Draft COUNCIL REGULATION (EC) on the allocation of the financial intermediation services indirectly measured (FISIM) within the European system of national and regional accounts (ESA)
Date: 1997-02-13
Institutions: European Commission
Subjects: European accounting system, data collection, financial policy, gross domestic product, statistical method

COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels,  13.02.1997 
COM(97)50 final 

97/0037 (CNS) 

Draft 

COUNCIL REGULATION (EC) 

on  the  allocation  of  the  financial  intermediation  services 

indirectly  measured  (FISIM)  within  the  European  system  of  national  and 

regional  accounts  (ESA) 

(presented by the Commission) 

EXPLANATORY  MEMORANDUM 

Article  2(3)  of  the  ES A  1995  Regulation  adopted  by  the  Council  on  25  June  1996  states  that  "in 
accordance  with 
than 
31 December  1997,  take  a  decision  on  introducing  the  system  for  breaking  down  the  financial 
intermediation  services  indirectly  measured  (FISIM)  described  in  the  annex  to  the  methodology, 
and shall, if appropriate, adopt the necessary  measures  for the implementation  thereof. 

the  relevant  provisions  of  the  Treaty,  the  Council  shall,  not 

later 

At  its 22nd  meeting  on 23  September  1996, the  Statistical  Programme  Committee  (SPC)  decided  to 
forward  the  draft  Regulation  to  the  Council  even  if  solutions  still  needed  to  be  found  to  certain 
technical  problems  (availability  of  data,  reference  rates,  calculation  at  constant  prices).  These 
problems  would  continue  to  be  examined  at  the  meetings  of  national  accounts  experts  and  the 
Committee  on  Monetary,  Financial  and  Balance-of-Payments  Statistics  (CMFB).  The  text  of  the 
draft  Regulation  would  then  be  modified  in  the  course  of  the  Council  debates  in  the  light  of  the 
results obtained  by the Working  Parties. 

Breaking  down  FISIM  makes  it  possible  to  show  in  GDP  the  services  provided  by  financial 
intermediaries  to  households,  the  rest  of  the  world,  public  administrations  and  non-profit-making 
institutions  through  their  intermediate  consumption. 

1.  The  aim  of  the  draft  Regulation  is  to  establish  a  methodology  for  breaking  down  FISIM  which 
will  permit  a  more  accurate  comparison  of  gross  domestic  product  (GDP)  within  the  European 
Union. 

2.  The  Member  States  share  some  of  the  competency  for  this  activity,  which  is  aimed  at 
incorporating  the breakdown  of  FISIM  into the  European  System  of Accounts  (ESA).  Collection 
itself and the  collection  methods  used are the responsibility  of the Member  States. 

3.  All  the  Member  States  are  concerned.  The  Member  States  already  collect  some  information  on 
the breakdown  of FISIM. The  act  will entail  the  collection  of supplementary  information  (a  fairly 
small  number  of  items  for  the  majority  of  Member  States)  and  changes  in  the  concepts  and 
classifications  used. 
The  draft  Regulation  takes  account  of  the  need  to  be  able  to  adapt  statistical  definitions  in  the 
light  of  socio-economic  and  technical  developments  which  affect  the  production  system.  It  will 
determine  the quality  of the observation  and  analysis  for purposes  of economic  policies. 

4.  Only  a  Community-level  measure  such  as  this  will  make  it  possible  to  define  the  reference 
framework  for  the  accounting  rules  governing  the  breakdown  of  FISIM.  the  actual  breakdown 
being  subsequently  carried  out  by  the  Member  States  according  to  the  system  established  at 
Community  level. 

O 

5.  The implementation  of this legal act will  lead to a substantial  improvement  in the methodology 
of the  European  System  of National  and  Regional  Accounts  in the  European  Community.  The 
resulting increased comparability will make it possible to meet more effectively  the requirements 
arising from  the management of Economic and Monetary Union and the use of national accounts 
aggregates for Community administrative, and in particular budgetary, calculations. Without this 
legal act, the development, monitoring, verification  and evaluation of Community economic and 
monetary  policies  could  be  based  only  on  non-harmonised  statistics,  since  the  proportion  of 
direct  invoicing  of users by financial  intermediation  services varies widely from  one country to 
another. This would pose problems. 

