Council Regulation (EC) No 448/98 of 16 February 1998 completing and amending Regulation (EC) No 2223/96 with respect to the allocation of financial intermediation services indirectly measured (FISIM) within the European system of national and regional accounts (ESA)
Date: 1998-02-16
Institutions: Council of the European Union
Subjects: EU statistics, Economic and Monetary Union, European accounting system, data transmission, financial analysis, gross national product

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I

(Acts whose publication is obligatory)

COUNCIL REGULATION (EC) No 448/98

of 16 February 1998

completing and amending Regulation (EC) No 2223/96 with respect to the
intermediation services indirectly measured (FISIM)
allocation of

financial

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
Commission (1),

Having regard to the opinion of
liament (2),

the European Par-

Having regard to the opinion of the European Monetary
Institute (3),

Whereas Council Regulation (EC) No 2223/96 of 25 June
1996 on the European System of National and Regional
Accounts in the Community (4) contains the reference
framework of common standards, definitions, classifica-
tions and accounting rules for drawing up the accounts of
the Member States for the statistical requirements of the
European Community,
in order to obtain comparable
results between Member States;

Whereas Article 2(3) of Regulation (EC) No 2223/96
provides that a decision on the allocation of financial
intermediation services indirectly measured (FISIM) will
be taken no later than 31 December 1997;

Whereas solving the problem of allocating FISIM should
lead to major improvements in the methodology of the
ESA and to a more accurate intra-European Union
comparison of gross domestic product (GDP) levels;

Whereas the purpose of this Regulation is to introduce
the principle of allocation of FISIM and the detailed rules
of its implementation;

Whereas the effectiveness of the allocation of FISIM and
its implementation need to be
the detailed rules of

evaluated by means of calculations to be carried out by
the Member States according to the trial methods
described in Annex III to this Regulation during a trial
period which is sufficiently long in order to test whether
this allocation yields more reliable results for the correct
measurement of the economic activity concerned than the
present zero allocation;

Whereas, it is appropriate that the Commission on the
the calculations carried out during the trial
basis of
period, presents evaluation reports on the quality of the
data, in particular, on their availability and a qualitative
and quantitative analysis of the stability in time and the
sensitivity of the results in respect of the different trial
methods;

Whereas it is appropriate in case of a positive evaluation
of reliability of the results obtained that the Commission
decides on the most suitable method for the allocation of
FISIM;

Whereas in case the trial methods do not yield more reli-
able results for the correct measurement of the economic
activity concerned than the present zero allocation it is
however appropriate that the Commission submits to the
Council an appropriate proposal
for modification of
Regulation (EC) No 2223/96;

Whereas it is appropriate that the decision to allocate
FISIM for the establishment of the GNP used for the
purposes of
the Community’s budget and its own
resources will be adopted by the Council, acting unan-
imously, on a proposal from the Commission;

Whereas it is appropriate not to allocate FISIM for the
purposes of other Community policies until the Commis-
sion has decided on the method to be used for allocating
FISIM in case the results obtained are judged to be more
reliable;

(1) OJ C 124, 21. 4. 1997, p. 28.
(2) OJ C 339, 10. 11. 1997.
(3) Opinion delivered on 16 October 1997 (not yet published in

the Official Journal).

(4) OJ L 310, 30. 11. 1996, p. 1.

Whereas, in accordance with the principle of subsidiarity,
the objectives pursued by this Regulation can be better
achieved at the Community level than at the level of
Member States because only the Commission can co-

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27. 2. 98

ordinate the necessary harmonisation of
the statistical
methods for calculating and allocating FISIM at Com-
munity level; whereas, however, the calculation and allo-
cation proper as well as the infrastructure required to
monitor application of the methods, should be organised
by the Member States; whereas for this reason it is neces-
sary to prescribe that the competent national authorities
have access to all available data at national level;

Whereas the Committee on the Statistical Programmes of
the European Communities, established by Decision
89/382/EEC, Euratom (1), and the Committee on Mon-
etary, Financial and Balance of Payments Statistics,
established by Decision 91/115/EEC (2), have been re-
spectively consulted in accordance with Article 3 of each
of the aforesaid Decisions,

HAS ADOPTED THIS REGULATION:

Article 1

Purpose

1.
The purpose of this Regulation is to introduce the
principle, using reliable methodology,
allocating
indirectly measured
financial
(FISIM), described in Annex I of Annex A to Regulation
(EC) No 2223/96.

intermediation services

for

For this purpose, Annexes I and II of Annex A to
2.
Regulation (EC) No 2223/96 shall be amended in ac-
cordance with Annexes I and II to this Regulation.

