2001R2423 — EN — 08.01.2007 — 005.001

This document is meant purely as a documentation tool and the institutions do not assume any liability for its contents

Amended by:

Corrected by:

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REGULATION (EC) No 2423/2001 OF THE EUROPEAN CENTRAL BANK

of 22 November 2001

concerning the consolidated balance sheet of the monetary financial institutions sector

(ECB/2001/13)

THE GOVERNING COUNCIL OF THE EUROPEAN CENTRAL BANK, Having regard to Council Regulation (EC) No 2533/98 of 23 November 1998 concerning the collection of statistical information by the European Central Bank ( 2 ), and in particular to Article 5(1) and Article 6(4) thereof, Having regard to Council Regulation (EC) No 2531/98 of 23 November 1998 concerning the application of minimum reserves by the European Central Bank ( 3 ), and in particular to Article 6(4) thereof, Whereas: (1) Regulation (EC) No 2819/98 of the European Central Bank of 1 December 1998 concerning the consolidated balance sheet of the monetary financial institutions sector (ECB/1998/16) ( 4 ) has already been amended by Regulation (EC) No 1921/2000 (ECB/2000/8) ( 5 ); now that new substantial amendments are being made to the said Regulation, it is desirable that the provisions in question should be recast by bringing them together in a single text with this Regulation. (2) The European System of Central Banks (ESCB) requires, for the fulfilment of its tasks, the production of the consolidated balance sheet of the monetary financial institutions (MFI) sector. The principal purpose thereof is to provide the European Central Bank (ECB) with a comprehensive statistical picture of monetary developments in the participating Member States, which are viewed as one economic territory. These statistics cover the aggregate financial assets and liabilities, in terms of stocks, high quality flows for loans and also improved flows for holdings of securities. (3) The ECB shall, in accordance with the provisions of the Treaty establishing the European Community (hereinafter referred to as the ‘Treaty’) and under the conditions laid down in the Statute of the European System of Central Banks and of the European Central Bank (hereinafter referred to as the ‘Statute’), make regulations to the extent necessary to implement the tasks of the ESCB as defined in the Statute and in some cases laid down in the provisions adopted by the Council referred to in Article 107(6) of the Treaty. (4) Article 5.1 of the Statute requires the ECB, assisted by the national central banks (NCBs), to collect the necessary statistical information either from the competent national authorities or directly from economic agents in order to undertake the tasks of the ESCB. Article 5.2 of the Statute stipulates that the NCBs shall carry out, to the extent possible, the tasks described in Article 5.1. (5) It may be necessary, and may reduce the reporting burden, for NCBs to collect from the actual reporting population the statistical information necessary to fulfil the statistical requirements of the ECB as part of a broader statistical reporting framework which the NCBs establish under their own responsibility in accordance with Community or national law or established practice and which serves other statistical purposes, provided that the fulfilment of the statistical requirements of the ECB is not jeopardised. In order to foster transparency, it is appropriate, in these cases, to inform the reporting agents that data are collected to fulfil other statistical purposes. In specific cases, the ECB may rely on statistical information collected for such purposes to fulfil its requirements. (6) Article 3 of Regulation (EC) No 2533/98 requires the ECB to specify the actual reporting population within the limits of the reference reporting population and entitles it to fully or partly exempt specific classes of reporting agents from its statistical reporting requirements. Article 6(4) provides that the ECB may adopt regulations specifying the conditions under which the right to verify or to carry out the compulsory collection of statistical information may be exercised. (7) Article 5 of Regulation (EC) No 2531/98 empowers the ECB to adopt regulations or decisions in order to exempt institutions from the minimum reserve requirements, to specify modalities to exclude or deduct liabilities owed to any other institution from the reserve basis and to establish differing reserve ratios for specific categories of liabilities. Under Article 6, the ECB has the right to collect from institutions the information necessary for the application of minimum reserves and the right to verify the accuracy and quality of the information which institutions provide to demonstrate compliance with the minimum reserve requirements. It is desirable, in order to reduce the overall reporting burden, for the statistical information regarding the monthly balance sheet to be used, in addition, for the regular calculation of the reserve base of the credit institutions subject to the ESCB's minimum reserve system. (8) Article 4 of Regulation (EC) No 2533/98 provides for Member States to organise themselves in the field of statistics and to cooperate fully with the ESCB in order to ensure fulfilment of the obligations arising from Article 5 of the Statute. (9) While it is recognised that regulations adopted by the ECB under Article 34.1 of the Statute do not confer any rights or impose any obligations on non-participating Member States, Article 5 of the Statute applies to both participating and non-participating Member States. Regulation (EC) No 2533/98 recalls that Article 5 of the Statute, together with Article 5 of the Treaty, implies an obligation to design and implement at national level all the measures that the non-participating Member States consider appropriate in order to carry out the collection of the statistical information needed to fulfil the ECB's statistical reporting requirements and timely preparations in the field of statistics in order for them to become participating Member States. (10) In order to facilitate the liquidity management of the ECB and of credit institutions, reserve requirements should be confirmed at the latest on the first day of the maintenance period; the need may exceptionally arise for credit institutions to report revisions to the reserve base or to reserve requirements which have been confirmed; the procedures for confirmation or acknowledgement of reserve requirements are without prejudice to the obligation for reporting agents always to report correct statistical information and to revise incorrect statistical information they may have already reported. (11) The determination of specific procedures for mergers and divisions involving credit institutions is necessary in order to clarify the obligations of these institutions in respect of reserve requirements; the definitions of mergers and divisions laid down in this Regulation are based on definitions already existing in secondary Community legislation relating to public limited liability companies. These definitions have been adapted to the purposes of this Regulation; these procedures are without prejudice to the possibility of holding minimum reserves through an intermediary. (12) The monetary statistics of the ECB are derived from MFI balance sheet statistics collected in accordance with Regulation (EC) No 2819/98 (ECB/1998/16) which was prepared during the second stage of economic and monetary union and so were considered to be only the minimum set of data required for monetary policy purposes. Moreover, the Regulation only covered the collection of balance sheet stocks and not the reporting of revaluation adjustment data required to compile flow statistics for counterparts of the broad monetary aggregate M3, from which the growth rates are derived. Taking into account the limitations of these sets of data, it was necessary to enhance the MFI balance sheet statistics. (13) It is necessary to expand the monthly requirements to provide a monthly breakdown of deposit liabilities by subsector and further by maturity/currency and of loans by subsector/maturity and purpose as these breakdowns are considered essential for monetary policy purposes. This includes the integration of data previously collected only on a quarterly basis. (14) It is necessary to derive stock and flow statistics for the monetary aggregates and counterparts in a timely manner. From the consolidated balance sheet in terms of stocks, flow statistics are derived using additional statistical information relating to exchange rate changes, other changes in the value of securities and the write-offs/write-downs of loans and other adjustments such as reclassifications. (15) It is necessary to ensure the availability of appropriately harmonised and high quality data on write-offs/write-downs on loans by addressing a requirement to the statistical reporting agents. There is also a need to collect data on price revaluations of securities. (16) The separate balance sheet category ‘money market paper’ is removed and merged with the data category ‘debt securities issued’ on the liability side. Instruments classified in this category are entered under ‘debt securities issued’ and allocated according to their original maturity. A corresponding reallocation has been taken also on the asset side of the MFI balance sheet. (17) The definition of deposits should take into account the use of balances representing prepaid amounts in the context of electronic money, Whereas: HAS ADOPTED THIS REGULATION:

Article 1

Definitions

For the purpose of this Regulation, the terms ‘reporting agents’, ‘participating Member State’, ‘resident’ and ‘residing’ shall have the same meaning as defined in Article 1 of Regulation (EC) No 2533/98.

Article 2

Actual reporting population

1. The actual reporting population shall consist of the MFIs resident in the territory of the participating Member States. For statistical purposes, MFIs comprise resident credit institutions as defined in Community law, and all 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.

2. National central banks may grant derogations to small MFIs, provided that the MFIs which contribute to the monthly consolidated balance sheet account for at least 95 % of the total MFI balance sheet in terms of stocks, in each participating Member State. NCBs shall check the fulfilment of this condition in good time in order to grant or withdraw, if necessary, any derogation with effect from the start of each year.

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3. For the purposes of Annex I(1)(III)(vi), the actual reporting population shall also consist of other financial intermediaries except insurance corporations and pension funds (hereinafter referred to as ‘OFIs’), as set out in Article 2(2)(a) of Regulation (EC) No 2533/98. NCBs may grant derogations to those entities provided that the required statistical information is collected from other available sources in accordance with Annex I(1)(III)(vi). NCBs shall check the fulfilment of this condition in good time in order to grant or withdraw, if necessary, any derogation with effect from the start of each year in agreement with the ECB. For the purposes of this Regulation, NCBs may establish and maintain a list of reporting OFIs in accordance with the principles set out in Annex I(1)(III)(vi).

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Article 3

List of MFIs for statistical purposes

1. In accordance with the classification principles set out in Part 1(I) of Annex I, the ECB shall establish and maintain a list of MFIs for statistical purposes, taking into account the requirements in respect of frequency and timeliness which arise from its use in the context of the ESCB's minimum reserve system. The competence to establish and maintain the list of MFIs for statistical purposes pertains to the Executive Board of the ECB.