6.  A  legal  act  -  in  this  case  a  Council  Regulation  -  makes  it  possible  to  establish  a  reference 
framework  for  the  accounting  rules  governing  the  breakdown  of  FISIM,  without  having  to go 
into the details of how this breakdown should be organised and produced in practice. 

7.  A  Council  Regulation  is  necessary  for  establishing  the  reference  framework,  but  the  actual 
breakdown  of  FISIM  remains  a matter  for  the  Member  States,  which  will  need  to  adapt  their 
statistical systems. 

8.  The proposal  in itself defines  the standards and concepts to be implemented. It does not provide 

for any specific measures for any one category of enterprise. 

H 

Draft 

COUNCIL REGULATION ŒO 

on  the  allocation  of  the  financial  intermediation  services 

indirectly  measured  (FISIM)  within  the  European  system  of  national  and 

regional  accounts  (ESA) 

THE COUNCIL  OF THE  EUROPEAN  UNION, 

Having  regard  to  the  Treaty  establishing  the  European  Community,  and  in  particular  Article  213 
thereof, 

Having regard to the draft  Regulation  submitted  by the  Commission1, 

Having regard  to the opinion  of the European  Parliament2, 

Having regard  to the opinion of the European Monetary  Institute3, 

Whereas  Council  Regulation  (EC)  No.../96  of  25.  June  1996  on  the  European  System  of  National 
and  Regional  Accounts  in the European  Community  (ESA)4 is the reference  framework  of  common 
standards,  definitions,  classifications  and  accounting  rules  for  drawing  up  the  accounts  of  the 
Member  States  for  the requirements  of the European  Community, so that results that are  comparable 
between  Member  States can be  obtained; 

Whereas  solving  the  problem  of  allocating  financial  intermediation  services  indirectly  measured 
(FISIM)  would  be an important  qualitative  improvement  to the methodology  of the  ESA; 

Whereas  the  allocation  of  FISIM  would  lead  to  a  more  accurate  intra-European  Union  comparison 
of Gross Domestic  Product  (GDP)  levels; 

Whereas  Article  2,  paragraph  3,  of  the  Regulation  (EC)  No.../96  states  that  the  decision  on 
implementing  the  allocation  of  FISIM,  the  principles  of  which  are  described  in  Annex  3  of  the 
Regulation,  shall  be taken no later than  31.  December  1997; 

Whereas, in accordance  with the principle of subsidiarity, the objectives  of the measures  to be  taken 
can  only  be  achieved  via  a  Community  legal  act  because  only  the  Commission  can  coordinate  the 
necessary  harmonisation  of  the  statistical  methods  for  calculating  and  allocating  FISIM  at 
Community  level,  although  the  calculation  and  allocation  proper  as  well  as  the  infrastructure 
required  to monitor  application of the methods, can be organised  by the Member  States; 

Whereas 
the  Statistical  Program  Committee  established  by  Council  Decision  89/382/EEC, 
Euratom5,  consulted  by the  Commission  in accordance  with  Article  3 of the  aforesaid  Decision  and 
the  Committee  on  Monetary,  Financial  and  Balance  of  Payments  Statistics  established  by  Council 

1  OJNo.  C../..  1996, p. 
2O J N o.  C.V..  1996, p. 
3  OJNo.  C.V..  1996,  p. 
4  OJNo.  L.V..  1996. p. 
5  OJNo.  L  181. 28.6.1989  p.l 

*f  bto 

Decision  91/115/EEC6,  consulted  by the  Commission  in accordance  with  Article  3 of  the  aforesaid 
Decision, have declared  themselves  in favour  of the draft  of this  Regulation; 

HAS ADOPTED  THIS  REGULATION: 

Article 1 
General  provisions 

F  r the  purpose  of  introducing  the  system  for  breaking  down  the  financial  intermediation  services 
•ectly measured  (FISIM),  Annex  I and  II of Annex  A  of Regulation  (EC) No..796  are  amended 

ordance  with Annexes  1  and 2 of the present  Regulation. 

r  Tiber States  shall base themselves on the provisions  set out  in Annex  3 of the present  Regulation 

jrder to implement the system of FISIM  allocation. 