Article 2

Methods

1.
The Member States shall carry out calculations in
accordance with the methods described in Annex III to
this Regulation during the trial period described in
Article 4.

2. On the basis of an evaluation of the results of these
calculations a decision on the method to be used for the
allocation of FISIM shall be taken in accordance with
Article 5.

Article 3

Means

The Member States shall ensure that the necessary
1.
data or appropriate estimates for carrying out these calcu-
lations shall
the
national authority in charge of conducting the calcula-
tions referred to in Article 2(1).

forthwith be put at

the disposal of

(1) OJ L 181, 28. 6. 1989, p. 47.
(2) OJ L 59, 6. 3. 1991, p. 19. Decision as amended by Decision

96/174/EC (OJ L 51, 1. 3. 1996, p. 48).

2.
The national authority shall be responsible for the
collection of supplementary data it deems necessary for
the calculations.

Article 4

Submission of the results of calculations during the
trial period

The Member States shall submit to the Commission the
results of the calculations referred to in Article 2(1), in
accordance with the following schedule:

The results for calendar years 1995, 1996, 1997 and 1998
shall be submitted no later than 1 November 1999.

The results for calendar year 1999 as well as revised
results for calendar years 1995, 1996, 1997 and 1998 shall
be submitted no later than 1 November 2000.

The results for calendar year 2000 as well as revised
results for calendar years 1995, 1996, 1997, 1998 and 1999
shall be submitted no later than 1 November 2001.

The first estimates for calendar year 2001 as well as
revised results for calendar years 1995, 1996, 1997, 1998,
1999 and 2000 shall be submitted no later than 30 April
2002.

Article 5

Evaluation of results

after

consulting

1. On the basis of the results referred to in Article 4,
the Commission,
Statistical
Programme Committee, shall submit before 31 December
2000 a mid-term report and before 1 July 2002 a final
report
to the European Parliament and the Council
containing a qualitative and quantitative analysis of the
implications of the trial methods for allocating and calcu-
lating FISIM as described in Annex III.

the

2.
The necessary measures for the application of this
Regulation, including measures to clarify and improve the
trial methods described in Annex III, shall be adopted by
the Commission in accordance with the procedure of
Article 7.

3.
Before 31 December 2002, the Commission shall,
after consulting the Committee for Monetary, Financial
and Balance of Payments Statistics and in accordance
with the procedure of Article 7, adopt the method to be
used for the allocation of FISIM in case the findings of
the final evaluation report on the reliability of the results
obtained during the trial period are positive.

4.
In case the Commission in its final evaluation report
referred to in paragraph 1 finds that none of the trial
methods for allocating FISIM are more reliable for the
correct measurement of the economic activity than the
present zero allocation, the Commission shall submit, if
necessary, an appropriate proposal to the Council for the
modification of Regulation (EC) No 2223/96.

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Article 6

Transmission to the Commission

From 1 January 2003 the Member States shall transmit to
the Commission the results of
the calculations made
pursuant to this Regulation as part of the tables referred
to in Article 3 of Regulation (EC) No 2223/96.

Article 7

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 lay down according
to the urgency of the matter.

The opinion shall be delivered by the majority laid down
in Article 148(2) of the Treaty establishing the European
Community in the case of 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 that Article. The Chairman shall not vote.

(b) If the measures envisaged are not in accordance
the Committee, or
if
with the opinion of
no opinion is delivered,
the Commission shall,
without delay, submit to the Council a proposal
relating to the measures to be taken. The Council
shall act by a qualified majority.

If, upon expiry of a period of three months the
Council has not acted, the proposed measures shall
be adopted by the Commission.

Article 8

Derogations

By way of derogation from this Regulation:

1. The decision to allocate FISIM for the establishment of
the GNP used for the purposes of the Community’s
budget and its own resources shall be adopted by the
Council, acting unanimously, on a proposal from the
Commission.