2. The list of MFIs for statistical purposes and its updates shall be made accessible by NCBs and the ECB to the institutions concerned in an appropriate way, including by electronic means, via the Internet or, at the request of the reporting agents concerned, in paper form.

3. The list of MFIs for statistical purposes shall be for information only. However, in the event that the latest accessible version of the list in accordance with paragraph 2 is incorrect, the ECB shall not impose sanctions on any entity which did not properly fulfil its reporting requirements to the extent that it relied in good faith on the incorrect list.

Article 4

Statistical reporting requirements

1. For the purposes of the regular production of the consolidated balance sheet of the MFI sector, in terms of stocks and flows, the actual reporting population shall report monthly statistical information relating to its end-of-month balance sheet and monthly flow adjustments in respect of write-offs/write-downs of loans and price revaluations in respect of security holdings during the reporting period, to the NCB of the Member State in which the MFI is resident. Further details on certain items of the balance sheet shall be reported quarterly, in terms of stocks.

2. The required statistical information is specified in Annex I to this Regulation. ►M3 With reference to paragraphs 6a and 7a of Part 1, Section IV of Annex I, each NCB shall assess if data in respect of cells marked ►M5 with the ‘#’ or ‘*’ symbol, ◄ in Tables 3 and 4 of Part 2 of Annex I, are insignificant, and shall inform the reporting agents when it does not require their reporting. ◄

3. The required statistical information shall be reported in accordance with the minimum standards for transmission, accuracy, conceptual compliance and revisions as set out in Annex IV to this Regulation.

4. The NCBs shall define and implement the reporting arrangements to be followed by the actual reporting population in accordance with national characteristics. The NCBs shall ensure that these reporting arrangements provide the statistical information required and allow accurate checking of compliance with the minimum standards for transmission, accuracy, conceptual compliance and revisions as referred to in Article 4(3).

5. The derogations referred to in Article 2(2) shall have the effect of reducing the statistical reporting requirements of MFIs as follows:

— the credit institutions to which such derogations apply shall be subject to the reduced reporting requirements as set out in Annex II to this Regulation,

— those small MFIs that are not credit institutions shall be subject to the reduced reporting requirements as set out in Annex III to this Regulation.

Small MFIs may choose not to make use of the derogations and to fulfil the full reporting requirements instead.

6. Without prejudice to the derogation in Article 2(2), NCBs may grant a derogation in respect of the reporting of revaluation adjustments to money market funds (MMFs), removing from the MMFs any requirement to report the revaluation adjustment.

7. NCBs may grant a derogation in respect of the frequency and the timeliness of the reporting of price revaluations of securities and require these data on a quarterly basis and with the same timeliness as for stock data reported on a quarterly basis, subject to compliance with the following requirements:

— reporting agents shall provide the NCBs with the relevant information on valuation practices, including quantitative indications on the percentage of their holdings of these instruments subject to different valuation methods,

— where a substantial price revaluation has occurred, NCBs shall be entitled to request reporting agents to provide additional information relating to the month in which the development took place.

8. In the event of a merger, a division or any other reorganisation that might affect the fulfilment of its statistical obligations, the reporting agent involved shall inform the relevant NCB, once the intention to implement such operation has become public and in due time before the merger, the division or the reorganisation takes effect, of the procedures that are planned to fulfil the statistical reporting requirements set out in this Regulation.

Article 5

Use of the reported statistical information for the purposes of Regulation (EC) No 2818/98 (ECB/1998/15)

1. The statistical information reported by credit institutions in accordance with this Regulation shall be used by each credit institution to calculate its reserve base in accordance with Regulation (EC) No 2818/98 of the European Central Bank of 1 December 1998 on the application of minimum reserves (ECB/1998/15) ( 6 ), as amended by Regulation (EC) No 1921/2000 (ECB/2000/8). In particular, each credit institution shall use this information to verify the fulfilment of its reserve requirement over the maintenance period.

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3. Specific and transitional provisions for the purposes of the application of the ESCB's minimum reserve system are set out in Annex II to this Regulation. The specific provisions of this Annex shall prevail over provisions laid down in Regulation (EC) No 2818/98 (ECB/1998/15).

Article 6

Verification and compulsory collection

The right to verify or to collect compulsorily the information which reporting agents shall provide in compliance with the statistical reporting requirements set out in this Regulation shall be exercised by the NCBs, without prejudice to the right of the ECB to exercise these rights itself. This right shall be exercised in particular when an institution included in the actual reporting population does not fulfil the minimum standards for transmission, accuracy, conceptual compliance and revisions as set out in Annex IV to this Regulation.

Article 7

Transitional provisions

Transitional provisions for application of parts to this Regulation are laid down in Annex V to this Regulation.

Article 8

Repeal

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1. Regulation (EC) No 2819/98 (ECB/1998/16) shall be repealed on 1 January 2003.

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2. References made to the repealed Regulation shall be construed as being made to this Regulation.

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Article 9

This Regulation shall enter into force on 1 January 2003.

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ANNEX I

STATISTICAL REPORTING REQUIREMENTS AND CLASSIFICATION PRINCIPLES

PART 1

Monetary financial institutions and statistical reporting requirements

Introduction

The requirement is to produce on a regular basis a properly articulated consolidated balance sheet of the money-creating financial intermediaries for the participating Member States, seen as one economic territory, in terms of stocks and flows, based on a complete and homogeneous monetary sector and reporting population.

The statistical system for the participating Member States covering the consolidated balance sheet of the monetary financial institution (MFI) sector therefore comprises the two following main elements:

— a list of MFIs for statistical purposes, and

— a specification of the statistical information reported by these MFIs at monthly and quarterly frequency.

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For the purpose of obtaining complete information on the MFIs' balance sheets, it is necessary to impose certain reporting requirements on other financial intermediaries except insurance corporations and pension funds (hereinafter referred to as ‘OFIs’), when acting in the context of financial activities involving MMF shares/units.

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This statistical information is collected by the national central banks (NCBs) from the MFIs and from OFIs, within the limits set out in Section I(6), according to national arrangements relying on the harmonised definitions and classifications set out in this Annex.

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I. Monetary financial institutions

1. The European Central Bank (ECB) establishes and updates on a regular basis the list of MFIs for statistical purposes in accordance with the classification principles outlined below. One important aspect is financial innovation, which itself is affected by the development of the single market and the move to economic and monetary union, both of which affect the characteristics of financial instruments and induce financial institutions to change the focus of their business. Procedures for monitoring and continuous checking ensure that the list of MFIs remains up to date, accurate, and as homogeneous as possible and sufficiently stable for statistical purposes. The list of MFIs for statistical purposes includes an entry on whether or not institutions are legally subject to the European System of Central Banks (ESCB) minimum reserve system.

2. Thus, in accordance with the definition set out in Article 2(1) of this Regulation, the MFI sector comprises, in addition to central banks, two broad groups of resident financial institutions. These are credit institutions as defined in Community law (‘an undertaking whose business is to receive deposits or other repayable funds from the public ( 7 ) and to grant credits for its own account; or an electronic money institution within the meaning of Directive 2000/46/EC of the European Parliament and of the Council of 18 September 2000 on the taking up, pursuit and prudential supervision of the business of electronic money institutions’) (OJ L 275, 27.10.2000, p. 39) ( 8 ) and other MFIs, i.e. other resident financial institutions which fulfil the MFI definition, irrespective of the nature of their business. The degree of substitutability between the instruments issued by the latter and the deposits placed with credit institutions determines their classification, provided that they meet the MFI definition in other respects.

3. It is noted that Directive 2000/12/EC partially excludes some entities from its application. These exempted entities shall fall under the application of this Regulation, provided that they meet the MFI definition.

4. Substitutability for deposits in relation to financial instruments issued by financial intermediaries other than credit institutions is determined by their liquidity, combining characteristics of transferability, convertibility, certainty and marketability, and having regard, where appropriate, to their term of issue.

5. For the purpose of defining substitutability for deposits in the previous paragraph: — transferability refers to the possibility of mobilising funds placed in a financial instrument by using payment facilities, such as cheques, transfer orders, direct debits or similar means, — convertibility refers to the possibility and the cost of converting financial instruments into currency or transferable deposits; the loss of fiscal advantages in such conversion may be considered to be a kind of penalty that reduces the degree of liquidity, — certainty means knowing precisely in advance the capital value of a financial instrument in terms of national currency, and — securities quoted and traded regularly on an organised market are considered to be marketable. For shares in open-end collective investment undertakings, there is no market in the usual sense. Nevertheless, investors know the daily quotation of the shares and can withdraw funds at this price.