Article 2 
Tables 

The  figures  contained  in  the  tables  affected  by  the  allocation  of  FISIM  in  Annex  A  of  Regulation 
(EC)  No.../96  are  to  be  amended  in  accordance  with  the  procedure  set  out  in  Article  5  of  this 
Regulation. 
The  tables  affected  by  implementation  of  the  allocation  of  FISIM  contained  in  Annex  B- of 
Regulation  (EC) No.../96  are to be amended  in accordance  with the procedure  set out  in Article  5 of 
this  Regulation. 

Article 3 
Reports 

Member  States  shall  transmit  to  the  Commission,  at  its  request,  any  information,  necessary  for  the 
application  of the present  Regulation. 

Article  4 
Committee 

The  necessary  measures  for  the  application  of the  present  Regulation,  including  measures  to  clarify 
and  improve  the  methodology  for  calculating  and  allocating  FISIM,  shall  be  adopted  by  the 
Commission  in accordance  with Article 2(2) of Regulation  (EC)No.../96. 

Article  5 
Procedure 

1.  The  Commission  shall  be  assisted  by  the  Statistical  Programme  Committee,  hereinafter  referred 

to as "the  Committee". 

2.  The representative  of the Commission  shall  submit to the committee  a draft  of the measures  to be 
taken.  The  committee  shall  deliver  its  opinion  on  the  draft  within  a  time  limit  which  the 
Chairman  may  set  in  the  light  of  the  urgency  of  the  matter  in  hand.  The  opinion  shall  be 

6  OJNo.  L 59, 6.3.1991 p.l 

delivered  by  the  majority  laid  down  in  Article  148(2)  of  the  Treaty  establishing  the  European 
Community  for  decisions  which  the  Council  is  required  to  adopt  on  a  proposal  from  the 
Commission.  The  votes  of  the  representatives  of  the  Member  States  within  the  committee  shall 
be weighted  in the manner set out in the above mentioned  Article. The Chairman  shall  not vote. 

3.  The  Commission  shall  adopt  measures  which  shall  apply  immediately.  However,  if  these 
measures  are  not  in accordance  with  the  opinion  of the  Committee,  they  shall  be  communicated 
by the Commission  to the Council  forthwith.  In that  event: 

a)  The  Commission  shall  defer  application  of  the  measures  which  it  has  decided  for  a period  of 

three months  from  the date of  communication. 

b) The  Council, acting by a qualified  majority,  may take a different  decision  within  the time  limit 

referred  to in point a). 

Article 6 
Data  transmission 

The  Member  States  shall  apply  the  provisions  of  this  Regulation  within  the  context  of  transmitting 
to the Commission  the tables specified  in Article  3 of Regulation  (EC) No.../96. 

Article  7 
Final  provisions 

This  Regulation  shall  enter  into  force  on the  twentieth  day  following  its  publication  in  the  Official 
Journal  of the European  Communities. 

This Regulation  shall  be binding  in its entirety  and directly  applicable  in all Member  States. 

Brussels,  ../..  19;; 

For the  Council, 
The  President 

6 

Annex  1 

Financial  intermediation  services  indirectly  measured 
(FISIM) 

to  Council  Regulation  (EC)  No.../97,  . of 

the 
Pursuant 
allocation  of financial  intermediation  services  indirectly  measured  (FISIM) 
within  the  framework  of  the  European  system  of  national  and  regional 
accounts  (ESA)  (...),  the  following  amendments  are  made  to  the  ESA 
chapters  set out  hereafter: 

...1997,  on 

C h a p t e r! 

1.13. d) 

Delete  after  "The  ESA  also  contains  many 
specific  conventions,  e.g.:" 

financial  services 
"recording 
the  use  of 
indirectly  measured  as 
intermediate 
the 
consumption  of  a  nominal  sector  or  a 
nominal  industry." 