2. FISIM shall not be allocated for the purposes of other
Community policies until
the Commission has
adopted the method to be used for the allocation of
FISIM in accordance with Article 5(3).

Article 9

Final provisions

3.

(a) The Commission shall adopt the measures envis-
aged if they are in accordance with the opinion of
the Committee.

This Regulation shall enter into force on the day of 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.

Done at Brussels, 16 February 1998.

For the Council

The President

G. BROWN

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ANNEX I

AMENDMENTS TO ANNEX A AND ANNEX I THERETO OF REGULATION (EC) No 2223/96

Chapter 1

1.13,
fifth paragraph,
(d)

1.25,
second
paragraph

Chapter 3

3.63

Delete after
many specific conventions, e.g.:’:

‘The ESA also contains

Replace by:

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

‘allocating the use of financial intermedi-
ation services indirectly measured (FISIM)
to user sectors/industries.’

Add after the list of points introduced by
‘Some
in
concepts are:’ the following point:

the major differences

of

‘(i) the use of

financial

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

Delete all the text from the beginning
until ‘. . . is valued on the basis of the
fees of commissions charged’ included, at
the end of the fourth paragraph.

Replace by:

‘J. Financial
(this
includes
pension funds services)

intermediation
insurance

services
and

services

Financial
services
intermediation
(excluded insurance services and pension
funding services) consist in:

(a) financial

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

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

intermediation services in-
(b) financial
directly
indirectly
and
charged
measured (FISIM).

provide
intermediaries
Financial
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.

FISIM output

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

securities

other

except

financial

intermediaries

The output of
the subsectors S122
(other financial institutions) and S123
(other
ex-
cluding insurance corporations and
pension funds),
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 those
to whom 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 those from whom the intermedi-
aries borrow funds, both resident and
non-resident,
it is measured by the
difference between the interest they
would receive if a reference rate were
used and the effective interest they
actually receive;

(c) financial

intermediation

services

provided by the central bank.

central bank must not be
The
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
indirectly
measured (FISIM) provided by resident
producers.’

services

of

‘the use
intermediation
financial
services indirectly measured by resident
producers.’

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3.70.

Add:

‘(k) By convention,

the

central bank
output should be entirely allocated to
consumption of
intermediate
the
other
intermediaries
financial
(subsectors S122 — S123).’

3.76(e)

3.142(h)

Chapter 4

4.51,
second
paragraph

Chapter 8

8.09.

Add
to
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 commis-
sions and fees;’ the phrase:

‘and the part of financial intermediation
services
indirectly measured used by
non-residents;’

Delete:

Replace by:

‘The value of the services provided by
intermediaries not being al-
financial
the
located among different customers,
actual payments or receipts of interest to
or from financial intermediaries are not
adjusted to eliminate the margins that
represent the implicit charges made by
intermediaries. An adjustment
financial
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 al-
located as intermediate consumption.’

interest

‘The value of the services provided by
intermediaries being allocated
financial
the actual
among different customers,
payments or receipts of
to or
from financial intermediaries 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 the amounts of interest receivable
by depositors must be similarly increased.
The values of the charges are treated as
payments for services rendered by finan-
cial intermediaries to their customers and
not as payments of interest.’

EXPLANATORY NOTE

Add to figures presented: Tables A.I.1
and A.I.2, to show the consequences of
allocation of FISIM on figures presented
‘Sequence of accounts
in the chapter 8,
and
(numerical
balancing
example).

items’

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8.14.

Delete:

Replace by:

sectors, certain parts of

‘As financial intermediation services in-
directly measured (FISIM) are allocated to
user
interest
payments are reclassified as payments of
services. This
reclassification has con-
sequences for the values of output and
intermediate consumption (as well as for
the values of imports, exports and final
consumption).’

intermediate

the whole of

consumption of

‘As financial intermediation services in-
directly measured (FISIM) are not alloc-
ated to user sectors,
the
value of the output of FISIM is treated as
the
a
sector with zero output and
nominal
in size but
negative value added equal
intermediate
opposite
in
consumption.
the value
added of all sectors and industries toge-
ther is reduced in total by this amount.
To lighten the presentation of accounts,
it is possible not to insert a supplemen-
tary column for the nominal sector, but
instead to take into account the corres-
ponding figure in the column total
economy.’

