Monetary and Financial Statistics Manual and Compilation Guide

Jose Cartas, and Artak Harutyunyan

• Publisher: INTERNATIONAL MONETARY FUND
• Year: 2017
• ISBN:
  9781513579191

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1. Introduction

I. Purposes of the Monetary and Financial Statistics Manual and Compilation Guide

1.1 The main purpose of the Monetary and Financial Statistics Manual and Compilation Guide (Manual) is to offer guidelines for the compilation and presentation of monetary statistics, with compilers and users of such statistics as its focal target audience. Additionally, the Manual provides an orientation to the financial statistics framework. The Manual is also useful to compilers and users of other macroeconomic statistics in understanding the relationships among the various macroeconomic datasets.

1.2 This Manual combines and updates the concepts, definitions, and recommendations contained in the 2000 Monetary and Financial Statistics Manual (MFSM) and the 2008 Monetary and Financial Statistics Compilation Guide (MFS Guide). The Manual offers a set of tools for identifying, classifying, and recording stocks and flows of financial assets and liabilities. At the same time, it assists compilers responsible for monetary data collection with practical recommendations on the classification, valuation, and sectoring of financial assets and liabilities for monetary statistics purposes, with special emphasis on borderline cases. In this way, the Manual promotes the harmonization of concepts among different macroeconomic datasets and cross-country comparability.

1.3 This Manual sets up a conceptual framework for the analytical presentation of monetary statistics, which provides a critical input for monetary policy formulation and monitoring. The statistics covered in this Manual also support the assessment of financial system stability.

II. Historical Perspective

1.4 In 2000, the International Monetary Fund (IMF) published the MFSM, which was the first volume of its kind in the field of monetary and financial statistics. The MFSM was harmonized with the System of National Accounts 1993 (1993 SNA) and other statistical manuals, such as the fifth edition of the Balance of Payments Manual (BPM5). Because of its focus on concepts, the MFSM was not intended as a compilation guide and did not deal with practical issues on sources or methods for compiling statistics.

1.5 The publication in 2008 of the MFS Guide filled the void for practical guidance, providing assistance to monetary statistics compilers on the ways to implement the methodology and statistical framework contained in the MFSM. The MFS Guide focused on the cross-country harmonization of source data and methodology, with special attention to the accounting standards applicable to the source data for MFS.

1.6 Between the publication of the MFSM and the MFS Guide, the IMF introduced in 2004 the standardized report forms (SRFs) for monetary data reporting by member countries to the IMF. The SRFs present the sectoral balance sheets of the central bank, other depository corporations (ODCs), and other financial corporations (OFCs) in a balance-sheet-like structure, according to the instrument, the currency of denomination, and the counterpart sector. Monetary data compiled using the SRFs were first published in International Financial Statistics (IFS) in September 2006. Most member countries are submitting their data to the IMF using the SRFs. Many of these countries are also using the SRFs as the platform to generate the monetary data disseminated through their national publications.

1.7 Since these events took place, the methodological framework for national accounts was updated with the release in 2009 of the System of National Accounts 2008 (2008 SNA). Almost simultaneously, the sixth edition of the Balance of Payments and International Investment Position Manual (BPM6) was published. Finally, a revised Government Finance Statistics Manual 2014 (GFSM 2014) was made available to the public in 2014.

1.8 Another development was the publication in 2014 by the European Central Bank (ECB) and the United Nations of the handbook on Financial Production, Flows and Stocks in the System of National Accounts. This handbook elaborates on the financial production and income from an SNA perspective, complementing the concepts and methodology laid out in this Manual.

1.9 In view of these major developments, a revision of the 2000 MFSM and the 2008 MFS Guide was required, in order to align the methodology of monetary and financial statistics to the new framework. The need for revision also presented an opportunity to address practical compilation issues based on the experience gained with the implementation of the SRFs and to reflect recent developments in the financial sector and financial markets. The decision was made to combine the manual and the compilation guide into a single volume, as a way to reduce overlaps and to facilitate the work of compilers and users of monetary statistics.

III. Main Changes from the MFSM and the MFS Guide

1.10 The major methodological revisions contained in this Manual, compared with the MFSM and the MFS Guide, are summarized in the next paragraphs.

1.11 With respect to institutional sectors, the 2008 SNA increased to nine the number of the subsectors of the financial corporations (FCs) sector, compared with the five of the 1993 SNA. There is a greater focus on the OFCs, with a split between insurance corporations and pension funds, the identification of money market funds (MMFs) and non-MMF investment funds, and the inclusion of a category for captive financial institutions and money lenders. As it will be seen in Chapter 3, for monetary statistics purposes the institutional units of the FCs sector are grouped into only three subsectors: central bank; ODCs, which include deposit-taking corporations except the central bank [MS]¹ and MMFs; and OFCs [MS], which include all remaining FCs. The Manual also expands on the treatment of some special cases of institutional units, such as special purpose entities (SPEs), sovereign wealth funds (SWFs), and central clearing counterparties (CCPs).

