Liabilities of Australian-located Operations

In March 2003, banks and selected Registered Financial Corporations (RFCs) began reporting their international assets, liabilities and country exposures to APRA in ARF/RRF 231 International Exposures. This return is the basis of the data provided by Australia to the Bank for International Settlements (BIS) for its International Banking Statistics (IBS) data collection. APRA ceased the RFC data collection after September 2010.

The IBS data are based on the methodology described in the BIS Guide on International Financial Statistics (see http://www.bis.org/statistics/intfinstatsguide.pdf; Part II International banking statistics). Data reported for Australia, and other countries, on the BIS website are expressed in United States dollars (USD).

Data are recorded on an end-quarter basis.

All banks operating in Australia complete ARF 231. Between March 2003 and September 2010, only those larger RFCs with sizeable overseas assets and/or liabilities completed RRF 231. Bank and RFC positions are reported in Australian dollars (AUD). Non-AUD denominated positions have been converted to AUD using an appropriate end-quarter exchange rate, so changes in reported data between quarters are due not only to changes in positions but also valuation gains or losses due to exchange rate changes.

There are two sets of IBS data: locational data, which are used to gauge the role of banks and financial centres in the intermediation of international capital flows; and consolidated data, which can be used to monitor the country risk exposure of national banking systems. Only locational data are reported in this statistical table.  

Some liabilities are reported at market value, but contractual or nominal values are used where market values are not appropriate.

The locational data presented in this statistical table may differ from the balance sheet data reported by banks (and RFCs between March 2003 and September 2010) in their ARF/RRF 320.0 Statement of Financial Position return to APRA (and published in statistical tables B2, B3, B9 and B10). ARF/RRF 231 asks for gross positions to be reported (including on-balance sheet derivatives). However, in ARF/RRF 320.0, derivative positions can be reported on a net asset or net liability basis. This difference is particularly relevant in the case of foreign currency derivative positions with residents in Australia (included in other assets and other liabilities in the locational data).

Data are shown for a selected group of countries that account for the bulk of the total. Similar data for other countries are also available in statistical table B12.2.1.

The positions by country are summed to produce a ‘Total non-residents’ figure that represents reporting entities’ total positions with offshore counterparties in all currencies. The positions shown for Australia are positions with residents in foreign currency.

‘Deposits’ comprise all claims reflecting evidence of deposit – including non-negotiable certificates of deposit – that are not represented by negotiable securities. Thus, loans and deposits include interbank borrowings, loans and inter-office balances, foreign trade-related credits, international loans received and granted, and deposits received and made on a trust basis.

Sale and repurchase transactions (repos) involving the sale of assets (e.g. securities and gold) with a commitment to repurchase the same or similar assets, financial leases, promissory notes, non-negotiable debt securities, endorsement liabilities arising from bills rediscounted abroad and subordinated loans (including subordinated non-negotiable debt securities) are also included as ‘Deposits’.

‘Debt securities issued’ are all negotiable short- and long-term debt instruments (including subordinated issues and issues in an entity’s own name but on behalf of third parties). The classification as international debt securities issued is determined by the place and currency of issue rather than the residence of the issuer as in the case of reporting entities’ holdings of debt securities. This criterion is used due to the difficulty of determining the residence of the current holder of a negotiable instrument.

‘Other liabilities’ include on-balance sheet derivative contracts and working capital received by local branches from their head offices abroad. Accrued interest and items in the course of collection are also included in other assets and liabilities.


Tags: banks, finance, rba, statistics
Organization: Reserve Bank of Australia