In this way,

sign

to

8.24.

Delete:

Replace by:

financial

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

and receivable

actual

are those for

‘As financial intermediation services in-
directly measured (FISIM) are not alloc-
ated to user sectors, the entries shown for
interest
interest
payable and receivable. An adjustment is
made to resources in the column finan-
cial 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 to insert a
supplementary column for the nominal
sector, but instead to present the corres-
ponding figure in the column total
economy.’

Chapter 9

9.25(a)

Delete:

intermediate

consumption

by
‘the
financial
industry includes the use of
intermediation
indirectly
measures that are recorded in a nominal
industry (see paragraph 9.33);’

services

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9.25(b)

Delete:

financial

intermedi-
‘minus the use of
ation
indirectly measured
(recorded in a nominal industry, see para-
graph 9.33.)’

services

9.33.

Delete:

of

use

‘Throughout the supply and use tables,
the NACE REV 1 industry classification
is extended with a nominal industry for
intermediation
financial
the
services
In the
indirectly measured.
supply table, no transactions are recorded
at all for this industry. In the use table,
that total use of financial intermediation
services indirectly measured is recorded
as the intermediate consumption of this
nominal
this nominal
industry does not have any other transac-
tions, its net operating surplus is negative
by
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.’

industry. As

amount of

the

its

Uses

Accounts

Total

2

4

27

30

30

230

22

22

28

I.
Production
account/
external
account

II.1.1.
Generation
of income
account

II.1.2.
Allocation
of primary
income
account

II.2.
Secondary
distribu-
tion of
income
account

II.4.
Use of
income
account

Table A.I.1 — Effect of allocating FISIM to institutional sectors, including changes for non-market producers

S.2

S.1

S.15

S.14

S.13

S.12

Rest
of the
world

Total
eco-
nomy

NPISHs

House-
holds

General
govern-
ment

Finan-
cial
cor-
pora-
tions

S.11
Non-
finan-
cial
cor-
pora-
tions

Goods
and
services
(res.)

2

Resources

S.11
Non-
finan-
cial
cor-
pora-
tions

S.12

S.13

S.14

S.15

S.1

S.2

Finan-
cial
cor-
pora-
tions

General
govern-
ment

House-
holds

NPISHs

Total
eco-
nomy

Rest
of the
world

Goods
and
services
(uses)

Total

Accounts

48

6

3

57

2

4

Transactions
and balancing items

P.72 Imports of services

P.62 Exports of services

P.1 Output

4

–2

27

30

30

3

0

6

0

18 P.2

Intermediate
sumption

con-

48 –18 B.1 Value

balance

added/external

–18

48

48 –18 B.2 Operating surplus

–18

48

30

30

13

217

22

22

6

1

1

14

35

106

56 D.41 Interest

35 –21

48 –41 B.5 Balance of primary in-
comes

33

106

14

–41

48 –21

49

35

35 –21

48 –41 B.6 Disposable income

–41

48 –21

35

7

1

1

21

209

22

22

28

3

19

6

P.3

Final consumption ex-
penditure

6

–6 –2

16 –27

48 –41 B.8n Saving,
balance

net/external

2

4

57

30

30

230

22

22

I.
Production
account/
external
account

II.1.1.
Generation
of income
account

II.1.2.
Allocation
of primary
income
account

II.2.
Secondary
distribu-
tion of
income
account

II.4.
Use of
income
account

2
7

.

2

.

9
8

‹

E
N

‹

O

f
f
i
c
i
a
l

J
o
u
r
n
a
l

o
f

t
h
e

E
u
r
o
p
e
a
n

C
o
m
m
u
n
i
t
i
e
s

L

5
8
/
9

S.2

S.1

S.15

S.14

S.13

S.12

S.12

S.13

S.14

S.15

S.1

S.2

Uses

Accounts

Total

Goods
and
services
(res.)