Replace  by: 

intermediation 
"allocating  the  use  of  financial 
services  indirectly  measured  (FISIM)  to  user 
sectors/industries." 

1.25. 

Chapter  3. 

Add  after  "Some  of  the  major  differences 
in concepts  are:" 

"i) 

the  use  of 
intermediation 
financial 
services  indirectly  measured  (FISIM)  is 
now  allocated  to  user  sectors/industries 
instead  of  to  a  nominal  sector  (industry). 
As  a  consequence,  the  use  of  FISIM  is 
not  anymore  by  convention 
recorded 
entirely  as  intermediate  consumption,  but 
can  also  be 
final  consumption  and 
exports.  This  implies  then  that  imports  of 
FISIM can also  occur." 

3.63. 

Delete  all  the  text  from  the  beginning  until 
"....  is  valued  on  the  basis  of  the  fees  of 

commissions  charged" 

included. 

Replace  by: 

"J.  Financial 
(this 
intermediation 
includes  insurance  services  and  pension  funds 
services) 

services 

intermediation 

Financial 
insurance 
services)  consist in: 

services 

services 

and 

pension 

(excluded 
funding 

financial  intermediation  services  directly 
charged  by 
to 
their  clients  and  measured  as  the  sum  of 
fees and commission  charged. 

intermediaries 

financial 

can 

intermediaries 

Financial 
charge 
explicitly  for  the  intermediation  services 
which  they  provide.  The  output  of  such 
services  is  valued  on  the  basis  of  fees 
and commissions  charged; 

a) 

* 

b) 

financial intermediation  services  indirectly 
charged and indirectly measured (FISIM). 

Financial  intermediaries  provide  services 
for  which  they  do  not  charge  explicitly 
fees  and  commissions.  They  pay  lower 
rates of interest  than would  otherwise  be 
the case to those  who  lend  them  money 
and  charge  higher  rates  of  interest  to 
those who borrow from them. 

the  management 

Consequently,  FISIM output  is  generated 
by 
financial 
intermediaries  of 
loans  and  deposits 
whose  rates  they  control;  in  contrast, 
there  is  no  intermediation  service  for 
securities other than shares. 

by 

— 

those 

to  whom 

The output of the subsectors  S122 (other 
financial  institutions)  and  S123  (other 
financial 
excluding 
intermediaries 
insurance  corporations  and  pension 
funds), except investment funds  is valued 
on the basis of the difference between the 
actual  rates  of 
interest  payable  and 
receivable  and  a  "reference"  rate  of 
interest.  For 
the 
intermediaries  lend  funds,  both  resident 
and  non-resident,  it  is  measured  by  the 
difference  between  the  effective  interest 
charged  on  loans  and  the  amount  that 
would  be  paid  if  a  reference  rate  were 
used.  For 
the 
intermediaries borrow funds, both resident 
and  non-resident,  it  is  measured  by  the 
difference  between 
they 
would  receive  if  a  reference  rate  were 
used  and 
they 
actually receive; 

from  whom 

the  effective 

interest 

interest 

those 

the 

c) 

financial  intermediation  services  provided 
by the central bank. 

The central bank must  not be included  in 
the  calculation  of  FISIM:  its  output  is 
measured as the sum of costs." 

3.70. j) 

Delete: 

Replace by: 

"only  for  the  total  economy:  all  financial 
intermediation  services  indirectly  measured 
(FISIM) provided by resident producers." 

"the  use  of  financial  intermediation  services 
indirectly measured by resident producers." 

3.70. 

