Overview of MFS Statistics Skopje seminar 2-5 October 2013 Jean-Marc Israël Head of Division, Monetary and Financial Statistics ECB.

Overview of MFS Statistics

Skopje seminar

2-5 October 2013

Jean-Marc Israël

Head of Division,

Monetary and Financial Statistics

ECB

Rubric

www.ecb.europa.eu © Overview of MFS Statistics 2

Contents

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Overview of monetary and financial statistics

Case study: MFI statistics

Production and dissemination of statistics – Challenges and international context

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5 Selected results

Case study: MIR statistics

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www.ecb.europa.eu ©

• Each country has its statistics• GDP• population• inflation • money• external balance, …

• A monetary union is a single economic entity• common currency and monetary policy • free movement of persons, goods and services, capital flows • increasingly integrated (financial) markets

• A monetary union needs high quality statistics and indicators to• assess the economic developments in the whole area • base its forecasts• assess the transmission of monetary policy decisions on the economy• analyse and assess its financial stability• support the conduct of other policies (e.g. financial integration); and• other functions may be looming (e.g. micro-prudential supervision)

Overview of MFS Statistics 3

Statistics production and dissemination

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Is it not possible to simply add up national data?

•Even if and when national data are- timely,- at the same frequency and- accurate enough…

•concepts and definitions may still diverge (following international standards which may also need to be interpreted)

•some classifications differ, e.g. intra-transactions need to be classified as “domestic” of the monetary union and, thus, allocated to SNA/ESA sectors – once asymmetry-free

•institutions of the monetary union (e.g. the ECB) are residents of the union, but not of any country (even where they are located)


Decentralised statistics processingChallenges for euro area statistics (1/2)

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Start from national statistics

Harmonise concepts, definitions and methods to– increase comparability – enable consolidation, where appropriate – ensure the necessary coverage and level of disaggregation

Cost-conscious approach

– while statistics are a public good, and good policy basedon good data may be invaluable for business, they have a cost

– simple, automated reporting is less costly

– financial transactions and positions get (more) complex

– security-by-security minimises the reporting burden

Central banks maintain granular datasets, e.g. a common securities database, to identify, classify, value individual assets

– securities (reference data, aggregated and individual) issues and holdings

– granular lending data, in part based on credit registers, are also under study


Decentralised statistics processingChallenges for euro area statistics (2/2)

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Based on international statistical standards – System of National Accounts 1993 (and stepwise 2008) – European System of Accounts 1995 and stepwise 2010, and– IMF Monetary and Financial Statistics Manual 2000 (being updated)

The contribution of ECB’s DG-S to the IMF Manual was substantial

Complemented by Compilation guides and Text books

common methodological definitions and concepts

laid down for the euro area in

Regulations (ECB/2001/13, as recast in ECB/2008/32; ECB/2001/18, as amended by ECB/2009/7; ECB/2007/8; ECB/2008/30)

MFS (recast) Guideline (ECB/2007/9, amended by ECB/2008/31 and ECB/2009/23) and Manuals and/or Guidance notes

All under a revision process (close to completion)


Managing Eurosystem / ESCB statisticsHarmonisation and best practices (1/3)

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Main ECB monetary and financial statistics manuals

•Manual on MFI Balance Sheet Statistics April 2012

http://www.ecb.europa.eu/pub/pdf/other/manualmfibalancesheetstatistics201204en.pdf

•Manual on MFI Interest Rate Statistics October 2003http://www.ecb.europa.eu/pub/pdf/other/mfiintrestratestatisticsmanualen.pdf

•Manual on Investment Funds Statistics May 2009http://www.ecb.europa.eu/pub/pdf/other/manualinvestmentfundstatistics200905en.pdf

•Guidance Notes on the Definitions of ‘Financial Vehicle Corporations’ and ‘Securitisation’ under Regulation ECB/2008/30 February 2012

http://www.ecb.europa.eu/pub/pdf/other/guidancenotedefinitionsfvcsecuritisation2012en.pdf

•Monetary Financial Institutions and Markets Statistics Sector Manual March 2007http://www.ecb.int/pub/pdf/other/mfimarketstatisticssectormanual200703en.pdf



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• Plus, based on experience in collecting, compiling and disseminating statistics in EU Member States

• level-playing field: even-handed treatment

• sharing of information across nationalcompiling agencies and across Member States

• increasing use of common tools and methods

a set of best practices for a medium-term convergence



to ensure: • fair competition • similar and light reporting burden• consistency and • accuracy

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Contents

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5 Selected results


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Share of total assets by sub-sector (percentage)


The financial sector in the euro area - Overview

EUR trillion

34.4of which Money Market Funds (MMFs) 1.0of which Credit Institutions (CIs) 33.2

7.42.16.7

50.7

AssetsMonetary Financial Institutions excluding Eurosystem (MFIs)

Insurance Corporations and Pension Funds (ICPFs)Financial Vehicle Corporations (FVCs)Investment Funds other than MMFs (IFs)Total Assets

Exluding other financial intermediaries other than IF and FVC.