Rest
of the
world

Total
eco-
nomy

PISHs

House-
holds

General
govern-
ment

48

48

Table A.I.2 — Effect to allocating FISIM to nominal sector only

Resources

S.11
Non-
finan-
cial
cor-
pora-
tions

S.11
Non-
finan-
cial
cor-
pora-
tions

Nom-
inal

Transactions
and balancing items

Nom-
inal

P.1 Output

48 P.2

Intermediate
sumption

con-

–48 B.1 Value added/external
balance

–48

–48 B.2 Operating surplus

–48

Finan-
cial
cor-
pora-
tions

48

48

Finan-
cial
cor-
pora-
tions

48

48

48

General
govern-
ment

House-
holds

PISHs

Total
eco-
nomy

Rest
of the
world

Goods
and
services
(uses)

Total Accounts

48

48 I.

48

48

Produc-
tion
account

II.1.1.
Genera-
tion of
income
account

12

33

5

200

22

222 II.1.2.

222

16

206

7

17

39

77

66

D.41 Interest
P.119 Adjustment for

FISIM

25

125
–48

48

–6 –2

16 –27

48 –41

B.5 Balance of primary

–41

48 –27

16 –2 –6

incomes

–6 –2

16 –27

48 –41

B.6 Disposable income

–41

48 –27

16 –2 –6

6 –6 –2

16 –27

48 –41

B.8n Saving,
balance

net/external

I.
Produc-
tion
account

II.1.1.
Genera-
tion of
income
account

II.1.2.
Allocation
of
primary
income
account

II.2.
Secondary
distribu-
tion of
income
account

II.4.
Use of
income
account

Allocation
of
primary
income
account

II.2.
Secondary
distribu-
tion of
income
account

II.4.
Use of
income
account

L

5
8
/
1
0

‹

E
N

‹

O

f
f
i
c
i
a
l

J
o
u
r
n
a
l

o
f

t
h
e

E
u
r
o
p
e
a
n

C
o
m
m
u
n
i
t
i
e
s

2
7

.

2

.

9
8

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ANNEX II

AMENDMENT TO ANNEX II OF ANNEX A TO REGULATION (EC) No 2223/96

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

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

ANNEX III

CALCULATING FISIM

1. CALCULATION OF FISIM OUTPUT BY SECTOR S122 AND S123

(a) Statistical data required

For each of the sub-sectors S122 and S123 (1), it is necessary to use the table of average stocks of
loans, deposits (split by user sectors) and the securities other than shares issued by FI for the period
(average of four quarters) 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

In the balance sheets of financial intermediaries included in S122 and S123 loans and deposits with
resident units 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 (S11 — S124 — S125 — S13 — S14 —

S15)

(except with the central banks).

In addition to that, loans and deposits with the rest of the world (S2) should also be broken down into
loans and deposits with non-resident financial intermediaries and loans and deposits within other
non-residents.

In the trial period of five years Member States are required to compare the results on the allocation of
FISIM by using the internal reference rate calculated according to the following four methods:

Method 1

To obtain the FISIM output of the resident FIs by institutional sector, the ‘internal’ reference rate is
calculated as the ratio of interest receivable on loans between S122 and S123 to stocks of loans
between S122 and S123.

interest receivable on loans between S122 and S123

stock of loans between S122 and S123

Method 2

To obtain the FISIM output of the resident FIs by institutional sector, the ‘internal’ reference rate is
calculated as the weighted average of the rates on both interbank loans and on securities other than
shares issued by FIs. The weights are the level of stocks in the headings loans between resident FIs
included in S122 and S123 and securities other than shares issued by the resident financial inter-
mediairies included in S122 and S123.

(1) The financial intermediaries to be considered are the sectors S122 (other monetary financial institutions) and S123 (other

financial intermediaries, except insurance corporations and pension funds), except investment funds.

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interest receivable on loans between S122 and S123
+ interest on securities other than shares issued by S122 and S123

stock of loans between S122 and S123
+ securities other than shares issued by S122 and S123

If the institutional characteristics of the national banking systems do not allow to calculate this rate
(e.g. because banks do not issue securities other than shares), then an alternative reference rate should
be used. This rate can be calculated by using the stocks and interest flows of assets (excluding loans)/
liabilities (excluding deposits) whose average time to maturity is the nearest to that of the liabilities in
the balance sheets of FIs included in S122 and S123.