Add : 

"k) 

By  convention,  the  central  bank  output 
the 
should  be  entirely  allocated 
intermediate 
other 
of 
consumption 
financial intermediaries (sub-sectors S122 
-S123)." 

to 

to 

Add 
charged;": 

"financial  services  directly 

"and the part of financial  intermediation  services 
indirectly  measured  used  for  final  consumption 
purposes by households;" 

Add  immediately after  "financial  services 
by the amount of the explicit commissions 
and fees;": 

"h') 

the  part  of 
services 
non-residents;" 

financial 

intermediation 
indirectly  measured  used  by 

Replace by: 

"The value of the services  provided  by  financial 
intermediaries  being  allocated  among  different 
customers,  the  actual  payments  or  receipts  of 
interest to or from financiaTintermediaries need 
to  be  adjusted  to  eliminate  the  margins  that 
represent the implicit charges  made by financial 
intermediaries. The amounts of  interest  paid by 
borrowers  to  financial  intermediaries  must  be 
reduced by the estimated values of the charges 
payable,  while 
interest 
receivable  by  depositors  must  be  similarly 
increased.  The  values  of  the  charges  are 
treated  as  payments  for  services  rendered  by 
financial  intermediaries  to  their  customers  and 
not as payments of interest." 

the  amounts  of 

3.76.  e) 

3.142.  h) 

Chapter 4. 

4.51. 

Delete: 

"The  value  of  the  services  provided  by 
financial  intermediaries  not  being  allocated 
among  different  customers, 
the  actual 
payments  or  receipts  of  interest  to  or  from 
financial  intermediaries  are  not  adjusted  to 
eliminate  the  margins  that  represent  the 
implicit 
financial 
intermediaries. An adjustment item is needed 
in the allocation of primary income account of 
financial  intermediaries  and  of  a  nominal 
industry  to  which,  by  convention,  the  whole 
output  of financial  intermediaries  is allocated 
as intermediate consumption." 

charges  made 

by 

3 

Chapter 8. 

8.09. 

Add on figures presented: 

Tables  1.1  and  1.2,  to show the  consequences 
of  allocation  of  FISIM  on  figures  presented  in 
the  chapter  8.,  "Sequence  of  accounts  and 
balancing items" (numerical example). 

8.14. 

Delete: 

Replace by: 

"As  financial  intermediation  services  indirectly 
measured (FISIM) are allocated to user sectors, 
certain  parts  of 
interest  payments  are 
reclassified  as  payments  of  services.  This 
reclassification has consequences for the values 
~oi output and intermediate consumption  (as well 
as  for  the  values  of  imports,  exports  and  final 
consumption)." 

financial 

intermediation 

services 
"As 
indirectly  measured (FISIM) are not allocated 
to user sectors, the whole of the value of the 
output of FISIM is treated as the intermediate 
consumption  of  a  nominal  sector  with  zero 
output  and  negative  value  added  equal  in 
size  but  opposite  in  sign  to  intermediate 
consumption. In this way, the value added of 
all sectors and industries together  is reduced 
in  total  by  this  amount.  To  lighten  the 
presentation of accounts, it is possible  not to 
insert  a  supplementary  column 
the 
nominal  sector,  but  instead  to  take  into 
in  the 
account  the  corresponding 
column total economy." 

figure 

for 

8.24. 

Delete: 

Replace by: 

"As financial intermediation services indirectly 
measured  (FISIM)  are  not  allocated  to  user 
sectors,  the  entries  shown  for  interest  are 
interest  payable  and 
for  actual 
those 
to 
receivable.  An  adjustment 
resources 
financial 
in 
corporations (with a negative sign) and in the 
column  nominal  sector  (with  a positive  sign). 
To  lighten  the  presentation  of  accounts,  it is 
possible  not 
insert  a  supplementary 
column for the nominal sector,  but instead to 
present 
the 
column total economy." 

the  corresponding 

is  made 

column 

figure 

the 

to 

in 

"As financial intermediation services  (FISIM) are 
allocated  to  user  sectors,  the  item  "interest"  in 
the  allocation  of  primary 
income  account 
corresponds  to  interest  payable  and  receivable 
after  FISIM  has  been  deducted  from  actual 
payables  by  borrowers  and  added  to  actual 
receivables by lenders." 

JJO 

Chapter 9. 