Data as of 2012Q2, ICPF data as of 2012Q1)

Euro area GDP in 2nd quarter of 2012: EUR 2.3 trillion

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The E(S)CB collects and compiles statistics for:

The financial sector and its sub-sectors (e.g. credit institutions)

A list (register) of financial institutions in the EU

Financial instruments (e.g. loans, securities)

Outstanding amounts (e.g. balance sheet items)

Transactions and growth rates (e.g. annual growth of M3)

“Prices” (interest rates, yields, exchange rates)

Various breakdowns (e.g. counterparty sector, maturity, currency)


E(S)CB statistics: Overview

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Monetary aggregates and counterparts: balance sheet statistics on banks and money market funds (e.g. M3, credit)

Statistics on average interest rates (market interest rates, retail interest rates for deposits, loans for consumption, housing, firms)

Statistics on assets and liabilities of investment funds (bond, equity, hedge funds etc.)

Statistics on Financial Vehicle Corporations engaged in securitisation and banks’ securitisation June 2011

Statistics on Insurance Corporations and Pension Funds June 2011

Securities issues; yield curves; financial markets price, volume and structure; payments and securities settlement statistics


Monetary and financial statistics

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Register of financial Institutions and Affiliates Database

A register is key to identify the reporting population(s) (and stratify it/them)

Key to identify and classify counterparts (by respondents)

Key also to identify (financial) groups structures

A register is essential for statistics, and its value added is even greater if it becomes multi-purposes, e.g.

• ‘Close links’ for monetary policy operations

• Identification of payment service institutions, and

• Supporting the Single Supervisory Mechanism


Monetary and financial statistics

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Contents

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5 Selected results


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Case study ECB statistics: The ECB’s monetary policy and MFI b/s statistics

Full set of information

Analysis of money and credit based on

MFI statistics

Analysis of economic

dynamics and shocks

Governing Council takes monetary policy decisions based on a unified overall assessment

of the risks to price stability

Primary objective of price stability

Economicanalysis

MonetarMonetaryy

analysisanalysis

Macro-economic

Projections

Cross-checking

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Other uses of MFI balance sheet statistics:

•Minimum reserves

•Economic analysis

•Financial stability

•Financial integration

•Statistical support to the ESRB



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Monetary Financial Institutions (MFIs)

= financial institutions (= money-issuing sector of the euro area)

= central banks

+ resident credit institutions as defined in EU law

+ other resident financial institutions whose business is

- to receive deposits and/or close substitutes for deposits from entities other than MFIs and,

- for their own account (at least in economic terms), to grant credits and/or make investments in securities


Case study: Defining MFIs

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Case study: Defining the statistical balance sheet

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Case study: Collecting & compiling MFI b/s statistics

1. NCBs collect balance sheets from all MFIs resident in the country

2. NCBs transmit aggregated national balance sheet to ECB

3. ECB aggregates (sums) national balance sheets

Euro area MFI aggregated balance sheet

4. The aggregated balance sheet is then consolidated

= Netting the aggregated positions between MFIs in the euro area

Euro area MFI consolidated balance sheet

5. Main euro area aggregates are seasonally adjusted by the ECB.

Euro area monetary aggregates

and counterparts.

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Case study: Collecting & compiling MFI b/s statistics

• However aggregated data may not suffice for in-depth analysis

• Detailed breakdowns are requested by users following different analytical needs, e.g. monetary analysis, monetary policy transmission, collateral management, financial stability

• Statisticians need to become more proactive and responsive to ever increasing and rapidly changing needs

Analytical Credit datasetbased on granular loan data

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Contents

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5 Selected results


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What is MIR?

“MFI interest rates” statistical data are…

• interest rates and corresponding business volumes

• applied by MFIs (credit institutions)

• on deposits and loans

• to households (HHs) and non-financial corporations (NFCs)

• resident in the euro area

• denominated in euro

• collected by the ESCB from MFIs


Case study: MIR statistics - Definition

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“MFI interest rates” are… in great demand

•cost of borrowing indicators are published since this summer

(see Monthly Bulletin article in Aug. 2013 and PR in Sept. 2013)

•selected (national) business volumes for publication

•possible extension to better capture loans to SMEs


Case study: MIR statistics - Definition

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Case study: MIR statistics - Breakdowns

Breakdown by

Counterpart sector Households (HHs)Non-financial corporations (NFCs)

Sole proprietors(doctors, architects, dentists…)

Business coverageOutstanding amounts

New business

Maturity Original maturity Period of notice Initial rate fixation

Purpose of the loans to HHs

For consumption For house purchase For other purposes

Size of the loans to NFCs

Up to EUR 0.25 mnBetween EUR 0.25 mn and EUR 1 mn

Over EUR 1 million

Collateralisation With collateral Total

Special instruments

Revolving loans and overdrafts

Credit card credit

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Contents

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5 Selected results


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Evolution of M3 aggregate and loans to non-MFIs excluding general government

(percentage change)


Money and credit

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Sectoral contribution to annual growth rate of M3

(percentage point contribution)


M3 dynamics by sector

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Monetary policy transmission mechanism and financial stability


Transmission mechanisms

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Nominal MFI interest rate on short-term loans to NFCs (% per annum)


MFI interest rate on short-term loans

Overview of MFS Statistics Skopje seminar 2-5 October 2013 Jean-Marc Israël Head of Division, Monetary and Financial Statistics ECB.

Documents

statistics production

euro area statistics

financial statistics

disseminationoverview

contentsoverview of

high quality statistics

andimf monetary

national data