6. In the case of collective investment undertakings (CIUs), money market funds (MMFs) fulfil the agreed conditions for liquidity and are therefore included in the MFI sector. MMFs are defined as those CIUs of which the units are, in terms of liquidity, close substitutes for deposits and which primarily invest in money market instruments and/or in MMF shares/units and/or in other transferable debt instruments with a residual maturity of up to and including one year, and/or in bank deposits, and/or which pursue a rate of return that approaches the interest rates of money market instruments. The criteria applied in order to identify MMFs shall be derived from the public prospectus as well as fund rules, instruments of incorporation, established statutes or by-laws, subscription documents or investment contracts, marketing documents, or any other statement with similar effects, of the CIUs. ►M2 The MMF itself or the persons legally representing it ensures the provision of any information required to meet the statistical reporting requirements of MMFs. Where necessary for practical reasons, the data may be effectively submitted by any of the entities that act in the context of financial activities involving MMF shares/units, such as depositories. ◄

7. For the purpose of defining MMFs in paragraph 6: — CIUs shall mean undertakings the sole object of which is the collective investment of capital raised from the public and the units of which are, at the request of the holders, repurchased or redeemed directly or indirectly out of the undertaking's assets. Such undertakings may be constituted according to law, either under the law of contract (as common funds managed by management companies), or trust law (as unit trusts) or under a statute (as investment companies), — bank deposits shall mean cash deposits made with credit institutions, repayable on demand or upon prior notice of up to three months, or at agreed maturities of up to two years, inclusive of sums paid to credit institutions in respect of a transfer of securities under repurchase operations or securities loans, — close substitutability for deposits in terms of liquidity shall mean the ability of units of CIUs, under normal market circumstances, to be repurchased, redeemed or transferred, at the request of the holder, where the liquidity of the units is comparable to the liquidity of deposits, — primarily shall be deemed to be at least 85 % of the investment portfolio, — money market instruments shall mean those classes of transferable debt instruments which are normally traded on the money market (for example, certificates of deposit, commercial paper and banker's acceptances, treasury and local authority bills) because of the following features: — (i) liquidity, where they can be repurchased, redeemed or sold at limited cost, in terms of low fees and narrow bid/offer spread, and with very short settlement delay; and (ii) market depth, where they are traded on a market which is able to absorb a large volume of transactions, with such trading of large amounts having a limited impact on their price; and (iii) certainty in value, where their value can be accurately determined at any time or at least once a month; and (iv) low interest risk, where they have a residual maturity of up to and including one year, or regular yield adjustments in line with money market conditions at least every 12 months; and (v) low credit risk, where such instruments are either: — admitted to an official listing on a stock exchange or traded on other regulated markets which operate regularly, are recognised and are open to the public, or — issued under regulations aimed at protecting investors and savings, or — issued by: — — a central, regional or local authority, a central bank of a Member State, the European Union, the ECB, the European Investment Bank, a non-Member State or, if the latter is a federal State, by one of the members making up the federation, or by a public international body to which one or more Member States belong, — or — an establishment subject to prudential supervision, in accordance with criteria defined by Community law or by an establishment which is subject to and complies with prudential rules considered by the competent authorities to be at least as stringent as those laid down by Community law, or guaranteed by any such establishment, — or — an undertaking the securities of which have been admitted to an official listing on a stock exchange or are traded on other regulated markets which operate regularly, are recognised and are open to the public.

8. In the European System of Accounts (ESA 95), financial institutions classified as MFIs are categorised in two subsectors, namely central banks (S.121) ( 9 ) and other MFIs (S.122).

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For the purposes of this Regulation:

— ‘MMF registered shares/units’ shall mean MMF shares/units in respect of which, in accordance with national legislation, a record is kept identifying the holders of its shares/units, including information on the residency of the holder,

— ‘MMF bearer shares/units’ shall mean MMF shares/units in respect of which, in accordance with national legislation, a record is not kept identifying the holders of its shares/units, or in respect of which a record is kept which does not contain information on the residency of the holder.

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II. Accounting rules

Unless otherwise provided for in this Regulation, the accounting rules followed by MFIs for the purposes of reporting under this Regulation are those laid down in the national transposition of Council Directive 86/635/EEC of 8 December 1986 on the annual accounts and consolidated accounts of banks and other financial institutions ( 10 ) , as well as in any other international standards applicable. Without prejudice to accounting practices and netting arrangements prevailing in Member States, all financial assets and liabilities are reported on a gross basis for statistical purposes.

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III. The consolidated balance sheet on a monthly basis: stocks

Objective

1. The objective is to supply monthly data on the business of MFIs in terms of stocks. Data are supplied in sufficient detail in order to provide the ECB with a comprehensive statistical picture of monetary developments in the participating Member States seen as one economic territory and to allow flexibility in the calculation of monetary aggregates and counterparts covering this territory. Moreover, the monthly individual stock data reported by the credit institutions subject to the ESCB minimum reserves system are used for the calculation of the reserve base of the said credit institutions in accordance with Regulation (EC) No 2818/98 of the European Central Bank of 1 December 1998 on the application of minimum reserves (ECB/1998/15) ( 11 ), as amended by Regulation (EC) No 1921/2000 (ECB/2000/8) ( 12 ). The monthly reporting requirements in respect of the stocks are shown in Table 1 below. Cells with thin borders ( 13 ) are reported solely by credit institutions subject to reserve requirements (for full details, see Annex II); this reporting is mandatory except for the reporting of deposits redeemable at notice over two years which remains voluntary until further notice. A detailed definition of instruments is presented in Part 3 of this Annex.

Requirements

2. The ECB compiles the monetary aggregates for the territory of the participating Member States as amounts outstanding (stocks). The money stock includes notes and coins in circulation and other monetary liabilities (deposits and other financial instruments which are close substitutes for deposits) of MFIs. The counterparts to the money stock comprise all other items in the MFI balance sheet. The ECB also compiles flows derived from the stocks and from other data, including data reported by MFIs (see section V below).