9.25.  a)  Delete: 

"the  intermediate  consumption  by  industry 
includes  the  use  of  financial  intermediation 
that  are 
indirectly  measured 
services 
recorded 
industry 
nominal 
(see paragraph 9.33.)" 

in 

a 

9.25.  b)  Delete: 

"minus  the  use  of  financial  intermediation 
services  indirectly  measured  (recorded  in  a 
nominal industry, see paragraph 9.33.)" 

9.33. 

Delete: 

In 

the 

supply 

rev.  1 

industry  classification 

"Throughout  the  supply  and  use  tables,  the 
NACE 
is 
extended with  a nominal  industry  for the use 
of  financial  intermediation  services  indirectly 
table,  no 
measured. 
transactions  are  recorded  at  all  for  this 
industry.  In  the  use  table,  the  total  use  of 
financial 
indirectly 
intermediation  services 
measured  is  recorded  as  the  intermediate 
consumption  of this  nominal industry.  As this 
nominal  industry  does  not  have  any  other 
transactions, 
its  net  operating  surplus  is 
negative  by  the  amount  of  its  intermediate 
consumption;  all  other  components  of  its 
value  added are zero. As a consequence, its 
total  gross  value  added  is  equal  to  its 
(negative) net operating surplus." 

M 

Table 1.1  Effect  of allocating  FISIM to  institutional sectors, including  changes for  non-market  producers 

"ST" 

^T 

"5TÏ5 

514 

51T 

^ 12 

Goods 
and 
services 
(res.) 

Total 
eco 
nomy 

General 
govem-

House 
holds 

Finan 
cial 
corpo 
rations 

Non-
finan-
cial 
corpo 
rations 

Resources 

S . 11 

Non-
finan-

corpo-
retions 

1S7Î2 

5TÏT 

^U 

"57ÏT 

"3T 

~S~2~ 

Finan 
cial 
corpo 
rations 

General 
govem-
ment 

House 
holds 

Total 
eco 
nomy 

Rest 
of 
the 
world 

Goods 
and 
services 
(uses) 

Production 
account/ 
external 
account 
Trrr 
Generation 
of  income 
account 
1ŒT. 
Allocation 
of  primary 
income 
account 
TT2- 
Secondary 
distribution 
of 
income 
account 
l.4\  Use 
of  income 
account 

" 

4 

27 
30 

30 

28 

217 

22 

22 

T r a n s a c t i o ns  a nd  b a l a n c i ng  I t e ms 

P.72 
P.62 
P.1 
P.2 
B  1 

Imports  of  services 
Exports  of  services 
Output 
Intermediate  consumption 
Value  added/external  balance 

B  2 

Operating  surplus 

35 

-21 

D 41 

Interest 

33 

106 

0  5 

Bolance  ol primary  incomes 

" 3T 

4T 

14 

3T 

49 

33" 

7 

1 

Disposable 

Income 

P.3 

Final consumption  expenditure 

B  8n 

Saving,  net/external  balance 

"35" 

209 

21 

2T 

22 

Total  Accounts 

2 
4 
57 

I.  Production 
account/ 
external 
account 

is"  im 

Generation 
of  income 
account 
TTTT 
Allocation 
of primary 
income 
account 

IrJ 

230 

2T  T IT 

Secondary 
distribution 
of  income 
account 
14.  Use 
of  Income 
account 

Table 1.2  Effect of allocating  FISIM to nominal sector only 

S.1 

S.15 

S.14 

Goods 
and 

Rest 
of 

Total 

(res.) 

. world 

nomy  PISHs 

ouse-  govern- 
ment 
holds 

S.11 
Non-
finan 
cial 
corpo-
rations  Nominal 

Finan 
cial 
corpo- 
rations 

Transactions  and balancing  Items  Nominal 

S.11 
Non-
finan 
cial 
corpo-
rations 

S.12 

Finan 

cial  General 
corpo-  govem-
rations 

ment 

S.14 

S.1 

S.2 

holds  PISHs 

nomy 

Rest  Goods 
of 
and 
the  ervices 
world 

(uses) 

Total 

Accounts 

I. Production 
account 

11.1.1. 
Generation 
of income 
account 
11.1.2. 
Allocation 
of primary 
Income 
account 
II.2. 
Secondary 
distribution 
of income 
account 
II.4.  Use 
of income 
account 

