C E N T R A L B A N K O F C H I L E DECEMBER 2010 Progress status of the Quarterly Institutional Accounts project OECD Working Party on Financial Statistics Conference centre, La Muette December, 2010

C E N T R A L B A N K O F C H I L E DECEMBER 2010 Topics I. Introduction II. Progress status of the project III. Preliminary results IV. Upcoming activities 2

C E N T R A L B A N K O F C H I L E DECEMBER 2010 I. Introduction

C E N T R A L B A N K O F C H I L E DECEMBER 2010 An initiative to develop measurement of institutional accounts on a quarterly basis has been underway in the CBCh since  This initiative is based on the experience gained with the annual measurements performed by the Department of National Accounts.  It has also benefited from the methods and sources of information used by the Bank of Spain for computing financial accounts.  This presentation portrays the progress status and preliminary results of the project, which are still being assessed and analyzed with relation to balance sheet structures and financial transactions. 4

C E N T R A L B A N K O F C H I L E DECEMBER 2010 II. Progress status of the project

C E N T R A L B A N K O F C H I L E DECEMBER 2010 In executing the work schedule of the project, methods, processes and a work team have been created...  Methodologies:  The starting point is the methodology used for performing annual compilations.  This individual sectoral compilation also breaks down data by sectors and financial instruments.  The only source of information used are individual complete financial statements.  Processes:  Processes have been developed for managing basic information and for linking it with the method for structuring accounts.  An IT platform was implemented, which gathers and standardizes the accounts related to each sector, and then proceeds to their synthesis, compatibilization and dissemination. 6

C E N T R A L B A N K O F C H I L E DECEMBER 2010 In executing the work schedule of the project, methods, processes and a work team have been created... At present, preliminary progress has been made on Institutional Quarterly Accounts where financial statements cover the 2008q1– 2009q4 period. 7  Work Team:  A work team was created and assigned specific responsibilities within each sector (Government, Finances, Corporations), and in relation with financial instruments (securities market).

C E N T R A L B A N K O F C H I L E DECEMBER 2010 III. Preliminary results

C E N T R A L B A N K O F C H I L E DECEMBER 2010 Financial balance sheet structure at the institutional sector level

C E N T R A L B A N K O F C H I L E DECEMBER 2010 The balance sheet of the Chilean households shows that its main assets are the technical reserves of life insurances and pension funds. Figure 1. Comparison of Household sector balance sheet of OECD countries. Detailed financial assets. Percentage structure Chile Denmark Netherlands Sweden United Kingdom Switzerland Ireland France United States Norway Belgium Poland Finland Hungary Portugal Korea Spain Austria EstoniaCzech Republic Slovenia Greece Slovak Republic Germany Italy Mexico HIGH similarityMEDIUM similarityLOW similarity Currency and depositsDebt securitiesShares and other equity Mutual fund sharesReservesOther accounts 10

C E N T R A L B A N K O F C H I L E DECEMBER 2010 The balance sheet of Chile’s General government shows a significant holding of securities and deposits. Figure 2. Comparison of General government sector balance sheet of OECD countries. Detailed financial assets. Percentage structure Chile United States Japan Korea Canada Spain Greece Estonia Portugal Norway Finland Slovak Republic Denmark Belgium Luxembourg Sweden Germany Austria Czech Republic Ireland Slovenia France Poland Hungary Iceland Switzerland United Kingdom Italy Netherlands Mexico HIGH similarityMEDIUM similarityLOW similarity Currency and depositsDebt securitiesLoansShares and other equityOther accounts 11

C E N T R A L B A N K O F C H I L E DECEMBER 2010 The main asset component of non-financial corporations are commercial loans and holdings of shares and other equity. Figure 3. Balance sheet of the Chilean Non-financial Corporate sector. Detailed financial assets and liabilities. Percentage structure. 12

C E N T R A L B A N K O F C H I L E DECEMBER 2010 The financial sector holds an asset portfolio composed mainly of loans (46%) and securities other than shares (29%). Figure 4. Balance sheet of the Chilean Financial Corporate sector. Detailed assets and liabilities. Percentage structure. 13

C E N T R A L B A N K O F C H I L E DECEMBER 2010 Preliminary evidence of the financial and economic crisis in the accounts of the Household sector

C E N T R A L B A N K O F C H I L E DECEMBER 2010 Household debt shrunk from 62% of disposable income by early 2008, to 58% during the height of the crisis. Figure 5. Debt/Income ratio of Households and changes in disposable income. Percentage. 15

C E N T R A L B A N K O F C H I L E DECEMBER 2010 In 2008, pension funds losses from revaluations amounted to 13% of GDP. Figure 6. Changes in Pension fund reserves. Billions of pesos. 16

C E N T R A L B A N K O F C H I L E DECEMBER 2010 During 2009, a gradual return occurred towards investments offering a higher return, to the detriment of securities and deposits holdings. Figure 7. Financial transactions of Households. Billions of pesos. 17

C E N T R A L B A N K O F C H I L E DECEMBER 2010 III. Upcoming activities

C E N T R A L B A N K O F C H I L E DECEMBER 2010 In the coming months:  Work will continue in determining sectoral counterparts for financial instruments, bonds, shares, and trade credit.  A comprehensive assessment will be carried out to check the consistency of financial and non-financial accounts, mainly for the Household and Non-financial Corporate sectors.  Progress will continue to be done as to the extension of available time series, to cover from the first quarter of 2005 to the second quarter of  Publication of this new statistic is projected for the second quarter of next year. 19

C E N T R A L B A N K O F C H I L E DECEMBER 2010 Progress status of the Quarterly Institutional Accounts project OECD Working Party on Financial Statistics Conference centre, La Muette December, 2010