3. The ECB requires the statistical information to be broken down in terms of instrument/maturity categories, currencies and counterparties. Since separate requirements apply to liabilities and assets, the two sides of the MFI balance sheet are considered in turn. They are shown in Table A, in Part 2 of this Annex. (i) Instrument and maturity categories (a) Liabilities 4. The compilation of monetary aggregates covering the participating Member States requires relevant instrument categories. These are currency in circulation, deposit liabilities, MMF shares/units issued, debt securities issued, capital and reserves and remaining liabilities. In order to separate monetary and non-monetary liabilities, deposit liabilities are also broken down into overnight deposits, deposits with agreed maturity, deposits redeemable at notice and repurchase agreements (repos). 5. Original maturity cut-offs provide a substitute for instrument detail where financial instruments are not fully comparable between markets. The cut-off points for the maturity bands (or for periods of notice) are: for deposits with agreed maturity, at one-year and two-years' maturity at issue; and for deposits redeemable at notice, at three-months' notice and at two-years' notice. Repos are not broken down by maturity as these are usually very short-term instruments (usually less than three-months' maturity at issue). Debt securities issued by MFIs are broken down at one year and two years. No maturity breakdown is required for shares/units issued by MMFs. (b) Assets 6. MFI holdings of assets are broken down into cash, loans, securities other than shares, MMF shares/units, shares and other equity, fixed assets and remaining assets. A maturity breakdown by original maturity (at one year and five year maturity bands) is required for MFI loans to residents (other than MFIs and general government) of the participating Member States by subsector and further for MFI loans to households by purpose. A maturity breakdown is also required for MFI holdings of debt securities issued by other MFIs located in the participating Member States. These holdings must be broken down into one and two year maturity bands to enable the inter-MFI holdings of this instrument to be netted off in the calculation of the monetary aggregates. (ii) Currencies 7. The ECB shall have the option of defining monetary aggregates in such a way as to include balances denominated in all currencies combined or in euro alone. Balances in euro are therefore identified separately in the reporting scheme in respect of those balance sheet items that may be used in the compilation of monetary aggregates. (iii) Counterparties 8. The compilation of monetary aggregates and counterparts covering the participating Member States requires the identification of those counterparties located in the territory of the participating Member States that form the money-holding sector. Counterparties located in the domestic territory and in the other participating Member States are identified separately and treated in exactly the same way in all statistical breakdowns. There is no requirement for a geographical breakdown of counterparties located outside the territory of the participating Member States in monthly data. 9. Counterparties located in the territory of the participating Member States are identified according to their domestic sector or institutional classification in accordance with the list of MFIs for statistical purposes and the guidance for the statistical classification of customers provided in the ECB's Money and Banking Statistics Sector Manual (‘Guidance for the statistical classification of customers’), which follows classification principles that are consistent with the ESA 95 as far as possible. In order to allow for the identification of a money-holding sector of the participating Member States, non-MFI counterparties are divided into general government (S.13), with central government (S.1311) identified separately in total deposit liabilities, and other resident sectors. In order to calculate a monthly sector disaggregation of the monetary aggregates and credit counterpart, other resident sectors are further broken down by the following subsectors: other financial intermediaries + financial auxiliaries (S.123 + S.124), insurance corporations and pension funds (S.125), non-financial corporations (S.11) and households + non-profit institutions serving households (S.14 + S.15). With respect to total deposit liabilities and the deposit categories ‘deposits over two years agreed maturity’, ‘deposits redeemable at notice over two years’ and ‘repos’, an additional distinction is made between credit institutions, other MFI counterparties and central government for the purposes of the ESCB's minimum reserve system. (iv) Purpose of loans 10. Loans to households (including non-profit institutions serving households) are broken down by type of loan (consumer credit; lending for house purchase; other). A detailed definition of consumer and housing loans is contained in Part 3 of this Annex, within ‘Detailed description of instrument categories of the monthly aggregated balance sheet of the MFI sector’, under category 2: ‘Loans’. (v) Cross-relating instrument and maturity categories with currencies and counterparties 11. The compilation of monetary statistics covering the participating Member States and the data needed for the calculation of the reserve base of credit institutions subject to the ESCB's minimum reserve system necessitates certain cross-relationships being made in the balance sheet between instrument/maturity/currency and counterparties and, in addition, for loans to households, a further breakdown by purpose. 12. The data requirements are most detailed where the counterparties are part of the money-holding sector. Statistical information on deposit liabilities by subsector and maturity classified further by currency is necessary to permit a closer analysis of the developments of the foreign currency components included in M3. In particular, a currency analysis of these components facilitates investigations concerning the degree of substitutability between foreign currency and euro denominated components of M3. Breakdowns of the positions vis-à-vis other MFIs are identified only in so far as this is necessary to allow for netting of inter-MFI balances or to calculate the reserve base. 13. Positions vis-à-vis the rest of the world are required for ‘deposits over two years agreed maturity’, ‘deposits redeemable at notice over two years’ and ‘repos’ in order to calculate the reserve base subject to the positive reserve ratio and for total deposit liabilities in order to compile the external counterparts. In addition, for balance of payments (b.o.p.) and financial accounts purposes, deposit liabilities and loans vis-à-vis the rest of the world are broken down at one year original maturity. ▼M2 (vi) Residency of the holders of MMF shares/units 13a. Reporting agents report, on a monthly basis, as a minimum data on the residency of the holders of MMF shares/units issued by MFIs of the participating Member States according to a domestic/other participating Member States/rest of the world breakdown. This will enable NCBs to provide the ECB with data on the residency of the holders of this instrument and allow the exclusion of holdings of non-residents of the participating Member States for the purposes of the compilation of monetary aggregates. 13b. In accordance with Article 4(4), NCBs may require data on additional breakdowns not covered in the requirements of this Regulation, including breakdowns by counterparty sector, currency or maturity. 13c. As regards registered shares/units, issuing MMFs or the persons legally representing them or the entities referred to in Annex I(1)(I)(6) report data on the residency breakdown of the holders of their shares/units issued in the monthly balance sheet. 13d. As regards bearer shares/units, reporting agents report data on the residency breakdown of the holders of MMF shares/units according to the approach decided by the relevant NCB in agreement with the ECB. This requirement is limited to one or a combination of the following options, to be adopted having regard to the organisation of the relevant markets and the national legal arrangements in the Member State(s) in question. This will be periodically monitored by the NCB and the ECB. (a) Issuing MMFs Issuing MMFs or the persons legally representing them or the entities referred to in Annex I(1)(I)(6) report data on the residency breakdown of the holders of their shares/units issued. If an issuing MMF is not in a position to identify directly the residency of the holder, it reports the relevant data on the basis of available information. Such information may come from the agent distributing the shares/units or from any other entity involved in the issuance, buy-back or transfer of the shares/units. (b) MFIs and OFIs as custodians of MMF shares/units As reporting agents, MFIs and OFIs acting as custodians of MMF shares/units report data on the residency breakdown of the holders of shares/units issued by resident MMFs and held in custody on behalf of the holder or of another intermediary also acting as a custodian. This option is applicable if the following conditions are met. First, the custodian distinguishes MMF shares/units kept in custody on behalf of holders from those that are kept on behalf of other custodians. Second, most of the MMF shares/units are in the custody of domestic resident institutions that are classified as financial intermediaries (MFIs or OFIs). (c) MFIs and OFIs as reporters of transactions of residents with non-residents involving shares/units of a resident MMF As reporting agents, MFIs and OFIs acting as reporters of transactions of residents with non-residents involving shares/units of a resident MMF report data on the residency breakdown of the holders of shares/units issued by resident MMFs, which they trade on behalf of the holder or another intermediary also involved in the transaction. This option is applicable if the following conditions are met. First, the reporting coverage is comprehensive, i.e. it covers substantially all of the transactions carried out by the reporting agents. Second, accurate data on purchases and sales with non-residents of the participating Member States are provided. Third, differences between issuing value and redemption value, excluding fees, of the same shares/units are minimal. Fourth, the amount of shares/units held by non-residents of the participating Member States issued by resident MMFs is low. If the reporting agent is not in a position to identify directly the residency of the holder, it reports the relevant data on the basis of available information. 13e. If registered shares/units or bearer shares/units are issued for the first time or if market developments require a change of option or combination of options, NCBs may grant derogations for one year in respect of the requirements set out in paragraphs 13c and d. ▼B

Timeliness

14. The ECB receives an aggregated monthly balance sheet covering the positions of MFIs in each participating Member State by close of business on the 15th working day following the end of the month to which the data relate. NCBs decide when they need to receive data from reporting agents in order to meet this deadline, taking into account the required timeliness for the ESCB's minimum reserve system.

▼M4

Statistical valuation of deposit liabilities and loans

15. Deposit liabilities and loans are reported, for the purposes of this Regulation, at the nominal amount outstanding at the end of the month and on a gross basis. Nominal amount means the amount of principal that a debtor is contractually obliged to repay to a creditor.

16. NCBs may allow the reporting of provisioned loans net of provisions and the reporting of purchased loans at the price agreed at the time of their acquisition, provided that such reporting practices are applied by all resident reporting agents and are necessary to maintain continuity in the statistical valuation of loans with the data reported for periods prior to January 2005.

▼B

IV. Balance sheet statistics at quarterly frequency (stocks)

Objective

1. Certain data are needed for the further analysis of monetary developments and to serve other statistical purposes such as financial accounts and balance of payments. The objective is to provide further details on certain items of the balance sheet for these purposes.

Requirements

2. The quarterly breakdowns are provided only in respect of key items of the aggregated balance sheet. Furthermore, the ECB may allow some flexibility in calculating aggregates where it can be shown from figures collected at a higher level of aggregation that the data involved are unlikely to be significant. (a) Subsector and maturity breakdown of credit to non-MFIs of the participating Member States 3. In order to enable the complete subsector and maturity structure of MFIs' overall credit financing (loans and securities) vis-à-vis the money-holding sector to be monitored, loans to general government other than central government are to be broken down quarterly at one year and five year original maturity and holdings of securities issued by general government other than central government at one year original maturity, all cross-related to a subsector breakdown (state government (S.1312), local government (S.1313) and social security funds (S.1314)). A cross-related breakdown by subsector with a maturity split, up to one year and more than one year, of holdings of securities other than shares issued by residents other than MFIs and general government is also required. A breakdown of MFI holdings of shares and other equity by subsector is required vis-à-vis the following subsectors: other financial intermediaries + financial auxiliaries (S.123 + S.124), insurance corporations and pension funds (S.125) and non-financial corporations (S.11). 4. Total amounts of MFI loans and MFI holdings of securities other than shares vis-à-vis the central government (S.1311) are also required. (b) Subsector breakdown of MFI deposit liabilities to the general government (other than central government) of the participating Member States 5. The deposit liability categories vis-à-vis general government other than central government in the participating Member States are broken down into the state government (S.1312), local government (S.1313) and social security funds (S.1314). (c) Country breakdown 6. Counterparties by Member State are identified to analyse further monetary developments and also for the purposes of the transitional requirements and for data quality checks. In order to provide better information on the holdings of debt securities by issuing country included in the monetary aggregates, the maturity breakdown is required at one and two year maturity bands. ▼M3 6a. Reporting agents report data in respect of the cells not marked ►M5 with the ‘#’ or ‘*’ symbol ◄ in Table 3 of Part 2. Reporting agents also report data in respect of the cells marked ►M5 with the ‘#’ or ‘*’ symbol. ◄ However, if figures collected at a higher level of aggregation show that these data are insignificant, NCBs may decide not to require their reporting. Each NCB informs the reporting agents of such a decision. ▼B (d) Currency breakdown 7. The key balance sheet items are broken down into the currencies of the non-participating Member States and into the major international currencies (the US dollar, the yen and the Swiss franc). These breakdowns are required in order to permit the calculation of flow statistics for monetary aggregates and counterparts adjusted for exchange rate changes where these aggregates are defined in such a way as to include all currencies combined. For b.o.p. and financial account purposes, the currency breakdown for deposit liabilities and loans vis-à-vis the rest of the world is provided with a maturity breakdown at one-year original maturity. ▼M3 7a. Reporting agents report data in respect of the cells not marked ►M5 with the ‘#’ or ‘*’ symbol ◄ in Table 4 of Part 2. Reporting agents also report data in respect of the cells marked ►M5 with the ‘#’ or ‘*’ symbol. ◄ However, if figures collected at a higher level of aggregation show that these data are insignificant, NCBs may decide not to require their reporting. Each NCB informs the reporting agents of such a decision. ▼B (e) Sector breakdowns of positions with counterparties outside the participating Member States (non-participating Member States and the rest of the world) 8. For MFIs' positions vis-à-vis counterparties resident outside the territory of the participating Member States, positions with banks (or MFIs in non-participating Member States) and non-banks need to be distinguished; as regards non-banks, a distinction is needed between general government and other resident sectors. The sector classification in accordance with the SNA93 applies where the ESA 95 is not in force.