& 

39 

77 

P.1  Output 
P.2 
B.I 

Intermediate  consumption 
Value added/external balance 

48 
-48 

B.2  Operating surplus 

D.41 

Interest 

P.l 19  Adjustment for FISIM 

B.5 

Balance of primary Incomes 

48 

"48" 

48 
125 

48 

48 
48 

12 

33 

5 

200 

22 

48 

-27 

16 

-2 

-6 

-27 

16 

B.6 

Disposable Income 

B.8n  Saving, net/external balance 

16 

-2 

-6 

Production 
account 
11.1.1. 
Generation 
of income 
account 
11.1.2. 
Allocation 
of primary 
income 
account 
11.2. 
Secondary 
distribution 
of income 
account 
11.4.  Use 
of income 
account 

Annex  2 

Annex II of Annex A of Regulation (EC) No.../96 is amended as follows. 

The following text is deleted from the third sentence of point  11 : 

":  property  income  receivable  less  interest  payable,  excluding  any  property 
income receivable from the investment of their own funds." 

4Q 

Annex 3 

Calculating  FISIM 

1)  Calculation  of FISIM  output by the sectors  S122  and  S123 

a) 

Statistical  data  required 

For  each  of  the  sub-sectors  S122  and  S123,  it  is  necessary  to  use  the  table  of  average 
stocks  of  loans  and  deposits  (split  by  user  sectors)  for  the  period  (average  for  the  start-
of-period  and  end-of-period,  or  preferably  the  average  of  four  quarters  or  twelve 
months)  and  the  accrued  interest  after  reallocation  of  interest  rate  subsidies  to  their 
actual  recipients as defined  by the  1995  ESA. 

b) 

The choice of a reference  rate 

The  loan  and  deposit  headings  in the  balance  sheets  of  financial  intermediaries  included 
in S122 and  S123 have to be broken  down to differentiate  between  loans-and deposits: 

-  which  are  "interbank"  (i.e.  within  the  institutional  units  included  in  sectors  S122  and 

S123); 

-  which  are  undertaken  with  the  user  institutional  sectors  (SI24  -  S125  -  Sll  -  ST3  -

S14 - SI5  - S2) (except  with the central  banks). 

Each  of  these  sub-divisions  must  be  broken  down  to  show  whether  the  borrower  or  the 
depositor  is resident  or  non-resident. 

To obtain  the FISIM  output  of the resident  Fis by  institutional  sector,  the reference  rate  is 
calculated  as 

Interest  receivable  on  loans  between  S122 and  S123 
stock  of  loans  between  S122 and  S123 

This  calculated  rate  is  the  "internal"  reference  rate  which  is  used  to  calculate  FISIM 
produced  by the resident  Fis and consumed  by residents. 

To  determine  FISIM  imports  and  exports,  the  reference  rate  used  is  the  average  rate 
weighted  by  the  levels  of  stocks  in  the  headings  "loans  between  S122  and  S123  on  one 
hand,  and  non-resident  Fis  on  the  other  hand"  and  "deposits  between  S122  and  S123  on 
one  hand, and  non-resident  Fis on the  other  hand"  which  are  included  in the  balance  sheet 
of the financial  intermediaries. 

This  calculated  rate  is  the  "external"  reference  rate  which  is  used  to  calculate  FISIM 
exports  and  imports. 

AS 

c) 

Calculation  of FISIM bv institutional  sector 

For  each  institutional  sector  it  is  necessary  to  have  the  following  table  of  loans  and 
deposits  granted  by the resident  Fis: 

stocks 

interest 
receivable 

stocks 

interest 
payable 

Loans  granted  by 
resident  Fis  I  S122 
IS123 

Deposits with 
resident  Fis | S122 
I  S123 

The  total  FISIM  by  institutional  sector  is  obtained  as the  sum  of  FISIM  on  loans  granted 
to the  institutional  sector and of FISIM  on deposits of the institutional  sector. 