1.12 Regarding financial instruments, the Manual adopts the revised terminology and classification of the 2008 SNA, although in most cases the revisions do not connote a change in concepts. The new classification adds three subcategories to financial instruments: (1) investment fund shares/units are added to equity; (2) the term Insurance technical reserves is replaced by the term Insurance, pension, and standardized guarantee schemes (IPSGS), while the asset boundary is extended to include Provisions for calls under standardized guarantee schemes and Claims of pension funds on pension managers; and (3) employee stock options (ESOs) are added to financial derivatives. This Manual contains additional discussions on borderline cases in the classification of financial assets and liabilities.

1.13 An important revision concerning financial instruments is the reclassification of the Special Drawing Rights (SDR) allocations to the Fund’s member countries, from equity to long-term foreign liability. The change was introduced in August 2009 in the monetary data compiled by countries, with historical data having been revised correspondingly. Previously, SDR allocations were recorded in monetary statistics as part of equity. The 2008 SNA and the BPM6 changed this treatment, considering the SDR allocations as long-term foreign liabilities of the countries receiving the allocation, because of a requirement to repay the allocation in certain circumstances, and also because interest accrues on the allocation. If SDR allocations are held on the balance sheet of the central bank, they are treated as liabilities to nonresidents (foreign liabilities), and recorded as a separate line item (see Annex 4.2).

1.14 Another revision relates to the classification of financial instruments with principal and interest indexed to a foreign currency. In the 2000 MFSM and the 2008 MFS Guide, the currency of settlement of the instrument was the key factor to determine whether a financial asset or liability was classified as denominated in domestic or in foreign currency. Therefore, instruments denominated in domestic currency but fully indexed to a foreign currency were classified as denominated in domestic currency. This was, for instance, the case for the IMF No. 1 Account, IMF No. 2 Account, and IMF Securities Account, which were classified as being in domestic currency, although they are indexed to the SDRs. However, the BPM6 recommends treating financial instruments with principal and interest indexed to a foreign currency as if they were denominated in foreign currency. This Manual defers to this approach.

1.15 This Manual offers a more elaborate discussion on money aggregates, focusing on the characteristics of the financial instruments that should be included as part of broad money: liquidity and store of nominal value. The MFSM and the MFS Guide were not prescriptive on the national definitions of money, monetary base, credit, and debt, which were left to the discretion of national authorities. This Manual provides clear guidelines on the instruments that should be included in the calculation of these aggregates, which should be tailored to the particular characteristics of each economy. For the definition of money aggregates, the Manual introduces the concepts of money issuing, money holding, and money neutral sectors. Furthermore, the Manual provides a more elaborate discussion on credit and liquidity aggregates.

1.16 To implement the methodological changes when compiling monetary statistics, the sectoral balance sheets/SRFs were correspondingly revised. The main changes relate to (1) the inclusion of a separate line for SDR allocations on the liability side of the central bank sectoral balance sheet; (2) the reclassification of the IMF No. 1 Account, IMF No. 2 Account, and IMF Securities Account from deposits denominated in domestic currency to deposits denominated in foreign currency; (3) the introduction of separate lines for MMF and non-MMF investment funds shares/units on the asset side of the sectoral balance sheets; (4) the introduction of separate lines for MMF (in the ODCs sectoral balance sheet) and non-MMF investment fund (in the OFCs sectoral balance sheet) shares/units on the liability side with a breakdown by counterpart sector; and (5) more detail in memorandum items that identify assets and liabilities with nonresident FCs, interbank positions with affiliated nonresident FCs, debt securities and loans with a maturity of one year or less, and loans and deposits of households.

IV. Structure of the Manual

1.17 This Manual consists of eight chapters, including annexes to specific chapters, and three appendices, as presented below.

1.18 After this introductory chapter, Chapter 2 describes the scope and uses of monetary and financial statistics. It provides the process for the compilation of monetary statistics in a schematic presentation. The process integrates the different institutional units that constitute the FC sector with the source data needed to compile their sectoral balance sheets. It also presents the different analytical surveys, which are generated from the sectoral balance sheets.

1.19 The chapter then discusses the main principles and concepts, focusing on the links between the 2008 SNA as an overarching framework for all macroeconomic datasets, including monetary and financial statistics, and explaining the areas where this Manual differs from the 2008 SNA.

1.20 The remainder of the chapter explains the linkages between the accounting records of FCs, which are the source data for monetary statistics, and the methodological guidelines for monetary and financial statistics. Accounting records are produced according to International Financial Reporting Standards (IFRSs) or national accounting standards, which focus on the financial position and performance of an entity as a way to provide information useful to a wide range of users in making investment and other economic decisions. Therefore, when compiling monetary and financial statistics, the information available from accounting records needs to be expanded to provide more details and be tailored so as to conform to the sectoring of institutional units and the classification of financial instruments recommended in this Manual.

1.21 Chapter 3 deals with institutional units and their allocation to institutional sectors. When distinguishing between resident and nonresident units, and classifying resident institutional unit...

Table of contents

• Cover Page
• Title Page
• Copyrights
• Contents
• Foreword
• Preface
• Acronyms
• 1 Introduction
• 2 Overview of the Monetary and Financial Statistics Framework
• 3 Institutional Units and Sectors
• 4 Classification of Financial Assets and Liabilities
• 5 Stocks, Flows, and Accounting Rules
• 6 Money, Liquidity, Credit, and Debt
• 7 Compilation, Source Data, and Dissemination of Monetary Statistics
• 8 Financial Statistics
• Appendixes
• References
• Glossary
• Index
• Tables
• Footnotes