Timeliness

9. Quarterly statistics are transmitted by NCBs to the ECB by close of business on the 28th working day following the end of the month to which they relate. NCBs decide when they need to receive data from reporting agents in order to meet this deadline.

▼M3

Where data in respect of cells marked ►M5 with the ‘#’ or ‘*’ symbol ◄ are insignificant but NCBs nevertheless collect them, these may be transmitted by the NCBs to the ECB with a delay of a further one month from the close of business on the 28th working day following the end of the quarter to which they relate. NCBs decide when they need to receive data from reporting agents in order to meet this deadline.

▼M4

Statistical valuation of deposit liabilities and loans

10. Deposit liabilities and loans are reported according to the rules set out for monthly stocks in paragraphs 15 and 16 of section III.

▼B

V. Compilation of flows statistics

Objective

1. In order to compile flow statistics in respect of the monetary aggregates and counterparts, data on the value of transactions need to be derived in a timely manner from the consolidated balance sheet in terms of stocks, which provides information on outstanding assets and liabilities, and additional statistical information relating to reclassifications, exchange rate changes, other valuation changes and certain other adjustments such as write-offs of loans.

Requirements

2. Financial transactions are identified as the difference between stock positions at end-month reporting dates, from which the effect of changes that arise due to influences other than transactions is removed. For this purpose, the ECB requires statistical information on these influences relating to many items of the MFI balance sheet. The information takes the form of adjustments that cover ‘reclassifications and other adjustments’, exchange rate adjustments and ‘revaluations and loan write-offs/write-downs’. In addition, the ECB requires explanatory information on the adjustments in ‘reclassifications and other adjustments’.

3. The statistical requirement addressed to the actual reporting population under this Regulation concerns exclusively the ‘revaluation adjustments’, covering both the write-offs/write-downs of loans and price revaluations in respect of holdings of securities in the reference period.

4. Reporting agents are subject to a reporting requirement formed by the ‘minimum requirements’ identified in Table 1A in Part 2 of this Annex. The ‘minimum requirements’ are considered as the minimum required in order to compile and estimate adjustments in respect of the full set of data required by the ECB. NCBs are permitted to collect additional data not covered by the ‘minimum requirements’. These additional data may refer to the breakdowns marked in Table 1A other than the ‘minimum requirements’.

5. The requirement addressed to the reporting agents does not cover the exchange rate changes and the reclassification adjustment. The ECB calculates the monthly exchange rate adjustment from currency-by-currency stock data supplied by the reporting agents. These data are supplied on a quarterly basis in accordance with Table 4 in Part 2 of this Annex. The reclassifications mentioned in paragraph 1 are also excluded because these data are collected by the NCBs themselves using various information sources that are already available to the NCBs.

Write-offs / write-downs of loans

6. The adjustment in respect of the write-offs/write-downs is reported in order to remove from the flows statistics the impact of changes in the value of loans recorded on the balance sheet that are caused by the application of write-off/write down of loans. It should also reflect the changes in provisions on loans if an NCB decides that outstanding stocks should be recorded net of provisions. Write-offs/write-downs recognised at the time the loan is sold or transferred to a third party are also included, where identifiable. (i) Instrument and maturity categories 7. Write-offs/write-downs refer to the asset item ‘loans’. A maturity breakdown is not required as part of the ‘minimum requirements’. NCBs may however require reporting agents to submit additional data according to the maturity breakdown outlined for the monthly stock data. (ii) Currencies 8. A breakdown of the ‘revaluation adjustment’ according to the currency (euro/non-euro) of the loans is not included in the ‘minimum requirements’; whereas NCBs may, however, require a currency breakdown. (iii) Counterparties 9. The ‘minimum requirements’ include the separate identification of amounts written-off/written-down, and changes in provisions where loans are reported net of provisions, according to the geographical location of the counterparties. In addition, counterparties located in the participating Member States are classified according to their institutional sector, with separate data for MFIs and ‘other resident sector’ and the latter with a further breakdown by subsector i.e. other financial intermediaries + financial auxiliaries (S.123 + S.124), insurance corporations and pension funds (S.125), non-financial corporations (S.11) and households + non-profit institutions serving households (S.14 + S.15). Furthermore, the household sector is reported with an additional breakdown according to the purpose of the loan, i.e. consumer credit, lending for house purchase and other (residual). Total amounts are reported in respect of the loans to the rest of the world, without any additional breakdown. (iv) Timeliness 10. The ECB shall receive aggregated ‘revaluation adjustments’ in respect of loan write-offs/write-downs corresponding to the loans granted by the reporting agents in each participating Member State by close of business on the 15th working day following the end of the month to which the data relate. NCBs decide when they need to receive data from reporting agents in order to meet this deadline.

Price revaluation of securities

11. ▼M4 The adjustment in respect of the price revaluation of securities refers to fluctuations in the valuation of securities that arise because of a change in the price at which securities are recorded or traded. The adjustment includes the changes that occur over time in the value of end-period balance sheet stocks because of changes in the reference value at which securities are recorded, i.e. potential gains/losses. It may also contain valuation changes that arise from transactions in securities i.e. realised gains/losses. ▼B (i) Instrument and maturity categories (a) Liabilities 12. ▼M4 No minimum reporting requirement is established for the liability side of the balance sheet. However, if valuation practices applied by reporting agents to debt securities issued result in changes to their end-period stocks, NCBs are permitted to collect data relating to such changes. Such data are reported as ‘other revaluation’ adjustments. ▼B (b) Assets 13. The price revaluation adjustment is collected from MFIs in respect of the items ‘securities other than shares’ and ‘shares and other equity’. The ‘minimum requirements’ refer to ‘securities other than shares’ with original maturity over two years. Nevertheless, NCBs may extend the requirement beyond the ‘minimum requirements’, by requiring the reporting of the same currency and maturity breakdowns as for monthly stock data. In respect of the item ‘shares and other equity’, the ‘minimum requirements’ refer to total amounts by sector and coincide with the requirement for stock data. (ii) Currencies 14. A currency breakdown of the price revaluation is not required in ‘minimum requirements’. NCBs may extend the requirement beyond the ‘minimum requirements’ in respect of the currency breakdown (euro/non-euro). (iii) Counterparties 15. In respect of the price revaluation for the item ‘securities other than shares’, the ‘minimum requirements’ refer to the breakdown of the domestic residents and residents of the other participating Member States by sector, i.e. MFIs, general government and other resident sector. Total amounts of the adjustment are reported in respect of the rest of the world. NCBs may extend the requirement to cover the same breakdown as for monthly stock data. 16. In respect of the price revaluation for ‘shares and other equity’, the ‘minimum requirements’ refer to the breakdown of the domestic residents and residents of the other participating Member States by sector i.e. MFIs and other resident sectors, and total amounts of the adjustment are reported in respect of the rest of the world. In this case, the set of ‘minimum requirements’ coincides with the set of data reported to the ECB by the NCB. (iv) Timeliness 17. The ECB receives the aggregated revaluation adjustments covering the price revaluations of securities corresponding to the reporting agents in each participating Member State by close of business on the 15th working day following the end of the month to which the data relate. NCBs decide when they need to receive data from reporting agents in order to meet this deadline.

▼C1

PART 2

Required breakdowns

Table A

Survey of breakdowns for the purposes of the aggregated balance sheet of the MFI sector

Instrument/maturity categories, counterparties and currencies

(Monthly data breakdowns are indicated in bold with an asterisk)



INSTRUMENT/MATURITY CATEGORIES Assets Liabilities 1. Cash *2. Loans * up to 1 year (1) * over 1 year and up to 5 years (1) * over 5 years (1) * 3. Securities other than shares * up to 1 year (2) * over 1 year and up to 2 years (2) * over 2 years (2) * 4. Money market fund shares/units * 5. Shares and other equity * 6. Fixed assets * 7. Remaining assets * 8. Currency in circulation 9. Deposits * up to 1 year (3) * over 1 year (3) * 9.1. Overnight deposits ( 4 ) * 9.2. Deposits with agreed maturity * up to 1 year * over 1 year and up to 2 years * over 2 years (5) * 9.3. Deposits redeemable at notice * up to 3 months (6) * over 3 months * of which over 2 years (9) * 9.4. Repurchase agreements * 10. Money market fund shares/units * 11. Debt securities issued * up to 1 year * over 1 year and up to 2 years * over 2 years * 12. Capital and reserves * 13. Remaining liabilities *