FISIM  on the loans granted to the institutional  sector =  interest  receivable  on  loans 
- (loans  stocks x "internal" reference  rate) 

~  -

FISIM  on  the  deposits  of  the  institutional  sector  =  (deposit  stocks  x  "internal"  reference 
rate) - interest payable on deposits 

Part  of  the  output  is  exported;  on  the  basis  of  the  balance  sheet  of  the  financial 
intermediaries  (SI22  and  S123) we observe: 

stocks 

interest 
receivable 

stocks 

interest 
payable 

Loans  to non 
residents 

deposits  of non 
residents 

Exported  FISIM  is calculated  using the  "external" reference  rate as  follows: 

FISIM on loans granted  to non-resident  (including  Fis) = interest  receivable  - (loan  stocks 
x "external" reference  rate) 

FISIM  on  the  deposits  of  non-residents  (including  Fis)  =  (deposit  stocks  x  "external" 
reference  rate) - interest payable. 

d) 

Breakdown  into intermediate and final  consumption  of FISIM allocated  to  households 

The  services attributable  to households  must  be broken down into: 

- 
- 

- 

intermediate  consumption  of households  in their capacity  as owners of dwellings; 
intermediate  consumption  of households  in their  capacity  as owners  of  unincorporated 
enterprises; 
final  consumption  of households. 

A6 

It entails a breakdown  of loans to households (stocks and  interest) into: 

-  dwelling  loans; 
- 
-  other  loans to households. 

loans to households as owners of unincorporated  enterprises; 

Loans  to  households  as  owners  of  unincorporated  enterprises  and  dwelling  loans  are 
generally  shown  separately  in  the  various  breakdowns  of  lending  in  financial  and 
monetary  statistics.  Other  loans  to  households  can  be  obtained  by  subtraction.  FISIM  for 
loans  to  households  should  be  distributed  among  three  items  (dwelling  loans,  loans  to 
households  as owners of unincorporated  enterprises  and other  loans to households)  on  the 
basis of information  on average stocks and  interest  for  each of the three groups.  Dwelling 
loans are not identical  to mortgage  loans, as mortgage  loans can have other  purposes. 

Household  deposits must  be broken down into: 

-  deposits of households  as owners of unincorporated  enterprises;' 
-  deposits of  individuals. 

In  the  absence  of  statistics  on  the  deposits  of  households  as  owners  of  unincorporated 
enterprises,  average  stocks  can  be calculated  for  each  industry  on  the  basis  of  the  ratio  of 
deposits  to  value  added  observed  for  corporations  and  extrapolated  for  unincorporated 
enterprises.  FISIM  on  the  deposits  of  households  must  be  distributed  between  FISIM  on 
the  deposits  of  households  as  owners  of  unincorporated  enterprises  and  that  on  the 
deposits  of  individuals  on  the  basis  of  the  average  stocks  of  these  two  categories,  for 
which,  owing  to lack of further  information,  the same interest  rate will be used. 

2) 

Calculation  of  imported  financial  intermediation 

Non-resident  Fis grant  loans to residents and receive deposits  from  residents. 

For each  institutional  sector  it is necessary  to have the following  table: 

stocks 

interest 
receivable 
by 
non-resident  Fis 

stocks 

interest 
payable  by 
non-resident 
Fis 

Loans 
granted 
non-resident  Fis 

by 

Deposits  with  non 
resident  Fis 

The  financial  intermediation  imported  by  each  institutional  sector  is  therefore  calculated  as 
follows: 

FISIM  imported  for  loans  =  interest  receivable  by  non-resident  Fis  - (loan  stocks  x  "external" 
reference  rate) 

FISIM  imported  for  deposits = (deposits stocks x "external" reference  rate) - interest  payable  by 
non resident  Fis 

/If 

ISSN 0254-1475 

COM(97) 50 final 

DOCUMENTS 

EN 

17 

Catalogue  number  :  CB-CO-97-047-EN-C 

ISBN  92-78-15642-6 

Office  for  Official  Publications of the European  Communities 

L-2985  Luxembourg 

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