Method 3

To obtain the FISIM output of resident FIs by institutional sector, two reference rates can be applied,
one for short term transactions (calculated as in Method 1) and one for long term transactions (using
published rates for securities other than shares whose maturity reproduces that of the liabilities in the
balance sheet with a long maturity).

Method 4

To obtain the FISIM output of the resident FIs by institutional sector, the ‘internal’ reference rate is
calculated according to the three alternatives below:

(a) as an average of lending and deposits rates which are undertaken with the resident institutional

sectors (S124 — S125 — S11 — S13 — S14 — S15)

(except with the central banks);

(b) as an average between the average of lending and deposits rates which are undertaken with the
resident user institutional sectors (S124 — S125 — S11 — S13 — S14 — S15) (except with the
central banks) and the implicit interest rate calculated as in Method 1;

(c) as an average between the average of lending and deposits rates which are undertaken with the
resident user institutional sectors (S124 — S125 — S11 — S13 — S14 — S15) (except with the
central banks) and the implicit interest rate calculated as in Method 2.

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

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

In the trial period the calculation should be done distinguishing the internal and external reference
rates both on the basis of the residence of the FIs engaged in the transactions and on the basis of the
currencies in which these transactions are denominated.

Member States are required to provide Eurostat with all the statistical information used in the
methodology applied.

(c) Detailed breakdown of FISIM by 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

S 122
S 123

Deposits
with
resident
FIs

S 122
S 123

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

FISIM on the loans granted to the institutional sector = interest receivable on loans – (loan stocks
× ‘internal’ reference rate)

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FISIM on the deposits of the institutional sector = (deposit stocks × ‘internal’ reference rate) –
interest payable on deposits

Part of the output is exported; on the basis of the balance sheet of the financial intermediaries (S122
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’ interbank reference rate as follows:

FISIM on loans granted to non-residents (including FIs) = interest receivable – (loan stock ×
‘external’ reference rate)

FISIM on the deposits of non-residents (including FIs) = (deposit stocks × ‘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 enter-

prises,

— final consumption of households.

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

— dwelling loans,

— loans to households as owners of unincorporated enterprises,

— other loans to households.

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 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 deposits of households as owners of unincorporated enterprises in the
trial period of five years Member States are required to compare the results on the allocation of FISIM
by using the following two methods:

Method 1

Stocks can be calculated on the basis of the ratio of deposits to value added observed for the smallest
size corporations and extrapolated for unincorporated enterprises.

Method 2

Stocks can be calculated on the basis of the ratio of deposits to turnover observed for the smallest size
corporations and extrapolated for unincorporated enterprises.

FISIM on the deposits of households must be distributed between FISIM on the deposits of house-
holds as owners of unincorporated enterprises and that on the deposits of households as consumers
on the basis of the average stocks of these two categories, for which, owing to lack of further informa-
tion, the same interest rate may be used.

As an alternative, especially in the case more detailed information on loans and deposits of house-
holds is absent, FISIM to households can be allocated to intermediate consumption and final
consumption assuring that all loans are attributable to households as producer or as owners of dwel-
lings and that all deposits are attributable to households as consumers.

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2. CALCULATION OF IMPORTED FINANCIAL INTERMEDIATION

Non-resident FIs grant loans to residents and receive deposits from residents. By 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 by
non-resident FIs

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 × ‘external’
reference rate)

FISIM imported for deposits = (deposit stocks × ‘external’ reference rate) – interest payable by non-
resident FIs

3. FISIM AT CONSTANT PRICES

The difference between the reference rate and the effective rate of interest represents the margin earned
by the financial intermediary, and thus can be considered to be the price paid for the service provided.
FISIM at constant prices are derived as the quotient of the value of FISIM on loans and deposits held by
S122 and S123 and this price. The stocks of loans and deposits are revalued to base period prices using a
general price index (e.g. the implicit price deflator for domestic final demand).

FISIM on the loans granted
to the institutional sector at
constant prices

FISIM on the deposits of the
at
institutional
constant prices

sector

=

=

FISIM on the loans granted
to the institutional sector
price index

FISIM on the deposits of the
institutional sector
price index

base period margin
effective margin

base period margin
effective margin

Base period margin on loans = effective interest rate on loans – reference rate

Base period margin on deposits = reference rate – effective interest rate on deposits