COUNTERPARTIES Assets Liabilities A. Domestic residents * MFIs * Non-MFIs * General government * central government state government local government social security funds Other resident sectors (10) * other financial intermediaries, etc. (S. 123 + S. 124) (7) , (10) * insurance corporations and pension funds (S. 125) (10) * non-financial corporations (S. 11) (10) * households, etc. (S. 14 + S. 15) (8) , (10) * B. Residents of the other participating Member States * MFIs * Non-MFIs * General government * central government state government local government social security funds Other resident sectors (10) * other financial intermediaries, etc. (S. 123 + S. 124) (7) (10) * insurance corporations and pension funds (S. 125) (10) * non-financial corporations (S. 11) (10) * households, etc. (S. 14 + S. 15) (8) , (10) * C. Residents of the rest of the world * Banks Non-banks general government other resident sectors D. Not allocated A. Domestic residents * MFIs * of which: Credit institutions * Non-MFIs * General government * central government * state government local government social security funds Other resident sectors (10) * other financial intermediaries, etc. (S. 123 + S. 124) (7) , (10) * insurance corporations and pension funds (S. 125) (10) * non-financial corporations (S. 11) (10) * households, etc. (S. 14 + S. 15) (8) (10) * B. Residents of the other participating Member States * MFIs * of which: Credit institutions * Non-MFIs * General government * central government * state government local government social security funds Other resident sectors (10) * other financial intermediaries, etc. (S. 123 + S. 124) (7) , (10) * insurance corporations and pension funds (S. 125) (10) * non-financial corporations (S. 11) (10) * households, etc. (S. 14 + S. 15) (8) , (10) * C. Residents of the rest of the world * Banks Non-banks general government other resident sectors D. Not allocated



Currencies e euro x Foreign currencies Currencies other than the euro (i.e. other Member State currencies, USD, JPY, CHF, remaining currencies)

(1) Monthly maturity breakdown applicable only to loans to other resident sectors than MFIs and general government of the participating Member States and the monthly maturity breakdown at one year, for loans to the rest of the world. Quarterly maturity breakdowns for loans to general government other than central government of the participating Member States.

(2) Monthly maturity breakdown relates only to holdings of securities issued by MFIs located in the participating Member States. As quarterly data, holdings of securities issued by non-MFIs in the participating Member States are split into ‘up to one year’ and ‘over one year’.

(3) Vis-à-vis the rest of the world only.

(4) Including suspense balances representing amounts stored on prepaid cards issued in the name of MFIs and other liabilities resulting from the issuance of electronic money.

(5) Including administratively regulated deposits.

(6) Including non-transferable sight deposits.

(7) Other financial intermediaries (S. 123) + financial auxiliaries (S. 124)

(8) Households (S. 14) + non-profit institutions serving households (S. 15).

(9) The reporting of the item ‘deposits redeemable at notice over two years’ is voluntary until further notice.

(10) Monthly breakdown by subsector is required for loans and deposits.

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▼B

PART 3

Definitions relating to the consolidated balance sheet to be submitted to the ECB - instrument categories of liabilities and assets

General definitions

For the purpose of compiling the consolidated balance sheet of the MFI sector covering the participating Member States, the reporting population consists of MFIs included in the list of MFIs for statistical purposes and resident in the territory of the participating Member States ( 24 ). These are:

— institutions incorporated and located in the territory, including subsidiaries of parent companies located outside that territory, and

— branches of institutions that have their head office outside that territory.

Subsidiaries are separate incorporated entities in which another entity has a majority or full participation, whereas branches are unincorporated entities (without independent legal status) totally owned by the parent.

MFIs consolidate for statistical purposes the business of all their offices (registered or head office and/or branches) located within the same national territory. No consolidation for statistical purposes is permitted across national boundaries.

When a parent company and its subsidiaries are MFIs located in the same national territory, the parent company is permitted to consolidate in its statistical returns the business of these subsidiaries, keeping however the business of credit institutions and other MFIs separate, for the purposes of the ESCB minimum reserve system.

If an institution has branches located within the territories of the other participating Member States, the registered or head office located in a given participating Member State shall consider the positions towards all these branches as positions towards residents in the other participating Member States. Conversely, a branch located in a given participating Member State shall consider the positions towards the registered or head office or towards other branches of the same institution located within the territories of the other participating Member States as positions towards residents in the other participating Member States.

If an institution has branches located outside the territory of the participating Member States, the registered or head office in a given participating Member State shall consider the positions towards all these branches as positions towards residents of the rest of the world. Conversely, a branch located in a given participating Member State shall consider the positions towards the registered or head office or towards other branches of the same institution located outside the participating Member States as positions towards residents of the rest of the world.

Institutions located in offshore financial centres are treated statistically as residents of the territories in which the centres are located.

Maturity at issue (original maturity) refers to the fixed period of life of a financial instrument before which it cannot be redeemed (e.g. debt securities) or before which it can be redeemed only with some kind of penalty (e.g. some types of deposits). The period of notice corresponds to the time between the moment the holder gives notice of an intention to redeem the instrument and the date on which the holder is allowed to convert it into cash without incurring a penalty. Financial instruments are classified according to the period of notice only when there is no agreed maturity.

Definitions of sectors

The ESA 95 provides the standard for sector classification. For the sector classification of non-MFI counterparties located outside the domestic territory, further guidance may be found in the ECB's Money and Banking Statistics Sector Manual.

Banking institutions located outside the Member States are referred to as ‘banks’ rather than as MFIs. Similarly, the term ‘non-MFI’ refers only to the Member States; for other countries the term ‘non-banks’ is appropriate. ‘Non-MFIs’ comprise the following sectors and sub-sectors:

— general government: resident units which are principally engaged in the production of non-market goods and services, intended for individual and collective consumption and/or in the redistribution of national income and wealth (the ESA 95, paragraphs 2.68 to 2.70),

— central government: administrative departments of the State and other central agencies whose competence extends over the whole economic territory, except for the administration of social security funds (the ESA 95, paragraph 2.71),

— state government: separate institutional units exercising some of the functions of government at a level below that of central government and above that of local government, except for the administration of social security funds (the ESA 95, paragraph 2.72),

— local authorities: public administration whose competence extends only to a local part of the economic territory, excluding local agencies of social security funds (the ESA 95, paragraph 2.73),

— social security funds: central, state and local institutional units whose principal activity is to provide social benefits (the ESA 95, paragraph 2.74).

The other resident sectors, i.e. non-MFI residents other than the general government, comprise:

— other financial intermediaries + financial auxiliaries: non-monetary financial corporations and quasi-corporations (excluding insurance corporations and pension funds) principally engaged in financial intermediation by incurring liabilities in forms other than currency, deposits and/or close substitutes for deposits from institutional units other than MFIs (the ESA 95, paragraphs 2.53 to 2.56). Also included are financial auxiliaries consisting of all financial corporations and quasi-corporations that are principally engaged in auxiliary financial activities (the ESA 95, paragraphs 2.57 to 2.59),

— insurance corporations and pension funds: non-monetary financial corporations and quasi-corporations principally engaged in financial intermediation as the consequence of the pooling of risks (the ESA 95, paragraphs 2.60 to 2.67),

— non-financial corporations: corporations and quasi-corporations not engaged in financial intermediation but principally in the production of market goods and non-financial services (the ESA 95, paragraphs 2.21 to 2.31),

— households: individuals or groups of individuals as consumers, and producers of goods and non-financial services exclusively for their own final consumption, and as producers of market goods and non-financial and financial services provided that their activities are not those of quasi-corporations. Included are non-profit institutions which serve households and which are principally engaged in the production of non-market goods and services intended for particular groups of households (the ESA 95, paragraphs 2.75 to 2.88).

Definitions of instrument categories

Definitions of the categories of assets and liabilities included in the consolidated balance sheet take account of the features of different financial systems. Maturity analyses may provide a substitute for consistency in instrument definition where instruments are not fully comparable between financial markets.

The following tables provide a detailed standard description of the instrument categories, which NCBs transpose into categories applicable at the national level in accordance with this Regulation ( 25 ).

Detailed description of instrument categories of the monthly aggregated balance sheet of the MFI sector



