN21 Natural resources AN211 Land 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) 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 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