ASSET CATEGORIES Category Description of main features 1. Cash Holdings of euro and foreign banknotes and coins in circulation that are commonly used to make payments 2. Loans For the purposes of the reporting scheme, this consists of funds lent by reporting agents to borrowers, which are not evidenced by documents or are represented by a single document (even if it has become negotiable). It includes assets in the form of deposits: — loans granted to households in the form of consumer credit (loans granted for the purpose of personal use in the consumption of goods and services), lending for house purchases (credit extended for the purpose of investing in housing, including building and home improvements) and other (loans granted for purposes such as business, debt consolidation, education, etc.). Lending for house purchases comprises loans secured on residential property that are used for the purpose of house purchase and, where identifiable, other loans for house purchases made on a personal basis or secured against other forms of assets — deposits placed with other MFIs — financial leases granted to third parties — Financial leases are contracts whereby the legal owner of a durable good (‘lessor’) lends these assets to a third party (‘lessee’) for most if not all of the economic lifetime of the assets, in exchange for instalments covering the costs of the good plus an imputed interest charge. The lessee is in fact assumed to receive all of the benefits to be derived from the use of the good and to incur the costs and risks associated with ownership. For statistical purposes, financial leases are treated as loans from the lessor to the lessee (enabling the lessee to purchase the durable good). Financial leases granted by an MFI (acting as the lessor) are to be recorded in the MFI balance sheet under the asset item ‘loans’. The assets (durable goods) which have been lent to the lessee should not be recorded anywhere on the MFI's balance sheet — bad debt loans that have not yet been repaid or written off — Bad debt loans are considered to be loans in respect of which repayment is overdue or otherwise identified as being impaired. NCBs define whether bad loans are to be recorded gross or net of provisions — holdings of non-negotiable securities — Holdings of securities other than shares and other equity which are not negotiable and cannot be traded on secondary markets, see also ‘traded loans’ — traded loans Loans that have de facto become negotiable are to be classified under the asset item ‘loans’ provided that they continue to be evidenced by a single document and are, as a general rule, only traded occasionally: — subordinated debt in the form of deposits or loans — Subordinated debt instruments provide a subsidiary claim on the issuing institution that can only be exercised after all claims with a higher status (e.g. deposits/loans) have been satisfied, giving them some of the characteristics of ‘shares and other equity’. For statistical purposes, subordinated debt is to be treated according to the nature of the financial instrument, i.e. classified as either ‘loans’ or ‘securities other than shares’ according to the nature of the instrument. Where MFI holdings of all forms of subordinated debt are currently identified as a single figure for statistical purposes, this figure is to be classified under the item ‘securities other than shares’, on the grounds that subordinated debt is predominately constituted in the form of securities, rather than as loans — claims under reverse repos — Counterpart of cash paid out in exchange for securities purchased by reporting agents — see liability item 9.4 The following item is not treated as a loan: — loans granted on a trust basis Loans granted on a trust basis (‘trust loans’/‘fiduciary loans’) are loans made in the name of one party (‘the trustee’) on behalf of a third party (‘the beneficiary’). For statistical purposes, trust loans are not to be recorded on the balance sheet of the trustee where the risks and rewards of ownership of the funds remain with the beneficiary. The risks and rewards of ownership remain with the beneficiary where: (i) the beneficiary assumes the credit risk of the loan (i.e. the trustee is responsible only for the administrative management of the loan); or (ii) the beneficiary's investment is guaranteed against loss, should the trustee go into liquidation (i.e. the trust loan is not part of the assets of the trustee that can be distributed in the event of bankruptcy) 3. Securities other than shares Holdings of securities other than shares or other equity, which are negotiable and usually traded on secondary markets or can be offset on the market, and which do not grant the holder any ownership rights over the issuing institution. This item includes: — holdings of securities which give the holder the unconditional right to a fixed or contractually determined income in the form of coupon payments and/or a stated fixed sum at a specific date (or dates) or starting from a date defined at the time of issue — negotiable loans that have been restructured into a large number of identical documents and that can be traded on secondary markets (see also ‘traded loans’ in category 2) — subordinated debt in the form of debt securities (see also ‘subordinated debt in the form of deposits or loans’ in category 2) — in order to maintain consistency with the treatment of repo-type operations, securities lent out under securities lending operations remain on the original owner's balance sheet (and are not to be transferred to the balance sheet of the temporary acquirer) where there is a firm commitment to reverse the operation (and not simply an option to do so) 3a. Securities other than shares of up to and including one year's original maturity — Holdings of negotiable debt securities (evidenced or not by documents) of original maturity of up to and including one year — Negotiable loans of original maturity of up to and including one year that are restructured into a large number of identical documents and that are traded on secondary markets — Subordinated debt in the form of debt securities of original maturity of up to and including one year 3b. Securities other than shares of over one year and up to and including two years' original maturity — Holdings of negotiable debt securities (evidenced or not by documents) of over one year and up to and including two years' original maturity — Negotiable loans of over one year and up to and including two years' original maturity that are restructured into a large number of identical documents and that are traded on secondary markets — Subordinated debt in the form of debt securities of over one year and up to and including two years' original maturity 3c. Securities other than shares of over two years' original maturity — Holdings of negotiable debt securities (evidenced or not by documents) of original maturity over two years — Negotiable loans of over two years' original maturity that are restructured into a large number of identical documents and that are traded on secondary markets — Subordinated debt in the form of debt securities of original maturity over two years 4. ►C1 Money market fund shares/units ◄ This asset item includes holdings of shares/units issued by MMFs. MMFs are collective investment undertakings the shares/units of which are, in terms of liquidity, close substitutes for deposits, and which primarily invest in money market instruments and/or in MMF shares/units and/or in other transferable debt instruments with a residual maturity of up to and including one year, and/or in bank deposits, and/or which pursue a rate of return that approaches the interest rates of money market instruments (see also categories 5 and 10) 5. Shares and other equity Holdings of securities which represent property rights in corporations or quasi-corporations. These securities generally entitle the holders to a share in the profits of corporations or quasi-corporations and to a share in their own funds in the event of liquidation. Mutual fund shares (other than MMF shares/units) are included here. 6. Fixed assets For the purposes of the reporting scheme, this consists of non-financial assets, tangible or intangible, which are intended to be used repeatedly for more than one year by reporting agents. They include land and buildings occupied by the MFIs, as well as equipment, software and other infrastructure. Fixed financial assets are not recorded here but instead under ‘loans’/‘securities other than shares’/‘shares and other equity’, according to the type of instrument 7. Remaining assets The item ‘remaining assets’ is regarded as the residual item on the asset side of the balance sheet, defined as ‘assets not included elsewhere’ This item may include: — financial derivative positions with gross positive market values — For statistical purposes, financial derivative instruments that are subject to on-balance-sheet recording are included here — gross amounts receivable in respect of suspense items — Suspense items are asset balances held in the MFI balance sheet which are not booked in the name of customers but which nevertheless relate to customers' funds (e.g. funds that are awaiting investment, transfer or settlement) — gross amounts receivable in respect of transit items — Transit items represent funds (usually belonging to customers) that are in the course of being transmitted between MFIs. Items include cheques and other forms of payment that have been sent for collection to other MFIs ►M4 — accrued interest receivable on loans — In accordance with the general principle of accruals accounting, interest receivable on loans should be subject to on-balance-sheet recording as it accrues (i.e. on an accruals basis) rather than when it is actually received (i.e. on a cash basis). Accrued interest on loans is classified on a gross basis under the category ‘remaining assets’. Accrued interest is excluded from the loan to which it relates ◄ — dividends to be received — amounts receivable not related to the main MFI business — asset counterpart to coins issued by the State (NCBs' balance sheets only) — ‘Remaining assets’ may exclude financial instruments that take the form of financial assets (included within the other balance sheet items), certain financial instruments that do not take the form of financial assets, such as guarantees, commitments, administered and trust loans (recorded off-balance sheet), and non-financial assets, such as land and commodities (included within ‘fixed assets’)



LIABILITY CATEGORIES Category Description of main features 8. Currency in circulation The liability category ‘currency in circulation’ is defined as ‘banknotes and coins in circulation that are commonly used to make payments’. This category includes banknotes issued by the ECB and the NCBs. Coins in circulation are not a liability of MFIs in the participating Member States, but a liability of the central government. However, coins are part of the monetary aggregates and, by convention, this liability is to be entered under the category ‘currency in circulation’. The counterpart to this liability is to be included within ‘remaining assets’ 9. Deposits Amounts owed to creditors by reporting agents, other than those arising from the issue of negotiable securities. For the purposes of the reporting scheme, this category is broken down into overnight deposits, deposits with agreed maturity, deposits redeemable at notice and repurchase agreements ‘Deposits’ also cover ‘loans’ as liabilities of MFIs. In conceptual terms, loans represent amounts received by MFIs that are not structured in the form of ‘deposits’. The ESA 95 distinguishes between ‘loans’ and ‘deposits’ on the basis of the party that takes the initiative (if this is the borrower, then it constitutes a loan, but if this is the lender, then it constitutes a deposit), although in practice the relevance of this distinction will vary according to the national financial structure. Within the reporting scheme, ‘loans’ are not recognised as a separate category on the liabilities side of the balance sheet. Instead, balances that are considered as ‘loans’ are to be classified indistinguishably under the item ‘deposit liabilities’, unless they are represented by negotiable instruments. This is in line with the definition of ‘deposit liabilities’ above. Loans to MFIs that are classified as ‘deposit liabilities’ are to be broken down in accordance with the requirements of the reporting scheme (i.e. by sector, instrument, currency and maturity) Non-negotiable debt instruments issued by reporting agents are generally to be classified as ‘deposit liabilities’. Instruments may be referred to as being ‘non-negotiable’ in the sense that there are restrictions on the transfer of legal ownership of the instrument that means that they cannot be marketed or, although technically negotiable, they cannot be traded owing to the absence of an organised market. Non-negotiable instruments issued by reporting agents that subsequently become negotiable and that can be traded on secondary markets should be reclassified as ‘debt securities’ Margin deposits (margins) made under derivative contracts should be classified as ‘deposit liabilities’, where they represent cash collateral deposited with MFIs and where they remain in the ownership of the depositor and are repayable to the depositor when the contract is closed out. On the basis of current market practice, it is also suggested that margins received by the reporting agent should only be classified as ‘deposit liabilities’ to the extent that the MFI is provided with funds that are freely available for on-lending. Where a part of the margin received by the MFI has to be passed to another derivatives market participant (e.g. the clearing house), only that part which remains at the disposal of the MFI should in principle be classified as ‘deposit liabilities’. The complexities of current market practice may make it difficult to identify those margins that are truly repayable, because different types of margin are placed indistinguishably within the same account, or those margins that provide the MFI with resources for on-lending. In these cases, it is acceptable to classify these margins under ‘remaining liabilities’ or as ‘deposit liabilities’, according to national practice ‘earmarked balances related to e.g. leasing contracts’ are classified as deposit liabilities under ‘deposits with agreed maturity’ or ‘deposits redeemable at notice’ depending on the maturity/provisions of the underlying contract Funds (deposits) received on a trust basis shall not be recorded on the MFI statistical balance sheet (see ‘loans granted on a trust basis’ under category 2) 9.1. Overnight deposits Deposits which are convertible into currency and/or which are transferable on demand by cheque, banker's order, debit entry or similar means, without significant delay, restriction or penalty. Balances representing prepaid amounts in the context of electronic money, either in the form of ‘hardware based’ e-money (e.g. prepaid cards) or ‘software based’ e-money, issued by MFIs, are included under this item. This item excludes non-transferable deposits which are technically withdrawable on demand but which are subject to significant penalties: — balances (interest-bearing or not) which are transferable by cheque, banker's order, debit entry or the like, without any significant penalty or restriction — balances (interest-bearing or not) which are immediately convertible into currency on demand or by close of business on the day following that on which the deposit was made, without any significant penalty or restriction, but which are not transferable — balances (interest-bearing or not) representing prepaid amounts in the context of ‘hardware-based’ or ‘software-based’ e-money (e.g. prepaid cards) — loans to be repaid by close of business on the day following that on which the loan was granted 9.2. Deposits with agreed maturity Non-transferable deposits which cannot be converted into currency before an agreed fixed term or that can only be converted into currency before that agreed term provided that the holder is charged some kind of penalty. This item also includes administratively regulated savings deposits where the maturity related criterion is not relevant (classified in the maturity band ‘over two years’). Financial products with roll-over provisions must be classified according to the earliest maturity. Although deposits with agreed maturity may feature the possibility of earlier redemption after prior notification, or may be redeemable on demand subject to certain penalties, these features are not considered to be relevant for classification purposes 9.2a. Deposits of up to and including one year's agreed maturity — Balances placed with a fixed term to maturity of no more than one year (excluding deposits with an original maturity of one day) that are non-transferable and cannot be converted into currency before that maturity — Balances placed with a fixed term to maturity of no more than one year that are non-transferable but can be redeemed before that term after prior notification; where notification has been given, these balances should be classified in 9.3a or 9.3b, where appropriate — Balances placed with a fixed term to maturity of no more than one year that are non-transferable but can be redeemed on demand subject to certain penalties — Margin payments made under derivative contracts to be closed out within one year, representing cash collateral placed to protect against credit risk but remaining in the ownership of the depositor and being repayable to the depositor when the contract is closed out — Loans evidenced by a single document of up to and including one year's original maturity — Non-negotiable debt securities issued by MFIs (evidenced or not by documents) of original maturity of up to and including one year — Subordinated debt issued by MFIs in the form of deposits or loans of original maturity of up to and including one year 9.2b. Deposits of over one year and up to and including two years' agreed maturity — Balances placed with a fixed term to maturity of between one and two years that are non-transferable and cannot be converted into currency before that maturity — Balances placed with a fixed term to maturity of between one and two years that are non-transferable but can be redeemed before that term after prior notification; where notification has been given, these balances should be classified in 9.3a or 9.3b, where appropriate — Balances placed with a fixed term to maturity of between one and two years that are non-transferable but can be redeemed on demand subject to certain penalties — Margin payments made under derivative contracts to be closed out within between one and two years, representing cash collateral placed to protect against credit risk but remaining in the ownership of the depositor and being repayable to the depositor when the contract is closed out — Loans evidenced by a single document of between one and two years' original maturity — Non-negotiable debt securities issued by MFIs (evidenced or not by documents) of original maturity of over one year and up to and including two years — Subordinated debt issued by MFIs in the form of deposits or loans of original maturity of over one year and up to and including two years 9.2c. Deposits of over two years agreed maturity — Balances placed with a fixed term to maturity of more than two years that are non-transferable and cannot be converted into currency before that maturity — Balances placed with a fixed term to maturity of more than two years that are non-transferable but can be redeemed before that term after prior notification; where notification has been given, these balances should be classified in 9.3a or 9.3b, where appropriate — Balances placed with a fixed term to maturity of more than two years that are non-transferable but can be redeemed on demand subject to certain penalties — Balances (regardless of maturity) in which the interest rates and/or terms and conditions are specified in national legislation and which are designed to be held for specific purposes (e.g. house financing) occurring after two years (even if technically they are redeemable on demand) — Margin payments made under derivative contracts to be closed out in more than two years, representing cash collateral placed to protect against credit risk but remaining in the ownership of the depositor and being repayable to the depositor when the contract is closed out — Loans evidenced by a single document of more than two years' original maturity — Non-negotiable debt securities issued by MFIs (evidenced or not by documents) of original maturity of over two years — Subordinated debt issued by MFIs in the form of deposits or loans of original maturity of over two years 9.3. Deposits redeemable at notice Non-transferable deposits without any agreed maturity which cannot be converted into currency without a period of prior notice, before the term of which the conversion into cash is not possible or possible only with a penalty. They include deposits which, although perhaps legally withdrawable on demand, would be subject to penalties and restrictions according to national practice (classified in the maturity band ‘up to and including three months’), and investment accounts without period of notice or agreed maturity, but which contain restrictive drawing provisions (classified in the maturity band ‘over three months’) 9.3a Deposits redeemable at up to and including three months notice — Balances placed without a fixed maturity that can be withdrawn only subject to a pre-announcement of up to and including three months; if redemption prior to that notice period (or even on demand) is possible, it involves the payment of a penalty — Non-transferable sight savings deposits and other types of retail deposits which, although legally redeemable on demand, are subject to significant penalties — Balances placed with a fixed term to maturity that are non-transferable but that have been subject to a notification of less than three months for an earlier redemption 9.3b. Deposits redeemable at over three months notice of which over two years notice (where applicable) — Balances placed without a fixed maturity that can be withdrawn only subject to a pre-announcement of more than three months; if redemption prior to that notice period (or even on demand) is possible, it involves the payment of a penalty — Investment accounts without a period of notice or agreed maturity, but which contain restrictive drawing provisions — Balances placed with a fixed term to maturity, that are non-transferable but have been subject to a notification of more than three months for an earlier redemption 9.4. Repos Counterpart of cash received in exchange for securities/gold sold by reporting agents at a given price under a firm commitment to repurchase the same (or similar) securities/gold at a fixed price on a specified future date. Amounts received by reporting agents in exchange for securities/gold transferred to a third party (‘temporary acquirer’) are to be classified under ‘repurchase agreements’ where there is a firm commitment to reverse the operation and not merely an option to do so. This implies that reporting agents retain effective (economic) ownership of the underlying securities/gold during the operation. In this respect, the transfer of legal ownership is not the relevant feature for determining the treatment of repo-like operations. Where the temporary acquirer sells the securities received by way of a repo operation, this sale must be recorded as an outright transaction in securities/gold and entered in the balance sheet of the temporary acquirer as a negative position in the securities/gold portfolio The following three variants of repo-type operations are all structured in such a way as to satisfy the conditions necessary for treatment as collateralised loans. Hence amounts received by reporting agetns (in exchange for securities/gold temporarily transferred to a third party) are classified under ‘repurchase agreements’: — amounts received in exchange for securities/gold temporarily transferred to a third party in the form of a repurchase agreement — amounts received in exchange for securities/gold temporarily transferred to a third party in the form of bond lending (against cash collateral) — amounts received in exchange for securities/gold temporarily transferred to a third party in the form of a sale/buy-back agreement 10. Money market fund shares/units Shares or units issued by MMFs. MMFs are collective investment undertakings the shares/units of which are, in terms of liquidity, close substitutes for deposits, and which primarily invest in money market instruments and/or in MMF shares/units and/or in other transferable debt instruments with a residual maturity of up to and including one year, and/or in bank deposits, and/or which pursue a rate of return that approaches the interest rates of money market instruments 11. Debt securities issued Securities other than equity issued by reporting agents, which are instruments usually negotiable and traded on secondary markets or which can be offset on the market and which do not grant the holder any ownership rights over the issuing institution. This item includes securities that give the holder the unconditional right to a fixed or contractually determined income in the form of coupon payments and/or a stated fixed sum at a specific date (or dates) or starting from a date defined at the time of issue. Non-negotiable instruments issued by reporting agents that subsequently become negotiable should be reclassified as ‘debt securities’ (see also category 9) Subordinated debt issued by MFIs is to be treated in the same way as other debt incurred by MFIs for the purposes of money and banking statistics. Hence, subordinated debt issued in the form of securities is to be classified as ‘debt securities issued’, whereas subordinated debt issued by MFIs in the form of deposits or loans is to be classified as ‘deposit liabilities’. Where all subordinated debt issued by MFIs is identified as a single amount for statistical purposes, this figure is to be classified under the item ‘debt securities issued’, on the grounds that subordinated debt is predominately constituted in the form of securities rather than as loans. Subordinated debt should not be classified under the liability item ‘capital and reserves’ 11a. Debt securities of up to and including one year's original maturity — Negotiable debt securities issued by MFIs (evidenced or not by documents) of original maturity of up to